WT/DS473/R  
 
29 March 2016  
(16-1756)  Page: 1/154  
    
 
   
  
EUROPEAN UNION – ANTI-DUMPING MEASURES ON BIODIESEL 
FROM ARGENTINA 
 
REPORT OF THE PANEL 
 
 
 
 WT/DS473/R 
 
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  TABLE OF CONTENTS 
 
1   INTROD UCTION  ........................................................................................................ 12  
1.1   Complaint by Argentina ............................................................................................. 12 
1.2   Panel establishm ent and comp osition .......................................................................... 12 
1.3   Panel proceedings ..................................................................................................... 13 
1.3.1   Genera l ............................................................................................................... . 13 
1.3.2   Request for preliminary ruling .................................................................................. 13 
2   FACTUAL ASPECTS AND MEASURES AT ISSUE ........................................................... 13  
3   PARTIES' REQUESTS FOR FI NDINGS AND RECO MMENDATIONS ................................ 14  
4   ARGUMENTS OF  THE PARTIES ................................................................................... 15  
5   ARGUMENTS OF TH E THIRD PA RTIES ........................................................................ 15  
6   INTERIM REVIEW ...................................................................................................... 15  
6.1   Introduction ............................................................................................................. 15 
6.2   Specific requests for re view submitted by  the parties ..................................................... 16 
7   FIND INGS ................................................................................................................. 24 
7.1   General principles regarding treaty interpretation, the applicable standard of review 
and burden of proof ......................................................................................................... 25 
7.1.1   Treaty interpreta tion .............................................................................................. 25 
7.1.2   Standard of review ................................................................................................. 25 
7.1.3   Burden  of proof ..................................................................................................... 26 
7.2   Terms of reference – European Un ion's request for a pr eliminary ruling ............................ 26 
7.2.1   Intr oducti on ..........................................................................................................  26 
7.2.2   Objection concerning the claim of inconsistency with Article 9.3 of the 
Anti-Dumping Agreement in paragraph 2( B)(6) of Argentina' s panel request ............................ 28 
7.2.3   Objection concerning the claims of inconsistency with Article VI:1 of the 
GATT 1994 in paragraphs 2(A)(1) and 2( A)(2) of Argentina's panel request ............................. 32 
7.2.4   Objection concerning the claim of inconsistency with Article 2.2 of the 
Anti-Dumping Agreement in paragraph 2( A)(2) of Argentina' s panel request ............................ 37 
7.3   Argentina's claims concerning whether Article 2(5), second subparagraph, of the 
Basic Regulation is inconsistent "as such" with Articles 2.2, 2.2.1.1 and 18.4 of the 
Anti-Dumping Agreement, Article VI:1(b)(ii) of the GATT 1994, and Article XVI:4 of the 
WTO Agr eement .............................................................................................................. 39 
7.3.1   Intr oducti on ..........................................................................................................  39 
7.3.2   Relevant provisions of the covered agreements .......................................................... 40 
7.3.3   Factua l background ................................................................................................ 41 
7.3.4   Main argume nts of the parties ................................................................................. 42 
7.3.5   Arguments of  the third parties ................................................................................. 47 
7.3.6   Evaluation by the Panel .......................................................................................... 51 
7.4   Argentina's claims concerning whether the EU anti-dumping measures on imports of 
biodiesel from Argentina are inconsistent with Articles 2.1, 2.2, 2.2.1.1, 2.2.2(iii), 2.4, 
3.1, 3.4, 3.5, and 9.3 of the Anti-Dumping Agreement and Articles VI:1, VI:1(b)(ii) and 
VI:2 of the GATT 199 4, "as applied" ................................................................................... 66 WT/DS473/R 
 
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  7.4.1   Whether the EU anti-dumping measures on imports of biodiesel from Argentina 
are inconsistent with Articles 2.1, 2.2, an d 2.2.1.1 of the Anti-Dumping Agreement and 
with Articles VI:1 and VI:1(b)(ii) of the GATT 1994 ............................................................... 66 
7.4.2   Whether the European Union acted inconsistently with Article 2.4 of the 
Anti-Dumping Agreement by failing to make a fair comparison between the normal value 
and the expo rt price ......................................................................................................... 92 
7.4.3   Whether the European Union acted inconsistently with Articles 2.2 and 2.2.2(iii) of 
the Anti-Dumping Agreement by failing to base the determination of the amount for 
profits on a "rea sonable method" ....................................................................................... 99 
7.4.4   Whether the European Union acted inconsistently with Article 9.3 of the 
Anti-Dumping Agreement and Article VI:2 of the GATT 1994 by imposing and levying 
anti-dumping duties in excess of the margins of dumping .................................................... 110  
7.4.5   Whether the EU authorities' evaluation  of production capacity, capacity utilization 
and return on investments is inconsistent with Articles 3.1 and 3.4 of the Anti-Dumping 
Agreement .................................................................................................................... 113  
7.4.6   Whether the EU authorities' non-attribution findings are inconsistent with 
Articles 3.1 and 3.5 of the Anti-Dumping Agreement ........................................................... 129  
8   CONCLUSIONS AN D RECOMMEND ATION ................................................................. 152  
 
  
 WT/DS473/R 
 
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  LIST OF ANNEXES 
 
ANNEX A 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex A-1 Working Procedures of the Panel A-2 
Annex A-2 Additional Working Procedures of the Panel Concerning Business Confidential 
Information A-7 
ANNEX B 
ARGUMENTS OF ARGENTINA 
Contents Page 
Annex B-1 Executive Summary of the Firs t Written Submission of Argentina B-2 
Annex B-2 Executive Summary of the Second Written Submission of Argentina B-12 
Annex B-3 Executive Summary of the Statement of Argentina at the First Meeting of the 
Panel B-23 
Annex B-4 Executive Summary of the Statement of Argentina at the Second Meeting of 
the Panel B-29 
Annex B-5 Executive Summary of the Response  of Argentina to the European Union's 
Request for a Preliminary Ruling  B-34 
ANNEX C 
ARGUMENTS OF THE EUROPEAN UNION 
Contents Page 
Annex C-1 Executive Summary of the First Written Submission of the European Union C-2 
Annex C-2 Executive Summary of the Second Written Submission of the European Union C-11 
Annex C-3 Executive Summary of the Stat ement of the European Union at the 
First Meeting of the Panel C-21 
Annex C-4 Executive Summary of the Statemen t of the European Union at the 
Second Meeting of the Panel C-26 
Annex C-5 Executive Summary of the European Un ion's Request for a Preliminary Ruling  C-33  
ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Executive Summary of Third-Party Arguments of Australia D-2 
Annex D-2 Executive Summary of Third-Party Arguments of China D-5 
Annex D-3 Executive Summary of Third-Party Arguments of Colombia D-10  
Annex D-4 Executive Summary of Third-Party Arguments of Indonesia D-13 
Annex D-5 Executive Summary of Thir d-Party Arguments of Mexico D-17  
Annex D-6 Executive Summary of Third-Party Arguments of Norway D-21 
Annex D-7 Executive Summary of Third-Party Arguments of the Russian Federation D-23  
Annex D-8 Executive Summary of Third-Party Argume nts of the Kingdom of Saudi Arabia D-26 
Annex D-9 Executive Summary of Thir d-Party Arguments of Turkey D-30  
Annex D-10 Executive Summary of Third-Party Arguments of the United States D-32 WT/DS473/R 
 
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  CASES CITED IN THIS REPORT 
Short Title Full Case Title and Citation 
Argentina – Import 
Measures Appellate Body Reports, Argentina – Measures Affe cting the Importation of 
Goods , WT/DS438/AB/R / WT/DS444/AB /R / WT/DS445/AB/R, adopted 
26 January 2015 
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/AB/R, adopted 20 Augu st 1999, DSR 1999: III, p. 1161 
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affect ing Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, p. 167 
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive 
Industry , WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, 
DSR 2000:VI, p. 2985 
China – Broiler Products  Panel Report, China  Anti-Dumping and Countervailing Duty Measures on 
Broiler Products from the United States , WT/DS427/R and Add.1, adopted 
25 September 2013, DSR 2013:IV, p. 1041 
China – GOES Appellate Body Report, China – Countervailing and Anti-Dumping Duties on 
Grain Oriented Flat-Rolled Electrical Steel from the United States , 
WT/DS414/AB/R, adopted 16 November 2012, DSR 2012:XII, p. 6251 
China – GOES Panel Report, China – Countervailing and Anti -Dumping Duties on Grain 
Oriented Flat-Rolled Electrical Steel from the United States , WT/DS414/R and 
Add.1, adopted 16 November 2012, upheld by Appellate Body Report WT/DS414/AB/R, DSR 2012:XII, p. 6369 
China – HP-SSST (Japan) / 
China – HP-SSST (EU) Appellate Body Reports, China – Measures Imposing Anti-Dumping Duties on 
High-Performance Stainless Steel Seam less Tubes ("HP-SSST") from Japan / 
China – Measures Imposing Anti-Dum ping Duties on High-Performance 
Stainless Steel Seamless Tubes (" HP-SSST") from the European Union , 
WT/DS454/AB/R and Add.1 / WT/D S460/AB/R and Add.1, adopted 
28 October 2015 
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of Various 
Raw Materials , WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 
22 February 2012, DSR 2012:VII, p. 3295 
China – Raw Materials Panel Reports, China – Measures Related to th e Exportation of Various Raw 
Materials , WT/DS394/R, Add.1 and Corr.1 / WT/DS395/R, Add.1 and Corr.1 / 
WT/DS398/R, Add.1 and Corr.1, adopted 22 February 2012, as modified by 
Appellate Body Reports WT/DS394/AB/R  / WT/DS395/AB/R / WT/DS398/AB/R, 
DSR 2012:VII, p. 3501 
Dominican Republic – 
Import and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the 
Importation and Internal Sale of Cigarettes , WT/DS302/AB/R, adopted 
19 May 2005, DSR 2005:XV, p. 7367 
EC – Bananas III Appellate Body Report, European Communities – Regi me for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 25 September 1997, 
DSR 1997:II, p. 591 
EC – Bed Linen Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton-Type Bed Linen from India , WT/DS141/R, adopted 12 March 2001, as 
modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, p. 2077 
EC – Fasteners (China)  Appellate Body Report, European Communities – Definitive Anti-Dumping 
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R, 
adopted 28 July 2011, DSR 2 011:VII, p. 3995 
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti-Dumping Measures on 
Certain Iron or Steel Fasteners from China , WT/DS397/R and Corr.1, adopted 
28 July 2011, as modified by Appellate Body Report WT/DS397/AB/R, DSR 2011:VIII, p. 4289 
EC – Fasteners (China)  
(Article 21.5 – China) Appellate Body Report, European Communities – Definitive Anti-Dumping 
Measures on Certain Iron or Steel 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 – Fasteners (China) 
(Article 21.5 – China)  Panel Report, European Communities – Definitive Anti-Dumping Measures on 
Certain Iron or Steel Fasteners from China – Recourse to Article 21.5 of the DSU by China , WT/DS397/RW and Add.1, adopted 12 February 2016, as modified by 
the Appellate Body Report WT/DS397/AB/RW  
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, p. 135 WT/DS473/R 
 
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  Short Title Full Case Title and Citation 
EC – IT Products Panel Reports, European Communities and it s member States – Tariff 
Treatment of Certain Information Technology Products , WT/DS375/R / 
WT/DS376/R / WT/DS377/R, adopted 21 September 2010, DSR 2010:III, 
p. 933 
EC – Salmon (Norway)  Panel Report, European Communities – Anti-Dumping Measure on Farmed 
Salmon from Norway , WT/DS337/R, adopted 15 January 2008, and Corr.1, 
DSR 2008:I, p. 3 
EC – Tube or Pipe Fittings  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 – Tube or Pipe Fittings Appellate Body Report, European Communities – An ti-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 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 Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from 
Turkey , WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, p. 2667 
EU – Footwear (China)  Panel Report, European Union – Anti-Dumping Measures on Certain Footwear 
from China , WT/DS405/R, adopted 22 February 2012, DSR 2012:IX, p. 4585 
India – Agricultural products  Panel Report, India – Measures Concerning the Importation of Certain 
Agricultural Products , WT/DS430/R and Add.1, adopted 19 June 2015, as 
modified by Appellate Bo dy Report WT/DS430/AB/R 
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 
Japan – Alcoholic Beverages 
II Appellate Body Report, Japan – Taxes on Alcoholic Beverages , WT/DS8/AB/R, 
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 97 
Korea – Certain Paper Panel Report, Korea – Anti-Dumping Duties on  Imports of Certain Paper from 
Indonesia , WT/DS312/R, adopted 28 November 2005, DSR 2005:XXII, 
p. 10637 
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 
p. 3 
Mexico – Anti-Dumping 
Measures on Rice  Panel Report, Mexico – Definitive Anti-Dumping  Measures on Beef and Rice, 
Complaint with Respect to Rice , WT/DS295/R, adopted 20 December 2005, as 
modified by Appellate Body Report  WT/DS295/AB/R, DSR 2005:XXIII, p. 11007 
Mexico – Anti-Dumping 
Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dumping Measures on Beef and 
Rice, Complaint with Respect to Rice , WT/DS295/AB/R, adopted 
20 December 2005, DSR 2005:XXII, p. 10853 
Mexico – Corn Syrup 
(Article 21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose 
Corn Syrup (HFCS) from the United Stat es – Recourse to Article 21.5 of the 
DSU by the United States , WT/DS132/AB/RW, adopted 21 November 2001, 
DSR 2001:XIII, p. 6675 
Mexico – Olive Oil Panel Report, Mexico – Definitive Countervailing  Measures on Olive Oil from the 
European Communities , WT/DS341/R, adopted 21 October 2008, DSR 2008:IX, 
p. 3179 
Mexico – Steel Pipes and 
Tubes Panel Report, Mexico – Anti-Dumping Duties on Steel Pipes and Tubes from 
Guatemala , WT/DS331/R, adopted 24 July 2007, DSR 2007:IV, p. 1207 
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 – Anti-Dumping and 
Countervailing Duties 
(China)  Appellate Body Report, United States – Definitive Anti-Dumping and 
Countervailing Duties on Certain Products from China , WT/DS379/AB/R, adopted 
25 March 2011, DSR 2011:V, p. 2869 
US – Carbon Steel (India) Appellate Body Report, United States – Countervailing Measures on Certain Hot-
Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R, adopted 
19 December 2014 
US – Certain EC Products  Appellate Body Report, United States – Import Measures on Certain Products 
from the European Communities , WT/DS165/AB/R, adopted 10 January 2001, 
DSR 2001:I, p. 373 WT/DS473/R 
 
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  Short Title Full Case Title and Citation 
US – Clove Cigarettes  Appellate Body Report, United States – Measures Affecting the Production and 
Sale of Clove Cigarettes , WT/DS406/AB/R, adopted 24 April 2012, DSR 2012: 
XI, p. 5751 
US – Continued Zeroing Appellate Body Report, United States – Continued Ex istence and Application of 
Zeroing Methodology , WT/DS350/AB/R, adopted 19 February 2009, 
DSR 2009:III, p. 1291 
US – Corrosion-Resistant 
Steel Sunset Review Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties 
on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, p. 3 
US – Countervailing and 
Anti-Dumping Measures (China) Appellate Body Report, United States – Countervailing and Anti-Dumping 
Measures on Certain Products from China , WT/DS449/AB/R and Corr.1, adopted 
22 July 2014 
US – Countervailing Duty 
Investigation on DRAMS  Appellate Body Report, United States – Countervailing Duty Investigation on 
Dynamic Random Access Memory Se miconductors (DRAMS) from Korea , 
WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, p. 8131 
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 
23 August 2001, DSR 2001:X, p. 4697 
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, 
p. 4051 
US – Section 211 
Appropriations Act Appellate Body Report, 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  Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998, 
DSR 1998:VII, p. 2755 
US – Shrimp (Thailand)  
/ 
US – Customs Bond 
Directive Appellate Body Report, U n i t e d  S t a t e s  –  M e a s u r e s  R e l a t i n g  t o  S h r i m p  f r o m  
Thailand / United States – Customs Bond Directive for Merchandise Subject to 
Anti-Dumping/Countervailing Duties , WT/DS343/AB/R / WT/DS345/AB/R, 
adopted 1 August 2008, DSR 2008:VII, p. 2385 / DSR 2008:VIII, p. 2773 
US – Shrimp II (Viet Nam) Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Shrimp from Viet Nam , WT/DS429/AB/R, adopted 22 April 2015, and Corr.1 
US – Softwood Lumber 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 Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada , WT/DS264/AB/R, adopted 31 August 2004, 
DSR 2004:V, p. 1875 
U S  –  S o f t w o o d  L u m b e r  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/DS264/AB/RW, adopted 1 September 2006, DSR 2006:XII, 
p. 5087 
U S  –  S o f t w o o d  L u m b e r  V I  
(Article 21.5 – Canada)  Appellate Body Report, United States – Investigation of the International Trade 
Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada , WT/DS277/AB/RW, adopted 9 May 2006, and Corr.1, 
DSR 2006:XI, p. 4865 
US – Stainless Steel (Korea) Panel Report, United States – Anti-Dumping Measures on Stainless Steel Plate 
in Coils and Stainless Steel Sheet and Strip from Korea , WT/DS179/R, adopted 
1 February 2001, DSR 2001:IV, p. 1295 
US – Stainless Steel 
(Mexico)  Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 
23 August 2001, DSR 2001:X, p. 4697 
US – Wheat Gluten Appellate Body Report, United States – Definitive  Safeguard Measures on 
Imports of Wheat Gluten from the European Communities , WT/DS166/AB/R, 
adopted 19 January 2001, DSR 2001:II, p. 717 
US – Wool Shirts and 
Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R, adopted 23 May 1997, and 
Corr.1, DSR 1997:I, p. 323 
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R, adopted 
9 May 2006, and Corr.1, DSR 2006:II, p. 417 
US – Zeroing (Japan) Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/AB/R, adopted 23 January 2007, DSR 2007:I, p. 3 
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Stee l Flat Products from Germany , WT/DS213/AB/R 
and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779 WT/DS473/R 
 
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  Short Title Full Case Title and Citation 
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 – Zeroing (Japan) 
(Article 21.5 – Japan)  Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan , 
WT/DS322/AB/RW, adopted 31 Augu st 2009, DSR 2009:VIII, p. 3441 
EXHIBITS REFERRED TO IN THIS REPORT 
Panel Exhibit Title (Short Title) 
Exhibit ARG-1 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), OJ L 343, 22.12.2009, p. 51 and corrigendum to Council Regulation (EC) No 1225/2009, OJ L 7, 12.1.2010, p. 22 (Basic Regulation) 
Exhibit ARG-5 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, OJ L 305, 7.11.2002, p. 1, 
(Council Regulation 1972/2002) 
Exhibit ARG-6 Edward Borovikov and Bogdan 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 , 2002, pp. 875-896 
Exhibit ARG-7 Olesia Engelbutzeder, EU Anti-Dumping Measures Against Russian Exporters – 
In View of Russian Accession to the WTO and the EU Enlargement , 2004, 
pp. 159-160 
Exhibit ARG-8 Council Regulation (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, OJ 2005 L 302, 19.11.2005, p. 14, (Council Regulation 1891/2005) 
Exhibit ARG-9 Council Regulation (EC) No. 1050/2006 of 11 July 2006, imposing a definitive 
anti-dumping duty on imports of potass ium chloride originating in Belarus and 
Russia, OJ 2006 L 191, 12.7.2006, p. 1, (Council Regulation 1050/2006) 
Exhibit ARG-10 Council Regulation (EC) No. 954/2006 of 27 June 2006, imposing definitive anti-
dumping duty on imports of certain seam less pipes and tubes, or iron or steel 
originating in Croatia, Romania, Russia and Ukraine, repealing Council 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 terminating 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, 
OJ 2006 L 175, 29.6.2006, p. 4, (Council Regulation 954/2006) 
Exhibit 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 alia , in Russia, OJ 
2008 L 220, 15.8.2008, p. 1, (Council Regulation 812/2008) 
Exhibit 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, OJ 2012 L 357, 28.12.2012, p. 1, (Council Implementing Regulation 1269/2012) 
Exhibit ARG-13 Council Regulation (EC) No. 1911/2006 of 19 December 2006, imposing a 
definitive anti-dumping duty on import s of solutions of urea and ammonium 
nitrate originating in Algeria, Belarus, Russia and Ukraine following an expiry 
review pursuant to Article 11(2) of Regulation (EC) No 384/96, OJ 2006 L 365, 
21.12.2006, p. 26, (Council Regulation 1911/2006) 
Exhibit 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, OJ 2008 L 75, 18.3.2008, p. 14, (Council Regulation 238/2008) 
Exhibit ARG-15 Council 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, OJ 2009 L 338, 19.12.2009, p. 5, (Council Implementing WT/DS473/R 
 
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  Panel Exhibit Title (Short Title) 
Regulation 1251/2009) 
Exhibit 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 imports of ammonium nitrate originating in Russia, OJ 2008 L 75, 18.3.2008, p. 1, (Council Regulation 236/2008) 
Exhibit ARG-17 Council Regulation (EC) No 661/2008 of 8 July 2008 imposing a definitive anti-
dumping duty on imports of ammonium nitrate 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, OJ 2008 L 185, 12.7.2008, p. 1, 
(Council Regulation 661/2008) 
Exhibit 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, OJ 2008 L 75, 18.3.2008, p. 8, (Council Regulation 237/2008) 
Exhibit 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 expiry 
review pursuant to Article 11(2) of Regulation (EC) No 384/96, and terminating 
the partial interim reviews pu rsuant to Article 11(3) of such imports originating 
in Russia, OJ 2007 L 198, 31.7.2007, p. 4, (Council Regulation 907/2007) 
Exhibit 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 pursua nt to Article 11(2) of Regulation (EC) 
No 384/96, OJ 2008 L 75, 18.3.2008, p. 33, (Council Regulation 240/2008) 
Exhibit ARG-21 Council Regulation (EC) No. 1256/2008 of 16 December 2008, imposing a 
definitive anti-dumping duty on import s 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 pursua nt 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 
review pursuant to Article 11(2) and an interim review pursuant to Article 11(3) 
of the same Regulation – and terminatin g the proceedings in respect of imports 
of the same product originating Bosnia and Herzegovina and Turkey, 
OJ 2008 L 343, 19.12.2008, p. 1, (Council Regulation 1256/2008) 
Exhibit ARG-22 Council Implementing Regulation (EU) No. 1194/2013 of 19 November 2013, 
imposing a definitive anti-dumping du ty and collecting definitively the 
provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, OJ 2013 L 315, 26.11.2013, p. 2, (Definitive Regulation) 
Exhibit ARG-23 Judgment of the General Court of the European Union (Eighth Chamber) of 
7 February 2013, Acron OAO and Dorogobuzh OAO v Council of the 
European Union , Case T-235/08, (General Court of the European Union, 
Acron I ) 
Exhibit 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, OJ 2013 L 141, 28.5.2013, p. 6, (Provisional Regulation) 
Exhibit ARG-31 Consolidated version of the new anti-dum ping complaint concerning imports of 
biodiesel originating in Argentina and Indonesia, (Consolidated version of the 
complaint) 
Exhibit ARG-32 Notice of initiation of an anti-dumping proceeding concerning imports of 
biodiesel originating in Argentina and Indonesia, OJ 2012 C 260, 29.8.2012, p. 8, (Notice of initiation of the anti-dumping investigation) 
Exhibit ARG-33 Notice of initiation of an anti-subsidy proceeding concerning imports of biodiesel 
originating in Argentina and Indonesia, OJ 2012 C 342, 10.11.2012, p. 12, 
(Notice of initiation of the countervailing duty investigation)  
Exhibit ARG-35 General Disclosure Document (Annex 1), AD593 Anti-Dumping Proceeding 
Concerning imports of biodiesel originatin g in Argentina and Indonesia, Proposal 
to impose definitive measures, (Definitive Disclosure) 
Exhibit ARG-36 Commission Regulation (EU) No. 1198/2013 of 25 November 2013, terminating 
the anti-subsidy proceeding concerning imports of biodiesel originating in 
Argentina and Indonesia and repealing Regulation (EU) No 330/2013 making 
such imports subject to registration, OJ 2013 L 315, 26.11.2013, p. 67, (Notice 
of termination of the countervailing duty investigation)  
Exhibit ARG-37 CARBIO's written submission of 5 November 2012 
Exhibit ARG-38 Definitive Disclosure, Annex II, (BCI) 
Exhibit ARG-39 CARBIO's comments on the Definitive Disclosure of 17 October 2013, (CARBIO's 
comments on the Defi nitive Disclosure) 
Exhibit ARG-43 Powerpoint presentation projected du ring the hearing of 14 December 2012 
(CARBIO's Powerpoint presentation of 14 December 2012) 
Exhibit ARG-44 Information concerning producti on capacity and capaci ty utilization of EBB 
Members and non-EBB Members submitted by EBB on 12 March 2013, (EBB's WT/DS473/R 
 
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  Panel Exhibit Title (Short Title) 
submission of 12 March 2013) 
Exhibit ARG-46 Powerpoint presentation projected during the hearing of 8 July 2013 (CARBIO's  
Powerpoint presentation of 8 July 2013) 
Exhibit ARG-47 Submission by EBB of 17 September 2013 (EBB's submission of 
17 September 2013)  
Exhibit ARG-51 CARBIO's comments on the Provisional Disclosure of 1 July 2013, (CARBIO's 
comments on the Provisional Disclosure) 
Exhibit ARG-52 Judgment of the General Court (Eighth Chamber) of 7 February 2013, Acron 
OAO v Council of the European Union , Case T-118/10 (General Court of the 
European Union, Acron II ) 
Exhibit ARG-53 Judgment of the General Court (Eighth Chamber) of 7 February 2013, 
EuroChem Mineral and Chem ical Company OAO (EuroChem MCC) v Council of 
the European Union , Case T-459/08 (General Court of the European Union, case 
T-459/08) 
Exhibit ARG-54 Judgment of the General Court (Eighth Chamber) of 7 February 2013, 
EuroChem Mineral and Ch emical Company OAO (EuroChem MMC) v Council of 
the European Union , Case T-84/07 (General Court of the European Union, case 
T-84/07) 
Exhibit ARG-57 European Commission, Proposal for a Council Regulation further amending 
Council Regulation (EC) No. 384/96 on the protection against dumped imports 
from countries not members of the European Communities, COM(2002)467 
final, 31 December 2002 
Exhibit EU-1 Council Regulation (EC) No. 950/2001 of 14 May 2001 imposing a definitive 
anti-dumping duty on imports of certain aluminium foil originating in the People's Republic of China and Russia, OJ L 134, p.1, (Council Regulation 950/2001) 
Exhibit EU-8 Tietje et al., "Cost of Production Ad justments in Anti-Dumping Proceedings", 
Journal of World Trade , 45, No. 5 (2011), pp. 1071-1102 
Exhibit EU-9 Shorter Oxford English Dictionary , 6th edn, (version 3.0.2.1) 
Exhibit EU-10 Media reports on plant closur es in the European Union 
Exhibit EU-12 Appendix II, contai ning all regulations, resolutions and administrative provisions 
required in the questionnaire sent by the Commission to the Government of 
Argentina, related to the product under investigation, (Appendix II to the Government of Argentina's questionnaire response in the countervailing duty 
investigation) 
Exhibit EU-13 Commission Regulation (EC) No. 193/2009 of 11 March 2009, imposing a 
provisional anti-dumping duty on imports of biodiesel originating in the United 
States of America; OJ L 67, 12.3.2009, p. 22, (Provisional Regulation, anti-
dumping investigation on biodiesel from the United States) 
Exhibit EU-14 Council Regulation (EC) No. 599/2009 of 7 July 2009, imposing a definitive anti-
dumping duty and collecting definitive ly the provisional duty imposed on 
imports of biodiesel originating in the United States of America, OJ L 179,  
10.7.2009, p. 26, (Definitive Regulation, anti-dumping investigation on biodiesel from the United States) 
 
 WT/DS473/R 
 
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  ABBREVIATIONS USED IN THIS REPORT 
Abbreviation Description 
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 
BCI Business Confiden tial Information 
CARBIO Cámara Argentina de Biocombustib les (association of Argentine biodiesel 
producers) 
DET Differential export tax 
DSB Dispute Settlement Body 
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes 
EBB European Biodiesel Board (complainant, association of EU biodiesel producers) 
FOB  Free on Board 
GAAP Generally accepted accounting principles 
GATT 1994 General Agreement on Tariffs and Trade 1994 
IP Investigation period 
SG&A Selling, general and administrative costs 
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155 
UNTS 331; 8 International Legal Materials 679 
WTO World Trade Organization 
 WT/DS473/R 
 
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  1  INTRODUCTION 
1.1  Complaint by Argentina 1.1.  On 19 December 2013, Argentina requested consultations with the European Union pursuant 
to Articles 1 and 4 of the Understanding on Ru les and Procedures Governing the Settlement of 
Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994  (GATT 1994) and 
Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs 
and Trade 1994 (Anti-Dumping Agreement) with respect to 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 Community (the Basic Regulation
1) and with respect to the anti-
dumping measures imposed by the European Un ion on imports of biodiesel originating in, 
inter alia , Argentina.2 
1.2.  Consultations were held on 31 January 2014 but failed to resolve the dispute. 
1.2  Panel establishment and composition 1.3.  On 13 March 2014, Argentina requested the establishment of a panel pursuant to Articles 4.7 
and 6 of the DSU, Article XXIII of  the GATT 1994 and Article 17.4 of the Anti-Dumping Agreement 
with standard terms of reference.
3 At its meeting on 25 April 2014, the Dispute Settlement Body 
(DSB) established a panel pursuant to the request of Argentina in document WT/DS473/5, in 
accordance with Article 6 of the DSU.4 
1.4.  The Panel's terms of reference are the following: 
To examine, in the light of the relevant pr ovisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by Argentina in document 
WT/DS473/5 and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements.5 
1.5.  On 13 June 2014, Argentina requested the Director-General to determine the composition of 
the Panel, pursuant to Article 8.7 of the DSU. On 23 June 2014, the Director-General accordingly 
composed the Panel as follows: 
Chairperson: Mr Arumugamangalam V. Ganesan 
 
Members:  Mr Gilles Le Blanc    Mr Scott Gallacher
6 
 
1.6.  Mr Scott Gallacher resigned from the Panel on 15 February 2015. On 18 February 2015, the 
Director-General appointed a new member of the Panel, Mr Mathias Francke. Accordingly, the 
Panel is composed as follows: 
 Chairperson: Mr Arumugamangalam V. Ganesan 
  Members:  Mr Gilles Le Blanc 
   Mr Mathias Francke
7 
 1.7.  Australia, China, Colombia, Indonesia, Ma laysia, Mexico, Norway, the Russian Federation, the 
Kingdom of Saudi Arabia, Turkey and the United States notified their interest in participating in the 
Panel proceedings as third parties. 
                                               
1 Exhibit ARG-1. 
2 WT/DS473/1. 
3 WT/DS473/5. 
4 WT/DSB/M/344. 
5 WT/DS473/6. 
6 WT/DS473/6. 
7 WT/DS473/8. WT/DS473/R 
 
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  1.3  Panel proceedings 
1.3.1  General 1.8.  After consultation with the partie s, the Panel adopted its Working Procedures
8 and timetable 
on 21 August 2014.9 On 25 November 2014, the Panel adopted Additional Working Procedures 
Concerning Business Confidential Information (BCI).10  
1.9.  The Panel held a first substantive meeting with the parties on 18 and 19 March 2015. A 
session with the third parties took place on 19 March 2015. The Panel held a second substantive 
meeting with the parties on 9 and 10 June 2015. On 16 July 2015, the Panel issued the descriptive 
part of its Report to the parties. The Panel issued its Interim Report to the parties on 8 December 2015. The Panel issued its Final Report to the parties on 23 February 2016. 
1.3.2  Request for preliminary ruling 
1.10.  On 24 November 2014, the European Union submitted to the Panel a request for a 
preliminary ruling, arguing that certain of Argentina's claims were outside the Panel's terms of reference.
11 On 18 December 2014, Argentina submitted a response to the European Union's 
request.12 The parties further addressed each other's arguments in their subsequent submissions 
to the Panel. Some third parties also commented on the European Union's request in their third-party submission. 
1.11.  The Panel addresses the European Union's re quest for a preliminary ruling in its findings 
below. 
2  FACTUAL ASPECTS AND MEASURES AT ISSUE 2.1.  This dispute concerns two sets of measures of the European Union.  
2.2.  First, Argentina makes "as such" claims agai nst Article 2(5), second subparagraph, of Council 
Regulation (EC) No. 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (the Basic Regulation). 
2.3.  Second, Argentina challenges certain aspect s of the anti-dumping measures imposed by the 
European Union on imports of biodiesel from Argentina. These measures were adopted at the conclusion of an investigation on imports of biodiesel originating in Argentina and Indonesia that 
was initiated by the European Commission on 29 August 2012
13 following a complaint submitted 
by the European Biodiesel Board (EBB).14 Provisional anti-dumping duties were imposed on 
29 May 201315, and definitive anti-dumping duties on 27 November 2013.16 With regard to 
Argentine producers/exporters, in the De finitive Regulation, the EU authorities17 calculated 
dumping margins ranging from 41.9% to 49.2% and applied anti-dumping duties corresponding to 
                                               
8 Working Procedures of the Panel (last revised on 27 January 2015), Annex A-1. 
9 Last revised on 23 September 2015. 
10 Additional Working Procedures of the Panel Concerni ng Business Confidential Information, Annex A-2. 
11 See Executive summary of the European Union' s request for a prelimin ary ruling, Annex C-5. 
12 See Executive summary of the response of Argentina to the European Union's request for a 
preliminary ruling, Annex B-5. 
13 Notice of initiation of the anti-dumping investigation, (Exhibit ARG-32). 
14 Consolidated version of the complaint, (Exhibit ARG-31). 
15 Provisional Regulation, (Exhibit ARG-30). In a ddition, on 10 November 2012, the EU authorities 
initiated an anti-subsidy proceeding with regard to imports of biodiesel from Argentina and Indonesia and 
commenced a separate investigation. (Notice of initiation of the countervailing duty investigation, (Exhibit ARG-33)). On 7 October 2013, the domestic industry withdrew its complaint. The EU authorities terminated the anti-subsidy investigation on 27 November 2013. (Notice of termination of the countervailing duty investigation, (Exhibit ARG-36)) 
16 Definitive Regulation, (Exhibit ARG-22). 
17 The European Commission conducts investigations and adopts preliminary determinations; the 
European Council is a decision-making body that adopts final determinations  on the basis of proposals from the 
European Commission. WT/DS473/R 
 
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  the injury margins they calculated, which ranged from 22.0% to 25.7%.18 The duties were applied 
in the form of specific duties expressed as a fixed amount in euro/tonne.  
3  PARTIES' REQUESTS FOR FI NDINGS AND RECOMMENDATIONS 
3.1.  Argentina requests that the Panel find that:19 
a. Article 2(5), second subparagraph, of the Basic Regulation is "as such" inconsistent with: 
i. Articles 2.2.1.1 and 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of 
the GATT 1994 by providing that the author ities shall reject or adjust the cost 
data of the exporters as included in their records when those costs reflect prices 
which are "abnormally or artificially low", because the costs do not reflect market prices or because they are allegedly affected by a distortion; 
ii. Article 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of the 
GATT 1994 by providing that the costs shall be adjusted or established in certain 
cases "on any other reasonable basis, including information from other representative markets", even though  neither provision allows for an 
establishment of the costs on this basis; and 
iii. As a result, with Article XVI:4 of the Marrakesh Agreement Establishing the WTO 
and Article 18.4 of the Anti-Dumping Agreement. 
b. The anti-dumping measures imposed by the European Union on imports of biodiesel 
from Argentina are inconsistent with: 
i. Articles 2.2.1.1 and 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of 
the GATT 1994 because the European Union failed to calculate the cost of 
production on the basis of the records kept by the producers under investigation; 
ii. Article 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of the 
GATT 1994 because the European Union failed to construct the normal value of 
the exports of biodiesel on the basis of th e cost of production in the country of 
origin; 
iii. Article 2.2.1.1 of the Anti-Dumping Agreement because the European Union 
included costs not associated with the production and sale of biodiesel in the 
calculation of the cost of production;  
iv. Article 2.1 of the Anti-Dumping Agreemen t and Article VI:1 of the GATT 1994 as 
a result of the inconsistencies in points (i) – (iii) above affecting the dumping 
margin determinations;  
v. Articles 2.2 and 2.2.2(iii) of the Anti-Dumping Agreement because the 
European Union failed to base the profit margin as a component of the 
constructed normal value on a reasonable method within the meaning of 
Article 2.2.2(iii) of the Anti-Dumping Agreement; 
vi. Article 2.4 of the Anti-Dumping Agreement because the European Union failed to 
make due allowance for differences affecting price comparability, including 
differences in taxation, thereby precluding  a fair comparison between the export 
price and the normal value; 
vii. Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 
because the European Union imposed and levied anti-dumping duties in excess of 
                                               
18 Provisional and definitive anti-dumping duties were imposed on imports from both Argentina and 
Indonesia. 
19 Argentina's first written submission, paras. 468-470; second written submission, paras. 252-254. WT/DS473/R 
 
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  the margin of dumping that should have been established in accordance with 
Article 2 of the Anti-Dumping Agreement; 
viii. Articles 3.1 and 3.4 of the Anti-Dumping Agreement because the 
European Union's injury determination is not based on positive evidence and does 
not involve an objective examination of the consequent impact of the allegedly 
dumped imports on domestic producers of the like product in relation to capacity, utilization of production capacity and return on investment of the European Union 
industry; and 
ix. Articles 3.1 and 3.5 of the Anti-Dumping Agreement since the European Union 
failed to conduct an objective examination, based on positive evidence, of known factors other than the allegedly dumped imports in its non-attribution analysis; 
hence, the European Union failed to ensure that the injury suffered by the 
domestic industry of the European Union resulting from other factors was not attributed to the allegedly dumped imports. 
3.2.  Argentina requests the Panel to make use of its discretion under the second sentence of 
Article 19.1 of the DSU by suggesting ways in which the European Union should implement the 
recommendations and rulings of the DSB to bring its measures into conformity with the 
Anti-Dumping Agreement and the GATT 1994.
20  
3.3.  The European Union requests that the Panel reject Argentina's claims in their entirety.21 
4  ARGUMENTS OF THE PARTIES 4.1.  The arguments of the parties are reflected in their executive summaries provided to the 
Panel in accordance with paragraphs 19 and 21 of the Working Procedures adopted by the Panel 
(see Annexes B-1 to B-5 and C-1 to C-5). 
5  ARGUMENTS OF THE THIRD PARTIES 
5.1.  The arguments of Australia, China, Colombia, Indonesia, Mexico, Norway, the 
Russian Federation, the Kingdom of Saudi Arabia, Turkey, and the United States are reflected in 
their executive summaries provided to the Panel in accordance with paragraph 20 of the Working 
Procedures adopted by the Panel (see Annexes D-1 to D-10). Malaysia did not submit any written 
or oral arguments to the Panel. 
6  INTERIM REVIEW 6.1  Introduction 
6.1.  On 8 December 2015, the Panel issued its Interim Report to the parties. On 
22 December 2015, Argentina and the European Union each submitted written requests for the Panel to review aspects of the Interim Report. On 15 January 2016, both parties submitted 
comments on the other party's requests for revi ew. Neither party requested an interim review 
meeting. In addition, on 5 February 2016, the Pa nel provided an opportunity for the parties to 
comment on the relevance for the present dispute of the Appellate Body Report in EC – Fasteners 
(China) (Article 21.5 – China) , which was circulated after the issuance of the Interim Report. In 
this context, the Panel invited the parties to co mment on a proposed revision to paragraph 7.302 
of the Interim Report (paragraph 7.303 of the Final Report).  
6.2.  In accordance with Article 15.3 of the DSU, this section of the Report sets out the 
parties' requests for modifications made at the interim review stage as well as the Panel's 
response to these requests. In addition, the Pane l has made a number of changes of an editorial 
                                               
20 Argentina's first written submission, para. 472; second written submission, para. 256. 
21 European Union's first written submission, para . 348; second written submission, para. 170. In 
addition, as noted above in paragrap h 1.10, the European Union considers that certain claims pursued by 
Argentina are not proper ly before the Panel. WT/DS473/R 
 
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  nature to improve the clarity and accuracy of the Report or to correct typographical and other non-
substantive errors, certain of which were suggested by the parties.  
6.3.  The numbering of some of the paragraphs  and footnotes in the Final Report has changed 
from the numbering in the Interim Report. The di scussion below refers to the numbering in the 
Final Report and, where appropriate, includes th e corresponding numbering in the Interim Report. 
6.2  Specific requests for re view submitted by the parties 
Paragraph 7.13 
 
6.4.  Argentina requests that the Panel modify paragraph 7.13 to properly reflect its position, namely, that for most of the claims identified in this paragraph, Argentina did not raise claims that it decided not to pursue, but rather, the European Union raised procedural objections with regard 
to non-existent issues. The European Union objects to Argentina's request and notes that the text 
suggested by Argentina is already included in a footnote. 
6.5.  In addition, the European Union requests the Panel to reformulate the penultimate sentence 
of paragraph 7.13 to indicate that the absence of claims being made or pursued pertains to points 
arising from Argentina's panel request. Argentina does not comment on this request. 
6.6.  We have amended the text of paragraph 7.13 to better reflect Argentina's arguments and the 
Panel's reasoning. We note however that footnote 45 to paragraph 7.13 already quotes the text 
suggested by Argentina; we therefore did not repeat  this text in the body of paragraph 7.13. The 
changes suggested by the European Union are, in our view, unwarranted, and we decline to make them. We have, however, amended the penultimate sentence of paragraph 7.13 to express with 
more clarity the point made in this sentence.  
Paragraphs 7.56-7.57 
 
6.7.  The European Union requests the Panel to  reformulate paragraphs 7.56 and 7.57 and to 
amend footnote 105 to paragraph 7.59. According to the European Union, paragraph 2(A)(2) of Argentina's panel request introduced two new elements, both of which the European Union 
challenged: (a) a reference to Article 2.2 of the Anti-Dumping Agreement; and (b) a reference to a 
"second reason", namely, "that the costs used be associated with the production and sale of the 
product". In the European Union's view, this second element was properly covered in paragraphs 7.12 and 7.13, and has no place in the section beginning with paragraph 7.56. 
Argentina requests the Panel to reject the reformulations proposed by the European Union. 
Argentina considers it appropriate in paragraph 7.56 to refer to the entire objection raised by the European Union pertaining to "new claims" against Article 2(5) of the Basic Regulation. 
6.8.  We are not persuaded that the specific changes requested by the European Union would add 
any clarity to the paragraphs and footnote concerned or are necessary. We note, in this regard, that footnote 99 to paragraph 7.56 refers back to paragraph 7.12, which relates to the first 
element of paragraph 2(A)(2) of Argentina's panel request challenged by the European Union. We 
further note that, in paragraph 7.57, we clarify that we will consider the European Union's objection pertaining to Article 2.2 of the Anti-Dum ping Agreement. However, in order to avoid any 
risk of confusion, we have made certain amendmen ts to the text of paragraphs 7.56 and 7.57 with 
a view to clarifying those aspects of the European Union's objection to paragraph 2(A)(2) of 
Argentina's panel request that the European Union no longer appears to pursue, in contrast to 
those aspects that the European Union continues to "invite" the Panel to consider. 
Paragraph 7.67 
 6.9.  The European Union suggests adding language ("due to an alleged distortion in the operation 
of the markets of the exporting country result ing from a measure of the government of the 
exporting country; and") to qualify the term "dis tortion" at the end of the last sentence of 
subparagraph (a) to paragraph 7.67 to avoid confusion and to render it consistent with paragraph 7.113. Moreover, the European Union suggests adding language – "and when 
information on the costs of other producers or expo rters in the same country is not available, or 
cannot be used" – at the end of subparagraph (b) of the same paragraph to make it clear that a WT/DS473/R 
 
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  determination that a producer/exporter's records do not reasonably reflect the costs is not the only 
condition for the recourse to "prices prevailing on  other markets than the market of the country of 
origin". Argentina opposes these requests. Argentina considers that subparagraph (a) of paragraph 7.67 accurately reflects its claim, as consistently referred to in its submissions, and that 
the description is consistent with the wording included in paragraphs 7.69 and 7.74 of the 
Interim Report. Argentina also considers that the wording of subparagraph (b) correctly reflects the issue raised by Argentina's claim. 
6.10.  We decline to add the language suggeste d by the European Union. In our view, the two 
sub-paragraphs of paragraph 7.67 accurately reflect the questions of interpretation that arise from 
Argentina's claims. 
Paragraph 7.112 
 
6.11.  Argentina requests that the Panel add a third subparagraph to paragraph 7.112 to clarify that with respect to both of its "as such" claims, Argentina also claimed that even if it granted the 
EU authorities the discretion alleged by the Europe an Union, Article 2(5), second subparagraph, of 
the Basic Regulation would nonetheless be inconsistent with Articles 2.2.1.1 and 2.2. The European Union objects to Argentina's request. The European Union notes that paragraph 7.112 
reflects the Panel's understanding of the "essence of Argentina's claims" and that Argentina seems 
to accept the Panel's summary of its arguments in relation to this claim as it does not request any changes to paragraphs 7.74 to 7.86. The European Union submits that the Panel's understanding is accurate, while the new text suggested by Argentina is inaccurate. Moreover, the 
European Union submits that the purpose of the interim review is not to allow the complaining 
party to dictate to the Panel the understanding that the Panel should have, or the reasoning the Panel should follow. 
6.12.  We note that the Interim Report already included several references to the alternative line 
of argumentation that Argentina would have us reflect in paragraph 7.112, notably in footnote 189 of the Interim Report. Nonetheless, we have added the language requested by Argentina, albeit 
with some minor changes, but have included it in a new paragraph after paragraph 7.117 rather 
than as a new subparagraph of paragraph 7.112. Consequently, we have deleted footnote 189 of the Interim Report. We have also included a brie f summary of the European Union's response to 
this argument in the new paragraph, and amended paragraph 7.81 to reflect the alternative 
argument as it pertains to Argentina's Article 2.2.1.1 claim in the summary of its arguments.  
Paragraphs 7.116, 7.142 and 7.143 
 
6.13.  The European Union suggests adding the qualifier "government induced" to the term 
"distortion" in paragraphs 7.116 and 7.142 and to the term "market distortion" in paragraph 7.143. Argentina objects to the modificati on proposed by the European Union, which, it 
submits, is a new terminology that the European Union seeks to introduce at a late stage of the 
proceedings. Argentina submits that the current wording is clear and is in line with Argentina's claims as formulated in its submissions to the Panel. 
6.14.  We decline to make the change requeste d by the European Union, particularly as the 
European Union did not itself refer to a "government induced" distortion in these contexts. Nor do 
Recital 4, Article 2(3), second subparagraph, or Argentina's submissions use such a qualifier.  
Paragraph 7.132 
 
6.15.  The European Union suggests replacing the terms "after a determination is made" with "after a determination has been made". Argentina objects to this request. 
6.16.  We have made the amendment suggested by the European Union.  
Paragraph 7.133 
 6.17.  Argentina requests the addition of footnote  references to its second written submission at 
the end of the second sentence of paragraph 7.13 3. The European Union does not object to the WT/DS473/R 
 
- 18 - 
 
  Panel adding the footnote suggested by Argentina pr ovided that the text of the main body of the 
paragraph is not modified. 
6.18.  We have added the footnote references suggested by Argentina. 
Paragraph 7.140 
 
6.19.  Argentina requests that paragraph 7.140 be amended to more accurately reflect its arguments to the Panel regarding the relevance of Recital 4 for purposes of interpreting 
Article 2(5), second subparagraph. The European Union objects to the proposed amendments on 
the ground that the paragraph already accurately describes Argentina's argument and contains the references to Argentina's submissions which Argentina suggests adding.  
6.20.  We have modified paragraph 7.140 to more accurately reflect Argentina's arguments albeit 
in somewhat different terms than suggested by Argentina.  
Paragraph 7.142 
 
6.21.  The European Union suggests reformulating the last sentence of paragraph 7.142 to ensure 
consistency with paragraphs 7.138 and 7.141, which indicate that Recital 4 relates to Article 2(5) of the Basic Regulation. Argentina does not comment on this request. 
6.22.  We have amended the last sentence of paragraph 7.142 in accordance with the 
European Union's request. 
Paragraph 7.146 
 
6.23.  Argentina requests the addition of language at the end of paragraph 7.146 to clarify its 
arguments before the Panel. The European Union objects to Argentina's request as it considers the proposed changes unnecessary and considers the paragraph in its current form to be satisfactory. 
The European Union submits that if the Panel were  to accept the redundant new text requested by 
Argentina, it should also move the content of f ootnote 224 into the main body of the Report and 
explain in detail the reason for which Argentina's as sertions are erroneous, as already reflected in 
footnote 224. 
6.24.  We have, in the light of Argentina's request, modified footnote 224 to better reflect 
Argentina's arguments.  
Paragraph 7.149 
 
6.25.  Argentina requests that we add language to paragraph 7.149 in order to more completely reflect the arguments it presented with respect to the judgments of the General Court. The 
European Union objects to Argentina's request. The European Union submits that it is unnecessary 
to reproduce in this paragraph all of the arguments presented by Argentina on the judgments of the General Court given that the following paragr aphs directly address all of these arguments. 
6.26.  We decline to add the language suggested by Argentina, which we do not consider to be 
necessary particularly as, in this section, the Panel addresses the relevant arguments submitted by Argentina with respect to the judgments of the General Court.  
Paragraphs 7.149-7.152 
 
6.27.  The European Union suggests adding language to paragraphs 7.149-7.152 to reflect the Panel's conclusion that the judgments confirm that the EU authorities are not "required" or 
"mandated" to act in any particular way, which is already reflected in paragraphs 7.167-7.168. 
Argentina opposes this request, noting that in this section of its Report, the Panel only examines the judgments in relation to the issue of the re lationship between the first two subparagraphs of 
Article 2(5) of the Basic Regulation. Argentina takes the view that paragraphs 7.167-7.168 relate 
to a different issue; the conclusion in these paragraphs therefore cannot merely be transposed in paragraphs 7.149-7.152 and the latter cannot include any conclusion regarding the issue whether WT/DS473/R 
 
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  the authorities are "required" or "mandated" to act in a particular way without examining this issue 
in detail.  
6.28.  We agree with Argentina, and therefore decline the European Union's request. Paragraph 7.150 
 
6.29.  Argentina requests that the Panel add a footnote in the second sentence of paragraph 7.150 to refer to the relevant paragraphs of the ju dgments. The European Union does not comment on 
this request. 
6.30.  We have included footnote references to the relevant paragraphs of the judgments at issue. 
Footnote 227 to paragraph 7.150 
 
6.31.  Argentina requests that, in footnote 227 to paragraph 7.150, the Panel include a reference 
to its response to Panel question No. 98. The European Union does not object to Argentina's request in this regard, provided that the rest of the footnote and of the paragraph are not 
modified.  
6.32.  We have included the additional reference requested by Argentina. Paragraph 7.155 
 
6.33.  Argentina requests that the Panel modify paragraph 7.155 in order to clarify that it also submits that Article 2(5) of the Basic Regulation is inconsistent with Article 2.2 of the Anti-Dumping Agreement regardless of whether it is mandatory. The European Union opposes this 
request because, it submits, this point is already addressed in paragraphs 7.173 and 7.174, 
whereas paragraph 7.155 presents the Panel's understanding of Argentina's main claim, which is that Article 2(5) mandates the investigating authorities to act in a certain way. 
6.34.  As indicated above, in our response to Argentina's request concerning paragraph 7.112, the 
Interim Report already included several references  to the alternative line of argumentation that 
Argentina would have us reflect in paragraph 7.155, and we have added such a reference in a new 
paragraph, paragraph 7.118. Moreover, footnote 229 to paragraph 7.155 already referred to 
Argentina's alternative line of argumentation. In light of the foregoing, we do not consider it necessary to modify paragraph 7.155 as requested by Argentina. We have, instead, amended footnote 229 to clarify it and to refer back to paragraph 7.118.  
Paragraph 7.165 
 6.35.  Argentina requests the Panel to identify in  a footnote the examples of EU determinations 
supporting the statement contained in paragraph 7.165. The European Union does not comment 
on this request. 
6.36.  We have amended paragraph 7.165 and adde d a footnote to add greater precision to the 
discussion of the examples of EU determination cited by Argentina. 
Paragraph 7.166 
 6.37.  The European Union suggests reformulat ing the final sentence of paragraph 7.166. 
Argentina does not comment on this request.  
6.38.  We have revised the final sentence of paragraph 7.166 in the light of the European Union's 
comment.  
Paragraph 7.172 
 6.39.  The European Union suggests reformulating paragraph 7.172 to clarify the conclusion that, 
under Article 2(5) of the Basic Regulation, the authorities may use the listed sources of 
information to establish an investigated producer/exporter's costs in constructing its normal value, WT/DS473/R 
 
- 20 - 
 
  but are not required to do so. Argentina objects to this request as it considers that the paragraph 
as currently worded is clear and does not need to be modified. 
6.40.  We note that the European Union did not explain the reason for its suggested revision. In 
our view, paragraph 7.172 is sufficiently clear. Accordingly, we see no reason to modify it. 
Paragraphs 7.173 and 7.174 
 6.41.  The European Union suggests merging paragraphs 7.173 and 7.174 and treating the 
arguments of Argentina addressed in these paragrap hs as different formulations of the same legal 
interpretation. Argentina takes the view that the two paragraphs deal with different arguments and requests that the Panel reject this request. 
6.42.  We reject the request of the European Union. Paragraphs 7.173 and 7.174 address 
different, alternative arguments submitted by Argentina with respect to what it must establish for 
its "as such" claims to succeed. 
Paragraph 7.174 
 
6.43.  The European Union suggests breaking up the second sentence of paragraph 7.174 into separate sentences because the present formulation may create some confusion as to what "as 
discussed above" refers to. Argentina considers that paragraph 7.174 is clear and does not need to 
be modified. 
6.44.  We have amended paragraph 7.174 to eliminate the risk of confusion identified by the 
European Union. 
Paragraph 7.240 
 6.45.  Argentina requests that paragraph 7.240 be modified to include the word "alleged" before 
the words "distortion arising out of government actions or circumstances". The European Union 
objects to this request, noting that Argentina acknowledged in its reply to Panel question No. 43 that its export tax system has a significant "impact on soybean prices as an input material for 
biodiesel". 
6.46.  We decline to make the change requested by Argentina. Paragraph 7.240 discusses 
distortions in the abstract as they might relate to the second Ad Note to Articles VI:2 and VI:3 of 
GATT 1994, rather than articulating any conclusion s with respect to Argentina's export tax system 
in particular. 
Footnote 421 to paragraph 7.249 
 
6.47.  The European Union suggests that it would be more accurate in footnote 421 to 
paragraph 7.249 to preface the word "regulated" with the word "directly". Argentina requests the Panel to reject this modification because, in its view, the parties did not dispute that the domestic 
prices of soybean are not regulated. 
6.48.  In light of the considerations raised by the parties, we have reformulated the last sentence 
of footnote 421 to paragraph 7.249. 
Paragraph 7.257 
 
6.49.  The European Union suggests that the Pane l add a sentence at the end of paragraph 7.257 
to reflect Argentina's acknowledgement that the prices used by the EU authorities "would have 
been the prices paid by the Argentine producers of biodiesel in the absence of the export tax 
system, possibly with small variations depending on the particular terms of each transaction." In the European Union's view, this addition would make the description of the facts in that paragraph 
more accurate. Argentina objects, asserting that it did not agree that the price to be paid by 
exporters would be the reference price minus fobbing costs. WT/DS473/R 
 
- 21 - 
 
  6.50.  We see no basis for making the change su ggested by the European Union. The paragraph at 
issue contains a brief restatement of pertinent as pects of the findings of the EU authorities, 
whereas the addition suggested by the European Union concerns Argentina's arguments before the 
Panel, which are addressed elsewhere in the Report.  
Paragraphs 7.261-7.269 
 6.51.  Argentina requests the Panel to complete its reasoning with respect to its second "as 
applied" claim concerning Article 2.2.1.1 of the Anti-Dumping Agreement. In Argentina's view, its 
second claim is of a different nature to its first cl aim. In Argentina's view, a finding on this second 
claim would be necessary to preserve its rights  at subsequent stages of the proceeding. The 
European Union does not consider that Argentina's request is justified. In the European Union's 
view, in light of its finding in paragraph 7.249, the Panel is justified in concluding in 
paragraph 7.269 that a finding on a logically identical claim under Article 2.2.1.1 of the Anti-Dumping Agreement is not necessary for the effective resolution of the dispute. 
6.52.  We reject Argentina's request. For the reasons explained in paragraph 7.269, we maintain 
our view that a finding on Argentina's second claim under Article 2.2.1.1 of the Anti-Dumping Agreement is not necessary for the effective resolution of this dispute.  
Paragraph 7.293 
 6.53.  The European Union requests that we delete the words "pursuant to Article 2.1" from the first sentence of paragraph 7.293 given that these words are not mentioned in the text of 
Article 2.4 of the Anti-Dumping Agreement. Argent ina requests that we reject the request of the 
European Union. Argentina considers that the Euro pean Union misreads the sentence at issue and 
that the sentence is accurate. 
6.54.  Although the sentence at issue did not, as the European Union suggests, state that the 
opening sentence of Article 2.4 refers to Article 2. 1, in order to avoid any risk of confusion, we 
have omitted the words "pursuant to Article 2.1"  from the first sentence of paragraph 7.293. 
Footnote 511 to paragraph 7.296 
 6.55.  The European Union suggests that the Panel delete the text in footnote 511 starting with 
"[w]e note, however …". The European Union does not see the connection between this text and 
the reference to the panel report in EU – Footwear (China) , nor between this text and the sentence 
in paragraph 7.296 to which footnote 511 is appended. Argentina requests the Panel to reject the request of the European Union. According to Argent ina, the text that the European Union seeks to 
delete is related to the content of paragraph 7.296. 
6.56.  The text that the European Union seeks to delete in footnote 511 to paragraph 7.296 
reflects a nuance that is not otherwise reflected in the attendant quotations and considerations in 
paragraph 7.296. As we explain in that paragr aph, the subject matter of Article 2.4 can be 
contrasted with that of Articles 2.1, 2.2, and 2.3, which pertain to the methodology of determining the normal value and the export price. However, as  we explain in footnote 511 to that paragraph, 
the fourth and fifth sentences of Article 2.4 pertai n to the construction of the export price under 
Article 2.3. Omitting this nuance would dilute th e accuracy of the Panel's discussion. Nonetheless, 
in order to avoid any risk of confusion, and since the text referred to by the European Union is not 
directly connected to the reference to EC – Footwear (China)  in the same footnote, we have 
moved this text to a new footnote at the end of the following sentence (footnote 512). 
Paragraphs 7.303 and 7.304 
 
6.57.  In the evaluation of Argentina's claim unde r Article 2.4 of the Anti-Dumping Agreement, the 
Interim Report made reference to certain findings of the panel in EC – Fasteners (China) (Article 
21.5 – China) . On 18 January 2016, the Appellate Body issued its Report in the same dispute. In 
this Report, the Appellate Body addressed, inter alia , the findings of the EC – Fasteners (China) 
(Article 21.5 – China)  panel  referred to in this Panel's Interim Report. This being the case, on 5 
February 2016, the Panel amended paragraph 7.303 and included a new paragraph (now paragraph 7.304) in order to reflect the reasoning of the Appellate Body, and invited the parties to WT/DS473/R 
 
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  provide their comments, if any, on these revi sions. Argentina provided comments, and the 
European Union provided comments on Argentina's comments. 
6.58.  Argentina does not request any changes to the revised paragraph 7.303, but makes three 
sets of requests for revisions to paragraph 7.304.  First, Argentina takes issue with the statement 
in that paragraph that, in EC – Fasteners (China) (Article 21.5 – China) , the "Appellate Body 
agreed  with the panel that, in the context of an investigation in which the analogue country 
methodology is applied, the investigating authority is not required under Article 2.4 to adjust for 
differences in costs where this would lead it to adjust back to the costs in the NME industry that it 
had found to be distorted".22 Argentina considers that rather than agreeing with the panel, the 
Appellate Body faulted the panel for the lack of ca re and detailed evaluation in assessing whether 
the investigating authority had complied with its duty to determine whether the adjustments 
requested were warranted pursuant to Article 2.4. As a consequence, Argentina requests that we 
replace the term "agreed" in the first sentence with the term "found". Second, Argentina considers that the Appellate Body's findings in EC – Fasteners (China) (Article 21.5 – China)  do not stand for 
the "broad, unqualified and far-reaching" prop osition that methodological approaches for 
establishing the normal value cannot be challenged under Article 2.4 as "differences affecting price comparability" without more, as – in Argentina's view – the Panel's language seems to suggest. 
Rather, Argentina considers that the Appellate Body (like the panel) found that recourse to the 
analogue country methodology did not relieve the investigating authority from the obligation to make a fair comparison under Article 2.4, and th e Appellate Body clarified the conditions under 
which a determination as to whether adjustme nts are warranted should be made. Argentina 
therefore suggests that we make certain change s to the last sentence of paragraph 7.304, 
specifically that we qualify the term "proposition " in that sentence with the term "general", and 
that we add "provided that the fair comparison requirement is not affected" at the end of that 
sentence. Finally, Argentina requests that we qualify the term "distortion" in footnote 527 to 
paragraph 7.304 with the term "alleged", that we replace the term "mitigated" in that footnote with the term "found", and that we qualify the te rm "replace" with the term "improperly" in the 
same footnote. 
6.59.  The European Union only comments on Argentina's requests for revisions concerning the 
footnote to paragraph 7.304. In this respect, th e European Union notes that the Panel had already 
used the word "mitigated" elsewhere in the Report and that Argentina had not expressed any 
comment in this respect in its initial requests for review. Further, the European Union considers 
that the term "found", suggested by Argentina, does not accurately reflect the meaning expressed 
by the relevant sentence, and suggests that any change should use the terms "eliminated" or 
"addressed". The European Union also asks us to reject Argentina's request to qualify the term 
"distortion" with the term "alleged" on grounds that the relevant sentence describes the actions taken by the investigating authorities as opposed the parties', or the Panel's, assessment of 
whether the distortion was "alleged" or real. Finally, the European Union asks us to reject 
Argentina's request to qualify the term "replace" with the term "improperly" on grounds that the relevant sentence is simply describing facts and does not assess whether the actions of the investigating authority were "proper". 
6.60.  We made certain changes to the language of paragraph 7.304 and the corresponding 
footnote in light of Argentina's comments an d the European Union's comments thereon. In 
particular, we have modified the first sentence of paragraph 7.304. In this respect, we note 
however that both the panel and the Appellate Body in EC – Fasteners (China) (Article 21.5 – 
China)  considered that, in the context of an investigation in which the analogue country 
methodology is applied, the investigating authority is not required under Article 2.4 to adjust for 
differences in a manner that would lead it to adjust back to the costs in the NME industry that it 
had found to be distorted, thereby undermining th e use of the analogue country methodology. The 
footnote to paragraph 7.304 already highlighted the differences in the approaches adopted by the panel and Appellate Body; we modified our text to provide even greater clarity in this respect. We 
decline to qualify certain language in the footnote by adding "alleged" and "improperly" before 
"distortion" and "replace", as requested by Argentina, because the language at issue reflects certain factual aspects of the EU authorities' determination rather than findings of the Panel. 
However, we replaced the term "mitigated" by "a ddressed" to better reflect the EU authorities' 
determination. Finally, we modified the last sentence of paragraph 7.304 to better reflect our understanding of the essence of the Appellate Body's findings in EC – Fasteners (China) (Article 
                                               
22 Emphasis added. WT/DS473/R 
 
- 23 - 
 
  21.5 – China)  and of its relevance to the present disput e. As a result, we also amended the first 
sentence of paragraph 7.305. 
Footnote 581 to paragraph 7.337 
 
6.61.  The European Union notes that in footnote 581 to paragraph 7.337, the reference to the 
panel report in Thailand – H-Beams  relates to subparagraphs (i) and (ii) of Article 2.2.2 of the 
Anti-Dumping Agreement, whereas the present disput e involves subparagraph (iii) of Article 2.2.2. 
Argentina considers the European Union's observation inapposite because the paragraph of the 
panel report in Thailand – H-Beams  points out the connection between Article 2.2.2(iii) and the 
preceding subparagraphs of Article 2.2.2. 
6.62.  Paragraph 7.112 of the panel report in Thailand – H-Beams  discusses the "chapeau and 
overall structure" of Article 2.2. 2 of the Anti-Dumping Agreement.  We therefore decline to amend 
that reference. However, we have omitted an inaccurate reference to EU – Footwear (China)  in the 
same footnote, identified by the European Union. 
Paragraph 7.347 
 6.63.  The European Union suggests that the Panel include the word "particularly" before the 
clause beginning "when reliable data concerni ng …" in paragraph 7.347. According to the 
European Union, this would be more consistent with footnote 579. Argentina objects on the ground that the modification suggested by the European Union is unnecessary. 
6.64.  In order to avoid any risk of misunderstanding, we substituted the word "might" for the 
word "may" in the sentence referred to by the European Union. 
Paragraph 7.361 
 
6.65.  The European Union submits that paragraph 7.361 inaccurately attributes to the Appellate 
Body in US – Zeroing (EC)  a quotation ("that is, a margin established consistently with Article 2"). 
In response, Argentina notes that the language identified by the European Union is not part of the 
quotation in paragraph 7.361. 
6.66.  We see no reason to modify paragraph 7.361. The text referred to by the European Union 
does not appear in quotation marks, nor does it misrepresent the quotation from US – Zeroing 
(EC) extracted in paragraph 7.361.  
Paragraph 7.370 
 6.67.  Argentina requests that the Panel modify paragraph 7.370 to reflect the fact that its claims 
under Articles 3.1 and 3.4 should be read jointly with the claims under Articles 3.1 and 3.5. The 
European Union disagrees with Argentina's request, arguing that footnote 618 already makes the same point. 
6.68.  We reject Argentina's request. Paragraph 7.370 and footnote 618 to the same paragraph 
already make clear the link between Argentina's claims under Articles 3.1 and 3.4, on the one hand, and its claims under Articles 3.1 and 3.5, on the other. 
Paragraphs 7.416-7.422 
 
6.69.  Argentina submits that the Panel's finding that the EU authorities failed to base their evaluation of production capacity and capacity utilization on positive evidence and failed to conduct 
an objective examination of the impact of dumped imports on the domestic industry insofar as it 
relates to these two factors only provides a partial resolution of the matter at issue. Argentina considers that to ensure a complete resolution of the dispute, it is also necessary for the Panel to 
make a finding regarding the issue whether the EU authorities acted inconsistently with Article 3.4 
in their definition of capacity and capacity ut ilization. The European Union does not comment on 
this request.  WT/DS473/R 
 
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  6.70.  Argentina has not demonstrated that findings with respect to its allegation concerning the 
EU authorities' definition of capacity utilization are necessary to the resolution of the dispute between the parties in light of the Panel's conclusions in paragraphs 7.413 and 7.415. We therefore maintain our view that we need not make such findings.  
Paragraph 7.429 
 6.71.  The European Union suggests adding a reference to the panel reports in China – Raw 
Materials  (second phase of the preliminary ruling, paragraphs 74 to 76) to this paragraph. 
Argentina objects to this suggestion. Argentina argues that it is too late at the interim review stage to advance new arguments or to refer to prior reports that were not brought to the Panel's attention earlier.  
6.72.  We do not consider it necessary to include a reference to the panel reports in China – Raw 
Materials  and have therefore not made the addition suggested by the European Union.  
Paragraph 7.462 
 
6.73.  Argentina requests that we clarify that its argument with regard to overcapacity discussed in paragraph 7.462 focuses on the violation of both Articles 3.1 and 3.5. The European Union does 
not provide comments on this request. 
6.74.  The relevant clarification has been inserted into the text. Paragraphs 7.463 and 7.465 
 
6.75.  The European Union suggests that, in its descr iption of the findings of the EU investigating 
authorities, the Panel add footnote references to the relevant documents containing these findings. Argentina does not comment on this request.  
6.76.  In the light of the European Union's request, we have inserted relevant footnote references 
where appropriate (footnotes 783-785 and 788-790).  
Paragraph 7.471 
 
6.77.  The European Union suggests adding footnote s indicating the source of certain statements 
in paragraph 7.471. Argentina does not comment on this request. 
6.78.  The relevant footnotes have been inserted in the Final Report (footnotes 798, 800, 
and 802).  
Paragraph 7.509 
 
6.79.  The European Union suggests adding footnote s indicating the source of certain statements 
in paragraph 7.509. Argentina does not comment on this request. 
6.80.  The Panel has made certain changes to paragraphs 7.503, 7.505, 7.508, and 7.509 to 
clarify its findings and, in doing so, has added foot notes to identify the source of the statements or 
arguments it refers to, where appropriate (footnotes 867, 872-873, and 875-878). 
7  FINDINGS 7.1.  This dispute concerns European Union meas ures imposing anti-dumping duties on biodiesel 
from Argentina, which Argentina challenges on an "as applied" basis, as well as Article 2(5), 
second subparagraph, of the Basic Regulation, which Argentina challenges on an "as such" basis. Argentina's claims proceed under various provisions of the Anti-Dumping Agreement; Articles VI:1, 
including subparagraph (b)(ii) thereof, and VI:2 of the GATT 1994; and Article XVI:4 of the World 
Trade Organization (WTO) Agreement. The European Union requests that the Panel reject each of the claims presented by Argentina, and in additi on, requests the Panel to find that certain of 
Argentina's claims are not within the Panel's terms of reference.  WT/DS473/R 
 
- 25 - 
 
  7.2.  We begin by examining the request for a pr eliminary ruling submitted by the European Union 
prior to the filing by Argentina of its first written submission. Thereafter, we consider Argentina's "as such" claims against Article 2(5), second subparagraph, of the Basic Regulation, before considering Argentina's "as applied" claims, which pertain to the EU authorities' Provisional 
Regulation and Definitive Regulation in the biodiesel investigation. However, before proceeding to 
do so, we briefly recall the relevant general princi ples regarding treaty interpretation, the standard 
of review and the burden of proof in WTO disput e settlement proceedings, as laid down by the 
Appellate Body. 
7.1  General principles regarding treaty interp retation, the applicable standard of review 
and burden of proof 
7.1.1  Treaty interpretation 
7.3.  Article 3.2 of the DSU provides that the dispute settlement system serves to clarify the 
existing provisions of the covered agreements "in accordance with customary rules of interpretation of public international law". It is generally accepted that the principles codified in 
Articles 31 and 32 of the Vienna Convention are such customary rules.
23 
7.1.2  Standard of review 7.4.  Panels generally are bound by the standard of review set forth in Article 11 of the DSU, which 
provides, in relevant part: 
[A] panel should make an objective assessment of the matter  before it, including an 
objective assessment of the facts of the case  and the applicability of and conformity 
with the relevant covered agreements. (emphasis added) 
7.5.  Further to Article 11 of the DSU, Article 17.6 of the Anti-Dumping Agreement sets forth a 
specific standard of review applicable to anti-dumping disputes, namely: 
(i) in its assessment of the facts of the matter, the panel shall determine whether 
the authorities' establishment of the facts was proper and whether their evaluation of 
those facts was unbiased and objective. If the establishment of the facts was proper 
and the evaluation was unbiased and objective, even though the panel might have 
reached a different conclusion, the evaluation shall not be overturned; and 
(ii) the panel shall interpret the relevant provisions of the Agreement in accordance 
with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible 
interpretation, the panel shall find the authorities' measure to be in conformity with 
the Agreement if it rests upon one of those permissible interpretations. 
7.6.  The Appellate Body has stated that the "objective assessment" to be made by a panel 
reviewing an investigating authority's determination is to be informed by an examination of 
whether the agency provided a reasoned and adequa te explanation as to: (i) how the evidence on 
the record supported its factual findings; and (ii) how those factual findings supported the overall 
determination.
24 
7.7.  The Appellate Body has also stated that  a panel reviewing an investigating authority's 
determination may not undertake a de novo  review of the evidence or substitute its judgment for 
that of the investigating authority. A panel must limit its examination to the evidence that was 
before the agency during the course of the investigation and must take into account all such 
evidence submitted by the parties to the dispute.25 At the same time, a panel must not simply 
                                               
23 Appellate Body Report, Japan – Alcoholic Beverages II , p. 10. 
24 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS , para. 186. 
25 Ibid. para. 187. WT/DS473/R 
 
- 26 - 
 
  defer to the conclusions of the investigating authority. A panel's examination of those conclusions 
must be "in-depth" and "critical and searching".26 
7.1.3  Burden of proof 7.8.  The general principles applicable to the al location of the burden of proof in WTO dispute 
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert 
and prove its claim.
27 Therefore, as the complaining party, Argentina bears the burden of 
demonstrating that the EU measures it challenges are inconsistent with the provisions of 
the covered agreements that it invokes. The Appellate Body has stated that a complaining party 
will satisfy its burden when it establishes a prima facie  case, namely, a case which, in the absence 
of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of the complaining party.
28 It is generally for each party asserting a fact to provide proof 
thereof.29 
7.2  Terms of reference – European Union's request for a preliminary ruling 7.2.1  Introduction 
7.9.  On 24 November 2014, the European Union submitted a request for a preliminary ruling in 
which it objected to the inclusion of certain claims and measures in Argentina's panel request. In its request, the European Union argued that Argentina's panel request failed to identify the specific 
measure(s) at issue, failed to provide a brief summary of the legal basis of the complaint sufficient 
to present the problem clearly, and/or added claims that had not been included in Argentina's request for consultations.  
7.10.  Specifically, the European Union requested the Panel to find that: 
a. the references to "implementing measures and related instruments or practices" in 
paragraph 1(A) and footnote 7 of Argentina's panel request, and the reference to "related measures and implementing measures" in paragraph 1(B) of Argentina's panel 
request, fail to "identify the specific measures  at issue" as required by Article 6.2 of the 
DSU and, as a consequence, any claims with respect to these measures fall outside the scope of the Panel's terms of reference
30; 
b. the use of the term " inter alia " in section 2(A) of Argentina's panel request, in the 
description of the provisions of the covered ag reements allegedly violated by Article 2(5) 
of the Basic Regulation, fails to properly identify the legal basis of the complaint and to present the problem clearly and, as a consequence, the relevant claims are outside the 
Panel's terms of reference
31; 
c. paragraph 2(B)(6) of Argentina's panel request, to the effect that the Provisional and 
Definitive Regulations are inconsistent with  Article 9.3 of the Anti-Dumping Agreement 
and Article VI:2 of the GATT 1994, fails to properly identify the legal basis of the 
complaint and to present the problem clearly and, as a consequence, falls outside the Panel's terms of reference
32;  
d. the claim in respect of "related … practices" in paragraph 1(A) of Argentina's panel 
request (the paragraph that identifies Article 2(5) of the Basic Regulation as a measure at issue), refers to a measure that was not included in Argentina's consultations request, 
                                               
26 Appellate Body Reports, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 93; US – Lamb , 
paras. 106 and 107. 
27 Appellate Body Report, US – Wool Shirts and Blouses , p. 14. 
28 Appellate Body Report, EC – Hormones , para. 104. 
29 Appellate Body Report, US – Wool Shirts and Blouses , p. 14. 
30 European Union's requ est for a preliminary ruling, paras. 3-9. 
31 European Union's requ est for a preliminary ruling, paras. 11-13. 
32 European Union's requ est for a preliminary ruling, paras. 14-22. WT/DS473/R 
 
- 27 - 
 
  thereby expanding the scope of the dispute and changing the essence of Argentina's 
complaint and, as a consequence, falls outside the Panel's terms of reference33; 
e. an unnumbered paragraph inserted between paragraphs 2(B)(3) and 2(B)(4) of 
Argentina's panel request appears to set forth a new "as applied" claim in respect of 
Article 2(5) of the Basic Regulation that was not included in Argentina's consultations 
request and expands the scope of the dispute, and which, as a consequence, falls outside the Panel's terms of reference
34; 
f. the claim under Article 9.3 of the Anti-Dumpi ng Agreement against Article 2(5) of the 
Basic Regulation in paragraph 2(A)(3) of Argentina's panel request is a new claim that was not included in Argentina's request for consultations, expands the scope of the dispute and changes the essence of the compla int, and, as a consequence, falls outside 
the Panel's terms of reference
35; 
g. the claims under Article VI:1 of the GATT 1994 in paragraphs 2(A)(1) and 2(A)(2) of 
Argentina's panel request are new claims that were not included in Argentina's request 
for consultations, expand the original scope of the dispute and, as a consequence, fall 
outside the scope of the panel's terms of reference36; 
h. the claims in paragraph 2(A)(2) of Argentina's panel request that Article 2(5) of the 
Basic Regulation is inconsistent with the re quirement in Articles 2.2 and 2.2.1.1 of the 
Anti-Dumping Agreement that "the costs used  be associated with the production and 
sale of the product under consideration" are new claims that were not included in Argentina's request for consultations, expand the original scope of the dispute and, as a 
consequence, fall outside the scope of the Panel's terms of reference
37; and 
i. the claim under Article 2.1 of the Anti-Dumping Agreement in paragraph 2(B)(4) of 
Argentina's panel request concerning the amount for profits is a new claim that was not 
included in Argentina's request for consultations and, as a consequence, falls outside the 
scope of the Panel's terms of reference.38 
7.11.  Argentina responded to the European Union's request on 18 December 2014.39 The 
European Union submitted comments on Argentina's response on 19 January 2015 as part of its 
first written submission40 and both parties further commented on the matter as part of their 
subsequent submissions and statements before the Panel. In addition, China and Mexico submitted 
comments on the European Union's request as third parties.41  
7.12.  The European Union's request for a preliminar y ruling pre-dated Argentina's filing of its first 
written submission. Argentina submitted that the European Union's objections concerning "implementing measures and related instruments or practices", "related measures and 
implementing measures", the terms " inter alia " and "related practices", and the "as such" claim 
against Article 2(5) of the Basic Regulation based on Article 9.3 of the Anti-Dumping Agreement, were unnecessary because, at the time these obje ctions were made, Argentina had not yet made 
any submissions indicating that it was challenging measures on those bases.
42 The European Union 
subsequently contended in its first written submission that: 
Argentina has abandoned: (1) any claim against " related practices ", mentioned in 
Paragraph 1(A) and in Footnote 7 of Argentina's Panel Request; (2) any claim under 
an "inter alia " legal basis, mentioned in Paragraph 2(A) of Argentina's Panel 
                                               
33 European Union's requ est for a preliminary ruling, paras. 27-30. 
34 European Union's requ est for a preliminary ruling, paras. 31-35. 
35 European Union's requ est for a preliminary ruling, paras. 36-40. 
36 European Union's requ est for a preliminary ruling, paras. 41-44. 
37 European Union's requ est for a preliminary ruling, paras. 45-49. 
38 European Union's requ est for a preliminary ruling, paras. 50-54. 
39 Argentina's response to the European Union's request for a preliminary ruling. 
40 European Union's first writ ten submission, paras. 11-44. 
41 Mexico's third-party submission on the European Union's request for a preliminary ruling; China's 
third-party submission, paras. 4-14. 
42 Argentina's response to the European Union's requ est for a preliminary ruling, paras. 33, 42, 72, 78, 
and 80. WT/DS473/R 
 
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  Request; (3) the claim against Article 2(5) of the Basic Regulation based on Article 9.3 
of the Anti-dumping Agreement, mentioned in Paragraph 2(A)3 of Argentina's Panel Request; (4) any distinct " as applied " claim against Article 2(5) of the Basic 
Regulation, mentioned in the not-numbered paragraph between paragraphs 2(B)3 
and 2(B)4 of Argentina's Panel Request; (5) the claim against Article 2(5) of the Basic 
Regulation for the "second reason" mentioned in Paragraph 2(A)2 of Argentina's Panel Request, namely that the costs used are allegedly not "associated with the production 
and sale of the product under consideration"; and (6) the claim against the "profit 
determination" based on Article 2.1 of the Anti-Dumping Agreement, mentioned in Paragraph 2(B)4 of Argentina's Panel Request.
43 (emphasis original; fns omitted) 
7.13.  On the basis of that understanding, the European Union submitted that the Panel cannot 
examine or make any findings on those particular claims, and stated that it would "not address 
these claims further, because they are outside the scope of the present dispute".44 Argentina noted 
these statements of the European Union, and stated that "these issues appear to be moot and, in 
Argentina's view, the Panel therefore does not need to examine them any further".45 Therefore, we 
understand the parties to agree that there is no need for us to rule on these aspects of the European Union's request for a preliminary ruling. In light of Argentina's submissions and in the 
absence of claims being made or pursued in rela tion to these aspects of the European Union's 
request for a preliminary ruling, we consider them moot. Accordingly, we make no findings on these aspects of the European Union's request. 
7.14.  We also note that, in response to the Eu ropean Union's objection concerning "implementing 
measures and related instruments or practices" and "related measures and implementing 
measures" in paragraph 1(A), paragraph 1(B) and footnote 7 of Argentina's panel request, Argentina indicated that a ruling by the Panel woul d have no "practical implications for the dispute 
at issue".
46 The European Union responded that this "confirms that Argentina has abandoned these 
claims" and that its arguments pertaining to the other allegedly abandoned claims applied.47 In 
that context, and in view of our understanding that Argentina has not, in fact, pursued claims 
concerning "implementing measures and related instruments or practices", we consider these 
aspects of the European Union's request for a preliminary ruling to be moot, and will therefore make no findings on these aspects. 
7.15.  Below, we consider and resolve the remaining objections raised by the European Union in its 
request for a preliminary ruling.
48 
7.2.2  Objection concerning the claim of  inconsistency with Article 9.3 of the 
Anti-Dumping Agreement in paragraph 2(B)(6) of Argentin a's panel request 
7.16.  The European Union requests that we find paragraph 2(B)(6) of Argentina's panel request to 
be inconsistent with Article 6.2 of the DSU, and thus outside the scope of the Panel's terms of reference.
49 
                                               
43 European Union's first wr itten submission, para. 12. 
44 European Union's first writte n submission, paras. 13 and 14. 
45 Argentina's opening statement at the first meeting of the Panel, paras. 29-31. Argentina stated that 
"[f]or most of the claims concerned by this allegation, th e fact is not that Argentina has raised claims that it 
decided not to pursue, but that the European Union has raised procedural objections with regard to 
non-existent issues". (Argentina's second written submission, para. 6) 
46 Argentina's second written submission, para. 7. 
47 European Union's second written submission, para . 7 (referring to European Union's first written 
submission, para. 13). 
48 We note that, in its subsequent submissions to th e Panel, the European Union raises a jurisdictional 
objection with respect to Argentina's claims under Articl es 3.1 and 3.5 of the Anti-Dumping Agreement as they 
pertain to the EU authorities' evaluation of re turn on investments. Se e below, para. 7.389. 
49 European Union's request for a preliminary ruling, paras. 15-22. We note that the European Union 
stated in its first written submission that Argentina has clarified that this claim is conditioned upon the success of Argentina's claims under Article 2 and, therefore, that  Argentina's Article 9.3 claim "is of very limited value 
for the present dispute". The European Union nonetheless "invites the panel to cons ider whether the claim is 
properly within its terms of reference". (European Un ion's first written submission, paras. 41 and 42). We 
understand from this that the European Union persists with its jurisdictional objection with respect to this claim. WT/DS473/R 
 
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  7.2.2.1  Main arguments of the parties 
7.2.2.1.1  European Union 7.17.  The European Union submits four arguments in support of its assertion that 
paragraph 2(B)(6) of Argentina's panel request is inconsistent with the requirement in Article 6.2 
of the DSU to "provide a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly".
50 
7.18.  First, the European Union argues that panel requests must specify which specific 
subparagraph of a provision is alleged to be in fringed where the provision contains different 
subparagraphs containing different sets of obligations.51 Accordingly, the failure of Argentina to 
specify in paragraph 2(B)(6) which of the chapea u or three subparagraph of Article 9.3 of the 
Anti-Dumping Agreement is alleged to be infringed is inconsistent with Article 6.2 of the DSU.  
7.19.  Second, the European Union argues that the allegation in paragraph 2(B)(6) that it 
"imposed and levied anti-dumping duties in exce ss of the margin of dumping that should have 
been established" does not articulate clearly the exact claim that Argentina advances.52 For the 
European Union, this allegation could refer either to a challenge to the comparison between the 
anti-dumping duty and the margin of dumping (e.g . as a result of a numerical mistake in setting 
the anti-dumping duty), or to a challenge to the method of calculation of the margin of dumping 
itself.  
7.20.  Third, assuming arguendo  that the claim in paragraph 2(B)(6) pertains to the method of 
calculation of the margin of dumping itself, the European Union argues that it is unclear which aspect of this calculation is challenged by Argentina's claim.
53 In particular, the European Union 
points out that the determination of the dumping margin by the EU authorities was based on four 
separate components or aspects (the determination of the normal value, the determination of the export price, the comparison between the two, an d the analysis of certain requests by Argentine 
exporters), and that these are dealt with by the challenged measures in four different sections 
with four different titles. For the European Union, the failure to specify which component or aspect of the measures is challenged means that it cannot understand the scope of the challenge it faces.  
7.21.  Finally, assuming arguendo  that the claim in paragraph 2(B)(6) pertains to the fourth 
section of the challenged measures entitled "Dumping Margins", the European Union submits that this section discusses two different and distinct issues pertaining to requests submitted by Argentine exporters.
54 The failure of Argentina to specify which of those two issues are under 
challenge in paragraph 2(B)(6) falls short of the applicable standard under Article 6.2. 
7.2.2.1.2  Argentina 7.22.  Argentina contends that there is no gene ral requirement under Article 6.2 to refer to the 
specific paragraphs of a provision of the covere d agreements that is alleged to be infringed.
55 
Rather, according to Argentina, WTO jurisprude nce suggests that the question of whether a 
general reference to a treaty provision is adequate to meet the "sufficiency" requirement of 
Article 6.2 calls for a case-by-case assessment, taking into account the extent to which such 
reference sheds light on the nature of the obligation at issue.56 
7.23.  In the particular circumstances of this case, Argentina points to an alignment between the 
language used in paragraph 2(B)(6) of its panel request and the chapeau of Article 9.3 of the 
Anti-Dumping Agreement.57 In particular, the chapeau of Article 9.3 states that "the amount of the 
anti-dumping duty shall not exceed the margin of dumping as established under Article 2", and 
                                               
50 European Union's request for a preliminary ruling, paras. 15 -22; first written submission, 
paras. 39-42. 
51 European Union's re quest for a preliminary ruling, para. 16. 
52 European Union's re quest for a preliminary ruling, para. 17. 
53 European Union's re quest for a preliminary ruling, para. 19. 
54 European Union's requ est for a preliminary ruling, paras. 20 and 21. 
55 Argentina's response to the European Union's requ est for a preliminary ruling, para. 47. 
56 Argentina's response to the European Union's requ est for a preliminary ruling, para. 48. 
57 Argentina's response to the European Union's requ est for a preliminary ruling, para. 49. WT/DS473/R 
 
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  paragraph 2(B)(6) of Argentina's panel request states that there is a violation of Article 9.3 
"because the European Union imposed and levied an ti-dumping duties in excess of the margin of 
dumping that should have been established in ac cordance with Article 2". In the light of this 
textual alignment, Argentina submits that it is clear that the claim set out in paragraph 2(B)(6) of 
its panel request is directed at the chapeau of Ar ticle 9.3 of the Anti-Dumping Agreement. In this 
regard, Argentina cites the Appellate Body Report in Thailand – H-Beams , in which an explicit 
reference to the specific language of Article 3 of the Anti-Dumping Agreement was found to be 
sufficient to meet the requirements of Article 6.2,  without identifying the specific paragraphs of 
Article 3 alleged to have been infringed.58 Moreover, Argentina argues that the conclusion that the 
claim is directed at the chapeau is further supported by the fact that the claim relates at the same time to Article VI:2 of the GATT 1994.  
7.24.  In Argentina's view, the nature of the obligation in the chapeau of Article 9.3 of the 
Anti-Dumping Agreement clarifies that the claim in paragraph 2(B)(6) of its panel request could not be construed as pertaining to the method of calculating dumping margins, contrary to the 
argument of the European Union.
59 This is because the chapeau of Article 9.3, and Article 9 
generally, do not deal with the determination of dumping. Rather, they deal with the imposition 
and collection of anti-dumping duties.  
7.25.  In the light of its other claims concerning the determination of the dumping margin under 
Article 2 of the Anti-Dumping Agreement, Argentin a submits that its claim under Article 9.3 of the 
Anti-Dumping Agreement logically refers to the le vying of anti-dumping duties that exceed the 
margins of dumping that the European Union should have calculated without violating its 
obligations under Article 2.60 In any case, Argentina claims that the European Union has failed to 
demonstrate that any ambiguity in its panel request prejudiced the European Union's ability to defend itself.
61 
7.2.2.2  Arguments of the third parties  
7.26.  China  submits that there is no general and mandatory requirement to refer to a specific 
subparagraph of a WTO treaty provision, but ra ther, a panel should examine whether a general 
reference to a treaty provision meets the requirem ent under Article 6.2 on a case-by-case basis, 
taking into account the extent to which such refe rence sheds light on the nature of the obligation 
at issue.62 In China's view, the language of paragraph 2(B)(6) of Argentina's panel request 
indicates that the factual basis of the alleged inconsistency with Article 9.3 is that the anti-
dumping duties were levied in excess of the margins of dumping, which connected the challenged 
measure with the chapeau of Article 9.3. 
7.2.2.3  Evaluation by the Panel 
7.27.  Pursuant to Article 6.2 of the DSU, the request for the establishment of a panel must, 
inter alia , "provide a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly". A panel must determine whether a panel request is sufficiently clear on the basis 
of an objective examination of the panel request as a whole, as it existed at the time of filing, and 
on the basis of the language used therein63, that is, "'on the face' of the panel request".64 Parties' 
                                               
58 Argentina's response to the Europe an Union's request for a preliminary ruling, para. 50 (referring to 
Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China) , para 4.24, in turn referring to 
Appellate Body Report, Thailand – H-Beams , para. 90). 
59 Argentina's response to the European Union's requ est for a preliminary ruling, para. 53. 
60 Argentina's response to the European Union's re quest for a preliminary ru ling, para. 54. Argentina 
reiterated its position in para. 9 of its second written submission. 
61 Argentina's response to the European Union's requ est for a preliminary ruling, para. 57. 
62 China's third-party submission, para. 8. 
63 Appellate Body Report, EC and certain member States – Large Civil Aircraft , paras. 641 (referring to 
Appellate Body Reports, US – Carbon Steel , para. 127; US – Oil Country Tubular Goods Sunset Reviews , 
paras. 164 and 169; US – Continued Zeroing , para. 161; and US – Zeroing (Japan) (Article 21.5 – Japan) , 
para. 108), and 642). 
64 Appellate Body Report, US – Continued Zeroing , para. 161 (quoting Appellate Body Report, US – 
Carbon Steel , para. 127). WT/DS473/R 
 
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  submissions and statements during the panel proceedings cannot "cure" defects in the panel 
request.65  
7.28.   As a minimum requirement, the panel re quest must list the provision(s) of the covered 
agreement(s) claimed to have been violated.66 There may be situations, however, where such 
listing is not "sufficient to present the problem clearly", for instance, where the provisions contain 
multiple and/or distinct obligations.67 On the other hand, there may be situations where a general 
reference to a treaty provision is sufficient under Article 6.2.68 Thus, the determination of 
conformity with Article 6.2 must be undertaken on  a case-by-case basis, taking account of the 
nature of the measure(s) at issue, and the manner in which it is (or they are) described in the panel request, as well as the nature and scope of the provision(s) of the covered agreements 
alleged to have been violated.
69 
7.29.  Finally, in order to "present the problem cl early", a panel request must "plainly connect" the 
challenged measure(s) with the provision(s) claimed to have been infringed such that a respondent can "know what case it has to answer, and … begin preparing its defence".
70 
7.30.  With this understanding of the relevant principles, we now address the objection raised by 
the European Union with respect to the claim under  Article 9.3 of the Anti-Dumping Agreement set 
forth in paragraph 2(B)(6) of Argentina's panel request. 
7.31.  Paragraph 2(B)(6) of Argentina's panel request states that Argentina considers that the 
anti-dumping measures imposed by the Europe an Union on imports of biodiesel, and the 
underlying investigation in that regard, are inconsistent with: 
Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 because 
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-Dumping Agreement. 
The question before us is whether this text suffices to "provide a brief summary of the legal basis 
of the complaint sufficient to present the problem clearly". 
7.32.  The text of paragraph 2(B)(6) refers to Article 9.3 of the Anti-Dumping Agreement. That 
Article consists of a chapeau and three subparagraphs, each of which sets out different obligations. 
Taken in isolation, the reference to Article 9.3 in paragraph 2(B)(6) of Argentina's panel request may cause some confusion over which particular obligation contained therein is the object of the claim. However, paragraph 2(B)(6) contains an additional narrative referring to "anti-dumping 
duties in excess of the margin of dumping that should have been established in accordance with 
Article 2 of the Anti-Dumping Agreement". This narrative is clear enough to align it with the text of the chapeau of Article 9.3, which states that "[ t]he amount of the anti-dumping duty shall not 
exceed the margin of dumping as established under  Article 2". Thus, in our view, this additional 
narrative clarifies that the obligation in Article 9.3 at issue is that contained in the chapeau of the provision. Our understanding is further confirmed by the reference in paragraph 2(B)(6) of 
Argentina's panel request to Article VI:2 of the GATT 1994. That provision provides, in relevant 
part, that "a contracting party may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respec t of such product". The similarity between that 
provision and the chapeau of Article 9.3 of the Anti-Dumping Agreement provide a further 
indication that the reference to Article 9.3 in paragraph 2(B)(6) of Argentina's panel request 
concerns the obligation contained in the chapeau. 
                                               
65 Appellate Body Report, EC and certain member States – Large Civil Aircraft , para. 787 (referring to 
Appellate Body Reports, EC – Bananas III , para. 143; and US – Carbon Steel , para. 127). 
66 Appellate Body Reports, Korea – Dairy , paras. 123 and 124 (referring to Appellate Body Reports, 
Brazil – Desiccated Coconut , fn 21, p. 22, DSR 1997:I, p. 186; EC – Bananas III , fn 13, paras. 145 and 147; 
and India – Patents (US) , fn 21, paras. 89, 92, and 93); and US – Carbon Steel , para. 130. 
67 Appellate Body Report, China – Raw Materials , para. 220 (referring to Appellate Body Reports, Korea 
– Dairy , para. 124; and EC – Fasteners (China) , para. 598). 
68 Appellate Body Reports, US – Countervailing and Anti-Dumping Measures (China) , para. 4.17; US – 
Carbon Steel , para. 130 (referring to Appellate Body Report, Korea – Dairy , para. 124). 
69 Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China) , para. 4.17. 
70 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 162 (quoting 
Appellate Body Report, Thailand – H-Beams , para. 88). WT/DS473/R 
 
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  7.33.  Turning to the structure of Argentina's panel request, we note that paragraph 2(B)(6) of 
that request is part of a series of claims concerning the anti-dumping measures imposed by the European Union on imports of biodiesel from Argentina. In particular, it is preceded by claims under Article 2 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 pertaining to 
alleged failures in the calculation of the cost of production and in the construction of the normal 
value for the producers under investigation, as well as those pertaining to the fairness of the comparison between the export price and the normal value. It is in this context that Argentina 
subsequently claims in paragraph 2(B)(6) that "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-Dumping Ag reement." When read in this context, it is 
apparent that the claim in paragraph 2(B)(6) of  Argentina's panel request is premised on a 
number of other claims pertaining to Article 2 of the Anti-Dumping Agreement. In our view, it is 
sufficiently clear from this context that Argentina makes a claim in paragraph 2(B)(6) of its panel request that the alleged inconsistencies with Article 2 in the calculation of the margin of dumping 
led, in turn, to the levying of an amount of anti-dumping duty that exceeds the level at which the 
margin of dumping would have been established if  the disciplines of Article 2 had been properly 
observed.  
7.34.  For the foregoing reasons, we reject the European Union's request and conclude that the 
claim under Article 9.3 of the Anti-Dumping Agreement set forth in paragraph 2(B)(6) of Argentina's panel request falls within our terms of reference. 
7.2.3  Objection concerning the claims of  inconsistency with Article VI:1 of the 
GATT 1994 in paragraphs 2(A)(1) and 2(A)(2) of Argentina's panel request  
7.35.  The European Union submits that Argentina's claims under Article VI:1 of the GATT 1994 
against Article 2(5) of the Basic Regulation in paragraphs 2(A)(1) and 2(A)(2) of Argentina's panel 
request fall outside the scope of the Panel's terms of reference as they are new claims which were 
not included in Argentina's request for consultations, and which expand the scope of the dispute.
71 
7.2.3.1  Main arguments of the parties 
7.2.3.1.1  European Union 
7.36.  The European Union contends that Argentina's request for consultations did not contain any 
claims based on Article VI:1 of the GATT or any claims regarding Article 2(5) of the Basic Regulation based on the GATT 1994 more generally.
72 For the European Union, the claims under 
Article VI:1 set out in paragraphs 2(A)(1) and 2(A)(2) of Argentina's panel request expand the 
original scope of the dispute, and there are no facts that suggest that these new claims might 
reasonably be said to have evolved from the consultations.73 In particular, the European Union 
submits that nothing prevented Argentina from presenting the same claims in the request for 
consultations, as is evidenced by the fact that the request for consultations contains other claims regarding the same provision. Further, the Europe an Union asserts that the addition of these new 
claims is indicative of Argentina's view that this provision has a different scope to the provisions of 
the Anti-Dumping Agreement listed in its request for consultations, and thus, the "essence" of these respective provisions and claims is different.
74  
                                               
71 European Union's request for a preliminary ruling, paras. 41-44. We note that the European Union 
stated in its first written submission that Argentina has not developed its Article VI:1 of the GATT 1994 claims against Article 2(5) of the Basic Regulation in the course of the proceedings, and that Argentina's claims in this regard are reliant on its other claims pertaining to Articles 2.2.1.1 and 2.2 of the Anti-Dumping Agreement. The European Union adds that this being the case, the claims are of very limite d relevance for the present 
dispute. The European Union nonetheless invites the Panel to consider whether this claim is properly within its terms of reference. (European Union's first written su bmission, paras. 43 and 44). We understand from this 
that the European Union persists with its jurisdictional objection with respect to these claims. 
72 European Union's re quest for a preliminary ruling, para. 41. 
73 European Union's re quest for a preliminary ruling, para. 42. 
74 European Union's re quest for a preliminary ruling, para. 43. WT/DS473/R 
 
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  7.2.3.1.2  Argentina 
7.37.  Argentina first notes that it has limited the claims set out in paragraphs 2(A)(1) and 2(A)(2) 
of its panel request to Article VI:1(b)(ii) of the GATT 1994.75 In addition, Argentina submits that 
nothing prevents it from adding provisions that are identical in scope to an existing claim on which 
consultations were held.76 Argentina considers that the claim does not expand the scope of the 
dispute, and, in its view, a comparison of the text and context of that provision, and the provisions of the Anti-Dumping Agreement cited in its request for consultations, demonstrates that those sets 
of provisions do not differ in essence or scope.
77 Argentina draws on criteria mentioned by the 
panel in China – Broiler Products  to argue that there is a strong connection between the panel 
request and the request for consultations due to the obligations at issue (obligation to construct normal value on the basis of the cost of producti on of the producers, and cost in the country of 
origin) being the same, and the factual circumstances leading to the alleged violation (failure to 
allow, in the costs calculation, for the use of costs in the country of production, and failure to require that the costs be calculated on the basis of producers' records) being identical.
78 Argentina 
also submits that Article VI:1 of the GATT 1994 is cited in its request for consultations in respect of 
"as applied" claims that are similar to the "as such" claims at issue. On the basis of the foregoing, Argentina submits that "consultations were held" with the European Union on Article VI:1(b)(ii) of 
the GATT 1994 regarding Argentina's claims under paragraphs 2(A)(1) and 2(A)(2) of its panel 
request.
79 
7.2.3.2  Arguments of the third parties  7.38.  Mexico  submits that the Appellate Body has established that Articles 4 and 6 of the DSU do 
not require a precise and exact identity between  the request for consultations and the panel 
request with respect to the "legal basis" of the complaint.
80 According to Mexico, the Panel should 
look at whether the allegedly "new claims" actually  derive from claims previously identified by 
Argentina in the request for consultations, and should consider whether "some connection" exists 
between the respective claims.81 
7.2.3.3  Evaluation by the Panel 
7.39.  The European Union's objection concerns th e relationship between the claims set forth in 
Argentina's consultations request, on the one hand, and those set forth in its panel request, on the other. 
7.40.  Pursuant to Article 7.1 of the DSU, a panel's terms of reference are normally defined on the 
basis of the panel request made pursuant to Article 6.2 of the DSU. However, the request for 
consultations made under Article 4 of the DSU co nstitutes a prerequisite for the panel request.
82 
Articles 4 and 6 of the DSU "set forth a process by which a complaining party must request 
consultations, and consultations must be held, be fore a matter may be referred to the DSB for the 
establishment of a panel".83 Moreover, "consultations provide the parties an opportunity to define 
and delimit the scope of the dispute between them".84 As a result, the request for consultations 
circumscribes the scope of the panel request and, therefore, the panel's terms of reference.85 
7.41.  However, Articles 4 and 6 do not "require a precise and exact identity" between the specific 
provisions of the covered agreements identified in the request for consultations, and those 
                                               
75 Argentina's response to the European Union's requ est for a preliminary ruling, para. 81. 
76 Argentina's response to the European Union's requ est for a preliminary ruling, para. 83. 
77 Argentina's response to the European Union's requ est for a preliminary ruling, para. 85. 
78 Argentina's response to the Europe an Union's request for a preliminary ruling, para. 85 (referring to 
Panel Report, China – Broiler Products , para. 7.224). 
79 Argentina's response to the European Union's requ est for a preliminary ruling, para. 86. 
80 Mexico's submission on the Eu ropean Union's request for a prel iminary ruling, para. 9 (citing 
Appellate Body Report, Brazil – Aircraft , para. 131). 
81 Mexico's submission  on the European Union's request for a preliminary ruling, para. 11 (citing Panel 
Report, India – Agricultural products , para. 3.48). 
82 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 58. 
83 Appellate Body Report, Brazil – Aircraft , para. 131. 
84 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 54. 
85 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 137. WT/DS473/R 
 
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  identified in the panel request.86 This is because a complaining party may come to know of 
additional information during consultations – fo r example, it may develop a better understanding 
of the operation of a challenged measure – that could warrant revising the list of treaty provisions with which the measure is alleged to be inconsistent.
87 Thus, it is not necessary that the provisions 
referred to in the request for consultations be identical to those set out in the panel request, 
provided that the "legal basis" in the panel request may reasonably be said to have evolved from the "legal basis" that formed the subject of consultations.
88 In other words, the addition of 
provisions must not have the effect of changing the essence of the complaint.89  
7.42.  Paragraphs 2(A)(1) and (2) of Argentina's panel request provide, in relevant part: 
Argentina considers that Article 2(5) of the Basic Regulation is inconsistent as such 
with, inter alia , the following provisions of the Anti-Dumping Agreement, the 
GATT 1994 and the Marrakesh Agreement Esta blishing the World Trade Organization 
("Marrakesh Agreement"): 
1. Article 2.2 of the Anti-Dumping Agreement and Article VI:1 of the 
GATT 1994, because these provisions do not permit to adjust or establish the 
cost of production on the basis of data or information other than that in the country of origin. 
2. Articles 2.2, 2.2.1.1 of the Anti-Dumping Agreement and Article VI:1 of the 
GATT 1994 for two reasons: first, since these provisions require that the costs be calculated on the basis of the records kept by the producers under investigation when such records are in accordance with the generally accepted 
accounting principles of the exporting co untry and reasonably reflect the costs 
associated with the production and sale of the product under consideration and do not permit to adjust or replace the costs actually incurred by the producers 
under investigation by other costs simply because they are considered to be 
artificially low or distorted; secondly, since these provisions require that the costs used be associated with the production and sale of the product under 
consideration.  
7.43.  The corresponding paragraphs of Argentina's request for consultations appear to be 
paragraphs b(1) and (2), which set forth claims under Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreement. These two paragraphs in dicate that Argentina is seeking consultations 
with respect to: 
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 Community in that it establishes that 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 adjust ed 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. This measure appears to be inconsistent as such  with 
the following obligations of the European Union: 
1. Article 2.2 of the Anti-Dumping Agreement, which requires that the cost 
of production in the country of origin  be used to determine the margin of 
dumping on the basis of a comparison  between the export price and the 
production cost plus a reasonable amount for administrative, selling and general 
costs and for profits; 
                                               
86 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 138. 
87 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 138. 
88 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 138. 
89 Appellate Body Reports, Mexico – Anti-Dumping Measures on Rice , para. 137; US – Shrimp 
(Thailand) / US – Customs Bond Directive,  para. 293. WT/DS473/R 
 
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  2. Article 2.2.1.1 of the Anti-Dumping Agreement, which requires that costs 
normally be calculated on the basis of records kept by the exporter or producer under investigation … . (emphasis original; fn omitted) 
7.44.  Neither Article VI:1 nor any other provision of the GATT 1994 is mentioned in these 
paragraphs of Argentina's request for consultations.
90 
7.45.  As Article VI:1 of the GATT 1994 was added as a legal basis for the claims set out in 
paragraphs 2(A)(1) and 2(A)(2) of Argentina's panel request, we now consider whether the 
addition of this provision as a legal basis for those claims changes the essence of the complaint or 
whether the legal basis for these claims may reasonably be said to have evolved from the legal basis that formed the subject of consultations.  
7.46.  We first consider the texts of the provis ions at issue. Article VI:1 of the GATT 1994 
provides, in relevant part
91: 
[A] product is to be considered 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 … 
(ii) the cost of production of the product in the country of origin plus a 
reasonable addition for selling cost and profit . (emphasis added) 
7.47.  Articles 2.2 and 2.2.1.1 of the Anti-Dumpi ng Agreement provide, in relevant part, that: 
2.2 When there are no sales of the like prod uct in the ordinary course of trade 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 administrative, selling and general costs and for profits . 
… 
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, 
                                               
90 However, paragraph b(3) of Argentina's consultati ons request alleges that Article 2(5) of the Basic 
Regulation violates: 
Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization and Article 18.4 of the Anti-Dumping Agreement, since the European Union did not take all of the necessary measures to ensure conformity of its laws, regulations and administrative procedures 
with the provisions of the GATT 1994  and the Anti-Dumping Agre ement. (emphasis added) 
We also note that paragraphs (a) 1 and 2 of Argent ina's request for consultations include "as applied" 
claims under Article VI:1 of the GATT 1994 with respect to the anti-dumping measures imposed by the European Union on biodiesel from Argentina and the underlying investigation. These paragraphs indicate that Argentina is seeking consultations with respect to these measures and allege that they are inconsistent with: 
1. Article 2.1, 2.2 and 2.2.1.1 of the Anti-Dumping Agreement and Article VI:1 of 
the GATT 1994 , because the European Union did not calculate the costs on the basis of the 
records kept by the exporters or producers under  investigation and because the European Union 
did not properly determine the costs of production; 2. Article 2.1 and 2.2 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 , 
because in constructing the normal value, the European Union did not use the production cost in the country of origin … . (emphasis added) 
91 Before the Panel, Argentina clarified that the clai ms in paragraphs 2(A)(1) and 2(A)(2) of its panel 
request pertain not to Article VI:1 in its entirety, but rather, are limited to Article VI:1(b)(ii) of the GATT 1994. (Argentina's response to the European  Union's request for a preliminary ruling, para. 81). We must rule on the 
European Union's objection on the basis of the text of Argentina's panel request rather than on the basis of 
Argentina's representations before the Panel. Nonetheless, the narrative of paragraphs 2(A)(1) and (2) of its 
panel request makes it clear that Argentina's claims therein are limited to Article VI:1(b)(ii). WT/DS473/R 
 
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  provided that such records are in a ccordance with the generally accepted 
accounting principles of the export ing country and reasonably reflect the costs 
associated with the production and sale of the product under consideration . 
(emphasis added; fn omitted) 
7.48.  Based on our understanding of the foregoing extracts, we consider that there is a close 
correlation between the content – in terms of the obligations imposed – of Articles 2.2 and 2.2.1.1 
of the Anti-Dumping Agreement, on the one hand, and Article VI:1(b)(ii) of the GATT 1994, on the 
other. In particular, these provisions concern, inter alia , whether a product is to be considered as 
being introduced into the commerce of an importing country at less than its normal value by reference to the cost of production in the country of origin in instances where domestic prices are unavailable or unsuitable.  
7.49.  We next consider the texts of the claims in Argentina's request for consultations, on the one 
hand, and the corresponding claims in Argentina's panel request, on the other. As noted above, 
paragraph 2(A)(1) of Argentina's panel request specifically claims that Article 2(5) of the Basic 
Regulation is inconsistent with Article 2.2 of the Anti-Dumping Agreement and with Article VI:1 of 
the GATT 1994 on the basis that these provisions "do not permit to adjust or establish the cost of 
production on the basis of data or information other than that in the country of origin".
92  
7.50.  This can be juxtaposed against Argentin a's request for consultations. The consultations 
request alleges that whereas Article 2.2 of the An ti-Dumping Agreement "requires that the cost of 
production in the country of origin  be used to determine the margin of dumping"93, Article 2(5) of 
the Basic Regulation: 
[E]stablishes that 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.
94 
7.51.  Paragraph 2(A)(2) of Argentina's panel request claims that Article 2(5) of the Basic 
Regulation is inconsistent with Articles 2.2 an d 2.2.1.1 of the Anti-Dumping Agreement and with 
Article VI:1 of the GATT 1994, on the basis that these provisions: 
[R]equire that the costs be calculated on the basis of the records kept by the 
producers under investigation when 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 and 
do not permit to adjust or replace the costs actually incurred by the producers under 
investigation by other costs simply because they are considered to be artificially low or distorted; … [and] that the costs used be associated with the production and sale of 
the product under consideration.
95 
7.52.  This can be juxtaposed against the language  of paragraph b(2) of Argentina's consultations 
request, which alleges, for the same reasons as under paragraph b(1), that Article 2(5) of the Basic Regulation is inconsistent with Article 2.2.1.1 of the Anti-Dumping Agreement, which 
"requires that costs normally be calculated on the basis of records kept by the exporter or 
producer under investigation". 
7.53.  When these claims are compared, it is appare nt to us that they are sufficiently similar in 
terms of the alleged circumstances leading to the alleged violation and that the "essence" of these 
claims is the same. In particular, the claims under paragraph 2(A)(1) of the panel request and b(1) of the consultations request both concern the fact that Article 2(5) is inconsistent with an 
alleged prohibition against determining the cost of production on a basis other than data or 
information in the country of origin. The claims under paragraph 2(A)(2) of the panel request and 
                                               
92 WT/DS473/5, para. 2(A)(1). 
93 WT/DS473/1, para. b(1). (emphasis original) 
94 WT/DS473/1, chapeau of para. b. 
95 WT/DS473/5, para. 2(A)(2). WT/DS473/R 
 
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  under paragraph b(2) of the consultations request both take issue with the fact that Article 2(5) of 
the Basic Regulation allegedly makes it permissible to determine the cost of production on a basis other than the records kept by the producers, despite those records conforming to the specified requirements.  
7.54.  In view of the foregoing, we consider th at there is a close and clear relationship between 
the claims set forth in the request for consultations, on the one hand, and those included in the panel request, on the other, in terms of the obligations at issue, the provisions cited, the measure 
being challenged, and the alleged violation resulting from this measure. Therefore, in our view, the 
claims in the panel request may reasonably be said to have evolved from those in the request for consultations such that the essence of the disp ute has not been changed by the addition of 
Article VI:1 as a legal basis for the claims included in the panel request.
96  
7.55.  For these reasons, we conclude that these claims under Article VI:1 of the GATT 1994 do 
fall within our terms of reference. 
7.2.4  Objection concerning the claim of  inconsistency with Article 2.2 of the 
Anti-Dumping Agreement in paragraph 2( A)(2) of Argentina's panel request  
7.56.  The European Union initially requested that  the Panel find that the "as such" claims of 
inconsistency against Article 2(5) of the Basic Re gulation with the requirement in Articles 2.2 
and 2.2.1.1 of the Anti-Dumping Agreement that "the costs used be associated with the production 
and sale of the product under consideration" contained in paragraph 2(A)(2) of Argentina's panel request are new claims not included in Argentina's request for consultations and, as a result, fall outside the Panel's terms of reference.
97 Specifically, the European Union contended that these 
claims in Argentina's panel request introduce a new legal basis not found in Argentina's 
consultations request, namely, Article 2.2 of the Anti-Dumping Agreement, and further, that they 
introduce a new type of complaint, namely, the alleged use of costs not "associated with the 
production and sale of the product under consideration".98 As mentioned above, in its first written 
submission, the European Union appeared to take the view that Argentina had abandoned the claim against Article 2(5) of the Basic Regulation for the "second reason" mentioned in 
paragraph 2(A)(2) of Argentina's panel request, namely, that the costs used are allegedly not 
"associated with the production and sale of the product under consideration".
99 As we discuss 
above, the parties appear to concur that this aspect of the European Union's request for a preliminary ruling is moot.
100 However, we also note that, in its discussion of one of the objections 
that were not moot, the European Union stated the following101: 
In these circumstances, the question of whether the claims against Article 2(5) of the 
Basic Regulation based on Article VI:1 of the GATT are within the Panel's terms of 
reference is of very limited value for the present dispute. For this reason, the 
European Union invites the Panel to consider whether this claim is properly within its terms of reference, but will not discuss the issue any further.[*] 
_______________ 
[*fn original]43 The same is true for Argentina' s reference to Article 2.2 of the 
Anti-Dumping Agreement, mentioned in Paragraph 2(A)2 of its Panel Request and in paragraph 133 of its First Written Submission.
 
7.57.  Thus, the European Union appears to call upon the Panel to consider whether Argentina's 
reference to Article 2.2 of the Anti-Dumping Agr eement in paragraph 2(A)(2) of its panel request 
insofar as it relates to the first basis specified in paragraph 2(A)(2) – namely, the EU authorities' 
                                               
96 The fact that Argentina could already have included a claim against Article 2(5) of the Basic 
Regulation under Article VI:1 of the GATT 1994 in light of , notably, the inclusion of an "as applied" claim under 
this provision challenging the anti-dumping measures  imposed by the European Union on biodiesel from 
Argentina does not, in our view, mean that the Article VI:1 claim against Article 2(5) of the Basic Regulation could not reasonably be said to have evolved from the co rresponding claims included in Argentina's request for 
consultations. 
97 European Union's requ est for a preliminary ruling, paras. 45-49. 
98 European Union's re quest for a preliminary ruling, para. 46. 
99 See above, para. 7.12. 
100 See above, para. 7.13. 
101 European Union's first written submission, para. 44 and fn 43 thereto.  WT/DS473/R 
 
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  alleged failure to calculate the costs on the basis of the records kept by the producers/exporters 
under investigation – is within the Panel's terms of reference.102 Accordingly, we now consider the 
European Union's objection in this respect.  
7.2.4.1  Main arguments of the parties 
7.2.4.2  European Union 
7.58.  With respect to its objection pertaining to  Article 2.2 of the Anti-Dumping Agreement, the 
European Union argues that the allegedly new claims in paragraph 2(A)(2) of Argentina's panel 
request expand the scope of the dispute and change  the essence of the complaint by introducing a 
new legal basis. In particular, the European Union argues that the corresponding portion of Argentina's request for consultations only included a claim based on Article 2.2.1.1 of the Anti-Dumping Agreement, rather than on Article 2.2.
103 The European Union submits that the 
addition of Article 2.2 could not "'reasonably be said to have evolved' from the consultations" given 
that Argentina was fully aware of the European Union's interpretation and application of Article 2(5) of the Basic Regulation at the time of its consultations request, and was aware of all 
the facts that would have allowed it to articulate this claim in its consultations request, particularly 
as Argentina's consultations request already included "as applied" claims alleging a violation of Article 2.2.
104 
7.2.4.2.1  Argentina 
7.59.  Argentina disagrees with the European Union's contention that it added a provision in the 
panel request. Argentina argues that paragraph 2(A)(2) of its panel request should not be read by reference to paragraph b(2) of its request for consultations only. Rather, Argentina submits that 
the issue of the calculation of costs for the purpose of the construction of normal value is also 
addressed in paragraph b(1) of its request for co nsultations, which refers to Article 2.2 of the 
Anti-Dumping Agreement. On this basis, Argentina argues that consultations were held on 
Article 2.2 and with respect to the same substantive obligations at issue. Moreover, Argentina 
argues, there is a clear and logical connection betw een Article 2.2.1.1 and Article 2.2, the former 
being a specific provision governing the calculation of costs for the construction of normal value 
while the latter concerns, among other matters, the construction of normal value and its 
components, including the cost of production. Argentina submits that consultations on the calculation of costs for the construction of normal value pursuant to Article 2.2.1.1 logically also cover the construction of normal value pursuant to  Article 2.2, when such costs are being included 
in the construction of normal value. Therefore, even assuming that Argentina had only referred to 
Article 2.2.1.1 in its consultations request, the inclusion of Article 2.2 in the panel request can "reasonably be said to have evolved" from the consultations.
105 
7.2.4.2.2  Arguments of the third parties  
7.60.  China  submits that Article 2.2 of the Anti-Dum ping Agreement was invoked to challenge 
Article 2(5) of the Basic Regulation in both the request for consultations and the panel request.106 
Thus, it appears to China that Argentina has not added a new legal basis in the panel request, but 
has merely clarified or reformulated the connection between the challenged measure and the legal basis. Further, China submits that Articles 4.4 and 6.2 of the DSU set different requirements for the request for consultations and the panel request; in particular, it is sufficient for a consultations 
request to include an indication  of the legal basis for the complaint. Therefore, the terms "which 
requires" in the consultations request, in contrast with the terms "because" or "for two reasons" 
                                               
102 Moreover, we recall that the Appellate Body has stated that "the vesting of jurisdiction in a panel is a 
fundamental prerequisite for lawful panel proceedings … pa nels must deal with such issues – if necessary on 
their own motion – in order to satisfy themselves that they have authority to proceed". (Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 36) 
103 European Union's re quest for a preliminary ruling, para. 46. 
104 European Union's requ est for a preliminary ruling, paras. 45 and 46. 
105 Argentina's response to the Eu ropean Union's reques t for a preliminary ruling, paras. 87-94. 
106 China's third-party submission, para. 12. WT/DS473/R 
 
- 39 - 
 
  used in the panel request, suggest that Argentina's intention in the consultations request was not 
to "present the problem clearly" but just to indicate the legal basis of the claim.107 
7.2.4.2.3  Evaluation by the Panel 7.61.  As we have noted in the previous subsection, the claim set forth in paragraph 2(A)(2) of 
Argentina's panel request corresponds to the claim set forth in paragraph b(2) of Argentina's 
request for consultations. Hence, Argentina's panel request added a reference to Article 2.2 in a claim which already cited Article 2.2.1.1.  
7.62.  In light of the close relationship and – to  some extent – even identity between the measure 
that is being challenged, the grounds for the alleged violation, and the obligations and provisions involved, we are of the view that the Article 2.2 claim can reasonably be said to have evolved from the Article 2.2.1.1 claim set forth in the request for consultations.
108 In particular, with respect to 
the obligations at issue, we note that Article 2.2.1.1 is a subparagraph of Article 2.2 and serves to 
further refine the obligation set forth under that provision as it provides how the "cost of production in the country of origin" is to be determined. Moreover, the corresponding paragraphs 
of the request for consultations and of the panel request make it clear that Argentina takes issue 
in both documents with the fact that Article 2(5) of the Basic Regulation allegedly permits not constructing the cost of production on the basis of  producers' records. The language of Argentina's 
panel request clearly implies that the alleged violation of Article 2.2 is closely related to the alleged 
violation of Article 2.2.1.1.  
7.63.  Moreover, we note that Argentina's consultations request already included an "as applied"  
claim under Article 2.2 challenging the EU authorities' failure to calculate the costs on the basis of 
the records kept by the producers/exporters  under investigation similar to the "as such" claim to 
which the European Union objects. Argentina's consultations request also included an "as such" claim under Article 2.2 based on the requirement to construct the normal value using the cost of 
production in the country of origin . The fact that Argentina's consultations request already included 
these claims under Article 2.2, does not, in our view, mean that the scope of the dispute was broadened by the addition in its panel request of an "as such" claim under Article 2.2 challenging 
the failure to calculate the costs on the basis of the records kept by the producers/exporters  under 
investigation. In particular, in our view, the addition of a reference to Article 2.2 in a claim already listing Article 2.2.1.1 is indicative of a further refinement of the legal basis for the claim that was in the request for consultations. Thus, it does not follow that the addition of Article 2.2 in 
paragraph 2(A)(2) of Argentina's panel request could not reasonably have evolved from the 
corresponding claim in Argentina's request for consultations on the basis that this provision had already been cited in the request for consultations in another sense. 
7.64.  In light of the foregoing, we find that the claim of inconsistency with Article 2.2 of the 
Anti-Dumping Agreement set forth in paragraph 2(A)(2) of Argentina's panel request falls within our terms of reference. 
7.65.  Having considered the request of the European Union for a preliminary ruling on the terms 
of reference of the Panel, we now turn to address the "as such" and "as applied" claims of Argentina. 
7.3  Argentina's claims concerning whether Article 2(5), second subparagraph, of the 
Basic Regulation is inconsistent "as such" with Articles 2.2, 2. 2.1.1 and 18.4 of the 
Anti-Dumping Agreement, Article VI:1(b)(ii)  of the GATT 1994, and Article XVI:4 of the 
WTO Agreement 
7.3.1  Introduction  
7.66.  Argentina makes a number of claims pertaining to Article 2(5), second subparagraph, of the 
Basic Regulation, both "as such" and with respect to the application of this provision in the EU 
anti-dumping measures on biodiesel from Argentina.  
                                               
107 China's third-party submission, para. 13. 
108 We also refer, in this respect, to our considerations in section 7.2.3.3. WT/DS473/R 
 
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  7.67.  Argentina's claims raise complex questions pertaining to the interpretation of Articles 2.2 
and 2.2.1.1 of the Anti-Dumping Agreement and Ar ticle VI:1(b)(ii) of the GATT 1994 that have not 
been addressed previously by panels or the Appellate Body concerning the following issues: 
a. whether, under Article 2.2.1.1 of the An ti-Dumping Agreement, an investigating 
authority may find that a producer/exporter's records do not "reasonably reflect the 
costs associated with the production and sale of the product under consideration" on the ground that the records reflect costs (notably for inputs) that the authority considers to 
be abnormally or artificially low due to an alleged distortion; and 
b. whether an investigating authority may, under Article 2.2 of the Anti-Dumping 
Agreement and Article VI:1(b)(ii) of the GATT 1994, adjust or calculate the producer/exporter's costs of production by using information pertaining to prices 
prevailing on other markets than the market of the country of origin when it has been 
determined that a producer/exporter's records do not "reasonably reflect" the costs of production and sale. 
7.68.  In this section, we consider Argentina's claims that Article 2(5), second subparagraph, of 
the Basic Regulation is "as such" (i.e. independently of its application in specific instances), inconsistent with the covered agreements.
 We address Argentina's "as applied" claims in the 
following section of this Report. 
7.69.  With respect to its claims concerning Article 2(5), second subparagraph, of the Basic 
Regulation "as such", specifically, Argentina claims that:  
a. by providing that the authorities shall reject or adjust the cost data of the 
producers/exporters as included in their records when those costs reflect prices which 
are "abnormally or artificially low" because they are affected by an alleged distortion, 
Article 2(5), second subparagraph, of the Basic Regulation is inconsistent with 
Article 2.2.1.1 of the Anti-Dumping Agreement; and this violation in turn leads to a 
violation of Article 2.2 of the Anti-Dumping Agreement and of Article VI:1(b)(ii) of the GATT 1994;  
b. by providing that the costs shall be adjusted or established in certain cases "on any 
other reasonable basis, including information from other representative markets", Article 2(5), second subparagraph, of the Basic Regulation is inconsistent with Article 2.2 of the Anti-Dumping Agreement and Arti cle VI:1(b)(ii) of the GATT 1994; and 
c. as a consequence of these violations, 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.
109 
7.3.2  Relevant provisions of the covered agreements 
7.70.  Articles 2.2 and 2.2.1.1 of the An ti-Dumping Agreement provide as follows: 
2.2 When there are no sales of the like prod uct in the ordinary course of trade 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 administrative, selling and general costs and for profits. (fn omitted)  
… 
                                               
109 Argentina's first written submission, paras. 87, 133-134, 142, and 468-469; second written 
submission, para. 252. WT/DS473/R 
 
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  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 a ccordance with the generally accepted 
accounting principles of the exporting co untry and reasonably reflect the costs 
associated with the production and sale of the product under consideration. 
Authorities shall consider all available evid ence 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 have 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 cost 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.[*]
  
_______________ 
[*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 reasonably be taken into account by the authorities during the investigation. 
7.71.  Article VI:1 of the GATT 1994 reads, in relevant part: 
The contracting parties recognize that dumpin g, by which products of one country are 
introduced into the commerce of another country at less than the normal value of the 
products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the 
establishment of a domestic industry. For the purposes of this Article, a product is to 
be considered 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) … is less than … 
… (ii) the cost of production of the product in the country of origin plus a reasonable 
addition for selling cost and profit. 
7.3.3  Factual background 7.72.  Article 2 of the Basic Regulation provides, in relevant part: 
Article 2 
Determination of dumping A. NORMAL VALUE 
1. The normal value shall normally be based on the prices paid or payable, in the 
ordinary course of trade, by independ ent customers in the exporting country. 
However, where the exporter in the exporting country does not produce or does not 
sell the like product, the normal value may be established on the basis of prices of 
other sellers or producers. 
… 2. Sales of the like product intended for domestic consumption shall normally be used 
to determine normal value if such sales volume constitutes 5% or more of the sales WT/DS473/R 
 
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  volume of the product under consideration to the Community. However, a lower 
volume of sales may be used when, for example, the prices charged are considered representative for the market concerned. 
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 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 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 low, 
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 the 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 not available or cannot be used, on any other 
reasonable basis, including information from other representative markets. 
7.73.  Argentina challenges only the second subparagraph of Article 2(5) above and not any other 
part or provision of the Basic Regulation.
110 
7.3.4  Main arguments of the parties 
7.3.4.1  Argentina 7.74.  Argentina argues that the second subparagraph of Article 2(5) contains a rule that: 
[W]hen the costs associated with the production and sale of the product concerned 
are not reasonably reflected in the records of the producer concerned, that is, 
according to the European Union, when the prices of the raw materials included in the records of the exporters are considered as being abnormally or artificially low because 
the market is regulated or because of some  alleged distortion, then they must be 
adjusted or established on the basis of the costs of other producers in the same country, or on any other reasonable basis, including information from other 
representative markets.
111 
                                               
110 We use the terminology used by the European Union, which has re ferred to this provision as the 
"second subparagraph of Article 2(5)". Before the Panel, Argentina initially referred to the second 
subparagraph of Article 2(5) of th e Basic Regulation as the "second paragraph " of this provision, but later 
adopted the European Union's terminology. In addition, the European Union notes that the General Court of the European Union has referred to th e same subparagraph as the "second se ntence of the first subparagraph" 
of Article 2(5) of the Basic Regulation (the General Cour t refers to the first subparagraph of Article 2(5) as the 
"first sentence of the first su bparagraph" of this provision). 
111 Argentina's first written submission, para. 2. See also Argentina's first writ ten submission, para. 86. WT/DS473/R 
 
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  7.75.  Argentina adds that this rule is "reflected in the continued and consistent practice of the 
European Union"112, but indicates that it is not challenging this alleged consistent practice as a 
separate measure at issue.  
7.76.  In support of its interpretation of the second subparagraph of Article 2(5), Argentina 
submits evidence pertaining to the text of this provision, its legislative history, its consistent 
application by the EU authorities, and judgments of the General Court of the European Union. 
7.77.  With respect to the text of the provision at issue, Argentina argues that Article 2(5), first 
subparagraph, only repeats the general rule under Article 2.2.1.1 that when the records 
reasonably reflect the costs associated with the production and sale of the product under consideration and are in accordance with generally accepted accounting principles (GAAP), those records must be used. However, the first subparagraph does not lay down the criteria that must 
lead to the determination that the records do no t reasonably reflect the costs. Argentina submits 
that it is the second subparagraph of Article 2(5)  that gives meaning and content to the situations 
in which the records are to be found not to reasonably reflect the costs of production and sale of 
the product under investigation. According to Argentina, it is the second subparagraph that leads 
to the determination that records do not reasonably reflect costs if the prices for inputs are artificially or abnormally low due to an alleged distortion. This is clarified by the fact that the 
second subparagraph requires the authorities to adjust or establish the costs on any other 
reasonable basis, including information from othe r representative markets, where information from 
the domestic market cannot be used. Thus, Argentina argues, the second subparagraph of Article 2(5) provides the legal basis for disregarding the records of the producers in those 
situations.
113 Argentina also argues that Article 2(5), second subparagraph, establishes a 
mandatory rule in this respect: where this condition is met, then the second part of the sentence automatically applies, i.e. the recorded costs must  be adjusted or established on another basis, 
including potentially, "from other representative markets".
114 
7.78.  With respect to the legislative history115 of the second subparagraph of Article 2(5), 
Argentina submits that this subparagraph was introduced by Council Regulation 1972/2002 at the 
same time as the Russian Federation was granted full market economy status, with the purpose of 
allowing the EU authorities to continue to apply non-market economy techniques in investigations involving products from the Russian Federation. Argentina draws attention to Recital 4 of Council Regulation 1972/2002, which it submits sheds light on the meaning of Article 2(5), second 
subparagraph, by making it clear that it was added in order to provide a legal basis for the 
authorities to reject the cost data included in the records when those costs are found to be "artificially low" or "abnormally low" because they are affected by a "distortion" and to adjust or 
replace these costs by data which are not affected by such "distortion".
116 Argentina also refers to 
Article 2(3), second subparagraph, of Council Regulation 1972/2002, which was added to clarify what circumstances could be considered as constituting a "particular market situation". Argentina 
argues that, taken together, Recital 4 and the second subparagraph of Article 2(3) clarify that the 
opening phrase of the second subparagraph of Arti cle 2(5), viz. "[i]f costs associated with the 
production and sale of the product … are not reasonably reflected in the records", refers to situations where prices are abnormally or artificially low or affected by a distortion.  
7.79.  With respect to the consistent practice of the EU authorities in applying the second 
subparagraph of Article 2(5), Argentina argues that the EU authorities have followed the practice that if the prices of certain raw materials are, in their view, "abnormally or artificially low" in 
comparison with the prices in other markets, that means that the costs associated with the 
production and sale of the product under investigation are not reasonably reflected in the producer's records, notwithstanding the fact that  the records may have accurately reported the 
actual prices paid by the producers/exporters.  
7.80.  Argentina refers the Panel to four judgments of the General Court of Justice of the 
European Union in which the General Court considered issues pertaining to the application of 
                                               
112 Argentina's first written submission, para. 2. 
113 Argentina's second written submission, paras. 16-20. 
114 Argentina's first written submission, para. 55. 
115 Argentina refers to this evidence  as the "historical perspective". (A rgentina's first wr itten submission, 
section 4.1.2) 
116 Argentina's second written submission, paras. 27-28 and 33. WT/DS473/R 
 
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  Article 2(5).117 Argentina argues that these judgments, and particularly the judgment of the Court 
in Acron , confirm that the second subparagraph to Article 2(5) covers situations where prices are 
regulated or distorted.118 
7.81.  Argentina claims that Article 2(5), second subparagraph, is inconsistent with Article 2.2.1.1 
of the Anti-Dumping Agreement (and, as a consequence, with Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii)  of the GATT 1994) because it requires the 
EU authorities to determine that a producer's records do not reasonably reflect the costs of 
production in situations in which the records reflect prices which are artificially or abnormally low, 
by reference to prices prevailing in other markets, whereas Article 2.2.1.1 requires that that determination be solely made by reference to the costs actually incurred by the producer and reflected in its records.
119 In addition, Argentina submits that even if the authorities had the 
discretion alleged by the European Union, the mere fact that Article 2(5), second subparagraph, 
provides for the possibility to find that the records do not reasonably reflect the costs on the ground that costs are artificially or abnormally low would render it inconsistent with 
Article 2.2.1.1.
120  
7.82.  In addition, Argentina claims that Article 2(5), second subparagraph, is inconsistent with 
Article 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 as it provides 
that, where the costs of other producers or exporters in the same country are not available or 
cannot be used, the costs shall be adjusted or established on "any other reasonable basis, including information from other representative markets", i.e. it provides for the use of costs not in the country of origin in establishing a producer's costs of production. 
7.83.  By contrast, Argentina argues, Article 2. 2 of the Anti-Dumping Agreement requires that, 
when the margin of dumping is established by comparison with a constructed normal value, the c o m p a r i s o n  s h a l l  b e  m a d e  w i t h  " t h e  c o s t  o f  p r o d u c t i o n  i n  t h e  country of origin ".
121 Argentina 
submits that the term "shall" denotes an obligation, and the term "country of origin" refers to the 
exporting country. Article V1:1(b)(ii) of the GATT 1994 similarly refers to "the cost of production of 
the product in the country of origin".122 For Argentina, the "cost of production in the country of 
origin" refers to the "price to be paid for the act of producing" in the country of origin, which 
necessarily implies that the evidence or data  used are those in the country of origin.123 Assuming 
for the sake of argument that evidence outside the country of origin could be used, Argentina considers that adjustments would need to be made in order to ensure that it correctly reflects the 
situation in the country of origin
124, and it would need to be demonstrated how such evidence 
reflects the "cost of production" in the exporter's country of origin.125 On this basis, Argentina 
rejects what it considers to be an artificial distinction drawn by the European Union between the 
"cost" and the "evidence", whereby evidence from outside the country of origin could be used to 
determine the cost of production in the country of origin. 
7.84.  In this respect, Argentina argues that in Article 2(5), second subparagraph, the "information 
from other representative markets" constitutes the evidence which is used to determine the cost of 
production. However, the mere fact that evidence  is used "for the purposes" of determining the 
"cost of production in the country of origin" does not demonstrate that such evidence reflects the situation in the country of origin. Moreover, Argentina submits that the consistent practice of the 
EU authorities actually confirms the absence of a "connection" or "nexus" between the evidence 
                                               
117 Argentina's first written submission, paras. 80-85; response to Panel question Nos. 23 (para. 59), 26 
(para. 81), and 35 (para. 99). 
118 Argentina's first written submission, para. 85. 
119 See below, paras. 7.186-7.191 for a more detailed summary of Argentina's arguments on the 
interpretation of Article 2.2.1.1. 
120 Argentina's opening statement at the first meeting of  the Panel, para. 74; resp onse to Panel question 
No. 24, para. 69; second written submission, paras. 147-149. 
121 Argentina's first written submission, para. 138. (emphasis original) 
122 Argentina's first written submission, para. 139. 
123 Argentina's second written submission, para. 154 (referring to Panel Report, EC – Salmon (Norway) , 
para. 7.481). 
124 Argentina's second written submission, para. 156; response to Panel question No. 20, paras. 55-58. 
125 Argentina's second written submission, para. 158. WT/DS473/R 
 
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  used, namely the information from other representative markets, and the cost of production in the 
"country of origin".126 
7.85.  Argentina argues that, to establish that a measure is "as such" inconsistent with the 
covered agreements, it is not necessary to demonstrate that it leads to WTO-inconsistent results in 
each and every case. Rather, it is sufficient to demonstrate that the rule will necessarily lead to 
WTO-inconsistent results. Thus, Argentina considers that, whether Article 2(5), second subparagraph, grants discretion to the authorities or not is irrelevant; insofar as Article 2.2 
prohibits the construction of normal value on a basis other than the cost of production in the 
country of origin, the fact that Article 2(5), second subparagraph, provides for the use of a basis other than the cost of production in the country of origin renders that measure inconsistent with Article 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994.
127 
7.86.  In any event, Argentina argues, Article 2(5), second subparagraph, does not give the 
authorities "broad discretion" as is claimed by the European Union. Argentina submits that, under Article 2(5), second subparagraph, in every case where domestic information is not available or 
cannot be used, the authorities have to adjust or replace the costs on any other reasonable basis, 
including information from other representative markets.
128 Argentina argues that "any other 
reasonable basis" necessarily refers to information outside the country of origin129, and that "other 
representative markets" necessarily is not "the cost of production in the country of origin". 
Argentina asserts that the consistent practice of the EU authorities confirms the absence of discretion since, in the cases referred to by Argentina, where the authorities have found that prices were "artificially low" or "abnormally low" because of a distortion, they have used information 
other than information from the country of origin.
130 
7.3.4.2  European Union 7.87.  The European Union argues that, to succeed in its "as such" claims, Argentina must 
establish that Article 2(5) requires  the EU authorities to act inconsistently with the relevant 
provisions of the covered agreements in all cases.
131 According to the European Union, neither the 
first nor the second subparagraph of Article 2(5) of the Basic Regulation mandates the 
EU authorities to act in any particular manner but, quite to the contrary, both provisions allow the 
EU authorities discretion.132  
7.88.  The European Union submits that th e scope, meaning and content of the second 
subparagraph of Article 2(5) are clear "on its face ", and that therefore, the consistency of this 
measure with the covered agreements must be assessed on the basis of the text of the legal 
instrument alone.133 The European Union considers that Argentina attributes to the second 
subparagraph of Article 2(5) a meaning not found in its text.134 The European Union argues that it 
is clear from the text of Article 2(5) that the determination whether a producer's records 
"reasonably reflect" the costs of production and sales is made under the first subparagraph of Article 2(5), and not under the second subparagraph of that provision.
135 The European Union 
asserts that the second subparagraph only describes what the authorities can do when one of the 
provisos of the first subparagraph is not met, and in such situations, gives them alternative options for establishing or adjusting the costs of production. The European Union also submits that the text of Article 2(5) does not include the terms – "abnormally low", "artificially distorted", 
"reflect market values", "regulated market" – used by Argentina in describing the alleged 
measure; that the second subparagraph does not define the notion of records that "reasonably 
                                               
126 Argentina's second written submission, paras. 156-158. 
127 Argentina's second written submission, paras. 161-166. 
128 Argentina's second written submission, para. 149. 
129 Argentina's response to Panel question No. 99,  para. 66; comments on  the European Union's 
response to Panel question No. 101, para. 33. 
130 Argentina's second written submission, paras. 161-166. 
131 European Union's first written submission, paras. 184-187 (quoting from, inter alia,  Appellate Body 
Report, US – Carbon Steel (India) , para. 4.483); second written submission, paras. 38 and 82. 
132 European Union's opening statement at th e first meeting of the Panel, para. 61. 
133 European Union's first written submission, paras. 74 and 78 (quoti ng from Appellat e Body Report, US 
– Corrosion-Resistant Steel Sunset Review , para. 168, referring in turn to Appellate Body Report, US – Carbon 
Steel, para. 157). 
134 European Union's first writ ten submission, para. 71.  
135 European Union's first wr itten submission, para. 78. WT/DS473/R 
 
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  reflect costs"; and that it does not impose on the authorities the obligation to treat as 
"unreasonable" cost data that are "abnormally or artificially low" or "distorted".136 
7.89.  The European Union argues that even if the scope, meaning and content of the second 
subparagraph of Article 2(5) were not clear "on its face", quod non , none of the other evidence 
invoked by Argentina supports Argentina's reading of the measure at issue. 
7.90.  With respect to the legislative history, the European Union argues that the introduction of 
the second subparagraph in 2002 had no impact on  the scope, meaning or content of the terms 
"reasonably reflects costs" in Article 2(5) since those terms already existed in that Article and the 
EU authorities had determined that records did not reasonably reflect costs based on similar grounds in many cases even prior to that date.
137 The European Union also argues that Recital 4 of 
Council Regulation 1972/2002 and the second subparagraph of Article 2(3) are not relevant to the 
interpretation of the second subparagraph of Arti cle 2(5) as they pertain to only one of the two 
situations under the Basic Regulation where the authorities may construct the normal value, i.e. where there is a "particular market situation".
138  
7.91.  With respect to the evidence submitted by  Argentina on the "consistent practice" of the 
EU authorities applying the measure, the European Union argues that Argentina needs to establish that: (i) the practice forms an integral part of (i.e. is not distinct from) the measure itself and that 
it is necessarily applied in all instances; and (ii) that the practice is required by the measure and 
constitutes a binding requirement to apply the measure in the same way in all cases.
139 The 
European Union considers that Argentina fails to establish any of these requirements. Moreover, the European Union argues that the examples of al leged consistent practice of the EU authorities 
cited by Argentina do not support its interpretation because: (i) in the precedents cited by 
Argentina, the EU authorities invoke the first, rather than the second, subparagraph of Article 2(5) in the analysis of whether company records "reasona bly reflect" costs; (ii) Argentina cites too few 
examples and its examples mostly pertain to the i ssue of dual pricing of gas in Russia; and (iii) 
Argentina excludes cases where the EU authoritie s found that company records did not reasonably 
reflect costs on grounds other than the artificially low value of inputs.
140  
7.92.  The European Union argues that the judgmen ts of the General Court of the European Union 
cited by Argentina do not support Argentina's assertions because: (i) they make clear that the determination of whether company records "reasonabl y reflect" costs is made pursuant to the first 
rather than the second subparagraph of Article 2(5); and (ii) they confirm that Article 2(5) entitles 
– but does not require – the EU authorities to find that the records do not "reasonably reflect 
costs" if the prices are "abnormally or artificially low".
141 
7.93.  In sum, the European Union argues th at Article 2(5), second subparagraph, is not 
inconsistent with Article 2.2.1.1 of the Anti-Dumping Agreement because it does not govern the 
determination whether producers' costs are reasonably reflected in their records or provide criteria for the authorities to make such a determination, let alone require them to reach a determination 
that the costs are not reasonably reflected in a producer's records in the situations identified by 
Argentina. Moreover, the European Union considers that Article 2.2.1.1 does not require an authority to determine whether a producer's records "reasonably reflect" the costs of production and sale solely with reference to the costs actually incurred by that producer, but allows it to 
examine whether the costs themselves are "reasonable".
142  
7.94.  With respect to Argentina's claim under Article 2.2 of the Anti-Dumping Agreement, the 
European Union argues that Argentina misinterprets Article 2(5), second subparagraph, when it 
asserts that this provision establishes a mandatory rule. According to the European Union, this 
provision affords the EU authorities broad discretion in choosing between different options to establish or adjust the costs, imposes no limitation or direction as to what constitutes an "other 
                                               
136 European Union's first writ ten submission, paras. 79-87. 
137 European Union's first writ ten submission, paras. 89-92. 
138 European Union's first writ ten submission, paras. 93-98. 
139 European Union's first written submission, paras. 118 (quoting from Appellate Body Report, US – 
Carbon Steel (India) , paras. 4.460, 4.474, 4.476, 4.477, and 4.480), and 119-126. 
140 European Union's first written submission, paras. 100 and 102-105. 
141 European Union's first written submission, paras. 106-115. 
142 See below, paras. 7.194-7.201 for a more detailed summary of the European Union's arguments on 
the interpretation of Article 2.2.1.1 of the Anti-Dumping Agreement. WT/DS473/R 
 
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  representative market", and does not prescribe that the latter should be a market outside the 
country of origin.143 Thus, the European Union submits, the text of Article 2(5), the judgments of 
EU courts, and the EU authorities' determinations in prior investigations all show that Article 2(5), second subparagraph, does not require the authorities to use information from other countries in 
all cases, as it does not require them to engage in any particular conduct and, much less, in any 
conduct necessarily inconsistent with the covered agreements.
144  
7.95.  In addition, the European Union argues that, although Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1 of the GATT 1994 require that an investigating authority 
determine the costs of production in the country of origin, the evidence  t h a t  m a y  b e  u s e d  i n  
constructing these costs is not subject to this limitation.  
7.96.  In particular, in respect of Article 2.2 of the Anti-Dumping Agreement, the European Union 
submits that the determination of a firm's costs of production in a particular country will typically 
require evidence pertaining to that country, but it cannot be excluded that evidence relating to that determination might originate in other countries . For example, evidence of the cost of imports 
might be verified by means of invoices issued by exporters in other countries.
145 Thus, the 
European Union contends that there is a conceptual distinction between the "costs", on the one hand, and the "evidence" pertaining to the determination of those costs, on the other.
146 The 
European Union argues that support for the distinction between costs and the evidence pertaining 
to the determination of costs can be found in the context of Article 2.2. The European Union refers in particular to the second sentence of Article 2.2.1.1 in this regard. The European Union notes 
that whereas "costs" in Article 2.2 refers to "the country of origin", the requirement to consider "all 
available evidence" in Article 2.2.1.1 in the proper al location of such costs is not restricted in that 
way
147, and that Article 6.12 of the Anti-Dumping Agreement expressly provides that various 
groups outside the country of origin can provide information relevant to the investigation regarding 
dumping.148 The European Union argues that the conditional permission in Article 2.2.2 of the 
Anti-Dumping Agreement to calculate amounts for administrative, selling, and general costs using "any reasonable method" supports its understanding, because it implies that Article 2.2, as a 
whole, does not impose an absolute prohibition on the use of data on the cost of production from 
countries other than the country of origin.
149 
7.97.  In respect of Article VI:1(b)(ii) of the GATT 1994, the European Union submits that, 
pursuant to Article 17.6(i) of the Anti-Dumping Ag reement, a criterion of reasonableness applies to 
the evidence used by investigating authorities in establishing the exporter's costs in the country of 
origin.150 
7.3.5  Arguments of the third parties151 
7.98.  Australia  considers that the mandatory/discretionary distinction is relevant to the Panel's 
analysis of Argentina's "as such" claims in the present dispute. Australia refers to the Appellate Body Report in US – 1916 Act , which endorsed the approach developed by GATT panels 
that only legislation which mandates WTO-inconsistent conduct can be challenged "as such".
152 
Australia submits that this approach was re cently confirmed by the Appellate Body in US – Carbon 
                                               
143 European Union's first written submission, paras. 174-183; opening statement at the second meeting 
of the Panel, paras. 114-118; comments on Argentina's response to Panel question No. 99, paras. 87-91. 
144 European Union's first written submission, paras. 184-187. 
145 European Union's first written submission, para. 193. 
146 European Union's first written submission, paras. 193 and 194. 
147 European Union's first written submission, para. 194. 
148 European Union's response to Panel question No. 20, para. 28. 
149 European Union's first written submission, paras. 197 and 198; second written submission, 
paras. 136 and 137. 
150 European Union's first written submission, paras. 203 and 204. 
151 The third parties' arguments on the interpretation of Article 2.2.1.1 are summarized below, in the 
section addressing Argentina's "as applied" claims. In  addition, we note that some third parties made 
observations on Article 2.2 of th e Anti-Dumping Agreement insofar as it may serve as context to the 
interpretation and application of Article 2.2.1.1 of the Anti-Dumping Agreement. (China's third-party response to Panel question No. 13, paras. 28-31; Colombia's th ird-party submission, para. 20; Russian Federation's 
third-party statement, paras. 9-11; Turkey's third-party statement, paras. 10-12). Since those observations 
were not connected directly to the present claim, they are not reflected in this section. 
152 Australia's third-party response  to Panel question No. 19 (refe rring to Appellate Body Report, US – 
1916 Act, paras. 88-89). WT/DS473/R 
 
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  Steel (India) , in which the Appellate Body rejected "as such" claims on the basis that the 
challenged measure did not require  inconsistent conduct but instead was of a "discretionary 
nature".153 Australia further notes that Argentina does not challenge the European Union's practice 
of application of Article 2(5), but only the provision itself. In this regard, Australia considers that 
the Appellate Body's findings in US – Carbon Steel (India) suggest that the practice must not be 
distinct and separate from Article 2(5) and that it must require  the European Union to engage in 
inconsistent conduct.154 
7.99.  Australia submits that the "country of orig in" requirement in Article 2.2 does not preclude 
evidence from being obtained from outside the country concerned.155 However, the authorities 
should explain why the evidence is useful for providing a basis for comparison to determine dumping margins. 
7.100.  China  submits that, in view of the special link  between the first and second subparagraphs 
of Article 2(5), these two paragraphs simultaneo usly require the authority to make the same 
determination as to whether the company records "reasonably reflect" costs. China considers that, 
read together with Recital 4 of Council Regu lation 1972/2002, the second subparagraph of 
Article 2(3) and Recital 3 of the same Council Re gulation, the second subparagraph of Article 2(5) 
appears to require the investigating authority to re ject the records of the parties concerned on the 
ground that "prices are artificially low" or for reasons relating to the situation of the entire market 
caused by governmental policy interventions.
156 China argues that this reading is confirmed by the 
EU authorities' practice in applying Article 2(5), which shows that they apply the two subparagraphs simultaneously, and that in determining whether the records reasonably reflect the 
costs, they compare the producer's costs with hypothetical costs that would be borne by a 
producer in a theoretical market where the prices of relevant inputs were not affected by governmental policy interventions.
157  
7.101.  China argues that in order for a rule or norm of general and prospective application to be 
found to be inconsistent, "as such", with the Anti -Dumping Agreement, it is not necessary that it 
"mandate" a WTO-inconsistent outcome in every case; rather the complainant must provide 
evidence demonstrating that, in defined circumstances , the application of the impugned rule will 
necessarily lead to a violation of that Member's WTO obligations. China argues that Article 2(5), second subparagraph, appears necessarily to require the EU authorities to reject records of a producer/exporter that accurately account for the costs incurred by that producer/exporter for the 
sole reason that the recorded costs are "artificially low" compared to the hypothetical costs that 
would be incurred in a market unaffected by governmental policy interventions. This being the case, China argues, the impugned provision is in consistent with Article 2.2.1.1. China also 
considers that Article 2(5), second subparagraph, appears to require, in the same situations, the 
adjustment of the costs recorded in the producer/exporter's records on the basis of information outside the country of origin when the costs of other producers/exporters in the same country are 
also "artificially low" and other "reasonable" base s are not available. China submits that Article 2.2 
of the Anti-Dumping Agreement requires that the co st of production that may be used to construct 
normal value must be the cost "in the country of origin".
158 For China, evidence in the form of 
prices from outside the country of origin will not itself reflect costs in the country of origin.159 
China considers that by explicitly authorizing the EU authorities to act in violation of Article 2.2 by 
using information outside the country of origin, Article 2(5), second subparagraph, is "as such" inconsistent with Article 2.2 of the Anti-Dumping Agreement.
160 
                                               
153 Australia's third-party response  to Panel question No. 19 (refe rring to Appellate Body Report, US – 
Carbon Steel (India),  para. 4.483). Australia submits that the relevance of the mandatory/discretionary 
distinction is also supported by Appellate Body Reports, US – Corrosion-Resistant Steel Sunset Review, 
para. 89 and US – Section 211 Appropriations Act , para. 259;  and Panel Report, US – Section 301 Trade Act , 
para. 7.53. 
154 Australia's third-party respon se to Panel question No. 20. 
155 Australia's third-party respon se to Panel question No. 12. 
156 China's third-party submission, paras. 85-90. 
157 China's third-party submission, paras. 92-99. 
158 China's third-party submission, para. 121. 
159 China's third-party response to Panel question No. 12, para. 25. 
160 China's third-party submission, paras. 79-80 (quoting from Appe llate Body Report, US – Oil Country 
Tubular Goods Sunset Reviews , para. 172), and 100-108; third-party response to Panel question No. 19, 
para. 37. WT/DS473/R 
 
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  7.102.  Colombia  argues that a complainant bringing an "as such" claim must demonstrate that 
the challenged law has general and prospective application.161 Colombia refers to previous panel 
and Appellate Body reports that indicate that evidence in support of an "as such" claim is not limited to the text of the measure, but can include, as appropriate, decisions and jurisprudence of 
domestic courts on the meaning of such laws, doctrine issued by legal experts and examples of 
application of the challenged law.
162 Thus, Colombia argues, the Panel should take into 
consideration all the evidence submitted by the parties in examining Argentina's "as such" 
claims.163 
7.103.  Indonesia  submits that previous Appellate Body reports suggest that evidence submitted 
by Argentina in support of its "as such" claim beyond the text of the measure, including the legislative background, administrative practice and domestic court rulings, must be reviewed by 
the Panel.
164 Indonesia further submits that Recital 4 of Council Regulation 1972/2002 and the 
application of Article 2(5) in previous anti-dumping investigations support the above understanding of the scope and content of the challenged provision.
165  
7.104.  Indonesia considers that the second subparagraph of Article 2(5) of the Basic Regulation 
establishes a rule which mandates WTO-inconsistent conduct by the European Union and that it constitutes a WTO-inconsistent condition or requirement in the form of a "non-distortion" test not 
provided for in the Anti-Dumping Agreement or  in any of the other WTO covered agreements.
166 
Indonesia submits that this requirement has been "woven" into the requirement that the costs be 
"reasonably reflected" in the records of the investigated producer/exporter.167 Indonesia also 
submits that in case the producer/exporter's costs are found to be distorted, the EU authorities are 
required to replace or adjust them with prices from outside the country of origin.168  
7.105.  With respect to Argentina's claims unde r Article 2.2 of the Anti-Dumping Agreement and 
Article VI:1(b)(ii) of the GATT 1994, Indonesia submits that, once an investigating authority 
decides to construct the normal value under Article 2.2, it does not have the discretion to use third 
country prices or cost data.169 By unequivocally referring to the cost of production in the "country 
of origin", Article 2.2 expressly limits the cost of  production to be assessed on the basis of, and to 
be based on, costs that exist in the country where the investigated producer/exporter produces 
the product under consideration.170 The text and context of Article 2.2 do not permit any 
exceptions to this rule. For Indonesia, once out-of -country evidence is used, the actual cost of the 
producer/exporter in the country of origin is disregarded and replaced by the out-of-country 
evidence or cost.171 
7.106.  The  Russian Federation  notes that amendments to Articles 2(3) and 2(5) of the Basic 
Regulation were introduced simultaneously with the granting of full market economy status to the 
Russian Federation in 2002. The Russian Federation considers that these amendments were 
introduced to allow the EU authorities to use data from markets other than the country of origin for constructing the normal value. In particular, the amendment to Article 2(5) gave the 
EU authorities the right to reject or adjust costs reflected in the producers/exporters' records and 
to establish such costs based on "information from other representative markets". The Russian Federation argues that this practice is  similar to the EU authorities' treatment of 
non-market economies applied to the Russian Fede ration before it was granted market economy 
                                               
161 Colombia's third-party submission, paras. 8-10. 
162 Colombia's third-party submis sion, paras. 9-10 (referring to the Appellate Body Report, US – Carbon 
Steel, para. 157; and Panel Reports, Mexico – Anti-Dumping Measures on Rice , para. 6.26; and EC – IT 
Products , para. 7.108). 
163 Colombia's third-party su bmission, para. 12; third-pa rty statement, pa ra. 4; third-party response to 
Panel question No. 20, para. 10. 
164 Indonesia's third-party submission, para. 8 (referring to Appellate Body Report, US – Carbon Steel 
(India) , paras. 4.446 and 4.451). 
165 Indonesia's third-party submission paras. 9, 12,  14-15, and 23-32; third-party statement, para. 4; 
third-party response to Panel question No. 19, paras. 46-49. 
166 Indonesia's third-party submission, para . 16; third-party statement, para. 4. 
167 Indonesia's third-party submission, para . 16; third-party statement, para. 4. 
168 Indonesia's third-party submission, para . 17; third-party statement, para. 4. 
169 Indonesia's third-party submissi on, para. 50; third-party respon se to Panel question No. 12, 
paras. 33-36. 
170 Indonesia's third-party submission, para. 52. 
171 Indonesia's third-party submission, para. 51. WT/DS473/R 
 
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  status.172 The Russian Federation argues that the relevance of the mandatory/discretionary 
distinction is "highly questionable", because the distinction is not based on any provision of the covered agreements.
173 
7.107.  Saudi Arabia  submits that the ordinary meaning of Article 2.2 is unequivocal in that it 
only permits investigating authorities to construct the normal value on the basis of the "cost of 
production in the country of origin" and not on the basis of costs of production in a third country market or the world market.
174 For Saudi Arabia, this is reflective of the country-specific nature of 
an anti-dumping investigation, and is confirme d by the context afforded by Articles 2.2.1.1 
and 2.2.2, which suggest that the constructed cost  of production and the constructed amounts for 
administrative, selling and general costs and for profits must be based on data from the country under investigation and cannot be established by re ference to out-of-country benchmarks such as 
international reference prices.
175 
7.108.  The  United States  considers that to succeed in an "as such" claim, a complainant has to 
demonstrate that the measure at issue requires  an investigating authority to act in a 
WTO-inconsistent manner, and that if the measure can be applied in a WTO-consistent manner, 
there is no basis for finding a violation.176 The United States notes that in US – Carbon Steel 
(India) the Appellate Body found that the evidence submitted (which included, beyond the text of 
the measures, also judicial decisions, legislative history, and evidence of the application of the 
measure) did not "establish conclusively that the measure requires an investigating authority to consistently" act contrary to the WTO obligations.
177 Therefore, the Unites States submits, the 
Panel should consider whether Argentina has demonstrated that Article 2(5) of the Basic 
Regulation requires  that the EU authorities act in a WTO-inconsistent manner.178 The United States 
submits that if the text of the challenged law provides discretion to act in a WTO-inconsistent manner, the complainant must submit additional evidence in order to identify "elements requiring 
an investigating authority to engage" in WTO-inconsistent conduct.
179 In this regard, the 
United States notes the European Union's arguments that Article 2(5) expressly provides for discretion for the EU authorities to adjust costs an d that it does not require the EU authorities to 
depart from the producers' cost data. The United States considers that the practice of the 
application of a challenged measure can be reviewed in considering an "as such" claim, but the practice must demonstrate that the measure itself  mandates WTO-inconsistent action.
180 The 
United States takes the view that the additional  evidence submitted by Argentina does not show 
that the EU authorities are mandated to act in a particular manner.181  
7.109.  The United States submits that Article 2.2 does not limit the evaluation of record evidence 
to evidence obtained in the country of origin, and further, that revising particular elements of the 
cost calculation based on record evidence from outside the country of origin would not undermine 
the constructed normal value as a proxy for home market value.182 However, the United States 
notes that it is for the investigating authority to demonstrate, based on the record evidence, that 
such costs serve as an appropriate comparator or alternative source of data, and that such costs 
are only appropriate to the extent that they ai d in determining the cost of production in the 
domestic market.183 
                                               
172 Russian Federation's third-pa rty statement, paras. 4-7. 
173 Russian Federation's third-party response to Pane l question No. 19, paras. 9 and 10 (referring to 
Appellate Body Reports, US – Hot-Rolled Steel , para. 200; and US – Countervailing and Anti-Dumping 
Measures (China) , para. 4.101). 
174 Saudi Arabia's third-party submission, para. 25. 
175 Saudi Arabia's third-party submission, para. 29. 
176 United States' third-party subm ission, para. 5; third-party resp onse to Panel question No. 19, 
para. 34. 
177 United States' third-party submission, para. 7 (referring to Appellate Body Report, US – Carbon Steel 
(India) , para. 4.483). 
178 United States' third-pa rty submission, para. 8. 
179 United States' third-party respon se to Panel question No. 19, para. 35 (referring to Appellate Body 
Report, US – Carbon Steel (India) , para. 4.483). 
180 United States' third-party response to Panel question No. 20, para. 37. 
181 United States' third-pa rty submission, para. 6. 
182 United States' third-party response to Panel question No. 12, para. 25. 
183 United States' third-party response to Panel question No. 12, para. 26. WT/DS473/R 
 
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  7.3.6  Evaluation by the Panel 
7.3.6.1  Introduction 7.110.  Argentina challenges "as such", that is, independently of its application in specific 
instances, Article 2(5), second subparagraph, of the Basic Regulation as being inconsistent with 
several provisions of the Anti-Dumping Agreem ent and the GATT 1994. Argentina's challenge is 
limited to this second subparagraph of Article 2(5)  of the Basic Regulation and does not extend to 
the first subparagraph of the same provision.
184 In addition, while Argentina has referred to the 
EU authorities' consistent practice in applying the second subparagraph of Article 2(5), it has 
repeatedly made it clear that it only refers to this practice in support of its interpretation of the text of Article 2(5), second subparagraph, but does not challenge this alleged practice in and of itself.
185  
7.111.  Argentina has used different formulations in describing the scope, meaning and content of 
the challenged measure during these proceedings. While we would have preferred greater consistency in this regard, we do not consider that these variations amount to a failure on its part 
to articulate properly, with the requisite eviden ce, the precise content of the measure challenged, 
as the European Union alleges.
186  
7.112.  We understand the essence of Argentina's claims to be as follows:  
a. 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", Ar ticle 2(5), second subparagraph, of the Basic 
Regulation requires the EU authorities to dete rmine 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.
187 Argentina submits that this 
renders Article 2(5), second subparagraph, inconsistent with Article 2.2.1.1 of the 
Anti-Dumping Agreement, and as a consequence, with Articles 2.2 of the same Agreement and Article VI:1(b)(ii) of the GATT 1994. 
b. When the aforesaid determination is made, Article 2(5), second subparagraph, further 
requires the EU authorities to adjust or establish the costs on the basis of other information, including costs other than those prevailing in the country of origin. Argentina submits that this renders Article 2(5), second subparagraph, inconsistent with 
Article 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994. 
7.113.  Argentina explains that it uses 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. In addition, Argentina points out that these terms, and the 
terms "distorted or affected by a distortion" and "do not reflect market values or prices", which it uses in describing the measure at issue, are not included in the text of Article 2(5), second 
subparagraph, of the Basic Regulation, but have been used in the other evidence it submits to the 
Panel to support its understanding of the scope, meaning and content of this provision.
188  
                                               
184 Argentina's first written submission, para. 34; open ing statement at the first meeting of the Panel, 
paras. 47 and 69; and response to Panel question No. 23, para. 59. 
185 Argentina's response to Pane l question No. 23(c), para. 61. 
186 European Union's opening statemen t at the first meeting of the Pane l, paras. 53-60; second written 
submission, paras. 40-41 (referri ng to Appellate Body Report, Argentina – Import Measures , 
paras. 5.102-5.104). 
187 Argentina indicates that, under its interpretation of Article 2(5), se cond subparagraph, this provision 
imposes the following test: "the authorities must determine whether the costs reflect prices that are 'artificially low' or 'abnormally low' as a result of an alleged 'd istortion'". (Argentina's response to Panel question 
No. 26(b), para. 83) 
188 Argentina explains that the terms "affected  by a distortion" are found in Recital 4 
of Council Regulation 1972/2002; that the terms "abnormally  low" and "artificially low" have been used by the 
EU authorities in their "practice", and that the words "artificially low" are also used in Article 2(3) of the Basic 
Regulation to describe one type of circumstances in wh ich a "particular market situation" may be deemed to 
exist; and that it uses the terms "reflect market valu es and prices" in its submis sions by reference to the WT/DS473/R 
 
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  7.114.  The European Union takes the view that Argentina challenges two separate measures.189 
However, it is clear to us that Argentina challenges two related aspects of the same measure, namely Article 2(5), second subparagraph, of the Basic Regulation under two separate but related claims or groups of claims. For ease of refere nce, we hereafter refer to these claims as two 
separate "claims" advanced by Argentina. 
7.115.  Before we proceed with our analysis, we consider it useful to recapitulate the main points 
of disagreement between the parties with respect to the meaning and operation of the measure at 
issue as it relates to each of Argentina's two claims. 
7.116.  First, with respect to Argentina's first claim, which principally involves Article 2.2.1.1 of the 
Anti-Dumping Agreement, the European Union disput es that Article 2(5), second subparagraph, is 
the provision governing the determination whether the costs of production are "reasonably 
reflected" in the producer's records. The European Union argues that the relevant provision for this 
determination is the first, and not the second, subp aragraph of Article 2(5). Even with respect to 
such a determination under the first subparagraph of Article 2(5), the European Union contends 
that the EU authorities are not required to find that the costs are not "reasonably reflected" in the 
records in the situations identified by Argentin a (i.e. where the records reflect prices that are 
artificially or abnormally low due to a distortion). According to the European Union, the authorities 
are merely afforded discretion based on their view  of the facts and circumstances of each case. 
7.117.  With respect to Argentina's second claim, which involves Article 2.2 of the Anti-
Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994, the disagreement between the 
parties centres on "the discretion" afforded to the EU authorities to resort to information prevailing 
in "other representative markets", particularly in the situations identified by Argentina. According 
to Argentina, the reference to "information from  other representative markets" in Article 2(5), 
second subparagraph, mandates  the use of costs not prevailing in the country of origin. On the 
contrary, the European Union contends that th e provision grants wide discretion to the EU 
authorities to resort to various options when they have determined under the first subparagraph of Article 2(5) that the costs are not reasonably reflected in the records. 
7.118.  Although it considers that Article 2(5), second subparagraph, of the Basic Regulation, 
contains a rule or requirement, Argentina argues, in the alternative, that even if the authorities 
had the discretion alleged by the European Union, this provision would nonetheless be inconsistent with Articles 2.2.1.1 and 2.2 of the Anti-Dum ping Agreement and Article VI:1(b)(ii) of the 
GATT 1994. With respect to Article 2.2.1.1 of the Anti-Dumping Agreement, Argentina submits 
that even if Article 2(5), second subparagraph, only provided for the possibility – and did not 
require – that the authorities reject the records in situations where prices are artificially low or 
abnormally low, the mere possibility would render it inconsistent with Article 2.2.1.1. With respect 
to Article 2.2 of the Anti-Dumping Agreement an d Article VI:1(b)(ii) of the GATT 1994, the fact 
that Article 2(5), second subparagraph, provides for the use of a basis other than the cost of 
production in the country of origin renders that measure inconsistent with Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994.
190 The European Union 
considers that Argentina needs to establish that the measure mandates WTO-inconsistent action for its claims to succeed.
191 
7.3.6.2  General principles relevant to a pa nel's examination of "as such" claims and of 
municipal legislation 
7.119.  We begin our analysis by recalling the relevant principles established under WTO 
jurisprudence on the examination of the scope, cont ent and meaning of provisions of the municipal 
(i.e. domestic) legislation of a Member, under "as such" claims. 
                                                                                                                                               
criterion used by the EU authorities when Russian exporters were subject to the hybrid market economy 
treatment system before the Russian Federation was gr anted market economy status in 2002 and by reference 
to several cases in which the costs were described by th e EU authorities as reflecti ng "regulated prices which 
are far below market prices  in unregulated markets". (Argentina's response to Panel question No. 26, 
paras. 78-82) (emphasis original) 
189 European Union's first writ ten submission, paras. 63-66. 
190 See, e.g. Argentina's opening statement at the fi rst meeting of the Panel, para. 74; response to 
Panel question No. 24, para. 69; second written submission, paras. 147-149 and 162. 
191 See, e.g. European Union's first written submission, paras. 184-187; second written submission, 
paras. 38 and 82. WT/DS473/R 
 
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  7.120.  First, we note that the Appellate Body has emphasized that "as such" challenges to a 
Member's legislation are "serious challenges", particularly as Members are presumed to have enacted their laws in good faith.
192 We also note that, consistent with the generally applicable 
principles regarding the burden of proof applicable in WTO disputes, it is for the complainant to 
establish the WTO-inconsistency of provisions of domestic law.  
7.121.  In the recent US – Carbon Steel (India)  dispute, the Appellate Body explained that:  
With regard to the construction of munici pal law, the Appellate Body explained in US – 
Hot-Rolled Steel  that, "[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 legislation in assessing its consistency with WTO law".[*] As part of their duties under Article 11 of the DSU, panels have the 
obligation to examine the meaning and content of the municipal law at issue in order 
to make an objective assessment of the matter before it, including an objective assessment of the facts of the case and th e applicability and conformity with the 
covered agreements. This obligation under Article 11 means that panels must conduct 
their own objective and independent assessm ent of the meaning of municipal law, 
instead of deferring to a party's characterization of such law.[*]
193 
_______________ 
[*fn original]1115 Appellate Body Report, US – Hot-Rolled Steel , para. 200.  
[*fn original]1116 Appellate Body Report, India – Patents (US) , para. 66. 
7.122.  The Appellate Body has also emphasized that when a panel is called upon to interpret 
domestic legislation to decide on its WTO-consistency, the panel should undertake a "holistic assessment" of all relevant elements, including, for instance, the consistent application of the 
relevant domestic laws, pronouncements of domestic courts on the meaning of such laws, the 
opinion of legal experts, and the writings of recognized scholars.
194 
7.123.  In the recent US – Shrimp II (Viet Nam)  case, the Appellate Body explained that: 
In respect of the types of elements that are required to be considered in order to 
establish the content and meaning of municipal law, the Appellate Body has clarified that, in some cases, the text of the relevant legislation may suffice. In other cases, the complainant will also need to suppo rt its understanding of the content and 
meaning of the measure at issue with eviden ce beyond the text, such as evidence of 
consistent application of the measure, pronouncements of domestic courts, and the writings of recognized scholars.[*] Furthermore, the Appellate Body has held that, "in 
ascertaining the meaning of municipal law, a panel should undertake a holistic 
assessment of all relevant elements, starting with the text of the law and including, but not limited to, relevant practices of administering agencies."[*] An examination of 
such elements, including legal interpretations given by domestic courts or domestic 
administering authorities, may inform the question of whether a measure is consistent with a WTO Member's obligations under the covered agreements. In respect of the burden of proof, the Appellate Body has clarified that "[t]he party asserting that 
another party's municipal law, as such, is inconsistent with relevant treaty obligations 
bears the burden of introducing evidence as  to the scope and meaning of such law to 
substantiate that assertion."[*]
195  
                                               
192 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , paras. 172-173: 
In our view, "as such" challenges against a Member's measures in WTO dispute settlement proceedings are serious challenges. … The presumption that WTO Members act in good faith in the implementation of their WTO commitments is particularly apt in the context of measures 
challenged "as such". 
193 Appellate Body Report, US – Carbon Steel (India) , para. 4.445. 
194 Appellate Body Report, US – Carbon Steel (India) , para. 4.472 and fn 1157 (referring to Appellate 
Body Reports, US – Countervailing and Anti-Dumping Measures (China) , para. 4.101; and US – Carbon Steel , 
para. 157). 
195 Appellate Body Report, US – Shrimp II (Viet Nam) , para. 4.32.   WT/DS473/R 
 
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  _______________ 
[*fn original]184 Appellate Body Reports, US – Countervailing and Anti-Dumping Measures 
(China) , para. 4.101; US – Carbon Steel , para. 157; US – Carbon Steel (India) , para. 4.446. 
[*fn original]185 Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China) , 
para. 4.101. [*fn original]
186 Appellate Body Report, US – Carbon Steel (India) , para. 4.446 (quoting Appellate 
Body Report, US – Carbon Steel , para. 157, in turn referring to Appellate Body Report, US – 
Wool Shirts and Blouses , p. 14, DSR 1997:I, p. 335). 
7.124.  While the Appellate Body has stated that where the meaning of a provision is clear on the 
face of its text, the text of the relevant legislation may suffice to establish the content and meaning of municipal law, in recent disputes the Appellate Body has clarified that:  
[I]n order to conduct a "detailed examination"  of the measure at issue, and to engage 
in an "objective assessment of the matter", it 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 inconsistency 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 significance to establish a prima facie  case, this can only 
be determined after its probative value has been reviewed and assessed.
196 (emphasis 
added) 
7.125.  Our reading of these statements of the Ap pellate Body suggests to us that, depending on 
the probative value of the facts and the evidence before it, a panel may well be required to go 
beyond the text of the impugned measure regardless of how clear the text might be on its face and that a panel may be required to make a "holistic assessment" of all the relevant elements.
197 
In the present dispute, we understand Argentina to take the position that confining the analysis to 
the text of Article 2(5), second subparagraph, itself will not suffice to arrive at a proper interpretation of this provision. Argentina's interp retation of Article 2(5), second subparagraph, of 
the Basic Regulation relies on its reading of the text  of this provision, on the legislative history that 
led to its introduction, on an alleged consistent practice of the EU authorities in applying it, and on judgments of the General Court of the European Union. 
7.126.  With these principles in mind, and mindful 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.  
7.3.6.3  Argentina's first "as such" claim under 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 1994  
7.127.  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. 
7.3.6.3.1  Text of Article 2(5), second  subparagraph, of the Basic Regulation 
7.128.  With respect to its first claim, Argent ina's case is premised on its view that the 
EU authorities make the determination that the records do not "reasonably reflect" the costs 
pursuant to the opening phrase of the second su bparagraph of Article 2(5) ("If costs …"). The 
European Union disagrees and argues that th e determination whether a producer's records 
reasonably reflect the costs of production and sale of the product is made pursuant to the first 
subparagraph of Article 2(5) of the Basic Regulation. In addition, the European Union contends that neither the first nor the second subparagraph set forth the criteria for the EU authorities to 
make that determination. 
                                               
196 Appellate Body Report, US – Carbon Steel (India) , para. 4.454.  
197 Moreover, the Appellate Body has indicated that it  sees "no merit in the proposition … that a panel 
must limit itself, in considering a claim against legislation as such, exclusively  to the wording of legislation 
itself." (Appellat e Body Report, Dominican Republic – Import and Sale of Cigarettes , para. 112) (emphasis 
original) WT/DS473/R 
 
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  7.129.  Although Argentina initially contended that  the determination is governed by the opening 
phrase of Article 2(5), second subparagraph, Argentina later clarified that its position is that while Article 2(5), first subparagraph, is – or may be – the provision generally authorising authorities to reject data when that data does not reasonably reflect the costs of production, the second 
subparagraph of the Article is the real provision that identifies the situations where costs are 
artificially or abnormally low as a result of a distortion as constituting the basis for the determination that records do not reasonably reflect the costs. In other words, according to 
Argentina, the second subparagraph is the provision requiring the EU authorities to determine that 
the records do not "reasonably reflect" the costs when the costs included in the records are "artificially" or "abnormally low" as a result of a distortion.
198 
7.130.  The European Union has objected to this subsequent clarification of Argentina, alleging 
that it amounts to a "change [in] the factual basis" of Argentina's claims introduced for the first 
time in Argentina's responses to the Panel's questions after the second meeting.199 We decline to 
reject this clarification of its arguments by Argentina, as the European Union would have us do. 
Contrary to what the European Union suggests, the Working Procedures adopted by the Panel do 
not impose a time limit on the submission of arguments to the Panel, but only on the factual 
evidence  submitted to the Panel.200 In our view, the clarification is more properly regarded as a 
clarification or refinement of Argentina's argumentation, rather than as the introduction of a new 
"factual basis". In any event, the European Union has had the opportunity to respond to 
Argentina's "clarification", and has done so, such that due process has been preserved. 
7.131.  We now consider whether the text of Article 2(5) of the Basic Regulation supports 
Argentina's reading of that provision.201 In our view, it does not. Article 2(5) applies to the 
calculation of costs of production for purposes of: (i) applying the below-cost ("ordinary course of trade") test; or (ii) constructing the normal value on the basis of the costs of production. With 
respect to the latter, Article 2(3) provides for two separate grounds on which the investigating 
authority may be permitted to resort to a constructed normal value: (i) where there are no or insufficient sales in the ordinary course of trade; or (ii) where sales in the ordinary course of trade 
do not permit a proper comparison because of a particular market situation. Article 2(5) applies in 
both situations. The first subparagraph of Article 2(5) reproduces almost word for word the first sentence of Article 2.2.1.1. It sets out the sour ce of the data which is to be preferred in the 
construction of a producer's costs of production, i.e. the producer's records, and subjects this 
preference to two conditions: that the records be consistent with the generally accepted 
accounting principles of the exporting Member, an d that they reasonably reflect the costs of 
production. 
7.132.  The second subparagraph of Article 2(5) begins with a condition: "If costs associated with 
the production and sale of the product under investigation are not reasonably reflected in the records of the party concerned", followed by "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." Thus, the text of the second subparagraph of Article 2(5) strongly 
suggests that this provision takes effect following a determination under the first subparagraph 
that a producer's records do not reasonably refl ect the costs associated with the production and 
sale of the product under investigation. This is clear from the use of the word "[i]f", which clearly refers to the second condition under the first subparagraph. Thus, the plain text of Article 2(5), 
second subparagraph, does not support Argentina's contention that it governs the issue as to when 
the EU authorities are to reach the conclusion that the producer's records do not reasonably reflect the costs of production and sale of the product under investigation. On the contrary, on the face of 
                                               
198 Argentina's response to Panel qu estion Nos. 84, para. 10, and 88(b) , para. 30. In its response to 
Panel question No. 84, Argentina uses the conditional form ("even if the first subparagraph were to be 
regarded as including the authorizat ion for the authorities to conclude that the records do not reasonably 
reflect the costs, it is the second subparagraph which provides that such determination has to be made where 
costs are distorted") whereas in its response to Panel question No. 88(b), para. 30, Argentina affirmatively states that the first subparagraph "contains the general principle that the costs must be calculated on the basis of the records provided that it is shown that such re cords reasonably reflect the costs associated with the 
production and sale of the product under consideration". 
199 European Union's comments on  Argentina's response to Pane l question No. 84, para. 22. 
200 Panel's Working Procedures, Annex A-1, para. 8. 
201 Although Argentina challenges only the second subpa ragraph, in light of their close relationship, we 
consider it pertinent to consider the me aning and content of both subparagraphs. WT/DS473/R 
 
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  the language used therein, this is an issue that is governed by the first subparagraph of 
Article 2(5) of the Basic Regulation. We therefore agree with the European Union that the relevant 
determination is made under the first subparagraph of Article 2(5) and that the second subparagraph of the Article 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 investigation. 
7.133.  Moreover, we note 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. Argentina argues that the options that ar e given to the investigating authorities under the 
second part of the second subparagraph constitute or inform the reasons why information from the domestic market cannot be used to determine the costs of production.
202 By this, we understand 
Argentina to argue that the phrase " 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 requires the EU authorities to find that the producer's 
records do not reasonably reflect costs where they differ from costs in other representative markets. Argentina's argument disregards the fact that the phrase quoted above refers not only to 
"information from other representative markets", bu t also to the costs of producers or exporters in 
the exporting country, and to "any other reasonable basis".  
7.134.  In sum, Argentina would have us read the second subparagraph in a manner that is 
contrary to its text. We agree with the Euro pean Union that the second subparagraph of 
Article 2(5) only lays down what the authorities can do – and allows them to exercise 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 no t reasonably reflect the costs. We also find, as 
a matter of considerable significance to the mean ing 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"; "regulated market", "artificially distorted", etc. None of these terms are found in the text 
of the Article to be used by the EU authoritie s as criteria for determining whether the records 
reasonably reflect the costs of production and sale of the product under consideration. 
7.135.  We are therefore of the view that the text  of Article 2(5), second subparagraph, does not 
support Argentina's allegations with respect to th e scope, meaning, and content of that provision. 
Having reached these preliminary conclusions on the basis of the text we now consider the other evidence submitted by Argentina. We start with the legislative history pertaining to the 
introduction of the second subparagraph of Article 2(5). 
7.3.6.3.2  Legislative history pertaining to the inclusion of the second subparagraph of 
Article 2(5) in the Basic Regulation 
7.136.  Argentina relies on the legislative history that led to the introduction of the second 
subparagraph of Article 2(5) in support of its interpretation of this provision. Argentina refers in particular to: (i) Recital 4 of Council Regulation  1972/2002, which is the Regulation that added the 
second subparagraph to Article 2(5); (ii) the second subparagraph of Article 2(3), which was 
added at the same time as the second subparagraph of Article 2(5); and (iii) academic writings 
drawing a link between the introduction of th e second subparagraph and the granting, by the 
European Union, of market economy status to the Russian Federation. 
7.137.  Argentina submits that the introduction of the second subparagraph in Article 2(5) by 
Council Regulation 1972/2002 gave a specific meaning and content to the condition that the "costs associated with the production and sale of th e product under investigation are not reasonably 
reflected in the records of the party concerned", such that the EU authorities are required to 
conclude that the records do not reasonably reflect costs associated with the production and sale of the product under consideration where they find that the costs of the inputs reflect prices that 
are "abnormally or artificially low" in comparison to prices in other markets.
203  
                                               
202 Argentina's second written submission, paras. 19-22 and 63. 
203 Argentina's opening statement at the firs t meeting of the Panel, paras. 53-58.  WT/DS473/R 
 
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  7.138.  Recital 4 of Council Regulation 1972/2002, which explains the addition of the second 
subparagraph of Article 2(5) of the Basic Regulation, states as follows: 
I t  i s  c o n s i d e r e d  a p p r o p r i a t e  t o  g i v e  s o m e  g u i d a n c e  a s  t o  w h a t  h a s  t o  b e  d o n e  i f ,  
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 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 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.
204 (emphasis added) 
7.139.  In addition, Argentina refers to the seco nd subparagraph of Article 2(3), which was also 
introduced by Council Regulation 1972/2002 and which provides that: 
A particular market situation for the product concerned within the meaning of the 
preceding sentence may be deemed to exist, inter alia , when prices are artificially low, 
when there is significant barter trade, or when there are non-commercial processing arrangements.
205 
7.140.  Argentina submits that Recital 4, read together with the new Article 2(3), makes clear 
that, pursuant to Article 2(5), second subparagraph, when the costs are "artificially low" or 
"affected by a distortion", the costs must be adjusted or established on another basis. Argentina further submits that Recital 4 does more than merely identify the options available in case the 
records do not reasonably reflect the costs, as it also identifies the situations in which recourse to 
such options will be made, namely when costs are affected by a distortion.
206 Argentina submits 
that even though Recital 4 refers to situations in which normal value is constructed because of the 
existence of a "particular market situation", it is relevant for the purposes of interpreting 
Article 2(5), second subparagraph, as this provision applies not only in cases in which the authorities proceed to construct the normal value due to the existence of a "particular market situation", but also in cases in which the authorities construct normal value following a finding that 
there are no or insufficient sales in the ordinary course of trade.
207  
7.141.  It is clear from Recital 4 that the second subparagraph was added to Article 2(5) to give 
some guidance as to what has to be done if "pursuant to Article 2(5)" – which clearly refers to 
what is now the first subparagraph208 – "the records do not reasonably reflect the costs associated 
                                               
204 Council Regulation 1972/2002, (Exhibit ARG-5), Recital 4 (quoted in Argentina's first written 
submission, para. 37). 
205 Recital 3 of Council Regulation 1972/2002, (Exhibit ARG-5), explains the rationale for the 
introduction of the new subparagraph to Article 2(3): 
It 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 impe diments. As a result 
market signals may not properly reflect supply an d demand which in turn may have an impact on 
the relevant costs and prices and may also result in domestic prices being out of line with world-market prices or prices in other representa tive markets. Obviously, any clarification given 
in this context cannot be of an exhaustive nature in  view of the wide variety of possible particular 
market situations not permit ting a proper comparison. 
206 Argentina's response to Pane l question No. 84, para. 10. 
207 Argentina's response to Panel qu estion No. 29(a), paras. 93-94. 
208 We are not convinced by Argentina's argument that  these terms refer to Ar ticle 2(5) "without any 
further precision", as opposed to only to its first subpara graph. (Argentina's response  to Panel question No. 84, 
para. 9). At the time, Article 2(5) of the previous Regu lation had only one sentence, namely, the current first 
subparagraph of Article 2(5). Thus, we see me rit in the European Union's argument that: 
The text of Recital 4 shows that Article 2( 5) had already been the legal basis for the 
authorities' determination of whether the records reasonably reflected cost s, already before the 
introduction of the second subparagraph of Articl e 2(5). This is made clear by the fact that 
Recital 4 does not state that the purpose of the introduction of the second subparagraph was to WT/DS473/R 
 
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  with the production and sale of the product under consideration", before proceeding to list what 
sources may be used in so doing, essentially repeating the language contained in the second subparagraph. This is consistent with our read ing of the second subparagraph of Article 2(5) 
above, namely, that it applies only after the EU authorities have determined that the producer's 
records do not reasonably reflect the costs of prod uction and sale of the investigated product, and 
that it governs how the EU authorities are to establish the cost of production in such a situation.  
7.142.  We consider next the second subparagraph of Article 2(3). This new subparagraph 
provides guidance as to the meaning of the terms "particular market situation" in the first 
subparagraph of the same Article. It provides that  such a "particular market situation" may exist 
"when prices are artificially low, when there is  significant barter trade, or when there are 
non-commercial processing arrangements". Reading the second subparagraph of Article 2(3) in 
conjunction with Recital 4 suggests that, when they determine that a particular market situation 
exists on the basis of the existence, inter alia , of "artificially low" prices due to a distortion, the 
authorities should establish or adjust the costs of a producer on a basis that is not affected by that 
distortion. However, it is not at all apparent from the text of Article 2(3), even read in conjunction 
with that of Recital 4, firstly, that it applies to Article 2(5) and secondly, that these considerations govern the determination that the costs of production are not "reasonably reflected" in the 
producer's records.  
7.143.  Hence, neither Recital 4 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 subparagraph of Article 2(5).
209, 210 
7.144.  Argentina also argues that the modifications made to Articles 2(3) and 2(5) of the Basic 
Regulation by Council Regulation 1972/2002 sought to  enable the EU authorities to continue using 
non-market economy techniques vis-à-vis  the Russian Federation at the same time as the 
European Union granted the Russian Federation full market economy status. Argentina refers us to 
an article published in a law journal and to excerpts from a book. Argentina also comments on an 
article submitted to the Panel by the European Union.211 The authors of these articles express a 
                                                                                                                                               
provide, for the first time, to the investigating authorities the power to determine whether the 
records reasonably reflect costs. Recital 4 treats this legal authority as a given on the basis of 
the pre-existing form of Article 2(5) and states that the addition of the second subparagraph to Article 2(5) simply gives guidance on the sources to be used in order to identify the relevant 
data, when the company records cannot be used . This confirms that the legal basis for the 
determination of whether the records reasonably  reflect costs is the first subparagraph of 
Article 2(5), which is the only provision that existed prior to the addition of the second subparagraph and the adoption of Recital 4. (Eur opean Union's opening statement at the second 
meeting of the Panel, para. 28) (emphasis original) 
209 In addition, Argentina submits as evidence what  appears to be the initial European Commission 
proposal for the amendments to the Basic Regulati on that would become Council Regulation 1972/2002, and 
which contains an "Explanatory Memorandum" by th e European Commission to  explain the proposal. 
(European Commission, Proposal for a Council Regula tion further amending Council Regulation (EC) 
No. 384/96 on the protection against dumped imports from countries not members of the European Communities, COM(2002)467 final, 31 December 2002, (Exhibit ARG-57), discussed in Argentina's response to Panel question No. 84, para. 11 and fn 13). The European  Union objects to Argentina's submission of this 
exhibit. (European Union's comments on Argentina's resp onse to Panel question No. 84, para. 16). We do not 
find it necessary to decide on the European Union's objection given that the Explanatory Memorandum merely 
states – in different terms – the same explanations as are provided in Council Regulation 1972/2002. 
210 In light of this conclusion, we do not find it necessary to consid er in any more detail Argentina's 
argument that Recital 4 and/or the second subparagraph of Article 2(3) of the Basic Regulation are relevant to the interpretation of Article 2(5) as this provision applies not only in cases when the authorities proceed to construct the normal value on the basis of the existence of a "particular market situ ation", but also when the 
authorities determine to do so on the basis that there are no, or that are insufficient, sales of the investigated product in the ordinary course of trade on the domestic market.  
211 Argentina's first written submission, para. 43 (q uoting from Edward Borovikov and Bogdan Evtimov, 
"EC's Treatment of Non-Market Economies in Anti-Dum ping Law: Its History: An Evolving Disregard of 
International Trade Rules; Its State of Play: Inconsistent with the GATT/WTO?" Revue des Affaires 
Européennes , 2002, pp. 875 – 896, (Exhibit ARG-6), p. 888; and Olesia Engelbutzeder, EU Anti-Dumping 
Measures Against Russian Exporters – In View of Russian Accession to the WTO and the EU Enlargement 2004 , 
pp. 159 – 160, (Exhibit ARG-7)); second written submission, paras. 29-30 (referring to Tietje et al., "Cost of WT/DS473/R 
 
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  personal view that by virtue of Article 2(3), se cond subparagraph, the EU authorities might extend 
the non-market economy techniques to market economies as well. However, we consider it particularly relevant that the authors of these articles do not suggest that the 2002 amendments 
to the Basic Regulation require that the EU authorities conclude that the records do not 
"reasonably reflect" costs where prices are artificia lly low, but merely suggest that it enables them 
to do so. More importantly, they do not suggest th at it is the second subparagraph of Article 2(5) 
that governs the determination whether costs are re asonably reflected in a producer's records.  
7.3.6.3.3  Alleged consistent pr actice of the EU authorities 
7.145.  We now turn to Argentina's allegations concerning the alleged consistent "practice" of the 
EU authorities in applying Article 2(5), second subparagraph. We recall that Argentina does not challenge the alleged consistent practice in and of itself as a measure at issue but only relies on 
this alleged consistent practice as evidence in support of its interpretation of Article 2(5), second 
subparagraph. Therefore, we consider whether this alleged practice sheds light on the meaning of the impugned provision. 
7.146.  Argentina refers us to decisions of the EU authorities in a series of anti-dumping 
proceedings, Potassium Chloride from Belarus, Russia or Ukraine
212, Seamless Pipes and Tubes of 
Iron or Steel from Croatia, Romania, Russia and Ukraine213, Solutions of Urea and Ammonium 
Nitrate from inter alia Russia and Algeria214, Ammonium Nitrate from Russia215, Ammonium Nitrate 
from Ukraine216, Urea from Russia217, Urea from, inter alia, Croatia and Ukraine218, Certain Welded 
Tubes and Pipes of Iron or Non-Alloy Steel from inter alia Russia219, and the investigation 
concerning imports of biodiesel from Argentina and Indonesia220 which is the subject of Argentina's 
"as applied" claims in the present dispute. 
7.147.  Having reviewed the decisions of the EU au thorities cited by Argentina, we find that they 
do evidence a certain pattern of the EU authoritie s concluding that the costs of production of the 
product under investigation were not reasonably re flected in the records of a producer/exporter in 
situations in which the prices of inputs (particularly energy) were lower than world prices, prices in third country markets, the cost of production of the input, or the price of the same input when 
exported from the country of origin (e.g. the Russian Federation). However, we also note that in 
almost all these cases, the input or energy pr ices were set and regulated by the government, 
which raises in our view doubts as to whether they can be regarded as establishing a "consistent practice" or as convincing evidence that Article 2(5), second subparagraph, mandates the 
authorities to disregard the producer's actual cost s in every case in which the authorities find the 
input prices to be artificially low.
221, 222  
                                                                                                                                               
Production Adjustments in Anti-Dumping Proceedings", Journal of World Trade , 45, No. 5 (2011), 
pp. 1071-1102, (Exhibit EU-8)). 
212 Council Regulation 1891/2005, (Exhibit ARG-8); Council Regulation 1050/2006, (Exhibit ARG-9). 
213 Council Regulation 954/2006, (Exhibit ARG-10); Council Regulation 812/2008, (Exhibit ARG-11); 
Council Implementing Regulation 1269/2012, (Exhibit ARG-12). 
214 Council Regulation 1911/2006, (Exhibit ARG-13); Council Regulation 238/2008, (Exhibit ARG-14); 
Council Implementing Regulation 1251/2009, (Exhibit ARG-15). 
215 Council Regulation 236/2008, (Exhibit ARG-16); Council Regulation 661/2008, (Exhibit ARG-17). 
216 Council Regulation 237/2008, (Exhibit ARG-18). 
217 Council Regulation 907/2007, (Exhibit ARG-19). 
218 Council Regulation 240/2008, (Exhibit ARG-20). 
219 Council Regulation 1256/2008, (Exhibit ARG-21). 
220 Definitive Regulation, (Exhibit ARG-22), p. 2. 
221 In some of the cases cited by Argentina, the EU authorities reach the conclusion that the prices for 
the input did not reasonably reflect the cost of production for that  input  rather than the cost of production of 
the product under investigation. (Council Regulation 1891/2005, (Exhibit ARG-8), Recital 31; Council Regulation 1050/2006, (Exhibit ARG-9), Recital 54)  
222 We do not find it relevant to our consideration of  Argentina's claims that the EU authorities may in 
some instances have found that company records did no t reasonably reflect the co sts on grounds other than 
those that are alleged by Argentina, i. e. the artificially low value of the ra w materials or inputs. We recall that 
"[w]hat Argentina is claiming is that the second subpa ragraph of Article 2(5) re quires the authorities to 
conclude that the records do not reasonably reflect the co sts if they find that the costs of the inputs reflect 
prices that are 'abnormally low' or 'artificially low' be cause of an alleged distortion on the domestic market", 
and that Argentina is not claiming that these constitute the only reason that lead the EU authorities to reach 
such a conclusion. (Argentina's opening statement at the first meeting of the Pa nel, para. 61; see also idem 
at 73) WT/DS473/R 
 
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  7.148.  In any event, we do not consider it ne cessary to examine at any greater length whether 
the examples of application cited by Argentina can properly be characterised as reflecting, or be 
constitutive of, a consistent "practice" of the EU authorities. This is because the decisions cited by Argentina do not establish, or even suggest, that  the second subparagraph of Article 2(5) is the 
provision pursuant to which these 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 Arge ntina'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.
223 In sum, the determinations submitted to our attention by Argentina do not 
undermine our preliminary conclusion, reached abov e 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).224  
7.3.6.3.4   Judgments of the General Court of the European Union interpreting the 
measure at issue 
7.149.  In support of its interpretation of the second subparagraph to Article 2(5), Argentina 
submits evidence pertaining to four judgments of  the General Court of the European Union that 
were issued on the same date by a bench composed of the same three judges, address similar 
claims, and largely share the same reasoning.225 
7.150.  Of significance for the purposes of our consideration of Argentina's claims, these 
judgments do not suggest that the determination whether th e costs are reasonably reflected in the 
records of a producer is one which is governed by  the second subparagraph of Article 2(5). On the 
contrary, it is obvious to us that the General Court considered in each case that this determination is one which is governed by Article 2(5), first subparagraph.
226 We note that Argentina directs our 
attention to a statement of the General Court in one of the judgments, which Argentina reads as 
supporting its view that the second subparagraph of Article 2(5) is the provision governing the determination of whether the records reasonably reflect the costs of production and sales in 
certain situations.
227 In our view, Argentina reads out of context a statement that the Court 
intended to be a mere restatement of its earlier findings, which as we have stated above, do not support Argentina's position. 
                                               
223 Argentina's response to Pa nel question 35(a), para. 99. 
224 Moreover, although Argentina submits that there had been no cases in which the EU authorities 
concluded that the records do not reasonably reflect costs on the basis of Article 2(5) because the costs were found to be abnormally or artificially low as a result of  an alleged distortion before  the inclusion of the second 
subparagraph of Article 2(5) in 2002 (Argentina's re sponse to Panel question No. 126, para. 113), the 
European Union refers to what it co nsiders is an example of the EU authorities reaching a determination that 
the costs were not reasonably reflected in the producer's records by virtue of  a distortion of th e type alleged by 
Argentina prior to the inclusion of the second paragraph of Article 2(5) in the Basic Regulation. (European Union's first written submission, para. 91 (quoting Aluminum Foil  originating in China and Russia  
investigation, Council Regulation 950/2001, (Exhibit EU-1), Recital 45)). We agree with the European Union that this example lends support to the view that Article 2(5), first subparagraph, is the provision pursuant to which this determination is made. While, as Argentina notes, in Aluminum Foil originating in China and Russia , 
the normal value was established on the basis of "fac ts available" pursuant to Article 18 of the Basic 
Regulation, the determination also indicates that the EU authorities sought to rely on the producer's data to the extent possible. 
225 Judgments of the General Court of the European Union of 7 February 2013 in Cases T-235/08 
(Acron I) , (Exhibit ARG-23); T-118/10 ( Acron II ), (Exhibit ARG-52); T-459/08, (Exhibit ARG-53); T-84/07, 
(Exhibit ARG-54). 
226 See General Court of the European Union, Acron I , (Exhibit ARG-23), in particular paras. 39-41; 
General Court of the European Union, case T-118/10 ( Acron II ), (Exhibit ARG-52), in particular paras. 46-48; 
General Court of the European Union, case T-459/08, (Exhibit ARG-53), in particular paras. 60-62; General Court of the European Union, case T-84/07, (E xhibit ARG-54), in particular paras. 53-55. 
227 General Court of the European Union, Acron II , (Exhibit ARG-52), para. 72 (cited in Argentina's 
second written submission, paras. 41-42; and response to Panel question No. 98, paras. 60- 63): 
[T]he WTO rules do not define the expression 'a particular market  situation', as defined in the 
second sentence of the Article 2(3) of the basic regulation and which may be used as a basis by the institutions for assessing wh ether the records reasonably refl ect the costs, pursuant to the 
second sentence of the first su bparagraph of Article 2(5) of the basic regulation, as noted in 
paragraphs 44 to 51 above. The decision in case T-84/07, (Exhibit ARG-54), contains an identical statement at para. 83.  WT/DS473/R 
 
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  7.151.  Similarly, we are unconvinced by Argent ina's suggestion that the judgments confirm, on 
the basis of Recital 4 of Council Regulation 1972/2002 that the second subparagraph of Article 2(5) was introduced to provide a legal basis to reject the cost data contained in the records where such costs reflect prices that are found to be "abnormally" or "artificially low" because of a 
distortion. On the contrary, in the judgments, the General Court reads Recital 4 of Council 
Regulation 1972/2002 as we do, i.e. as indicating  that the second subparagraph of Article 2(5) 
was inserted to provide guidance as to "what has to be done" following a determination that the 
records do not reasonably reflect the costs pursuant to the first subparagraph.  
7.152.  In sum, 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 pursua nt to the first subparagraph of Article 2(5).  
7.3.6.3.5   Conclusion with respect to Arge ntina's first claim that Article 2(5), second 
subparagraph, of the Basic Regulation is inco nsistent 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 1994  
7.153.  On the basis of the foregoing, and base d on our "holistic assessment" of the evidence 
submitted by Argentina in support of its interpretation of the provision at issue, we conclude that Article 2(5), second subparagraph, of the Basic Re gulation does not require 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 when these records reflect prices that are considered to be artificially or abnormally low as a result of a distortion. In fact, the evidence 
indicates that Article 2(5), second subparagraph, ap plies to an entirely different issue, i.e. 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. 
7.154.  This aspect of Argentina's claims is associated with its claims of inconsistency under 
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 1994. As we conclude that Argentina 
has not established its case regarding the scope, meaning, and content of the challenged measure 
on which these claims are based, we find that Argentina has not established that Article 2(5), 
second subparagraph, of the Basic Regulation, is in consistent "as such" with Article 2.2.1.1 of the 
Anti-Dumping Agreement and, as a consequenc e, Article 2.2 of the same Agreement and 
Article VI:1(b)(ii) of the GATT 1994.  
7.3.6.4   Argentina's second claim under Ar ticle 2.2 of the Anti-Dumping Agreement and 
Article VI:1(b)(ii) of the GATT 1994 
7.155.  With respect to Argentina's second claim, which involves Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994, the disagreement between the 
parties centres on the "discretion" afforded (or not) to the EU authorities to resort to information prevailing in "other representative markets" in establishing or adjusting the normal value where 
they have concluded that a producer's records do not reasonably reflect the costs of production of 
the investigated product, particularly in the situations identified by Argentina. Argentina's claims are premised on its reading of Article 2(5), seco nd subparagraph, as requiring the EU authorities 
to adjust or establish a producer's costs on the basis of information from countries other than the 
country of origin if the EU authorities have determined that the records reflect prices which 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.
228 According to 
Argentina, the references to "any other reasonable basis" and to "information from other representative markets" in Article 2(5), second subparagraph, mandate  the use of costs not 
prevailing in the country of origin.
229 On the contrary, the European Union contends that the 
                                               
228 See, inter alia , Argentina's first written submission, paras. 134-140. 
229 As noted above, however, Argentina also argues, in the alternative, that to the extent that Article 2.2 
prohibits the construction of normal value on a basis othe r than the cost of production in the country of origin, 
the fact that Article 2(5), second subparagraph, prov ides for the use of a basis other than the cost of WT/DS473/R 
 
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  provision grants wide discretion to the EU authorities to resort to various options in constructing 
the normal value when they have determined under  the first subparagraph of Article 2(5) that the 
costs are not reasonably reflected in the records. 
7.156.  We proceed to analyse 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 with respect to this second 
claim.  
7.3.6.4.1  Text of Article 2(5), second  subparagraph, of the Basic Regulation 
7.157.  We note 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. 
On its face, the phrase of the second subparagraph at issue is formulated in permissive terms. The first – and it seems, preferred – option is for the EU authorities to use the costs of other producers 
or exporters in the country of origin. Where "such information is not available or cannot be used", 
they can resort to "any other reasonable basis", including "information from other representative markets". Hence, the text of Article 2(5), second  subparagraph, suggests that the EU authorities 
would first seek to establish or adjust a producer's  costs of production on the basis of information 
originating from producers in the same country. It only permits the authorities to adjust or establish the costs on the basis of information from  other representative markets as one of several 
options that they can consider if such information is not available or cannot be used. 
7.158.  In support of its reading of the text of Article 2(5), second subparagraph, as requiring the 
EU authorities to use information outside the country of origin, Argentina argues that as the term "on any other reasonable basis" necessarily relates to information other than information from 
other domestic producers, it can refer only to information from outside the country of origin.  
7.159.  Certainly, as Argentina argues, the plain text of the second subparagraph makes it clear 
that the phrase "any other reasonable basis" refers to something other than "the costs of other 
producers or exporters in the same country". Ho wever, in our view, there may be "bases" or 
sources of information in the country of origin other than the costs of other producers or exporters of the investigated products. This is particularly so as Argentina's reading would render the phrase "including information from other representative markets" inutile. Hence, we are not convinced by 
Argentina's argument that the reference to "any ot her reasonable basis" necessarily is a reference 
to costs outside the country of origin.  
7.160.  In addition, we note that Argentina considers that Article 2(5) necessarily implies that the 
authorities will use not only "information", but will actually construct the normal value on the basis 
of "costs" in countries other than the country of origin when they decide to resort to "information" from "other representative markets". We note, howe ver, that the text of the second subparagraph 
refers to "adjust[ing] or establish[ing]" the costs "on the basis" of "information". As Article 2(5), 
second subparagraph, refers to the sources of information  (as opposed to the costs themselves) 
that may be used to establish an investigated producer or exporter's costs, it does not, in our view, require  the EU authorities to construct the normal value so as to reflect costs prevailing in 
other countries. Hence, the text of Article 2(5), second subparagraph, does not, in our view, 
support Argentina's argument that this provision requires the EU authorities, where 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 prevailing in other countries than the country of 
origin.  
7.161.  On the basis of the foregoing, we are of the view that the text of Article 2(5), second 
subparagraph, does not support Argentina's allegations with respect to the scope, meaning, and 
content of that provision as regards Argentina's second claim. Rather, in our view, the text of Article 2(5), second subparagraph, suggests that it provides the EU authorities with a wide range of options concerning the information they may use in constructing the normal value where they 
                                                                                                                                               
production in the country of origin renders that  measure inconsistent with Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994. (See above, paras. 7.85 and 7.118) WT/DS473/R 
 
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  have determined that producers/exporters' records do not reasonably reflect the costs of 
production. 
7.162.  Having reached these preliminary conclusions on the basis of the text, we now consider 
the other evidence submitted by Argentina. 
7.3.6.4.2  Legislative history pertaining to the inclusion of the second subparagraph of 
Article 2(5) in the Basic Regulation 
7.163.  As we have stated above, in the context of addressing Argentina's first claim, our reading 
of the second subparagraph of Article 2(3) in conjunction with Recital 4 of Council 
Regulation 1972/2002 suggests that when the auth orities determine that a particular market 
situation exists on the basis of the existence, inter alia , of "artificially low" prices due to a 
distortion, they should 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 authorities are constrained in such a way that they must systematically resort to information or prices not in the country of 
origin.
230 
7.3.6.4.3  Alleged consistent pr actice of the EU authorities 
7.164.  We now focus on the application of Article 2(5), second subparagraph, by the 
EU authorities as it pertains to Argentina's claim under Article 2.2 of the Anti-Dumping Agreement 
and Article VI:1(b)(ii) of the GATT 1994. 
7.165.  As we have noted above, in our evaluation of Argentina's first claim under Article 2.2.1.1, 
Argentina has brought to our attention a number of instances in which the EU authorities, having 
determined (primarily in situations in which the prices for certain energy inputs were regulated by 
the government) that the producer's records did not reasonably reflect its costs, adjusted the costs on the basis of information from sources that they did not consider to be affected by the 
distortion.
231 The decisions of the EU authorities cited by  Argentina contain explicit statements by 
the EU authorities to the effect that Article 2(5) allows recourse to data from other representative markets including third countries.
232 Indeed, in the majority of th e examples cited by Argentina, 
the EU authorities adjusted the actual costs in curred 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.233 As 
discussed below, in the Biodiesel case, the EU authorities adjusted the actual input costs on the basis of reference prices which, in their view, reflected what the domestic prices for the inputs 
would have been in the absence of the distortion s created by the export tax systems maintained 
by Argentina and Indonesia.
234 
7.166.  In our view, while the examples of a pplication cited by Argentina reveal that the 
EU authorities may resort to prices prevailing in countries other than the country of origin, any 
consistent practice emanating from these examples does not demonstrate that Article 2(5), second 
                                               
230 We do not find it necessary to form a view as to whether Recital 4 and the second subparagraph of 
Article 2(3) are relevant to interpre ting Article 2(5), second subparagraph, in a situation where the authorities 
decide to construct the normal value on the basis that  there are no, or insufficient, domestic sales in the 
ordinary course of trade; see above, fn 210.  
231 In some of the determinations, the EU authoritie s explain that one of the primary criteria for the 
choice of the basis on which to adjust or establish the in put price is that "it reasonab ly reflects a price normally 
payable in undistorted markets". See, e.g. Council Regulation 238/2008, (Exhibit ARG-14), Recitals 28-29; Council Regulation 236/2008, (Exhibit ARG-16), Recitals 29 and 31. 
232 Council Implementing Regulation 1251/2009, (Exhibit ARG-15), paras. 20 et seq. 
233 Council Regulation 1891/2005, (Exhibit ARG-8), Recital 31; Council Regulation 1050/2006, (Exhibit 
ARG-9), Recital 54; Council Regulation 954/2006, (Exhibit ARG-10), Recitals 97 and 127; Council 
Regulation 812/2008, (Exhibit ARG-11), Recital 17; Council Implementing Regulation 1269/2012, (Exhibit ARG-12), Recital 21; Council Regulation 1911/2006, (Exhibit ARG-13), Recitals 28 and 58; Council Regulation 238/2008, (Exhibit ARG-14), Recital 22; Council Regulation 1251/2009, (Exhibit ARG-15), Recital 18; Council Regulation 236/2008, (Exhibit ARG-16), Recital 19; Council Regulation 661/2008, (Exhibit ARG-17), Recital 59; Council Regulation 237/2008, (Exhibit ARG-18), Recital 26; Council Regulation 907/2007, 
(Exhibit ARG-19), Recital 34; Council Regulation 240/2008, (Exhibit ARG-20), Recitals 26 and 46; Council 
Regulation 1256/2008, (Exhibit ARG-21), Recital 111. 
234 See below, paras. 7.179-7.184. WT/DS473/R 
 
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  subparagraph, requires  the m to d o so.235 Merely the fact that the authorities opted to act in a 
certain manner in the past does not mean that the provision at issue requires them to do so in all 
cases; as we have already noted, Argentina relies on the EU authorities' practice in support of its interpretation of Article 2(5), second subparagr aph, but does not challenge the WTO-consistency 
of the practice itself.
236  
7.3.6.4.4  Judgments of the General Court of the European Union interpreting the 
measure at issue 
7.167.  Argentina does not refer specifically to the judgments of the General Court of the 
European Union with respect to the issue of how the EU authorities are to establish a producer's costs in situations in which they conclude that the records do not reasonably reflect the costs associated with the production and sale of the product under consideration. We note, however, 
that in the judgments cited by Argentina in su pport of its arguments on the scope, meaning and 
content of Article 2(5) relating to its first claim, the General Court cites Recital 4 of Council Regulation 1972/2002 as stating that "the data should be obtained from sources which are 
unaffected by such distortions".
237 Moreover, the General Court holds that the EU authorities are 
entitled  to conclude that where an item in a producer's records could not be regarded as 
reasonable, it had to be adjusted by having re course to other sources from markets which the 
authorities regarded as more representative, for instance by adjusting the costs to bring them into 
line with costs prevailing in other countries. 
7.168.  In sum, the judgments show that, in a situ ation 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. This is consistent with our reading of the text of Article 2(5), second 
subparagraph, above.  
7.3.6.4.5   Conclusion with respect to Argent ina's second claim that  Article 2(5), second 
subparagraph, is inconsistent with Article 2.2 of the Anti-Dumping Agreement and 
Article VI:1(b)(ii) of the GATT 1994 
7.169.  With respect to the scope, meaning and content of Article 2(5), second subparagraph, as it 
pertains to Argentina's second claim, our review of the text of Article 2(5), second subparagraph, shows that this provision lays out a series of options for the EU authorities in establishing the costs 
of production once it has been determined that the producer's records do not reasonably reflect 
the costs associated with the production and sale of the product being investigated. On its face, the phrase at issue is formulated in permissive te rms, and does not require that the costs reported 
in the producer's records be replaced by costs in another country. It only permits the authorities to 
establish or adjust the costs reported in the producers' records on the basis of information  from 
other representative markets; moreover, this option is subject to the costs of other producers or 
exporters in the same country not being available or not being suitable and is only one of "other 
reasonable bas[es]" which the EU authorities may resort to.  
7.170.  The other evidence submitted by Argentina does not convince us that the second 
subparagraph of Article 2(5) requires  the EU authorities to construct a producer's costs of 
production on the basis of information pertaining to countries other than the country of origin.  
7.171.  Even where the EU authorities do resort to information from 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. In this respect, we note that it 
is 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 cons truction of normal value on the basis of the 
"cost of production" "in the country of origin". The parties however disagree as to whether 
                                               
235 Moreover, as already noted, the examples cited by Argentina mostly pert ained (with the notable 
exception of the investigation on biodiesel from Argentina and Indonesia) to situations in which prices were regulated. For this reason, we are not convinced that  they suffice to establish a "consistent practice". 
236 We find guidance in the Appellate Body Report in US – Carbon Steel (India) ; see in particular 
para. 4.480 of the Report. 
237 General Court of the European Union, Acron I , (Exhibit ARG-23), paras. 41 et seq.  WT/DS473/R 
 
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  Article 2.2 and Article VI:1(b)(ii) permit the use of information  not from the country of origin in the 
construction of the cost of production. Argentina takes the view that these Articles do not permit the use of information other than information from the country of origin and therefore that there would never be any instance in which the use of information from other representative markets 
can be consistent with Article 2.2 of the Anti-Dumping Agreement and Article VI:1 of the 
GATT 1994.
238 We note, however, that 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 the "cost of pr oduction" "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. 
7.172.  By contrast, our consideration of the evidence submitted by Argentina leads us to conclude 
that the language of Article 2(5), second subparagraph, pertains to the sources of information  (as 
opposed to the costs themselves), that may be used to establish an investigated 
producer/exporter's costs in constructing its normal value. As a result, even when information 
from "other representative markets" is used, Article 2(5), second subparagraph, does not, in our 
view, require  the EU authorities to establish the costs of production so as to reflect costs prevailing 
in other countries.
239  
7.173.  Argentina contends that for its claims to prevail, it would be "sufficient for Argentina to 
demonstrate that this rule will necessarily lead to violations of WTO rules in certain specified 
circumstances".240 However, we have concluded that Argentina has not made such a 
demonstration.  
7.174.  In addition, we understand Argentina to take the position, in the alternative, that the fact 
that Article 2(5), second subparagraph, provides  for the use of a basis other than the cost of 
production in the country of origin in the construction of the normal value renders Article 2(5), 
second subparagraph, inconsistent with the same provisions. However, 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 with Article VI:1 (b)(ii) of the GATT 1994, as discussed above 
Argentina has not demonstrated that this provision cannot be applied in a WTO-consistent manner. 
This being the case, we find that Argentina has not established that Article 2(5), second subparagraph, of the Basic Regulation, is inco nsistent "as such" with Article 2.2 of the 
Anti-Dumping Agreement and with Article VI:1(b)(ii) of the GATT 1994.
241 
7.3.6.5  Whether Argentina has established th at Article 2(5), second subparagraph, is 
inconsistent with Article XVI:4 of th e WTO Agreement and Article 18.4 of the 
Anti-Dumping Agreement 
7.175.  Argentina claims that, as a consequence of the inconsistency of Article 2(5), 
second subparagraph, of the Basic Regulation 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 European Union also violates Article XVI:4 
of the WTO Agreement and Article 18. 4 of the Anti-Dumping Agreement.242 As these claims are 
purely consequential and as we have rejected Argentina's principal claims on which they depend, we also find that Article 2(5), second subparagraph, of the Basic Regulation is not inconsistent 
with Article XVI:4 of the WTO Agreement and Article 18.4 of the Anti-Dumping Agreement. 
                                               
238 See, e.g. Argentina's opening statement at the second meeting of the Panel, para. 24. 
239 The European Union argues that the terms "other representative markets" could be markets in the 
country of origin. We do not find it necessary to resolve this question to decide Argentina's claims.  
240 Argentina's opening statement at the first meeting of the Panel, para. 84 
241 We find guidance in the Appellate Body Report in US – Carbon Steel (India) ; see in particular 
para. 4.483 of the Report. 
242 Argentina's first written submission, paras. 142-146 and 469. WT/DS473/R 
 
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  7.4  Argentina's claims concerning whether th e EU anti-dumping measures on imports of 
biodiesel from Argentina are inco nsistent with Articles 2.1, 2. 2, 2.2.1.1, 2.2.2(iii), 2.4, 
3.1, 3.4, 3.5, and 9.3 of th e Anti-Dumping Agreement and Articles VI:1, VI:1(b)(ii) and 
VI:2 of the GATT 1994, "as applied" 
7.4.1  Whether the EU anti-dumping measures  on imports of biod iesel from Argentina 
are inconsistent with Articles 2.1, 2.2, an d 2.2.1.1 of the Anti-Dumping Agreement and 
with Articles VI:1 and VI:1(b)(ii) of the GATT 1994 
7.4.1.1  Legal claims 
7.176.  Argentina claims that the anti-dumping measures applied by the European Union on 
imports of biodiesel from Argentina are inconsistent with a number of provisions of the Anti-Dumping Agreement and of the GATT 1994. Spec ifically, Argentina requests us to find that 
the European Union acted inconsistently with: 
a. 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 failing to calculate the cost of production of the 
product under investigation on the basis of the records kept by the producers; 
b. 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 on the basis of the cost of production in the country 
of origin, namely, Argentina; 
c. Article 2.2.1.1 of the Anti-Dumping Agreement by including costs not associated with the 
production and sale of biodiesel in the calculation of the cost of production; and 
d. Article 2.1 of the Anti-Dumping Agreemen t and Article VI:1 of the GATT 1994 as a 
consequence of the above-mentioned violatio ns under the Anti-Dumping Agreement and 
the GATT 1994.
243 
7.177.  We begin by addressing the first of these claims, which hinges, in large part, on the proper 
interpretation of Article 2.2.1.1 of the Anti-Dumping Agreement.  
7.4.1.2  Relevant provisions  of the covered agreements 
7.178.  The texts of Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreement and of Article VI:1 of 
the GATT 1994 are reproduced above, paragraphs 7.70-7.71. Article 2.1 of the 
Anti-Dumping Agreement reads: 
2.1 For the purpose of this Agreement, a product is to be considered as being 
dumped, i.e. introduced into the commerce of another country at less than its normal 
value, if the export price of the product exported from one country to another is less 
than the comparable price, in the ordinary course of trade, for the like product when 
destined for consumption in the exporting country. 
7.4.1.3  Factual background 
7.179.  On 16 July 2012, the European Biodiesel Board (EBB) submitted a complaint to the 
EU authorities, requesting the initiation of an anti-dumping investigation concerning imports of 
biodiesel originating in Argentina and Indonesia.244 The EU authorities subsequently initiated an 
anti-dumping investigation on imports of biod iesel from these countries on 29 August 2012.245 On 
28 May 2013, the European Union published a Provisional Regulation imposing provisional anti-dumping duties on imports of biodiesel from Argentina at margins of between 6.8% and 
10.6% in the form of specific duties expressed as a fixed amount per tonne.
246 On 1 October 2013, 
                                               
243 Argentina's first written submission, para. 470(a)-(d); second written submission, para. 254(a)-(d). 
244 Consolidated version of the complaint, (Exhibit ARG-31). We will not address the aspects of the 
investigation pertaining to Indonesia, as th ese are not material to the claims at hand. 
245 Notice of initiation of the anti-dumping investigation, (Exhibit ARG-32). 
246 Provisional Regulation, (Exhibit ARG-30), Recital 179. WT/DS473/R 
 
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  the European Union issued a Definitive Disclosure and proposal for definitive measures to 
interested parties.247 Interested parties were allowed to submit comments on this Definitive 
Disclosure. On 26 November 2013, the Definitive Regulation was published in the Official Journal of the European Union. It confirmed the provisional findings of dumping and injury. It calculated 
dumping margins ranging from 41.9% to 49.2%. Given that the dumping margins exceeded the 
injury margins calculated by the EU authorities,  which ranged from 22.0 to 25.7%, the European 
Union applied duties corresponding to the latter, in the form of specific duties on imports of 
biodiesel from Argentina.
248 
7.180.  In the Provisional Regulation, the EU auth orities found that, since the Argentine biodiesel 
market was heavily regulated, domestic sales were not made in the ordinary course of trade, which meant that the normal value would have to be constructed.
249 As part of constructing the 
normal value, the EU authorities calculated the cost s of production of biodiesel on the basis of the 
costs recorded in the producers' records during the investigation period (IP). While the EBB had claimed that the "Differentia l Export Tax" (DET) system
250 in Argentina depressed the price of 
soybeans and soybean oil (the main raw material inputs used in the production of biodiesel) and, 
therefore, distorted the costs of biodiesel producer s, the EU authorities indicated that they did not 
have enough information at that stage of the investigation to make a decision as to the most 
appropriate way to address that claim.251 Hence, they stated, the question as to whether the costs 
of soybeans in the producers' records reasonably reflect the costs associated with the production of biodiesel would be examined further at the definitive stage, as well as in the parallel countervailing duty investigation.
252 
7.181.  In the Definitive Disclosure, the EU author ities confirmed their finding that domestic sales 
were not made in the ordinary course of trade given that the Argentine market was heavily regulated, such that the normal value had to be constructed.
253 In addition, the EU authorities 
found that the DET depressed the domestic price of soybeans and soybean oil to an artificially-low 
level which, as a consequence, affected the costs of the biodiesel producers.254 The EU authorities 
further considered that this cost distortion should be taken into account in establishing the normal 
value.255 In particular, the EU authorities considered that the investigation demonstrated that the 
DET in Argentina distorted the costs of production of Argentine biodiesel producers because: 
[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) … 
… On the other hand, domestic prices of soya beans and soya bean oil are determined 
on the relevant markets under the prevailing conditions. However, the domestic prices 
follow the trends of the international prices. The investigation 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 incurred for exporting it. 
                                               
247 Definitive Disclosure, (Exhibit ARG-35). 
248 Definitive Regulation, (Exhibit ARG-22). 
249 Provisional Regulation, (Exhibit ARG-30), Recitals 44 and 45. 
250 See below, para. 7.181, for the EU authorities' description of the DET. 
251 Provisional Regulation, (Exhibit ARG-30), Recital 45. 
252 Provisional Regulation, (Exhibit ARG-30), Recital 45. The EU authorities conducted a parallel 
countervailing duty investigation on imports of biodiesel from Argentina and Indonesia. The investigation was initiated on 10 November 2012, following the submission of a complaint by the EBB on 27 September 2012. (Notice of initiation of the counterva iling duty investigation, (Exhibit ARG-33)). The alleged subsidies at issue 
consisted of the provision of inputs (soybean or soybean oil in the case of Argentina and palm oil in the case of Indonesia) at below market prices by  means of government policies impl emented and enforced by a policy of 
export tax (export tax on the inputs at higher rates than on the finished product, biodiesel), and which obliged input producers to sell on the domestic market, creati ng an excess of supply, depressing prices to a 
below-market level and artificially reducing the costs of the biodiesel producers. 
The countervailing duty investigation was terminated on 25 November 2013, following the EBB's 
withdrawal of its complaint on 7 October 2013. (Notice of termination of the countervailing duty investigation, (Exhibit ARG-36)) 
253 Definitive Disclosure, (Exhibit ARG-35), para. 24. 
254 Definitive Disclosure, (Exhibit ARG-35), para. 26. 
255 Definitive Disclosure, (Exhibit ARG-35), para. 26. WT/DS473/R 
 
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  The domestic reference prices of soya beans and soya bean oil are also published by 
the Argentine Ministry of Agriculture as the 'FAS theoretical price'. The producers of soya beans and soya bean oil therefore obtain the same net price no matter whether they sell for export or domestically. 
In conclusion, the domestic prices of the main raw material used by biodiesel 
producers in Argentina were found to be lower than the international prices due to the distortion created by the Argentine export tax system and, consequently, 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 as interpreted by the General Court as explained above.
256 (fns omitted) 
7.182.  In light of the above, the EU authorities decided to disregard the price actually paid by 
Argentine producers for soybeans – which the EU authorities referred to as "the main raw material 
purchased and used in the production of biodiesel"  – and to replace it with "the price at which 
those companies would have purchased the soya beans in the absence of such a distortion".257 The 
EU authorities thus replaced the actual purchase price of soybeans during the IP, as reflected in 
the producers' records used in the calculation at the provisional stage, with the average reference 
price of soybeans published by the Argentine Mini stry of Agriculture for export, FOB Argentina, 
minus fobbing costs, during the IP.258 This resulted in the EU authorities replacing the costs 
incurred by the producers as reported in thei r records by a uniform price of 2,144.60 ARS 
(Argentine pesos) for soybeans for all producers in establishing their costs of production. This significantly increased the costs of production for each of the Argentine producers.
259 The 
EU authorities considered that this reference price reflected the level of international prices.260  
7.183.  In its comments on the Definitive Disc losure, the association of Argentine exporting 
producers (Cámara Argentina de Biocombustibles, CARBIO) argued, inter alia , that export taxes on 
soybeans or soybean oil are not a cost associated with the production of biodiesel in Argentina, 
and therefore cannot be included in the cost of production and sale of biodiesel.261 
7.184.  In the Definitive Regulation, the EU auth orities confirmed their conclusion that domestic 
prices of soybeans were artificially lower than in ternational prices due to the distortion created by 
the Argentine export tax system, and also confirme d their use of reference prices published by the 
Argentine Ministry of Agriculture to establish the cost at which companies would have purchased soybeans in the absence of the distortion.
262 In response to CARBIO's claim that export taxes on 
soybeans or soybean oil could not be included in the cost of production and sales of biodiesel, the 
EU authorities stated:  
In the present case it was established that the costs associated with the production of 
the product concerned are not reasonably reflected in the records of the companies 
concerned as they are artificially low due to the distortion caused by the Argentine 
DET system. This holds true regardless of whether or not DET systems in general may 
be as such contrary to the WTO Agreement … [W]hen making such a determination to 
derogate from [the general rule set forth in the first sentence of Article 2.2.1.1 of the Anti-Dumping Agreement], the investigating authority must set forth its reasons for doing so. Consistent with this interpretation , in view of the distortion created by the 
DET system, which creates a particular market situation, the Commission replaced the 
costs recorded by the companies concerned for the purchase of the main raw material in Argentina with the price that would have been paid in the absence of the 
established distortion.
263  
                                               
256 Definitive Disclosure, (Exhibit ARG-35), paras. 31-34.  
257 Definitive Disclosure, (Exhibit ARG-35), para. 35. 
258 Definitive Disclosure, Annex II, (Exhibit ARG-38) (BCI). 
259 Definitive Disclosure, Annex II, (Exhibit ARG-38) (BCI), pp. 2, 5, 8, 11, and 14; Argentina's first 
written submission, para. 182. 
260 Definitive Disclosure, (Exhibit ARG-35), para. 32. 
261 CARBIO's comments on the Definitive Disclosure, (Exhibit ARG-39), pp. 5 and 6 (discussed in 
Definitive Disclosure, Annex II, (Exhibit ARG-38) (BCI)). 
262 Definitive Regulation, (Exhibit ARG-22), Recitals 38-40. 
263 Definitive Regulation, (Exhibit ARG-22), Recital 42. WT/DS473/R 
 
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  7.4.1.4  Whether the European Union acted in consistently with Article 2.2.1.1 of the 
Anti-Dumping Agreement, and as a conseq uence, Article 2.2 of the Anti-Dumping 
Agreement and Article VI:1(b)(ii) of the GA TT 1994 by failing to calculate the cost of 
production of biodiesel on the basis of the records kept by the producers 
7.4.1.4.1  Arguments of the parties 
7.4.1.4.1.1  Argentina 7.185.  Argentina submits that the European Union acted inconsistently with Article 2.2.1.1 and, as 
a consequence of this inconsistency, with Article 2.2 of the Anti-Dumping Agreement and with 
Article VI:1(b)(ii) of the GATT 1994 by failing to calculate the cost of production of the product 
under investigation on the basis of the records kept by the producers.
264 In particular, Argentina 
claims that the European Union erred by determining that the costs of the main raw material in the 
production of biodiesel, soybean oil and soybeans265, were not reasonably reflected in the records 
kept by the Argentine producers under investigation because those costs were artificially lower than international prices due to the distortion created by the Argentine export tax system.
266  
7.186.  Argentina submits that Article 2.2.1.1 of the Anti-Dumping Agreement requires an 
investigating authority to calculate a producer/exporter's costs of production on the basis of the records kept by the producer/exporter under investigation, provided that such records are in 
accordance with the generally accepted accounting principles (GAAP) of the exporting country, and 
reasonably reflect the costs associated with the production and sale of the product under consideration.
267 According to Argentina, the second basis for disregarding the costs reflected in 
the records kept by the producer/exporter under Article 2.2.1.1 is needed because those records 
pre-exist and are not necessarily organized in a manner which coincides with what is requested in 
an anti-dumping investigation, which focuses on a specific product and a specific period of investigation.
268 For instance, this ground might be relied upon where the costs reflected in these 
records do not correlate to the specific time period or product under investigation, or in instances 
where the exporter forms part of a group of comp anies and sources certain inputs from a related 
company.269 However, this ground only permits examination of whether the records  – rather than 
the costs contained therein – are "reasonable".270 Thus, the reliance on this condition by the 
EU authorities to remedy what they considered to be "artificially low" prices stemming from the Argentine export tax system was erroneous.
271 Argentina bases its understanding of Article 2.2.1.1 
                                               
264 Argentina's first written submission, paras. 171(1), 244, and 470(a). Argentina also argues, as a first 
line of argumentation, that Article 2(5) of the Basic Regulation is inconsistent "as such" with Article 2.2.1.1 of 
the Anti-Dumping Agreement, and, therefore, the Panel sh ould likewise find the application of Article 2(5) of 
the Basic Regulation in the anti-dumping measures at issue to be inconsistent with the same provision. (Argentina's first written submission, para. 196). We have found in the previous section of our report that Argentina has not established that Article 2(5), second subparagraph, of the Basic Re gulation, is inconsistent 
"as such" with the provisions of the Anti-Dumping  Agreement and of the GATT 1994 which it invokes. 
Accordingly, in the present section, we only address th e second line of argumentat ion presented by Argentina 
in support of its "as applied" claim under Article 2.2.1.1, i.e. that Article 2(5) was applied in a manner inconsistent with Article 2.2.1.1 in the circumstances of the investigation at issue. 
265 We note that Argentina claims that the European Union erred in referring indistinctly in the Definitive 
Regulation to soybeans and soybean oil as "the main ra w material", because soybeans are not a direct input in 
the production of biodiesel. In particular, Argentina co ntends that producers must "crush" soybeans to obtain 
soybean oil (in addition to soybean me al and pellets) before biodiesel can be obtained from the oil by way of 
transesterification. (Argentina's first written submission , paras. 211 and 212 (referring to Definitive Regulation, 
(Exhibit ARG-22), Recitals 30, 34, 38, and 39)). We adopt the same terminology as the Definitive Regulation without prejudice to the merits of Argentina's contention in that regard. 
266 Argentina's first written submission, paras. 204-207 (referring to Definitive Regulation, (Exhibit ARG-
22), Recital 38). 
267 Argentina's first written submission, paras 92 and 200. Argentina contends that the term "normally" 
in the first sentence of Article 2.2.1.1 does not render the rule contained therein optional, but rather, indicates 
that there are exceptions to the rule as expressed by the two conditions referred to in the same sentence (see ibid. paras. 93 and 201). 
268 Argentina's response to Panel question Nos. 90, para. 32 (referring to Panel Report, Egypt – Steel 
Rebar , para. 7.393), and 7, paras. 17-23. 
269 Argentina's response to Panel question No. 7, paras. 18-23. 
270 Argentina's second written submission, para. 179. 
271 Argentina's first written submission, paras. 99 and 209-211. WT/DS473/R 
 
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  in this regard on the ordinary meaning of that provision, in its context and in light of the object 
and purpose of the Anti-Dumping Agreement.272  
7.187.  In particular, Argentina contends that the ordinary meaning of the term "costs" concerns 
costs actually incurred by the producer/exporte r, regardless of whether the amount actually 
incurred by the producer/exporter corresponds to pr ices that they could have hypothetically paid 
on other markets.273 Further, Argentina notes that, if the producer/exporter were to include costs 
in its records that represent the costs that it could have hypothetically incurred instead of the 
costs that were actually incurred, those records would be inconsistent with the GAAP.274 Thus, for 
Argentina, the term "costs" in Article 2.2.1.1 refers to costs actually incurred by the producer/exporter. On that basis, the term "associ ated" in the phrase "costs associated with the 
production and sale" cannot be construed in a broad sense to cover hypothetical costs that were 
not actually incurred by the producer/exporter. Rather, it refers to costs pertaining specifically to 
the production and sale of the product under investigation.
275 
7.188.  Argentina further argues that, in the ph rase "provided that such records … reasonably 
reflect the costs …", the term "records" is the su bject, the term "costs" is the object, the term 
"reflect" is the verb, and the term "reasonably" is an adverb.276 Thus, it follows from the structure 
of this phrase that the correct inquiry into whether the records reasonably reflect the cost of 
production involves an assessment of the reasonableness of the records , as opposed to the 
reasonableness of the costs themselves.277 Thus, while governmental intervention might distort 
costs, such intervention is not relevant if those costs are reasonably reflected in the records.278 
7.189.  Turning to the context of the phrase "pro vided that such records … reasonably reflect the 
costs …" in the first sentence of Article 2.2.1. 1, Argentina asserts that the second and third 
sentences in Article 2.2.1.1 are directly concerned with the manner in which costs are apportioned and registered in the records, rather than with the costs themselves.
279 For Argentina, this 
confirms that the first sentence of Article 2.2.1.1 is not concerned with the reasonableness of the 
costs, but rather, with whether the costs are reas onably reflected in the records. Argentina also 
argues that the presence of Article 2.2.2 in the Anti-Dumping Agreement suggests that the 
drafters of the Agreement would have explicitly provided for using data other than those of the 
producers in determining the cost of production if they had intended such a meaning.280 This is 
because Article 2.2.2 provides an express basis for using data other than those of the producers' records for determining particular cost s and profits, in contrast to Article 2.2.1.1. 
7.190.  Argentina also argues that the textual refere nces to the domestic market of the "country of 
origin" in Articles 2.2 and 2.2.2 of the Anti-D umping Agreement and Article VI:1(b)(ii) of the 
GATT 1994 suggest that costs reflected in the records kept by the producer/exporter should not be 
considered "unreasonable" on the basis that they do not reflect international prices.
281 Argentina 
further argues that the very concept of dumping, as articulated through multiple provisions of the Anti-Dumping Agreement, is clearly exporter-specific.
282 It concerns the costs actually incurred by 
an exporter, rather than abstract or hypothetical costs pertaining to other exporters in different 
contexts. This militates against an interpretation that would permit an investigating authority to disregard the actual costs incurred by an exporter  on the basis that they were unreasonable or 
                                               
272 Argentina's first written submission, para. 207. 
273 Argentina's first written submission, paras. 101 an d 216. In this connection, Argentina refers to a 
number of panel reports which, it claims, support the view that Article 2.2.1.1 pertains to actual costs incurred by the producer/exporter. See ibid. paras 128-131 (referring to Panel Reports, US – Softwood Lumber V , 
para. 7.321; Egypt – Steel Rebar , para. 7.393; and EC – Salmon (Norway) , para. 7.483). Argentina also notes 
the absence of any reference to terms su ch as "prices" or "international pr ices" in Article 2.2.1.1 that connote 
what the costs could be by reference to undistorted markets (see ibid. para. 217). 
274 Argentina's first written submission, para. 228. 
275 Argentina's second written submission, paras. 114-115 and 180; comments on the European Union's 
response to Panel question No. 90, para. 18. 
276 Argentina's first written submission, para. 225. 
277 Argentina's response to Panel question No. 4,  para. 3; first written submission, para. 225. 
278 Argentina's response to Pane l question No. 4, para. 3. 
279 Argentina's first written submission, para. 111; response to Panel question No. 11, para. 24. 
280 Argentina's first written submission, para. 113; second written submission, paras. 123-125. 
281 Argentina's first written submission, paras. 114, 117, and 232-235; second written submission, 
paras. 184 and 185. 
282 Argentina's second written submission, paras.  127-131 and 136; opening statement at the first 
meeting of the Panel, para. 79. WT/DS473/R 
 
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  artificially low.283 Thus, to permit the replacement of costs actually incurred by the 
producer/exporter in the domestic market with international prices would subvert the object and purpose of the Anti-Dumping Agreement, which is  to regulate dumping based on a comparison 
between the normal value and the export price.
284 Further, addressing the existence of a 
"distortion" on the domestic market is totally unrelated to the issue of "dumping".285 
7.191.  In Argentina's view, the foregoing considerations make clear that Article 2.2.1.1 does not 
permit the costs in producers/exporters' records to be disregarded on the basis that those costs 
are artificially low due to distortions flowing from governmental intervention. Given that the 
interpretation of the term in light of its ordina ry meaning and read in context is not ambiguous, 
the negotiating history of Article 2.2.1.1 would only be useful insofar as it confirms the meaning of that provision as set out above.
286 In this regard, Argentina argues, inter alia , that the negotiating 
history demonstrates that the costs of production relate to costs in the country of origin, that 
Article 2.2.1.1 concerns the allocation of costs in  the records kept by the producer/exporter rather 
than the reasonableness of the costs themselves, and that the negotiating parties decided not to 
regulate "input dumping" in the Anti-Dumping Agreement.287 Further, Argentina argues that the 
second Ad Note to Articles VI:2 and VI:3 of the GATT 1994 does not establish, contrary to the 
arguments of the European Union, that dumpin g is capable of stemming from governmental 
practices such as Argentina's export tax system.288 Rather, the second Ad Note to Articles VI:2 
and VI:3 is limited to the specific case of multiple currency practices.289 
7.192.  Finally, Argentina submits that the European Union's finding that the records do not 
reasonably reflect the cost of "the main raw material" is based on an improper establishment of 
the facts. In particular, the finding that domestic prices of soybeans and soybean oil in Argentina 
are "distorted" is factually incorrect since those prices are freely set.290 Further, soybeans are not 
a direct input in the production of biodiesel. Inst ead, they are used to produce soybean oil, from 
which biodiesel can in turn be obtained through transesterification.291 Argentina argues that given 
that soybeans are not a direct input in the production of biodiesel, it does not flow from the finding that the domestic price of soybeans is "distorted" that the price of the "main raw material" 
(i.e. soybean oil) is "distorted", or that the records of the Argentinean producers do not reasonably 
reflect the cost of soybean oil.
292 
7.193.  As a result of failing to calculate the costs of production in accordance with Article 2.2.1.1 
of the Anti-Dumping Agreement, Argentina claims that the European Union failed to properly 
construct the normal value, and therefore acted inconsistently with Article 2.2 of the 
Anti-Dumping Agreement and with Article VI:1(b)(ii) of the GATT 1994.293 
7.4.1.4.1.2  European Union 
7.194.  The European Union requests the Panel to find that Argentina has failed to make a 
prima facie  case that it acted inconsistently with Articles 2.2.1.1 and 2.2 of the 
Anti-Dumping Agreement by disregarding the cost s of soybeans and soybean oil in the records 
kept by the producers because they were "artificially low" as a consequence of Argentina's export 
tax system.294 For the European Union, investigating authorities are only required to use the 
"costs" reflected in such records under Article 2.2.1.1 where they are "reasonable" for the production of the goods in question.
295 Thus, where such costs are not "reasonable", Article 
                                               
283 Argentina's first written submission, paras. 125-127 and 240. 
284 Argentina's opening statement at the firs t meeting of the Panel, paras. 77 and 78. 
285 Argentina's response to Pane l question No. 91, para. 40. 
286 Argentina's response to Pane l question No. 18, para. 38. 
287 Argentina's response to Panel question No. 18, paras. 37-47; second written submission, 
paras. 141-145. 
288 Argentina's comments on the European Union's response to Panel question No. 94, paras. 23-26. 
289 Argentina's opening statement at the second meeting of the Panel, paras. 38-40. 
290 Argentina's first written submission, paras. 209 and 210. In addition, Argentina argues that export 
taxes are legal under WTO law, and the particular expo rt tax in question is not a form of government 
intervention in the domestic price of soybeans. (Argenti na's response to Panel question No. 103, paras. 77-79) 
291 Argentina's first written submission, para. 211. 
292 Argentina's first written submission, para. 212. 
293 Argentina's first written submission, para. 244. 
294 European Union's second written submission, paras. 132 and 143. 
295 European Union's first written submission, paras. 130-133 (referring to Panel Report, Egypt – Steel 
Rebar , para. 7.393). WT/DS473/R 
 
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  2.2.1.1 does not preclude investigating authoritie s from determining that the producer's records 
do not reasonably reflect those costs, regardless of the fact that they may record the costs that were actually incurred by the producer under investigation.
296 
7.195.  In respect of the ordinary meaning of Ar ticle 2.2.1.1 of the Anti-Dumping Agreement, the 
European Union argues that the term "costs" does not necessarily refer only to the costs actually 
incurred by a producer, but rather, it connotes the prices "to be paid" by the producer for the production of the product under consideration.
297 In this connection, the European Union contends 
that the term "associated" in the phrase "costs associated with the production and sale" in 
Article 2.2.1.1 captures a broader range of relati ons between the "costs" and the "production" of 
the goods than the costs actually incurred by the producer/exporter.298 For instance, it captures 
the costs that would "normally" be associated with the production and sale of the goods.299 The 
European Union notes, in this regard, the absence of a textual link in the first sentence of 
Article 2.2.1.1 between the "costs associated …" and the specific "producer" under investigation. The European Union also contends that the term "reflect" suggests that there is no need for "a 
precise calculation or determination"; therefore, the use of that term in the first sentence of 
Article 2.2.1.1 does not support Argentina's thesis that the records should be considered as "reasonable" where they simply include the precis e costs "actually incurred by the producer". The 
European Union refers to a number of panel and Appellate Body reports which it considers provide 
authority for its understanding of Article 2.2.1.1.
300 
7.196.  In respect of the context of the first sentence of Article 2.2.1.1 of the 
Anti-Dumping Agreement, the European Union argues that the specific references to the "actual 
amounts" incurred by the producer/exporter in Arti cle 2 of the Anti-Dumping Agreement, such as 
those in Articles 2.2.2(i) and 2.2.2(ii), suggest that  the choice of the words "costs associated with 
the production and sale" in Article 2.2.1.1 aims  to cover something different from the "actual 
amounts incurred" or "expenses actually incurred" by a specific producer.301 Further, the inclusion 
of the condition in the first sentence of Article 2.2.1.1 for the records to be consistent with GAAP – which, the European Union submits, suffices to en sure that the records include the costs actually 
incurred by the producer under investigation – suggests that the subsequent condition pertaining 
to the records reasonably reflecting costs must mean something more than  simply "the expenses 
actually incurred".
302 The European Union also argues that the second and third sentences of 
Article 2.2.1.1 suggest that adjustments may be made to the costs reported by a company in 
certain circumstances, and that authorities can take into consideration cost information that does 
not appear in such records.303 This, in turn, suggests that Article 2.2.1.1 stands for the principle 
that authorities may disregard, or adjust, the information in the records of producers under 
investigation, provided certain conditions are met.304 
7.197.  The European Union submits that the chapea u of Article 2.2.2 also provides context for the 
interpretation of Article 2.2.1.1, insofar as it states that the amounts for administrative, selling and 
general costs and for profits shall be based on actual  data pertaining to production and sales in the 
ordinary course of trade. In particular, it can be inferred from this that, where sales are not in the 
ordinary course of trade, actual data may potentially be disregarded. Since it is not disputed in the present case that sales of biodiesel were not in the ordinary course of trade in Argentina, the 
                                               
296 European Union's response to Panel question No. 5, para. 10. 
297 European Union's first written submission, para. 136 (referring to Panel Report, EC – Salmon 
(Norway) , para. 7.481); second written submission, paras. 125-128. 
298 European Union's first written submission, para. 137 (referring to Panel Report, Egypt – Steel Rebar , 
para. 7.393). 
299 European Union's first written submission, para. 139. 
300 European Union's first written submission, paras. 140-141, 166-169 (referring to Panel Reports, EC – 
Salmon (Norway) , para. 7.481; Egypt – Steel Rebar , para. 7.383; US – Softwood Lumber V  paras. 7.327-7.329 
and 7.347; and Appellate Body Report, US – Softwood Lumber V , para. 171); response to Panel question 
No. 10, para. 18; opening statement at the second meet ing of the Panel, paras. 136-138 (referring to Panel 
Report, Egypt – Steel Rebar , para. 7.393), and 151-152 (referring to Panel Report, EC – Salmon (Norway) , 
para. 7.483); comments on Arge ntina's response to Panel question No. 90, para. 49. 
301 European Union's first written submission, para. 147. 
302 European Union's first written submission, para s. 148 and 149; opening statement at the second 
meeting of the Panel, para. 142. 
303 European Union's first written submission, paras. 151-153 (referring to Panel Report, EC – Salmon 
(Norway) , para. 7.484). 
304 European Union's first written submission, para. 154. WT/DS473/R 
 
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  context provided by Article 2.2.2 suggests that Ar ticle 2.2.1.1 should not be read to require the 
investigating authority to use the costs actually incurred by the producers.305 
7.198.  The European Union rejects Argentina's argument that various textual references to the 
"country of origin" support Argentina's interpretati on of Article 2.2.1.1 that costs reflected in the 
records kept by the producer/exporter may not be considered "unreasonable" where they do not 
accord with international prices. First, the European Union argues that the reference to the country of origin in Article 2.2 does not mean that evidence from other countries cannot be used in 
determining the costs of production. The European Un ion argues in this respect that Article 2.2.1.1 
directs an investigating authority to consider "all available evidence", which may include, for instance, invoices issued by exporters in other countries.
306 Second, the European Union argues 
that the leeway provided for in Article 2.2.2(iii) to use "any other reasonable method" implies that 
there is no absolute prohibition on the use of data on the cost of production from countries other 
than the country of origin where the conditions of production and sale are not in the "ordinary course of trade".
307 
7.199.  In respect of the object and purpose of the Anti-Dumping Agreement, the European Union 
contends that it is directed at preventing damage  to the industries of an importing country by the 
producers of an exporting country through the use of prices that are artificially low due to some 
abnormal condition. For the European Union, therefore, goods that are produced with costs that 
are not "normal" fall within the type of conditions that the Anti-Dumping Agreement is intended to address.
308 In this connection, the European Union cont ends that exogenous factors, such as the 
actions of the government of the exporting country , are capable of being the source of dumping. 
For instance, the Appellate Body has considered that there can be circumstances where dumping 
and subsidization arise from the "same situation"309, and further, the second Ad Note to 
Articles VI:2 and VI:3 of the GATT 1994 states that "multiple currency practices" meant as 
"practices by governments" can "constitute a form of dumping".310 Given its similarities to 
"multiple currency practices" (both involve a government-induced manipulation of the ordinary operation of the market, which substantially affects and distorts pricing), Argentina's export tax 
falls within the types of government measures that may lead to dumping.
311 More generally, this 
Ad Note demonstrates that the definition of dump ing cannot be construed to exclude government 
practices, but rather, that whether a particular governmental price intervention results in dumping must be considered on a case-by-case basis.
312 
7.200.  The European Union argues that the negotiating history of Article 2.2.1.1 contradicts 
Argentina's interpretation of this provision, given that the terms "the allocation of costs" included 
in a previous version of the provision were replaced with "costs shall be normally calculated", 
which suggests that this provision is not limited to cost allocation issues, and given that the 
requirement for "reasonableness" was severed from the GAAP, which suggests a broader scope for the "reasonableness" obligation in Article 2.2.1.1.
313 
7.201.  Finally, the European Union submits that Argentina's contentions that the EU authorities 
improperly established the facts in determining that a distortion existed and that soybeans are a direct input in the production of biodiesel are unfounded.
314 
                                               
305 European Union's first written submission, paras. 247 and 248; opening statement at the first 
meeting of the Panel, paras. 73-75. 
306 European Union's first written submission, pa ras. 193 and 194; second written submission, 
paras. 134 and 135. 
307 European Union's first written submission, para. 198; opening statement at the second meeting of 
the Panel, para. 159. 
308 European Union's first written submission, paras. 157 and 158. 
309 European Union's opening statement at the first me eting of the Panel, paras. 25-36 (referring to 
Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 568). 
310 European Union's second written submission, paras. 114-124. 
311 European Union's second written submission, para s. 119-124; response to Panel question No. 94, 
paras. 38-41. 
312 European Union's response to Pa nel question No. 94, paras. 39-41. 
313 European Union's second written submission, paras. 96-98. 
314 European Union's first written submission, paras. 222-232. WT/DS473/R 
 
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  7.4.1.4.2  Arguments of the third parties  
7.202.  Australia  submits that an investigating authority should be permitted to consider whether 
the costs reflected in the records of the produc er/exporter are reasonable, and, where they are 
not, to adjust or replace them in an appropriate manner.315 Thus, Article 2.2.1.1 permits 
investigating authorities to look beyond a producer/exporter's actual records and consider whether 
the costs reflected therein are reasonably related to the costs of producing and selling the product. For Australia, the reasonableness of costs of inputs or raw materials would be relevant to this 
analysis.
316  
7.203.  In Australia's view, to disallow an authority from considering elements that were beyond 
the direct control of a producer/exporter would render inutile the provision in Article 2.2 of the Anti-Dumping Agreement for cost construction in circumstances of a particular market situation.
317 
Further, to limit an investigating authority's scope of analysis to factors that are endogenous to the 
foreign producers/exporters implies limitations in Article 2.2 that do not exist, and, moreover, contradicts the ordinary meaning of the term "particular market situation".
318 
7.204.  China  submits that the authority to apply anti-dumping measures is limited to 
circumstances in which the pricing behaviour of an individual producer/exporter under investigation is found to result in price discrimination between the normal value and export price 
for a product and that price discrimination causes injury to the importing Member's domestic 
industry.
319 For China, this producer/exporter-specific focus is embodied in the definition of 
dumping in Article VI:1 of the GATT 1994 and Articl e 2.1 of the Anti-Dumping Agreement, and is 
also reflected throughout various provisions of the Anti-Dumping Agreement.320 Accordingly, an 
investigating authority cannot reject the costs recorded in the producer/exporter's accounts on 
grounds exogenous to that producer/exporter, su ch as governmental interventions beyond its 
control.321 While China does not consider that governmental interventions "are outside the 
remedial scope of the covered agreements", China argues that to ignore this foundational element 
of the Anti-Dumping Agreement would be to subvert the carefully negotiated balance of rights, disciplines and remedies provided for Members in the WTO Agreement as a whole.
322 
7.205.  China thus submits that the European Un ion's understanding of Article 2.2.1.1 of the 
Anti-Dumping Agreement goes impermissibly far in suggesting that recorded costs may be benchmarked against hypothetical costs that might be borne by a producer in a theoretical market where the price of relevant inputs is not affected by governmental interventions.
323 For China, a 
cost in a hypothetical market, incurred by a hypothetical producer, does not pertain to the 
production of the product by the investigated producer.324  
7.206.  China acknowledges that, in certain cases, there could be evidence suggesting that the 
actual costs ascribed to a producer/exporter and reflected in its records may not properly reflect 
the costs associated with production and sale in the country of origin.325 A comparison with the 
costs incurred by other producers/exporters of th e product in the country of origin could be 
indicative in that regard.326 Importantly, however, the context afforded by Articles 2.2 and 2.2.2 of 
the Anti-Dumping Agreement demonstrates that re corded costs "can only be rejected as not 
'reasonably reflect[ing]' costs of production if they fail to reasonably reflect the cost of production 
                                               
315 Australia's third-party submission, para. 12. 
316 Australia's third-party submission, para. 5 (referring to Panel Report, China – Broiler Products , 
para. 7.164). 
317 Australia's third-party respon se to Panel question No. 5. 
318 Australia's third-party respon se to Panel question No. 8. 
319 China's third-party submission, paras. 26 (referring to Appellate Body Reports, US – Zeroing (Japan) , 
para. 111; US – Stainless Steel (Mexico) , para. 86) and 58-62; third-party statement, para. 4. 
320 China's third-party statement, para. 4;  third-party submissi on, paras. 47-50. 
321 China's third-party submission, para. 27. 
322 China's third-party submission, paras. 29 and 30; third-party statement,  para. 5: "Otherwise, 
anti-dumping proceedings cease to be a remedy for the pr icing behavior of producers or exporters, and instead 
become a tool for investigating authorities to penalize imports for cost advantages that foreign producers may 
enjoy." 
323 China's third-party submission, para. 36. 
324 China's third-party submission, paras. 37 an d 42-45; third-party stat ement, paras. 9-13. 
325 China's third-party submission, para. 39. 
326 China's third-party submission, para. 51. WT/DS473/R 
 
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  of the product in the country of origin ".327 Thus, for China, it is never appropriate to substitute 
out-of-country costs for costs in the country of origin.328 China does not exclude the possibility that 
an investigating authority may encounter exceptional circumstances in which there is simply no evidence as to the relevant costs available from within the country of origin.
329 However, any 
evidence that does not directly pertain to costs of production in the country of origin would need to 
be dealt with in a manner that reflects the specific market conditions in the country of origin, including any differences in respect of relevant governmental interventions between the two 
markets, such as taxes and duties.
330  
7.207.  Colombia  submits that the phrase "reasonably reflect the costs" in Article 2.2.1.1 refers to 
"the actual cost of production a producer has to reflect in its records", in the light of the syntax of the phrase
331, as well as the fact that Article 2.2.1.1 is directed at situations where a Member that 
imposes an anti-dumping measure "is actually invest igating the costs of production of producers of 
the exporting Member".332 Colombia notes the absence of any terms in Article 2.2.1.1 suggesting 
that the "costs" have to be the ones " normally  associated with the production and sale of 
goods"333, as well as the context of the term "allocation", which refers to an amount of a resource 
assigned for a particular purpose, and the context provided by Articles 2.2 and 2.2.2 of the Anti-Dumping Agreement, which establish that the benchmark for calculating the normal value is the 
cost of production in the country of origin.
334 Therefore, in Colombia's view, the European Union 
acted against Article 2.2.1.1 by using internationa l prices of soybeans to calculate the costs of 
production.  
7.208.  Colombia submits that it may have been more appropriate for the European Union to have 
pursued a countervailing duty investigation.335 For Colombia, the Anti-Dumping Agreement 
governs actions against exporters that injuriously sell at an abnormally low value, and distorted input prices due to an export tax do not fall within its scope.
336 
7.209.  Indonesia  concurs with Argentina's interpretation of Article 2.2.1.1 of the Anti-Dumping 
Agreement.337 In Indonesia's view, the European Union added an additional dimension to the test 
governing the reasonable reflection of costs by including an element on the non-distortion and 
reasonableness of input costs per se .338 For Indonesia, this is not supported by the text or context 
of Article 2.2.1.1.339 In this regard, Indonesia notes that a reasonability condition explicitly applies 
to the "administrative, selling and general costs" under Article 2.2 of the Anti-Dumping Agreement, whereas the two criteria in the first se ntence of Article 2.2.1.1 are concerned with cost 
allocation issues unrelated to the reasonability of those costs.
340 Indonesia also argues that these 
two criteria call for an assessment of the records of the producer/exporter under investigation, which, in turn, limits an investigating authority from expanding its consideration to any other set 
of prices outside the costs contained in those records.
341 
7.210.  Indonesia submits that the European Union's rejection of the argument that Article 2.2.1.1 
refers to costs "actually incurred by the producer" is untenable because the first sentence of that 
provision clearly refers to the "records kept by the producer/exporter under investigation", and 
further, because it would be contrary to the requirement to calculate individual dumping margins.
342 Indonesia draws on certain historical materials to support its position. In particular, 
                                               
327 China's third-party submission, para. 52 (emphasis original); third-party statement, paras. 14-16. 
328 China's third-party response to Panel question No. 13, para. 28. 
329 China's third-party response to Panel question No. 13, para. 30. 
330 China's third-party response to Pa nel question Nos. 13, para. 31; 4,  para. 12; and 12, paras. 25-27. 
331 Colombia's third-part y statement, para. 7. 
332 Colombia's third-part y submission, para. 18. 
333 Colombia's third-party submissi on, para. 18. (emphasis original) 
334 Colombia's third-part y submission, para. 20. 
335 Colombia's third-party submission, para. 24; third-party response to Panel question Nos. 6, 
paras. 3-6, and 16, para. 7. 
336 Colombia's third-party subm ission, paras. 23 and 24. 
337 Indonesia's third-party submission, para. 33. 
338 Indonesia's third-party su bmission, paras. 35 and 36. 
339 Indonesia's third-party submission, para. 35. 
340 Indonesia's third-party submission, para s. 37 and 38 (referring to Panel Report, EC – Salmon 
(Norway) , para. 7.484). 
341 Indonesia's third-party submission, para. 39. 
342 Indonesia's third-party submission , para. 40; third-party statement, paras. 10-12 (referring to Panel 
Report, Thailand – H-Beams , para. 7.112); third-party response to Panel question No. 2, para. 12. WT/DS473/R 
 
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  Indonesia suggests that the European Union's own view in the Ad hoc  group on the 
implementation of the Anti-Dumping Code was th at the actual costs of a producer had to be 
used.343 Further, Indonesia suggests that the negotiating history on Article 2.2.1.1 demonstrates 
that the term "reasonably" is not intended to qualify the term "costs".344 
7.211.  In response to questions from the Panel, Mexico  submits that it did not consider there to 
be fixed parameters in the text or context of Article 2.2.1.1 of the Anti-Dumping Agreement governing the manner in which an investigating authority is to determine whether the records 
reasonably reflect the costs associated with the production and sale of the product concerned.
345 
Accordingly, Mexico considers that investigating authorities have a margin of discretion to make such a determination on a case-by-case basis. 
7.212.  Norway  submits that both of the cumulative condit ions in Article 2.2.1.1 seem to relate to 
the quality of the records as such, and the stru cture and ordinary meaning of Article 2.2.1.1 
suggest that the second condition only concerns whether the records reflect the costs associated with the production and sale of the product under investigation in a reasonable manner.
346 
7.213.  The Russian Federation  considers that the practice of input cost adjustment is 
inconsistent both with the provisions of the WTO Agreement and the spirit of the WTO.347 
Concerning Article 2.2.1.1 of the Anti-Dumping Agreement, the Russian Federation submits that 
the records must depict the costs that have been incurred in association with the production and 
sale of the product under consideration.348 The plain meaning of the term "costs" focuses on what 
is paid, rather than on the value or the reasonableness of what is paid, and the core issue under Article 2.2.1.1 is whether the costs are reasonably reflected in the records, as opposed to whether 
the costs themselves were reasonable in the light of extraneous economic considerations.
349 
Indeed, an analysis of the structure of the first sentence of Article 2.2.1.1 reveals that the word "reasonably" immediately precedes the word "reflect", and therefore the inquiry under 
Article 2.2.1.1 is whether the records reflect the costs associated with the production and sale of 
the product under consideration "reasonably".
350  
7.214.  Further, the Russian Federation contends that the European Union's understanding of the 
object and purpose of the Anti-Dumping Agreement, which is a holistic, integrative notion, is 
"manifestly wrong" because it was derived from a si ngle provision of the treaty while ignoring the 
others, and because the term "normal" in the Anti-Dumping Agreement does not correspond to concepts of "artificially low" and "abnormal condition" as suggested by the European Union.
351 
Further, the Russian Federation submits that WTO jurisprudence demonstrates that the concept of 
"dumping" in the Anti-Dumping Agreement does not deal with the price of the product's inputs.352 
7.215.  Saudi Arabia contends that the first sentence of Article 2.2.1.1 imposes a general and 
mandatory obligation to use, for the purpose of calculating costs of production, the costs in the 
country of origin as reflected in the records of each individual producer/exporter concerned.353 For 
Saudi Arabia, the term "normally" in that sentence confirms that the general rule must be followed 
unless one of the two exceptional circumstances listed therein applies.354 In Saudi Arabia's view, 
these two limited conditions concern the reliability and accuracy of the costs in relation to the product under consideration, and underline the exceptional nature of the circumstances that would allow an investigating authority to reject those costs.
355 For Saudi Arabia, the "reasonableness" 
referred to in the first sentence of Article 2.2. 1.1 does not allow an investigating authority to 
question the general "reasonableness" of the costs recorded, such as by comparison with 
                                               
343 Indonesia's third-party su bmission, paras. 42 and 47. 
344 Indonesia's third-party statement, para. 7; th ird-party response to Panel question No. 11, 
paras. 24-32. 
345 Mexico's third-party response  to Panel question No. 2. 
346 Norway's third-party stat ement, paras. 7 and 8. 
347 Russian Federation's third- party statement, para. 2. 
348 Russian Federation's third-party submission, para. 3. 
349 Russian Federation's third-party submission, para. 5. 
350 Russian Federation's third-party submission, para. 3. 
351 Russian Federation's third-pa rty submission, paras. 17-22. 
352 Russian Federation's third-pa rty submission, paras. 23-31. 
353 Saudi Arabia's third-party submission, para. 12. 
354 Saudi Arabia's third-party submission, para. 13. 
355 Saudi Arabia's third-part y submission, paras. 14-16. WT/DS473/R 
 
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  international reference prices. Rather, it merely co ncerns the association of the recorded costs with 
the product under consideration as compared with other products of the producer/exporter to which certain costs may also be associated.
356 Saudi Arabia also invokes the object and purpose of 
the Anti-Dumping Agreement in contending that it is not aimed at preventing Members from 
adopting WTO-consistent measures or undoing Members' comparative advantages by correcting 
reported costs of production in light of international reference prices.357 In Saudi Arabia's view, 
there are other multilateral or unilateral instruments available to address measures alleged to 
distort the market environment and trade.358 
7.216.  Turkey  submits that Article 2.2.1.1 of the Anti-Dumping Agreement requires that, for the 
purpose of establishing normal value, the investigating authority is normally obliged to use the records kept by the producer/exporter if the two conditions in the first sentence of that provision 
are met.
359 If those conditions are met, the term "nor mally" in Article 2.2.1.1 indicates that the 
investigating authority has discretion, and the investigating authority would be required to provide a reasoned and adequate explanation to deviate from the rule.
360 For Turkey, whether a "particular 
market situation" would justify disregarding the records of producers/exporters requires a 
case-by-case examination.361 Turkey submits that the term "reaso nably" in Article 2.2.1.1 not only 
defines the method for how the prices (paid or due to be paid) are recorded in the books of the 
producer/exporter, but also implies an examinatio n that focuses on whether the recorded prices 
correspond to a price level that is determined by market forces free from any intervention.362 For 
Turkey, therefore, the "reasonabl eness" assessment displays a two-sided structure. Based on the 
outcome of this assessment, the investigating auth ority has discretion to modify the elements of 
costs in line with in-country or out-of-country benchmarks, so long as the out-of-country data 
used is associated with the cost of production and sales of the product under consideration.363 
7.217.  The United States  submits that, in situations where records are kept in accordance with 
GAAP and reasonably reflect the costs associated with the product under consideration, the 
investigating authority is normally obligated to use those records pursuant to Article 2.2.1.1 of the Anti-Dumping Agreement.
364 The term "normally" in Article 2.2.1.1 indicates that the use of a 
producer/exporter's records is not necessary in every case, but if the investigating authority finds 
that the records meet the conditions and nonethele ss departs from them, it is bound to provide an 
explanation.365  
7.218.  The United States contends that the ordinary meaning of the term "costs" in Article 2.2.1.1 
does not necessarily imply costs "actually incurred by the producer".366 The United States finds 
support for this understanding by comparing it to the express references to "the actual amounts incurred" elsewhere in Article 2.
367 The United States also notes that Article 2.2.1.1 references 
costs "associated with" the production and sale of the product under consideration. In that regard, 
the United States contends that the term "associated with" suggests a more general connection between the relevant costs and the production or sale of the product than just those costs borne 
by the specific producer.
368 
7.219.  The United States rejects Argentina's contention that Article 2.2.1.1 solely concerns cost 
allocation issues, but rather, contends that Article 2.2.1.1 leaves open what costs may be "unreasonable" such that the records do not reasonably reflect the costs associated with the 
                                               
356 Saudi Arabia's third-party submission, para. 17. 
357 Saudi Arabia's third-party submission, para. 20. 
358 Saudi Arabia's third-party submission, para. 21. 
359 Turkey's third-party su bmission, para. 7 (referring to Panel Reports, EC – Salmon (Norway) , 
para. 7.483, and China – Broiler Products , para. 7.164). 
360 Turkey's third-party subm ission, para. 7; third-pa rty statement, para. 3. 
361 Turkey's third-party su bmission, paras. 10-12. 
362 Turkey's third-party response to Pa nel question No. 7, paras. 7 and 8. 
363 Turkey's third-party response to Panel qu estion Nos. 4, para. 6, and 17, para. 8. 
364 United States' third-pa rty submission, para. 11. 
365 United States' third-pa rty submission, para. 12. 
366 United States' third-part y submission, para. 14 (referring to Panel Report, EC – Salmon (Norway) , 
para. 7.481). 
367 United States' third-party submission, para. 15; third- party statement, para. 9. 
368 United States' third-party submission, paras. 26 and 27 (referring to Panel Report, Egypt – Steel  
Rebar, para. 7.393). WT/DS473/R 
 
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  production and sale of the product.369 In that connection, the United States argues that the 
context provided by Article 2.2, such as the reference to a "low volume of the sales in the domestic market of the exporting country" or "a particular market situation", supports the understanding that market conditions, including some  "peculiarity, structure, [or] distortion", may 
lead to records reflecting "unreasonable" costs.
370 In the United States' view, an investigating 
authority may, on a case-by-case basis, use a wide  range of record evidence, potentially including 
international prices, to evaluate whether the producer/exporter's records reasonably reflect their 
costs.371 However, international prices, if used, must be a proxy for the costs in the country of 
origin.372 
7.4.1.4.3  Evaluation by the Panel 7.220.  Argentina requests us to find 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 by failing to calculate the cost of prod uction of the product under investigation on the 
basis of the records kept by the producers.
373 
7.221.  We note, at the outset, that the EU authorities disregarded the records kept by the 
Argentine producers insofar as they pertained to the costs for soybeans and soybean oil because: 
[T]he domestic 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 
distortion created by the Argentine export tax system and, consequently, 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 as interpreted by the General Court as explained above.
374 
7.222.  Beyond this statement from the Definitive Regulation, it has not been alleged that the 
costs pertaining to the main raw material in the records kept by producers do not represent the 
actual price paid by those producers, nor has it been alleged that the records themselves are 
improper, flawed, or otherwise inconsistent with the GAAP.  
7.223.  Argentina's principal allegation is that the European Union acted inconsistently with 
Article 2.2.1.1 (and, as a consequence, with Article 2.2 of the Anti-Dumping Agreement and 
Article VI:1(b)(ii) of the GATT 1994) because the reasons given by the EU authorities for disregarding the records – i.e. because the prices for an input were artificially lower than international prices due to an alleged distortion – are not legally permissible under 
Article 2.2.1.1.
375 
7.224.  Thus, we consider the question before us to be whether, on the basis of the reasoning set 
out in the Definitive Regulation, the European Unio n acted consistently with Article 2.2.1.1 of the 
Anti-Dumping Agreement, and, consequently, with  Article 2.2 of the Anti-Dumping Agreement and 
Article VI:1(b)(ii) of the GATT 1994. 
7.225.  We begin our analysis by setting out our understanding of Article 2.2.1.1. Before doing so, 
however, we note that Article 2.2 of the Anti-Dumping Agreement prescribes that 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" in one of two situations, namely when there are no sales of the like product in the ordinary course of trade, or 
                                               
369 United States' third-party submission, para s. 20 and 22 (referring to Panel Reports, China – Broiler 
Products , para. 7.172; and US – Softwood Lumber V , para. 7.318). 
370 United States' third-party submission, para. 24; third-party response to Panel question No. 3, 
paras. 10 and 11. 
371 United States' third-party response to Panel question No. 1, para. 2. 
372 United States' third-party response to Panel question No. 12, para. 26. 
373 Argentina's first written submission, paras. 195, 244, and 470(a); second written submission, 
para. 254(a). 
374 Definitive Regulation, (Exhibit ARG-22), Recital 38. 
375 Argentina's first written submission, paras. 195, 244, and 470(a). Argentina also contests that its 
export tax system creates a distortion. WT/DS473/R 
 
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  where there is a particular market situation or a low volume of sales in the domestic market, such 
that those sales do not permit a proper comparison.376 
7.226.  Article 2.2.1.1 provides, in relevant part: 
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. 
7.227.  The opening phrase "[f]or the purpose of paragraph 2" makes clear that Article 2.2.1.1 
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 in the circumstances mentioned above. The first 
sentence of Article 2.2.1.1 also establishes the records of the investigated producer as the 
preferred source of information for the establishm ent of the costs of production. The term "shall" 
in this first sentence of Article 2.2.1.1 indicates that it establishes a mandatory rule in this 
respect
377, whereas the term "normally" suggests that this rule may be derogated from under 
certain conditions.378 In that regard, the first sentence of Article 2.2.1.1 expressly provides for two 
circumstances in which an investigating authority need not follow the general rule to calculate 
costs on the basis of the records kept by the producer/exporter under investigation.379 In the case 
before us, the investigating authority explicitly relied on the second of these conditions, namely that the records do not reasonably reflect the costs associated with the production and sale of the product under consideration.
380 We have therefore to address the proper scope and meaning of 
only that condition, before turning to whether it was correctly invoked by the investigating 
authority in the present case.  
7.228.  We begin our interpretation with the ordinary meaning of the phrase "provided such 
records … reasonably reflect the costs associated with the production and sale of the product under 
consideration". First, we note that for both this condition and the GAAP-related condition in Article 2.2.1.1, the subject is the producer/exporter's "records". It is the "records" of the 
producer/exporter under investigation that must be in accordance with the generally accepted 
accounting principles and that must reasonably reflect the costs associated with production and sale of the product under consideration for the conditional obligation set forth under the first sentence to apply. Thus, the focus of the condition is on the specific producer/exporter under 
investigation, and what is contained in its records.
381  
                                               
376 Article 2.2 of the Anti-Dumping Agreement provides: 
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, 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 sh all be determined by comparison with a 
comparable price of the like product when export ed 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 an d general costs and for profits. (fn omitted) 
Article 2.2.1.1 is also applicable to determining whether, pursuant to Article 2.2.1, sales in the domestic 
market of the exporting country are at  prices below per-unit costs and ther efore not in the ordinary course of 
trade by reason of price. 
377 Appellate Body Report, EC – Fasteners (China) , paras. 316 and 317. 
378 Appellate Body Report, US – Clove Cigarettes , para. 273; Panel Report, China – Broiler Products , 
para. 7.161. See also Appellate Body Report, EC – Fasteners (China) , para. 317. 
379 See Panel Reports, China – Broiler Products , para. 7.164; and  US – Softwood Lumber V, 
paras. 7.236 and 7.237. 
380 Definitive Regulation, (Exhibit ARG-22, Recital 38); European Union's response to Panel question 
No. 82, paras. 10-14. We note, in this regard, that it has not been argued in the proceedings before us that the 
investigating authority derogated from the rule set out in the first sentence of Article 2.2.1.1 on any other basis, and we therefore consider it unnecessary to expr ess any views in that regard. For the same reason, we 
consider it unnecessary to the resolution of the present claim to express any views on the arguments 
presented by the parties and third parties as to whether,  in general terms, Article 2.2.1.1 permits derogations 
on grounds other than those expressly listed in Article 2.2.1.1. (Argentina's first written submission, para. 98; 
Saudi Arabia's third-party submission, para. 13; United States' third-part y submission, para. 12) 
381 This focus is consistent with th e general rule in Article 6.10 of the Anti-Dumping Agreement that an 
individual dumping margin should be calculated for ea ch particular producer/expor ter under investigation.  WT/DS473/R 
 
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  7.229.  We turn next to the verb in the phrase "provided such records … reasonably reflect the 
costs associated with the production and sale of the product under consideration". The verb is "reflect": the records must reflect the costs. The Oxford English Dictionary  defines "reflect" as, 
inter alia , "to reproduce, esp. faithfully or accurately; to depict."
382 Therefore, we understand this 
verb to refer, in the context of the construction of the cost of production under Article 2.2.1.1, to 
records that capture, or depict, the costs associated with the production and sale of the product under investigation in a faithful or accurate manner.  
7.230.  We consider next the term "reasonably" in this phrase. It is clear to us that "reasonably" is 
an adverb that modifies the verb "reflect", and not, as the European Union seems to suggest, the 
term "costs". Generally speaking, an adverb modi fies the meaning of a verb, adjective or another 
adverb in terms of ideas such as time, place, degree or manner. In the context of the provision of 
Article 2.2.1.1, where the verb is to "reflect" the costs associated with production and sale of the 
product under consideration, it seems to us that th e modification introduced by the adverb is with 
respect to the degree or manner of reflection of such costs in the records of the producer or 
exporter. In other words, the question before us concerns the manner or degree by which the 
records depict or capture the costs associated with production and sale of the product so to satisfy the condition that they "reasonably reflect" such costs.  
7.231.  This brings us to the meaning of "reasonably" in the phrase " reasonably reflect  the costs 
associated with the production and sale of the product". The adjective underlying the adverb "reasonably" is "reasonable". The word "reasonable" is given several definitions in dictionaries depending on the context in which it is used. In the context of Article 2.2.1.1, where the records 
must "reasonably reflect" the costs, together with the requirement that the same records must 
also be in accordance with generally accepted accounting principles, it seems to us that an appropriate ordinary meaning of the word "reasona ble" is conveyed here by concepts such as 
"rational or sensible", "in accordance with reason", and "fair and acceptable in amount".
383 Since it 
is the "records" that must "reflect reasonably" th e costs of production and sale of the product for 
the purpose of the construction  of the "normal value", and in th e light of our understanding that 
"reflect" connotes the faithful and accurate depiction of information, we understand the term 
"reasonably reflect" in Article 2.2.1.1 to mean th at the records of a producer/exporter must depict 
all the costs it has incurred in a manner that is – within acceptable limits – accurate and reliable . 
7.232.  Turning to the immediate context of this ph rase in Article 2.2.1.1, we note that it sits 
alongside the condition that records be "in accordance with the generally accepted accounting 
principles of the exporting country". It is undisputed between the parties that the GAAP generally  
encompass a requirement that all the costs that ha ve actually been incurred in the production of 
the items be truly reported in a company's records.384 This means that records containing costs 
that differ from the costs actually incurred by producers would likely not be in accordance with GAAP, and would thus form a basis for derogating from the general rule to use producers' records 
under Article 2.2.1.1. This suggests to us that the first sentence of Article 2.2.1.1 is concerned 
with the "reasonable reflect[ion]" of the costs that producers actually  incur in the production of the 
product in question. In this regard, we disagree with the European Union that the inclusion of the 
condition in the first sentence of Article 2.2.1.1 for the records kept to be consistent with GAAP 
suggests that the subsequent condition pertaining to the records reasonably reflecting costs must 
mean something more than simply "the expenses actually incurred".
385 Rather, in our view the 
inclusion of the second condition reflects the fact that, while records might be consistent with 
GAAP, they may still not adequately report the actual costs incurred by the producer/exporter 
under investigation. Moreover, 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 relevant time periods. As another example, the specific producer/exporter under investigation might be part of a vertically-integrated group of companies in which the actual cost of production of particular inputs is spread across different companies' records, or in which 
                                               
382 Oxford English Dictionary, http://www.oed.com/view/Entry/160912?rskey=Ly5uAc&result=3#eid , 
accessed 23 November 2015.  
383 Oxford English Dictionary, http://www.oed.com/view/Entry/159072?redirectedFrom=reasonable#eid , 
accessed 23 November 2015. 
384 Argentina's first written submission, para. 228; European Union's first written submission, paras. 148 
and 149. 
385 European Union's first written submission, paras. 148 and 149. WT/DS473/R 
 
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  transactions between such companies are not at arms-length or indicative of the actual costs 
involved in the production of the product under consideration.  
7.233.  We find further support for our understanding that the "costs associated with the 
production and sale of the product under consideration" refers to the actual costs incurred by the 
producer/exporter under investigation in other elements of the context of Article 2.2.1.1. First, the 
basic purpose of calculating the cost of production and constructing the normal value on the basis of that cost under Article 2.2 is to identify an appropriate proxy for the price "of the like product in 
the ordinary course of trade in the domestic ma rket of the exporting country" when that price 
cannot be used.
386 To us, it clearly 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. Conversely, if the actual costs 
incurred by a producer are not properly taken into account, this would lead to an unreliable proxy 
for what the price of the like product in the ordinary  course of trade in the domestic market of the 
exporting country would have been. Second, we note that, pursuant to Article 6.10 of the 
Anti-Dumping Agreement, investigating authorities are required as a general rule to determine an 
individual margin of dumping for each known pr oducer/exporter concerned of the product under 
investigation. This, in turn, suggests to us that costs of production will vary from producer to 
producer and each producer's costs of production should be evaluated separately. In that context, 
it would seem anomalous to us if the "costs associated with the production and sale" did not refer to the actual  costs incurred by individual producers, as reflected in their records.  
7.234.  Our view in this regard is also supported by footnote 6 to Article 2.2.1.1 of the 
Anti-Dumping Agreement, which provides: 
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 reasonably be taken into account by the authorities during the 
investigation. 
7.235.  In particular, it is implicit in this footnote that costs are to be assessed on the basis of the 
specific circumstances of each producer/exporter and the costs that they incur, such as those 
pertaining to start-up operations. Thus, contrary to the arguments of the European Union, we do not understand the term "associated" in the phrase "costs associated with the production and sale" in Article 2.2.1.1 to be capable of denoting costs "normally" associated with the production and 
sale of the goods in general.
387 Such an approach could lead to a determination that the costs 
contained in the investigated producer/exporter's records do not "reasonably reflect" the costs of production because of the mere fact that they differ from costs incurred by other 
producers/exporters. The European Union's interpretation would, in our view, frustrate the purpose 
of Article 2.2.1.1 to enable investigating authorit ies to identify an appropriate proxy for the price 
of the like product in the ordinary course of trad e in the domestic market of the exporting country 
for each individual producer.
388  
7.236.  We are also not persuaded by the European  Union's reliance on Article 2.2.2 as context, 
namely, that the 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.389 As we 
discuss elsewhere390, the structure of Article 2.2.2 indicates a preference for the actual data of the 
exporter and like product in question, with an in cremental progression away from these principles 
before reaching "any other reasonable method" in Article 2.2.2(iii), for approximating, as closely 
as possible, the profit margin and administrative, selling and general costs for the product under consideration. Hence, the reference to "actual costs" in the specific context of Article 2.2.2 does 
                                               
386 Panel Reports, Thailand – H-Beams , para. 7.112; and US – Softwood Lumber V , para. 7.278. 
387 European Union's first written submission, paras. 137-143 (referring to Panel Report, Egypt – Steel 
Rebar , para. 7.393) and 258-263; response to Panel question No. 97, para. 51. 
388 We emphasize, however, that ou r observations in this regard pe rtain to the invocation of the 
particular condition in Article 2.2.1.1 of the Anti-Dumpi ng Agreement relied upon by the European Union in the 
present claim. As we mention above in footnote 380, we  consider it unnecessary to express any views on any 
potential derogations other than that specifically invoked and relied upon by the European Union. 
389 European Union's first written submission, paras. 247 and 248. 
390 See below, para. 7.335, and Panel Report, Thailand – H-Beams , para. 7.112. WT/DS473/R 
 
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  not in our view support the European Union's re ading of the first sentence of Article 2.2.1.1.391 If 
anything, the context provided by Article 2.2.2 su ggests to us that, as a general principle, the 
actual data of producers/exporters is to be pr eferred in constructing the normal value. This 
accords with our understanding of Article 2.2.1.1 set out above. 
7.237.  The European Union argues that the omission of the words "of the product" in Article 2.2 of 
the Anti-Dumping Agreement, in contrast to the corresponding provision in Article VI:1(b)(ii) of the GATT 1994, suggests an intentio n that in the calculation of the constructed price the focus 
does not need to be exclusively on the specific company under investigation and the production of 
its goods.
392 We disagree. In our view, the term "cost of production" in Article 2.2 could not be 
read as referring to anything other than the cost of production "of the product", particularly as Article 2.2 already refers to the "like product" twice. Thus the inference suggested by the 
European Union cannot validly be drawn. 
7.238.  We further note that the parties made a number of arguments pertaining to the object and 
purpose of the Anti-Dumping Agreement. We recall, in this regard, that Argentina argues that the 
object and purpose of the Anti-Dumping Agreement is to "counteract dumping, which occurs when 
the export price is less than the comparable pric e, in the ordinary course of trade, in the domestic  
market and not on any other markets".
393 The European Union responds that the object and 
purpose of the Anti-Dumping Agreement is directed  at preventing damage incurred by the use of 
prices that are artificially low "due to some ab normal condition", and, therefore, goods produced 
with costs that are not "normal" fall within the type of conditions that the Anti-Dumping Agreement is intended to address.
394 The Anti-Dumping Agreement does not contain 
a preamble or an explicit indication of its object and purpose.395 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.396 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.  
7.239.  The European Union draws on the second Ad Note to Articles VI:2 and VI:3 of the 
GATT 1994 to argue that the notion of dumping is  not limited to situations that arise out of 
producers/exporters' "voluntary" pricing behaviour, but rather, it also covers situations that are created by the action of governments.
397 The European Union also argues that the situation 
addressed in the Ad Note, i.e. multiple currency practices, involve a government-induced 
manipulation of the ordinary operation of the market, which substantially affects and distorts 
pricing, and that these are precisely the characteristics of Argentina's export tax on soybeans. 398 
7.240.  We are not convinced by these arguments. The second Ad Note to Articles VI:2 and VI:3 
is, on its own terms, limited to "multiple currency practices", and its very existence indicates that 
it should be treated as an exceptional and specialized provision. We therefore see no reason to extrapolate from this provision that the concept of "dumping" is generally intended to cover any 
                                               
391 Along broadly similar lines, Aust ralia and the United States subm it that the "particular market 
situation[s]" referred to in Article 2.2 encompass distor tions that could render a producer/exporter's recorded 
costs unreasonable as to the cost of production and sale, and thereby justify departing from those recorded 
costs. However, in our view, Article 2.2 of the Anti-Dumping Agreement only states that a "particular market situation" may necessitate the construction of normal va lue. It does not address how that construction should 
be undertaken, which is instead set out in detail in th e subparagraphs of Article 2. 2. (Australia's third-party 
response to Panel question No. 5; United States' thir d-party response to Panel question No. 3, para. 11) 
392 European Union's first wr itten submission, para. 196. 
393 Argentina's first written submission, para 240. (emphasis original) 
394 European Union's first written submission, paras. 157 and 158. 
395 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 118. 
396 Appellate Body Report, US – Shrimp , para. 114. 
397 The text of the second Ad Note provides that: 
Multiple currency practices can in certain circumstances constitute a subsidy to exports which may be met by countervailing du ties under paragraph 3 or can co nstitute a form of dumping by 
means of a partial depreciation of a country' s currency which may be met by action under 
paragraph 2. By "multiple currenc y practices" is meant practices by governments or sanctioned 
by governments. 
398 European Union's second written submission, paras. 113-115. WT/DS473/R 
 
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  distortion arising out of government action or circumstances such as those surrounding Argentina's 
export tax system and its impact on soybean prices as an input material for biodiesel.399 
7.241.  Finally, we note the explicit provisions allowing investigating authorities to disregard 
domestic prices and costs when determining the normal value that are provided for under the 
second Ad Note to Article VI:1 of the GATT 1994 (which is incorporated by reference into the 
Anti-Dumping Agreement through Article 2.7 thereof) , and in the protocols of accession of certain 
Members. These provisions lend further support to our understanding of Article 2.2.1.1. At the 
very least, these provisions suggest to us that th eir drafters considered explicit derogations to be 
needed in order to allow investigating authorities to use prices or costs other than those prevailing in the country of origin. 
7.242.  On the basis of the foregoing consideratio ns, we understand the ordinary meaning of the 
phrase "provided such records … reasonably reflect the costs associated with the production and 
sale of the product under consideration", in its context, to concern whether the costs set out in a producer/exporter's records reflect all the actual costs incurred by the producer/exporter under 
investigation in –within acceptable limits – an accurate and reliable manner. This, in our view, calls 
for a comparison between, on the one hand, the costs as they are reported in the producer/exporter's records and, on the other, the costs actually incurred by that producer.
400 We 
emphasize, however, that the 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 circumstances and which the investigating authority considers more "reasonable" than the costs 
actually incurred.
401 
7.243.  We find support for our understanding of Article 2.2.1.1 in the reports of other panels and 
the Appellate Body considering claims under this provision. For instance, the panel in US – 
Softwood Lumber V  was confronted with a claim that the investigating authority erred under 
Article 2.2.1.1 by using the records of certain producers to calculate their cost of production of softwood lumber.
402 In particular, the claim concerned whether those records "reasonably 
                                               
399 As we do not see the relevance of the second Ad Note to Article VI:2 and VI :3 on its face, we do not 
consider it necessary to address further the material submitted on its negotiating history. 
400 However, we do not understand the phrase "reasonably reflect" to mean  that whatever is recorded in 
the records of the producer or exporter must be auto matically accepted. Nor does it mean, as argued by 
Argentina, that the words "reasonably reflect" are limited only to the "allocation" of costs. The investigating 
authorities are certainly free to examine the reliability an d accuracy of the costs recorded in the records of the 
producers/exporters, and thus, whether those records "r easonably reflect" such co sts. In particular, the 
investigating authorities are free to examine whether all costs incurred are captured and none has been left out; they can examine whether the actual costs incu rred have been over or understated; and they can 
examine if the allocations made, for example for depr eciation or amortization , are appropriate and in 
accordance with proper accounting standards. They ar e also free to examine non-arms-length transactions or 
other practices which may affect the reliability of the re ported costs. But, in our view, the examination of the 
records that flows from the term "reaso nably reflect" in Article 2.2.1.1 does not involve an examination of the 
"reasonableness" of the reported costs themselves, wh en the actual costs recorded in the records of the 
producer or exporter are otherwise found, within acceptable limits, to be accurate and faithful. 
401 We note that the parties and third parties made a number of submissions concerning the negotiating 
history of relevant provisions of the Anti-Dumping Agreement and the GATT 1994 pertaining to the interpretation of Article 2.2.1.1. In this connection, we note that Article 32 of the Vienna Convention provides that: 
Recourse may be had to supplementary means of interpretation, including the preparatory work 
of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or  (b) leads to a result which is ma nifestly absurd or unreasonable. 
Our analysis of the interpretation of Article 2.2.1.1 does not, in ou r view, leave its meaning ambiguous 
or obscure, nor lead to a result which is manifestly absurd. Thus, our analysis does not, in our view, call for a recourse to the negotiating history referred to by the part ies and third parties. In any event, our review of that 
negotiating history suggests that it is not conclusive on the issues at hand. 
402 We recall that the claim under review in the present section is that the investigating authority erred 
by not using the costs reflected in the producers' records. The panel in US – Softwood Lumber V  was 
confronted with a different claim, namely , whether the investigating authority erred by using  the costs 
reflected in the producers' records. We  note, in this regard, that the nature of the claim faced by the panel in 
US – Softwood Lumber V  formed a key part of its evaluation of that claim. This was because, in that panel's 
view, Article 2.2.1.1 gives rise to a discretion – not a requirement – to decline to use the costs reflected in WT/DS473/R 
 
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  reflect[ed]" the level of profit derived from se lling woodchips – a by-product generated in the 
production of softwood lumber – which, in turn, of fset the cost of production of softwood lumber. 
The panel approached this claim by assessing whether the "records do not reasonably reflect the 
extent to which the existence of the by-product reduces the costs  to the producer ".403 By assessing 
the extent  to which the profits derived from woodchip  sales reduced the cost of production of 
softwood lumber, we understand the panel to have sought to ascertain the actual  cost of 
production to the producer in question. In this regard, we note that the panel rejected an 
argument concerning one of the producers that, be cause that producer's sales were made through 
interdivisional transactions within the same company at a discounted rate, the profits reflected in its records should be replaced with a market benchmark price.
404 Instead, the panel found that the 
investigating authority did not err in using the actual  profits derived from woodchip sales reflected 
in that producer's records to offset the cost of production of softwood lumber, notwithstanding that 
those transactions may have been at prices lower than market prices for woodchips.405 
7.244.  We note that, in respect of another producer, the panel in US – Softwood Lumber V  took a 
different approach. For that particular producer, the investigating authority had rejected the profits 
reported in its records for sales of woodchips to affiliated parties, and instead replaced those profits with other values from that producer's transactions with unaffiliated parties.
406 The panel 
did not find error with the investigating author ity's replacement of profits from affiliated 
transactions with those from unaffiliated transactions.407 However, contrary to the arguments of 
the European Union, we do not understand this find ing to represent an acceptance of disregarding 
recorded costs where they do not reflect market values.408 Instead, we understand the panel to 
have been concerned with whether, in the case of this particular producer, the profits from sales to 
affiliated parties were "reliable", that is, whether they provided an accurate indication of the actual  
extent to which the sales of woodchips reduce d the costs of production to the producer.409 The 
panel took note, in this connection, of the concerns of the investigating authority about the probity 
of the evidence on affiliated sales, as well as the late submission by the relevant producer of 
                                                                                                                                               
producers' records where the reflection of these is not reasonable. Thus, its observations on whether the 
investigating authority erred by using the costs re flected in the producers' records were on an arguendo  basis, 
assuming that Article 2.2.1.1 imposes a positive obligation on an investigating authority. (Panel Report, US – 
Softwood Lumber V , paras. 7.236-7.237, 7.241, 7.310, 7.316, and 7.317; see also European Union's second 
written submission, para. 102) 
403 Panel Report, US – Softwood Lumber V , para. 7.312. (emphasis added) 
404 Panel Report, US – Softwood Lumber V , para. 7.321 and fn 447 thereto. 
405 Panel Report, US – Softwood Lumber V , paras. 7.322-7.324. In this regard, we disagree with the 
European Union that the investigating authority in that case "used market value as a benchmark for 
determining the reasonableness of prices paid by a co mpany to purchase a by-product from an affiliated 
c o m p an y "  i n  o r d e r  t o  " c o n fi rm  w h e t h e r  t h e  f i n al  v a l u a t i o n  w o u l d  be  a s  c l os e  as  p o s s i bl e  t o  m a r k e t  v a l u e ".  
(European Union's second written submission, para. 106). Ra ther, in our reading, the investigating authority in 
that case sought to ascertain whether the reflection  of the recorded costs was reasonable. In other words, the 
investigating authority tested the recorded costs/prices against a market benchmark in order to determine whether those costs/prices were reliable and accurate because the transactions at issue were transactions between divisions of the same company, thus raising questions as to whether the value of the transactions in the producer's records accurately reflected the costs/prices to the producer. In any event, we note that the panel's ultimate finding on this aspect was that "an unbiased and objective investigating authority could have used the actual cost of the input as recorded in Tembec's books as a benchmark for valuing internal transfers of wood chips". (Panel Report, US – Softwood Lumber V , para. 7.324). The panel did not, in our view, reach a 
finding that "confirm[ed] that investigating authorities can use market prices as 'benchmarks' in order to confirm the 'reasonableness' of the recorded costs and values". (European Union's second written submission, 
para. 109). See also Argentina's opening statement at the first meeting of the Panel, para. 95. 
406 Panel Report, US – Softwood Lumber V , para. 7.327. 
407 Panel Report, US – Softwood Lumber V , para. 7.332. 
408 European Union's first written submission, paras. 167-169; second written submission, para. 105. 
409 Panel Report, U S  –  S o f t w o o d  L u m b e r  V , para. 7.329. In this regard, we do not agree with the 
European Union that, by assuming that investigating authorities are not precluded from carrying out an arm's 
length test in order to ensure prices charged to affiliated parties are "reliable", the panel in US – Softwood 
Lumber V  accepted that investigating authorities may reject the data in the companies' records where they do 
not reflect market prices, and that they may adjust cost s on the basis of market prices. (European Union's first 
written submission, para 167). Rather, we understand the panel to have assumed that such a test is permissible in order to establish the veracity of the re flection of the recorded costs, and thus to establish 
whether those costs are "reliable", or able to  be trusted and relied upon. Moreover, in US – Softwood 
Lumber V , the investigating authority had used the producer's own transactions in comparing costs and prices 
between unaffiliated and affiliated parties, as opposed to a market be nchmark that was external to the 
producer. WT/DS473/R 
 
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  otherwise pertinent data.410 Based on the foregoing, our understanding of the panel's analysis in 
US – Softwood Lumber V  accords with that of Argentina, insofar as it stands for the proposition 
that there is no requirement under Article 2.2.1.1 for costs in producers' records to reflect market values.
411  
7.245.  We also find support for our understanding of Article 2.2.1.1 in the panel's findings in 
Egypt – Steel Rebar . The European Union argues that the panel in that case interpreted 
Article 2.2.1.1 to mean that "the costs reflected in the records must be 'reasonable' for the 
production of the good in question", and to "refle ct the broader notion of 'associated', instead of 
the narrow notion of 'actually incurred'".412 Our reading of the panel's findings, however, does not 
accord with this understanding. In particular, the panel in that case was faced with the question 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.
413 In undertaking this inquiry, the 
panel focused on evidence as to whether each company under investigation had demonstrated that the interest income at issue was sufficiently closely related to their costs of production of rebar.
414 
Since none of these companies had provided sufficient factual evidence during the investigation 
that the interest income was related to their cost  of production of rebar, the panel found that 
Turkey had not established a prima facie  case that the investigating authority violated 
Article 2.2.1.1 in deciding not to factor this income as an offset in its calculation of the cost of 
production of rebar.415 In our reading, this approach reveals that the panel understood that 
Article 2.2.1.1 calls for a factual assessment of  each producer/exporter's actual costs of 
production, and whether the evidence on record demonstrates that those costs were offset by 
certain income. 
7.246.  The European Union argues that the panel's findings in EC – Salmon (Norway)  "confirms 
that Article 2.2.1.1 creates an association with th e costs that would normally be required for the 
act of producing " and that the "notion of 'reasonable costs' is not limited to the expenses that the 
specific company under investigation has incurred".416 We do not share the European Union's view 
of the panel's analysis in that case. Rather, a close reading of that case suggests to us that the 
panel was concerned to ensure the accuracy of the calculation of the actual cost of production to 
the producers concerned. In particular, the panel faulted the investigating authority for calculating certain non-recurring costs on the basis of a th ree year average, despite three years being the 
average amount of time to farm a salmon, because those non-recurring costs did not relate 
exclusively to the farming-related activities for a given salmon generation.
417 Instead, the panel 
stated that "in order to comply with Article 2.2.1.1, the allocation methodology that is applied by an investigating authority to determine cost of production must reflect the relationship that exists 
between the costs being allocated and the production activities to which they are 'associated'" .
418 
This statement does not suggest to us that Article 2.2.1.1 is concerned with what might "normally" be the cost of production. Rather, it suggests to us that the panel was focused on the actual  costs 
of production incurred by the producers in assessing alleged violations of Article 2.2.1.1. This is 
because the panel tested whether there existed, in actuality, a rational relationship between the costs allocated and the production activities, in order to yield an accurate outcome. Our understanding in this regard is strengthened  by the panel's subsequent finding that the 
investigating authority erred in adding costs of purchasing salmon from domestic sources to a 
producer's cost of production, without taking account of the revenue received from the same 
domestic sources for slaughtering services by that producer in respect of the same purchased 
salmon.
419 Again, this reveals an approach focused on the actual  costs of production incurred by 
producers in assessing alleged violations of Article 2.2.1.1, including any appropriate offset revenue, rather than the costs that might be "normally" incurred. 
7.247.  In sum, we consider that the proper inte rpretation of "provided such records … reasonably 
reflect the costs associated with the production and sale of the product under consideration" under 
                                               
410 Panel Report, US – Softwood Lumber V , paras. 7.331-7.333. 
411 Argentina's response to Pane l question No. 19, para. 54. 
412 European Union's first written submission, paras. 133 and 138. 
413 Panel Report, Egypt – Steel Rebar , para. 7.422. 
414 Panel Report, Egypt – Steel Rebar , paras. 7.423-7.426. 
415 Panel Report, Egypt – Steel Rebar , para. 7.426. 
416 European Union's first written submission, paras. 141 and 163. (emphasis original) 
417 Panel Report, EC – Salmon (Norway) , paras. 7.506-7.507. 
418 Panel Report, EC – Salmon (Norway) , para. 7.514. 
419 Panel Report, EC – Salmon (Norway) , paras. 7.606 and 7.609. WT/DS473/R 
 
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  Article 2.2.1.1 calls for an 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 incurred by the particular producer or exporter for the product under consideration. 
7.248.  With the foregoing considerations in mind, we now turn to whether, in the case before us, 
the investigating authority derogated from using the costs reflected in the records kept by 
producers in a manner consistent with Article 2.2.1.1. The investigating authority determined not to use the costs of the main raw material, soybeans, in the production of biodiesel because "the 
domestic 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 distortion created by the Argentine export tax system".
420 In our view, this does not constitute a legally sufficient basis 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.  
7.249.  Therefore, we find 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 
investigation on the basis of the records kept by the producers.421  
7.250.  Argentina also requests that we find that, as a consequence of failing to calculate the costs 
of production consistently with Article 2.2.1.1 of  the Anti-Dumping Agreement, the European Union 
failed to properly construct the normal value and thus acted inconsistently with Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994.422 Argentina's claims under 
these provisions are purely consequential to its claim under Article 2.2.1.1, and we do not consider findings under those provisions to be necessary for the effective resolution of this dispute. 
7.4.1.5  Whether 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 failing to construct 
the normal value on the basis of the cost of production in the country of origin 
7.4.1.5.1  Arguments of the parties 
7.4.1.5.1.1  Argentina 7.251.  Argentina requests that we find 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 failing to 
construct the normal value on the basis of the cost of production in the country of origin.
423  
7.252.  In addition to its arguments concerni ng the interpretation of Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994424, Argentina submits that the 
                                               
420 Definitive Regulation, (Exhibit ARG-22), Recital 38. 
421 In the light of this finding, we do not consider it necessary to address the arguments set out in 
paragraphs 208-213 of Argentina's first written submission concerning the alleged improper establishment of certain facts. We no te, however, that the Argentine government  does not set the price of soybeans in 
Argentina. 
We also note the argument of the European Union that Argentina's prima facie  case rests on the Panel 
upholding Argentina's interpretation of Article 2.2.1.1 of the Anti-Dumping Agreement, and consequently, if the Panel "replac[es] Argentina's legal interpretation of Article 2.2.1.1 with a different legal interpretation that Argentina has not proffered", this "would be tantamount  to the Panel's making the case for the complaining 
party". (European Union's second written submission, paras. 90-91, 118, 132, and 139). We disagree with the suggestion that panels are not entitled to develop their own legal reasoning in a context in which it is clear that the complaining party has made a claim on a matt er before the panel. (Appellate Body Reports , EC – 
Hormones , para. 156; US – Certain EC Products , para. 123). In any event, our understanding of Article 2.2.1.1 
of the Anti-Dumping Agreement bears  close similarity to the interpre tation advocated by Argentina. 
422 Argentina's first written submission, para. 244. 
423 Argentina's first written submission, paras. 254 and 470(b). Argentina also argues, as a first line of 
argumentation, that Article 2(5), second subparagraph, of the Basic Regulation being inconsistent "as such" 
with Articles 2.2 of the Anti-Dumping Agreement an d VI:1(b)(ii) of the GATT 1994, its application in the 
anti-dumping measures at issue is necessarily inconsiste nt with the same provisions. (Argentina's first written 
submission, paras. 248-249). As we have rejected Argentin a's "as such" claims under Articles 2.2 and VI:1, in 
the present section we only consider Argentina's second line of argumentat ion, i.e. that Article 2(5), second 
subparagraph, of the Basic Regulation was applied in a manner inconsistent with those provisions in the 
circumstances of the present investigation. 
424 See above, paras. 7.82, 7.86. WT/DS473/R 
 
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  EU authorities used prices of soybeans that are not the prices of soybeans in Argentina, i.e. the 
country of origin. Rather, they used the referenc e FOB price of soybeans, net of fobbing costs, 
which "reflect the level of international prices".425 For Argentina, the fact that this price is 
published by the Ministry of Agriculture in Argentina does not render it a "domestic price" because 
it is not a price at which soybeans are or can be acquired domestically, but rather, it provides an 
indication of the taxable base that will be used in the calculation of the export tax on a given day.
426 Therefore, Argentina submits, in construc ting the normal value on the basis of the 
reference FOB price minus fobbing costs, the EU authorities calculated a cost of production that is 
not the cost of production in the country of origin.427 
7.4.1.5.1.2  European Union 7.253.  The European Union responds that Ar ticle 2.2 of the Anti-Dumping Agreement and 
Article VI:1 of the GATT 1994 entitled it to use th e impugned data in order to calculate the normal 
value of Argentine biodiesel.
428  
7.254.  In addition to its arguments concerni ng the interpretation of Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994429, the European Union submits 
that the EU authorities were faced with the problem that certain costs had been distorted as a result of government action, and were required to  find appropriate evidence in order to determine 
what the cost would have been in the absence of the distortion.
430 They sought this evidence in the 
FOB prices published daily by the Government of Argentina, which technically constitute prices "in the country of origin"
431, and they properly set forth their reasons for doing so.432 Thus, the 
European Union submits, Argentina failed to make a prima facie  case.433 
7.4.1.5.2  Evaluation by the Panel 
7.255.  Argentina requests that we find 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 failing to 
construct the normal value on the basis of the cost of production in the country of origin.434  
7.256.  The text of both Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the 
GATT 1994 refer to the "cost of production" in "the country of origin".435 Thus, the question before 
us is whether the cost used by the EU authorities for soybeans can be understood to be a cost in 
"the country of origin", that is, in Argentina. 
7.257.  We recall, in this regard, that the EU auth orities found the domestic prices of the main raw 
material used by biodiesel producers in Argentina to be "artificially lower" than international prices 
due to the distortion created by the Argentine export tax system.436 On that basis, the 
EU authorities disregarded the price actually paid by Argentine producers for soybeans and replaced it with "the price at which those companies would have purchased the soya beans in the 
absence of such a distortion".
437 Accordingly, the EU authorities replaced the average actual 
purchase price of soybeans during the IP, as reflected in the producers' records, with the average reference price of soybeans published by the Ar gentine Ministry of Agriculture for export, FOB 
                                               
425 Argentina's first written submission, paras. 251-253; second written submission, para. 191 (referring 
to Definitive Regulation, (Exhibit ARG-22), Recital 34). 
426 Argentina's second written submission, paras. 193 and 194. 
427 Argentina's second written submission, para. 195. 
428 European Union's first written submission, para. 257. 
429 See above, paras.7.94 - 7.97. 
430 European Union's first written submission, para. 205. 
431 European Union's opening statement at the fi rst meeting of the Panel, paras. 80 and 81. 
432 European Union's first written submission, para. 206; response to Panel question No. 45, 
paras. 57-60. 
433 European Union's first written submission, para. 207. 
434 Argentina's first written submission, paras. 254 and 470(b). 
435 The parties agree that both provisions require the use of the "cost of production" in the country of 
origin. (European Union's first written submission, paras. 200 and 205-207; Argentina's first written 
submission, para. 117). 
436 Definitive Disclosure, (Exhibit ARG-35), para. 34. 
437 Definitive Disclosure, (Exhibit ARG-35), para. 35. WT/DS473/R 
 
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  Argentina, minus fobbing costs, during the IP.438 The EU authorities considered that this reference 
price reflected the level of international prices and that this would have been the price paid by the Argentine producers in the absence of the export tax system.
439 
7.258.  In our view, it is plain from this that the cost used by the European Union is not a cost "in 
the country of origin". It was specifically selected to remove the perceived distortion in the 
domestic price of soybeans caused by the Argentine export tax system.440 This is because the 
prices prevailing in Argentina were considered to be artificially lower than international prices. In 
other words, the EU authorities selected this cost precisely because it was not the cost of soybeans 
in Argentina.  
7.259.  The fact that this price was published by the Argentine Ministry of Agriculture, and 
therefore, was a price published "in" Argentina, is irrelevant. This price did not represent the cost 
of soybeans in Argentina for domestic purchasers of soybeans, including the Argentine 
producers/exporters of biodiesel.441 The European Union itself stated that "the prices used were 
indeed reflecting the soya bean costs that the Argentine producers of biodiesel would have to bear 
in Argentina, in the absence of the distortion ".442 Thus, the European Union itself recognized that 
the prices used were not those actually prevailing in Argentina, but rather, were those that would have prevailed in the absence of the alleged distortion. 
7.260.  For the foregoing reasons, we find 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 the country of origin", namely, Argentina, in the construction of the normal value. 
7.4.1.6  Whether the European Union acted in consistently with Article 2.2.1.1 of the 
Anti-Dumping Agreement by including costs no t associated with the production and sale 
of biodiesel in the calculation of the cost of production 
7.4.1.6.1  Main arguments of the parties 
7.4.1.6.1.1  Argentina 7.261.  Argentina submits that the European Union acted inconsistently 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.
443  
7.262.  In Argentina's view, the test under Article 2.2.1.1 of the Anti-Dumping Agreement focuses 
on the records kept by the producer/exporter, and therefore the "costs associated with the 
production and sale" are necessarily the costs of that specific producer/exporter.444 This further 
flows from the fact that the test refers to the "costs associated with the production and sale of the 
product under consideration ".445 According to Argentina, instead of calculating the cost of 
production on the basis of the records of the ex porting producers, the European Union decided to 
base the cost of soybeans on an average of the FOB reference price published by the Ministry of 
Agriculture of soybeans net of fobbing costs.446 Since the producers under investigation did not 
pay the reference FOB price minus fobbing costs for soybeans but instead paid the actual  amounts 
reflected in their records, Argentina submit s that the price of soybeans used by the 
                                               
438 Definitive Disclosure, Annex II, (Exhibit ARG-38) (BCI), p. 1. 
439 Definitive Disclosure, (Exhibit ARG-35), para. 32. 
440 Definitive Regulation, (Exhibit ARG-22), Recitals 38-40. 
441 To recall, the price used by the EU authoritie s was the reference price used by the Argentine 
government for the calculation of the export tax on soybeans. See above, para. 7.184. 
442 European Union's response to Panel ques tion No. 45, para. 60.  (emphasis added) 
443 Argentina's first written submission, para. 470(c). 
444 Argentina's second written submission, para. 115. 
445 Argentina's second written submission, para. 115 (emphasis original); response to Panel question 
No. 91, para. 38. 
446 Argentina's first written submission, para. 260. WT/DS473/R 
 
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  European Union to calculate the cost of production is not a price that is associated with the 
production and sale of the like product.447 
7.4.1.6.1.2  European Union 7.263.  The European Union submits that Argentin a's claim is based on the assumption that the 
terms "associated with the production and sale" in Article 2.2.1.1 should be given the meaning 
"prices actually paid by the companies under investigation".
448 In the European Union's view, 
however, the term "associated" has a broader meaning than the words "actually incurred" or 
"actually paid".449 The European Union submits, in this regard, that the panel report in Egypt – 
Steel Rebar  used the term " pertain to the production".450 In the European Union's view, the panel's 
use of the term "pertain", akin to the use of the term "associated", demonstrates that Article 2.2.1.1 does not require that the "costs" used for the calculation be the "expenses actually 
incurred" by the producer.
451 
7.264.  The European Union submits that its understan ding in this regard is reinforced by the fact 
that Article 2.2.1.1 mentions the costs associated  "with the production", as opposed to the costs 
incurred by the "producer".452 The European Union notes the EC – Salmon (Norway)  panel's finding 
that the "costs of production" should be understood as the prices to be paid "for the act of producing".
453 For the European Union, the use of the te rms "production" and "act of producing", 
instead of the term "producer", shows that Article 2.2.1.1 does not require the costs to have been 
actually paid by the specific producers that are subject to the investigation. The European Union also argues that the context afforded by Article 2.2.2 of the Anti-Dumping Agreement, which uses 
the phrase "shall be based on actual data pertaining to production and sales in the ordinary course 
of trade", can be contrasted with Article 2.2.1.1, which uses the phrase "reasonably reflect the 
costs associated with the production and sale".
454  
7.4.1.6.2  Arguments of the third parties 
7.265.  China  submits that, self-evidently, the price of soybeans exported from Argentina is not a 
cost associated with the production and sale of bi odiesel in Argentina, since exported soybeans are 
necessarily not available to producers of biodiesel in Argentina.455 By including in its calculation of 
the cost of production of biodiesel a cost which was not associated with the cost of production and 
sale of biodiesel, China argues, the European Union acted inconsistently with Article 2.2.1.1 of the Anti-Dumping Agreement.
456 
7.266.  Indonesia  submits that the European Union misint erprets the statement of the panel in 
Egypt – Steel Rebar  in asserting that, by using the word "pertain", "the Panel was seeking a term 
that would reflect the broader notion of 'associated' instead of the narrow notion of actually incurred".
457 Indonesia submits that this is because, in the chapeau of Article 2.2.2, the present 
participle of the verb "pertain" is used to refer to the "actual data" of the producer/exporter under 
investigation.458 Indonesia also considers that previous panel reports have adequately established 
that the phrase "costs associated with the production and sale of the product under consideration" 
                                               
447 Argentina's first written submission, para. 261; second written submission, paras. 185-189 (referring 
to Panel Report, EC – Salmon (Norway) , para. 7.483). 
448 European Union's first written submission, para. 259. 
449 European Union's first written submission, para. 260. 
450 European Union's first written submission, para. 260 (referring to Panel Report, Egypt – Steel Rebar , 
para. 7.393). (emphasis added) 
451 European Union's first written submission, para. 260; opening statement at the first meeting of the 
Panel, para. 72. 
452 European Union's first written submission, para. 261. 
453 European Union's first written submission, para. 261 (referring to Panel Report, EC – Salmon 
(Norway) , para. 7.481). 
454 European Union's opening statement at th e first meeting of the Panel, para. 73. 
455 China's third-party submission, para. 125. 
456 China's third-party submission, para. 127. 
457 Indonesia's third-party submissi on, para. 40(iii) (referring to European Union's first written 
submission, paras. 137 and 138, in turn referring to Panel Report, Egypt – Steel Rebar , para. 7.383). 
458 Indonesia's third-party submission, para. 40(iii); third-party statement, para. 11. WT/DS473/R 
 
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  necessarily refers to the costs which are connected in some manner to the actual production and 
sales of the product under consideration by the investigated producer/exporter.459 
7.267.  The United States  submits that it is revealing that, rather than modify "reasonably reflect 
costs" with the phrases "actually incurred" or "by the exporter or producer in question," 
Article 2.2.1.1 references costs " associated with  the production and sale of the product under 
consideration".460 For the United States, the text of Article 2.2.1.1 is not directly tied to the 
producers or their books and records. Rather, the term "associated with" suggests a more general 
connection between the relevant costs and the production or sale of the product.461 The 
United States contends that the use of the term "associated with" also conveys a conception of costs more general than just those borne by the specific producer. 
7.4.1.6.3  Evaluation by the Panel 
7.268.  Argentina requests that we find that the European Union acted inconsistently 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.
462  
7.269.  We recall, in this connection, that Arge ntina has also requested us to find 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 on the basis of the records kept by the producers.463 In our 
understanding, the present claim also follows from  the reliance of the European Union on the 
condition in Article 2.2.1.1 set out in the phrase "provided that such records … reasonably reflect the costs associated with the production and sale of the product under consideration". The EU authorities relied on this condition in their determination not to calculate costs on the basis of 
the records kept by the producers under investigation. We have already examined whether the 
EU authorities had a legally sufficient basis under Article 2.2.1.1 for concluding that the producers' records do not reasonably reflect the actual costs incurred in the production of biodiesel. We found 
that they did not and consequently, found that the European Union acted inconsistently with 
Article 2.2.1.1 of the Anti-Dumping Agreement.
464 Thus, in the light of that finding, we consider it 
unnecessary to reach a finding on the present claim for the effective resolution of this dispute. 
7.4.1.7  Whether the European Union acted inconsistently with Article 2.1 of the 
Anti-Dumping Agreement and Article VI:1 of the GATT 1994 
7.4.1.7.1  Main arguments of the parties 7.4.1.7.1.1  Argentina 
7.270.  Argentina submits that, as a consequence of  the European Union acting inconsistently with 
Articles 2.2.1.1 and 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 in calculating the cost of production and constructing the normal value, the dumping margin 
determinations made by the investigating authority are also inconsistent with Article 2.1 of the 
Anti-Dumping Agreement and with Article VI:1 of the GATT 1994.
465 
7.271.  Argentina indicates that its claim is "not a stand-alone claim", but rather, is a 
consequential claim premised on other violations.466 Argentina submits that, while Article VI:1 of 
the GATT 1994 and Article 2.1 of the Anti-Dumping Agreement are definitional provisions that do 
not impose independent obligations and on which no stand-alone claim can be based, the character of such provisions as definitional does not mean that a Member cannot act inconsistently 
                                               
459 Indonesia's third-party submission, pa ra. 40 (referring to Panel Reports, Egypt – Steel Rebar , 
paras. 7.393, 7.426; EC – Salmon (Norway) , para. 7.483). 
460 United States' third-party submis sion, para. 26. (emphasis original) 
461 United States' third-pa rty submission, para. 26. 
462 Argentina's first written submission, para. 470(c). 
463 Argentina's first written submission, paras. 195, 244, and 470(a). 
464 See above, para. 7.249. 
465 Argentina's first written submission, paras. 264 and 470(d); second written submission, paras. 196 
and 254(d). 
466 Argentina's response to Panel question No. 55, para. 134; opening statement at the first meeting of 
the Panel, para. 39. WT/DS473/R 
 
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  with such definitions in and of themselv es, and when applied to other provisions.467 Argentina 
notes, in this respect, that the Appellate Body has not declined to find violations of these provisions in its past reports because such provisions cannot be violated, but rather, the Appellate Body deemed that additional findings  under those provisions were not necessary to 
resolve the particular disputes concerned.
468 
7.272.  Argentina further submits that Article 2.1 of the Anti-Dumping Agreement is not limited to 
cases in which there are no sales in the ordinary course of trade, but rather, it is concerned with 
defining dumping generally, as evidenced by the phrase "for the purpose of this Agreement".469 In 
Argentina's view, a finding that the European Union acted inconsistently with Article 2.1 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 will provide "more solid legal 
predictability", and would ensure that, when implementing the Panel's recommendations and 
rulings, the European Union adopts a measure which is not only consistent with Articles 2.2 
and 2.2.1.1, but also with Article 2.1 of the Anti-Dumping Agreement and Article VI:1 of the 
GATT 1994.
470 
7.4.1.7.1.2  European Union 
7.273.  The European Union submits that, according to the jurisprudence of the Appellate Body, 
Article 2.1 of the Anti-Dumping Agreement and Ar ticle VI:1 of the GATT 1994 do not impose any 
independent obligation on Members, and they cannot  serve as a legal basis for a distinct claim in 
WTO dispute settlement proceedings.471 Consequently, Argentina cannot base any claim on 
Article 2.1 of the Anti-Dumping Agreement. For the European Union, Argentina's assertion that its claims are "consequential" and dependent on other claims under different legal provisions 
essentially constitutes a request to the Panel to exercise judicial economy on these claims.
472 Since 
the provisions at issue are not aimed at protecting some specific and distinct legal right or interest, the European Union doubts whether raising claims under those provisions is compatible with the 
Members' obligations under Article 3.10 of the DSU.
473  
7.274.  Further, the European Union submits that, in defining the concept of a "dumped product", 
the text of Article 2.1 expressly refers to a comparison between the export price and the 
comparable domestic price of the product "in the ordinary course of trade".474 For the 
European Union, Article 2.1 does not cover situations, as in the present case, where there are no domestic sales "in the ordinary course of trade". 
7.4.1.7.2  Evaluation by the Panel 
7.275.  We commence our analysis by noting th at the Appellate Body has approached similar 
claims in the following manner
475: 
Article 2.1 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 are 
definitional provisions. They set out a definition of "dumping" for the purposes of the 
Anti-Dumping Agreement  and the GATT 1994. The definitions in Article 2.1 and 
Article VI:1 are no doubt central to the interpretation of other provisions of the 
Anti-Dumping Agreement , such as the obligations relating to, inter alia , the calculation 
of margins of dumping, volume of dumped im ports, and levy of anti-dumping duties to 
counteract injurious dumping. But, Article 2.1 and Article VI:1, read in isolation, do not impose independent obligations. As we have found that the United States acts 
inconsistently with Article 2.4.2 of the Anti-Dumping Agreement by maintaining 
zeroing procedures in original investigations on the basis of T-T comparisons, we do 
                                               
467 Argentina's response to Panel question No. 55, paras. 133 and 135. 
468 Argentina's response to Panel question No. 55, para. 135 (referring to Appellate Body Reports, US – 
Zeroing (Japan) , para. 140; US – Stainless Steel (Mexico) , para. 140); opening statem ent at the first meeting 
of the Panel, para. 40 (referri ng to Appellate Body Report, US – Zeroing (Japan) , para. 140). 
469 Argentina's opening statement at the first meeting of the Panel, para. 41. 
470 Argentina's response to Panel question No. 107, paras. 82-84. 
471 European Union's first written submission, paras. 48 and 53 (refe rring to Appellate  Body Report, US 
– Zeroing (Japan) , para. 140). 
472 European Union's second written submission, para. 14. 
473 European Union's second written submission, para. 14. 
474 European Union's first wr itten submission, para. 49. 
475 Appellate Body Report, US – Zeroing (Japan) , para. 140.  WT/DS473/R 
 
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  not consider it necessary to make additional findings on Japan's claims under these 
provisions. Japan has not explained why such additional findings under Article 2.1 of the Anti-Dumping Agreement  and Articles VI:1 and VI:2 of the GATT 1994 would be 
necessary to resolve this dispute. (fn omitted) 
7.276.  We see no reason to depart from this approach in the present case. In particular, 
Argentina has not explained how, the Panel having found the European Union to have acted inconsistently with Articles 2.2.1.1 and 2.2 of the Anti-Dumping Agreement and Article VI:1(b)(ii) 
of the GATT 1994, additional findings under Ar ticle 2.1 of the Anti-Dumping Agreement and 
Article VI:1 of the GATT 1994 would contribute to the effective resolution of the present dispute. Argentina asserts that such findings would provide "more solid legal predictability", and ensure that, as part of its implementation, the European Union would adopt a measure which is not only 
consistent with Articles 2.2 and 2.2.1.1, but also  with Article 2.1 of the Anti-Dumping Agreement 
and Article VI:1 of the GATT 1994.
476 However, Argentina does not ground these assertions on any 
further explanation or argumentation. In the ab sence of cogent reasons for departing from the 
approach of the Appellate Body in prior cases, we adopt the same approach.477 We therefore 
conclude that is it unnecessary to make findings on Argentina's claims under Article 2.1 of the Anti-Dumping Agreement and Article VI:1 of th e GATT 1994 for the effective resolution of the 
present dispute. 
7.4.2  Whether the European Union acted inconsistently with Article 2.4 of the 
Anti-Dumping Agreement by failing to make a fair comparison between the normal value 
and the export price 
7.4.2.1  Legal claim 
7.277.  Argentina requests that we find that the European Union acted inconsistently with 
Article 2.4 of the Anti-Dumping Agreement by failing to make due allowance for differences 
affecting price comparability, including differences in taxation, thereby precluding a fair 
comparison between the export price and the normal value.
478 In particular, Argentina claims that 
the comparison between a constructed normal valu e that reflected an average of the reference 
price of soybeans published by the Argentine Ministry of Agriculture (minus fobbing costs), on the 
one hand, and an export price that reflected the ac tual domestic price of soybeans, on the other, 
was not a "fair comparison" under Article 2.4.479 
7.4.2.2  Relevant provisions  of the covered agreements 
7.278.  Article 2.4 of the Anti-Dumping Agreement provides, in relevant part: 
A fair comparison shall be made between th e export price and the normal value. This 
comparison shall be made at the same level of  trade, normally at the ex-factory level, 
and in respect of sales made at as nearly as possible the same time. Due allowance 
shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale, taxation, levels of 
trade, quantities, physical characteristics, and any other differences which are also 
demonstrated to affect price comparability.[*] In the cases referred to in paragraph 3, allowances for costs, including duties and taxes, incurred between importation and resale, and for profits accruing, should also be made. If in these cases price 
comparability has been affected, the authorities shall establish the normal value at a 
level of trade equivalent to the level of trade of the constructed export price, or shall make due allowance as warranted under this paragraph. 
_______________ 
[*fn original]7 It is understood that some of the above factors may overlap, and authorities shall 
ensure that they do not duplicate adjustments th at have been already made under this provision.  
                                               
476 Argentina's response to Panel question No. 107, paras. 82-84. 
477 Appellate Body Report, US – Stainless Steel (Mexico) , para. 160. 
478 Argentina's first written submission, para. 470(f). 
479 Argentina's first written submission, para. 296. WT/DS473/R 
 
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  7.4.2.3  Factual background 
7.279.  As noted above480, the EU authorities considered that the normal value had to be 
constructed, and replaced the actual prices paid by the producers for the main raw material, soybeans, with prices that reflected the level of international prices. The reason for this 
replacement, according to the EU authorities, was that the domestic Argentine prices for soybeans 
were distorted by the Argentine export tax system.
481  
7.280.  In its comments on the Definitive Discl osure, CARBIO argued that, by comparing the 
exporting producers' actual export prices to a normal value based on international prices of 
soybean and soybean oil, the EU authorities effect ively compared a normal value that reflects the 
inclusion of the export taxes on soybeans and soybea n oil with an export price that is net of such 
taxes. It contended that, given that soybean oil is the main component of the production costs, the 
inclusion of the export taxes in the normal value substantially impacted price comparability. 
CARBIO argued that the EU authorities' decision to construct the normal value on the basis of international prices of soybeans and soybean oil and to compare this value with an export price net 
of export taxes (that would otherwise have brought such export price also to the level of 
"international prices") could not be considered a "fair comparison".
482 
7.281.  In response to CARBIO's argument that th e EU authorities did not make a fair comparison, 
the EU authorities stated that: 
The fact that from a pure numerical point of view the result is similar does not mean 
that the methodology applied by the Commission consisted in simply adding the export taxes to the costs of the raw material. International prices of commodities are 
set based on supply and demand and there is no evidence that the DET system in 
Argentina affects the CBOT prices. Therefore,  all claims and allegations that by using 
an international price the Commission did not make a fair comparison between normal 
value and export price are unfounded.
483 
7.4.2.4  Main arguments of the parties 7.4.2.4.1  Argentina 
7.282.  Argentina argues that the failure to construct the normal value on the basis of the cost of 
production reported in producers' records, which it claims is inconsistent with, inter alia , 
Articles 2.2.1.1 and 2.2 of the Anti-Dumping Agreement, introduced a difference between the 
normal value and export price that affected price comparability. For Argentina, the difference 
stems from the EU authorities' reflection of the ex port tax on soybeans in the cost of soybeans for 
the purposes of calculating the cost of producti on when constructing the normal value, while 
omitting that same tax from the export price.
484 In Argentina's view, this approach ignores the fact 
that both exported biodiesel and domestically sold biodiesel are manufactured using domestic 
soybean oil and this has led to an "artificial imbalance" between the export price and the normal value.
485  
7.283.  According to Argentina, the European Union should have made "due allowance" for this 
difference between the export price and the normal value, for instance by deducting the export tax 
on domestic soybeans from the constructed normal value.486 Although Argentina acknowledges 
that the export tax on soybeans was not directly added to the cost of production, Argentina 
                                               
480 See above, paras. 7.182, 7.184. 
481 Definitive Disclosure, (Exhibit ARG-35), paras. 35-37. 
482 CARBIO's comments on the Definitive  Disclosure (Exhibit ARG-39), p. 12. 
483 Definitive Regulation, (Exhibit ARG-22), Recital 42. 
484 Argentina's first written submission, para. 303. 
485 Argentina's second written submission, para. 202. 
486 Argentina's response to Panel question Nos. 56, para. 138, and 113, paras. 98-100. Argentina 
submits that this difference acco unts for approximately 75% of the dumping margin found by the 
European Union at the definitive stage. (Argentina's first written submission, para. 300; opening statement at 
the first meeting of the Panel, para. 105; re sponse to Panel question No. 56, para. 137) WT/DS473/R 
 
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  submits that the methodology of the European Un ion yielded a result which, from a numerical 
viewpoint, was similar to simply adding the export tax.487  
7.284.  Argentina submits that its claim under Article 2.4 does not concern the manner in which 
the normal value was constructed. Rather, for Argentina, the WTO-inconsistent construction of the 
normal value introduced differences between the no rmal value and the export price that affected 
price comparability and for which due allowance should have been made pursuant to Article 2.4.488 
In this regard, Argentina refers to the panel report in EU – Footwear (China) , which stated that 
"the provisions of Article 2.4 are intended precisely to deal with problems that arise in the 
comparison as a result of, inter alia , how normal value was established".489  
7.4.2.4.2  European Union 7.285.  The European Union argues that Argentina has failed to substantiate its claim of 
inconsistency with Article 2.4 of the Anti-Dumping Agreement. 
7.286.  The European Union contends that, properly characterized, Argentina's claim under 
Article 2.4 pertains to the calculation of the normal value, as opposed to the comparison between 
the normal value and the export price.
490 The European Union draws on the panel reports in 
Egypt – Steel Rebar  and EC – Tube or Pipe Fittings  to argue that Article 2.4 does not deal with "the 
basis for and basic establishment of the export price and normal value (which are addressed in 
other provisions)", but rather, has to do "with the nature of the comparison  of export price and 
normal value".491 Thus, Argentina's claim that the EU authorities should have calculated the 
normal value in a different way falls outside the scope of Article 2.4, because Article 2.4 does not apply to the establishment of the normal value.
492 
7.287.   The European Union submits that the EU authorities did not adjust the normal value by 
reference to the level of the export tax on soybeans.493 Rather, the European Union contends that 
the EU authorities considered the export tax to have introduced a distortion into the market for 
soybeans and soybean oil, thus prompting them to  measure the extent of that distortion and, 
accordingly, adjust the cost of production.494 While the extent of the distortion corresponded, in 
practice, to the level of the export tax, the European Union submits that the extent of the 
distortion could have been less had the balance of market power between the soybean growers 
and the biodiesel producers been such that the growers could have obtained a higher price.495 
Thus, the European Union should not be understood to have adjusted the normal value by an amount corresponding to the level of export ta x, but rather, to have made adjustments for a 
market distortion created by the export tax. 
7.288.  Further, the European Union argues that Argentina's reliance on the panel report in EU –
 Footwear (China)  is misplaced because that case addressed a different situation and a different 
claim, and, conversely, that panel report actu ally supports the European Union's position by 
concluding that Article 2.4 does not "establish specific obligations with regard to the methodologies that investigating authorities may use in order to ensure a fair comparison".
496 For the 
European Union, this suggests that investigating authorities enjoy discretion under Article 2.4 on 
how adjustments are made and which methodology they chose to ensure a fair comparison.497 The 
                                               
487 Argentina's first written submission, paras. 302-304 (referring to Panel Report, Egypt – Steel Rebar , 
para. 7.388). 
488 Argentina's first written submission, paras. 285 and 286; second written submission, para. 206; 
response to Panel question No. 56, paras. 136-138. 
489 Argentina's response to Panel question No. 56, para. 137; opening statement at the second meeting 
of the Panel, para. 7 (both quoting Panel Report, EU – Footwear (China) , para. 7.264). 
490 European Union's response to Panel question No. 57, para. 84. 
491 European Union's second written subm ission, para. 21 (quoting Panel Report, Egypt – Steel Rebar , 
para. 7.333 (emphasis added by the European Union)); see also ibid. para. 26 (quoting Panel Report, EC – 
Tube or Pipe Fittings , para. 7.140). 
492 European Union's second written submission, paras. 21-22 and 24. 
493 European Union's first written submission, para. 284. 
494 European Union's first written submission, para. 284. 
495 European Union's first written submission, para. 284. 
496 European Union's second written submissi on, paras. 31-35 (quoting Panel Report, EU – Footwear 
(China) , para. 7.281). 
497 European Union's second written submission, para. 36. The European Union also refers to the Panel 
Report in EC – Tube or Pipe Fittings , para. 7.178. WT/DS473/R 
 
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  European Union argues that in the present case, Argentina has failed to show that the 
EU authorities have exercised their discretion in  an arbitrary manner when comparing the normal 
value and the export price. 
7.4.2.5  Arguments of the third parties  
7.289.  China  submits that Article 2.4 of the Anti-Dumping Agreement applies generally to the 
calculation of the dumping margin, regardless of how the normal value and export price are determined.
498 In China's view, the European Union acte d inconsistently with Articles 2.2.1.1 
and 2.2 by making adjustments to the costs of soyb eans. However, even if the EU authorities were 
entitled to make such adjustments, China argues that those adjustments nonetheless resulted in a difference affecting price comparability under Article 2.4. This is because the adjustments led to a difference in the costs of inputs reflected respectively in the normal value and in the export price, 
and this difference affected price comparability.
499 In China's view, the European Union was 
obliged under Article 2.4 to make "due allowance" for this difference in order to ensure a fair 
comparison between the normal value and the export price. 
7.290.  Indonesia  submits that there is an obvious difference between the constructed normal 
value and the export price affectin g the comparability between the two.500 Indonesia submits that 
the use of international prices for soybeans or the inclusion of an amount numerically equal to the 
export tax on soybeans only in the normal value is a difference that needed to be taken into 
account in the comparison to the export price, be cause it affected the "comparable price" that was 
constructed.501 
7.291.  The United States  submits that the text of Article 2.4 of the Anti-Dumping Agreement 
presupposes that the appropriate normal  value has already been identified.502 The United States 
agrees in principle with both complainant and re spondent that the use of a constructed normal 
value does not preclude the need for due allowances or adjustments where necessary.503 In the 
context of the comparison required by Article 2.4,  the United States submits that the Panel should 
consider, first, whether there is a relevant difference between the constructed value and the export price, and second, whether that difference has an effect on "price comparability". 
7.4.2.6  Evaluation by the Panel 
7.292.  We begin our analysis by interpreting Article 2.4 of the Anti-Dumping Agreement based on 
its text and context, taking into account relevant reports of prior panels and the Appellate Body.  
7.293.  Beginning with the text of Article 2.4, we note that its opening sentence mandates that a 
"fair comparison" be made between the export price and the normal value when determining 
whether dumping exists.
504 The second sentence of Article 2.4 sets up certain parameters for this 
comparison, requiring it to be "at the same level of trade, normally at the ex-factory level, and in 
respect of sales made at as nearly as possible the same time". These parameters, in our view, 
provide an indication of matters to be considered in ensuring that the comparison is "fair".  
7.294.  The third sentence of Article 2.4 elaborates  on the means of ensuring, in practical terms, 
that the "comparison" between the normal value and the export price is "fair". It requires "[d]ue 
allowance" to be made "for differences which affe ct price comparability". In our understanding, the 
ordinary meaning of making an "allowance" connotes "mak[ing] [an] addition or deduction 
                                               
498 China's third-party submission, para . 143 (referring to Panel Report, Egypt – Steel Rebar , 
para. 7.388). 
499 China's third-party submission, para. 145. 
500 Indonesia's third-party statement, para. 21. 
501 Indonesia's third-party statement, para. 21 (referring to Appellate Body Report, US – Zeroing (EC) , 
para. 157; Panel Report, EU – Footwear (China) , para. 7.264). 
502 United States' third-pa rty submission, para. 33. 
503 United States' third-pa rty submission, para. 34. 
504 We note that the parties and third partie s do not dispute that Article 2.4 of the 
Anti-Dumping Agreement applies in cases involving normal values constructed under Article 2.2 of the 
Anti-Dumping Agreement. (Argentina's first written submission, para. 286; European Union's first written 
submission, para. 286; China's third-party submission, pa ra 145; Indonesia's third-party statement, para. 21; 
Saudi Arabia's third-party submission, para. 31; United States' third-part y submission, para. 34) WT/DS473/R 
 
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  corresponding to; … tak[ing] into account mitigating or extenuating circumstances"505, and "due" 
connotes what is "just, proper, regular, and reasonable".506 That is, additions or deductions in 
appropriate amounts to the export price or normal value may be required to account for "differences" between the two if they affect price comparability, thereby ensuring the "fairness" of 
the comparison under Article 2.4. The Appellate Bo dy, interpreting the text of Article 2.4, has 
indicated that this provision is specific in describing the circumstances in which such allowances are to be made, namely, as just noted, where there are "differences in characteristics of the 
compared transactions that have an impact, or are likely to have an impact, on the price of the 
transaction".
507 This, in turn, calls for the identification of "differences" that affect the 
appropriateness of the respective "price[s]" for the purposes of comparison, which would 
compromise the "fair[ness]" of the comparison if an allowance were not made.  
7.295.  Article 2.4 lists examples of "differences " between the normal value and the export price 
which presumptively may affect price comparability: "conditions and terms of sale, taxation, levels of trade, quantities, [and] physical characterist ics". The elements of listed differences are all 
features, or characteristics, of the transactions that are compared to determine whether there is 
dumping.
508 This list is non-exhaustive, and due allowance must also be made for "any other" 
difference which is demonstrated to affect price comparability. Thus, the reference in Article 2.4 to 
"price comparability" can be understood to refer to  differences in characteristics of the compared 
transactions that have an impact, or are likely to have an impact, on the prices involved in the transaction.
509 
7.296.  Viewed in this context, it is evident th at Article 2.4 concerns the comparison between the 
normal value and the export price and is not directed at what the panel in Egypt – Steel Rebar  
described as "the basis for and basic establishment of the export price and normal value", which it 
considered to be "addressed in detail in other provisions".510 Or, in the words of the EU – Footwear 
(China)  panel: "[n]othing in Article 2.4 suggests that the fair comparison requirement provides 
guidance with respect to the determination of the component elements of the comparison to be made, that is, normal value and export price."
511 Thus, the subject-matter of Article 2.4, i.e. 
differences affecting the comparability of the normal value and the export price, can be contrasted 
with that of Articles 2.1, 2.2 – including its subparagraphs – and 2.3 which pertain to the methodology for determining the normal value and the export price.
512  
7.297.  This is not to say that the manner in which the normal value or export price is determined 
is not pertinent to the question whether the authority is conducting a "fair comparison" within the 
meaning of Article 2.4. Indeed, as noted above513, the parties and third parties all agree that 
Article 2.4 of the Anti-Dumping Agreement applie s in cases involving normal values constructed 
under Article 2.2 of the Anti-Dumping Agreement. We agree with the Egypt – Steel Rebar  panel's 
indication that "[a] constructed normal value is, in effect, a notional price, 'built up' by adding costs of production, administrative, selling and other costs, and a profit". Thus, it may be 
necessary to make "due allowance" in a particular investigation in order to comply with the 
obligation to ensure a fair comparison under Arti cle 2.4, even though the normal value is one 
arrived at by way of a construction under Article 2.2.
514 Thus, there may be cases where the 
                                               
505 Oxford English Dictionary, http://www.oed.com/view/Entry/5464?rskey=sBvRt6&result=1#eid , 
accessed 23 November 2015. 
506 Panel Report, Mexico – Olive Oil,  para 7.67 (citing Black's Law Dictionary , 7th edn, abridged. (2000), 
p. 405). 
507 Appellate Body Report, US – Zeroing (EC) , para. 157. 
508 Appellate Body Report , US – Zeroing (EC) , para. 157; Panel Report, US – Stainless Steel (Korea) , 
para. 6.77. 
509 Appellate Body Report , US – Zeroing (EC) , para. 157; Panel Report, US – Stainless Steel (Korea) , 
para. 6.77. The Appellate Body has indicated that, conver sely, the third sentence of Article 2.4 can also be 
read a contrario , such that allowances may not be made for diffe rences that do not affect price comparability. 
(Appellate Body Report , US – Zeroing (EC) , para. 156) 
510 Panel Reports, Egypt – Steel Rebar , para. 7.333; EU – Footwear (China) , para 7.263. 
511 Panel Report, EU – Footwear (China) , para 7.263. 
512 We note, however, that the fourth and fifth senten ces of Article 2.4, which are not at issue here and 
which apply in specific cases involving a constructed export price under Article 2.3, can be conceived as 
supplementing the construction of the export price pursua nt to that provision. These two sentences incorporate 
disciplines to ensure that the constructed export prices are comparable to the normal value, notwithstanding 
that they have been constructed by the investigating authority on the bases specified in Article 2.3. 
513 See above fn 504. 
514 Panel Report, Egypt – Steel Rebar , para. 7.388. WT/DS473/R 
 
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  methodology by which the normal value is calculated has a bearing on the kinds of allowances that 
may need to be made to ensure a "fair comparis on" under Article 2.4. As one example, we note 
that, in United States – Hot-Rolled Steel , the Appellate Body found that the use of downstream 
sales prices in the calculation of the normal value under Article 2.1 could, in principle, necessitate 
the provision of appropriate allowances under Article 2.4 to account for any differences that affect 
price comparability.515 
7.298.  We turn now to Argentina's claim that the European Union acted inconsistently with 
Article 2.4 of the Anti-Dumping Agreement by failing to make a fair comparison between the 
export price and the normal value in the underlying investigation.516 Argentina's claim concerns 
what it describes as the "artificial imbalance" between a normal value that reflects an average of the reference FOB price of soybeans (minus fobbing costs), on the one hand, and an export price 
that reflects the actual domestic price of soybeans, on the other.
517 Thus, the question before us is 
whether this difference between the normal value and the export price is a "difference which 
affects price comparability" for which "due allowance" should have been made in order to ensure a 
"fair comparison" under Article 2.4 of the Anti-Dumping Agreement.518 
7.299.  At the outset, we consider it useful to recall how this difference between the normal value 
and the export price arose. In particular, we reca ll that the EU authorities reached the conclusion 
that the export tax applicable to soybeans and soybean oil depressed the domestic prices of the 
main raw material input in biodiesel to an artificially low level.519 This was found to distort the 
costs of production for biodiesel in Argentina.520 Thus, the EU authorities considered that the costs 
of the main raw material were not reasonably reflected in the records kept by the Argentine 
producers under investigation.521 They replaced those costs with costs reflecting the price which 
they considered would have been the price at which those producers would have purchased the soybeans in the absence of the distortion caused by the export tax.
522 The replacement used by 
the authorities was the average of the reference prices of soybeans published by the Argentine 
Ministry of Agriculture during the investigating period, which the Argentine government used to calculate the amount of the export tax on soybeans.
523 Thus, the level of distortion mitigated by 
the authorities more or less amounted to the leve l of the export tax, given that the difference 
between the reference price and actual prices roughly equalled the export tax.524 
7.300.  Thus, the "difference" that Argentina claims "affects price comparability" between the 
normal value and the export price, such that "due allowance" should have been made in order to 
ensure a "fair comparison" under Article 2.4, arose from the methodology used by the 
investigating authority to determine the normal value. In particular, it arose from the decision of the investigating authority – challenged by Argentina under claims that we have upheld above – to 
construct a normal value by, inter alia , using what it considered to be undistorted prices for the 
main raw material input.
525 
                                               
515 Appellate Body Report, US – Hot-Rolled Steel,  para. 169. 
516 Argentina's first written submission, para. 296. 
517 Argentina's second written submission, para. 202. 
518 The European Union asserts that Argentina's claim falls outside the "scope" of Article 2.4 and must 
therefore be rejected as a preliminary matter. (Europ ean Union's second written submission, paras. 20-28). 
The European Union's argument in that regard is premised on its own interpretation of Article 2.4. We do not see how we can reject Argentina's cl aim, as a preliminary matter, on the basis of the European Union's 
interpretation of Article 2.4 without first reviewing both the merits of Argentina's claim and the European Union's preferred interpretation. We therefore decline to reject Argentina's claim, as a preliminary 
matter, on the basis that it is outside the "scope" of Article 2.4. 
519 Definitive Disclosure, (Exhibit ARG-35), paras. 26 and 31; Definitive Regulation, (Exhibit ARG-22), 
paras. 30 and 35. 
520 Definitive Disclosure, (Exhibit ARG-35), para. 31; Definitive Regulation, (Exhibit ARG-22), para. 35. 
521 Definitive Disclosure, (Exhibit ARG-35), para. 34; Definitive Regulation, (Exhibit ARG-22), paras. 38 
and 39. 
522 Definitive Disclosure, (Exhibit ARG-35), para. 35; Definitive Regulation, (Exhibit ARG-22), para. 39. 
523 Definitive Disclosure, (Exhibit ARG-35), paras. 32 and 36; Definitive Regulation, (Exhibit ARG-22), 
paras. 36 and 40. 
524 European Union's first written submission, pa ra. 284; Argentina's first written submission, 
paras. 302-304. 
525 We note, in this regard, that Argentina indicated that its claim "results from the failure to construct 
normal value on the basis of the cost of production reported in the accounts of the exporting producers". 
(Argentina's first written submission, para. 285) WT/DS473/R 
 
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  7.301.  In our view, this difference is not a "diffe rence[] which affect[s] price comparability" within 
the meaning of Article 2.4 of the Anti-Dumping Agreement for which "[d]ue allowance" should 
have been made under that Article. It does not relate to a difference in the characteristics of the (actual or notional) domestic vs. export transactions being compared. In particular, we do not 
consider that this difference represents a tax – or some other identifiable characteristic – that was 
incorporated into the constructed normal value by the EU authorities. Rather, the alleged "difference" is one that arose exclusively from the methodology used to construct the normal 
value; it resulted from a methodological approach directed at remedying what the authority 
considered to be a distorted input cost, a matter th at is primarily governed by Article 2.2 of the 
Anti-Dumping Agreement.  
7.302.  Certainly, the perceived distortion itself was caused by the export tax, and the undistorted 
price ultimately used by the EU authorities clos ely resembled the domestic price plus the export 
tax. But this does not transform the export tax on soybeans into an identifiable component of the constructed normal value itself. Unlike the examples in the illustrative list in Article 2.4, it is not a 
characteristic  of the transactions being compared. It was a methodological approach that affected 
the price of biodiesel, but it did not affect the price comparability  of the normal value and the 
export price. 
7.303.  Our conclusion in this respect is consis tent with the views of the Appellate Body in EC – 
Fasteners (China) (Article 21.5 – China) . In that dispute, China alleged that there existed a 
number of differences between the export price an d the normal value, which had been determined 
on the basis of prices prevailing in an analogue "market economy" country, in application of the 
analogue country methodology. Specifically, Chin a referred to certain differences in taxation, 
arguing that the producer in the analogue co untry imported most of its raw materials and 
therefore paid import duties and other indirect taxes on its purchases of these raw materials, 
whereas the Chinese producers sourced their raw materials on the domestic market and 
consequently did not have to pay import duties and other associated taxes on the raw materials. China also alleged a number of other differences between the Chinese producers and the surrogate 
country producer, in terms of access to raw materials, the use of self-generated electricity, and 
"efficiency and productivity".
526  
7.304.  Like the panel, the Appellate Body consider ed that, in the context of an investigation in 
which the analogue country methodology is applied, the investigating authority is not required 
under Article 2.4 to adjust for differences in costs where this would lead it to adjust back to the 
costs in the NME industry that it had found to be distorted.527 W e  r e a d  t h e  f i n d i n g s  o f  t h e  
Appellate Body in EC – Fasteners (China) (Article 21.5 – China)  as consistent with  the general 
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".  
We note that unlike the factual scenario in EC – Fasteners (Article 21.5 – China) , the methodology 
at issue in the present dispute was challenged by Argentina, and found by us to be inconsistent 
                                               
526 Panel Report, EC – Fasteners (China) (Article 21.5 – China) , paras. 7.196-7.223 and 7.237-7.251.  
527 Appellate Body Report, EC – Fasteners (China) (Article 21.5 – China) , para. 5.207. See also ibid., 
paras. 5.214 and 5.231, and Panel Report, EC – Fasteners (China) (Article 21.5 – China) , paras. 7.218-219 
and 7.245. However, the Appellate Body took issue with the panel's approach, which – in the Appellate Body's words – was to find, "in general term s and without more", that adjustin g for differences in taxation or 
differences in costs would undermine the investigating authority's recourse to the analogue country methodology. The Appellate Body found that the panel had failed to review whether the authority had 
established that the differences were "related to the issue of the price of domestic raw materials that was found to be distorted or whether an adjustment was merited because price comparability was affected under Article 2.4". The Appellate Body considered in this respec t that it is incumbent on an investigating authority to 
take "steps to achieve clarity as to the adjustment claimed" and then to determine whether and to what extent the adjustment is warranted because it  reflects a difference affecting pric e comparability and – in a situation 
such as the one that arose in EC – Fasteners (China) (Article 21.5 – China) , "whether it would have had the 
effect of reintroducing distorted cost s or prices in the normal value component of the comparison". (Appellate 
Body Report,  EC – Fasteners (China) (Article 21.5 – China) , paras. 5.216-5.218 and 5.231-5.236). We recall, 
in this regard, that in the present dispute, the EU authorities explicitly clarified in their determination that the level of distortion addr essed by the authorities more or  less amounted to the level of the export tax, given that 
the difference between the reference price and actual prices roughly equalled the export tax (see Definitive Disclosure, (Exhibit ARG-35), paras. 32-35; see also Eu ropean Union's first written submission, para. 284; and 
Argentina's first written submission, paras. 302-304). There is  in our view no question that the entirety of the 
alleged difference resulted from the EU authorities' decision to replace the price actually paid by the 
investigated Argentine producers for soyb eans by the adjusted reference price. WT/DS473/R 
 
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  with certain provisions of the Anti-Dumping Agr eement. However, in our view, the aforementioned 
general proposition applies as well to instances in which the methodology may reveal itself to be WTO-inconsistent as in the case before us. 
7.305.  We find support for our reasoning in the Appellate Body's resolution of a claim that zeroing 
constitutes an impermissible allowance under Article 2.4 in US – Zeroing (EC) . The Appellate Body 
in that case found that the zeroing methodology used by the USDOC in the administrative reviews 
at issue – which it had already found to result in an inconsistency with Article 9.3 of the Anti-
Dumping Agreement because it meant that th e authority did not treat the product under 
consideration "as a whole" – could not be characterized as an allowance or adjustment "undertaken to adjust to a difference relating to a characteristic of the export transaction in comparison with a domestic transaction".
528 Similarly, in the present case, the action of the 
investigating authorities that is at the heart of Argentina's Article 2.4 claim – the use of reference 
prices in the construction of normal value, rather than the prices actually paid by the investigated 
producers – is not one which was undertaken with a view to adjusting for a difference relating to 
some characteristic of the domestic transactions in comparison with the export transactions.  
7.306.  For the foregoing reasons, we find that Argentina has not established that the 
European Union failed to make a "fair comparison " between the normal value and the export price, 
inconsistently with Article 2.4 of the Anti-Dumping Agreement. 
7.4.3  Whether the European Union acted incons istently with Articles 2.2 and 2.2.2(iii) 
of the Anti-Dumping Agreement by failing to base the determination of the amount for 
profits on a "reasonable method" 
7.4.3.1  Legal claim 
7.307.  Argentina claims that the anti-dumping meas ures at issue are inconsistent with Articles 2.2 
and 2.2.2(iii) of the Anti-Dumping Agreement be cause the European Union failed to base the 
amount for profits component of the constructed normal value on a reasonable method within the 
meaning of Article 2.2.2(iii).529 In response, the European Union submits that the method on the 
basis of which the EU authorities determined the level of profits was reasonable and that the 
resulting margin was itself reasonable.530 
7.308.  Before addressing Argentina's claim of inconsistency, we set out the relevant facts 
concerning the establishment of the profit margin  used in constructing the Argentine producers' 
normal value in the investigation. We will then examine whether Argentina has demonstrated that 
the European Union acted inconsistently with the provisions it cites. 
7.4.3.2  Relevant provisions  of the covered agreements 
7.309.  Article 2.2 of the Anti-Dumping Agreement provides, in relevant part: 
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, 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, prov ided 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. (fn omitted) 
7.310.  Article 2.2.2(iii) of the Anti-Dumping Agreement provides, in relevant part: 
For the purpose of paragraph 2, the amounts for administrative, selling and general 
costs and for profits shall be based on actual data pertaining to production and sales 
                                               
528 Appellate Body Report, US – Zeroing (EC) , para. 158. 
529 Argentina's first written submission, paras. 265 and 470(e); second written submission, 
para. 254(e). 
530 European Union's first written submission, para. 267. WT/DS473/R 
 
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  in the ordinary course of trade of the like product by the exporter or producer under 
investigation. When such amounts cannot be determined on this basis, the amounts may be determined on the basis of:  
…  
(iii) any other reasonable method, provided that the amount for profit so established 
shall not exceed the profit normally realized by other exporters or producers on sales of products of the same general category in the domestic market of the country of 
origin. 
7.4.3.3  Factual background 7.311.  In the complaint to initiate an investigation, for the construction of the normal value, the 
EBB used a profit margin which was not reported in the public version of the complaint but which 
was described as being comprised between 0 and 5% . The EBB claimed to base this figure on the 
Argentine regulations establishing the price formula of biodiesel, while noting that this level of profit "appear[ed] artificially low", and recallin g that, in the 2009 anti-dumping and countervailing 
duty investigations on imports of biodiesel from the United States, the EU authorities had 
considered a profit margin of 15% to be a le vel reasonably achieved by the European Union 
biodiesel industry.
531  
7.312.  In the Provisional Regulation, the EU authorities found that the Argentine market 
conditions for biodiesel were such that "domestic sales were not considered as being made in the ordinary course of trade and the normal value of the like product had to be provisionally constructed".
532 Considering the prevailing market conditions in Argentina, the EU authorities 
concluded that the amount for profits could not be based on the actual data of the Argentine 
producers and proceeded to determine the amount  for profits "on the basis of the reasonable 
amount of profit that a young and innovative capital intensive industry of this type under normal 
conditions of competition in a free and open market could achieve, that is 15% based on 
turnover".533  
7.313.  In its Comments on the Provisional Disclos ure, CARBIO argued that the 15% profit rate 
was "ridiculously high", and was not based on a reasonable parameter.534 In addition, CARBIO 
argued that the rate was not in line with the profit rates used by the EU authorities in all similar proceedings in the past. CARBIO cited the examples of recent investigations on biodiesel from the 
United States, in which a profit rate of 6.27% (co rresponding to the weighted average of the profit 
margins of investigated producers with representative domestic sales) was used, and on 
bioethanol from the United States, in which the we ighted average profit rate of the company that 
accounted for the majority of domestic sales was even lower. CARBIO added that these two 
industries were also "young and innovative capital intensive" industries. CARBIO also argued that 
in recent investigations in the commodities sector, the EU authorities had used profit margins in the region of 5% in constructing normal value.
535 
7.314.  In the Definitive Disclosure, the EU authorities noted these arguments by CARBIO, stating 
that some Argentine producers claimed that the 15 % amount for profits used by the EU authorities 
in constructing normal value was unrealistically high and represented a radical change in its established practice in similar proceedings. The EU authorities rejected these arguments, 
explaining that they do not systematically use a 5% profit margin when constructing normal value, 
and that every situation is assessed on its own merits taking into account the specific 
                                               
531 Consolidated version of the complaint, (Exhibit ARG-31), para. 64. 
532 Provisional Regulation, (Exhibit ARG-30), Recital 45. As part of their finding that the Argentine 
market was heavily regulated by the State, the EU auth orities noted that, during the IP, Argentina imposed a 
mandatory blending requirement of 7% and that the biod iesel needed to meet this blending requirement was 
apportioned via the attribution of qu otas among a selected number of Argentine biodiesel producers. The 
EU authorities further noted that the biodiesel sold under this quota system was sold at a price that was fixed by the State under a complex formula which took into  account the cost of production and ensured the 
achievement of a certain amount of profit, and which resulted in significant profitability for the Argentine producers. ( Idem, para. 44) 
533 Provisional Regulation, (Exhibit ARG-30), Recitals 44 and 46. 
534 CARBIO's comments on the Provisional Disclosure, (Exhibit ARG-51), pp. 4-5. 
535 CARBIO's comments on the Provisional Disclosure, (Exhibit ARG-51), pp. 5-6. WT/DS473/R 
 
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  circumstances of the case.536 They noted, for example, that in the 2009 investigation on biodiesel 
from the United States, different profit levels were used, with a weighted average profit rate well above 15%.
537 In addition, the EU authorities indicated that they had looked at the short and 
medium-term borrowing rate in Argentina, around 14% according to World Bank data, and 
considered that it was reasonable to expect a higher profit margin to be obtained when doing 
business in the domestic biodiesel markets than the borrowing cost of capital.538 They added that 
the 15% profit figure was "even lower than the profit  realised during the IP by the producers of the 
product concerned, albeit that level results from distortions in costs brought about by the DET and 
domestic biodiesel prices regulated by the State".539 For these reasons, the EU authorities 
maintained their determination that "15% profit is a reasonable amount that can be achieved by a relatively new, capital-intensive industry in Argentina".
540 
7.315.  In its comments on the Definitive Disclosure, CARBIO raised a number of objections 
against the EU authorities' determination of the amount for profits. First, CARBIO argued that the EU authorities' reference to the prior investigation on biodiesel from the United States was 
ill-founded given that the market had matured dram atically since then and that high profits were 
no longer possible. CARBIO added that, on this very consideration, the EU authorities had reduced from 15% to 11% the target profit margin for the EU  industry that it used in calculating the injury 
margin.
541 CARBIO requested that the EU authorities use a profit margin not exceeding the same 
figure of 11% when constructing the Argentine producers' normal value.542 CARBIO also objected 
to the EU authorities' reference to borrowing rates in Argentina, which it argued departed from the EU authorities' usual practice in constructing the normal value. CARBIO further argued that the 
Argentine producers make investments in USD terms, not just because of inflation in Argentina but 
also because, in virtually all cases, they make the investments together with foreign-owned entities related to EU producers. CARBIO added that none of the accounts of the sampled 
companies would show short and medium financing costs in the region of 14%.
543 Finally, CARBIO 
argued that because of the regulated prices of bi odiesel on the domestic market, profit margins on 
the – albeit limited – domestic sales were not "in the ordinary course of trade" and should 
therefore be disregarded.544 
7.316.  The Definitive Regulation, however, confirmed the 15% profit margin established in the 
Provisional Regulation and set out in the Definitive Disclosure on the following grounds:  
The Commission considered that a 15% profit margin was reasonable for the biodiesel 
industry in Argentina, since in that country during the IP it was still a young and 
capital intensive industry. The reference to the profit margin in the US case was made to rebut the claim that the Commission uses systematically a 5% profit margin when 
constructing normal value. The reference to the medium-term borrowing rate also was 
not meant to set a benchmark but to test the reasonableness of the margin used. The same applies to the profit actually earned by the sampled companies. On the other 
hand, since the purpose of constructing normal value is different from the calculation 
of the target profit for the Union industry  in the absence of dumped imports, any 
comparison between the two is irrelevant.
545 
7.4.3.4  Main arguments of the parties 
7.4.3.4.1  Argentina 
7.317.  Argentina submits that the amount for prof its established by the EU authorities, namely 
15% on turnover is not based on a reasonable method within the meaning of Article 2.2.2(iii) of 
                                               
536 Definitive Disclosure, (Exhibit ARG-35), paras. 37-38; Definitive Disclosure, Annex II, (Exhibit 
ARG-38) (BCI), pp. 2, 6, 8, 11, and 15. 
537 Definitive Disclosure, (Exhibit ARG-35), para. 38. 
538 Definitive Disclosure, (Exhibit ARG-35), para. 38. 
539 Definitive Disclosure, (Exhibit ARG-35), para. 38. 
540 Definitive Disclosure, (Exhibit ARG-35), paras. 37-38. 
541 CARBIO's comments on the Definitive  Disclosure, (Exhibit ARG-39), p. 13. 
542 CARBIO's comments on the Definitive Disclosure, (Exhibit ARG-39), pp. 13-14. 
543 CARBIO's comments on the Definitive  Disclosure, (Exhibit ARG-39), p. 14. 
544 CARBIO's comments on the Definitive  Disclosure, (Exhibit ARG-39), p. 14. 
545 Definitive Regulation, (Exhibit ARG-22), Recital 46. WT/DS473/R 
 
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  the Anti-Dumping Agreement and, consequently, cannot be considered to be "reasonable" within 
the meaning of Article 2.2 of  the Anti-Dumping Agreement.546 
7.318.  First, Argentina contends that the EU authorities failed to provide any explanation of how 
they determined a profit margin of 15%, but rath er, merely stated that they "considered" that 
amount to be reasonable.547 For Argentina, therefore, the 15% figure does not result from any 
"method" within the meaning of Article 2.2.2(ii i) of the Anti-Dumping Agreement, let alone a 
reasonable one. In Argentina's view, the refe rence to "any other reasonable method" in 
Article 2.2.2(iii) implies that the profit margin must be arrived at by way of a method.548 The profit 
margin cannot just be "established" first and then tested for its reasonableness. Otherwise, Article 2.2.2(iii) would have used the term "any reasonable amount". Argentina finds support for 
its interpretation in the first two subparagraphs of  Article 2.2.2, which lay down precise procedures 
that must be followed in order to arrive at a reasonable amount for profits. Argentina further 
considers that its interpretation is supported by the findings of the panels in Thailand – H-Beams  
and EC – Bed Linen , which it argues show that the ceiling under subparagraph (iii) operates after  a 
methodology has been applied rather than  an amount merely being "established".
549  
7.319.  Second, Argentina contends that the EU authorities' reference to World Bank data 
concerning the short to medium-term borrowing rate cannot be a relevant justification for the 15% 
profit margin determination because "profit" indicates a "result", and a profit margin is a figure 
that is arrived at after financing costs and other liabilities are taken into account, at least in the case of a net profit.
550 Consequently, there is no reason to expect the level of profits to exceed the 
borrowing cost of capital. Further, since this data was only used to confirm the reasonableness of 
the profit margin, it does not indicate the method by which that margin was determined.551 
7.320.  Third, Argentina contends that the EU authorities' reference to the 15% profit margin 
determination for the European Union's biodiesel industry in a prior investigation concerning 
imports from the United States relates to "entirely different" market conditions552, and further, it 
was unreasonable to consider the Argentine industry as "young and innovative" compared to the European Union's industry because, at the time of the investigation, Argentine production had 
peaked and the market had matured significantly.
553 In this connection, Argentina submits that the 
European Union's explanation concerning the profit margin used in the investigation on US biodiesel and its explanation concerning the relative levels of development of the Argentine and European Union biodiesel industries amounts to nothing more than a post hoc  rationalization.
554 
Argentina additionally submits that, while this might constitute a justification of the profit margin 
determined by the investigating authority, it does  not reveal the method by which the margin was 
determined.555 In contrast, Argentina submits that the 11% profit figure used by the investigating 
authority in the present investigation to calculate the injury elimination level would have been an 
acceptable figure in the present investigation because it reflects similar levels of development between the Argentine and European Union indust ries, and further, because this figure was 
determined in a reasoned manner on the ba sis of a carefully-described methodology.
556 
7.4.3.4.2  European Union 7.321.  The European Union submits that the method on which the determination for the profit 
margin was based consisted of a number of elements: (i) the figure was appropriate on the basis 
of the reasonable amount of profit that a young and innovative capital intensive industry of this 
type under normal conditions of competition in a free and open market could achieve; (ii) each 
                                               
546 Argentina's first written submission, para. 275. 
547 Argentina's first written submission, para. 276. 
548 Argentina's response to Panel question No. 54, para. 129; response to Panel question No. 108, 
paras. 85-88. 
549 Argentina's response to Panel question No. 54, paras 130-132 (referring to Panel Reports, Thailand – 
H-Beams , paras. 7.122 – 7.128; EC – Bed Linen , paras. 6.98-6.99; and EU – Footwear (China) , para. 7.299). 
550 Argentina's first written submission, paras. 279 and 280. 
551 Argentina's second written submission, para. 197(c). 
552 Argentina's first written submission, para. 281. 
553 Argentina's first written submission, paras. 282 and 283; response to Panel question No. 109, 
paras. 92 and 93. 
554 Argentina's second written submission, para. 198; response to Panel question No. 109, para. 92. 
555 Argentina's second written submission, para. 197(a). 
556 Argentina's response to Panel question No. 109, paras. 91-95. WT/DS473/R 
 
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  assessment is case-by-case and on its own merits; (iii) the figure was not out of line with that 
adopted in other investigations; (iv) the short and medium-term borrowing rate in Argentina was approximately 14%, and it was reasonable to expect biodiesel producing companies to obtain a profit margin exceeding that level; (v) Argentine biodiesel companies enjoyed a level of profit 
higher than 15% during the investigation period, albeit because they benefited from distorted 
costs; and (vi) a comparison with the target profit for the domestic industry in the absence of dumped imports is not relevant because the target profit rate for the domestic industry has a 
different purpose.
557  
7.322.  The European Union submits that this represents a "method" for the calculation of the 
profits that is "reasonable". The EU authorities first established a profit figure on the basis of their experience with the relevant industry from other investigations and then tested the 
reasonableness of that profit figu re against a number of benchmarks.
558 In this regard, the 
European Union asserts that, logically, if the amount determined by an investigating authority is "reasonable", then whatever "method" it had used in order to determine that amount should also 
be "reasonable".
559 On that basis, the European Union argues that the Panel should first examine 
whether the profit margin determined by the EU authorities was "reasonable" for purposes of the chapeau of Article 2.2 of the Anti-Dumping Agreement. 
7.323.  The European Union submits that the Wo rld Bank data on the short and medium-term 
borrowing rate in Argentina was only used in order to confirm the reasonableness of the 15% profit margin, rather than to determine that margin in the first instance. In that regard, the European Union submits that the fact that the EU authorities considered that investors decided to 
invest in the Argentine biodiesel industry with the knowledge that the cost of the invested capital 
would be around 14% was an additional element that supported the reasonableness of the 15% profit margin.
560 With regard to the EU authorities' finding that the Argentine producers actually 
achieved profit margins higher than 15% during th e investigation, the European Union argues that 
although this level was evidently achieved because of the distortions in costs caused by the export 
tax regime and State regulation of domestic biodiesel prices, "that was the context in which the 
companies were operating and the EU investigating authority could not ignore it".561 
7.324.  The European Union also notes that its prior anti-dumping investigation of biodiesel from 
the United States showed that during its early stag es, the profit levels achieved by the EU industry 
were around 18%.562 That investigation concluded that a profit margin of 15% on turnover could 
be regarded as an appropriate level that its domestic industry could have expected to obtain. The 
European Union submits that its authorities followed a similar analysis in the present case and reached the conclusion that a 15% margin was reasonable for the Argentine industry at a period of 
time when it was at the same stage of development as its domestic industry in the prior 
investigation.
563 However, the European Union clarified that it does not suggest that the 15% 
profit margin was adopted in the present investigation simply because that was the level used for 
the European Union industry in the United States' investigation.564 Rather, it was used to rebut 
Argentina's argument that the 15% profit margin for the European Union industry in the prior investigation had been reduced to an 11% profit margin in the present investigation due to its biodiesel market maturing. 
7.325.  With respect to the 11% profit figure  used in calculating the injury margin, the 
European Union argues that its domestic biodiesel industry was found to have matured by the time 
                                               
557 European Union's first written submission, para s. 269-275; response to Panel question No. 51, 
para. 70. 
558 European Union's second written submission, para. 148. 
559 European Union's response to Panel question No. 108, para. 84. 
560 European Union's response to Panel question No. 52, para. 76. 
561 European Union's first written submission, para. 280. In its response to Panel question No. 51, the 
European Union refers to Appendix II to the Govern ment of Argentina's questionnaire response in the 
countervailing duty investigation, (Exhibit EU-12), p. 36, which indicates that the Argentine biodiesel industry was achieving profit margins in excess of 25% at th e time. (European Union's response to Panel question 
No. 51, para. 74) 
562 European Union's response to Panel question No. 51, para. 72. 
563 European Union's response to Pa nel question No. 51, paras. 72-73. 
564 European Union's response to Panel question No. 110, para. 89. WT/DS473/R 
 
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  of the investigation on biodiesel from Argentina, and the different levels of development of the EU 
and Argentine biodiesel industries explain the difference in the two profit rates.565  
7.326.  Finally, the European Union submits that the anti-dumping duties were imposed on a 
"lesser duty rule" basis and that in the case of all Argentine exports the injury margin was well 
below the dumping margin. Accordingly, even if th e profits had been set at the level proposed by 
Argentina, viz. 11%, the amount of the anti -dumping duty imposed would have been no 
different.566 
7.4.3.5  Arguments of the third parties  
7.327.  China  submits that it is questionable whether the European Union adopted a "method", let 
alone a reasonable one, which meets the test under Article 2.2.2(iii) of the Anti-Dumping 
Agreement to determine the amounts for profits.567 In China's view, the EU authorities did not 
indicate the method that they used in order to  determine the 15% profit margin, and, at most, 
they only provided a general rationale for the figure.568 
7.328.  Indonesia  submits that the justification provided by the European Union does not meet 
the requirements of Article 2.2.2 and Article 2.2 because it does not qualify as a "methodology" 
and it overlooks the main purpose of the construction of the normal value, namely, to ensure that the constructed normal value approximates as closely as possible the price of the like product in 
the ordinary course of trade in the domestic market of the exporting country.
569 
7.4.3.6  Evaluation by the Panel 7.329.  The question before us is whether the anti-dumping measures imposed by the 
European Union on imports of biodiesel from Argentina are inconsistent with Articles 2.2 
and 2.2.2(iii) of the Anti-Dumping Agreement beca use the European Union failed to determine the 
profit margin as a component of the constructed normal value on the basis of a "reasonable method" within the meaning of Article 2.2.2(iii).
570  
7.330.  Article 2.2 provides that where the normal value is constructed, it shall include, inter alia , 
a "reasonable amount" for selling, general and administrative (SG&A) expenses and for profits. The chapeau and paragraphs (i) and (ii) of Articl e 2.2.2 outline specific methods available to the 
authorities to determine these amounts "[f]or the purpose of paragraph 2", i.e. Article 2.2. The 
chapeau requires the use of the SG&A expenses and profit margins from the producer/exporter's domestic sales of the like product in the ordina ry course of trade. When the amounts cannot be 
determined on that basis, the authorities may resort to the various approaches, or "methods", set 
out under paragraphs (i)-(iii).
571 The panel in EC – Bed Linen  summarized the three subparagraphs 
of Article 2.2.2 as they apply to the determin ation of the amount for profits as follows: 
Paragraphs (i)-(iii) provide three alternative methods for calculating the profit 
amount, which, in our view, are intended to constitute close approximations of the 
general rule set out in the chapeau of Article 2.2.2. These approximations differ from the chapeau rule in that they relax, respectively, the reference to the like product, the 
reference to the exporter concerned, or both  references, spelled out in that rule. Thus, 
Article 2.2.2(i) allows the calculation of the profit amount on the basis of data for the 
exporter concerned, corresponding to a general category of products , including the 
like product. In turn, Article 2.2.2(ii) permit s the calculation of the profit rate on the 
basis of the weighted average profit rate for other investigated exporters , 
corresponding to the like product itself. Finally, Article 2.2.2(iii) allows the use of any other method, as long as the resulting rate is not higher than the weighted average 
                                               
565 European Union's response to Pane l question No. 53, paras. 79 and 80. 
566 European Union's first written submission, para. 283. 
567 China's third-party submission, paras. 135 and 137. 
568 China's third-party submission, para. 136. 
569 Indonesia's third-party statement, para. 18. 
570 Argentina's first written submission, para. 470(e). 
571 Panel Report, EC – Bed Linen , para. 6.58. WT/DS473/R 
 
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  profit rate realised by other investigated exporters  in respect of sales in the same 
general category of products .572 (emphasis original; fn omitted) 
7.331.  As the panel in EC – Bed Linen  noted, Article 2.2.2(iii) prescribes two conditions for 
determining the amount for profits, when that prov iso is resorted to. First, the amount for profits 
must be determined on the basis of "any othe r reasonable method", and second, it must not 
exceed the ceiling defined under this subparagraph, i.e. "the profit normally realized by other exporters or producers on sales of products of th e same general category in the domestic market 
of the country of origin". The report of the panel in EU – Footwear (China)  suggests that each of 
the two conditions must be met in order for the amount for profit to be consistent with Article 2.2.2(iii).
573 In the present dispute, Argentina's claims are limited to the first condition 
concerning the use of a "reasonable method" in determining the amount for profits.  
7.332.  We note, however, that in addition to its claim under Article 2.2.2(iii), Argentina also 
makes a claim of inconsistency under Article 2.2. This provision requires the use of a "reasonable amount for administrative, selling and general costs and for profits" in constructing normal value. 
We understand Argentina to contend that a violation of the specific conditions of Article 2.2.2(iii) 
leads, ipso facto , to a violation of this requirement under Article 2.2 as well.
574 
7.333.  We now set out our understanding of what constitutes "any other reasonable method" 
under Article 2.2.2(iii), before assessing whether reliance on such a method can be discerned from 
the explanations provided by the EU authorities in the investigation at issue. 
7.334.  We turn first to the ordinary meaning of the term "method" in the context of 
Article 2.2.2(iii). Dictionary definitions of the term include "[p]rocedure for attaining an object", 
"[a] mode of procedure; a (defined or systematic) way of doing a thing", and "[a] written 
systematically-ordered collection of rules, observations, etc. on a particular subject".575 Based on 
these definitions, we understand the term "method"  to refer, in general terms, to a process or 
procedure, as opposed to an outcome.  
7.335.  The context of the term in Article 2.2.2(iii)  sheds further light on its scope. First, the term 
is qualified by the words "any other". The us e of "any" suggests a particularly broad scope576, and 
the use of "other" suggests that the other subpar agraphs of Article 2.2.2 illustrate what may be 
captured by the term "method" under Article 2.2.2(iii). In that regard, we note that the chapeau and paragraphs preceding Article 2.2.2(iii) provide, in relevant part, that the amounts for administrative, selling and general costs and for profits may be "based on" or "determined on the 
basis of": (i) actual data pertaining to production  and sales in the ordinary course of trade of the 
like product by the exporter or producer under investigation; (ii) the actual amounts incurred and realized by the exporter or producer in question in respect of the same general category of 
products; or (iii) the weighted average of the actual amounts incurred and realized by other 
exporters or producers subject to investigation in respect of production and sales of the like product.
577 It is significant, in our view, that these three alternatives refer to the kind of specific 
data on which the amount of profit can be determined, rather than a specific procedure or 
methodology for the calculation of the amount for profits. This suggests to us that the term "method" in subparagraph (iii) refers to a reasoned consideration of the evidence before the investigating authority for the determination of the amount for profits, rather than to a 
pre-established procedure or methodology.
578 In addition, these "other" methods indicate a 
                                               
572 Panel Report, EC – Bed Linen , para. 6.60. 
573 Panel Report, EU – Footwear (China) , paras. 6.52, 6.55, and 7.288 et seq. 
574 Argentina's first written submission, para. 284, and second written submission, para. 199. Moreover, 
we note that Argentina refers us to the reports of two panels that concluded that the "reasonable amount" 
language in Article 2.2 does not impose an additional re asonableness test on the am ount for profit determined 
pursuant to Article 2.2.2. (Argentina's response to Pa nel question No. 54, paras. 129-132 (referring to Panel 
Reports, EC – Bed Linen , paras. 6.98-6.99 and Thailand – H-Beams , paras. 7.122-7.128)) 
575 Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), 
Vol. 1, p. 1767. 
576 Appellate Body Reports, US – Anti-Dumping and Countervailing Duties (China), fn 197; Canada – 
Autos  para. 79. 
577 See above, para. 7.310, for the text of Articl e 2.2.2(iii) of the Anti-Dumping Agreement. 
578 Argentina acknowledges that "neither of the two procedures set forth in (i) and (ii) represents a 
complex or elaborated method. They are rather simple " (adding, however, that "they go beyond the mere WT/DS473/R 
 
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  preference for the actual data regarding the ex porter and like product in question, with an 
incremental progression away from these principles before reaching "any other reasonable method" in Article 2.2.2(iii). It flows from that context that the phrase "any other reasonable method" may be used in the absence of reliable data concerning the actual exporter or other 
exporters and the like product.
579 This, in turn, suggests that an investigating authority would 
usually have recourse to Article 2.2.2(iii) in circumstances where its options for basing the determination of an exporter's profit margin are constrained. This context, together with absence 
of any additional guidance in Article 2.2.2(iii) on  what the "method" chosen should entail in terms 
of either the source or scope of the data or proc edure, suggests to us a broad and non-prescriptive 
understanding of the term.  
7.336.  Second, as we have noted above, in addition to the requirement that it be determined on 
the basis of "any reasonable method", Article 2.2.2(iii) imposes a ceiling on the amount for profits 
determined
580, requiring that that the amount for profits "not exceed the profit normally realized 
by other exporters or producers on sales of products of the same general category in the domestic 
market of the country of origin". The presence of this constraint, in the absence of any other 
guidance on the kind of "method" to be adopted, confirms our broad and non-prescriptive understanding of the term "method". 
7.337.  We now turn to assess what constitutes a "reasonable" method in the context of 
Article 2.2.2(iii). In the context of Article 2.2.2(iii),  it is clear from the use of "any other" before 
"reasonable" that what is "reasonable" is conne cted to the preceding paragraphs and the chapeau 
and that the "methods" set in the preceding paragraphs and the chapeau are presumptively 
reasonable. As we have discussed, these indicate a preference for the actual data of the exporter 
and like product in question, with an incremental progression away from these principles before 
reaching "any other reasonable method" in Article 2. 2.2(iii). In our view, this context suggests that 
the general function of Article 2.2.2 is to approximate what the profit margin (as well as 
administrative, selling and general costs) would have been for the like product in the ordinary course of trade in the domestic market of the exporting country.
581 Thus, in our view, the 
reasonableness of the method used under Article 2. 2.2(iii) for determining the profit margin turns 
o n  w h e t h e r  i t  i s  r a t i o n a l l y  d i r e c t e d  a t  a p p r o x i m a t i n g  w h a t  t h a t  m a r g i n  w o u l d  h a v e  b e e n  i f  t h e  product under consideration were sold in the ordinary course of trade in the domestic market of the exporting country. 
7.338.  Based on the foregoing considerations, we understand the term "any other reasonable 
method" in Article 2.2.2(iii) to involve an enquiry into whether the investigating authority's determination of the amount for profits is the result of a reasoned consideration of the evidence 
before it, rationally directed at approximating the profit margin to what would have been realized if 
the product under consideration had been sold in the ordinary course of trade in the exporting 
country.  
7.339.  With this understanding in mind, we now examine whether the EU authorities' explanations 
for the 15% profit margin applied in the investigation at issue meet this requirement.  
7.340.  We recall that the EU authorities first iden tified a profit margin of 15% in the Provisional 
Regulation. This amount was reached "on the basis of the reasonable amount of profit that a 
young and innovative capital intensive industry of this type under normal conditions of competition 
in a free and open market could achieve".
582 We consider it relevant to this explanation that the 
application of the EBB to initiate the investigation had drawn attention to the finding reached by 
the EU authorities in a prior investigation that a profit margin of 15% represented a level 
                                                                                                                                               
unsubstantiated assertion with respect to what profits are"). (Argentina's response to Panel question No. 108, 
para. 86) 
579 We note that the panel in EC – Bed Linen  found that there is no hierarchy among the methods for 
determining the amount for profits in Articles 2.2.2(i)-(iii). (Panel Report, EC – Bed Linen, para. 6.59). The 
question of the interaction between these methods, or a potential hierarchy among them, has not been raised in this dispute and accordingly we express no views in that regard. 
580 We note that the ceiling does not apply to the determination of the amounts for administrative, 
selling and general costs. 
581 Panel Report, Thailand – H-Beams , para. 7.112. 
582 Provisional Regulation, (Exhibit ARG-30), Recitals 44 and 46. WT/DS473/R 
 
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  reasonably achieved by the European Union biodiesel industry.583 The figure of 15% in that 
investigation was "deemed reasonable for guaranteeing the productive investment on a long-term basis for this newly established [biodiesel] indust ry", and was reached in the light of profits of 
18.3%, 18%, and 5.7% achieved by the EU domestic  industry over the period of investigation.
584  
7.341.  Thus, it appears that the EU authorities initially arrived at the figure of 15% based on their 
experience with the relevant industry in other investigations, taking into account the characteristics of the industry in question.
585 The profit margin selected  and the rationale for that 
margin in the Provisional and Definitive Regulations are analogous to the profit margin and 
rationale in the prior investigation referred to by the domestic industry in its application. Moreover, the 15% profit margin calculated in the investigation concerning biodiesel from the United States is expressly relied upon by the EU authorities in the Provisional and Definitive Regulations at issue; 
the EU authorities used the same profit margin in calculating the injury elimination margin in the 
Provisional Regulation, before adjusting it to 11% in the Definitive Regulation in the light of market developments in the intervening period.
586  
7.342.  Thus, from the relevant attendant circumstances, we understand that the EU authorities 
arrived at the 15% figure by taking into account the characteristics of a biodiesel industry that is "young", "innovative", and "capital intensive" and by drawing on their earlier experience in a 
recent, similar investigation.  
7.343.  We note that, subsequent to determining the profit margin of 15% in the Provisional 
Regulation, and in response to CARBIO's arguments opposing this profit rate, the EU authorities explained that they tested it.
587 They compared it to the short and medium-term borrowing rate in 
Argentina of around 14% because, in their view, it  seemed reasonable to expect a higher profit 
margin to be obtained when doing business in the domestic biodiesel markets than the borrowing cost of capital. They also compared it to the profit  realized during the period of investigation by the 
Argentine producers and found it to be lower than that profit, while recognizing that the higher 
profit level achieved in the Argentine domestic market resulted from certain distortions. Following these tests, the EU authorities confirmed the 15% profit margin. 
7.344.  At this juncture, we note that our unders tanding of the approach of the EU authorities is 
consistent with the explanation of the European Un ion, namely, that they first established a profit 
figure on the basis of their experience with the relevant industry from other investigations, and 
then tested the reasonableness of that profit figure on the basis of a number of benchmarks.
588 
This being the case, we are of the view that the EU authorities' determination of the amount for 
profits proceeded from a reasoned consideration of  the evidence before them. Further, we recall 
that such data was not selected arbitrarily in the present case, but rather, on the basis of what 
appear to be plausible similarities between th e respective stages of development of the EU 
biodiesel industry at the time of the investigation on biodiesel from the United States and of the Argentine biodiesel industry during the IP in the investigation at issue here. We therefore disagree 
with Argentina that the approach of the EU authorities does not qualify, in the first instance, as a 
"method" within the meaning of Article 2.2.2(iii). 
7.345.  We turn now to the reasonableness of the method used by the EU authorities. CARBIO 
argued in response to the EU authorities' test ing of the 15% profit margin that the short and 
medium-term borrowing rate had never previously been used to set a reasonable level of profit, 
and that the sampled biodiesel producers make investments in USD and do not have financing costs of 14%.
589 CARBIO also argued that testing against the actual profit margins of biodiesel 
                                               
583 Consolidated version of the complaint, (Exhibit ARG-31), para. 64; Provisional Regulation, 
anti-dumping investigation on biodiesel from the United States, (Exhibit EU-13), Recital 164. 
584 Provisional Regulation, anti-dumping investigation on biodiesel from the United States, (Exhibit 
EU-13), Recitals 95 and 164. Moreover, the EU authorities indicated that "[t]he imposition of anti-dumping measures would likely put the Commun ity industry in the position to maintain its profitability at levels 
considered necessary for this capital intensive industry ." (Provisional regulation in the AD investigation on 
biodiesel from the United States, (Exhibit EU-13), Recital 146) (emphasis added) 
585 European Union's second written submission, para. 148. 
586 Provisional Regulation, (Exhibit ARG-30), Recita ls 174 and 175; Definitive Regulation, (Exhibit 
ARG-22), Recitals 204-210. 
587 Definitive Disclosure, (Exhibit ARG-35), para. 38. 
588 European Union's second written submission, para. 148. 
589 CARBIO's comments on the Definitive  Disclosure, (Exhibit ARG-39), p. 14. WT/DS473/R 
 
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  producers was not appropriate, as these are based on  sales that are not in the ordinary course of 
trade. CARBIO further submitted, in contrast to  its earlier submission, that "the market has 
matured dramatically since the early days in this industry", and therefore, that "high profits are no longer possible" and that "the reference to the US proceeding is ill-founded".
590  
7.346.  The EU authorities responded by stating that  the profit margin of the domestic industry for 
the injury elimination level in the current proceeding is not a relevant benchmark for comparison because the purpose of constructing normal value is different from the purpose of calculating the 
target profit for the EU biodiesel industry in the absence of dumped imports.
591 The EU authorities 
also replied that their reference to the profit margin in the prior investigation had been made to rebut CARBIO's claim that they systematically use a 5% profit margin when constructing normal value.
592 Further, the EU authorities stated that the short and medium-term borrowing rates, and 
the actual profits of producers, were not meant to set a benchmark but to test the reasonableness 
of the margin used.593  
7.347.  In our view, these arguments and explanat ions inform whether the "method" used by the 
EU authorities was "reasonable", that is, rationally directed at approximating the profit margin for 
the like product to what would have been achieved were the like product sold in the ordinary course of trade in the domestic market of the exporting country.
594 We recall that investigating 
authorities might have recourse to Article 2.2.2(iii) when reliable data concerning the actual 
exporter or other exporters and their products is unavailable, making the more specific approaches 
in the chapeau and subparagraphs (i) and (ii) of  Article 2.2.2 unusable. In that context, we 
consider that an unbiased and objective investigating authority could reasonably consider, as an 
initial step, that profit margins determined in prior investigations of other producers in the same 
industry at similar stages of development provide an indication of the profit margins of producers in a subsequent investigation. Further, since that figure was determined at a different point in time 
for different producers, it would be appropriate, in our view, that an unbiased and objective 
investigating authority would seek to test that figure against relevant benchmarks that might be available. In our understanding, four such benchmarks were considered by the EU authorities in 
this investigation and they seem to us to be plausible.  
7.348.  The EU authorities used the World Bank  indicator for short and medium-term borrowing 
rates in Argentina, which was 14%, to test the reasonableness of the 15% profit margin they had determined. In addition, the EU authorities noted the rate of the actual profits of Argentine 
biodiesel producers, which was in excess of 25%.
595 CARBIO proposed a 5% benchmark since that 
figure is regularly used in similar commodity-related markets, as well as an 11% benchmark since that figure was used for the domestic industry. The EU authorities rejected the first of CARBIO's 
benchmarks on the basis that a 5% profit margin is not systematically used and instead there 
should be a case-by-case analysis, and it rejected the second because the figure used for the purpose of constructing normal value is different from the calculation of the target profit for the 
domestic industry in the absence of dumped imports. Moreover, while the EU authorities did not 
explicitly find that the EU and Argentine industries were at different stages of development during the IP, a comparison of their discussion of the profit rate applied to the Argentine producers (in which they refer to that industry as a young and innovative one) with their discussion of the profit 
rate applied to the EU industry in the context of  determining the injury margin (which they found 
                                               
590 CARBIO's comments on the Definitive Disclosure , (Exhibit ARG-39), p. 13. In our view, CARBIO's 
position in this regard seems to ha ve evolved from its earlier contention that the profits of US producers in 
prior biodiesel investigations – which represented a "young and innovative capital intensive industry" – could be used as the profit margin for Argentine producers in  the current investigation. (See CARBIO's comments on 
the Provisional Disclosure, (Exhibit ARG-51), p. 6). In particular, in its later submission, CARBIO seemed to reject the characterization as a "yo ung and innovative capital intensive in dustry", and further, CARBIO also 
now seemed to reject the relevance of considering prior investigations. In contrast to its earlier submission, 
CARBIO now seemed to suggest that the profit margin of  the domestic industry for the injury elimination level 
in the current proceeding represente d a reasonable benchmark for compar ison. (See CARBIO's comments on 
the Definitive Disclosure, (Exhibit ARG-39), p. 13) 
591 Definitive Regulation, (Exhibit ARG-22), Recital 46. 
592 Definitive Regulation, (Exhibit ARG-22), Recital 46. 
593 Definitive Regulation, (Exhibit ARG-22), Recital 46. 
594 Panel Report, Thailand – H-Beams , para. 7.112. 
595 See above, fn 561. WT/DS473/R 
 
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  had "matured significantly" since the investigation on biodiesel from the United States596), makes 
it clear that the EU authorities considered this to be the case.  
7.349.  Thus, the selection and testing of the 15% profit margin resulted from a reasoned analysis 
that, in our view, was rationally directed at ap proximating what the Argentine producers' profit 
margin for the like product would have been if the like product had been sold in the ordinary 
course of trade in the domestic market of the exporting country.597 Both the initial selection of a 
figure of 15% and its subsequent confirmation th rough testing against benchmarks were grounded 
on coherent reasoning in a context where data on the actual producers and their products was not 
useable. We do note some apparent internal inconsistencies in the EU authorities' explanations. In particular, in response to CARBIO's argument that the EU authorities' reference to the prior investigation into biodiesel from the United States was ill-founded, the EU authorities stated that 
the reference to the profit margin in that investigation was made to rebut the claim that the 
European Union systematically uses a 5% profit margin when constructing normal value. That 
could be read to suggest that the EU authorities did not rely on that investigation as part of its 
method for deriving the figure of 15%.
598 Regardless of this statement, we do not understand the 
EU authorities to have used the findings in its prior investigation exclusively  to rebut CARBIO's 
argument concerning the 5% profit margin when constructing normal value. Rather, in our 
understanding, the EU authorities used those prior findings as part of its corpus of knowledge in 
identifying the initial figure of 15%, because that investigation involved an industry with similar characteristics and products to the case at hand. 
7.350.  We also note that the EU authorities rejected CARBIO's suggestion to use the 11% figure 
determined for the domestic industry as a benchmark in the present investigation on the grounds 
that the purpose of constructing the normal value is different from the calculation of the target profit for the European Union industry in the absence of dumped imports, in the context of 
determining the injury margin. There seems to be a degree of inconsistency between this 
reasoning, on the one hand, and the use by th e EU authorities of the 15% profit margin 
determined on the basis of its earlier experience from the United States investigation, on the 
other. This is because the 15% margin used by the EU authorities in the present investigation in 
constructing the Argentine producers' normal value  its e lf  was ,  as  we  note  ab ove , b as ed  on the  
15% target profit margin used by the EU authorities in their calculation of the injury margin  in the 
prior investigation on biodiesel from the United States. That notwithstanding, we consider that an 
objective and unbiased investigating authority, in the present case, could have plausibly 
differentiated between the determination of the profit margin of Argentine producers for the 
purpose of constructing normal value on the one hand, and the determination of the profit margin 
of the European Union industry for the purpose of determining the level of injury, on the other. 
This is particularly the case given that the EU authorities found that the EU domestic industry had matured such that a reduction in its target profit in the absence of dumped imports was 
warranted, but considered the Argentine industry to be "young and innovative", or, in other words, 
at a different stage of development. On that basis, we consider that it was not unreasonable for the EU authorities to distinguish between the profit rates used in the construction of normal value and the profit rate used in the calculation of the target profit for the European Union industry in 
the absence of dumped imports.
599 
7.351.  For the foregoing reasons, we find that Argentina has not established that the 
European Union acted inconsistently with Article 2.2.2(iii) of the Anti-Dumping Agreement in its 
determination of the amount for profits in construc ting the Argentine producers' normal value. In 
light of our understanding that Argentina's claim under Article 2.2 is dependent on its claim under 
                                               
596 Definitive Regulation, (Exhibit ARG-22), Recital 205. 
597 Panel Report, Thailand – H-Beams , para. 7.112. 
598 In addition, while, in its response to Panel question No. 51, the European Union discussed the 15% 
profit margin used to calculate the injury elimination margin in the investigation on biodiesel from the United States, the European Union later clarified in response to a question from the Panel, that it "did not state [in its response to Panel question No. 51] that the '15% profit margin comes from the US investigation'", and that it "did not suggest that the 15% profit margin had been adopted in the Argentine investigation simply because that was the level used for the European Union industry in the United States' investigation". (European Union's response to Panel question No. 110, para. 89) 
599 We also find it significant that, in response to a question from the Panel, Argentina indicated that a 
profit rate of 11%, the rate used by the EU authoritie s in calculating the injury elimination margin, would have 
been an acceptable profit rate for the Argentine producers, based inter alia  on the fact that the 11% rate had 
been determined in a reasoned manner. (Argentina's response to Panel question No. 109, paras. 91-95) WT/DS473/R 
 
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  Article 2.2.2(iii), we also find that the European Union did not act inconsistently with Article 2.2 in 
its determination of the amount for profits.  
7.4.4   Whether the European Union acted inco nsistently with Article 9.3 of the 
Anti-Dumping Agreement and Article VI:2 of the GATT 1994 by imposing and levying 
anti-dumping duties in excess of the margins of dumping  
7.4.4.1  Legal claim 7.352.  Argentina requests that we find 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 and 
levying anti-dumping duties in excess of the margin of dumping that should have been established in accordance with Article 2 of the Anti-Dumping Agreement.
600 
7.4.4.1.1  Relevant provisions of the covered agreements 
7.353.  The chapeau of Article 9.3 of the Anti-Dumping Agreement provides that:  
The amount of the anti-dumping duty shal l not exceed the margin of dumping as 
established under Article 2.  
7.354.  Article VI:2 of the GATT 1994 provides that: 
In order to offset or prevent dumping, a contracting party may levy on any dumped 
product an anti-dumping duty not greater in amount than the margin of dumping in 
respect of such product. For the purposes of this Article, the margin of dumping is the 
price difference determined in accordance with the provisions of paragraph 1. 
7.4.4.2  Main arguments of the parties 7.4.4.2.1  Argentina 
7.355.  Argentina argues that the European Union imposed and levied anti-dumping duties in 
excess of the margin of dumping that it should have calculated in conformity with Article 2 of the Anti-Dumping Agreement. Argentina submits that this results from the European Union acting 
inconsistently with Articles 2. 2, 2.2.1.1, 2.2. 2(iii) and 2.4 of the Anti-Dumping Agreement and 
Article VI:2 of the GATT 1994 in the construction  of the normal value and the comparison of the 
normal value to the export price.
601 Argentina submits that a dumping margin calculation in 
conformity with Article 2 would have established that imports of biodiesel originating in Argentina 
were not dumped, or would have resulted in margins well below the duties imposed by the European Union.
602 
7.4.4.2.2  European Union 
7.356.  The European Union submits that Articl e 9.3 of the Anti-Dumping Agreement addresses 
the comparison  between the anti-dumping duties and the dumping margins, as opposed to 
addressing the calculation  of the normal value.603 Thus, in the European Union's view, the text of 
Article 9.3 requires a comparison between the anti-dumping duties actually imposed and the 
dumping margin actually calculated by the investig ating authority. Article 9.3 does not call for a 
comparison with what should have been calculated under Article 2 of the 
Anti-Dumping Agreement. The European Union subm its that this understanding is supported by 
the context of the Anti-Dumping Agreement insofar as it contains two separate sets of rules in Article 2 and Article 9, the former of which conc erns the construction of normal values and the 
                                               
600 Argentina's first written submission, paras. 309 and 470(g); second written submission, 
para. 254(g). We recall that we have rejected the European  Union's contention that this claim is not within our 
terms of reference. See above, para. 7.34. 
601 Argentina's first written submission, paras. 307-309; response to Panel question No. 114, para. 101. 
602 Argentina's second written submission, para. 209; response to Panel question No. 114, para. 101. 
603 European Union's first written submission, para. 57. We note that the arguments of the 
European Union in this regard also pertain to its requ est for a preliminary ruling concerning Article 9.3 of the 
Anti-Dumping Agreement. WT/DS473/R 
 
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  calculation of dumping margins, and the latter of which regulates the imposition and collection of 
anti-dumping duties.604 Since Article 9.3 is situated in the latter, it would run counter to the 
context of Article 9.3 for it to encompass alleged erro rs in the construction of normal value. In this 
connection, the European Union draws on the panel's findings in EC – Salmon (Norway)  to 
demonstrate that a violation of Article 2 does not automatically lead to a violation of Article 9.3.605 
7.4.4.3  Evaluation by the Panel 7.357.  Argentina requests that we find 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 and 
levying anti-dumping duties in excess of the margin of dumping that should have been established in accordance with Article 2 of the Anti-Dumping Agreement.
606  
7.358.  We first address Argentina's claim under Article 9.3 of the Anti-Dumping Agreement. As we 
understand it, the key point of contention between the parties with respect to this claim concerns 
the proper interpretation of the term "margin of dumping as established under Article 2" in 
Article 9.3 of the Anti-Dumping Agreement. Thus, we consider the question before us to be 
whether this term refers to the margin of dumping that was actually determined by the 
investigating authority regardless  of any errors or inconsistencies with Article 2 of the 
Anti-Dumping Agreement, or whether it refers to the margin of dumping that an investigating 
authority would have established in the absence of any errors or inconsistencies with this Article. 
7.359.  We begin our analysis by setting out our interpretation of Article 9.3 of the Anti-Dumping 
Agreement. We note that Article 9 addresses the imposition and collection of duties. Article 9.3 
provides that "[t]he amount of the anti-dumping duty shall not exceed the margin of dumping as 
established under Article 2". It is therefore clear from the plain language of Article 9.3 that it 
concerns the margin of dumping "as established under Article 2". Relevant dictionary definitions of the preposition "under" include "subject to", "subject to the authority, control, direction, or 
guidance of", "in the form of", and "in the guise of".
607 "Under" may be used to introduce "the 
guise of" or "the manner how" a certain action is to be conducted.608 When read in the context of 
the phrase "as established under  Article 2", we understand "under" to refer to the disciplines set 
out in Article 2 of the Anti-Dumping Agreement, which contain detailed rules on the determination 
of dumping.609 Thus, in our view, "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. It would run counter to the inclusion of the phrase "as 
established under Article 2" if the margin of dumping referred to in Article 9.3 of the 
Anti-Dumping Agreement could encompass a margin that is established in a manner that is not 
consistent with the disciplines of Article 2.  
7.360.  We also consider it clear from the plain language of Article 9.3 that it sets the maximum 
level at which anti-dumping duties may be levied, namely, at the level of "the margin of dumping as established under Article 2". In the light of this, we do not take the view that an error or 
inconsistency in calculating the margin of dumping under Article 2 necessarily leads to a violation 
of Article 9.3 insofar as the upper limit of the margin is concerned. For instance, as we note below, the anti-dumping duty could be imposed or levied at a rate that is lower than the dumping margin that ought to have been determined had the authorities acted in accordance with Article 2. 
7.361.  Our reading of Article 9.3 of the Anti-Dumpi ng Agreement is supported by findings in prior 
disputes. For instance, in US – Zeroing (EC) , the Appellate Body noted that Article 9.3 refers to 
                                               
604 European Union's first wr itten submission, para. 60. 
605 European Union's first written submission, para. 61 (referring to Panel Report, EC – Salmon 
(Norway) , paras, 7.749 and 8.2). 
606 In respect of both Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994, the 
European Union stated that "Argentina's claims under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 are entirely consequential on  the [Article 2] claims that the European Union has 
answered in the preceding paragraphs", and that "[s]ince  Argentina has failed to establish the earlier claims 
these consequential claims must also  fail." (European Union's first wri tten submission, para. 288). We recall 
that we have upheld some of Argentina's claims  under Article 2 of the Anti-Dumping Agreement. 
607 Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), 
Vol. 2, p. 3421; Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China) , para. 4.75. 
608 Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China) , para. 4.75. 
609 Appellate Body Report, EC – Tube or Pipe Fittings , para. 80. WT/DS473/R 
 
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  Article 2, and considered that "[i]t follows that, under Article 9.3 of the 
Anti-Dumping Agreement and Article VI:2 of the GATT 1994, the amount of the assessed anti-
dumping duties shall not exceed the margin of dumping as established 'for the product as a 
whole'", that is, a margin established consistently with Article 2.610 Similarly, in US – Zeroing 
(Japan) , the Appellate Body found violations in resp ect of the determination of the margin of 
dumping under Article 2. In its consideration of claims under Article 9.3 of the Anti-Dumping Agreement, the Appellate Body did not refer to the margin of dumping actually determined by the 
investigating authority, which it had found to be inconsistent with Article 2. Rather, it stated that 
the calculation under Article 9.3 must be made "according to the margin of dumping established for that exporter or foreign producer without zeroing ", that is, without the error it had found in the 
determination under Article 2.
611  
7.362.  In sum, it is clear that the term "the margin of dumping as established under Article 2" 
means a margin established in a manner that is consistent with Article 2, as opposed to whatever erroneous margin was actually established by the investigating authority.  
7.363.  We note that the European Union relies on the panel report in EC – Salmon (Norway)  to 
support its argument that a violation of Article 2 does not automatically lead to a violation of Article 9.3.
612 This accords with our understanding that Article 9.3 sets the maximum level at 
which anti-dumping duties may be levied . As the Appellate Body explained in US – Stainless Steel 
(Mexico) , "under Article VI:2 and Article 9.3, the margin of dumping established for an exporter in 
accordance with Article 2 operates as a ceiling for the total amount of anti-dumping duties that can 
be levied on the entries of the subject merchandise from that exporter."613 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.614 This is because it is possible 
that an anti-dumping duty could be applied at a rate that is lower than the WTO-inconsistent 
dumping margin. This might be the case where the lesser duty rule is applied, in which case the 
anti-dumping duty actually applied may not only be lower than the WTO-inconsistent dumping margin, but also lower than the dumping margin that would have been established in accordance 
with Article 2. 
7.364.  In the case at hand, we recall that we found above that the EU authorities 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 their estab lishment of the dumping margins in the Definitive 
Regulation due to their use of surrogate input pr ices in the construction of each investigated 
Argentine producer's normal value. By 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.  
7.365.  Argentina contrasts the margins calculated  in the Provisional Regulation, ranging from 
6.8% to 10.6%
615, with the duties imposed by the EU authorities in the Definitive Regulation, 
which ranged from 22.0% to 25.7%616, i.e. two to three times higher. We cannot infer the exact 
dumping margins that would have been established had the determinations been done in accordance with Article 2. Yet, in our view 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. The substantial difference between the 
margins calculated at the provisional stage and the duties imposed in the Definitive Regulation suggests that the anti-dumping duties imposed by the European Union in the Definitive Regulation 
                                               
610 Appellate Body Report, US – Zeroing (EC) , para. 127. (fn omitted) 
611 Appellate Body Report, US – Zeroing (Japan) , para. 156. (emphasis added) 
612 European Union's first written submission, para. 61 (referring to Panel Report, EC – Salmon 
(Norway) , paras, 7.749 and 8.2). 
613 Appellate Body Report, US – Stainless Steel (Mexico) , para. 102. (emphasis original) 
614 For instance, in the Provisional Regulation, the lesser duty rule was not applied because the 
provisional injury margins were found to be higher than the provisional dumping margins, whereas the opposite finding resulted in the application of the lesser  duty rule in the Definitive Regulation. (Provisional 
Regulation, (Exhibit ARG-30), Recital 179; Definitive Regulation, (Exhibit ARG-22), Recital 215) 
615 Provisional Regulation, (Exhibit ARG-30), Recitals 59 and 179. 
616 Definitive Regulation, (Exhibit ARG-22), Recital 215. In application of the "lesser duty rule", these 
duty rates corresponded to the injury margins calc ulated by the EU authorities; the dumping margins 
calculated by the EU authorities in the Definitive Regu lation were significantly higher, ranging from 41.9% to 
49.2%.  WT/DS473/R 
 
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  exceeded what the dumping margins could have been had they been established in accordance 
with Article 2. On this basis, and in light of our finding referred to above, we consider that 
Argentina has made a prima facie  case that the European Union acted inconsistently with 
Article 9.3 of the Anti-Dumping Agreement, whic h the European Union has failed to rebut.  
7.366.  We now turn to Argentina's claim under Article VI:2 of the GATT 1994. This Article 
provides that a WTO Member "may levy … an anti-dumping duty not greater in amount than the margin of dumping in respect of such product", addi ng that "[f]or the purposes of this Article, the 
margin of dumping is the price difference determined in accordance with [Article VI:1]". The terms 
"in accordance with" in the latter phrase makes it clear, in our view, 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. The same considerations that guided our assessment of Argentina's Article 9.3 claim 
therefore apply mutatis mutandis  to our assessment of its Article VI:2 claim. With respect to this 
claim, we therefore also conclude that Argentina has made a prima facie  case that the 
European Union has not rebutted.  
7.367.  On the basis of the foregoing, we find th at the European Union acted inconsistently with 
Article 9.3 of the Anti-Dumping Agreement an d 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-Dumping Agreement. 
7.4.5  Whether the EU authorities' evaluation of production capacity , capacity utilization 
and return on investments is inconsistent wi th Articles 3.1 and 3.4 of the Anti-Dumping 
Agreement 
7.4.5.1  Legal claim 7.368.  Argentina claims that the anti-dumping me asures on imports of biodiesel from Argentina 
are inconsistent with Articles 3.1 and 3.4 of the Anti-Dumping Agreement. Argentina takes issue, 
in particular, with the EU authorities' exclusion of so-called "idle capacity" in their calculation and evaluation of production capacity and of utilization of capacity in their injury analysis. Specifically, 
Argentina asserts that: 
a. The EU authorities' definition of production capacity and of utilization of capacity was 
inconsistent with Article 3.4; 
b. The EU authorities' evaluation of production capacity and of utilization of capacity was 
inconsistent with Articles 3.1 and 3.4 because it was not based on positive evidence; 
c. The EU authorities' evaluation of production capacity and of utilization of capacity was 
inconsistent with Articles 3.1 and 3.4 because it did not proceed from an objective 
examination; and 
d. The EU authorities acted inconsistently with Article 3.4 by failing to adequately evaluate 
production capacity and utilization of capacity.  
7.369.  In addition, Argentina claims that the EU authorities acted inconsistently with Article 3.4 by 
failing to evaluate return on investments and utilization of capacity in a consistent manner.
617  
7.370.  Argentina argues that the exclusion of "idle capacity" led the EU authorities, in their 
findings, to understate production capacity and overstate utilization of capacity and that, 
moreover, their WTO-inconsistent evaluation of production capacity and utilization of capacity 
affected their non-attribution analysis under Article 3.5.618 
                                               
617 Argentina's first written submission, paras. 310, 353, and 470 (h); second written submission, 
para. 254 (h). 
618 Argentina asks that we read its Articles 3.1 and 3.4 claims together with its claims under Article 3.5 
of the Anti-Dumping Agreement regarding overcapacity of  the domestic industry as  an alleged other factor 
causing injury to that industry. (Argentina's first wr itten submission, para. 311; second written submission, 
para. 215; response to Panel question Nos. 61, para s. 146-149, and 122, para. 107 (referring to Appellate WT/DS473/R 
 
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  7.371.  The European Union considers that Argentina has not made a prima facie  case and 
therefore asks the Panel to reject these claims.619 
7.4.5.2  Relevant provisions  of the covered agreements 
7.372.  Article 3.1 of the Anti-Dumping Agreement reads as follows: 
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. 
7.373.  Article 3.4 of the Anti-Dumping Agreement provides that:  
The examination of the impact of the du mped imports on the domestic industry 
concerned shall include an evaluation of all relevant economic factors and indices 
having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, producti vity, return on investments, or utilization 
of capacity; factors affecting domestic prices; the magnitude of the margin of 
dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital or investments. This list is not exhaustive, nor 
can one or several of these factors necessarily give decisive guidance. 
7.4.5.3  Factual background  7.374.  The EBB initially submitted certain data regarding production capacity and capacity 
utilization of the EU biodiesel industry in its complaint.
620 Subsequently, on 12 March 2013, prior 
to the issuance of the Provisional Regulation, the EBB revised some of the data – including the 
data on production and production capacity – that it had submitted in the complaint.621 
7.375.  In the Provisional Regulation, issued on 27 May 2013, the EU authorities found that during 
the period considered for purposes of the injury  determination (2009 to the IP, i.e. 1 July 2011 to 
30 June 2012), the production capacity and capacity  utilization of the EU domestic industry were 
as reported in the following table 622: 
 2009 2010 2011 IP 
Production capacity 
(tonnes) 20 359 000 21 304 000 21 517 000 22 227 500 
Index 2009 = 100 100 105 106 109 
Production volume 
(tonnes) 8 745 693 9 367 183 8 536 884 9 052 871 
Index 2009 = 100 100 107 98 104 
Capacity utilisation 43% 44% 40% 41% 
Index 2009 = 100 100 102 92 95 
 
                                                                                                                                               
Body Report, China – GOES , para. 128)). We address Argentina's claims under Article 3.5 in the next 
sub-section of this Report. 
619 European Union's first written submission, pa ras. 329 and 348; second written submission, 
para. 170. 
620 Consolidated version of the complaint, (Exhibit ARG-31), paras. 122-126 and Annex 49. 
621 EBB's submission of 12 March 2013, (Exhibit ARG-44). 
622 Provisional Regulation, (Exhibit ARG-30), table 4. WT/DS473/R 
 
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  On the basis of this data, the EU authorities stat ed that the production capacity of the domestic 
industry had "remained relatively stable in particular between 2010 and the IP"623 and that 
capacity utilization had "remained low throughout the period".624 The Provisional Regulation 
indicates that the source of these figures was the data provided by the EU industry. 
7.376.   Following the Provisional Regulation, CARB IO disputed the finding that "capacity remained 
relatively stable".625 Subsequently, on 17 September 2013, the EBB filed a submission requesting 
an adjustment of the data it had previously submitted.626 The EBB stated that the estimate of the 
total production capacity of the EU industry that it had provided to the EU authorities (and which 
was also reported on its website) included "idle capacity" and, therefore, that it had to be adjusted to exclude such "idle capacity". The EBB explained that while the data it had previously submitted 
regarding EBB members already excluded the "idle capacity" of these EBB members, the figures 
for non-EBB members and for the total EU production capacity (i.e. EBB members and non-EBB 
members) still included "idle capacity".
627 Hence, to provide an accurate calculation of the EU 
industry's production capacity, the total EU pr oduction capacity and the capacity of non-EBB 
members had to be adjusted. The EBB explained that the previous estimated total EU industry 
production capacity should be adjusted by subt racting the "idle capacity" of both EBB members 
and of non-EBB members, and the previous esti mated production capacity of non-EBB members 
should be adjusted by subtracting EBB members' production capacity from the revised total EU 
production capacity.628 
7.377.  In the Definitive Disclosure issued to interested parties on 1 October 2013, the 
EU authorities stated that, "after close scrutiny", they had accepted the revised data regarding 
production capacity submitted by the EBB.629 As a result, the EU authorities modified their 
provisional findings regarding production  capacity and capacity utilization.  
7.378.  CARBIO commented on this issue in its comments on the Definitive Disclosure, arguing 
that it was inappropriate to exclude "idle capacity", questioning the revised production capacity 
data and suggesting that the change appeared to have been made with the only purpose of diminishing the importance of the EU industry's overcapacity as a source of injury.
630  
7.379.  In the Definitive Regulation, the EU auth orities confirmed their decision to accept the 
revised production capacity data submitted by the EBB. The Definitive Regulation states the 
following with regard to production capacity and capacity utilization: 
Following provisional disclosure the Union industry noted that the capacity data that 
had been used in Table 4 of the provisional Regulation included capacity that had not 
been dismantled, but was not in such a state that it would have been available for use during the IP, or previous years, to manufacture biodiesel. They separately identified 
this capacity as 'idle capacity' which should not be counted as capacity available for 
use. The capacity utilisation figures in Ta ble 4 were therefore understated. After close 
                                               
623 Provisional Regulation, (Exhibit ARG-30), Recital 103. 
624 Provisional Regulation, (Exhibit ARG-30), Recital 103. 
625 CARBIO's Powerpoint presentation of 8 July 2013, (Exhibit ARG-46), slides 19-21. 
626 EBB's submission of 17 September 2013, (Exhibit ARG-47). The Panel was only provided with the 
non-confidential version of this submission. 
627 The EBB also explained that it estimated the total EU biodiesel production capacity on the basis of 
the total production capacity of EBB members and then estimated the production capacity of non-EBB members by subtracting the production  capacity of EBB members from the EU-wide production capacity. Given 
that the capacity of non-EBB members had been calculated as the total EU capacity (including "idle capacity") minus the capacity of EBB members (excluding "idle capa city"), the production capacity previously calculated 
for non-EBB members included not on ly these non-EBB members' own "idl e capacity", but also the "idle 
capacity" of EBB members. (EBB's submission of 17 September 2013, (Exhibit ARG-47), pp. 2 and 3) 
628 The EBB submission included annexes providing the following information: (a) non-EBB members 
aggregate data on production, production capacity, sales and employment; (b) EBB members aggregate macro 
data, including the total production capacity of EBB memb ers, their capacity utilization, the total production 
capacity of sampled companies, the total EU production capacity excluding  "idle capacity" (i .e. excluding "idle 
capacity" for EBB members and non-EBB members) and the total EU production capacity including  "idle 
capacity" (i.e. including "idle capaci ty" of both EBB members and non-EBB members); (c) former and current 
EBB members that stopped production in the period 2009-2012; (d) information regarding "idle capacity" of 
non-EBB members per country. (EBB's submission of 17 September 2013, (Exhibit ARG-47), pp. 12-19) 
629 Definitive Disclosure, (Exhibit ARG-35), para. 105. 
630 CARBIO's comments on the Definitive Di sclosure, (Exhibit ARG-39), p. 16 et seq. WT/DS473/R 
 
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  scrutiny of this resubmitted data, it was accepted and Table 4 is restated below. The 
capacity utilisation rate, which had been from 43% to 41% in the provisional Regulation, was now 46% to 55%. The Union industry also corrected the production data for 2009 to produce the table below: 
 2009 2010 2011 IP 
Production capacity 
(tonnes) 18 856 000 18 583 000 16 017 000 16 329 500 
Index 2009 = 100 100 99 85 87 
Production volume 
(tonnes) 8 729 493 9 367 183 8 536 884 9 052 871 
Index 2009 = 100 100 107 98 104 
Capacity utilisatio n 46% 50% 53% 55% 
Index 2009 = 100 100 109 115 120 
 
Recital 103 of the provisional Regulation an alysed the previous capacity utilisation 
data, noting that production increased while capacity remained stable. With the 
revised data production still increases, but useable capacity decreased during the 
same period. This shows that the Union industry was reducing available capacity in face of increased imports from Argentina and Indonesia and thereby reacting to 
market signals. This revised data is now more in line with the public statements of the 
Union industry and Union producers, stating that during the period under consideration production was stopped in several plants and that the capacity that had 
been installed was not immediately available for use, or only available for use with 
significant reinvestment. 
Several interested parties questioned the revised capacity and capacity utilisation 
data. However, no alternatives were provided  by any interested party. The revision is 
based on the revised capacity data provided by the complainant, covering the entire 
Union industry. The revised data was cross-referenced to publicly available data concerning in particular idle capacity as well as capacity of producers that ceased 
operations due to financial difficulties. As explained above in Section 6, 
'Macroeconomic indicators', the revised data provide a more accurate dataset of capacity available to produce biodiesel during the period under consideration than the 
dataset originally provided and published in the provisional Regulation.
631 
7.4.5.4  Main arguments of the parties  7.4.5.4.1  Argentina 7.380.  Argentina submits that the EU authorities' de finition of capacity and capacity utilization is 
inconsistent with Article 3.4 as there is no concept of "idleness" or any legal basis in the text of 
Article 3.4 or the rest of the Anti-Dumping Agr eement that allows excluding "idle capacity" or 
capacity not "available for use". Therefore, Argentina submits, in the framework of Article 3, the 
entirety of production capacity must be taken into account regardless of whether it is "available for 
use" or not.
632 Argentina adds that this interpretation is supported by the object of Article 3.4, 
which is to provide for an "evaluation [of] … all relevant economic factors and indices having a 
bearing on the state of the industry". Argentina notes in this respect that the entirety of an 
industry's production capacity generates costs, re gardless of the assets' immediate availability for 
use. Therefore, the exclusion of "idle capacity" resu lts in an inaccurate picture of the state of the 
domestic industry.633 Argentina submits that excluding "idle capacity" from the assessment of 
capacity utilization would diminish the meaning of th e terms "utilization of" in Article 3.4 as it blurs 
the distinction between full production capacity and the portion of this full production capacity that 
                                               
631 Definitive Regulation, (Exhibit ARG-22), Recitals 131-133. 
632 Argentina's first written submission, para. 354; second written submission, para. 216. 
633 Argentina's first written submission, para. 355. WT/DS473/R 
 
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  is actually being used.634 Finally, Argentina asserts that the definition of "idle capacity" provided in 
the Definitive Regulation is vague and does not support the EU authorities' decision that the 
circumstances of the present investigation warranted the exclusion of the "idle capacity".635 
7.381.  Argentina claims that the European Union acted inconsistently with Articles 3.1 and 3.4 
because its evaluation of production capacity and capacity utilization was not based on positive 
evidence. Argentina builds its claim upon the foll owing three principal lines of argument. First, 
Argentina argues that the evidence on which the EU  authorities based their evaluation of capacity 
utilization is implausible. Argentina notes in this respect that the EU authorities' reduction of the 
production capacity figures in the Definitive Regulation amounted to 5,898,000 tonnes, or 26.53% of total production capacity, during the IP (i.e. 1 July 2011 to 30 June 2012). Argentina argues that the EBB could not have overlooked a "mistake " of this magnitude, given the frequency with 
which the EBB collected production capacity data and given the fact that the EBB's 
September 2013 submission shows that the entire ty of "idle capacity" had previously been 
attributed to non-EBB producers, a minority sector of the EU industry.
636 Second, Argentina 
asserts that the revised capacity figures are contra dicted by multiple reliable and publicly available 
sources reporting production capacity figures simila r to those initially provided by the EBB in the 
complaint.637 Furthermore, Argentina argues that while, in the Definitive Regulation, the 
EU authorities mentioned that they had cross-referenced the revised data to publicly available 
data, they failed to identify the public data used , to place this data on the public file of the 
investigation and to clarify the "cross-referencing" exercise which they allegedly undertook.638 
Third, Argentina argues that because the exclusion of "idle capacity" is not supported by the text 
of Article 3.4, evidence concerning such "idle capaci ty" is not evidence that is relevant or pertinent 
with respect to the issue of capacity.639  
7.382.  Argentina submits that the European Union did not conduct an objective examination of 
production capacity and capacity utilization, as requ ired by Article 3.1, as the EU authorities failed 
to act in an even-handed manner and favoured th e interests of the EU domestic industry in 
weighing and balancing the evidence before them. Argentina argues in this respect that the 
unusual exclusion, on the basis of unreliable data, of "idle capacity" of a huge magnitude favoured 
the interests of the domestic industry by understat ing capacity, overstating capacity utilization and 
consequently denying the significance of overcapacity as a source of injury.640 Argentina adds that 
this occurred in a context in which CARBIO argu ed that overcapacity, and not dumped imports, 
caused injury to the EU industry.641 In addition, Argentina argues that the facts that the 
EU authorities favoured evidence produced by one party even though that evidence is contradicted 
by public sources, that the EU authorities did no t disclose the publicly available data with which 
they cross-referenced the EBB's submission of 17 September 2013, and that the adjustment was 
made after the on-site verifications had been completed constitute a failure to conduct an objective examination.
642 Argentina adds that all sampled producers were EBB members, and 
therefore their production capacity figures excluded "idle capacity" from the beginning; therefore 
the EU authorities' verification of these producers' data does not establish the accuracy of the revised data.
643 
7.383.  Argentina claims that, contrary to Article 3.4, the EU authorities failed to adequately 
evaluate production capacity and capacity utilization. Argentina first submits in this respect that 
the obligation to evaluate all relevant economic factors under Article 3.4 is to be read in conjunction with the obligations imposed under Arti cle 3.1, such that the authorities' failure to 
                                               
634 Argentina's second written submission, para. 216; response to Panel question No. 59, para. 145. 
635 Argentina's second written submission, para. 218. 
636 Argentina's first written submission, paras. 363-364;  opening statement at the first meeting of the 
Panel, para. 113; second written submission, para. 219-220. 
637 Argentina's first written submission, para. 370.  The sources are EBB press releases, the EBB's 
website, the US Department of Agriculture's Global Ag ricultural Information Networ k, and data quoted by a 
Bloomberg New Energy Finance analyst in The Telegraph. 
638 Argentina's first written submission, paras. 371-372. 
639 Argentina's first written submission, para. 373; second written submission, para. 222 (referring to 
Panel Report, Mexico – Steel Pipes and Tubes , para. 7.213). 
640 Argentina's first written submission, paras. 376-377 and 380. 
641 Argentina's first written submission, para. 376. 
642 Argentina's first written submission, para. 378; opening statement at the first meeting of the Panel, 
para. 117. 
643 Argentina's second written submission, para. 224. WT/DS473/R 
 
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  base their evaluation of production capacity and ca pacity utilization on an objective examination of 
positive evidence also constitutes a violation of Article 3.4.644 Second, Argentina submits that the 
finding in the Provisional Regulation, confirmed in the Definitive Regulation, that "production capacity remained relatively stable" is factually incorrect in view of the fact that production 
capacity increased by 1,868,500 tonnes, or 9%, during the reference period.
645 
7.384.  Finally, Argentina argues that the EU authorities acted inconsistently with Article 3.4 
because they failed to evaluate return on investments and capacity utilization in a consistent 
manner. Argentina submits that "idle capacity" was excluded from the capacity utilization figures 
considered by the EU authorities but was included in the return on investment figures given that the EU authorities' evaluation of the latter procee ded on the basis of all assets employed in the 
production of biodiesel.
646 Argentina submits that while the European Union asserts that "idle 
capacity" was not included in the calculation of return on investments because there were no 
sampled companies with "idle capacity", there was at least one sampled company, namely Diester, 
with "idle capacity" that would have been excluded from the production capacity figure but was 
included in the return on investments figures used by the EU authorities.647 Argentina rejects the 
European Union's contention that its claim concerning return on investments does not properly fall within the Panel's terms of reference. 
7.4.5.4.2  European Union 
7.385.  Concerning Argentina's challenge of the EU authorities' definition of production capacity, 
the European Union argues that there is no definition of production capacity in the Anti-Dumping Agreement. It submits that the exclusion of "idle capacity" accords with the most 
relevant dictionary definitions of the term "capacity", such as the one in the Shorter Oxford English 
Dictionary , which defines it as "the maximum amount or number that can be contained, produced, 
etc."
648, given that "idle" plants make no contribution to the "maximum amount or number that 
can be … produced".649 According to the European Union, this conclusion is supported by the 
context of the term, as a plant that is not available for production cannot be utilized.650 The 
European Union argues that Article 3.4 requires  a substantive assessment of the state of the 
domestic industry (i.e. a substantive evaluation  rather than a formalistic one based on rigid 
definitions and a checklist of positive and negative factors) and that capacity utilization is only one 
of the factors listed in Article 3.4.651 The implications for the injury determination are the same 
regardless of the inclusion or exclusion of "idle capacity" as both low capacity utilization and 
closing or "mothballing" of plants are indicative of injury.652 However, the European Union submits 
that capacity utilization provides a measure of the level of efficiency at which an industry is operating, and that to include industrial plants th at have been mothballed in the same category as 
plants that are kept in operational condition would give a false impression about the state of the 
domestic industry.
653 
7.386.  The European Union rejects Argentina's allegations that the revised figures are implausible 
and therefore do not constitute positive eviden ce. The European Union submits that the change 
consisted in reclassifying part of the non-producing plants as "idle" because "[they were] not in a state that it would have been available for use during the IP" and that "having given the EBB's information 'close scrutiny', the EU authorities were prepared to accept it as accurate".
654 The 
European Union argues that the issue of whether and at what precise point a plant becomes "idle" 
is one of technical interest; what is significant in the context of Article 3.4 is the conclusion, as 
                                               
644 Argentina's first written submission, paras. 382-383 (quoting from Panel Report, Korea – Certain 
Paper , para. 7.272). 
645 Argentina's first written submission, paras. 384-385 (quoting from Panel Report, EC – Tube or Pipe 
Fittings , para. 7.314). 
646 Argentina's first written submission, para. 390. 
647 Argentina's opening statement at the first meeting of the Panel, para. 120; response to Panel 
question No. 63(b), para. 156. 
648 Shorter Oxford English Dictionary , 6th edn, (version 3.0.2.1), (Exhibit EU-9). 
649 European Union's first written submission, para. 300. 
650 European Union's first written submission, para. 301. 
651 European Union's response to Panel question  No. 59, para. 87; second written submission, 
para. 151. 
652 European Union's first written submission, para. 308. 
653 European Union's second written submission, para. 154. 
654 European Union's first written submission, para. 305. WT/DS473/R 
 
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  stated in recital 132 of the Definitive Regulation, that "during the period under consideration 
production was stopped in several plants and that the capacity that had been installed was not immediately available for use, or only available for use with significant reinvestment". The European Union submits that the evidence was secured from the best source, namely the domestic 
industry
655, and the EU authorities have made no attempt to conceal the analytical process in 
which they were engaged, and the effect of the new data received from the EBB.656 The 
European Union argues that the production capa city data contained in the publicly available 
material cited by Argentina were in fact based on the data that the EBB provides to the public, 
which include "idle capacity". The European Union further submits, with respect to Argentina's criticism that the EU authorities have not made available the publicly available material relating to "idle capacity", that there is no such obligation in the legal provisions invoked by Argentina, i.e. 
Articles 3.1 and 3.4.
657 In any event, the European Union considers that it has submitted to the 
Panel several examples of the types of publicly available material relied upon by the EU authorities.
658 
7.387.  The European Union argues that Argentina confuses the "objective examination" aspect of 
its claim by embarking on a discussion of the caus es of injury, a matter governed by Article 3.5, 
rather than the existence or extent of that  injury, which is the subject of Article 3.4.659 In addition, 
the European Union argues that even though the EBB's revised submission was filed after in situ  
verifications, the EU authorities gave it "close scrutiny".660 The European Union explains that the 
authorities analysed the data concerning capacity in two ways: first, by desk analysis and cross-
referencing against publicly available sources (published press releases, news from biodiesel 
producers and the EBB that plants had been clos ed or mothballed); and second, by selecting a 
sample of EU producers and subjecting their data to detailed examination and verification.661  
7.388.  With regard to Argentina's assertion that the EU authorities failed to properly evaluate data 
in respect of production capacity and capacity utilization, the European Union notes that this 
aspect of Argentina's claim is in part merely consequential to its claims concerning objective examination and positive evidence. The European Union responds to the other aspect of that 
claim, concerning the EU authorities' statement that production capacity was "relatively stable" 
even though it had increased by 9%, that the "r elatively stable" finding pertained to the period 
from 2010 to the IP, in which capacity increased by 4.3%, not by 9%.
662 
7.389.  The European Union argues that the inconsistency alleged by Argentina concerning the 
EU authorities' findings with regard to return on investments falls outside the Panel's terms of 
reference given that Argentina did not mention return on investments in either its panel request or its request for consultations.
663 On the merits, the European Union initially submitted that the 
EU authorities' assessment of production capacity was based on data for the industry as a whole, 
whereas their examination of return on investments was based on data from the sampled EU producers. The European Union indicated that  had any of the sampled producers had "idle 
capacity", that capacity would have been ignored in calculating return on investments. However, 
none of these sampled producers had "idle capacity "; therefore the exclusion of "idle capacity" had 
no impact on the EU authorities' assessment of return on investments.
664 In its second written 
submission, the European Union acknowledged that one of the sampled producers in fact had "idle 
capacity", which was reported by that company and verified.665 However, the European Union 
argued, excluding "idle capacity" from the consider ation of capacity utilization, on the one hand, 
                                               
655 European Union's second written submission, para. 155. 
656 European Union's first written submission, para. 308. 
657 European Union's first written submission, para. 310. However, the European Union recognizes that 
such an obligation is contained in Article 6 of the Anti-Dumping Agreement. 
658 European Union's first written submission, para. 310 and fn 254 (referring to Media reports on plant 
closures in the European Union, (Exhibit EU-10)). 
659 European Union's first written submission, para. 313. 
660 European Union's first written submission, para. 315. 
661 European Union's first written submission, para. 295; response to Panel question No. 62, para. 91. 
662 European Union's first written submission, para. 317. 
663 European Union's first written submission, pa ra. 318; second written submission, para. 165. 
664 European Union's first written submission, para. 318. 
665 European Union's second written submission, para. 157. WT/DS473/R 
 
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  but including it in the evaluation of return on investments, on the other, is entirely logical given 
that this capacity, although not in use, was nevertheless an asset of the company.666 
7.4.5.5  Arguments of the third parties 7.390.  China  considers that certain facts and arguments submitted by Argentina raise issues as 
to whether the European Union based its injury de termination on positive evidence and conducted 
an objective examination, as required by Article 3.1 of the Anti-Dumping Agreement.
667 China 
agrees with Argentina that Article 3.4 contains no reference to a concept such as "availability for 
use" or "idleness" and thus the entirety of the pr oduction capacity should be considered during the 
injury investigation.668 China considers that the term "idle" does not mean that such capacity 
ceased to exist, and that the exclusion of such capacity is not an "objective examination" of 
utilization of capacity.669 
7.391.  Colombia  invites the Panel to take into account the architecture of Article 3 and the key 
importance of "positive evidence" and "objective examination" in the legal obligation under Article 3.4.
670 Colombia submits that the Panel should consider the last sentence of Article 3.4, 
which provides that "this list is not exhaustive, nor can one or several of these factors necessarily 
give decisive guidance."671 This provision suggests that the Panel should refrain from limiting its 
analysis of the Article 3.4 claim to the evaluation of production capacity and utilization of capacity. 
Rather, all injury factors must be taken into account when evaluating the state of the domestic 
industry.672 
7.392.  Indonesia  argues that the full installed capacity of the domestic industry should be 
considered for evaluation of the injury factor "utilization of capacity".673 Indonesia refers to the 
definition of the term "capacity" provided in the Shorter Oxford English Dictionary  – "ability to 
receive, contain, hold, produce or carry".674 Indonesia believes that this was the meaning intended 
by the drafters of the Anti-Dumping Agreement, as a contrary interpretation would make an 
assessment of capacity utilization non-objective and discriminatory, because investigating 
authorities could adopt different interpretations of the term "idle capacity" in different contexts.675 
7.393.  Saudi Arabia  notes the importance of the injury analysis in preventing abuse of the 
anti-dumping instrument and recalls that the injury determination shall be based on positive 
evidence. Saudi Arabia submits that the injury analysis is not a "tick-the-box exercise"; rather it requires a critical analysis of the facts on the record and an unbiased and proper evaluation of 
facts.
676 
7.4.5.6  Evaluation by the Panel  
7.394.  Argentina's challenge with respect to the EU  authorities' analysis of the impact of dumped 
imports on the domestic industry raises two principal issues. The first is the EU authorities' 
exclusion of "idle capacity" in their determination and evaluation of production capacity and 
capacity utilization. Argentina argues that ex cluding "idle capacity" is not permissible under 
Article 3.4, that "idleness" of capacity is an irrele vant fact in the evaluation of production capacity 
and capacity utilization, and that reliance on an irrelevant fact violates the "positive evidence" 
requirement under Article 3.1. The second issue pertains to the data that was used by the EU authorities in their evaluation of production capacity and capacity utilization. This issue primarily arises under Article 3.1 of the An ti-Dumping Agreement – Argentina alleges the 
EU authorities acted inconsistently with the "positive evidence" and "objective examination" 
requirements under Article 3.1 in accepting the re vised data submitted by the EBB. Argentina also 
submits that a violation of these requirements in Article 3.1 gives rise to a violation of Article 3.4. 
                                               
666 European Union's second written submission, para. 158. 
667 China's third-party submission, para. 150. 
668 China's third-party submission, para. 151. 
669 China's third-party response  to Panel question No. 21. 
670 Colombia's third-party su bmission, paras. 27-29.  
671 Colombia's third-part y submission, para. 39. 
672 Colombia's third-party su bmission, paras. 38-49. 
673 Indonesia's third-party response to Panel question No. 21, para. 61. 
674 Indonesia's third-party response to Panel question No. 21, para. 53. 
675 Indonesia's third-party response to  Panel question No. 21, para 61. 
676 Saudi Arabia's third-party statement, para. 17. WT/DS473/R 
 
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  7.395.  We do not find it necessary, in the circumstances of the present dispute, to definitively 
resolve the first issue, i.e. whether the EU authorit ies acted inconsistently with Articles 3.1 and 3.4 
by excluding "idle capacity" in their determination and evaluation of production capacity and capacity utilization. This is because, as we expl ain below, we find that the EU authorities acted 
inconsistently with Articles 3.1 and 3.4 in accept ing the revised data submitted by the EBB without 
assuring themselves of the accuracy and reliability  of this revised data. Before turning to that 
conclusion, we recall the obligations imposed by Articles 3.1 and 3.4 of the Anti-Dumping 
Agreement.  
7.396.  Article 3.4 requires an investigating authority to evaluate "all relevant economic factors 
and indices having a bearing on the state of the in dustry". Article 3.4 sets forth a non-exhaustive 
list of such economic factors and indices which mu st be evaluated in order to examine the impact 
of the dumped imports on the domestic industry.
677 One of these is utilization of capacity. 
Consideration of capacity utilization as an economic factor or index having a bearing on the state of the industry necessarily involves, as a preliminary step, determining the production capacity of 
the domestic industry in order to be able to determine the level or percentage of such capacity 
that is being utilized.
678 In the investigation at issue, the EU authorities addressed both production 
capacity and capacity utilization in their analys is of the impact of the dumped imports on the 
domestic industry.679 
7.397.  Article 3.1 of the Anti-Dumping Agreement is "an overarching provision that sets forth a 
Member's fundamental, substantive obligation"680 that its injury determination be based on an 
"objective examination" of "positive evidence" co ncerning the impact of dumped imports on the 
domestic industry.  
7.398.  The obligation to base findings on positive evidence  pertains to "the quality of the evidence 
that authorities may rely upon in making a determination".681 Thus, it is concerned with "the facts 
underpinning and justifying the injury determination".682 Prior panels and the Appellate Body have 
observed that the term "positive" suggests that "the  evidence must be of an affirmative, objective 
and verifiable character, and that it must be credible".683 Further, "positive evidence" refers to 
"evidence that is relevant and pertinent with respect to the issue to be decided, and that has the 
characteristics of being inherently reliable and creditworthy".684 Appellate Body findings in prior 
disputes suggest that the obligation to conduct an objective examination  deals with the procedural 
aspects of the proceeding, i.e. the investigative process itself.685 It requires that the effects of 
dumped imports be investigated in an unbiased manner, without favouring the interests of any 
interested party in the investigation.686 Our analysis of Argentina's claim proceeds on the basis of 
this understanding of the relevant obligations under Article 3.1 invoked by Argentina. 
7.399.  We first consider Argentina's argument that the EU authorities based their evaluation of 
production capacity and capacity utilization on evid ence that was unreliable. We recall that in the 
Definitive Regulation, the EU authorities revised the production capacity figures that they had set 
out in the Provisional Regulation, on the basi s of revised data submitted by the EBB in 
                                               
677 Appellate Body Report,  Thailand – H-Beams , paras. 121-128. 
678 "Capacity utilization" is defined in the Oxford Di ctionary of Economics as the "[a]ctual output as a 
percentage of capacity." ( Oxford Dictionary of Economics, 3rd edn, J. Black, N. Hashimzade and G. Myles 
(Oxford University Press 2009), p. 50)   
679 Although Article 3.4 does not require evaluation of production capacity per se , it allows it, given that 
it includes a non-exhaustive  list of relevant factors or indices. Produc tion capacity and capacity utilization were 
two of the "macroeconomic indicators" which the EU authorities evaluated on the basis of data provided relating to all EU producers. (Provisional Regulation, (Exhibit ARG-30), Recitals 100-101; and Definitive Regulation, (Exhibit ARG-22), para. 130) 
680 Appellate Body Report, Thailand – H-Beams , para. 106. 
681 Appellate Body Report, US – Hot-Rolled Steel , para. 192. 
682 Appellate Body Report, US – Hot-Rolled Steel , para. 193. 
683 Appellate Body Report, US – Hot-Rolled Steel , para. 192.  
684 Panel Reports, Mexico – Steel Pi pes and Tubes, para. 7.213; and Mexico – Anti-Dumping Measures 
on Rice, para. 7.55, upheld by the Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, 
paras. 164-165. 
685 Appellate Body Report, US – Hot-Rolled Steel,  para. 193. 
686 Appellate Body Report, US – Hot-Rolled Steel,  para. 193. WT/DS473/R 
 
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  September 2013, which excluded "idle capacity" from overall production capacity. They also 
revised the capacity utilization figures accordingly.687  
7.400.  In our view, the circumstances surrounding what was a substantial revision of the data 
underlying the EU authorities' evaluation of produc tion capacity and capacity utilization were such 
that an unbiased and objective authority should have exercised particular care in ascertaining the 
accuracy and reliability of the revised data. 
7.401.  First, the change in the total production capacity figures that resulted from the EBB's 
revision of the data was of such a magnitude that it was likely to fundamentally affect the 
EU authorities' evaluation of this factor and,  as consequence, their evaluation of capacity 
utilization. The EBB's revised data resulted in a reduction in total EU production capacity of up to 5,898,000 tonnes, or 26.53% of the figure reported in the Provisional Regulation.
688 It also led to 
very different trends in the evolution of prod uction capacity. The figures relied upon by the 
EU authorities in the Provisional Regulation showed production capacity increasing  from 
20,359,000 tonnes to 22,227,500 tonnes between 2009 and the IP, while in the Definitive 
Regulation, production capacity decreases  from 18,856,000 to 16,329,500 tonnes. The data 
r e v i s i o n  a l s o  l e d  t o  v e r y  d i f f e r e n t  t r e n d s  i n  c a pacity utilization; according to the revised data, 
capacity utilization showed an upward trend, increasing from 46% to 55% over the period 
considered, in stark contrast to the downward trend from 43% to 41% over the same period in the 
Provisional Regulation.689 Moreover, the change in the data also led to different conclusions in the 
Definitive Regulation concerning the impact of the dumped imports on the domestic industry. The 
Definitive Regulation states that: "[w]ith the revised data production still increases, but useable 
capacity decreased during the same period. This shows that the Union industry was reducing 
available capacity in face of increased imports from Argentina and Indonesia and thereby reacting 
to market signals."690 Such significant changes as a result of accepting the revised data warrant 
careful consideration of the accuracy and reliability of the revised data, especially where, as in this 
case, the changes benefit the position of the submitter of the revised data.  
7.402.  Second, the reliability of the EBB data appears to have been an issue from the outset of 
the investigation. According to the European Union, the EU authorities entertained doubts 
concerning the reliability of the data initially provided by the EBB, which they relied upon in the Provisional Regulation.
691 In addition, it appears that the EBB corrected its production capacity and 
                                               
687 Definitive Regulation, (Exhibit ARG-22), Recital 131. 
688 The EU authorities revised the production capacity for each of the years considered in their injury 
determination: for 2009, production capacity was revised from 20,359,000 to 18,856,000 tonnes (a decrease of 1,503,000 or 7.38%); for 2010, it was revised from 21,304,000 to 18,583,000 tonnes (a decrease of 2,721,000 or 12.77%); for 2011, it was revised from 21,517,000 to 16,017,000 tonnes (a decrease of 
5,500,000 or 25.56%); for the IP, from 22,227,500 to 16,329,500 tonnes (a decrease of 5,898,000 or 
26.53%). 
689 Definitive Regulation, (Exhibit ARG-22), Recital 131. 
690 Definitive Regulation, (Exhibit ARG-22), Recital 132. 
691 In particular, during the second meeting of the Panel with the parties, in answer to a question from 
the Panel, the representative of the European Union stated that from the beginning the officials of the EU authorities had considerable doubts about the production capacity figures that they had received from the EBB and that throughout the investigation, they pursued the EBB with the view to identify the "actual capacity". In its second written submission, the Europe an Union argues that "[t]he  true situation regarding 
[idle] capacity was discovered by the investigating authority only after the adoption of the Provisional Regulation." (European Union's second written submission, para. 157). See also the European Union's response to Panel question No. 119(c), para. 111: "… it was only due to the persistent efforts of the Commission that the EBB provided figures for capacity that could be relied upon", and response to Panel question No. 115, 
para. 96: 
In the Biodiesel investigation the Commission sought to identify a reliable and meaningful figure for the production capacity of the industry. As a first step in this direction the Provisional Regulation reproduced data that had been suppli ed by the EBB. Following the adoption of the 
Provisional Regulation, the Commission focussed particular attention on the reliability of the capacity figures. In the course of this examinat ion it became apparent, in particular, that the 
figures in the Provisional Regulation included 'idle' plant, i.e. plant that was not available for use. The Commission set about identifying a figure that excluded any such capacity. The result of this effort is the figures which are given in the Definitive Regulation. These figures were closely examined by the Commission. 
The Definitive Regulation does not explicitly address the question of who, of the EU authorities or the 
EBB, initiated the revision of the production capacity figures, although it contains language that suggests the the EBB took the initiative to revise its data. It states, notably, that: WT/DS473/R 
 
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  capacity utilization data at least twice during the investigation process, in March 2013, after the 
initiation of the investigation and before the issuance of the Provisional Regulation, and again in September 2013, when the EBB presented the revise d data that is at the centre of the present 
claim.  
7.403.  Third, the September 2013 data was prep ared specifically for the purposes of the 
investigation, and differed from the production capa city data made available to the public by the 
EBB, notably on its website. We do not mean that the fact that the EBB presented different 
production data to different audiences for different purposes, in and of itself, says anything about 
the reliability of any of the data so presented. However, in our view, the difference between the data publicly reported by the EBB, which included  "idle capacity", and the data submitted by the 
EBB in its September 2013 submission, which excluded  "idle capacity", and the fact that the latter 
was specifically prepared for the purposes of the investigation made it all the more necessary for 
the EU authorities to satisfy themselves of the accuracy and reliability of the revised data.  
7.404.  Fourth, the revision of the data took place in a context in which the issue of capacity and, 
in particular, of overcapacity, was one of particular importance. From the outset of the 
investigation, Argentine interested parties repeatedly argued that the overcapacity of the domestic industry was an important cause of injury.  Again, this context supports the conclusion that careful 
consideration of the accuracy of the revised data was warranted. 
7.405.  In these circumstances, we would expect an investigating authority to exercise particular 
care and circumspection in assuring itself of the reliability of the production capacity data that it ultimately relies upon. However, nothing on the record allows us to conclude that the 
EU authorities did so in this case.  
7.406.  We recall in this respect that the Defini tive Regulation states that the EU authorities 
accepted the revised data "after close scrutiny".
692 However, the only elaboration on this "close 
scrutiny" is the statement that they cross-referenced this data against "publicly available data 
concerning in particular idle capacity as well as capacity of producers that ceased operations due to financial difficulties".
693 The Definitive Regulation also mentions that: 
[The] revised data is now more in line with the public statements of the Union 
industry and Union producers, stating that during the period under consideration production was stopped in several plants and that the capacity that had been installed was not immediately available for use, or only available for use with significant 
reinvestment.
694 
7.407.  These statements do not persuade us that the EU authorities were sufficiently careful in 
assessing the accuracy and reliability of the data. 
7.408.  Before the Panel, the European Union asse rted that the EU authorities had cross-checked 
the revised data against public sources. However, the European Union was unable to satisfactorily explain how this exercise was conducted. The Euro pean Union submitted to the Panel, as Exhibit 
EU-10, "examples of the kinds of sources that were used"
695 during the investigation to 
cross-check the data.696 The European Union admitted that this Exhibit does not contain the actual 
public sources used by the EU authorities in cross-referencing the revised data, and that the data that was actually used to verify the EBB's submission was not placed on the record of the 
investigation.
697 In our analysis, we are obliged to limit ourselves to evidence that was on the 
record of the investigating authority at the time of investigation. As Exhibit EU-10 was prepared 
                                                                                                                                               
Following provisional disclosure the  Union industry noted that the capacity data that had been 
used in Table 4 of the provisional Regulation incl uded capacity that had not been dismantled, but 
was not in such a state that it would have been available for use during the IP, or previous years, to manufacture biodiesel. They separately identified this capacity as 'idle capacity' which should not be counted as capacity available for use. (Definitive Regulation, (Exhibit ARG-22), Recital 131)  
692 Definitive Regulation, (Exhibit ARG-22), Recital 131. 
693 Definitive Regulation, (Exhibit ARG-22), Recital 133. 
694 Definitive Regulation, (Exhibit ARG-22), Recital 132. 
695 European Union's response to Panel question No. 118 (c), para. 106. 
696 See Media reports on plant closures in  the European Union, (Exhibit EU-10). 
697 European Union's response to Panel question No. 118 (c), para. 106. WT/DS473/R 
 
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  for the purposes of this dispute and did not form part of the record of the EU authorities in the 
anti-dumping investigation at hand, even assuming  we found it to be persuasive, which we do 
not698, it would not be pertinent to our analysis.699 
7.409.  The European Union further asserted before the Panel that the capacity data was 
"checked" through "desk analysis", which we underst and to mean that it was reviewed so as to 
spot problems in terms of clarity, consistency and completeness, etc.700 That said, even when 
asked directly, the European Union could not clarify whether only the initial data was "checked" 
through desk analysis or whether the revised data also was.701 Similarly, although the 
European Union's explanations on this matter are not particularly clear, we understand that the EU authorities verified the production capacity of sampled producers, who were all EBB members, 
prior to the submission by the EBB of the revised data. As noted above, the EBB indicated that the 
initial data, as it pertained to EBB members, already excluded "idle capacity", whereas the revised 
data concerned non-EBB members that were not part of the sample.
702 As the revised data was 
submitted after the on-site verifications of sample d EU producers conducted by the EU authorities, 
it is clear to us from the European Union's explanations that the EU authorities did not actually 
verify the revised data, at least as it pertai ned to non-EBB members, through these on-site 
verifications.  
7.410.  Finally, the European Union's answers to precise questions regarding the verification or 
checks on the revised data do not allow us to conclude that the EU authorities performed any other type of verification.
703 We add that the revised data was submitted less than 10 working days 
before the Definitive Disclosure containing revised findings based on the revised data was issued. 
The brevity of this period also raises question wh ether the EU authorities would have been able to 
assure themselves of the accuracy and reliability of the revised data.  
7.411.  In light of the foregoing, the explanations  provided by the European Union do not satisfy 
us that the EU authorities undertook sufficient steps to satisfy themselves that the revised figures 
were accurate. While it may be that the EU authorities exercised the necessary degree of circumspection in considering the revised data and assuring themselves of its accuracy, nothing on 
the record or in the explanations provided by the European Union allows us to satisfy ourselves 
that this was the case. Having considered the record before us and the explanations by the European Union, it is not clear that the EU author ities satisfied themselves of the accuracy of the 
information provided in the EBB submission of September 2013, consistent with the requirement 
under Article 3.1 to base their determination on positive evidence
704 We stress that we make no 
conclusion as to the accuracy in fact of the revised data; we merely find that the European Union has not persuaded us that the EU authorities exercised sufficient care in assessing the accuracy 
and reliability of the revised data in the circumstances of this investigation. 
7.412.  Moreover, in the context of an investigatio n in which the issue of capacity and overcapacity 
was fiercely contested between the domestic indu stry and the Argentine producers/exporters, the 
                                               
698 Media reports on plant cl osures in the European Union, (Exhibit EU-10), contains only a few news 
excerpts pertaining, inter alia , to the closing of certain plants. While this may have allowed the European Union 
to satisfy itself of the veracity of some of the plant closures reported in the EBB's revised submission, the type of information referred to in this exhibit would in our view have been insufficient to allow the EU authorities to verify the accuracy of the revised figures provided by the EBB in its September 2013 submission. 
699 Pursuant to Article 17.5 (ii) of the Anti-Dumping Agreement, a panel shall examine the matter based 
upon "the facts made available in co nformity with appropriate domestic procedures to the authorities of the 
importing Member". See also Appellate Body Report,  US – Countervailing Duty Investigation on DRAMS , 
para. 161: "a Member may not seek to defend its agency's decision on the basis of evidence not contained in the record of the investigation". 
700 European Union's response to Panel question No. 118, para. 104. 
701 European Union's response to Panel question Nos. 62, para. 91, and 118, paras. 104-108. 
702 The revised data also affected the total EU production capacity, which was comprised of EBB and 
non-EBB members' capacity. See above, paras. 7.374 - 7.379. 
703 See, e.g. European Union's response to Panel question No. 118, paras. 104-108. 
704 In its first written submission, the European Union submits that "[i]t is not the practice of the 
European Union in drafting measures such as the Provisional and Definitive Regulations to enter into the level of detail about its methodology that Argentina seems to expect", concerning how the revised data was verified or scrutinized. (European Union's first written submi ssion, para. 296). We note that we have not limited 
ourselves to the explanation provided in the Regulation s, but have given the European Union the opportunity 
to refer to other evidence on the re cord, whether or not that evidence or information was made public or 
communicated to in terested parties. WT/DS473/R 
 
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  EU authorities' acceptance of revised data presen ted by one of these parties without sufficiently 
assuring itself of the accuracy of this data do es not, in our view, constitute the "objective 
examination" required by Article 3.1.  
7.413.  Based on the above considerations, we conclude that Argentina has made a prima facie 
case, which the European Union has failed to rebu t, that the EU authorities failed to base their 
evaluation of production capacity and capacity utilization on positive evidence, and failed to conduct an objective examination of the impact of dumped imports on the domestic industry 
insofar as it relates to these two factors, thereby acting inconsistently with Article 3.1. 
7.414.   Argentina further asks us to find that the EU authorities' failure to act consistently with 
the "positive evidence" and "objective examinat ion" obligations under Article 3.1 renders its 
evaluation inconsistent not only with these provisions, but also with Article 3.4 of the 
Anti-Dumping Agreement.  
7.415.  We recall that Article 3.4 requires that an investigating authority's examination of the 
impact of the dumped imports on the domestic industry include "an evaluation of all relevant 
economic factors and indices having a bearin g on the state of the industry", including inter alia , 
utilization of capacity. We also recall that the fundamental obligations imposed under Article 3.1 
"inform[] the more detailed obligations in succeeding paragraphs" of Article 3
705, including 
Article 3.4. It is difficult to imagine that an unbiased and objective investigating authority could 
conduct its evaluation of any injury factor or index consistently with Article 3.4 where that 
evaluation is not based on "positive evidence" within the meaning of Article 3.1, and does not result from an "objective examination", also  within the meaning of Article 3.1. In the 
circumstances of the present dispute, we consider that Argentina has made a prima facie  case that 
the EU authorities acted inconsistently with Article 3.4, which the European Union has not rebutted, and therefore also uphold Argentina's Article 3.4 claim.  
7.416.  We now turn to Argentina's allegation that the EU authorities acted inconsistently with 
Article 3.4 in their definition of the term "capacity utilization". According to Argentina, the term "capacity" in that Article means the full production capacity of the domestic industry and no part of 
it can be excluded. On the contrary, the European Un ion is of the view that the term "capacity" as 
used in Article 3.4 permits the exclusion of production capacity which is not available for use during the IP. 
7.417.  Prior panels – in particular the panels in the recent EU – Footwear (China)  and EC – 
Fasteners (China)  disputes – have stressed that Article 3.4 does not provide any guidance or 
methodology for the evaluation of individual factors and indices listed in Article 3.4.
706 In other 
words, investigating authorities enjoy a certain degree of latitude in the evaluation of the 
Article 3.4 injury factors and indices. Nonetheless, in our view, the terms used in listing the 
various relevant factors under Article 3.4 delineate  what the authorities must examine, and what 
data they may rely upon in their examination of the relevant factors.  
7.418.  In this dispute, the parties have debated whether "capacity", as a concept, or as used in 
the phrase "utilization of capacity" in Article 3.4, requires inclusion or not of certain type(s) of capacity which is not used or not available for use,  e.g. "idle capacity". Hence, the question before 
us is whether some part of the installed capacity, which is not available for use, may be excluded 
from the calculation of a firm's total production capacity. 
7.419.  The ordinary meaning of the term "capacity"  (in the sense of production capacity) refers to 
the maximum output that a firm is capable of producing; in other words, it refers to its total 
installed production capacity.
707 As it refers to the notion of bein g capable to produce, this ordinary 
                                               
705 Appellate Body Report, Thailand – H-Beams , para. 106.  
706 Panel Reports, EU – Footwear (China) , paras. 7.445, 7.448, and 7.456; EC – Fasteners (China) , 
para. 7.401. 
707 The Shorter Oxford English Dictionary  defines "capacity" as, inter alia , the "[a]bility to receive, 
contain, hold, produce, or carry", and "[t]he maximum amount or number that can be contained, produced, 
etc." ( Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), Vol. 1, 
p. 338). The Oxford English Dictionary  defines the same term, as it is used in industry as "the ability to 
produce; equivalent to 'full capacity'." (OxfordDic tionaries.com, Oxford Univ ersity Press, accessed 
28 October 2015, http://www.oed.com/view/Entry/27368?redirectedFrom=capacity#eid ). The Oxford 
Dictionary of Economics  provides an even more pertinent definition of "capacity". It defines this term as "[t]he WT/DS473/R 
 
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  meaning does not conclusively resolve the question whether some installed capacity which is in 
practical terms not available for productive use may be excluded from the calculation of a firm's production capacity. It seems to accommodate defining production capacity as only that part of installed capacity which can actually be mobilized for production within the reasonably short term. 
Turning to the context of the term "capacity" as it is used in the phrase "utilization of capacity" in 
Article 3.4, the requirement to evaluate this fa ctor or index to determine whether the domestic 
industry has been injured makes it implicit that what is called for is an evaluation of the domestic 
industry's ability (or inability) to make use of it s installed capacity during the period considered. 
This evaluation calls for a determination as to the extent to which the assets were being put to use and the extent to which the assets could not be put to use as a result of the impact of dumped 
imports on the domestic industry during the period considered for purposes of the injury 
determination. Insofar as productive assets are ge nuinely not available for use, as noted above, an 
investigating authority could, in our view, properly consider that they do not form part of the domestic industry's production capacity. However, capacity utilization as a factor or index bearing 
on the state of the domestic industry would be less than meaningful or would be undermined if 
production capacity that is not being used as a result of the impact of dumped imports is excluded from the determination of rates of capacity utilization.
708  
7.420.  In this investigation, the record before us  strongly suggests that the EU authorities relied 
on the re-classification of production capacity be tween "useable" capacity and capacity that is not 
available for use done by the EBB without themselves assessing the EBB's reclassification709, and 
without adequately assessing whether the data actually corresponded to the explanation or 
definition of "idle capacity" that they themselves provided in the Regulations710 and, more 
importantly, without assuring themselves that th e production capacity that was excluded could 
properly be excluded from the domestic indu stry's production capacity. In addition, the 
Regulations refer to "idle capacity" as capacity which would require significant reinvestment in 
order to be put to use again but there is no explanation as to why reinvestment was required.  
7.421.   It is not clear whether "idle capacity", as that term was used by the EBB and the 
EU authorities, corresponds to plants that entirely stopped producing on a permanent basis or 
plants that were temporarily shut down but could be put back into use once the necessity arose, or both of them, or any other types of plants. Of particular concern is the reference by the EU authorities in the Definitive Regulation to capacity which was "not immediately available for 
use".
711 In principle, one would expect that the fact that certain capacity is momentarily 
unavailable is not sufficient to exclude it from the production capacity of a producer or of the overall industry. Where an investigating authorit y decides to exclude such production capacity 
from its evaluation, we would expect a plausible explanation of its reasons for doing so. In this 
context, we note that the capacity that was excluded in the Definitive Regulation amounts to as much as 5,898,000 tonnes according to the data set out in the Regulations.  
                                                                                                                                               
maximum output of goods and services a firm or an economy is capable of producing". ( Oxford Dictionary of 
Economics, 3rd edn, J. Black, N. Hashimzade and G. Myles (Oxford University Press 2009), p. 50). 
708 Argentina submits that the negotiating history of the Anti-Dumping Agreement supports its 
interpretation. In our view, the ordinary  meaning of the term "capacity" in Article 3.4 read in its context, does 
not entirely preclude determining the amount of capacity  with reference to capacity available for use in the 
reasonably short term and there is therefore no need to have recourse to the preparat ory work of the treaty as 
a supplementary means of interpretati on pursuant to Article 32 of the Vienna Convention. In any event, the 
negotiating history on this matter is inconclusive. 
709 W e  r e c a l l  t h a t  w e  h a v e  f o u n d  a b o v e  t h a t  A r g e n t i n a  h a s  m a d e  a prima facie  case that the 
EU authorities failed to properly satisfy themselves of th e accuracy of the relevant figures provided by the EBB. 
710 We recall that the Definitive Disclosure and the Definitive Regulation define the excluded capacity (or 
"idle capacity") as "capacity that had not been dismantled, but was not in such a state that it would have been 
available for use during the IP, or previous years, to manufacture biodiesel" (Definitive Disclosure, (Exhibit ARG-35), Recital 105; Definitive Regulation, (Exhibit ARG-22), Recital 131) and – implicitly – as "capacity that had been installed [but] was not imme diately available for use, or only available for use with significant 
reinvestment" (Definitive Regulation, (Exhibit ARG-22), Recital 132) and contrasted such "idle capacity" with "capacity available for use" or "useable capacity" (Definitive Regulation, (Exhibit ARG-22), Recitals 131 and 132). (See also European Union's response to Panel question No. 116, para. 99)  
711 The Definitive Regulation implies that the EU authorities excluded "capacity that had been installed 
[but] was not immediately available for use, or only available for use with significant reinvestment". (Definitive 
Regulation, (Exhibit ARG-22), Recital 132, cited in European Union's response to Panel question No. 116, para. 99) WT/DS473/R 
 
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  7.422.  In our view, these concerns raise doubts as to the consistency with Article 3.4 of the 
treatment of the total production capacity of the EU industry. It also raises questions as to the objectivity of the EU authorities' evaluation of production capacity and capacity utilization as factors bearing on the state of the domestic indust ry in their injury analysis under Article 3.4. 
However, given our findings above that the European Union acted inconsistently with Articles 3.1 
and 3.4, we do not see the need to reach a definitive view on this matter. 
7.423.  Lastly, we turn to Argentina's contention that the EU authorities acted inconsistently with 
Article 3.4 due to their "inconsistent" evaluati on of capacity utilization and of return on 
investments.
712 To recall, Argentina argues that "idle capacity" was excluded from the production 
capacity and capacity utilization figures, but was included in the "return on investments" figures.713 
Before addressing the merits of Argentina's claim in this respect, we address the European Union's 
objection that it is outside the Panel's term of reference.  
7.424.  The European Union argues that the inconsistency alleged by Argentina falls outside the 
panel's terms of reference because neither Ar gentina's panel request nor its request for 
consultations mentions return on investments.714 The European Union submits in this respect that 
each of the factors listed under Article 3.4 of the Anti-Dumping Agreement is the object of a 
separate obligation. Consequently, the European Un ion argues, pursuant to Article 6.2 of the DSU, 
Argentina's panel request should have referred to each factor for which it challenges the 
EU authorities' evaluation and its failure to mention this factor deprives Argentina of the possibility of challenging the EU authorities' evaluation of it. In addition, the European Union argues that Argentina's panel request does not satisfy the Article 6.2 requirement to present the problem 
clearly with respect to return on investments as  it does not even mention this injury factor.
715  
7.425.  Argentina responds that it does not challe nge the EU authorities' evaluation of return on 
investments in isolation, but rather that it challenges the inconsistent evaluation of capacity 
utilization and return on investments.716 Argentina disagrees with the proposition that each of the 
injury factor listed in Article 3.4 amounts to a specific and independent obligation, and considers that its panel request mentioned the relevant obligation, which is to evaluate all relevant economic 
factors and indices having a bearing on the state of the industry. Argentina adds that the alleged 
inconsistency arises from a change of figures on production capacity and capacity utilization, thus the evaluation of capacity utilization is a basis for this claim and it was included in the panel request.
717 In addition, Argentina argues that the express use of " inter alia " in the paragraph of its 
panel request setting out its Articles 3.1 and 3.4 claims means that the claim is not necessarily 
limited to the injury factor "utilization of capacity".718  
7.426.  We recall that Article 6.2 of the DSU provides that a panel request "shall indicate whether 
consultations were held, identify the specific measures at issue and provide a brief summary of the 
legal basis of the complaint sufficient to present the problem clearly". According to the Appellate Body, Article 6.2 requires claims, but not arguments, to be set forth in the panel 
request.
719  
7.427.  Argentina's panel request alleges that the anti-dumping measures imposed by the 
European Union on imports of biodiesel are inconsistent with: 
                                               
712 Argentina's response to Panel question No. 63, para. 151. 
713 Return on investments was one of the "microeconom ic" factors that the EU authorities considered on 
the basis of data provided by the sampled producers. The EU authorities indicated that their assessment of 
return on investments was made on the basis of the sampled domestic producers' "pre-tax result as a 
percentage of the average opening and closing net book value of the assets employed in the production of 
biodiesel." (Provisional Regulation, (Exhibit ARG-30), Recital 116, confirmed in Definitive Regulation, (Exhibit ARG-22), Recitals 140-141) 
714 European Union's first written submission, pa ra. 318; second written submission, para. 165. 
715 European Union's second written submission, paras. 166-168 (quoting from Appellate Body Report, 
China – Raw Materials , para. 231). 
716 Argentina's response to Panel question No. 63, para. 151. 
717 Argentina argues that it is making allegations concerning return on investments not as an 
independent factor, but as part of it s claim regarding capacity utilization. 
718 Argentina's opening statement at the first meeting of the Panel, para. 119; response to Panel 
question 63, paras. 150-153. 
719 Appellate Body Report, EC – Bananas III , para. 143. WT/DS473/R 
 
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  Articles 3.1 and 3.4 of the Anti-Dumping Agreement because the European Union's 
injury determination is not based on positive evidence and does not involve an objective examination of the consequent impact of the allegedly dumped imports on domestic producers of the like product, inter alia , in relation to capacity and capacity 
utilization of the domestic industry.
720  
7.428.  In it submissions to the Panel, Argentina requests that the Panel find that: 
[T]he anti-dumping measures imposed by the European Union on imports of biodiesel 
originating in Argentina are inconsistent with the following provisions of the 
Anti-Dumping Agreement and the GATT 1994: 
… Articles 3.1 and 3.4 of the Anti-Dumping Agreement because the European Union's 
injury determination is not based on positive evidence and does not involve an 
objective examination of the consequent impact of the allegedly dumped imports on domestic producers of the like product in relation to capacity, utilization of production 
capacity and return on investment of the European Union industry … .
721 
7.429.  Although Argentina responds to the European Union's objection that it does not challenge 
the evaluation of return on investments "in isolation", i.e. per se , this assertion is contradicted by 
the requests for findings that it presents to the Panel, in which it seeks a finding that the 
EU authorities' evaluation of this specific factor was inconsistent with Articles 3.1 and 3.4. Argentina's claim in this regard falls outside the Panel's terms of reference as Argentina's panel request does not mention "return on investments", while it expressly mentions "capacity and 
capacity utilization". Argentina had all the information in its possession to include a claim 
concerning this factor/index in its panel request. Thus, had Argentina wanted to also challenge the EU authorities' evaluation with respect to the factor return on investments in the same manner as 
it did with respect to production capacity and capa city utilization, there is no plausible reason why 
it could not have also mentioned this factor/index in its panel request – and, before then, in its consultations request – alongside the other two factors. To us, the use of the catch-all phrase 
"inter alia " does not cure this omission, particularly as, by explicitly listing capacity and capacity 
utilization as specific factors with respect to which the EU authorities' evaluation infringed Articles 3.1 and 3.4, Argentina's panel request implicitly limited the issues or problems it could raise in respect of the EU authorities' determination under Article 3.4. In light of the formulation of 
Argentina's claims under Articles 3.1 and 3.4 in its panel request, and considering the 
requirements of Article 6.2 of the DSU, the absence of any reference to the factor "return on investments" in Argentina's panel request could only lead to the conclusion that the 
EU authorities' evaluation of this factor falls outside the terms of reference of the Panel.  
7.430.  As noted above, Argentina argues that it is not challenging the EU authorities' evaluation 
of "return on investments" per se , but rather that it only refers to their evaluation of this factor as 
an argument in support of its claims concerning the EU authorities' evaluation of capacity 
utilization. Even if we agreed, and on this basis considered that Argentina's challenge concerning this factor falls within the Panel's terms of reference as a part of the production capacity and capacity utilization claims, we would still not need to make a finding with respect to the 
EU authorities' evaluation of this factor in order to resolve this dispute. This is because we have 
already found that the EU authorities acted inconsistently with Articles 3.1 and 3.4 in their evaluation of production capacity and capacity utilization.
722  
7.431.  In sum, for the reasons explained above, we find that Argentina has made a prima facie  
case that the EU authorities did not base their eval uation of production capacity and "utilization of 
capacity" on an "objective examination" of "positive evidence". This being the case we find that the 
European Union acted inconsistently with Articles 3.1 and 3.4 of the Anti-Dumping Agreement in 
                                               
720 WT/DS473/5, p. 4, para. 7. 
721 Argentina's requests for findings in first written submission, para. 470(h); second written 
submission, para. 254(h). 
722 See above, paras. 7.413 and 7.415. WT/DS473/R 
 
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  its examination of the impact of the dumped imports on the domestic industry, insofar as it relates 
to these two factors.723  
7.4.6  Whether the EU authorities' non-a ttribution findings are inconsistent with 
Articles 3.1 and 3.5 of the Anti-Dumping Agreement 
7.4.6.1  Introduction 
7.432.  Argentina claims that the European Union ac ted inconsistently with Articles 3.1 and 3.5 of 
the Anti-Dumping Agreement because the EU author ities failed to appropriately assess the injury 
caused by "other factors" at the same time and to separate and distinguish that injury from the 
injury caused by the dumped imports.724 Argentina challenges the EU authorities' consideration of 
the following "other factors", which were brought to their attention by CARBIO, the association of Argentine biodiesel producers: (i) the overcapaci ty of the EU domestic industry; (ii) the EU 
domestic industry's imports of the product under consideration; (iii) the EU domestic industry's 
lack of vertical integration and of access to raw materials; and (iv) the alleged double-counting regimes of certain EU member States.
725 
7.433.  In the determinations at issue, the EU authorities concluded that significantly increased 
volumes of dumped imports from Argentina and In donesia undercut the prices of the EU industry 
and caused material injury to it.726 They further concluded that whereas it was possible that other 
factors had affected the performance of the EU industry to a certain extent, the effect of those 
factors, considered individually or collectively, was not such as to break the causal link between 
the dumped imports and the material in jury suffered by the EU industry.727 Specifically, with 
respect to the other factors addressed by Argentina's claims, the EU authorities found that the 
domestic industry's overcapacity was a factor of injury, but not such a decisive one as to break the 
causal link between the dumped imports and the deterioration of the situation of the domestic 
industry.728 With regard to the imports by the EU industry, the EU authorities rejected allegations 
that the domestic industry had a long-term strategy of importing the investigated product and 
concluded that the causal link was not broken by these imports.729 Finally, the EU authorities 
rejected arguments that other factors such as the double-counting regimes put in place by certain 
EU member States, the domestic industry's lack of access to raw materials at reasonable prices, 
and absence of vertical integration, were causing injury to the domestic industry.730  
7.434.  We examine Argentina's claims as they pertain to each of these "other factors" in turn, 
after reviewing the relevant obligations under the two provisions invoked by Argentina. 
7.4.6.2  Relevant provisions  of the covered agreements 
7.435.  The text of Article 3.1 of the Anti-Dum ping Agreement has been reproduced above in 
paragraph 7.372. 
7.436.  Article 3.5 of the Anti-Dumping Agreement reads as follows: 
                                               
723 We do not understand Argentina to be seeking a finding with respect to the overall conclusion of 
material injury reached by the EU authorities (see, in particular, Argentina's response to Panel question No. 61, para. 148). Given that Argentina's claims are confined to the EU authorities' evaluation of production capacity 
and utilization of capacity, our findings of inconsistency are limited to the EU authorities' evaluation of these two factors. 
724 We note that while Argentina submits claims of vi olation under both Articles 3.1 and 3.5, with the 
exception of its allegations with respect to the issue of overcapacity, most of the arguments submitted by Argentina relate to the requirements under Article 3.5. 
725 Argentina's first written submission, paras. 420, 436, 453, 467, and 470(i); second written 
submission, para. 254(i). 
726 Provisional Regulation, (Exhibit ARG-30), Recital 128; confirmed in Definitive Regulation, (Exhibit 
ARG-22), Recital 147. 
727 Definitive Regulation, (Exhibit ARG-22), Recital 189. 
728 Definitive Regulation, (Exhibit ARG-22), Recital 164. 
729 Provisional Regulation, (Exhibit ARG-30), Recita l 136; Definitive Regulation, (Exhibit ARG-22), 
Recitals 151-160. 
730 Provisional Regulation, (Exhibit ARG-30), Recitals  141-146; Definitive Regulation, (Exhibit ARG-22), 
Recitals 172-179. WT/DS473/R 
 
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  It must be demonstrated that the dump ed 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 before 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 foreign and domestic producers, 
developments in technology and the expo rt performance and productivity of the 
domestic industry. (emphasis added) 
7.4.6.3  General considerations relevant to  Argentina's Articles 3.1 and 3.5 claims 
7.437.  We have already discussed in the previous section of this Report
731 the fundamental 
requirement imposed on investigating authorities by Article 3.1 of the Anti-Dumping Agreement 
that they should base their determination of injury on an "objective examination" of "positive 
evidence".  
7.438.  Article 3.5 of the Anti-Dumping Agreement requires the demonstration of a causal link 
between the dumped imports and the material injury as a prerequisite to the imposition of anti-dumping measures. It also requires the authorities to examine any other known factors that may 
be simultaneously causing injury to the domestic industry and to ensure that the injuries caused 
by those other factors are not attributed to the dumped imports. The Appellate Body in EC – Tube 
or Pipe Fittings  set out three elements for determining when such a "non-attribution" analysis is 
required. The Appellate Body indicated that the factor at issue must: (i) be "known" to the 
investigating authority; (ii) be a factor "other than dumped imports"; and (iii) be injuring the domestic industry at the same time as the dumped imports.
732 The Appellate Body has taken the 
view that if an "other factor" is causing injury to the domestic industry simultaneously with the 
dumped imports, the investigating authority "must appropriately assess the injurious effects of those other factors" and "such an assessment must involve separating and distinguishing the injurious effects of the other factors from the injurious effects of the dumped imports."
733  
7.439.  Article 3.5 does not contain any guidance or specify any methodology as to how an 
investigating authority may satisfy the obligation not to attribute to the dumped imports the injurious effect of the other known factor. Prior panels have taken the view that it is appropriate 
"to undertake a careful and in depth scrutiny" of the determinations made by the investigating 
authorities in order to evaluate whether the investigating authority's explanations and conclusions regarding the other factor are "such reasonable conclusions as could be reached by an unbiased 
and objective investigating authority in light of the facts and arguments before it and explanations 
given."
734  
7.440.  We are guided by these principles in our re view of the EU authorities' consideration of each 
of the other factors cited by Argentina, to which we now turn.  
                                               
731 See above, paras. 7.397, 7.398. 
732 Appellate Body Report, EC – Tube or Pipe Fittings, para. 175. 
733 Appellate Body Report, US – Hot-Rolled Steel , para. 223; reiterated in Appellate Body Reports, EC – 
Tube or Pipe Fittings, para. 188; China – GOES , para. 151; and China – HP-SSST (Japan) / China – HP-SSST 
(EU), para. 5.283. 
734 See, e.g. Panel Reports, EU – Footwear (China) , para. 7.483; and EC – Salmon (Norway) , 
para. 7.655. Moreover, we recall that, as noted in section 7.1.2 above, pursuant to the standard of review applicable in disputes involving anti-dumping measures, set forth under Article 17.6 (i) of the 
Anti-Dumping Agreement, the panel must not conduct a de novo  review of the evidence before an investigating 
authority, but must instead "determine whether the authorities' establishment of the facts was proper and whether their evaluation of those facts was unbiased and objective". WT/DS473/R 
 
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  7.4.6.4  Overcapacity of the EU domestic industry 
7.4.6.4.1  Introduction and factual background 7.441.  Argentina argues that excessive overcapacity  was the main factor that was injuring the EU 
domestic industry, rather than dumped imports from Argentina and Indonesia, and that by 
attributing the injury suffered by the domestic industry to the dumped imports rather than to 
overcapacity, the EU authorities failed to appr opriately separate and distinguish the injurious 
effects of this factor from those of the dumped imports.
735  
7.442.  During the course of the investigation, CARBIO identified overcapacity as a major factor 
causing injury to the EU industry, stressing the fact that despite the low capacity utilization rate during the period considered (less than 50%), th e EU producers had continuously expanded their 
production capacity on over-optimistic assumptions.
736  
7.443.  In the Provisional Regulation, the EU author ities rejected this argument on the basis that 
there was no temporal correlation between the domestic industry's capacity utilization, which remained low and stable during the period considered, and its profitability, which declined during 
the same period: 
It is the case that during the period considered capacity utilisation across the Union 
remained low, at a low point of 40% during the IP. Therefore some companies have 
not been using the capacity they have installed. 
However capacity utilisation was already low at the start of the period considered and 
has remained low throughout the whole period, and was also stable in the sampled companies. 
The sampled companies were profitable at the start of the period considered and loss 
making at the end, with stable capacity utilisation. It is reasonable to deduce that the whole industry has also become less profitable while its capacity utilisation has 
remained stable. This cannot therefore be co nsidered a major cause of injury, as there 
appears to be no causal link. This argument is therefore provisionally rejected.
737 
7.444.  CARBIO disagreed with these preliminary findings and argued that even the total 
elimination of imports would not have had a noticeable effect on capacity utilization. CARBIO 
pointed out that even in the total absence of impo rts, capacity utilization would have been only 
53% during the IP.738 CARBIO argued that such a low capacity utilization rate was problematic 
and, in the light of all the fixed costs that such a young industry must bear, would not allow the EU 
industry to be profitable.739 
7.445.  In the Definitive Regulation, the EU auth orities recalled their finding in the Provisional 
Regulation that the domestic industry's low capacity utilization rate, which was a stable feature, 
was not responsible for the injury caused to it, given that the situation of the sampled companies 
had deteriorated during the period considered whil e their capacity utilization did not decrease to 
the same extent.740 The EU authorities noted the arguments that, even in the absence of dumped 
imports, capacity utilization would have been low, and that the domestic industry had increased 
production capacity during the period chosen fo r injury analysis. The EU authorities considered 
that no evidence had been provided to show that the domestic industry's low capacity utilization was causing injury to such an extent as to break the causal link between the dumped imports and 
the deterioration in the situation of the domestic industry.
741 They added that fixed costs 
represented only a small proportion (roughly 5%) of  total production costs, which showed that the 
                                               
735 Argentina's first written submission, paras. 398-420; second written submission, paras. 227-235. 
736 See, e.g. CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), pp. 26-28; CARBIO's 
Powerpoint presentation of 14 December 2012, (Exhibit ARG-43), slides 17-18. 
737 Provisional Regulation, (Exhibit ARG-30), Recitals 138-140. 
738 CARBIO's Powerpoint presentation of 8 July 2013, (Exhibit ARG-46), slide 20; CARBIO's comments 
on the provisional disclosure, (Exhibit ARG-51), p. 16. 
739 CARBIO's comments on the provisional disclosure, (Exhibit ARG-51), p. 16. 
740 Definitive Regulation, (Exhibit ARG-22), Recitals 161-162 and 171. 
741 Definitive Regulation, (Exhibit ARG-22), Recitals 163 and 164. WT/DS473/R 
 
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  low capacity utilization was "only one factor of injury, but not a decisive one."742 They also 
considered that one of the reasons for the low capacity utilization rate was the fact that the domestic industry, "due to the particular market situation", imported the finished product itself.
743 
They stated, in addition, that according to the revi sed data on capacity and capacity utilization, the 
domestic industry had decreased its capacity during  the period considered, and capacity utilization 
had increased from 46% to 55%, which "show[ed] that the capacity utilisation of the Union industry would be significantly higher in the absence of dumped imports than the 53% [figure 
mentioned by interested parties]".
744 The EU authorities also rejected the argument that the 
domestic industry's overcapacity was so high that even in the absence of imports it would not be adequately profitable, reasoning that the fact that the domestic industry was profitable in 2009 with a low capacity utilization suggested that in the absence of dumped imports, profitability would 
have been even higher.
745  
7.446.  They also rejected as unsupported by evidence the argument that any company increasing 
production capacity during the period under consideration was making an irresponsible business 
decision. In this regard, they noted the fact that some companies were able to increase capacity in 
the face of increasing imports of dumped biodie sel from Argentina and Indonesia, which to the 
EU authorities showed that there was demand in the market for their particular products.746 The 
EU authorities further noted that, according to the revised data before them, "companies were 
during the period taking capacity out of possible us e, and closer to the end of the IP were starting 
a process of closing plants that are no longer viable". Increases in capacity on a company-by-company level were mainly due to the expansion of "second generation" biodiesel 
plants. Therefore, the EU authorities reasoned, th e domestic industry had been, and was, in the 
process of rationalising capacity to meet the demands of the EU market.
747 
7.447.  Finally, the EU authorities rejected as uns upported by evidence the arguments contesting 
their finding that fixed costs represented only ab out 5% of the domestic industry's total costs. 
They added that verification had shown a fixed-cost  to total-cost of production ratio between 3% 
and 10% during the IP for sampled producers and that in any case, fixed costs did not bear any 
relation to the capacity utilization rates.748 
7.448.  On the basis of these considerations, the EU  authorities confirmed their provisional findings 
on the issue.749 
7.4.6.4.2  Main arguments of the parties 
7.4.6.4.2.1  Argentina 
7.449.  In support of its claims, Argentina first refers to its claims under Articles 3.1 and 3.4750, 
and argues that the EU authorities acted inconsistently with Articles 3.1 and 3.5 by relying in their 
examination of overcapacity on the revised figures on production capacity and capacity 
utilization.751 Argentina submits that the correct figures would have shown a much higher 
production capacity and a much lower capacity utilization rate than the ones relied upon by the 
EU authorities in the Definitive Determination.752 In addition, Argentina argues that the correct 
figures would show different trends in capacity utilization: whereas the EU authorities found an increase in capacity utilization, the correct figures would have shown an increase in unused capacity of 1,561,322 tonnes from 2009 to the IP, and a decrease in capacity utilization during the 
same period.
753  
                                               
742 Definitive Regulation, (Exhibit ARG-22), Recital 164.  
743 Definitive Regulation, (Exhibit ARG-22), Recital 164. 
744 Definitive Regulation, (Exhibit ARG-22), Recital 165. 
745 Definitive Regulation, (Exhibit ARG-22), Recitals 165 and 167. 
746 Definitive Regulation, (Exhibit ARG-22), Recital 169. 
747 Definitive Regulation, (Exhibit ARG-22), Recital 170. 
748 Definitive Regulation, (Exhibit ARG-22), Recital 166. 
749 Definitive Regulation, (Exhibit ARG-22), Recital 171. 
750 See above section 7.4.5. 
751 Argentina's first written submission, paras. 400-401 (referring to Definitive Regulation, (Exhibit 
ARG-22), Recital 165). 
752 Argentina's first written submission, para. 400. 
753 Argentina's opening statement at the first meeting of the Panel, para. 124. WT/DS473/R 
 
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  7.450.  Second, Argentina takes issue with the EU authorities' reliance on the fact that capacity 
utilization was stable during the period considered. In this regard, Argentina submits that the EU authorities confused overcapacity as a factor causing injury and capacity  utilization as an injury 
indicator
754, and that their assessment of overcapacity as an "other factor" improperly focused on 
the capacity  utilization rate. Argentina argues that the authorities should instead have focused on 
the important increase in overcapacity in absolute terms, i.e. the fact that, according to Argentina, 
the EU industry's unused production capacity  increased by 1,561,322 tonnes from 2009 to the 
IP.755 Argentina argues that this was the focus of CARBIO's arguments during the investigation.756 
7.451.   Third, Argentina submits that the increase  in unused capacity correlates with the decrease 
in profitability of the EU industry, which in its vi ew shows that overcapacity was responsible for the 
deterioration of the situation of the industry.757 Argentina notes that, according to the figures 
initially provided by CARBIO, overcapacity increased from 11,613,307 to 13,174, 629 tonnes 
from 2009 to the end of IP, while prof itability decreased from 3.5% to -2.5% during the same 
period.758 Argentina also argues that the profit of 3. 5% of the domestic industry in 2009 was low, 
considering the fact that in the investigation on biodiesel from the United States, the 
EU authorities used a profit margin of 15% in determining the injury elimination margin during the period from April 2007 to March 2008.
759  
7.452.  In addition, Argentina notes that imports from Argentina and Indonesia increased by 
1,247,389 tonnes between 2009 and the IP. Argentina argues that if imports had not increased, 
the EU industry would still have had significant overcapacity, of 11,927,240 tonnes, and that even 
the total elimination of imports from Argentina and Indonesia would have hardly improved the EU 
industry's capacity utilization rates. Argentina notes that the EU industry experienced a similar 
level of overcapacity in 2010, when it was no longer profitable with a loss of -0.3%.760 
7.453.  Fourth, Argentina takes issue with the EU authorities' finding concerning fixed costs, 
pointing in particular to the EU authorities' statement that "fixed costs do not bear any relation to 
capacity utilisation rates". Argentina argues that the fact that fixed costs remain constant at different capacity utilization rates is precisely the reason why low capacity utilization rates result in 
fixed costs being disproportionally high on a per-unit basis.
761 Argentina argues that an increase in 
capacity utilization to a reasonable rate (at least 70%), would have led to a decrease in the ratio of fixed costs to total costs.
762 Argentina also disputes the EU authorities' statement that fixed cost 
represented only a "small proportion" of total produc tion costs in light of their finding that fixed 
costs amounted to 3-10% of the sampled companies' total costs during the IP.763 In addition, 
Argentina argues that the authorities' finding with regard to overcapacity of the EU industry is at odds with their recognition of the capital-intensive nature of the biodiesel industry. Argentina 
                                               
754 Argentina's first written submission, paras. 403-406; second written submission, para. 229. 
755 Argentina's first written submission, para. 405 (referring to the provisional findings on production 
capacity and production in table 4 of the Provisional Regulation, (Exhibit ARG-30)); second written submission, para. 232.  
756 Argentina's first written submission, paras. 404-406 (referring to CARBIO's written submission of 
5 November 2012, (Exhibit ARG-37), section 5.1 (pp. 26 et seq.); CARBIO's Powerpoint presentation of 14 December 2012, (Exhibit ARG-43), slides 17 and 18; CARBIO's Powerpoint presentation of 8 July 2013, (Exhibit ARG-46), slides 19 to 21).  
757 Argentina's second written submission, paras. 229-231. 
758 Argentina's second written submission, paras. 229-231, and table 1 thereto. 
759 Argentina's second written submission, para. 232 (referring to the findings of the EU authorities in 
the Definitive Regulation, anti-dumping investigation on biodiesel from the United States, (Exhibit EU-14), Recitals 181 and 182). Argentina also notes the profit margin of 18% achieved by the domestic industry in 2005 and 2006, when the capacity utilization levels amounted to around 90%. (Argentina's second written submission, para. 233 (referring to European Union's resp onse to Panel question No. 65, referring in turn to 
the Provisional Regulation in the anti-dumping investigation on imports of biodiesel originating in the United States, (Exhibit EU-13), paras. 87 and 95, tables 4 and 7)) 
760 Argentina's second written submission, para. 234 (referring to Definitive Regulation, (Exhibit 
ARG-22), table 2). 
761 Argentina's first written submission, para. 409. 
762 Argentina's first written submission, para. 411. 
763 Argentina's first written submission, para. 410. WT/DS473/R 
 
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  submits that overcapacity was "a controlling cause of injury", considering the relevance of fixed 
costs to the capital-intensive biodiesel industry.764 
7.454.  Fifth, Argentina points to other findings of the EU authorities pertaining to the issue of 
overcapacity which, in its view, are based on incorrect or irrelevant considerations. In particular, 
Argentina notes the EU authorities' statement that one of the reasons for the low capacity 
utilization rate was the importation of the product by the EU industry itself. Argentina argues that this consideration does not mean that overcapacity was not a significant source of injury.
765 
Argentina also takes issue with the EU authorities' statement that "the fact that some companies 
were able to increase their capacity in the face of increasing imports of dumped biodiesel … shows 
the demand on the market for their particular products".766 Argentina submits that an increase in 
capacity does not mean that there is sufficient demand to utilize installed production capacity.767  
7.4.6.4.2.2  European Union 
7.455.  The  European Union argues that the EU authorities made a reasoned assessment of the 
effects of overcapacity and properly concluded that whatever the effects of overcapacity, the 
evidence established that the dumped imports had caused injury to the domestic industry.768  
7.456.  The European Union argues that Argentina cannot shortcut the requirements of Article 3.5 
by simply relying, in its Article 3.5 claim, on the allegations of incorrect assessment of capacity 
utilization it made in the context of its Article 3.4 claim. The European Union submits that 
Argentina's approach fails to recognize the different natures of Articles 3.4 and 3.5.769  
7.457.  Responding to the argument of Argentina that the EU authorities focused on low capacity 
utilization, rather than on overcapacity, the European Union argues that in the case at hand, the 
production capacity of the EU industry had expanded more than there was a demand in the EU and 
export markets, and in this context these two term s, "low capacity utilization" and "overcapacity", 
are interchangeable.770 In addition, the European Union questions the figure on the increased 
unused capacity (1,561,322 tonnes from 2009 to the IP) cited by Argentina and submits that 
Argentina failed to provide a formula or principle as to how a particular level of overcapacity correlates with the consequent level of harm to the industry.
771 The European Union considers that 
the argument of Argentina that even a total elimination of imports would have hardly improved the 
EU domestic industry's capacity utilization rates is of no significance; such a hypothesis, if it were to have any significance, would have to consider all the consequences of the removal from the EU market of dumped imports that were markedly  undercutting the prices of EU producers.
772  
7.458.  With regard to Argentina's argument concerning fixed costs, the European Union refers to 
the EU authorities' finding that sampled companies were profitable at the beginning of the IP but loss-making at the end of the IP, while capacity utilization remained low during the IP. The 
European Union argues that this means that there was no correlation between the two.
773 
Similarly, the European Union argues that the capital intensive nature of the biodiesel industry is a constant feature, whereas injury to the domestic industry developed over the course of the period 
considered.
774 Referring to the EU authorities' findings in the Definitive Regulation, the 
European Union notes that the capacity utilization rate actually improved, which indicates that 
                                               
764 Argentina's first written submission, paras. 413-414 (referring to Provisional Regulation, (Exhibit 
ARG-30), Recitals 46, 65, 106, and 160; and Definitive Regulation, (Exhibit ARG-22), Recitals 44, 46, 84, and 138); opening statement at the first meeting of the Panel, para. 126. 
765 Argentina's first written submission, para. 417. 
766 Argentina's first written submission, para. 418 (referring to Definitive Regulation, (Exhibit ARG-22), 
Recital 169). 
767 Argentina's first written submission, para. 418. 
768 European Union's first written submission, para. 328. 
769 European Union's first written submission, para. 321. 
770 European Union's first wr itten submission, para. 322. 
771 European Union's first written submission, para. 323. 
772 European Union's second written submission, para. 159. 
773 European Union's first written submission, para. 324. 
774 European Union's first written submission, para. 325. WT/DS473/R 
 
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  capacity utilization was not responsible for the deterioration in the situation of the domestic 
industry.775 
7.459.  Regarding the EU industry's imports of biodiesel, the European Union submits that the 
dumped imports forced the EU industry to shift in part from producing biodiesel to importing it, 
thus aggravating its existing problem of overcapacity, which was in turn both an indicator of injury 
and a cause of harm reflected in other indicators, such as profits.776  
7.460.  Finally, the European Union argues that EU authorities' statement that "the fact that some 
companies were able to increase their capacity in the face of increasing imports of dumped 
biodiesel … shows the demand on the ma rket for their particular products"777 refers to "some 
companies" and to a demand for "their particular products", and not to the EU domestic industry as a whole.
778 
7.4.6.4.3   Arguments of the third parties 
7.461.  Colombia  notes the argument of Argentina that even in case of total elimination of 
imports, the capacity utilization of the EU industry would only have reached around 50%. 
Colombia submits that it is necessary to question what prompted the EU industry to expand its 
production capacity, despite the presence of the allegedly dumped imports during the IP.779 It 
argues that the decision to increase production capacity is not logical or responsible when an 
industry had already experienced difficulties and faced competition from dumped imports.780 
Colombia further notes that the European Union itself recognized that one of the reasons for the low capacity utilization rate was the imports of the product under consideration made by the EU industry. Colombia argues that the EU authorities failed to meet their obligation of separating and 
distinguishing causes of injury and suggests that  the Panel should apply an "order of magnitude 
test" with regard to the effect of the low capacity utilization rate, on the one hand, and the injury caused by the dumped imports, on the other hand.
781 
7.4.6.4.4  Evaluation by the Panel 
7.462.  We first consider Argentina's argument that the EU authorities' findings on overcapacity 
are inconsistent with Articles 3.1 and 3.5 because they are premised on an improper determination 
of the amount of capacity and of the capacity utilization rate.782 We recall our finding in the 
previous section of this Report that the EU authorities acted inconsistently with Articles 3.1 and 3.4 in their evaluation of the domestic industry's production capacity and capacity utilization, because they failed to base this evaluation on an "o bjective examination" of "positive evidence". 
Argentina's present argument raises the question whether these findings under Articles 3.1 
and 3.4 of the Anti-Dumping Agreement mean that we should also find that the EU authorities' 
non-attribution analysis with regard to overcapacity was inconsistent with Articles 3.1 and 3.5 for 
the same reasons. In resolving this question, we consider whether the non-attribution analysis of 
the EU authorities was tainted by, i.e. based on or affected by, the downward revision of the 
figures of the domestic industry's production capacity.  
7.463.  In this regard, we note that in both th e Provisional and the Definitive Regulation, i.e. 
irrespective of which set of figures they consid ered, the EU authorities found that the level of 
capacity utilization was low and stable during the period considered, whereas the profitability of the sampled producers had deteriorated during the same period.
783 The EU authorities considered 
that low capacity utilization was a constant or permanent feature of the EU biodiesel industry 
                                               
775 European Union's first written submission, paras. 322-323 (referring to Definitive Regulation, (Exhibit 
ARG-22), Recital 131 and table thereto); second written submission, para. 161. 
776 European Union's first written submission, para. 326. 
777 Definitive Regulation, (Exhibit ARG-22), Recital 169. 
778 European Union's first written submission, para. 327. 
779 Colombia's third-part y submission, para. 60. 
780 Colombia's third-part y submission, para. 61. 
781 Colombia's third-party su bmission, paras. 64-68 (referring to Panel Report, Egypt – Steel Rebar , 
paras. 7.119-7.121). 
782 See the summary of the EU authorities' findings on  production capacity and capacity utilization rates, 
above, paras. 7.375, 7.379. 
783 Provisional Regulation, (Exhibit ARG-30), Recitals  138-140; Definitive Regulation, (Exhibit ARG-22), 
Recitals 161-162.  WT/DS473/R 
 
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  during the period considered, and therefore, that it could not explain the deteriorating state of the 
domestic industry, and that it was the dumped imports with their price undercutting that caused the state of the domestic industry to deteriorate. It is clear from the EU authorities' findings that their conclusions were not dependent on, or even affected by, the use of the revised vs. the initial 
data and/or the trends associated with these data, as in either case, the data showed a low rate of 
capacity utilization. This, in fact, was the basis of the EU authorities' conclusion, which did not rely on the levels of capacity utilization or any changes in those levels. Again, the conclusion of the 
EU authorities on the issue of overcapacity is unchanged from the Provisional to the Definitive 
Regulation. In the Provisional Regulation – which according to Argentina, was based on "correct" capacity and capacity utilization data – the EU authorities found that overcapacity was not a major cause of injury.
784 The Definitive Regulation merely confirmed these findings, after addressing 
comments of interested parties on the findings in the Provisional Regulation and the Definitive 
Disclosure.785 This leads us to conclude that the revision of the production capacity and capacity 
utilization figures in the Definitive Determination did not taint the EU authority's 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.786 
7.464.  Argentina refers to a statement of the EU authorities in the Definitive Regulation in which 
they mention the revised figures: 
In addition, following the inclusion of the re vised 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.
787 
7.465.  However, the statement cited by Argentina was, in our view, a subsidiary point made by 
the EU authorities in response to a specific argume nt that even in the absence of any imports from 
Argentina and Indonesia, capacity utilization would have been low at 53% during the IP.788 The 
EU authorities rejected this argument on the ground that 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 dumped imports and the injury, before adding that fixed costs represented only a small proportion of the total production costs.
789 This, in their view, showed that low 
capacity utilization was a factor of injury, but not a decisive one. It is only after making these 
points that the EU authorities posited that, in view  of the revised capacity utilization rates, in the 
absence of any dumped imports, capacity utilization would have been significantly higher than the 53% figure cited by the interested parties.
790 Read in context, 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.  
7.466.  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. Consequently, the fact that their evaluation of capacity and capacity utilization was, as we 
have found, inconsistent with Articles 3.1 and 3.4, does not, in and of itself, render their non-attribution analysis with respect to overcapacity inconsistent with Articles 3.1 and 3.5. In 
other words, notwithstanding our findings above that the EU authorities acted inconsistently with 
Article 3.1 and Article 3.4 in their evaluation of  production capacity and capacity utilization, 
Argentina has not established that the authorities' consideration of the issue of overcapacity is, as 
a result, inconsistent with Articles 3.1 and 3.5.  
7.467.  This brings us to the next argument of Argentina, i.e. that in their non-attribution analysis, 
the EU authorities improperly focused on capacity utilization as opposed to the increase in 
overcapacity in absolute terms during the period considered. Argentina posits a difference between 
the capacity utilization rate (an injury indicator under Article 3.4 representing the percentage of 
                                               
784 Provisional Regulation, (Exhibit ARG-30), Recital 140. 
785 Definitive Regulation, (Exhibit ARG-22), Recital 171. 
786 The panel in China – GOES  took a similar approach (Panel Report, China – GOES,  paras. 7.541, 
7.542, and 7.621). See also Appellate Body Report, China – GOES , paras. 219-221. 
787 Definitive Regulation, (Exhibit ARG-22), Recital 165. 
788 Definitive Regulation, (Exhibit ARG-22), Recital 163. 
789 Definitive Regulation, (Exhibit ARG-22), Recital 164. 
790 Definitive Regulation, (Exhibit ARG-22), Recital 165. WT/DS473/R 
 
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  available production capacity being utilized) and overcapacity (the industry's unused capacity in 
absolute terms as an "other" source of injury). Referring to the figures in the Provisional Regulation, Argentina argues that while capacity utilization did not vary significantly, ranging 
between 43% and 41% between 2009 and the IP acco rding to the initial figures provided by the 
EBB, overcapacity increased dramatically from 11,613,307 to 13,174,629 tonnes, i.e. by 
1,561,322 tonnes, during the same period.
791 Argentina argues that, for this reason, the statement 
of the EU authorities that "production capacity remained relatively stable" is factually incorrect.792 
Argentina submits that the increase in unused capaci ty correlates with the decrease in profitability 
from 3.5% to –2.5 % during the same period, and concludes that overcapacity led to the declining 
profitability and the injury suffered by the domestic industry.  
7.468.  In our view, capacity utilization is logicall y 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. We fail to see how focusing on the increase in overcapacity in absolute terms, rather than on trends in capacity utilization rates, would have altered the conclusion reached by 
the EU authorities in this matter. More fundamentally, we see no basis in Article 3 of the 
Anti-Dumping Agreement – and Argentina has identifi ed none – 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 oppose d to its evolution in relative terms. In our view, 
an objective and unbiased investigating authority may well have proceeded to examine the issue of overcapacity on the basis of capacity utilizat ion rather than in terms of the evolution of the 
domestic industry's overcapacity. In fact, an authority may well consider that the former is a more 
pertinent and informative basis on which to assess the issue of overcapacity. We therefore reject 
Argentina's argument that in their non-attribution analysis, the EU authorities improperly focused on capacity utilization as opposed to the increase  in overcapacity in absolute terms during the 
period considered.
793 
7.469.  Argentina also takes issue with the EU authorities' conclusion that the sampled companies 
were profitable at the start of the IP, arguing th at a profit rate of 3.5% is extremely low in 
comparison to the profit rates realised by the EU domestic industry in earlier periods, in particular 
in view of the 15% profit rate used by the EU authorities in calculating the injury elimination margin in the anti-dumping investigation on biodiesel from the United States.
794 Argentina also 
refers to the European Union's indication, in response to a question from the Panel, that 
in 2005-2006 the EU biodiesel industry had a profitability rate of 18%, while its capacity utilization 
rate was 88–93%.795 The fact that the EU industry may have achieved higher levels of profitability 
at a time when its capacity utilization rates we re higher does not, in our view, undermine the 
EU authorities' conclusion that, during the period considered, dumped imports caused a 
deterioration in the situation of the domestic industry and that overcapacity was not such a cause of injury as to break this causal link. In our view, whether an industry is in good or poor condition 
at the outset of the period examined is not determinative of whether dumped imports caused 
material injury. We add, in this respect, that the concept of injury under Article 3 of the Anti-Dumping Agreement is not limited to the situation in which a healthy industry is injured by dumped imports.
796 Rather, the notion of "injury", in our view, calls for an inquiry into whether the 
situation of the industry deteriorated  during the period considered. Our view is supported by the 
fact that Article 3.5 itself envisages the possibility of more than one factor causing injury. We note in this regard that the EU authorities found that while capacity utilization was stable (although 
low), profits decreased. Merely because the EU dome stic industry might have been "less injured" if 
                                               
791 Argentina's first written submission, para. 405 (referring to the provisional findings on production 
capacity and production, which do not exclude "idle ca pacity" (Provisional Regulation, (Exhibit ARG-30), 
table 4)); second written submission, paras. 229-232.  
792 Argentina's first written submission, paras. 384 and 405 (referring to Provisional Regulation, (Exhibit 
ARG-30), Recital 103, confirmed in Definitive Regulation, (Exhibit ARG-22), Recital 139). 
793 Argentina's first written submission, para. 406. 
794 Argentina's second written submission, para. 232 (referring to Definitive Regulation, anti-dumping 
investigation on biodiesel from the United States, (Exhibit EU-14), Recitals 181 and 182). 
795 Argentina's second written submission, para. 233 (referring to European Union's response to Panel 
question No. 65, para. 95, referring in turn to Provisional Regulation, anti-dumping investigation on biodiesel from the United States, (Exhibit EU-13)).  
796 In this respect, we note that in response to a question from th e Panel, the European Union noted 
that the profit rate of 3.5% achieved by the EU samp led producers in 2009 could no t be deemed as the profit 
that would have been achieved in the absence of dumped imports, because in the period between 2005 
and 2009 the EU biodiesel producers faced the dumped imports from the United States and their profitability had considerably decreased. (European Union's response to Panel question No. 75, para. 107) WT/DS473/R 
 
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  the rate of capacity utilization were higher does not undermine the EU authorities' finding that, 
with a constant state of capacity utilization, the decline in profits can be attributed to dumped imports. The same considerations lead us to reject Argentina's argument that even in the absence of any imports from Argentina and Indonesia, the EU industry would still be operating at a 
significant level of overcapacity. 
7.470.  We now turn to Argentina's argument concerning the EU authorities' finding that fixed 
costs represent only a small proportion of the total production costs. Argentina argues that the 
biodiesel industry is a capital-intensive industry  that normally has high fixed costs, that the 
decrease in capacity utilization leads to cost increases on a per-unit basis and that it is important for a capital-intensive industry to have a high level of capacity utilization in order to stay profitable. However, the EU authorities verified that the sampled companies had ratios of fixed 
costs to total costs of production between 3% and 10% during the IP.
797 While Argentina's 
assertions may be valid in the abstract, they are belied by the facts on the record in this case. Given that Argentina has produced no evidence that brings into question these facts, we consider 
that the conclusion reached by the EU authorities on this issue is one which an unbiased and 
objective authority could have reached.  
7.471.  Finally, we turn to the other statements challenged by Argentina. First, Argentina takes 
issue with the statement that one of the reasons for the low capacity utilization rate was the 
importation of the product by the EU industry itself.
798 Argentina argues that this explanation does 
not support the conclusion that overcapacity was not a significant source of injury. However, in our view, this particular statement does not suggest that the EU authorities considered that 
overcapacity was not a cause of injury. Rather, it points to the fact that overcapacity was caused, 
at least in part, by competition from the dumped imports.
799 Likewise, in our view, Argentina 
misreads the EU authorities' statement that "the fact that some companies were able to increase 
their capacity in the face of increasing import s of dumped biodiesel … shows the demand on the 
market for their particular products".800 Argentina submits that an increase in capacity does not 
mean that there is sufficient demand to utilize installed production capacity.801 As the 
European Union points out, this statement pertained to some companies  and the demand for their 
particular products and not, as Argentina su ggests, to the entirety of the EU industry.802  
7.472.  Based on the above considerations, we reject Argentina's arguments with respect to the 
EU authorities' non-attribution analysis as it concerns the issue of overcapacity. Instead, we 
consider that the EU authorities' conclusion with respect to this "other factor" is one that an 
unbiased and objective investigating authority could have reached in light of the facts before it. Consequently, we reject Argentina's allegations th at the European Union acted inconsistently with 
Articles 3.1 and 3.5 with respect to the treatment of  overcapacity as an "other factor" of injury to 
the EU domestic industry.  
7.4.6.5  Imports by the EU domestic industry 
7.4.6.5.1  Introduction and factual background 
7.473.  During the investigation, CARBIO argued that the imports from Argentina were a result of 
a long-term commercial strategy of the EU producers to benefit from the considerable natural advantages of soybean production in Argentina.
803 CARBIO argued, in particular, that the volume 
of imports by the EU industry was significant an d that the imported biodiesel was produced in 
facilities directly related to EU producers.804 In the Provisional Regulation, the EU authorities 
                                               
797 Definitive Regulation, (Exhibit ARG-22), Recitals 164 and 166. 
798 Argentina's first written submission, para. 417 (referring to Definitive Regulation, (Exhibit ARG-22), 
Recital 164). 
799 We note that the EU authorities found that the domestic industry made these imports in self-defence 
in order to remain in business. Moreover, we note that we reject, below, Argentina's allegations concerning the 
issue of the EU industry's own imports. 
800 Definitive Regulation, (Exhibit ARG-22), Recital 169. 
801 Argentina's first written submission, para. 418. 
802 European Union's first written submission, para. 327. 
803 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), section 5.2, para. 81; 
CARBIO's Powerpoint presentation of 14 December 2012, (Exhibit ARG-43), slides 9-11. 
804 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), section 5.2, para.79; CARBIO's 
Powerpoint presentation of 14 December 2012, (Exhibit ARG-43), slides 9 to 16. WT/DS473/R 
 
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  rejected CARBIO's arguments and accepted the EU industry's arguments that imports were made, 
temporarily and in self-defence, in order to benefit from dumped prices and to stay in business.805 
The EU authorities concluded that the EU industry's imports did not break the causal link between the dumped imports and the injury, and explained th at even if the EU domestic industry had not 
imported these volumes of biodiesel, trading companies would have imported them anyway and 
would have undercut the EU domestic industry's prices to sell the product on the EU market.
806 
The Provisional Regulation addresses this issue as follows: 
It is clear from data provided by the Union industry that they have imported quantities 
of biodiesel from Argentina and Indonesia during the period considered, up to 60% of all imports in the IP from these countries. However they have stated these imports have been made in self-defence. Being able to benefit from the dumped prices of 
these imports, in the short term, has assisted Union producers in being able to stay in 
business for the medium term. 
The imports of biodiesel at dumped prices by the Union industry increased 
substantially in 2011 and the IP, which was wh en the effect of the differential export 
tax on biodiesel and its raw materials could be most felt, as it was at that time that imports of the raw materials (soybean oil and palm oil) became uneconomic as 
compared to imports of the finished product. The differential export tax system in 
both countries puts a higher tax on the export of raw materials than the tax on the finished product … . 
For example during some months of the IP the import price of soybean oil from 
Argentina was higher than the import price of SME, making purchase of soybean oil 
economically disadvantageous. In this position purchase of SME was the only 
economically justifiable option.
807 
7.474.  CARBIO objected to these findings in the Provisional Regulation.808 In the Definitive 
Disclosure the EU authorities found that no evidence of the "long term strategy" alleged was provided and concluded that, in any case, if such a strategy existed, it would be "nonsensical and 
illogical [for the EU industry] to then launch a complaint against such imports".
809 In addition, the 
EU authorities stated that the EU industry's imports were the result of the Differential Export Tax (DET) systems, which made imports of the finish ed product (biodiesel) more competitive than 
imports of raw materials (soybean or palm oil).
810 
7.475.  CARBIO objected to these findings, relying, in particular, on what it asserted was the 
EU authorities' standard practice in similar situations. CARBIO argued that the massive volume of imports made by the EU industry (60% of total im ports) represented far more in percentage terms 
than what the EU authorities usually regard as imports made in "self-defence''.
811 Consequently, 
CARBIO argued, it would have expected the EU au thorities to provide a substantiated and detailed 
explanation as to why, in this particular case, they had departed from their consistent practice.812 
Furthermore, CARBIO argued that the EU authorit ies had ignored certain of the arguments it had 
presented, in particular its arguments concerning the extent to which the increase in the market share of the imports from the countries concerne d resulting from the imports made by the EU 
industry had compensated for the decrease in the EU industry's own market share.
813 
7.476.  In the Definitive Regulation the EU authorities rejected these arguments and confirmed 
their provisional findings.814 They reiterated that no evidence of a "long-term strategy" had been 
provided and that such a "long-term strategy" ha d been denied by the EU industry, adding that 
"[c]learly if the strategy of the Union industry was to supplement their biodiesel production by 
                                               
805 Provisional Regulation, (Exhibit ARG-30), Recital 133. 
806 Provisional Regulation, (Exhibit ARG-30), Recital 136. 
807 Provisional Regulation, (Exhibit ARG-30), Recita ls 133-135; confirmed in Definitive Regulation, 
(Exhibit ARG-22), Recital 160. 
808 CARBIO's Powerpoint presentation of 8 July 2013, (Exhibit ARG-46), slide 22. 
809 Definitive Disclosure, (Exhibit ARG-35), Recital 127. 
810 Definitive Disclosure, (Exhibit ARG-35), Recital 128. 
811 CARBIO's comments on the Definitive  Disclosure, (Exhibit ARG-39), p. 19. 
812 CARBIO's comments on the Definitive  Disclosure, (Exhibit ARG-39), p. 19. 
813 CARBIO's comments on the Definitive  Disclosure, (Exhibit ARG-39), p. 19. 
814 Definitive Regulation, (Exhibit ARG-22), Recitals 151-160. WT/DS473/R 
 
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  producing in Argentina and importing the finished product, it would be nonsensical and illogical to 
then launch a complaint against such imports."815 They also reiterated their conclusions with 
respect to the effects of the differential export tax:  
The Union industry has also shown that in previous years the importation of soya bean 
oil — and palm oil — for processing into biodiesel was economically viable. No 
evidence of the contrary was provided by the interested party. Only with the distortive 
effect of the differential export tax which makes the export of biodiesel cheaper than 
the raw materials does import of the finished product become economically 
sensible.816 
7.4.6.5.2  Main arguments of the parties 7.4.6.5.2.1  Argentina 
7.477.  Argentina submits that the EU authorities failed to properly assess the injury caused by the 
EU industry's imports of the product concerned and to separate and distinguish those injurious 
effects from that of the allegedly dumped imports.  
7.478.  Argentina argues that, based on the av ailable evidence, the EU authorities could not 
reasonably have arrived at the conclusion that the imports of the EU industry were merely made in self-defence and that they did not break the ca usal link between the dumped imports and the 
injury suffered by the industry.
817 In particular, Argentina argues, first, that the EU authorities 
themselves recognised that the imports by the EU industry had led to a decrease in the level of 
capacity utilization, and thus were a cause of injury.818 Second, Argentina submits that the 
significant volume of imports by the EU industry  and the fact that the imported biodiesel was 
produced in facilities that were related to the EU producers and set up with investments made by 
them as from 2007, constitute ample evidence of  a long-term commercial strategy pursued by the 
EU industry.819 Third, Argentina argues that the EU authorities' "allegations" that the DET system 
forced the EU industry to import biodiesel and that  traders would have imported biodiesel if the EU 
industry had not, are irrelevant to the causation analysis.820 Argentina asserts that the 
EU authorities failed to provide any evidence that traders would have imported the same 
significant amount of biodiesel from Argentina.821 Finally, Argentina contends that the argument 
that the importation of biodiesel was a way to maintain a customer base is contradicted by the fact that imports made by the EU producers were counted in the market share of the allegedly dumped imports, rather than in the market share of the domestic industry.
822 
7.4.6.5.2.2  European Union 
7.479.  The European Union asserts that the EU au thorities rejected the allegation of a long-term 
commercial strategy because, in their view, such a strategy could not be reconciled with the EU 
industry's plan to have anti-dumping duties im posed on biodiesel from Argentina and Indonesia.823 
The European Union argues that evidence provided by Argentine interested parties during the investigation did not support the existence of a "long term commercial strategy" of importing the 
product under consideration.
824 W i t h  r e g a r d  t o  t h e  i m p a c t  o f  t h e  E U  i n d u s t r y ' s  i m p o r t s  o n  i t s  
capacity utilization rate, the European Union argu es that the dumped prices compelled the EU 
                                               
815 Definitive Regulation, (Exhibit ARG-22), Recital 154. See also idem, Recital 155: "Also, it would seem 
illogical for the concerned Un ion producers to support the complaint and, in some cases, to have increased its 
capacity in the Union while at the same time have a strategy to fulfil production needs by imports." 
816 Definitive Regulation, (Exhibit ARG-22), Recital 157. 
817 Argentina's first written submission, paras. 429-434; second written submission, paras. 236-242. 
818 Argentina's first written submission, paras. 432-433 (referring to Definitive Regulation, (Exhibit 
ARG-22), Recital 164). 
819 Argentina's first written submission, para. 434; second written submission, paras. 238-239; opening 
statement at the first meeting of the Panel, paras. 129-132. 
820 Argentina's first written submission, para. 435; open ing statement at the first meeting of the Panel, 
paras. 129-132. 
821 Argentina's second written submission, para. 240. 
822 Argentina's second written submission, para. 241;  comments on the European Union's response to 
Panel question No. 123, para. 68. 
823 European Union's first written submission, para. 333. 
824 European Union's first written submission, paras. 330-331. WT/DS473/R 
 
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  industry to import biodiesel, thereby causing injury in the form of low capacity utilization. The 
European Union submits that this was not injury caused by an "other factor" but merely injury caused by dumped imports through an indirect chain of causation.
825 Finally, the European Union 
notes that the EU authorities found that by importing biodiesel itself, the EU industry improved its 
financial situation and that independent traders would have secured the same deals if the EU 
industry had not made the imports.826 The European Union submits that biodiesel imported from 
Argentina was cheaper than the soybean oil used to produce biodiesel and that imports of the 
finished product – biodiesel – were a temporary effo rt on the part of the EU producers to maintain 
their customer base, while seeking protection against the unfair imports.827 
7.4.6.5.3  Arguments of the third parties 7.480.  Colombia  argues that the EU authorities failed to meet their obligation of separating and 
distinguishing causes of injury and suggests that  the Panel should apply an "order of magnitude 
test" with regard to, on the one hand, the imports by the EU industry, and on the other, the injury 
caused by the dumped imports.
828 
7.4.6.5.4  Evaluation by the Panel 
7.481.  We recall that the EU authorities rejected  allegations about the existence of a long-term 
strategy of importing biodiesel by the domestic in dustry and found that the industry's own imports 
of Argentine and Indonesian biodiesel did not br eak the causal link between the dumped imports 
and the injury to the industry.829 
7.482.  Argentina argues that based on the evid ence before them, the EU authorities could not 
have arrived at the conclusion that imports of Ar gentine biodiesel by the EU industry were not a 
result of a long-term commercial strategy of the EU producers to benefit from the natural 
advantages of soybean production in Argentina.  
7.483.  We recall that the EU authorities conclude d that no evidence of the alleged "long term 
strategy" had been provided to them. They adde d that it would have been "nonsensical and 
illogical" for the domestic industry to launch or support an investigation against such imports or to have increased its capacity in the European Union while at the same time pursuing a strategy of 
supplementing its production with imports.  
7.484.  We read these statements in the light of th e EU authorities' findings, in the section of the 
Definitive Regulation regarding the definition of the domestic industry, in which the EU authorities rejected comments of interested parties regardin g the relationship between the EU producers and 
Argentine and Indonesian producers: 
[T]hose companies were found to be openly  competing with each other for the same 
customers on the Union market, thereby showing that their relationship did not have 
any impact on the business practices of either the Argentinian exporting producer or 
the Union producer.
830 
7.485.  More importantly, the EU authorities found that the EU industry's imports were the result 
of the DET system, which made imports of the fini shed product, biodiesel, more competitive than 
imports of the raw materials needed for biodiesel production and thus caused the EU producers to temporarily import the finished product from Argentina in order to stay in business. We consider 
                                               
825 European Union's first written submission, para. 332. 
826 European Union's first written submission, para. 334; opening statement at the second meeting of 
the Panel, para. 221. 
827 European Union's response to Panel question No . 70, para. 100; opening statement at the second 
meeting of the Panel, para. 221. 
828 Colombia's third-party su bmission, paras. 65-68 (referring to Panel Report, Egypt – Steel Rebar , 
paras. 7.119-7.121). 
829 Provisional Regulation, (Exhibit ARG-30), Recita l 136; Definitive Regulation, (Exhibit ARG-22), 
Recital 160. 
830 Definitive Regulation, (Exhibit ARG-22), Recital 109 (referred to in European Union's second written 
submission, para. 164). WT/DS473/R 
 
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  that the EU authorities provided a plausible expl anation for the actions of the EU industry to 
support their conclusion that the imports were made temporarily and in self-defence.831 
7.486.  Argentina also takes issue with the EU authorities' explanation that even if the EU industry 
had not imported these volumes of biodiesel, trading companies would have imported them 
anyway and would have undercut the EU industry's prices to sell the product on the EU market.832 
Argentina submits that the conclusion that traders would import the same volume of biodiesel, amounting to 60% of the total imports, is not supported by any evidence.
833 The EU authorities 
stated in the Provisional Regulation, and confirmed in the Definitive Regulation that: 
In any case had the Union industry not imported these volumes of biodiesel, trading 
companies in the Union would have imported them, undercut the Union industry and sold them on the Union market, as they already import from these countries for sale 
to the diesel refiners in competition with the Union industry.
834 
In our view, this reflects a reasonable inference from the fact that the imported volumes of 
biodiesel were absorbed by the EU market, in dicating demand that needed to be met.  
7.487.  Argentina argues that the European Union's position that the importation of biodiesel was a 
way to maintain a customer base is contradicted by the fact that imports made by the EU producers were counted as part of the market shar e of the allegedly dumped imports, rather than 
as part of the market share of the domestic industry.
835 During the investigation, CARBIO argued 
that the decrease in the EU domestic industry's own market share was compensated by the increase in the domestic industry's sales of its imports of biodiesel from Argentina and Indonesia.
836 The EU authorities rejected this argument in the Definitive Regulation, explaining 
that the domestic industry's market share has to re flect the sales of the EU industry of goods they 
produced themselves and not their trading activities.837 
7.488.  We have no issue with this conclusion . Nothing in the Anti-Dumping Agreement supports 
the proposition that imports by the domestic produc ers must be included in the domestic industry's 
market share.838 
7.489.  Finally, we note that the parties disagree whether, in the EU authorities' finding that the 
"Union industry" imported almost 60% of all impo rts from Argentina and Indonesia during the IP, 
the term "Union industry" was a reference to all EU  biodiesel producers, or whether it excluded the 
three producers who had been excluded from the de finition of the EU industry because of their 
large volume of imports.839 In light of our conclusions above, we do not consider it necessary to 
                                               
831 Definitive Regulation, (Exhibit ARG-22), Recitals 154-155 and 157. 
832 Provisional Regulation, (Exhibit ARG-30), Recita l 136; Definitive Regulation, (Exhibit ARG-22), 
Recital 160. 
833 Argentina's second written submission, para. 240. 
834 Provisional Regulation, (Exhibit ARG-30), Recital 136, confirmed in Definitive Regulation, (Exhibit 
ARG-22), Recital 160. 
835 Argentina's second written submission, para. 241 (referring to Definitive Regulation, (Exhibit 
ARG-22), Recital 156); comments on the European Union's response to Panel question No. 123, paras. 68-70. 
The decrease in the market share of the domestic in dustry was one of the elements relied upon by the 
EU authorities in their causation analysis. (Provisional Regulation, (Exhibit ARG-30), Recital 125; confirmed in Definitive Regulation, (Exhibit ARG-22), Recital 147) 
836 CARBIO's comments on the Definitive  Disclosure, (Exhibit ARG-39), p. 19. 
837 Definitive Regulation, (Exhibit ARG-22), Recital 156. 
838 We agree with the findings of the panel in Korea – Certain Paper that:  
[W]e are unaware of any provision in the Agr eement which could support the proposition that 
dumped imports made by the domestic industry have to be excluded from the scope of dumped 
imports for purposes of the IA's injury determin ation. Imports from sources subject to an anti-
dumping investigation may properly be treated as dumped imports irrespective of the identity of the importers making these imports. ( Korea – Certain Paper , Panel Report, para. 7.287) 
839 In their determinations, the EU authorities defined the term "Union industry", as including 254 EU 
producers of biodiesel and excluding fi ve companies: three who were exclud ed due to their reliance on imports 
from Argentina and Indonesia and two who had not produced  biodiesel during the IP. This would suggest that 
the EU authorities found that 60% of all imports were made  by all the EU producers that were found to be part 
of the domestic industry, i.e. excluding those prod ucers who imported the most of the product under 
consideration. However, in response to a question from the Panel, the European Union clarified that the 60% 
figure referred to all EU producers,  including the three companies exclud ed from the definition of the EU WT/DS473/R 
 
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  reach a definitive view on the issue of the prec ise percentage of the imports from Argentina and 
Indonesia that were made by the EU industry in order to resolve Argentina's claims.  
7.490.  On the basis of the foregoing, we find that the EU authorities' conclusion that the EU 
industry's imports of the product concerned did not break the causal link between the dumped 
imports and the material injury to the domestic industry is one which an unbiased and objective 
investigating authority could have reached in light of the facts before it. We therefore reject Argentina's allegation that the European Union acted inconsistently with Articles 3.1 and 3.5 in 
finding that the EU industry's imports of Arge ntine and Indonesian biodiesel did not break the 
causal link between the dumped imports and the injury to the EU industry.  
7.4.6.6  Double-counting regimes of certain EU member States 
7.4.6.6.1  Introduction and factual background 
7.491.  Argentina submits that the EU authorit ies failed to appropriately assess the injurious 
effects of the "double-counting regimes" in place in certain EU member States and to distinguish 
and separate the injurious effects of such regime s from those of the allegedly dumped imports.  
7.492.  So-called "double-counting" refers to the fact that certain EU member States availed 
themselves of the possibility, under the EU Re newable Energy Directive, to allow minimum 
blending requirements (established pursuant to the same Directive) to be halved when the 
biodiesel used in blending is second generation bi odiesel made from certain types of raw materials, 
particularly waste oils or used animal fats, rather than from virgin vegetable oil such as soybean, palm, or rapeseed oil. Thus, in these member States, second generation biodiesel meeting certain criteria "counts double" for purposes of satisfying the minimum incorporation requirements.
840 
7.493.  In the investigation, CARBIO argued, inter alia , that the double-counting regimes of certain 
EU member States caused a decrease in the sales of first generation biodiesel during the IP, thereby injuring the EU domestic industry.
841 CARBIO submitted specific evidence concerning the 
French double-counting regime. In particular, it cited a public statement by Diester, a French 
biodiesel producer, in which this producer stated that it had experienced a significant decrease in its sales as a result of double-counting and that double-counting had diminished the French 
market by around 600,000 tonnes.
842 CARBIO also referred the EU authorities to a report of the 
French Cour des Comptes , which found that the introduction  on the French market of 350,000 
tonnes of double-counted biodiesel in 2011 caused Diester's sales to decrease by 700,000 tonnes – representing a third of its French production – and causing it to close down a non-depreciated 
production line.
843 CARBIO argued that in the light of this information, which showed that the 
double-counting policy in France alone caused 350,000 tonnes of biodiesel (representing 3.14% of total EU consumption) to disappear from the market altogether, the effect of double-counting on 
the domestic industry could not be considered limited or temporary.
844  
7.494.  The EU authorities rejected CARBIO's allegations concerning the impact of EU member 
States' double-counting regimes on the domestic industry. In the Provisional Regulation, the 
EU authorities noted that their sample of domestic producers included both companies producing 
first generation biodiesel and companies producing double-counted biodiesel, that the latter's prices had also been affected by the low price of the dumped imports and that their financial 
situation was not significantly different to that of sampled companies making biodiesel from virgin 
vegetable oils.
845 The EU authorities also rejected an argument that the domestic industry was 
                                                                                                                                               
industry, such that the if imports from these three pr oducers were excluded, the EU industry imported 35%, 
not 60%, of all subject imports during the IP. 
840 Provisional Regulation, (Exhibit ARG-30), Recital 144. 
841 CARBIO's comments on the Definitive Disclosure, (Exhibit ARG-39), p. 27. CARBIO also argued that 
lack of clarity and uniformity in the national legislations of EU member States and the lack of traceability of double-counting biodiesels had resulted in fraudul ent practices. Argentina has not emphasized these 
arguments in its submissions to the Panel. (C ARBIO's written submission of 5 November 2012, 
(Exhibit ARG-37), para. 95) 
842 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), paras. 96 and 97. 
843 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), pp. 106 and 107 to Annex 16. 
844 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), paras. 93-98; CARBIO's 
comments on the Definitive Disc losure, (Exhibit ARG-39), p. 27. 
845 Provisional Regulation, (Exhibit ARG-30), Recital 145. WT/DS473/R 
 
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  suffering injury by not investing more in second-generation biofuel production; the EU authorities 
indicated that there was not enough waste oil available in the European Union to significantly increase the amount of processing.
846 
7.495.  In the Definitive Regulation, the EU authorities rejected CARBIO's arguments concerning 
Diester and the French double-counting regime as follows: 
The negative impact on this one producer was however limited, temporary and only 
relevant for a part of the investigation period, as the double counting scheme was 
adopted in the Member State in which the company is located only in 
September 2011. Given that the financial performance of the sampled companies declined after September 2011, and this company was included in the sample, double counting cannot be considered a source of injury.
847 
They then confirmed the conclusions they had reached in the Provisional Regulation, stating: 
As the Union industry is composed of both companies producing biodiesel from waste 
oils and benefiting from double-counting in some Member States, and also of 
companies producing biodiesel from virgin oils, the movement in demand remains 
within the Union industry. Due to a finite supply of used oils which are needed for manufacturing double counting biodiesel, a large increase in production of 
double-counting biodiesel is difficult. Therefore, there is still a strong demand for first 
generation biodiesel. No significant imports of biodiesel eligible for double-counting was found during the investigation period, thereby confirming that double-counting is shifting the demand within the Union industry and not generating demand for imports. 
The Commission received no data from the interested party to show that double 
counting biodiesel had caused the price of virgin oil biodiesel to fall during the period under consideration. In fact data shows that double counting biodiesel has a small 
price premium over virgin biodiesel, the price of which is linked to mineral diesel. 
The decline in performance of the Union industry, which is composed of both types of 
producers, cannot be attributed to the double-counting regime in force in some 
Member States. In particular, the fact that companies in the sample producing 
double-counted biodiesel are also showing a decline in performance, as mentioned in recital 145 to the provisional Regulation, show s that injury caused by dumped imports 
is being suffered across the industry.
848 
7.496.  Finally, the EU authorities addressed the argument made by several interested parties 
after the Definitive Disclosure that the amounts of  double-counted biodiesel were underestimated. 
The authorities indicated that the amounts of doub le-counted biodiesel available on the EU market 
were limited in relation to the total sales of biodiesel during the IP, and repeated, in this context, 
that double-counted biodiesel was produced in the European Union "and therefore demand remain[ed] within the Union industry".
849  
7.4.6.6.2  Main arguments of the parties 
7.4.6.6.2.1  Argentina 7.497.  Argentina submits that the EU authorities failed to adequately a ssess the injurious effects 
of the double-counting regimes, which not only shifted demand from first-to second-generation 
                                               
846 Provisional Regulation, (Exhibit ARG-30), Recital 146. 
847 Definitive Regulation, (Exhibit ARG-22), Recital 175. In its first written submission, the 
European Union submitted that the stat ement in the Definitive Regulation that "the double counting scheme 
was adopted  in the Member State in which the company is lo cated only in September 2011" (emphasis added) 
was a clerical error and that "adopted" should be re placed by "repealed", (European Union's first written 
submission, para. 337). In response to a question from th e Panel, the European Union further clarified that the 
double-counting regime in France was introduced in April 2010 without fixing a ceiling to the incorporation rate, and was amended in 2011 to fix a ceiling of 0.35%. (European Union's response to Panel question 
No. 113, para. 103) 
848 Definitive Regulation, (Exhibit ARG-22), Recitals 176-177. 
849 Definitive Regulation, (Exhibit ARG-22), Recital 178. WT/DS473/R 
 
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  biodiesel, but actually reduced overall EU demand , citing evidence that the French regime alone 
caused an EU-wide drop in consumption of 3.14% in 2011.850 Argentina also notes that in one of 
its submissions to the EU authorities, the EBB admitted that the French double-counting regime 
"may have caused, to a certain extent in 2011, injury to first-generation biodiesel producers, such 
as Diester".851 
7.498.   Argentina disagrees with the European Union's assertion that the negative performance of 
companies producing double-counted biodiesel showed that the double-counting regimes were not 
a source of injury.852 Argentina submits that this conclusion is based on the mistaken assumption 
that the double-counting regimes could only have been found to be a cause of injury if the performance of producers of second-generation biod iesel were positive. Argentina submits that the 
negative effect of the double-counting regimes is evidenced by the reduced demand for 
biodiesel.
853 
7.499.  Argentina also disputes the relevance of the EU authorities' conclusion that the French 
regime was in effect only during a part of the IP, given that the evidence shows that it had an 
impact during the IP.854 Argentina argues that since the effects of the double-counting regime in 
France materialized during the IP, these effects should have been distinguished and separated as 
required by Article 3.5, regardless of the fact that it had been repealed.855  
7.500.  Finally, Argentina argues that the EU au thorities examined the injurious effect of the 
double-counting regime in France, but failed to examine the impact of the double-counting 
regimes of other EU member States.856 
7.4.6.6.2.2  European Union 
7.501.  The  European Union argues that Argentine interested parties submitted evidence regarding 
the alleged detrimental effect of double-counting regimes only with respect to France and only with regard to one producer (Diester).
857 The European Union submits that since the information 
about implementation of the double-counting regimes at the national level was difficult to obtain, 
the EU authorities based their analysis of the effe ct of double-counting regimes on the data of the 
sampled EU producers (eight producers from seven member States).858 Following this analysis, 
apart from a minor effect on one producer (Diester), the EU authorities did not identify any 
significant consequences of the regimes and found that the performance of both double-counting and non-double-counting biodiesel producers was in  decline, and therefore the deterioration of 
their situation resulted from a different so urce of injury, i.e. the dumped imports.
859 The 
EU authorities also relied on the fact that the sampled producers' performances declined only after 
the scheme was ended.860 
7.502.  The European Union submits that the French scheme ended three months into the IP in 
September 2011 and that the evidence presented by Argentina itself indicated that the 2011 
decline in production resulting from the double-counting regime would be more than cancelled during the following year.
861 In response to a question from the Panel, the European Union clarifies 
that the double-counting regime in France was introduced in April 2010 without fixing a ceiling to 
the incorporation rate, and was amended in 2011 to establish a ceiling of 0.35%. The European 
                                               
850 Argentina's first written submission, paras. 449-450.  
851 Argentina first written submission, para. 440 (referring to EBB's submission of 17 September 2013, 
(Exhibit ARG-47), p. 5). 
852 Argentina's second written submission, para. 245. 
853 Argentina's second written submission, para. 245. 
854 Argentina's first written submission, para. 452. 
855 Argentina's second written submission, para. 244. 
856 Argentina's first written submission, para. 448; second written submission, para. 246. 
857 European Union's first written submission, paras. 338-339. 
858 European Union's opening statement at the second  meeting of the Panel, para. 222; response to 
Panel question No. 124, para. 121. 
859 European Union's response to Panel question No. 71, para. 101 (referring to Definitive Regulation, 
(Exhibit ARG-22), Recitals 176-178). 
860 European Union's first written submission, paras. 337-339. 
861 European Union's first written submission, para. 338. WT/DS473/R 
 
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  Union argues that the injury this regime caused to first generation producers was limited and only 
relevant for a short period of the IP.862 
7.4.6.6.3  Evaluation by the Panel 7.503.  The EU authorities' analysis of "double-count ing" as an alleged "other factor" consists of a 
general discussion of the effects of double-counting,  in the context of rebutting interested parties' 
arguments that double-counting regimes injured the domestic industry. As part of this analysis, the EU authorities also consider specific evidence  placed before them by CARBIO concerning the 
French double-counting regime and its effect on Dies ter. In both respects, the EU authorities reject 
the argument that double-counting is a cause of injury to the EU industry. 
7.504.  We understand the EU authorities' reasonin g with respect to the evidence relevant to the 
French regime and Diester to be that the effect  of the French double-counting regime had been 
limited in time given that in September 2011 France imposed a ceiling on the proportion of 
double-counted biodiesel.
863 The evidence before the EU authorities showed that the French 
regime had been put in place in April 2010, an d the IP ran from 1 July 2011 to 30 June 2012, 
meaning that the French double-counting regime was in place without a ceiling for only 
approximately 3 months of the IP. Moreover, the same documents, which CARBIO cites, that reported the impact on Diester of the French double-counting regime in 2011 made the point that 
the negative impact of the double-counting regime would have essentially disappeared by 2012.
864 
In our view, an unbiased and objective investigating authority could have concluded from the evidence before the EU authorities that the negati ve impact of the French double-counting regime 
resulting from the introduction of 700,000 tonnes  of double-counted biodiesel on the French 
market was limited in scope and in time. This is particularly the case as this negative impact 
resulted from a specific situation having regard to the fact that France had initially not imposed a ceiling on the use of double-counted biodiesel. The fact that the impact on Diester corresponded – 
according to CARBIO – to 3% of the EU biodiesel market in 2011
865, or the fact that Diester may 
have had to close a production line, does not mean that it was unreasonable for the EU authorities to treat the impact of the French regime as limited in time and scope.
866 
7.505.  We also note the EU authorities' explanation that the situation of sampled companies, 
including Diester, deteriorated after the introd uction of the ceiling in the French regime.867 In our 
view, these explanations reasonably support the EU authorities' conclusion that double-counting was not a cause of injury to the domestic industry. 
7.506.  Argentina also argues that the EU authorit ies failed to examine the impact of the double-
counting regimes of EU member States other than France.
868 Argentina submits in this respect that 
CARBIO drew the attention of the EU authorities to the fact that double-counting regimes had been 
implemented in several EU member States, including France, Germany, Denmark and the 
                                               
862 European Union's response to Panel question No. 73, para. 103. 
863 Although the Definitive Regulation states that the French "double-counting" regime was adopted in 
September 2011, the European Union indicated that this was a clerical mistake and the paragraph should be read as stating that the French double-counting was repealed in September 2011, given that a ceiling was then imposed on the use of double-counted biodiesel. (See above, fn 847). We accept the European Union's explanation, particularly as it is the only one that makes the EU statement comprehensible, since the point that the EU authorities sought to make was that the perform ance of the companies declined only after the scheme 
had ceased to exist, thereby indicating that  it was not responsible for that decline. 
864 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), pp. 104 and 113. 
865 While Argentina argues that the ceiling of 0.35% placed on double-counted biodiesel in France in 
September 2011 did not prevent European Union-wide consumption from being reduced by 3.14% as explained by the French Cour des Comptes  (Argentina's first written subm ission, para. 452), in our view 
Argentina's argument is inapposite. We understand that 350,000 tonnes of double-counted biodiesel were sold on the French market during the year 2011, so we fail to see how it can be stated that the imposition of a 
ceiling by France in September 2011 did not prevent something which happened prior to the imposition of that ceiling. 
866 Moreover, we read the EU author ities' statement that the impact of double-counting on Diester was 
"limited" in the light of the statement of the EU authorit ies, in response to another aspect of the argument of 
interested parties on the issue of double-counting, that "the amounts of double-counted biodiesel available on the Union market were limited in relation to the total sales of biodiesel during the period under investigation". 
(Definitive Regulation, (Exhibit ARG-22), Recital 178) 
867 Definitive Regulation, (Exhibit ARG-22), Recital 175. 
868 Argentina's first written submission, para. 448; second written submission, para. 246. WT/DS473/R 
 
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  Netherlands.869 A r g e n t i n a  r e f e r s  i n  p a r t i c u l a r  t o  a  s u b m i s s i o n  m a d e  b y  C A R B I O  t o  t h e  
EU authorities, in which CARBIO addressed the double-counting regimes in other EU member States as follows: 
Several Member States of the EU have impl emented [the Renewable Energy Directive] 
at the national level. For instance, in France, the eligible raw materials are waste 
vegetable oils, animal fats or oils and cellulose matter. Germany, for instance, does not include animal fats or oils in its double-counting provisions due to traceability 
concerns. Denmark, on the other hand, includes animal fats but not waste vegetable 
oils in its double-counting provisions. Under Dutch legislation, the raw materials that qualify are waste oils, residues and lignocellulosic materials.
870 
7.507.  Article 3.5 only requires investigating auth orities to consider – and distinguish – the injury 
caused by "other factors" that are "known" to the investigating authority. As concerns the effects 
that double-counting regimes could have on demand, CARBIO only submitted specific evidence with respect to the effects of the French regime, which we have discussed above.
871 CARBIO's 
submission with respect to other double-counting regimes only describes certain aspects of those 
regimes; CARBIO did not submit to the EU authorities specific evidence concerning the effects of those other double-counting regimes. In the absence of specific evidence that the double-counting 
regimes of other member States were such as to injure the EU domestic industry, we do not 
consider that the EU authorities were required, under the terms of Article 3.5, to examine at 
greater length the impact of those regimes on the domestic industry. This is particularly the case as the EU authorities did not find that the one double-counting regime which they considered in 
more detail – that established by France – had injured the domestic industry during the IP.  
7.508.  Concerning the EU authorities' general discussion of the effects of double-counting 
regimes, Argentina takes issue with what it regard s as the EU authorities' "misplaced insistence" 
on the fact that double-counting only "shifts demand" within the European Union
872, citing in 
particular the findings in the report of the French Cour des Comptes  that double-counting in France 
alone reduced European Union-wide consumption of biodiesel, whether first generation or not, by 
more than 3% in 2011.  
7.509.  It cannot be contested that double-counting regimes reduce overall demand for biodiesel 
in the European Union; as Argentina explains, the very concept of double-counting means that one tonne of "double-counted" biodiesel replaces tw o tonne of vegetable oil biodiesel, which in 
principle reduces overall demand of biodiesel of any type by one tonne. Read in isolation, the 
EU authorities' reference to demand shifting within the European Union
873 c o u l d  b e  r e a d  a s  
suggesting that the EU authorities misunderstood this argument made by CARBIO. However, we 
read this statement as making the point that although double-counting may affect one segment of 
the EU domestic industry, it benefits another segment of the EU industry (and not foreign 
producers) by creating demand for "double-counted " second generation biodiesel of EU origin; in 
this context, the EU authorities noted that there had been no significant imports of double-counted 
biodiesel.874 In addition, we read the EU authorities' reference to the amounts of double-counted 
biodiesel being limited as an indication that double-counting only affected a fraction of the EU demand for biodiesel
875, and their reference to the limited supply of raw materials for the 
                                               
869 Argentina's response to Panel question No.72, para . 173 (referring to CARBIO's written submission of 
5 November 2012, (Exhibit ARG-37), paras. 93-98). 
870 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), para. 94. 
871 In its submission, CARBIO further cited a press release from the EBB regard ing the negative effects 
of double-counting regimes. However,  the press release at issue focused on problems generated by what the 
EBB saw as the lack of guidance concerning the impl ementation of the double-counting mechanism across EU 
member States and issues with compliance or verificati on, adding that "[i]f not consistently implemented in 
member States' legislations, the double-counting mechanism will inevitably lead to important disruptions of the EU biofuels market". (CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), para. 95). Hence, this press release concerns a secondary type of issues possibly arising out of the double-counting regimes (i.e. the potential for varying implementation across the Euro pean Union and risks of ci rcumvention), and differs 
from the issues that are at the heart of Argentina's cl aims, pertaining to the effe cts of double-counting on 
demand for first generation biodiesel an d on overall EU demand for biodiesel. 
872 Argentina's first written submission, para. 449 (referring to Definitive Regulation, (Exhibit ARG-22), 
Recital 176). 
873 Definitive Regulation, (Exhibit ARG-22), Recital 176. 
874 Definitive Regulation, (Exhibit ARG-22), Recital 176. See also ibid., Recital 178. 
875 Definitive Regulation, (Exhibit ARG-22), Recital 178. WT/DS473/R 
 
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  production of double-counted biodiesel as an indication that double-counted biodiesel would not 
significantly replace biodiesel made from virgin oils.876  
7.510.  Argentina also takes issue with the EU authorities' statement that both producers of 
non-double-counted biodiesel and producers of double-counted biodiesel saw their situation 
deteriorate. Argentina reads this statement as be ing premised on the unfounded assumption that 
double-counting could only have harmed the domestic industry if producers of double-counted biodiesel had done well, whereas in Argentina's view, double-counting harms the domestic 
industry by virtue of reducing overall demand fo r biodiesel, whether first generation or "double-
counted".
877 However, in our view, the EU authorities' discussion of this issue878 indicates that they 
considered that, if double-counting had been an important cause of injury, producers of "double-counted" biodiesel would have been expected to fa re better than producers of first generation 
biodiesel. Argentina has not convinced us that this inference is unreasonable and that an unbiased 
and objective investigating authority could not have inferred from the fact that producers of double-counted biodiesel were also injured, that both types of producers were injured by dumped 
imports. Moreover, we note that the EU authorities examined the impact of double-counted 
biodiesel on the price of first generation biodiesel, and found that double-counted biodiesel sells for a small premium over biodiesel made from virgin oil.
879 
7.511.  In light of the foregoing, and despite that  the EU authorities' treatment of this "other 
factor" of injury could have been better explaine d, we do not consider that the EU authorities' 
conclusions could not have been reached by an unbiased and objective investigating authority in the light of the evidence and arguments before it. Consequently, we reject Argentina's allegations 
that the European Union acted inconsistently with Articles 3.1 and 3.5 of the Anti-Dumping 
Agreement in the EU authorities' evaluation of "double-counting" as an "other factor" allegedly 
causing injury to the domestic industry.  
7.4.6.7  Alleged lack of vertical integratio n of and access to raw materials of the EU 
industry 
7.4.6.7.1  Introduction and factual background  
7.512.  During the investigation, CARBIO argued th at the lack of vertical integration of the EU 
industry and its lack of access to raw materials placed it at a disadvantage compared to the Argentine producers and constituted "other factors"  causing injury to the EU biodiesel industry.
880 
In particular, CARBIO argued that production of biodiesel in Argentina was more efficient than in 
the European Union because the Argentine industry was vertically integrated, with the growing of 
soybeans, crushing plants, and biodiesel production units all located in proximity to one another and close to port facilities.
881 By contrast, CARBIO argued, the EU industry was not integrated with 
crushing facilities and relied primarily on imported vegetable oil produced outside of the 
European Union or far from its biodiesel production units.882 CARBIO further argued, regarding the 
raw material used in the production of biodiesel, that the EU industry mainly used rapeseed oil, 
whereas the Argentine industry used soybean oil, which on average was 10% cheaper.883 
7.513.  In the Provisional Determination, the EU  authorities rejected these arguments on the 
ground that some of the sampled EU producers were located at ports with seamless access to imported raw materials brought in by ship, others had their biodiesel producing plants on the same 
site as their vegetable oil producing plants, and many – in the south of Europe – were located at 
port sites deliberately to access raw materials imported from Argentina and Indonesia or were on the same site as their customers (fossil oil refineries).
884 The EU authorities also considered that 
                                               
876 Definitive Regulation, (Exhibit ARG-22), Recital 176.  
877 Argentina's second written submission, para. 245. 
878 Provisional Regulation, (Exhibit ARG-30), Recita l 145; Definitive Regulation, (Exhibit ARG-22), 
Recital 177. 
879 By contrast, the EU authorities found that dump ed imports undercut the prices of the domestic 
industry. (Provisional Regulation, para. 126) 
880 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), para. 84. 
881 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), para. 85; CARBIO's Powerpoint 
presentation of 14 December 2012, (Exhibit ARG-43), slides 19-20. 
882 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), paras. 85-88. 
883 CARBIO's written submission of 5 November 2012, (Exhibit ARG-37), para. 91. 
884 Provisional Regulation, (Exhibit ARG-30), Recital 142. WT/DS473/R 
 
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  the effect of the DET systems of Argentina and Indonesia had been to make the raw materials 
more expensive than the finished product, which in jured the EU industry by making it economically 
impossible for it to manufacture biodiesel from soybean oil and palm oil in the European Union.885  
7.514.  CARBIO contested these provisional fi ndings, arguing that the EU producers were either  
located close to ports or close to raw materials. By contrast, Argentine producers were located 
close to both ports and raw materials.886 I n  a d d i t i o n ,  C A R B I O  a r g u e d  t h a t  i n  t h e  P r o v i s i o n a l  
Regulation, the EU authorities had recognized a dire ct causal link between the domestic industry's 
difficulties in obtaining imported feedstock at viable prices and the injury it suffered.887 CARBIO 
referred to the EU authorities' findings that: 
[D]ue to a poor rapeseed harvest in 2011 the co st of production rose to an extent that 
it could not be covered by an increase in sales price. It was uneconomical for the 
Union industry to import alternative raw materials from Argentina and Indonesia due 
to the tax regimes in place in those countries and therefore was forced to resort to importing the finished biodiesel in order to keep down its costs and therefore reducing 
overall losses.  
… The Union producers … could not pass on the further increase in cost from 2011 to the 
IP, due to an increase in the feedstock price, which represents close to 80% of the full 
cost of production of biodiesel. These cost increases could not be fully passed on to customers on the Union market, causing the losses in the IP.
888 
7.515.  CARBIO requested that the EU authorit ies isolate these factors – the poor rapeseed 
harvest of 2011, the domestic industry's lack of feedstock and increased feedstock prices – in its 
injury analysis.889 In addition, CARBIO argued that rapeseed is more expensive than soybeans and 
that the poor harvest of 2011 exacerbated the problem.890  
7.516.  In the Definitive Disclosure, the EU auth orities indicated that they would confirm their 
provisional findings based on the fact that no new evidence had been submitted on this issue.891 In 
its comments on the Definitive Disclosure, CARBIO contested this statement and referred to its 
comments on the Provisional Disclosure of 1 July 2013 and to statements it made at the hearing 
held in July 2013.892 
7.517.  In the Definitive Regulation, "in the absence of any new comments", the EU authorities 
confirmed their findings in the Provisional Regulation.893 
7.4.6.7.2  Main arguments of the parties 
7.4.6.7.2.1  Argentina 7.518.  Argentina argues that EU biodiesel produc ers are at a competitive disadvantage compared 
to Argentine producers (including the Argentine producers to which they are related) because of 
their lack of vertical integration and of access to raw materials.
894 A s  p a r t  o f  t h i s  a r g u m e n t ,  
Argentina submits, first, that EU producers are at a disadvantage because they must import 
soybeans, which contain only 20% oil, as opposed to soybean oil, which results in increases in the 
                                               
885 Provisional Regulation, (Exhibit ARG-30), Recital 142. 
886 CARBIO's Powerpoint presentation of 8 July 2013, (Exhibit ARG-46), slide 17. 
887 CARBIO's comments on the provisional disclosure, (Exhibit ARG-51), pp. 14 and 15. 
888 Provisional Regulation, (Exhibit ARG-30), Recita ls 111 and 120 (quoted in CARBIO's comments on 
the Provisional Disclosure, (Exhibit ARG-51), p. 12). 
889 CARBIO's comments on the provisional disclosure, (Exhibit ARG-51), p. 12. 
890 CARBIO's comments on the provisional disclosure, (Exhibit ARG-51), p. 14. 
891 Definitive Disclosure, (Exhibit ARG-35), para. 138. 
892 CARBIO's comments on the provisional disclosure, (Exhibit ARG-51), pp. 12 and 13; CARBIO's  
Powerpoint presentation of 8 July 2013, (Exhibit ARG-46), slides 15 and 16. 
893 Definitive Regulation, (Exhibit ARG-22), para. 172 (confirming Provisional Regulation, (Exhibit 
ARG-30), Recitals 141 and 142). 
894 Argentina's first written submission, para. 461. WT/DS473/R 
 
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  volume of cargo that must be transported and imported.895 Second, feedstock production in the 
European Union is not enough to cover the dema nd of the biodiesel industry and EU producers 
therefore have to rely on imported feedstock.896 Third, vertically integrated companies benefit 
from cost efficiencies due to on-site production of vegetable oil; in this respect, Argentina argues 
that the EU producers' location close to ports does not cure the relative disadvantage caused by 
the fact that they are not vertically integrated, as an additional phase, viz. transport of the raw materials, is added to their production chain.
897 Argentina further argues that, as acknowledged by 
the EU authorities, two factors related to the issu e of access to raw materials – the poor rapeseed 
harvest in the European Union in 2011 and rapese eds being on average 10% more expensive than 
soybeans – injured the domestic industry. However, the EU authorities have failed to examine these factors to ensure that the resulting injury was not attributed to dumped imports.
898  
7.519.  Finally, Argentina takes issue with the EU authorities' statement in the Definitive 
Regulation that no new comments were submi tted on the issue following the provisional 
determination, contending that CARBIO extensively commented on this issue during the 
investigation. 899 
7.4.6.7.2.2  European Union 7.520.  The European Union submits, first, that most of the factors pertaining to the alleged lack of 
vertical integration and access to raw materials are constant and existed also at the time when the 
EU industry was profitable, and they cannot be held responsible for the deterioration in the condition of the EU industry during the IP.
900 Second, the European Union contests Argentina's 
assumption that vertical integration is necessarily a more efficient way of operating in the biodiesel 
industry, particularly when processors and grow ers in different countries are located close to 
ports.901 Third, the European Union counters Argent ina's argument that the EU industry is 
disadvantaged by having to import soybeans, which contain only 20% oil, noting that oilseeds also 
have value as animal feed, which is in itself a sufficient reason to import them.902 Finally, 
regarding the poor rapeseed harvest in 2011, the European Union submits that normally in such a situation, biodiesel producers would switch to al ternative sources of supply, but because of the 
differential export tax systems in Argentina and Indonesia, they had to purchase the finished 
product from these countries.
903 Regarding the fact that rapeseeds are on average 10% more 
expensive than soybeans, the European Union responds that this is a constant factor and could not have explained the deterioration in the situation of the domestic industry.
904  
7.4.6.7.3  Arguments of the third parties 
7.521.  Colombia  notes that the arguments submitted by Argentina with regard to the EU 
industry's lack of vertical integration and of a ccess to raw materials raise the issue of the possible 
absence of a causal link between the dumped  imports and the injured suffered by the EU 
industry.905  
7.4.6.7.4  Evaluation by the Panel 
7.522.  Argentina primarily takes issue with the EU authorities' conclusion that the structure of the 
EU industry was not a cause of injury. The two factors, namely lack of vertical integration and lack of access to raw materials, identified by Argentina, essentially are inherent features of the EU domestic industry that, according to Argentina, render it less competitive than the Argentine 
producers. In our view, however, this line of argume nt is premised on a misreading of Article 3 of 
the Anti-Dumping Agreement and its various para graphs, including Article 3.5. The concept of 
                                               
895 Argentina's first written submission, para. 464(a). 
896 Argentina's first written submission, para. 464(b). 
897 Argentina's first written submission, para. 464(c); second written submission, para. 249. 
898 Argentina's first written submission, para. 466. 
899 Argentina first written submission, paras. 463 and 465 (referring to Definitive Regulation, (Exhibit 
ARG-22), Recital 172). 
900 European Union's first written submission, para. 342. 
901 European Union's first written submission, para. 343. 
902 European Union's first written submission, para. 343. 
903 European Union's first written submission, para. 345. 
904 European Union's first written submission, para. 346. 
905 Colombia's third-party su bmission, paras. 69-72. WT/DS473/R 
 
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  injury envisaged by Article 3 relates to negative developments  in the state of the domestic 
industry.906 Article 3 is not intended to address differences in the structure of the domestic 
industry as compared to that of the exporting Member. Rather, it is clear from the text of 
Article 3.5 and from its indicative list of such "other factors" – which all pertain to developments  in 
the situation of the domestic industry – that the authority is not required to conduct a 
non-attribution analysis with respect to features that are inherent to the domestic industry and have remained unchanged during the period consid ered by the investigating authority for purposes 
of its injury analysis.  
7.523.  Argentina argues, citing to the Appellate Body Report in US – Wheat Gluten , that the 
relevant issue is not when a factor occurred, took place, or varied, but when its effects were felt
907, and that although the lack of vertical integration or access to raw materials were constant 
features of the EU industry, they existed during the period of investigation and their effects were 
felt during that period.908 We agree with the European Union that the Appellate Body Report in US 
– Wheat Gluten  does not address the issue of whether a feature or characteristic of a domestic 
industry which is inherent to that domestic industry and does not vary over the course of the 
period considered may properly be regarded as an "other factor". Rather, that Report concerns the timing of the injury caused by an "other factor".
909 Argentina has not argued that the effect of the 
lack of raw materials or vertical integration changed during the period considered so as to cause 
injury to the domestic industry. Therefore, the Appellate Body Report in US – Wheat Gluten,  where 
the factual circumstances were different, is inapposite to the present case, and Argentina has not convinced us that the EU authorities were requir ed by Article 3.5 to conduct a non-attribution 
analysis with respect to the inherent features or characteristics of the EU biodiesel industry 
vis-à-vis  the Argentine industry. For the same reason, i.e. because this alleged fact does not, in 
our view, constitute an "other factor" within the meaning of Article 3.5, we do not consider 
Argentina's argument that the EU authorities failed to address the fact that rapeseed is on average 
10% more expensive than soybeans as an "other" factor causing injury to the EU industry. 
7.524.  Nonetheless, we will consider the EU authorities' determination with respect to the alleged 
lack of vertical integration and of access to raw materials of the EU domestic industry. We have 
carefully reviewed the EU authorities' discussion of this issue and the explanations for rejecting the arguments that the EU industry's alleged lack of access to raw materials and lack of vertical integration were "other factors" injuring that industry. We are not convinced that the conclusions 
reached by the EU authorities concerning these two alleged other factors are unreasonable. In 
particular, we read the Provisional Regulation as tacitly making the point that whereas the Argentine industry may have benefited from certai n advantages (e.g. location close to the source 
of raw materials), the EU industry may itself ha ve benefited from certain other advantages (e.g. 
location close to ports or to the final customer).  We consider the EU authorities' explanation on 
this issue reasonable. In any event, we consider the EU authorities' conclusion that these factors 
were not the cause of the deterioration in the condition of the domestic industry in the IP was 
reasonable in the light of the evidence before them.  
7.525.  Argentina also raises concerns regardin g the EU authorities' treatment of the poor 
rapeseed harvest of 2011 and the increase in feedst ock prices during the IP. Argentina argues that 
the EU authorities failed to address the effects of this poor harvest and the increase in feedstock 
prices in its consideration of this injury factor even though in the Provisional Regulation, the EU authorities themselves suggested that the p oor rapeseed harvest of 2011 had injured the EU 
industry, and Argentine interested parties subsequently asked the EU authorities to isolate the 
effects of the poor rapeseed harvest and the increase in feedstock prices. Argentina refers to the following language in the Provisional Regulation as an acknowledgment by the EU authorities of 
the impact of the 2011 rapeseed harvest: 
Although over the period considered the Union industry was able to increase its sales 
price, due to a poor rapeseed harvest in 2011 the cost of production rose to an extent that it could not be covered by an increase in sales price. It was uneconomical for the 
                                               
906 This is particularly clear from the text of Article 3.4, which requires consideration of the evolution of 
the state of the domestic industry and calls upon the authority to consider, inter alia , "declines" in various 
factors or indices. 
907 Argentina's response to Panel question No. 69, para. 169 (referring to Appellate Body Report, US – 
Wheat Gluten , paras. 87 and 88). 
908 Argentina's second written submission, para. 250. 
909 European Union's second written submission, para. 169. WT/DS473/R 
 
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  Union industry to import alternative raw materials from Argentina and Indonesia due 
to the tax regimes in place in those countries and therefore was forced to resort to importing the finished biodiesel in order to keep down its costs and therefore reducing 
overall losses.
910 
7.526.  The EU authorities addressed the effect of the poor rapeseed harvest in both the 
Provisional Regulation and the Definitive Regulation, in the context of their evaluation of the impact of dumped imports on domestic industry. In our view, the statement quoted above reflects 
the EU authorities' conclusion that but for the export tax regime, the poor rapeseed harvest would 
not have had the adverse effects it did. Thus, it seems to us to be more in line with a notion of indirect causation in injury by imports rather than an "other" factor causing injury. While it would have been helpful if the EU authorities had provid ed a more thorough discussion of the effects of 
the poor 2011 rapeseed harvest, in our view, the EU authorities' conclusion, that the negative 
impact of the poor harvest were compounded by th e effect of the differential export tax regimes, 
satisfies the requirements of Article 3.5. 
7.527.  On the basis of the foregoing, we reject  Argentina's allegations that the European Union 
acted inconsistently with Articles 3.1 and 3.5 of the Anti-Dumping Agreement in their evaluation of 
the alleged lack of vertical integration and of access to raw materials as "other factors" causing 
injury to the domestic industry. 
7.4.6.7.5  Overall conclusion with respec t to Argentina's clai ms concerning the 
EU authorities' non-attribution findings 
7.528.  We recall that we have considered and rejected the arguments raised by Argentina with 
respect to the EU authorities' non-attribution analysis as it concerns each of the four "other 
factors" at issue, finding in each case that th e EU authorities' conclusions with respect to the 
specific "other factor" were conclusions which an unbiased and objective investigating authority 
could have reached in the light of the facts before it.  
7.529.  Consequently, we find that Argentina has not established that the European Union's 
non-attribution analysis was inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement.  
8  CONCLUSIONS AND RECOMMENDATION 
8.1.  For the reasons set forth in this Report, we conclude as follows: 
a. With respect to the objections raised by the European Union in its request for a 
preliminary ruling: 
i. The claim under Article 9.3 of the Anti-Dumping Agreement set forth in 
paragraph 2(B)(6) of Argentina's panel request falls within our terms of reference; 
ii. The claims under Article VI:1 of the GATT 1994 set out in paragraphs 2(A)(1) 
and 2(A)(2) of Argentina's panel request fall within our terms of reference;  
                                               
910 Provisional Regulation, (Exhibit ARG-30), Recital 111. In addition, CARBIO had made a similar point 
with respect to the following paragraph of the Provisional Regulation: 
The Union producers were able to pass on most of the increase in cost of production from 2010 to 2011 (+33 percentage points) but only by lowering profitability to the break-even point. However they could not pass on the further increase in cost from 2011 to the IP, due to an increase in the feedstock price, which represents close to 80% of the full cost of production of 
biodiesel. These cost increases could not be fully passed on to customers on the Union market, causing the losses in the IP. (Provisional Regulation, (Exhibit ARG-30), Recital 120, confirmed in Definitive Regulation, (Exhibit ARG-22), Recital 143) 
(See CARBIO's comments on the provisional disclosure, (Exhibit ARG-51), pp. 12-14). The issue of poor rapeseed harvest and increase in feedstock prices during the IP was raised by Argentine interested 
parties in the context of their argument that the lack  of vertical integration and access of raw materials 
were other factors causing injury to  the domestic industry. In particular, CARBIO noted that that poor 
rapeseed harvest of 2011 is a part of the wider pr oblem of the EU biodiesel industry, namely their 
access to the raw materials. (CARBIO's comments on the provisional disclosure, (Exhibit ARG-51), 
p. 12) WT/DS473/R 
 
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  iii. The claim under Article 2.2 of the Anti-Dumping Agreement set forth in 
paragraph 2(A)(2) of Argentina's panel request falls within our terms of reference; and 
iv. We do not rule on the other objections in the European Union's request for a 
preliminary ruling.  
b. With respect to Argentina's "as such" claims: 
i. Argentina has not established that Article 2(5), second subparagraph, of the Basic 
Regulation is inconsistent 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 1994; 
ii. Argentina has not established that Article 2(5), second subparagraph, of the Basic 
Regulation is inconsistent with Article 2. 2 of the Anti-Dumping Agreement and with 
Article VI:1(b)(ii) of the GATT 1994; and  
iii. Argentina has not established that Article 2(5), second subparagraph, of the Basic 
Regulation is inconsistent with Article XVI:4 of the WTO Agreement and Article 18.4 
of the Anti-Dumping Agreement as a result of inconsistencies with Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreemen t and Article VI:1(b)(ii) of the GATT 1994. 
c. With respect to Argentina's claims concerning the anti-dumping measures 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 producers; we do not reach 
findings as to whether, as a consequence, the European Union acted inconsistently with Article 2.2 of the Anti-Dumping Ag reement and Article VI:1(b)(ii) of the 
GATT 1994; 
ii. 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" for inputs that 
was not the cost prevailing "in the country of origin", namely, Argentina; 
iii. We do not reach a finding as to whether the European Union acted inconsistently 
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; 
iv. We do not reach findings as to 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; 
v. Argentina has 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";  
vi. Argentina has 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 profits applied in the construc tion of the Argentine producers' normal 
value; 
vii. 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 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;  WT/DS473/R 
 
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  viii. The European Union acted inconsistently  with Articles 3.1 and 3.4 of the 
Anti-Dumping Agreement in its examination of the impact of the dumped imports on 
the domestic industry, insofar as it relates to production capacity and capacity utilization.  
ix. Argentina's claims under Articles 3.1 and 3.4 of the Anti-Dumping Agreement 
concerning the EU authorities' evaluation of return on investments fall outside our terms of reference; and 
x. Argentina has not established that the European Union's non-attribution analysis was 
inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement.  
8.2.  Under Article 3.8 of the DSU, in cases wh ere there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a case of 
nullification or impairment. We conclude that, to the extent that the measures at issue have been 
found to be inconsistent with the Anti-Dumping Agreement and the GATT 1994, they have nullified 
or impaired benefits accruing to Argentina under these agreements. 
8.3.  Pursuant to Article 19.1 of the DSU, we recommend that the European Union bring its 
measures into conformity with its obligations under the Anti-Dumping Agreement and the GATT 1994. Argentina requests that we use our discretion under the second sentence of the same 
article to suggest ways in which the European Union should bring its measures into conformity 
with the Anti-dumping Agreement and the GATT 1994. Argentina considers that the measures at issue in this dispute should be withdrawn. We de cline to exercise our discretion under the second 
sentence of Article 19.1 of the DSU in the manner requested by Argentina.  
 
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