WT/DS414/RW  
31 July 2015  
(15-3954)  Page: 1/66  
  Original: English  
 
 CHINA – COUNTERVAILING AND ANTI-DUMPING DUTIES ON  
GRAIN ORIENTED FLAT-ROLLED ELECTRICAL STEEL  
FROM THE UNITED STATES 
RECOURSE TO ARTICLE 21.5 OF TH E DSU BY THE UNITED STATES 
REPORT OF THE PANEL 
 
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  TABLE OF CONTENTS 
 
1   INTROD UCTION  ........................................................................................................ 10  
1.1   Complaint by the United States .................................................................................. 10 
1.2   Panel establishm ent and comp osition .......................................................................... 10 
1.3   Panel proceedings ..................................................................................................... 10 
1.3.1   Genera l ............................................................................................................... . 10 
1.3.2   Working procedures on Busine ss Confidential In formation (BCI) ................................... 11 
2   FACTUAL ASPECTS ..................................................................................................... 11  
2.1   The measures at issue ............................................................................................... 11 
3   PARTIES' REQUESTS FOR FI NDINGS AND RECO MMENDATIONS ................................ 11  
4   ARGUMENTS OF  THE PARTIES ................................................................................... 11  
5   ARGUMENTS OF TH E THIRD PA RTIES ........................................................................ 11  
6   INTERIM REVIEW ...................................................................................................... 12  
6.1   Requests submitted by the United  States ..................................................................... 12 
6.2   Requests su bmitted by China ..................................................................................... 13 
6.3   Editor ial changes ...................................................................................................... 16 
7   FIND INGS ................................................................................................................. 16 
7.1   General principles regarding treaty interpretation, the standard of review, and 
burden of  proof ...............................................................................................................  16 
7.1.1   Treaty interpreta tion .............................................................................................. 16 
7.1.2   Standard of review ................................................................................................. 17 
7.1.3   Burden  of proof ..................................................................................................... 18 
7.2   The United States' claim with respect to adverse impact ................................................. 18 
7.2.1   Main argume nts of the parties ................................................................................. 18 
7.2.2   Evaluation by the Panel .......................................................................................... 19 
7.2.3   Conclusion rega rding advers e impact ........................................................................ 22 
7.3   Whether MOFCOM's Redetermination regarding price effects is consistent with 
Articles 3.1 and 3.2 of the Anti-Dumping Agreement and Articles 15.1 and 15.2 of the 
SCM Agreement ............................................................................................................... 22 
7.3.1   Intr oducti on ..........................................................................................................  22 
7.3.2   Provisions at issue ................................................................................................. 23 
7.3.3   Main argume nts of the parties ................................................................................. 23 
7.3.3.1   United States ..................................................................................................... 23 
7.3.3.2   China ............................................................................................................... . 24 
7.3.4   Main arguments of the thir d parties .......................................................................... 25 
7.3.5   Evaluation by the Panel .......................................................................................... 26 
7.3.5.1   The effect of the increase in the volume and market share of subject imports on 
domestic like pr oduct prices .............................................................................................. 27 
7.3.5.1.1   Price Suppression in 2008 .................................................................................. 29 
7.3.5.1.2   Price suppression and depression in Q1 2009 ....................................................... 30 WT/DS414/RW 
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  7.3.5.2   MOFCOM's finding regarding price competition between subject imports and the 
domestic like  product ....................................................................................................... 33 
7.3.5.2.1   AK Steel's evidence of non-subs titutability of certain product categories ................... 33 
7.3.5.2.2   Seven factors supporting MO FCOM's finding of price competition ............................. 36 
7.3.5.2.3   Conclusions on price competition ........................................................................ 42 
7.3.6   Co nclusi on ............................................................................................................  43 
7.4   The United States' claim with respect to causation ......................................................... 43 
7.4.1   Provisions at issue ................................................................................................. 44 
7.4.2   Factua l background ................................................................................................ 44 
7.4.3   Legal framework .................................................................................................... 45 
7.4.4   Price effects ......................................................................................................... . 45 
7.4.4.1   Main arguments of the parties ............................................................................... 45 
7.4.4.2   Main argument s of the thir d parties ....................................................................... 46 
7.4.4.3   Evaluation by the Panel ........................................................................................ 46 
7.4.5   Economies of scale ................................................................................................. 46 
7.4.5.1   Main arguments of the parties ............................................................................... 46 
7.4.5.2   Main argument s of the thir d parties ....................................................................... 47 
7.4.5.3   Evaluation by the Panel ........................................................................................ 47 
7.4.6   Domestic industry expa nsion and increase d production ............................................... 48 
7.4.6.1   Main arguments of the parties ............................................................................... 48 
7.4.6.2   Main argument s of the thir d parties ....................................................................... 49 
7.4.6.3   Evaluation by the Panel ........................................................................................ 49 
7.4.7   Non-subject imports ............................................................................................... 51 
7.4.7.1   Main arguments of the parties ............................................................................... 51 
7.4.7.2   Main argument s of the thir d parties ....................................................................... 52 
7.4.7.3   Evaluation by the Panel ........................................................................................ 52 
7.4.8   Conclusion regarding causation ................................................................................ 53 
7.5   The United States' clai m with respect to discl osure ........................................................ 53 
7.5.1   Intr oducti on ..........................................................................................................  53 
7.5.2   Provisions at issue ................................................................................................. 53 
7.5.3   Legal framework .................................................................................................... 53 
7.5.4   Failure to disclose essential facts re garding MOFCOM's price effects determination .......... 54 
7.5.4.1   Main arguments of the parties ............................................................................... 54 
7.5.4.1.1   United States ................................................................................................... 54 
7.5.4.1.2   China .............................................................................................................  55 
7.5.4.2   Main argument s of the thir d parties ....................................................................... 56 
7.5.4.3   Evaluation by the Panel ........................................................................................ 56 
7.5.4.3.1   Alleged non-disclosure of information underlying MOFCOM's conclusion that 
the trend of the prices of the subject impo rts and the domestic like product were the 
same .......................................................................................................................... ... 56 WT/DS414/RW 
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  7.5.4.3.2   Alleged non-disclosure of essential facts regarding MOFCOM's finding that the 
domestic industry's loss in market share in 2008 led it to slash prices by over 30% in Q1 2009 ....................................................................................................................... .. 57
 
7.5.4.3.3   Essential facts regarding MOFCOM's finding that the price-cost differential for 
Wuhan decrease d in 2008 ................................................................................................. 58 
7.5.5   Failure to disclose essential facts regarding MOFCOM's caus ation determination .............. 58 
7.5.5.1   Main arguments of the parties ............................................................................... 58 
7.5.5.1.1   United States ................................................................................................... 58 
7.5.5.1.2   China .............................................................................................................  59 
7.5.5.2   Main argument s of the thir d parties ....................................................................... 59 
7.5.5.3   Evaluation by the Panel ........................................................................................ 60 
7.5.5.3.1   Essential facts re garding "sales obstacles" ........................................................... 60 
7.5.5.3.2   Essential facts regarding economies of scale ......................................................... 60 
7.5.5.3.3   Essential facts regard ing capacity, output and demand .......................................... 60 
7.5.5.3.4   Essential facts regarding inventory overhang ........................................................ 61 
7.6   The United States' claim wi th respect to pu blic notice .................................................... 61 
7.6.1   Intr oducti on ..........................................................................................................  61 
7.6.2   Provisions at issue ................................................................................................. 62 
7.6.3   Legal framework .................................................................................................... 62 
7.6.4   Main argume nts of the parties ................................................................................. 64 
7.6.4.1   United States ..................................................................................................... 64 
7.6.4.2   China ............................................................................................................... . 64 
7.6.5   Main arguments of the thir d parties .......................................................................... 64 
7.6.6   Evaluation by the Panel .......................................................................................... 64 
8   CONCLUSIONS ........................................................................................................... 66  
 
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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 on Business Confidential Information A-6 
ANNEX B 
ARGUMENTS OF THE UNITED STATES 
Contents Page 
Annex B-1 Executive summary of the first written submission of the United States B-2 
Annex B-2 Executive summary of the second written submission of the United States B-9 
Annex B-3 Executive summary of the oral statements of the United States at the 
Substantive Meeting B-17 
Annex B-4 Executive summary of the oral statem ent of the United States at the  
Interim Review Meeting B-21 
ANNEX C 
ARGUMENTS OF CHINA 
Contents Page 
Annex C-1 Executive summary of the first written submission of China C-2 
Annex C-2 Executive summary of the second written submission of China C-10 
Annex C-3 Executive summary of the oral statements of China at the Substantive Meeting C-18 
Annex C-4 Executive summary of the oral statement of China at the Interim Review 
Meeting C-22 
ANNEX D 
ARGUMENTS OF THE THIRD PARTIES 
Contents Page 
Annex D-1 Integrated executive summary of the arguments of the European Union D-2 
Annex D-2 Integrated executive summary of the arguments of Japan D-6 
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  CASES CITED IN THIS REPORT 
Short title Full case title and citation 
Argentina – Ceramic Tiles Panel Report, Argentina – Definitive Anti-Dumping Measures on Imports of 
Ceramic Floor Tiles from Italy , WT/DS189/R, adopted 5 November 2001, 
DSR 2001:XII, p. 6241 
Argentina – Poultry 
Anti-Dumping Duties Panel Report, Argentina – Definitive Anti-Dum ping Duties on Poultry from 
Brazil , WT/DS241/R, adopted 19 May 2003, DSR 2003:V, p. 1727 
Canada – Aircraft 
(Article 21.5 – Brazil) Appellate Body Report, Canada – Measures Affecting the Export of Civilian 
Aircraft – Recourse by Brazil to Article 21.5 of the DSU , WT/DS70/AB/RW, 
adopted 4 August 2000, DSR 2000:IX, p. 4299 
China – Autos (US) Panel Report, China – Anti-Dumping and Countervailing Duties on Certain 
Automobiles from the United States , WT/DS440/R and Add.1, adopted 
18 June 2014  
China – Broiler Products Panel Report, China  Anti-Dumping and Countervailing Duty Measures on 
Broiler Products from the United States , WT/DS427/R and Add.1, adopted 
25 September 2013 
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) Panel Reports, China – Measures Imposing Anti-Dumping Duties on 
High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from Japan / 
China – Measures Imposing Anti-Dum ping Duties on High-Performance 
Stainless Steel Seamle ss Tubes ("HP-SSST") from the European Union , 
WT/DS454/R and Add.1 / WT/DS460/R and Add.1, circulated to WTO 
Members 13 February 2015 [adoption/appeal pending] 
China – X-Ray Equipment Panel Report,  China – Definitive Anti-Dumpi ng Duties on X-Ray Security 
Inspection Equipment from the European Union , WT/DS425/R and Add.1, 
adopted 24 April 2013  
EC – Approval and Marketing of 
Biotech Products Panel Reports, European Communities – Measur es Affecting the Approval 
and Marketing of Biotech Products , WT/DS291/R, Add.1 to Add.9 and Corr.1 
/ WT/DS292/R, Add.1 to Add.9 and Corr.1 / WT/DS293/R, Add.1 to Add.9 
and Corr.1, adopted 21 Nove mber 2006, DSR 2006:III, p. 847 
EC – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas, Complaint by the United States , WT/DS27/R/USA, 
adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:II, p. 943 
EC – Bananas III 
(Article 21.5 – Ecuador) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Recourse to Article 21.5 of the DSU by Ecuador , 
WT/DS27/RW/ECU, adopted 6 May 1999, DSR 1999:II, p. 803 
EC – Bananas III 
(Article 21.5 – Ecuador II)  /  EC – Bananas III (Article 21.5 – US) Appellate Body Reports, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by Ecuador , WT/DS27/AB/RW2/ECU, adopted 
11 December 2008, and Corr.1 / European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of 
the DSU by the United States , WT/DS27/AB/RW/USA and Corr.1, adopted 
22 December 2008, DSR 2008:XVIII, p. 7165 
EC – Bananas III 
(Article 21.5 – US) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Recourse to Article 21.5 of the DSU by the 
United States , WT/DS27/RW/USA and Corr.1, adopted 22 December 2008, 
upheld by Appellate Body Report WT/DS27/AB/RW/USA, DSR 2008:XIX, 
p. 7761 
EC – Bed Linen Appellate Body Report, European Communities – An ti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from India , WT/DS141/AB/R, adopted 
12 March 2001, DSR 2001:V, p. 2049 
EC – Bed Linen Panel Report, European Communities – Anti-Dum ping 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 WT/DS414/RW 
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  Short title Full case title and citation 
EC – Bed Linen 
(Article 21.5 – India) Appellate Body Report, European Communities – An ti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of 
the DSU  by India , WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 
p. 965  
EC – Bed Linen 
(Article 21.5 – India) Panel Report, European Communities – Anti-Dum ping Duties on Imports of 
Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU  by 
India, WT/DS141/RW, adopted 24 April 2003, as modified by Appellate Body 
Report WT/DS141/AB/RW, DSR 2003:IV, p. 1269  
EC – Chicken Cuts Appellate Body Report, European  Communities – Customs Classification of 
Frozen Boneless Chicken Cuts , WT/DS269/AB/R, WT/DS286/AB/R, adopted 
27 September 2005, and Corr.1, DSR 2005:XIX, p. 9157 
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 
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 – Sardines Appellate Body Report, European Communities – Trade Description of 
Sardines , WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII, 
p. 3359 
EC – Selected Customs Matters Appellate Body Report, European Communities – Selected Customs Matters , 
WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p. 3791 
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 
Korea – Certain Paper 
(Article 21.5 – Indonesia) Panel Report, Korea – Anti-Dumping Duties on  Imports of Certain Paper from 
Indonesia – Recourse to Article 21.5 of the DSU by Indonesia , 
WT/DS312/RW, adopted 22 Octobe r 2007, DSR 2007:V III, p. 3369 
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 
US – Countervailing Duty 
Investigation on DRAMS Appellate Body Report, United States – Countervaili ng 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 – Countervailing Measures 
on Certain EC Products  
(Article 21.5 – EC) Panel Report, United States – Countervailing Measures Concerning Certain 
Products from the European Communitie s – Recourse to Article 21.5 of the 
DSU by the European Communities , WT/DS212/RW, adopted 
27 September 2005, DSR 2005:XVIII, p. 8950 
US – FSC 
(Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, 
p. 55 
US – FSC 
(Article 21.5 – EC II) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Second Recourse to  Article 21.5 of the DSU by the 
European Communities , WT/DS108/AB/RW2, adopted 14 March 2006, 
DSR 2006:XI, p. 4721 
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 Me at from New Zealand and Australia , 
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, p. 4051 
US – Oil Country Tubular 
Goods Sunset Reviews 
(Article 21.5 – Argentina) Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular G oods from Argentina – Recourse to 
Article 21.5 of the DSU by Argentina , WT/DS268/AB/RW, adopted 
11 May 2007, DSR 2007:IX, p. 3523 WT/DS414/RW 
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  Short title Full case title and citation 
US – Oil Country Tubular 
Goods Sunset Reviews (Article 21.5 – Argentina) Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on 
Oil Country Tubular Goods from Argentina – Recourse to Article 21.5 of the DSU by Argentina , WT/DS268/RW, adopted 11 May 2007, as modified by 
Appellate Body Report WT/DS268/AB/RW, DSR 2007:IX, p. 3609 
US – Softwood Lumber VI 
(Article 21.5 – Canada) Appellate Body Report, United States – Investigation of the International 
Trade Commission in Softwood Lumber from Canada – Recourse to 
Article 21.5 of the DSU by Canada , WT/DS277/AB/RW, adopted 9 May 2006, 
and Corr.1, DSR 2006:XI, p. 4865 
US – Tyres (China) Appellate Body Report, United States – Measures A ffecting Imports of Certain 
Passenger Vehicle and Ligh t Truck Tyres from China , WT/DS399/AB/R, 
adopted 5 October 2011, DSR 2011:IX, p. 4811 
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure A ffecting 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)  
(Article 21.5 – EC) Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the DSU by the European Communities , WT/DS294/AB/RW and Corr.1, 
adopted 11 June 2009, DSR 2009:VII, p. 2911 
US – Zeroing (EC)  
(Article 21.5 – EC) Panel Report, United States – Laws, Regu lations and Methodology for 
Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the 
DSU by the European Communities , WT/DS294/RW, adopted 11 June 2009, 
as modified by Appellate Body Report WT/DS294/AB/RW, DSR 2009:VII, 
p. 3117 
 
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  ABBREVIATIONS USED IN THIS REPORT 
Abbreviation Description 
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade 1994 
AK Steel AK Steel Corporation 
AK Steel Supplementary 
Questionnaire Response AK Steel Corporation, Supplementary  Industry Injury Investigation 
Questionnaire Response (Exhibit US-18) (BCI) 
Allegheny Ludlum ATI Allegheny Ludlum Corporation 
AUV Average unit value 
Baosteel Baosteel Group Corporation 
DSU Understanding on Rules and Procedures  Governing the Settlement of Disputes 
GATT 1994 General Agreement on Tariffs and Trade 1994 
GOES Grain oriented flat-rolled electrical steel 
MOFCOM Ministry of Commerce of the People's Republic of China 
Original Determination MOFCOM, Final Determination in Anti-Dumping and Anti-Subsidy 
Investigations on GOES Imports from the US and Russia, No. 21, 10 April 2010 (Exhibit US-4) 
Price negotiation letters Price negotiation letters exchanged be tween a Chinese producer and Chinese 
purchasers (Exhibits US-7, US-8 and US-9) (BCI) 
Redetermination MOFCOM, Determination on the Re-investigation of Anti-Dumping and 
Countervailing Duties on Grain Oriented Flat-Rolled Electrical Steel Imports from the United States, Public Notice [2013] No. 51, including its annexes (Exhibit US-1)  
Redetermination – China's 
translation MOFCOM, Determination of the Ministry of  Commerce of the People's Republic 
of China on the Anti-dumping and Coun tervailing Reinvestigation on Imports 
of Grain Oriented Flat-rolled Electrical Steel Originating in the United States 
(Exhibit CHN-1) 
Redetermination Disclosure MOFCOM, Notice of informatio n disclosure before the in dustry injury verdict of 
the anti-dumping on imported grain-oriented silicon electrical steel with the 
country of origin in the United States and Russia and the anti-subsidy on the imported grain-oriented silicon electrical steel with the country of origin in the 
United States, Public Notice [2013] No. 327 (Exhibit US-3) 
Redetermination Disclosure – 
China's translation MOFCOM, Notice of Disclosure Prior to Industry Injury Determination in the 
Anti-dumping Reinvestigation on Imports of Grain Oriented Flat-rolled 
Electrical Steel originating in the U.S. and Russia and the Anti-subsidy 
Reinvestigation on Imports of Grain Oriented Flat-rolled Electrical Steel 
originating in the U.S. SDCYCH [2013] No. 327 (Exhibit CHN-2) 
Russian contract Contract between a Russian producer and a Chinese purchaser (Exhibit US-6) 
(BCI) 
SCM Agreement Agreement on Subsidies an d Countervailing Measures 
Wuhan Wuhan Iron and Steel Corporation 
WTO Agreement Marrakesh Agreement Establishing  the World Trade Organization 
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  1  INTRODUCTION 
1.1  Complaint by the United States 1.1.  This compliance dispute concerns the challenge by the United States to measures taken by 
China to comply with the rulings and recommendat ions of the Dispute Settlement Body (DSB) in 
China – Countervailing and Anti-Dumping duties on Grain Oriented Flat-rolled Electrical Steel from 
the United States . 
1.2.  On 13 January 2014, the United States requested consultations with China pursuant to 
paragraph 1 of the understanding reached on 19 August 2013 between China and the 
United States in "Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding" (Sequencing Agreement), which states  that should the United States consider that 
the situation described in Article 21.5 of the Unde rstanding on Rules and Procedures Governing the 
Settlement of Dispute ("DSU") exists, the United  States will request that China enter into 
consultations with the United States. 
1.3.  Consultations were held on 24 January 2014, but failed to resolve the dispute. 
1.2  Panel establishment and composition 
1.4.  On 13 February 2014, the United States requested the establishment of a panel pursuant to 
Articles 6 and 21.5 of the DSU with standard terms of reference.
1  
1.5.  At its meeting on 26 February 2014, th e Dispute Settlement Body (DSB) referred this 
dispute, if possible to the original Panel, in accordance with Article 21.5 of the DSU. 
1.6.   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 the United States in 
document WT/DS414/16 and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.
2 
1.7.  In accordance with Article 21.5 of the DS U, the Panel was composed on 17 March 2014 as 
follows: 
Chairperson: Mr John Adank 
 
Members:  Mr Anthony Abad    Mr Jan Heukelman  
1.8.  The European Union, India, Japan and the Russian Federation notified their interest in 
participating in the Panel proceedings as third parties. 
1.3  Panel proceedings 
1.3.1  General 
1.9.  After consultation with the partie s, the Panel adopted its Working Procedures
3 and timetable 
on 22 May 2014. After further consulting the parties, the Panel revised its timetable on 
24 October 2014. The Panel further modified its timetable on 19 January 2015. 
1.10.  The Panel held its substantive meeting with the parties on 14 and 15 October 2014. A 
session with the third parties took place on 15 Oc tober 2014. The Panel issued its Interim Report 
to the parties on 17 March 2015. At the request of China, the Panel held a further meeting with 
                                               
1 WT/DS414/16. 
2 WT/DS414/17. 
3 See the Panel's Working Procedures in Annex A-1. WT/DS414/RW 
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  the parties to consider issues identified in the parties' requests for interim review on 23 April 2015. 
The Panel issued its Final Report to the parties on 5 May 2015. 
1.3.2   Working procedures on Business Confidential Information (BCI) 1.11.  After consultation with both parties, the Panel adopted, on 22 May 2014, additional 
procedures for the protection of BCI.
4 
2  FACTUAL ASPECTS 2.1  The measures at issue 
2.1.  This dispute concerns measures taken by  China to implement the DSB recommendations and 
rulings in China – Countervailing and Anti-Dumping duties on Grain Oriented Flat-rolled Electrical 
Steel from the United States , as set forth in MOFCOM's Redetermination issued on 31 July 2013, 
pursuant to which China continues to impose anti-dumping and countervailing duties on imports of 
GOES from the United States. 
3  PARTIES' REQUESTS FOR FI NDINGS AND RECOMMENDATIONS 
3.1.   The United States requests that the Panel find that: 
a. MOFCOM's injury determination is inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the 
Anti-Dumping Agreement and Articles 15.1, 15. 2, 15.4 and 15.5 of the SCM Agreement. 
Specifically: 
i. MOFCOM's price effects analysis is inconsistent with Articles 3.1 and 3.2 of the 
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement; 
ii. MOFCOM's impact analysis is inconsistent with Articles 3.1 and 3.4 of the 
Anti-Dumping Agreement and Articles 15. 1 and 15.4 of the SCM Agreement; and 
iii. MOFCOM's causation analysis is inconsistent with Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement and Articles 15.1 and 15.5 of the SCM Agreement. 
b. MOFCOM acted inconsistently with its obligations under Article 6.9 of the Anti-Dumping 
Agreement and Article 12.8 of the SCM Agreemen t by failing to disclose certain essential 
facts in connection with its Redetermination. 
c. MOFCOM acted inconsistently with its obligations under Articles 12.2 and 12.2.2 of the 
Anti-Dumping Agreement and Articles 22.3 and 22.5 of the SCM Agreement by failing to 
set forth in sufficient detail in its Redetermination or a separate report, China's findings and conclusions on certain material issues of fact and law in connection with its Redetermination. 
3.2.  China requests that the Panel reject the United States' claims in this dispute in their entirety. 
4  ARGUMENTS OF THE PARTIES 4.1.  The arguments of the parties are reflecte d in their executive summaries, provided to the 
Panel in accordance with paragraph 18 of the Working Procedures adopted by the Panel (see 
Annexes B and C). 
5  ARGUMENTS OF THE THIRD PARTIES 
5.1.  The arguments of the European Union and Japan are reflected in their executive summaries, 
provided in accordance with paragraph 19 of th e Working Procedures adopted by the Panel (see 
Annex D). India and the Russian Federation did not submit written or oral arguments to the Panel. 
                                               
4 See Additional Working Proced ures on BCI in Annex A-2. WT/DS414/RW 
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  6  INTERIM REVIEW 
6.1.   On 17 March 2015, the Panel submitted its In terim Report to the parties. On 31 March 2015, 
the United States and China both submitted written requests for the review of precise aspects of the Interim Report. In addition, China requested an interim review meeting, which was held on 
23 April 2015.  
6.2.  In accordance with Article 15.3 of the DSU,  this section of the Report sets out the Panel's 
response to the parties' requests made at the interim review stage. We modified certain aspects of 
the Report in light of the parties' comments where we considered it appropriate, as explained 
below. As a result of the changes that we have made, the numbering of footnotes in the Final Report has changed from the Interim Report. References to footnotes in this section relate to the Final Report. References to paragraph numbers are to the Interim Report. 
6.1  Requests submitted by the United States 
6.3.  The United States requests that the Panel revise the last sentence of paragraph 7.20 of the 
Interim Report to reflect the fact that it challe nged China's argument regarding the replacement of 
the term "low" with the term "unfair" in MOFCOM's  Redetermination, referring to its oral statement 
at the Panel's meeting with the parties in this regard.
5 China did not comment on this request.  
6.4.  We have reviewed the United States' oral statement at the Panel's meeting with the parties, 
and we have amended the last sentence of paragraph 7.20 to reflect more accurately the 
arguments made by the United States. 
6.5.  The United States requests that the Panel revise the last sentence of paragraph 7.63 of the 
Interim Report to align this sentence with the standard of review as enunciated by the Panel at 
paragraph 7.4 and as applied by the Panel in paragraphs 7.58 and 7.120.6 China did not comment 
on this request. 
6.6.  We agree that, for consistency and clarity, th e same terminology should be used in our report 
where, as in this instance, the same standard is being applied and the same meaning is intended. 
We have therefore amended the last sentence of paragraph 7.63 to align this sentence with other 
references to the standard of review as set out in paragraphs 7.4, 7.58 and 7.120. 
6.7.  The United States requests that the Panel mo dify its findings in paragraph 8.2 of the Interim 
Report. The United States recalls that it reques ted the establishment of the Panel pursuant to 
Article 21.5 of the DSU because it considered that China's measures taken to comply were inconsistent with the covered agreements, and as a result, China failed to comply with the DSB's 
recommendations and rulings in this dispute, and suggests that the Panel modify paragraph 8.2 to 
frame its findings of inconsistency in similar terms.
7 At the interim review meeting, China 
commented that there was no need for the new language suggested by the United States, 
contending that since the measures at issue no longer exist, there is no basis for a statement that 
China has failed to bring its measures into compliance.8 
6.8.  Having considered the matter, and in light of our decision regarding the United States' 
request concerning paragraph 8.6 of the Interim Report below, we have granted the United States' 
request and modified paragraph 8.2, albeit using different language from that suggested by the 
United States. Notwithstanding China's views concerning the termination of the measures, in this proceeding we have found that the measures take n by China to comply with the recommendations 
and rulings in the original dispute are inconsistent with relevant provisions of the Anti-Dumping 
and SCM Agreements. In this context, we consider that the conclusion that China failed to comply with the recommendations and rulings of the DSB is justified, regardless of subsequent events. 
6.9.  The United States requests that the Panel delete the recommendation set out in 
paragraph 8.6 of the Interim Report. The United States notes that this is a compliance proceeding, and suggests that there is consequently no need for the Panel to make a recommendation that 
                                               
5 United States' request for interim review, paras. 3-4. 
6 Ibid. paras. 5-7. 
7 Ibid. paras. 8-10. 
8 China's oral statement at the in terim review meeting, para. 15. WT/DS414/RW 
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  China bring its measures taken to comply into conformity. The United States contends that a panel 
in a compliance proceeding is tasked with determining whether a measure taken to comply by the Member concerned that is within the panel's terms of reference exists or is inconsistent with a covered agreement, and asserts, relying on  the report of the Appellate Body in US – FSC 
(Article 21.5 – EC II)
9, that the Panel fulfils its mandate when it concludes that China has failed to 
implement the recommendations and rulings of th e DSB, and that until a Member has brought its 
measures found to be inconsistent by the DSB into full compliance with its WTO obligations, the 
original recommendation by the DSB will remain operative, and no further recommendation 
pertaining to the measure taken to comply is necessary.10 At the interim review meeting, China 
argued that the original recommendations were no longer operative, as there are no longer any disputed measures in effect to which those recommendations could apply, and asserted that 
termination of the measures at issue in this proceeding brings China into full compliance.
11 
6.10.  While US – FSC (Article 21.5 – EC II) concerned in particular a recommendation under 
Article 4.7 of the SCM Agreement, the Appellate Body's reasoning suggests that a recommendation 
to bring the measures taken to comply into conformity is not necessary in an Article 21.5 
compliance proceeding in any case, as the original recommendations and rulings of the DSB under Article 19.1 remain in effect until fully complied with. The Appellate Body and a number of panels 
have in fact taken this view and not issued recommendations in Article 21.5 proceedings.
12 As 
discussed below, at paragraphs 6.20-6.25, we have no evidence properly before us on the basis of which we could conclude that there is no longer any disputed measure in effect to which the original recommendations and rulings of the DSB could apply, and thus no basis on which we could 
conclude that China is in compliance with those recommendations and rulings. 
6.11.  Having considered the matter, we agree with the United States that a recommendation is 
not necessary in this proceeding, and have theref ore decided to grant the United States' request 
and modified paragraph 8.6 to reflect our views.  
6.2  Requests submitted by China 6.12.  China requests that paragraph 7.21 of the Interim Report be modified to reflect its view that 
the term "unfair imports" is not unclear and that the change from "low-priced imports" to "unfair 
imports" was not cursory, and that the changes were necessary to refer more precisely to the imports at issue and avoid confusion about whet her MOFCOM had engaged in price comparisons. 
China makes no specific suggestions in this regard.
13 At the interim review meeting, the 
United States recalled its arguments on this issue and argued that China provided no basis for its 
request.14 
6.13.  We recall that we found China's explanation for the change in terminology, rather than the 
term "unfair imports" itself, to be unclear. Nothing in China's request affects our conclusion that 
the change in terminology appears to have been made primarily to avoid the reference to low prices that both we and the Appellate Body found problematic in the original dispute. Moreover, we 
considered the change in terminology specifically in evaluating whether it demonstrated a change 
in the Redetermination sufficient to allow the United States to challenge MOFCOM's analysis of the r e l e v a n t  i n j u r y  f a c t o r s ,  c o n c l u d i n g  t h a t  i t  d i d  n o t .  A c c o r d i n g l y ,  w e  s e e  n o  r e a s o n  t o  m a k e  a n y  changes to paragraph 7.21, and deny China's request.  
                                               
9 Appellate Body Report, US – FSC (Article 21.5 – EC II) , paras. 85-87, 100. 
10 United States' request for interim review, paras. 11-12. 
11 China's oral statement at the inte rim review meeting, paras. 12-14. 
12 E.g. Panel Report, Korea – Certain Paper (A rticle 21.5 – Indonesia) , para. 7.4 (the panel found that 
the Korean investigating authority's redetermination finding violated the Anti-Dumping Agreement but stated that since the original DSB recommendations and rulings remained operative, it would make no new recommendation under Article 19.1 of  the DSU); Appell ate Body Report, US – Zeroing (EC) (Article 21.5 – EC) , 
para. 470; Panel Report, US – Zeroing (EC) (Article 21.5 – EC) , para. 9.2 (neither the panel nor the Appellate 
Body made a new recommendation, but the Appellate Bo dy recommended that "the  DSB request the United 
States to implement fully the recommendations and ruling s of the DSB [in the original proceeding]"); Appellate 
Body Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) , para. 186; Panel 
Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) , para. 8.2 (neither the panel 
nor the Appellate Body made a ne w recommendation but the Appellate  Body recommended that the DSB 
request the United States to "implement fully the recommendations and rulings of the DSB"). See Panel 
Report, EC – Bananas III (Article 21.5 – US) , paras. 6.50, 8.13. 
13 China's comments on the interim report, para. 3. 
14 United States' oral statement at th e interim review meeting, para. 23. WT/DS414/RW 
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  6.14.  China requests that the Panel delete pa ragraphs 7.55-7.57 and 7.66 of the Interim Report. 
China notes that the Panel stated that it could "draw no conclusion" on the quarterly data under the standard of review, and states that it is not clear why the Panel included this discussion. In China's view, the Panel should discuss and rely upon only those facts that the Panel finds properly 
within its purview under the standard of review. China suggests that the discussion at these 
paragraphs, and "elsewhere" in the Interim Report, of facts the Panel believes are not properly before it should be deleted. In addition, with respect to paragraph 7.56, China states that the 
Panel appears to have transposed inadvertently the shift in market share by subject imports and 
non-subject imports in Q1 2004. China makes no specific suggestions in this context, and cites no support with respect to its assertion regarding paragraph 7.56.
15 At the interim review meeting, 
the United States observed that the facts at issu e were evidence submitted by China to the Panel, 
and that it was therefore appropriate for the Pane l to examine and discuss that evidence, including 
its role in light of the standard of review and of the fact that it provided further support for the Panel's findings. The United States asserted that no changes to the report were therefore 
necessary.
16 
6.15.  With respect to the alleged "inadvertent transposition" of data in paragraph 7.56, we have 
double-checked the figures set out in that paragraph against those provided by China in its 
response to Panel question 14, and they are the sa me. Therefore, there is no evidentiary basis for 
any changes to paragraph 7.56 in this regard. Turning to the remainder of China's comments regarding paragraphs 7.55 to 7.57 and 7.66, we note that while we made "observations" in paragraphs 7.55 to 7.57 on the basis of the quar terly data submitted by China, our findings in 
paragraph 7.66 were made on the basis of China Customs import data that was available to 
MOFCOM and the data on subject import volume in Q1 2009 set out in MOFCOM's Redetermination 
Disclosure. We do not consider that we are precluded from making the observations in 
paragraphs 7.55 to 7.57, despite the fact that th e information in question was not relied on by 
MOFCOM. We made it clear that we drew no conclu sions, adverse or otherwise, concerning shifts 
in market share based on the quarterly data submi tted in this proceeding by China, relying in our 
conclusions on evidence that was appropriately before us in light of the standard of review. In light 
of the foregoing, we deny China's request to delete paragraphs 7.55-7.57 and 7.66, and have 
made no changes to paragraph 7.56. 
6.16.  China requests the Panel to clarify that the only pricing data on the record were average 
unit values ("AUVs") and to reflect China's explan ation that MOFCOM addressed the price data, but 
did not compare the relative prices of subject imports and the domestic like product because of the deficiencies associated with AUV comparisons pointed out by the Appellate Body, referring 
specifically to paragraphs 7.58 and 7.63-7.65 of the Interim Report in this regard.
17 At the interim 
review meeting, the United States, noting that China offered no basis for the Panel to modify the reasoning or findings in question, stated its view that no changes were necessary.
18 
6.17.  China's request essentially would require us  to make a finding that the "only" price data 
before MOFCOM was AUV data. It is not clear to us, and China has not explained, why such a finding is necessary or appropriate. The issue before us was not whether the AUV data was the "only" price data available to MOFCOM, but rather whether MOFCOM could have reached the 
specific conclusions that it did, regarding the linkages between increases in volume of subject 
imports and price effects suffered by the domest ic industry, without comparing the prices of 
subject imports and the domestic like product. Whether AUV data was the only data before 
MOFCOM on prices is not relevant to our consideration of that issue. Insofar as China requests us 
to include its explanation that MOFCOM addresse d the price data regarding subject imports and 
the domestic like product, China's request does not clearly identify which specific aspect of 
MOFCOM's consideration of the price data remained unexplained in our report, what specific 
explanations it seeks to have included, or any support for such explanations. We therefore deny 
these aspects of China's request. However, having  reviewed China's arguments in this regard, we 
grant China's request that we reflect its explanation that MOFCOM did not make price comparisons 
between subject imports and the domestic like pr oduct because of the deficiencies in the price 
data that were highlighted by the Appellate Body , as this relates to an aspect of China's own 
arguments. We have therefore added a new footnote 128 to paragraph 7.65 in this report. 
                                               
15 China's comments on the interim report, paras. 4-5. 
16 United States' oral statement at the interim review meetin g, paras. 24-26. 
17 China's comments on the interim report, para. 6. 
18 United States' oral statement at th e interim review meeting, para. 27. WT/DS414/RW 
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  6.18.  China asserts that the Panel dismissed as in sufficient MOFCOM's verification of the domestic 
industry's production capability with respect to  high grade GOES despite the fact that MOFCOM 
properly addressed the issue of whether subject imports and the domestic like product were substitutable, referring to paragraphs 7.72-7.81 of the Interim Report. China expresses concern 
that the Panel's finding sets a precedent that "an authority must address every factual assertion 
placed on record, even where it is adequately addressed by other means, and no matter the context in which it is offered or the extent to which its significance is rendered moot by other facts 
and findings of the authority."
19 China makes no specific requests for changes to the interim 
report, and cites no evidence in support of it s concerns. At the interim review meeting, the 
United States, noting that it had responded to China's arguments on this issue, and the Panel had explained its findings, stated its view that no changes are necessary.
20 
6.19.  We explained the basis of our conclusion s in paragraphs 7.72-7.81, which include our 
review of the evidence before MOFCOM, rele vant arguments provided by the parties and 
MOFCOM's ultimate conclusions as provided in its Redetermination finding. In the absence of any 
specific suggestions for change, we see no basis to modify our analysis and conclusions and have 
made no changes in this section of the report. 
6.20.  Finally, China stated in its request for interim review that the measures at issue in this 
proceeding would expire on 10 April 2015 because the domestic industry did not request a review 
of those measures, which might have resulted in their continuation, and requested that the Panel take this into consideration and issue no recommendations in the final report.
21 On 21 April 2015, 
China submitted exhibit CHN-3, a copy of MOFCOM's  public notice of termination of the measures 
dated 10 April 2015. At the interim review meeting, the United States argued that the Panel 
should reject China's attempt to introduce new evidence during the interim review stage of this proceeding as contrary to the DSU, inconsistent with paragraph 8 of the Wo rking Procedures of the 
Panel and not based on the evidence before the Panel.
22 The United States noted that in its 
request for interim review, China stated its expectations regarding the future termination of the measures at issue. In the United States' view, since China's request was not based on any 
evidence that had been developed by the parties an d considered by the Panel prior to issuance of 
the report, there was no need or basis for the Panel to review its findings further.
23 Finally, the 
United States asserted that China's new evidence, in addition to being untimely, was not relevant to the matter being examined by the Panel, noting that the Appellate Body has stated that, as a 
general rule, the measures subject to a panel's review "must be measures that are in existence at 
the time of the establishment of a panel," and therefore the task of the panel is to determine whether the measures at issue are consistent with the obligations at issue " at the time the Panel 
was established. "
24 According to the United States, China's exhibit has no relevance to the legal 
situation that existed on the date of the Pane l's establishment when the DSB referred the matter 
to the Panel, and thus is not relevant to the Panel's legal assessment and its findings and 
conclusions in this proceeding. 
6.21.  Article 15.2 of the DSU entitles parties to submit a written request for the panel to review 
"precise aspects of the interim report" prior to circ ulation of the final report. However, a number of 
panels and the Appellate Body have held that Article 15.2 is available only for the panel to review 
precise aspects of the interim report and does not permit parties to introduce new evidence.25 
Further, the panel in EC - IT Products  concluded that evidence regarding the repeal of a measure 
at issue in that dispute, submitted by the EC subs equent to the issuance of the interim report, was 
such "new evidence" and could not be cons idered at the stage of interim review.26 The panel in 
                                               
19 China's comments on the interim report, para. 7. 
20 United States' oral statement at th e interim review meeting, para. 28. 
21 China's comments on the interim report, para. 8. 
22 United States' oral statement at the interim review meeting, paras. 6-14. 
23 Ibid. paras. 15-16. 
24 Ibid. paras. 17-18, citing  Appellate Body Report,  EC – Chicken Cuts , para. 156;  Appellate Body 
Report, EC – Selected Customs Matters , para. 264; Panel Report, EC – Approval and Marketing of Biotech 
Products, para. 7.456. 
25 Appellate Body Report, EC – Sardines , para. 301; Appellate Body Report, EC – Selected Customs 
Matters , para. 259; Panel Report, EC – Bananas III (Article 21.5 – US) , paras. 6.1-6.18; Panel Report, EC – IT 
Products , para. 6.48. 
26 Panel Report, EC - IT Products,  para. 6.48. The panel observed: 
Consistent with the Appellate Body 's approach and in the interest  of protecting the due process 
rights of the complainants, who had no opportun ity to make submissions for the record on the WT/DS414/RW 
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  that case retained its recommendation under Arti cle 19.1, observing that there was no evidence 
"properly before the Panel" confirming the repeal of some of the measures at issue.  
6.22.  The situation in the present case is analogous to that in EC - IT Products . As in that case, 
China has submitted new evidence, i.e. Exhibit CHN- 3, subsequent to the issuance of the interim 
report. In our view , MOFCOM's public notice of termination is new evidence that was not before 
the Panel at the time it issued its interim report. 
6.23.  We note in this context the similarities between this case and the proceedings in EC - 
Bananas III (Article 21.5 – US) . In that case, as here, both parties requested during interim review 
that the panel delete the recommendation made in  the interim report, but for different reasons: 
the United States because it considered such a recommendation to be unnecessary in a compliance proceeding, and the then-European Comm unities because it had adopted an amending 
regulation eliminating the measure challenged by the United States in that compliance dispute.
 The 
European Communities informed the compliance panel of the repeal of the measure when it filed its comments on the interim report, and submitte d a copy of the amending regulation at the 
interim review meeting. The panel found the evid ence regarding the amending regulation to be 
inadmissible as it had been submitted after the comments on interim review had been filed, at which stage it could no longer consider new evid ence, but decided to delete the recommendation, 
considering that the original DSB recommendations and rulings continued to be operative in the 
compliance proceeding.
27  
6.24.  On appeal, the European Communities argued that the panel's statement that the original 
DSB recommendations continued to be operative in the compliance proceeding constituted a 
"concealed recommendation" and that the panel had erred in issuing such a recommendation in 
relation to an expired measure. The Appellate Bo dy disagreed, concluding that the panel had made 
no recommendation in relation to a measure which was no longer in force.28 The Appellate Body 
itself made no recommendation on the ground that the measure at issue had ceased to exist.29 
6.25.  In light of the above, we deny China's request. Nonetheless, we note that, if the measures 
have in fact expired, there would in our view be no further obligation on China to "bring the 
[expired] measure[s] into conformity".  
6.3  Editorial changes 6.26.  Finally, we have made a number of changes of  an editorial nature to improve the clarity and 
accuracy of the Report or to correct typographical errors, including certain changes suggested by 
the United States.
30 
7  FINDINGS 7.1  General principles regarding treaty interpretation, the standard of review, and 
burden of proof 
7.1.1  Treaty interpretation 7.1.  Article 3.2 of the DSU provides that the WT O dispute settlement system serves to clarify the 
existing provisions of the covered agreements "in accordance with customary rules of 
interpretation of public international law". Article 17.6(ii) of the Anti-Dumping Agreement similarly requires panels to interpret that Agreement's provisions in accordance with the customary rules of 
                                                                                                                                               
documents provided, we decline to consider  further the document s attached by the 
European Communities to its re quest for interim review. The Pa nel also declines to make 
adjustments to the Interim Reports to exclude the measures in question from the Panel's recommendation and to add text about the Euro pean Communities' confirmation that certain 
measures have been repealed, as requ ested by the European Communities. 
27 Panel Report, EC – Bananas III (Article 21.5 – US), paras. 6.50, 8.13. 
28 Appellate Body Report, EC – Bananas III (Article 21.5 – US) , para. 272.  
29 Ibid. para. 479. 
30 United States' request for interim review, paras. 13-37. WT/DS414/RW 
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  interpretation of public international law.31 It is generally accepted that the principles codified in 
Articles 31 and 32 of the Vienna Convention on the Law of Treaties are such customary rules. 
While we have not found it necessary to engage with any significant issues of treaty interpretation in this proceeding, we have nonetheless been mindful of these principles in our analysis. 
7.1.2  Standard of review 
7.2.  Article 11 of the DSU provides, in relevant part, that:  
[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. 
In addition, Article 17.6 of the Anti-Dumping Agreement sets forth the special standard of review 
applicable to disputes under the Anti-Dumping Agreement: 
 
(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; 
(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.  
Thus, Article 11 of the DSU and Article 17.6 of th e Anti-Dumping Agreement together establish the 
standard of review we will apply with respect to both the factual and the legal aspects of the 
present dispute. 
 7.3.  The Appellate Body has explained that where a panel is reviewing an investigating authority's 
determination, the "objective assessment" standard  in Article 11 of the DSU requires a panel to 
review whether the authorities have provided a reasoned and adequate explanation as to (i) how the evidence on the record supported its factual findings; and (ii) how those factual findings support the overall determination.
32 In the context of Article 17.6(i) of the 
Anti-Dumping Agreement, the Appellate Body has clarified that a panel should not conduct a 
de novo  review of the evidence, nor substitute its ju dgment for that of the investigating authority. 
A panel must limit its examination to the evidence that was before the investigating authority 
during the course of the investigation and must ta ke into account all such evidence submitted by 
the parties to the dispute.33 At the same time, a panel must not simply defer to the conclusions of 
the investigating authority; a panel's examination of those conclusions must be "in-depth" and 
"critical and searching".34 
7.4.  The Appellate Body has clarified a panel's st andard of review of the facts pursuant to the 
above provisions in the following terms: 
It is well established that a panel must neither conduct a de novo review nor simply 
defer to the conclusions of the national authority. A panel's examination of those 
conclusions must be critical and searching, and be based on the information contained in the record and the explanations given by the authority in its published report. A 
panel must examine whether, in the light of the evidence on the record, the 
conclusions reached by the investigating authority are reasoned and adequate. What 
                                               
31 Article 17.6(ii) of the Anti-Dumping Agreement also provides that if a panel finds that a provision of 
the Anti-Dumping Agreement admits of more than one permissible interpretation, it shall uphold a measure 
that rests upon one of those interpretations. 
32 Appellate Body Reports, US – Countervailing Duty Investigation on DRAMS , para. 186; and US – 
Lamb , para. 103. 
33 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS , paras. 187-188. 
34 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 93. WT/DS414/RW 
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  is 'adequate' will inevitably depend on th e facts and circumstances of the case and the 
particular claims made, but several general lines of inquiry are likely to be relevant. The panel's scrutiny should test whether the reasoning of the authority is coherent and internally consistent. The panel must undertake an in-depth examination of 
whether the explanations given disclose how the investigating authority treated the 
facts and evidence in the record and whether there was positive evidence before it to support the inferences made and conclusion s reached by it. The panel must examine 
whether the explanations provided demonstrate that the investigating authority took 
proper account of the complexities of the da ta before it, and that it explained why it 
rejected or discounted alternative explanations and interpretations of the record evidence. A panel must be open to the possibility that the explanations given by the 
authority are not reasoned or adequate in the light of other plausible alternative 
explanations, and must take care not to assume itself the role of initial trier of facts, nor to be passive by 'simply accept[ing]  the conclusions of the competent 
authorities.'
35 (Footnote omitted.) 
7.1.3  Burden of proof 7.5.  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.
36 Therefore, as the complaining party in this proceeding, the United States 
bears the burden of demonstrating that certain aspects of the measures at issue are inconsistent with the Anti-Dumping Agreement and the SCM Agr eement. 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.
37 Finally, it is generally for each party asserting a 
fact to provide proof thereof.38 
7.2  The United States' claim with respect to adverse impact 7.6.  In this section of our report, we examine the United States' claim that MOFCOM's finding that 
the subject imports had an adverse impact on the domestic industry was not based on an 
objective examination of all relevant economic factors and indices having a bearing on the state of that industry. More specifically, the United States claims that, in its Redetermination, MOFCOM failed to examine the impact of subject imports on the domestic industry and to evaluate all 
relevant economic factors and indices having a bearing on the state of the industry consistently 
with China's obligations under Articles 3.1 and 3.4 of the Anti-Dumping Agreement and 
Articles 15.1 and 15.4 of the SCM Agreement. Ch ina responds, in the first instance, that the 
United States' claim is not properly before the Panel in a compliance proceeding under Article 21.5 
of the DSU. China adds that, even if it were to be considered, the US claim would fail on the merits. Given China's jurisdictional objection, we  must first consider whether the US claim with 
respect to adverse impact falls within our terms of  reference before turning, if necessary, to its 
merits. 
7.2.1  Main arguments of the parties 7.7.  The United States argues that its claim is properly before the Panel because it challenges 
aspects of China's compliance measure that are inconsistent with the covered agreements. The 
United States specifically alleges that MOFCOM modified its adverse impact analysis in the Redetermination by (i) replacing all references to imports of product concerned "at a low price" 
with references to "unfair" imports of the subject merchandise and (ii) relying significantly on 
market conditions in 2008, in contrast to its original impact analysis.
39 The United States considers 
that its claim relates directly to China's compliance measure, which it argues includes a revised 
                                               
35 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 93. 
36 Appellate Body Report, US – Wool Shirts and Blouses , para. 337. 
37 Appellate Body Report, EC – Hormones , paras. 98, 104. 
38 Appellate Body Report, US – Wool Shirts and Blouses , para. 337. 
39 United States' second written submission, para. 67. WT/DS414/RW 
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  injury analysis and newly disclosed facts.40 It maintains that China's arguments regarding the 
admissibility of claims under Article 21.5 of the DSU are misguided.  
7.8.  China asserts that the United States is not en titled to expand the scope of the dispute in this 
Article 21.5 proceeding to include a wholly new claim not previously addressed by the panel, and 
that it would be extremely unfair to allow this claim.41 China notes there is no question that this is 
a new claim by the United States, as there was no reference to either Article 3.4 of the Anti-Dumping Agreement or Article 15.4 of th e SCM Agreement in the original request for 
consultations.
42 China relies on several Appellate Body reports in arguing that a complaining 
Member ordinarily would not be allowed to raise a claim in an Article 21.5 proceeding that it could have pursued in the original proceedings, but did no t. According to China, the first mention of any 
such claim was in the United States' first written submission in this proceeding. Moreover, China 
maintains that MOFCOM's discussion of injury in the Redetermination is essentially unchanged 
from the original.
43 China argues that the introduction of a new claim at this stage of the 
proceedings would be contrary to basic principles of fairness and due process.44 It would give the 
United States a second chance to raise a claim it failed to raise in the original proceeding and 
would expose China to possible suspension of concessions for a violation it was never given a fair opportunity to address.
45 
7.2.2  Evaluation by the Panel 
7.9.  In the original proceedings, the United States made no claim concerning MOFCOM's 
evaluation of the various economic factors and indices having a bearing on the state of the domestic industry for purposes of the injury determination under Articles 3.4 and 15.4 of the 
Anti-Dumping and SCM Agreements, respectively. Accordingly, the Panel and Appellate Body did 
not consider any claim under these Articles and made no findings in this respect. Therefore, the question we must resolve is whether this aspect of the Redetermination is subject to review by the 
Panel in this Article 21.5 proceeding. 
7.10.  Article 21.5 of the DSU provides, in relevant part: 
Where there is disagreement as to the existence or consistency with a covered 
agreement of measures taken to comply with the recommendations and rulings such 
dispute shall be decided through recourse to these dispute settlement procedures, including wherever possible resort to the original panel. 
7.11.  Inherent in proceedings under Article 21.5 of the DSU is the need to balance important 
systemic interests. Expanding the scope of a compliance proceeding to measures not originally 
challenged by the complaining Member may be necessary to ensure prompt and thorough verification of compliance. However, it could also result in circumvention of the normal dispute 
settlement process if it allows the complaining Member to obtain a finding of non-compliance and 
potentially seek retaliation without the responding Member having had a reasonable period of time 
in which to bring any inconsistent measures into compliance. 
7.12.  The scope of a panel's jurisdiction with respect to what measures and claims it may consider 
in an Article 21.5 compliance proceeding has been addressed by a number of panels and the Appellate Body. Several fundamental principles have emerged from these decisions. Thus, it is now accepted that nothing in Article 21.5 limits a compliance panel to considering only certain issues, 
or certain aspects of a measure taken to comply. Panels have found that to satisfy the objective of 
prompt settlement of disputes, a complainant can challenge all aspects of a new measure taken to comply, not only those related to issues covered by the original proceedings.
46 
7.13.  Similarly, the Appellate Body has found that a panel is not limited, in conducting its review 
under Article 21.5, to examining the measures take n to comply from the perspective of the claims, 
                                               
40 United States' second written submission, para. 69. 
41 China's first written submission, para. 68. 
42 Ibid. para. 71. 
43 China's second written submission, paras. 60-61. 
44 China's first written submission, paras. 71, 74. 
45 Ibid. para. 71. 
46 See, e.g. Panel Report, EC – Bananas III (Article 21.5 – Ecuador) , paras. 6.3-6.12. WT/DS414/RW 
BCI deleted, as indicated [***] 
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  arguments and factual circumstances that relate d to the measure that was the subject of the 
original proceedings.47 The Appellate Body has observed that if a compliance panel were restricted 
to examining the new measure from this limited pe rspective, it would be unable to examine fully, 
in accordance with Article 21.5, the consistency with a covered agreement of the measures taken 
to comply.48 The Appellate Body has also upheld compliance panels' rulings that new claims 
challenging a changed component of the measure taken to comply are admissible.49 
7.14.  However, the Appellate Body has also co ncluded that, in the context of a compliance 
proceeding, a Member may be precluded from bringing the same claim with respect to an aspect of 
another Member's redetermination that is unchanged from the determination at issue in the original dispute.
50 An unchanged aspect of the original measure that a Member does not have to 
change, and does not change, in complying with the recommendations and rulings of the DSB thus 
should not be susceptible to challenge in a compliance proceeding.51 One panel, in applying these 
principles, distinguished between a new claim on an  aspect of the measure taken to comply that 
constituted a new or revised element of the original measure, and which thus could not have been 
raised in the original proceedings, and another new claim that concerned aspects of the original 
measure that were unchanged.52 The panel found the former to be admissible, and the latter 
inadmissible.53 
7.15.  We now proceed to consider the facts of this case, in light of the principles just described, to 
determine whether the United States' claim with respect to adverse impact is properly before us in this compliance proceeding. 
7 . 1 6 .   W e r e  w e  t o  c o n c l u d e  t h a t  M O F C O M  c h a n g e d the substance of its analysis or conclusions 
regarding adverse impact in the Redetermination, such that the United States could not have 
meaningfully raised the claim it now asserts in the original proceeding, we might conclude that allowing the United States' claim in this compliance proceeding would not unduly deprive China of 
its due process rights. However, should the changes in MOFCOM's Redetermination not be 
sufficient to justify this conclusion, we may find th at the United States is challenging aspects of the 
original measure that are essentially unchanged, and which it could have challenged in the original 
dispute, and therefore conclude that allowing the United States' new claim in this compliance 
proceeding could jeopardize fundamental principles of fairness and due process and should therefore not be allowed to proceed. We are of the view that the latter conclusion is warranted in this case. 
7.17.  It is undisputed that the United States is introducing a new claim in this compliance 
proceeding. The United States made no claims under Articles 3.4 and 15.4 of the Anti-Dumping 
and SCM Agreements in the original proceeding. However, the United States asserts that 
MOFCOM's Redetermination was changed from its original Determination, and that its claim is a 
justified challenge to this changed Redetermination. In arguing that MOFCOM's Redetermination is changed from its original Determination, the United States focuses on the deletion of references to 
subject imports "at a low price" and an alleged ch ange in the temporal focus of MOFCOM's injury 
analysis to 2008. China maintains that MOFCOM's  Redetermination is essentially unchanged from 
its original Determination. 
                                               
47 See, e.g. Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , paras. 37-41. 
48 Appellate Body Report, Canada – Aircraft (A rticle 21.5 – Brazil) , paras. 37-41.  
49 See, e.g. Appellate Body Report, US – FSC (Article 21.5 – EC) , paras. 197-222. 
50 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , paras. 88-89. In that case, the 
Appellate Body found that India was seeking to challenge an unchanged aspect of the original measure that the 
European Communities did not have to change, and di d not change, in complying with the recommendations 
and rulings of the DSB. The Appellate Body considered that: (i) the EC's redeterm ination could be separated 
into distinct parts; (ii) In dia was merely reasserting a claim that it ha d raised, and as to which it had failed to 
make a prima facie  case before the original panel; and (iii) In dia was precluded from bringing the same claim 
with respect to an aspect of the redetermination that  was unchanged from the determination at issue in the 
original dispute. 
51 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , paras. 88-89. 
52 Panel Report, US – Countervailing Measures on Cert ain EC Products (Article 21.5 – EC) , 
paras. 7.1-7.77. 
53 Ibid. WT/DS414/RW 
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  7.18.  MOFCOM's injury analysis in the original Determination contained four references to imports 
of the product concerned "at a low price".54 In the Redetermination, these four references have 
been reformulated, and now refer to "unfair" imports of subject merchandise in the otherwise nearly identical text.
55 China contends that "none of these references are engaging in price 
comparisons of any sort" and that "references to 'low price' imports in this discussion are just 
synonyms for unfairly traded imports."56 China thus suggests that these different formulations are 
simply interchangeable references to the subject imports in the context of MOFCOM's injury 
analysis. 
7.19.  The Panel and Appellate Body in the origin al proceeding considered MOFCOM's discussion of 
the "low price" of subject imports in the context of price effects and found that, "although MOFCOM did not make a finding of significant price undercutting, MOFCOM's finding as to the 'low 
price' of subject imports referred to the existe nce of price undercutting between 2006 and 2008, 
and that MOFCOM relied on this factor to support  its finding of significant price depression and 
suppression."
57 The Appellate Body specifically was not persuaded by China's arguments that the 
references to "low price" were simply references to the prices of subject imports in relation to their 
historical prices or to the low price established by virtue of the sale of subject imports at dumped and/or subsidized levels.
58 Thus, MOFCOM's references to "low price" were considered more 
significant by the Panel and Appellate Body in the original proceedings than was argued by China. 
7.20.  Accordingly, we have considered whether the deletion of these references from MOFCOM's 
injury analysis in the Redetermination and their replacement by a term that does not directly implicate price reflects a change in the focus and substance of the Redetermination from the 
original. We specifically asked China to clarify why MOFCOM replaced the original term in the 
Redetermination. China responded that MOFCOM replaced the Chinese term meaning "low" with 
one meaning "unfair" to avoid any confusio n with the concept of price undercutting.
59 China 
further responded that MOFCOM thus inserted what it deemed to be the more precise term for 
"unfair" in its injury analysis in the Redetermination to refer to subject merchandise in the sense of "unfairly traded dumped or subsidized imports."
60 The United States argued that China provided no 
support for this assertion, and that the Appella te Body had already rejected this argument.61 
7.21.  In our view, the term "unfair imports" appears to connote a broader concept than the term 
"low-priced imports", as it implies that the impo rts in question are dumped or subsidized. But 
dumping and subsidization are determinations th at can only be reached following thorough 
investigation and analysis. Accordingly, we find China's explanation for this change in terminology 
unclear. The change seems to be a cursory attempt to eliminate the reference to low prices that both we and the Appellate Body found problematic in the original dispute. Nevertheless, in the 
present proceeding, we consider this change in references specifically to assess whether it 
demonstrates a change in the Redetermination sufficient to allow the United States to challenge MOFCOM's analysis of the relevant injury factors. 
7.22.  On the basis of China's explanation, and in  light of the text of the Redetermination and the 
arguments in the original dispute, we are of the view that the injury analysis and determination component of the measure taken to comply in this case, that is, the Redetermination, has not been changed from the original determination in a manner that makes it susceptible to challenge 
in this compliance proceeding. As was the case in EC – Bed Linen (Article 21.5 – India) , there was 
no need for MOFCOM in this case to change its determination of injury in seeking to comply with 
                                               
54 MOFCOM, Final Determination in Anti-Dumping and Anti-Subsidy Investigations on GOES Imports 
from the US and Russia, No. 21, 10 April 2010 (Original Determination) (Exhibit US-4), pp. 60-63. 
55 Compare Original Determination, (Exhibit US-4), pp. 60-63, with MOFCOM, Determination on the 
Re-investigation of Anti-Dumping and Countervailing Du ties on Grain Oriented Flat-Rolled Electrical Steel 
Imports from the United States, Public Notice [2013]  No. 51, including its annexes (Redetermination) 
(Exhibit US-1), pp. 29-32; and MOFCOM, Determination of the Ministry of Commerce of the People's Republic 
of China on the Anti-Dumping and Countervailing Rein vestigation on Imports of Grain Oriented Flat-rolled 
Electrical Steel Originating in the United States (Redetermination – China's translation) (Exhibit CHN-1), pp. 29-33. 
56 China's second written submission, para. 64. 
57 Appellate Body Report, China – GOES , para. 196. 
58 Ibid. para. 194. 
59 China's response to Panel question No. 48, para. 135. 
60 Ibid. para. 136. 
61 United States' opening statement at the meeting of the Panel, para. 48. WT/DS414/RW 
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  the DSB's recommendation.62 As that determination was unchallenged in the original proceeding, 
the Redetermination simply incorporates elements of the original determination, unchanged in any material respect. In our view, the changes in wo rding between the original determination and the 
Redetermination are not substantively relevant to MOFCOM's analysis and determination of injury, 
and do not constitute a change that gives rise to a new aspect of that analysis and determination 
that can be challenged in this compliance proceeding.  
7.23.  The same reasoning applies to the United  States' allegation that MOFCOM changed the 
temporal focus of its injury analysis to 2008. The texts of the original Determination and 
Redetermination with respect to MOFCOM's injury analysis are identical in almost all respects
63; 
the minor changes between the original determination and the Redetermination do not reflect a shift in the temporal focus of MOFCOM's analysis to 2008.
64 
7.24.  Finally, while the United States has focused on the changes in wording in the 
Redetermination, the new claim it is raising in this compliance proceeding does not relate specifically to those changes, but rather to aspects of MOFCOM's analysis and conclusions 
regarding the injury factors that are unchanged from the original determination and unaffected by 
the change in wording. We note that in a previo us dispute, the Appellate Body emphasized that 
disallowing Brazil's claim in the compliance proceeding in Canada – Aircraft  would have resulted in 
Brazil being precluded from making claims that it could not have raised in the original dispute.
65 In 
contrast, in this case, the substance of MOFCOM's injury analysis in the original determination and in the Redetermination are identical to such a degree that it is clear to us that the United States could have raised, in the original dispute, the same claim regarding the injury analysis in the 
original determination it now seeks to bring before us with respect to the Redetermination. It 
chose not to do so in the original proceeding, and we conclude that it may not do so in this compliance proceeding. 
7.2.3  Conclusion regarding adverse impact 
7.25.  Thus, we find that the few changes between MOFCOM's original determination and 
Redetermination are inconsequential in the context of the latter, and the United States in this case 
seeks to challenge aspects of the Redetermination that are essentially unchanged from the original 
determination. In these circumstances, allowing the United States' new claim under Articles 3.1, 3.4 and 15.1, 15.4 of the Anti-Dumping and SCM Ag reements respectively, with respect to adverse 
impact in the present compliance proceeding would jeopardize fundamental principles of fairness 
and due process, and we therefore conclude it is not properly before us. 
7.3  Whether MOFCOM's Redetermination rega rding price effects is consistent with 
Articles 3.1 and 3.2 of the Anti-Dumping Agreement and Articles 15.1 and 15.2 of the 
SCM Agreement 
7.3.1  Introduction 7.26.  The United States contends that the foll owing three aspects of MOFCOM's Redetermination 
on price effects were not based on an objective examination of positive evidence, in violation of 
China's obligations under Articles 3.1 and 3.2 of  the Anti-Dumping Agreement and Articles 15.1 
and 15.2 of the SCM Agreement: 
a. Subject imports suppressed domestic prices in 2008 and Q1 2009; 
b. Subject imports depressed domestic prices by 30.25% in Q1 2009; and 
c. Pricing policies of subject country export ers caused price depression in Q1 2009. 
                                               
62 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , paras. 86-87. 
63 Original Determination, (Exhibit US-4), pp. 60-64; Redetermination, (Exhibit US-1), pp. 28-33; and 
Redetermination – China's translation, (Exhibit CHN-1), p. 29-33. 
64 Redetermination, (Exhibit US-1), p. 28 (The only textual change of  a temporal nature in MOFCOM's 
injury analysis in the Redetermination consists of the addition of the phrase "during the same period" at the 
end of the last full paragraph on page 28 in reference to the period 2007, 2008 and Q1 2009). See also 
Redetermination – China's translation, (Exhibit CHN-1), p. 29. 
65 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 88, discussing Appellate Body 
Report, Canada – Aircraft (A rticle 21.5 – Brazil) . That is not the situation in this case. WT/DS414/RW 
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  In particular, the United States makes a number of fact-specific arguments questioning MOFCOM's 
finding that subject imports had the "effect" of suppressing and depressing domestic prices, and also questions MOFCOM's decision to not make price comparisons between subject imports and the 
domestic like product, as part  of its price effects analysis.
66 
 
7.27.  China rejects the United States' contention s, asserting that MOFCOM's conclusions that the 
increased volume of subject imports and the do mestic industry's loss in market share had a 
suppressive and depressive effect on domestic like product prices were supported by factual 
findings indicating a competitive relationship between subject imports and the domestic like product.
67 China further argues that price negotiation letters exchanged between Chinese 
producers and customers, as well as provisions of a contract between a Russian producer and a 
Chinese customer (collectively referred to as "pricing policy documents") supported MOFCOM's 
conclusions regarding the existence of price competition and also the influence of prices on purchaser decisions as well as attempts by subject country exporters to set prices lower than 
those of the domestic like product.
68 These three factors, in turn, supported MOFCOM's conclusion 
that subject imports had had a suppressive and depressive effect on domestic prices.69  
7.3.2  Provisions at issue 
7.28.  Article 3.1 of the Anti-Dumping Agreement provides: 
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. 
Article 3.2 of the Anti-Dumping Agreement provides: 
 
With regard to the volume of the dumped imports, the investigating authorities shall 
consider whether there has been a significant increase in dumped imports, either in 
absolute terms or relative to production or consumption in the importing Member. 
With regard to the effect of the dumped imports on prices, the investigating authorities shall consider whether there has been a significant price undercutting by the dumped imports as compared with the price of a like product of the importing 
Member, or whether the effect of such imports is otherwise to depress prices to a 
significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. No one or several of these factors can necessarily give decisive 
guidance. 
Articles 15.1 and 15.2 of the SCM Agreement are iden tical to Articles 3.1 and 3.2, respectively, of 
the Anti-Dumping Agreement, with the exception that all references to "dumped imports" are 
replaced by references to "subsidized imports". 
 7.3.3  Main arguments of the parties 
7.3.3.1  United States 
7.29.  The United States rejects MOFCOM's conc lusion that the increased volume of subject 
imports and consequential loss of market share by the domestic industry, predominantly to subject 
                                               
66 See, e.g. United States' firs t written submission, para. 46. 
67 China's second written submission, para. 23. In this regard, China argues that MOFCOM's factual 
findings regarding the following seve n factors supported its finding of a directly competitive relationship 
between subject imports and the domest ic like product: (a) like product analysis; (b) cumulation analysis; 
(c) statement by US producer Alleghen y Ludlum that the subject merchandise that it produced or exported to 
China was highly substitutable and competitive with th e Chinese domestic like prod uct and the like product 
from other countries; (d) parallel price trends of subj ect imports and the domestic  like product; (e) pricing 
policy documents; (f) customer ov erlap; and (g) market share replacement. See also China's opening 
statement at the meeting of the Panel, p. 5; Chin a's response to Panel question No. 4, para. 18. 
68 China's response to Panel question No. 1, paras. 13-17. 
69 Ibid. WT/DS414/RW 
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  imports, had the effect of suppressing or depressing the prices of the domestic like product.70 The 
United States argues that MOFCOM could not have concluded that subject imports had the effect of suppressing or depressing domestic like product prices without comparing the actual prices of subject imports and the domestic like product, which MOFCOM admittedly did not do.
71 Further, 
the United States questions the linkage that MO FCOM drew between increases in the volume of 
subject imports in 2008 and adverse effects on the domestic like product prices in Q1 2009, c o n t e n d i n g  t h a t  t h e  v o l u m e  o f  s u b j e c t  i m p o r t s  d e c l i n e d  f r o m  Q 3  2 0 0 8  t o  Q 4  2 0 0 8  a n d  f r o m  
Q4 2008 to Q1 2009, making it less plausible that the decline in domestic industry prices in 
Q1 2009 was related to subject imports.
72 The United States also requests the Panel to reject as 
ex post facto  rationalizations arguments made by China in this proceeding on the basis of 
quarterly 2008 market share data concerning shif ts in market shares of subject imports, 
non-subject imports and the domestic like product. The United States asserts that this information 
was neither considered by MOFCOM in the Redetermination nor disclosed to the interested parties.
73 The United States emphasizes, however, that the quarterly market share data casts 
further doubt on MOFCOM's conclusions regarding the linkage between increases in the market 
share of subject imports and price effects in Q1 2009. According to the United States, the fact that non-subject imports gained market share in Q4 20 08 makes it more plausible that the decline in 
domestic like product prices in Q1 2009 was in response to increases in non-subject imports' 
market share rather than that of subject imports.
74 
7.30.  The United States submits that MOFCOM's factual findings purporting to demonstrate that 
the subject imports and the domestic like product competed on price were flawed. First, the 
United States contends that MOFCOM failed to co nsider submissions by the US exporter AK Steel 
that [***].75 In particular, the United States emphasizes that MOFCOM failed to consider evidence 
submitted by AK Steel that GOES produced by domestic producers was not certified for use in 
large transformers, i.e. transformers of 500kW and above.76 
7.31.  Further, the United States questions MOFCOM's conclusions concerning price competition on 
the ground that the factual findings relied upon by MOFCOM in support of this conclusion were 
either general in nature, or were not representative of the market dynamic as a whole.77  
7.3.3.2  China 7.32.  China rejects the United States' contention that MOFCOM could not have reached its 
conclusions regarding the suppressive and depressi ve effect of subject imports on the domestic 
like product prices without considering evidence of  actual prices of subject imports compared to 
the prices of the domestic like product. China contends that Article 3.2 of the 
Anti-Dumping Agreement and Article 15.2 of th e SCM Agreement do not require investigating 
authorities to make comparisons between the pric es of subject imports and the prices of the 
domestic like product.
78 Further, China argues that while MOFCOM did not compare the prices of 
subject imports and the domestic like product, MOFCOM's Redetermination discussed and 
demonstrated the competitive relationship be tween subject imports and the domestic like 
product.79 
7.33.  China submits that increases in the volume of subject imports, and in particular, gains in 
market share, may affect domestic prices regardless of whether the subject imports are priced 
higher or lower than the domestic like product.80 China notes that the domestic industry lost 
5.65 percentage points of market share in 2008 while subject imports gained 5.56 percentage 
points of market share in the same period.81 China submits that this showed that it was the 
                                               
70 See, e.g. United States' first written submission, paras. 49-53, 59-62; and second written submission, 
paras. 23-27, 48-56. 
71 United States' first written submission, para. 47. 
72 Ibid. para. 78. 
73 United States' comments on China's response to Panel question No. 14. 
74 Ibid. 
75 United States' opening statement at the meeting of the Panel, para. 30. 
76 United States' comments on China's response to Panel question No. 40. 
77 United States' opening statement at the meeting of the Panel, paras. 25-35. 
78 China's first written submission, para. 15. 
79 Ibid. para. 25. 
80 Ibid. para. 19. 
81 China's response to Panel question No.1, para. 9. WT/DS414/RW 
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  subject imports, which were taking market share from the domestic industry, which forced the 
domestic industry to respond to that loss by restraining or reducing prices.82 In addition, China 
also submits that MOFCOM had specific evidence that the domestic industry lowered its prices in reaction to the loss of market share during 2008.
83  
7.34.  China argues that MOFCOM's factual findings regarding (a) likeness and cumulation, 
(b) statements by US exporter Allegheny Ludlum that its exports were highly substitutable with 
the domestic like product, (c) parallel price trends, (d) consumer overlap, (e) market share 
replacement and (f) pricing policy documents, all su pported its conclusion that subject imports and 
the domestic like product competed on price.84  
7.35.  Regarding the United States' arguments concerning evidence furnished by US exporter 
AK Steel, China argues that first, while AK Steel submitted a questionnaire response during the 
original proceeding, it did not make any comments on the factual disclosure or the preliminary 
determination in the original investigation regarding the non-substitutability of certain product categories exported by it with the domestic like product or make any comments on this issue 
during the Redetermination proceedings.
85 Second, AK Steel's exports of high-end GOES 
accounted for only about ten per cent of total subject country exports to China.86 Therefore, 
according to China, the United States' argument regarding MOFCOM's failure to consider AK Steel's 
submission would have no bearing on MOFCOM's review of the effect of subject imports as a 
whole.87 
7.36.  Further, China asserts that while it may be true that test manufacturing of 500 kW 
transformers employing domestically-produced mate rials was not expected until the end of 2009, 
i.e. subsequent to the period of investigation, it did not necessarily follow that the domestic 
industry did not produce GOES capable of being used in 500 Kw transformers earlier.88 
7.3.4  Main arguments of the third parties 
7.37.  The European Union contends that an in crease in the volume of subject imports and a 
decline in the domestic industry's market shar e, taken together with the existence of price 
competition between subject imports and the domestic like product, will generally indicate that 
subject imports suppress or depress domestic like product prices.89 However, the European Union 
adds that while in principle, it may be possibl e to establish price competition between subject 
imports and the domestic like product without co mparing the prices of subject imports and the 
domestic like product, it is unclear whether in practice, it is possible to do so.90 Further, the 
European Union submits that by disregarding evid ence that may call into question the explanatory 
force of subject imports for price effects, an investigating authority acts contrary to its obligations under Articles 3.1 and 3.2 of the Anti-Dumping  Agreement and Articles 15.1 and 15.2 of the 
SCM Agreement.
91 
7.38.  Japan submits that an increase in the volume of subject imports and a decline in the 
domestic industry's market share, coupled with the existence of price competition, will not be 
sufficient to demonstrate price depression or pric e suppression within the meaning of Articles 3.1 
and 3.2 of the Anti-Dumping Agreement.92 It contends that if increases in import volume and 
decreases in domestic industry market share were sufficient to find price effects, the price effects 
analysis would be rendered redundant.93 In Japan's view, an increase in the volume of subject 
imports or parallel pricing between subject imports and the domestic like product only establishes 
                                               
82 China's response to Panel question No.1, para. 9. 
83 Ibid. 
84 China's opening statement at the meeting of the Panel, p. 5. 
85 China's comments on the United States' response to Panel question No. 40. 
86 Ibid. 
87 Ibid. 
88 Ibid. 
89 European Union's thir d-party response to Pa nel question No. 3. 
90 European Union's thir d-party response to Pa nel question No. 1. 
91 Ibid. 
92 Japan's third-party response  to Panel question No. 3. 
93 Ibid. WT/DS414/RW 
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  the potential for subject imports to suppress or depress domestic like product prices, and not 
actual price suppression or depression by subject imports.94 
7.39.  Japan finds MOFCOM's reliance on (a) the likeness analysis, (b) parallel pricing between 
subject imports and the domestic like product, (c) overlap in consumers between subject country 
exporters and domestic industry and (d) pricing poli cies of subject countries producers to establish 
price competition between subject imports and the domestic like product to be flawed.95 Japan 
submits that while investigating authorities may assess a competitive relationship for the purpose 
of a likeness enquiry, such inquiry is different from the scope, purpose and depth of consideration 
of a competitive relationship necessary in the context of a price effects analysis.96 With respect to 
parallel pricing, Japan argues that parallel movement in prices of subject imports and the domestic like product is not evidence of a competitive relationship between subject imports and the 
domestic like product, and that the existence of parallel pricing between subject imports and the 
domestic like product does not necessarily mean that  subject import prices are having an effect on 
domestic like product prices.
97 Further, Japan questions MOFCOM's reliance on consumer overlap, 
arguing that when subject imports and the domestic like product are concentrated at different 
ends of the like product spectrum, the fact that the same consumer may be procuring from subject country exporters and the domestic industry does not mean that price competition exists between 
subject imports and the domestic like product.
98 Finally, with respect to pricing policies of subject 
country exporters, Japan states that the mere consideration of prices of other producers while setting prices does not by itself establish the existence of a competitive relationship.
99  
7.3.5  Evaluation by the Panel 
7.40.  The principal issue before us is whether MOFCOM's conclusions regarding the price 
suppressing effect of subject imports in 2008 and the price suppressing and depressing effect of 
subject imports in Q1 2009 were based on an ob jective examination of positive evidence, in 
accordance with Articles 3.1 and 3.2 of the Anti -Dumping Agreement and Articles 15.1 and 15.2 of 
the SCM Agreement. In other words, we must determine whether the conclusions reached by MOFCOM, as explained in the Redetermination, are such as could be reached by an objective and 
impartial decision-maker on the basis of the information and arguments that were before 
MOFCOM. 
7.41.  Regarding price suppression and depression, Articles 3.2 and 15.2 require investigating 
authorities to consider whether the effect of subject imports is to "depress prices to a significant 
degree or prevent price increases, which otherwis e would have occurred, to a significant degree". 
The Appellate Body has stated that this requires investigating authorities to consider whether certain price effects are the "consequence" of subject imports.
100 We agree. But Articles 3.2 
and 15.2 do not prescribe any particular meth odology for that consideration. Therefore, 
investigating authorities retain some degree of discretion in adopting a methodology they deem fit for this purpose. This discretion, however, is not without limit. It is qualified by the overarching 
obligation set out in Articles 3.1 and 15.1 that investigating authorities shall base their 
determinations on an objective examination of positive evidence of, inter alia , the effect of subject 
imports on the market prices of domestic like products.  
7.42.  In China – GOES , the Appellate Body stated that the objective examination of positive 
evidence, in the context of price suppression or depression, requires that when an investigating 
authority "is faced with elements other than subj ect imports that may explain the significant price 
depression or suppression of domestic prices, it must consider relevant evidence pertaining to such 
elements for purposes of understanding whether subject imports indeed have a depressive or 
suppressive effect on domestic prices".
101 The Appellate Body found support for this conclusion in 
Articles 3.2 and 15.2, which obligate investigating authorities to consider whether subject imports 
prevented price increases "which otherwise would have occurred".102 We agree with the Appellate 
                                               
94 Japan's third-party submission, para. 9. 
95 Japan's third-party response  to Panel question No. 1. 
96 Ibid. 
97 Ibid. 
98 Ibid. 
99 Ibid. 
100 Appellate Body Report, China – GOES , para. 136. 
101 Ibid. para. 152. 
102 Ibid. WT/DS414/RW 
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- 27 - 
 
  Body that investigating authorities may not disregard evidence which raise questions as to 
whether it is subject imports or some other element or elements that are suppressing or depressing domestic like product prices.  
7.43.  In this case, the United States argues that  MOFCOM failed to compare the prices of subject 
imports and the domestic like product, despite evid ence in the record indicating that there was a 
substantial divergence in the prices of subject imports and the domestic like product, and that in Q1 2009, subject imports were priced higher than the domestic like product. The United States 
argues that this evidence raised questions as to  whether subject imports in fact had a suppressive 
or depressive effect on the domestic like product prices which MOFCOM, by not comparing the subject import and domestic like product prices, failed to consider. The United States contends that MOFCOM failed to explain how subject import s had the effect of suppressing or depressing 
domestic like product prices when subject import prices were higher in Q1 2009 than domestic like 
product prices. China argues that Articles 3.2 and 15.2 do not require investigating authorities to compare the prices of subject imports and the domestic like product, relying, in particular, on the 
Appellate Body's statement that, in light of the te xt of Articles 3.2 and 15.2, price suppression or 
depression may stem from "the price and/or volume of such imports".
103 China contends that 
increases in the volume of subject imports may have the effect of suppressing or depressing 
domestic prices independently of any effect of th e prices of those imports, and that therefore no 
consideration of their prices in comparison to domestic like product prices is necessary in making such a determination.  
7.44.  In our view, the issue in the present case is not whether price comparisons are mandated 
under Articles 3.2 and 15.2, whether increased volumes of subject imports may have a price 
suppressive or depressive effect independent of any consideration of their relative prices, or 
whether higher priced imports may have a suppressive or depressive effect on domestic like 
product prices. Instead, the issue is whether, with respect to the findings of price suppression and 
depression, MOFCOM's Redetermination in this case, on its own merits, was based on an objective examination of positive evidence and provides reasoned explanations for those findings, in light of 
the evidence and arguments before it. Therefore, we do not consider it necessary to determine 
whether price comparisons are or are not required by Articles 3.1 and 3.2 of the Anti-Dumping Agreement or Articles 15.1 and 15. 2 of the SCM Agreement as a general matter of 
law. Rather, we will consider, as part of our overall review of MOFCOM's conclusions on price 
effects, whether MOFCOM's failure to make price comparisons in this particular case, in light of the 
evidence and arguments before it, meant that it failed to make reasoned determinations regarding price effects on the basis of an objective examination of positive evidence. 
7.45.  MOFCOM concluded that the increases in the volume of subject imports and consequential 
gains in their market share, at the expense of the domestic like product sales, had the effect of suppressing and depressing domestic like product prices. China asserts that its conclusions were 
supported by factual findings demonstrating that the subject imports and the domestic like product 
competed on the basis of price. Therefore, we will commence our analysis by considering MOFCOM's conclusions on the effect of the increa sed volume of subject imports and consequential 
increase in their market share in 2008 on the pr ices of the domestic like product in 2008 and 
Q1 2009. Second, we will consider MOFCOM's findings concerning price competition between 
subject imports and the domestic like product. In th at context, we will also consider whether, as 
argued by the United States, MOFCOM failed to properly take into account specific assertions by 
US exporter AK Steel that certain product categories it exported could not be commercially 
supplied by the Chinese domestic industry. Finally,  we will assess whether, as argued by China, 
these findings, viewed as a whole, are sufficient to sustain MOFCOM's conclusions with respect to 
the price suppressing and depressing effects of subject imports. 
7.3.5.1  The effect of the increase in the vo lume and market share of subject imports on 
domestic like product prices  
7.46.  MOFCOM found that the volume of subj ect imports increased in 2008 and the domestic 
industry consequently lost 5.65 percentage poin ts of market share in 2008, predominantly to 
subject imports, which gained 5.56 percentage points of market share in the same period. 
MOFCOM concluded that the domestic industry had no option "but to compete with the subject 
                                               
103 Appellate Body Report, China – GOES , para. 138. WT/DS414/RW 
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- 28 - 
 
  merchandise on pricing".104 This precluded price increases in 2008, despite rising costs, resulting 
in a 7% decline in the domestic industry's price-cost differential.105 On this basis, MOFCOM 
concluded that subject imports suppressed domestic like product prices in 2008. 
7.47.  Further, MOFCOM found that as a result of the increase in the volume of subject imports 
in 2008, and a decline of 1.25% in subject import prices in Q1 2009 as compared to Q1 2008, the 
domestic industry reduced its prices by 30.25% in Q1 2009 as compared to Q1 2008 so as to avoid further loss of market share, resulting in price depression in Q1 2009.
106 MOFCOM also found 
that, as a result of the decline in the domestic like product prices, the price-cost differential of the 
domestic industry declined by 75% in Q1 2009, as compared to Q1 2008, and thus found that subject imports also suppressed prices in Q1 2009.
107  
7.48.  In this regard, we note China's argument that although market share increases of subject 
imports alone do not necessarily explain price effects in all cases, in this particular case they 
did.108 China focuses on the close correspondence between the domestic industry's loss of market 
share and gains in market share by subject import s. Further, China contends that the "extent and 
nature of the other evidence in this case" was sufficient to support the inference that subject 
import had adverse price effects and also that MOFCOM had "specific evidence" that the domestic industry lowered its prices in reaction  to the loss of market share during 2008.
109  
7.49.  China has not identified any "specific evidence" before MOFCOM that indicates that the 
domestic industry lowered its prices in reaction to the loss of market share during 2008. Nor has China identified the "other evidence in this case " whose "extent and nature" allegedly supports the 
inference that subject imports suppressed and depressed domestic prices. To the extent that 
China's reference to such evidence is actually a reference to the various factors relied on by 
MOFCOM in its conclusions on price competition, we discuss these separately below.  
7.50.  Before examining MOFCOM's conclusions, we recall that Articles 3.2 and 15.2 require 
investigating authorities to consider two lines of enquiry. With regard to the volume of dumped or 
subsidized imports, investigating authorities are required to consider whether there has been a significant increase in dumped or subsidized imports, in absolute terms, or relative to production 
or consumption in the importing Member. With regard to the effect of the dumped imports on 
prices, investigating authorities are required to consider "whether there has been a significant price undercutting by the dumped imports as comp ared with the price of a like product of the 
importing Member, or whether the effect of such imports is otherwise to depress prices to a 
significant degree or prevent price increases, which otherwise would have occurred, to a significant 
degree". In our view, it is clear that these two lin es of enquiry are separate, and that increases in 
subject import volume and/or market share may, or may not, have consequences for domestic 
prices. In order to decide which the case in any given investigation is, the investigating authority 
must specifically consider the question of price e ffects, guided by the requirements of Articles 3.2 
and 15.2. It is clear to us that it cannot simply  be assumed that an increase in subject import 
volume and market share will have a price suppressing or depressing effect on domestic prices. If 
investigating authorities could simply assume that an increase in subject imports' volume and market share suppresses and/or depresses domestic like product prices, without specifically explaining whether the effect of such dumped or subsidized imports was to suppress or depress 
prices, the second prong of Articles 3.2 and 15.2 would be rendered redundant.  
7.51.  Therefore, in our view an investigating authority may conclude that increases in the volume 
of subject imports and consequential market share gains have a price suppressing and depressing 
effect on the domestic like product only if it establishes a linkage between the subject import's 
increased volume and market share on the one hand and the price suppression or depression 
observed on the other. Furthermore, where an authority is faced with elements other than subject 
imports that may explain the price depression or suppression, it must consider the evidence 
                                               
104 Redetermination, (Exhibit US-1), p. 26; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 27. 
105 Ibid. 
106 Redetermination, (Exhibit US-1), p. 24; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 25. 
107 Redetermination, (Exhibit US-1), p. 26; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 27. 
108 China's response to Panel question No. 1, para. 9. 
109 Ibid. WT/DS414/RW 
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  relevant to such elements for purposes of understanding whether subject imports indeed have a 
depressive or suppressive effect on domestic prices.110 By taking into account such elements, an 
investigating authority ensures that its consideration of significant price depression and suppression under Articles 3.2 and 15.2 is properly based on positive evidence and involves an 
objective examination, as required by Articles 3.1 and 15.1.
111 With this understanding in mind, 
we turn to the specific facts in this case.  
7.3.5.1.1  Price Suppression in 2008 
7.52.  MOFCOM concluded that subject imports suppressed domestic like product prices in 2008 
because the volume of subject imports increased in 2008 and the domestic industry lost market 
share as a consequence, predominantly to subject imports, which precluded price increases by the domestic industry despite rising costs. MOFCOM's analysis and determination raise a number of 
concerns.  
7.53.  First, MOFCOM assumed that if the do mestic industry was losing market share, 
predominantly to subject imports, any inability to raise domestic prices must be a consequence of 
that loss in market share. We see no reference in MOFCOM's Redetermination to any evidence 
which could have led MOFCOM to the conclusion that the domestic industry's inability to increase prices and cover increased costs was actually the result of the loss in the domestic industry's 
market share to subject imports. Nor is there an y explanation of how MOFCOM linked lost market 
share, which may well translate into lost revenues, to the industry's inability to increase prices to cover costs. MOFCOM's assumptions are particularly problematic in light of its failure to engage with or consider relevant evidence on the record, which could have affected MOFCOM's conclusion 
that the close correspondence between the domestic industry's loss of 5.65 percentage points of 
market share and the subject imports' gain of 5. 56 percentage points of market share showed the 
suppressive effect of increased imports on domestic industry prices.  
7.54.  For instance, while MOFCOM concluded that price suppression was an effect of the domestic 
industry's loss of significant market share almost  entirely to the subject imports, as we discuss 
below in considering MOFCOM's causation analysis, it failed to consider the impact of non-subject 
imports on domestic like product prices, even though the volume of such imports was greater than 
that of subject imports. Moreover, as MOFCOM it self observed, the prices of non-subject import 
prices were "close to" the price of subject imports in 2008.
112 Since subject imports, non-subject 
imports and the domestic like product all competed in the Chinese market, it is unclear how 
MOFCOM reached the conclusion that domestic indust ry prices were precluded from increasing as a 
result of the increased volume of subject imports,  but that the significant volume of non-subject 
imports in the Chinese market, at prices similar to those of subject imports, had no such effect. 
Similarly, it is not clear to us how MOFCOM concluded that relative changes in market share 
between the domestic industry and subject import s had the effect of suppressing and depressing 
domestic prices, but relative changes in the much greater volume of non-subject imports did not.  
7.55.  China argues that non-subject imports gained only 0.09 percentage points of the 
5.65 percentage points of market share lost by th e domestic industry in 2008, given that subject 
imports gained 5.56 percentage points. Therefore, China contends that it was the subject imports' 
volume and market share increase that had the effect of suppressing and depressing domestic 
prices.113 In response to questions from the Panel, China provided the following information 
concerning quarterly shifts in market share in  2008 and Q1 2009 to the Panel, which was not set 
out in MOFCOM's Redetermination.114 
                                               
110 Appellate Body Report, China – GOES , para. 152.  
111 Ibid. 
112 See Redetermination, (Exhibit US-1), p. 37; and Redetermination – China's translation, 
(Exhibit CHN-1), p. 37; GOES: Imports into China (China  Customs import data), (Exhibit US-12) (this exhibit 
contains no page numbers). 
113 China's first written submission, para. 119. 
114 China's response to Panel question No. 14, para. 52. WT/DS414/RW 
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  Quarterly shifts in market share 
 
 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q1 2009 
compared to 
Q1 2008 
Domestic Industry …  -1.85% -5.00%  0.39%  7.50%  1.04% 
Subject imports … 10.28%  4.14% -4.69% -8.75%  1.17% 
Non-subject imports  …  -8.44%  0.86%  4.30%  1.08% -2.21% 
Source: China's response to Panel question No. 14. 
7.56.  While, in light of the standard of review , we draw no conclusions on the basis of this 
quarterly data, we observe that it undermines to a degree MOFCOM's conclusion that the market share lost by the domestic industry in 2008 was taken up almost exclusively by subject imports. 
For instance, we note that China submits, relying on this quarterly data, that in Q4 2008, "subject 
imports remained very high", "the domestic industry began to react" to increases in volumes of subject imports, and that the domestic AUV fell in Q4 2008, in comparison to Q3 2008.
115 Further, 
China explains that it is only in Q1 2009, with the cumulative effect of price decreases in Q4 2008 
and Q1 2009, that the domestic industry began to regain market share that it had lost in 2008.116  
7.57.  Yet, the quarterly data show that in Q4 2008, non-subject imports gained 4.30% market 
share, in comparison to Q3 2008, whereas subj ect imports lost 4.69% of market share, in 
comparison to Q3 2008. We observe that MOFCOM's  conclusion that in 2008 the domestic industry 
lost market share predominantly to subject imports does not adequately reflect the market dynamics prevalent in Q4 2008, and thereby understates the relevance or possible effect of 
non-subject imports on the domestic like product pr ices in 2008. This is particularly difficult to 
understand because China's submissions indicate that the price reactions from the domestic industry started in Q4 2008 and continued in Q1 2009, both of which are quarterly periods when 
non-subject imports gained and the subject imports lost market share.
117 Therefore, we observe 
that far from offering relevant context for MOFCOM's conclusion regarding linkages between increases in subject import volume and adverse price effects suffered by the domestic industry, 
the quarterly data casts further doubt on MOFCOM's conclusions.  
7.58.  Second, in our view, a reasonable and unbiased investigating authority could not have 
concluded that the domestic industry reacted to increased volumes of subject imports by 
competing on price without considering the relative prices of subject imports and the domestic like 
product. We recall that there was information before MOFCOM on the prices of the subject imports, 
non-subject imports, and the domestic like product. While we draw no conclusions as to the probative value of that information, we do question MOFCOM's failure to consider it at all in the 
Redetermination. Such a consideration is, in our view, important to understand the relationship 
between subject import and domestic like product prices. For example, if there is a significant 
variation between the price levels of subject imports and the domestic like product, it may be questioned whether domestic industry prices we re, in fact, precluded from increasing by the 
increases in the volume of subject imports in the market, or whether other factors were 
responsible for such price suppression. It is undisputed that MOFCOM did not make price comparisons.
118 In our view, MOFCOM could not have reached a reasoned and adequate conclusion 
that the domestic industry's prices were suppre ssed by the volume of subject imports, having 
failed to consider the relative prices of subjec t imports and the domestic like product at all. 
7.3.5.1.2  Price suppression and depression in Q1 2009 
7.59.  With respect to the price suppressing and de pressing effect of subject imports in Q1 2009, 
MOFCOM concluded that (a) the "large increase " in the volume of subject imports since 2008 and 
                                               
115 China's response to Panel question No. 14, paras. 55-56. 
115 Ibid. para. 55. 
116 Ibid. para. 56. 
117 Ibid. paras. 55-56. 
118 See, e.g. China's response to Panel question No. 7, para. 29. WT/DS414/RW 
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  (b) the "sharp decrease" in the price of those imports in the first quarter of 2009, together 
depressed and suppressed the price of the Chinese domestic like product in Q1 2009.119  
7.60.  In our view, when an investigating authority concludes that the increased volume and 
decreased prices of subject imports, taken together, affects domestic prices, it is not for a panel to 
independently seek to determine the price suppressi ve or depressive effect of either the volumes 
or prices of subject imports alone. Absent some indication that the investigating authority itself considered the effect on domestic prices of th e volumes and prices independent of each other, 
such an inquiry would require us to undertake a de novo  analysis of the facts, which we are not 
permitted to do.
120 Therefore, we asked China to clarify whether MOFCOM found that the domestic 
industry's loss of market share to subject impo rts in 2008 and the 1.25% decline in subject import 
prices in Q1 2009, taken together, forced the domestic industry to lower prices by 30.25% in the 
same period.  
7.61.  China clarified, referring to other parts of MOFCOM's Redetermination, that while MOFCOM 
noted both the increased volume of subject imports and consequential gains in market share and 
the decrease in import prices, it placed much mo re emphasis on the loss of domestic market share 
and was more concerned with the decline in subject import prices in the face of rising domestic costs than it was with the extent of the decline in subject import prices.
121 The following statement 
reflects this: 
In the first quarter of 2009, drawing upon the lesson of losing market share in 2008, 
the domestic industry was forced to cut price to avoid further losing market share. Given that sales price of the domestic like product fell by 30.25% compared to the 
previous year, the domestic industry won back part of the market share that was lost 
in 2008, but still failed to recover to the market share level of 2007 when the subject 
merchandise had not yet been imported in large quantities.
122 
7.62.  This statement refers to the effect of the increased volume of subject imports and 
consequential loss in domestic industry's market share alone on the domestic like product prices, suggesting that MOFCOM did consider the effect of  the volume of subject imports independent of 
the effect of the price decline.
123 Therefore, we now turn to consider whether MOFCOM's conclusion 
regarding the linkage between the increased volume of subject imports in 2008 and price effects in 
Q1 2009 was based on an objective examination of positive evidence.  
7.63.  We have two specific concerns regarding the linkage that MOFCOM draws between increases 
in subject import volume and price effects in Q1 2009. First, MOFCOM found that the domestic 
industry was forced to lower prices to avoid further loss of market share.124 However, MOFCOM 
made no attempt to compare the prices of subj ect imports and the domestic like product. If 
subject imports were priced higher than the domestic like product, it is not clear that further price 
reductions by the domestic industry would enable it to limit further market share losses, which occurred even though domestic prices were lower than subject import prices. We note in this 
context that the US government specifically argued that subject imports were priced higher than 
the domestic like product in Q1 2009 and MOFCOM did not find this assertion of fact to be incorrect.
125 In our view, MOFCOM could not have reached a reasoned and adequate conclusion 
regarding the linkage between increases in subject import volume and price effects suffered by the 
domestic industry, without examining the price levels of subject imports and the domestic like 
product.  
                                               
119 Redetermination, (Exhibit US-1), pp. 28, 41;  and Redetermination – China's translation, 
(Exhibit CHN-1), pp. 28, 42. 
120 See Appellate Body Report, China – GOES , paras. 216, 220. 
121 China's response to Panel question No. 27, para. 93. 
122 Redetermination, (Exhibit US-1), p. 49; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 49. 
123 In this regard, we find no similar independent refe rences to the depressive or  suppressive effect of a 
1.25% decline or sharp decrea se on domestic like product prices, nor does China argue that MOFCOM's finding 
could be sustained on the basis of a sharp decrease in su bject import prices in Q1 2009. Therefore, we do not 
consider this issue further. 
124 Redetermination, (Exhibit US-1), p. 26; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 27. 
125 Redetermination, (Exhibit US-1), p. 41; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 42. WT/DS414/RW 
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  7.64.  We recall that, in the original proceeding, the Appellate Body found that the "fact that there 
was a substantial divergence in pricing levels over that period [Q1 2009] could suggest that the two products [subject imports and the domestic like product] were not in competition with each other or that there were other factors at work".
126 In the Redetermination, instead of considering 
whether this substantial divergence in pricing levels (which China does not deny existed) brought 
into question its determination, MOFCOM simply chose not to make price comparisons or take the price levels into consideration at all.
127 In our view, in situations where a panel or the Appellate 
Body highlights certain concerns, based on the underlying evidence, regarding the consistency of a 
measure with the Anti-Dumping Agreement or SCM Agreement, it is on its face problematic for an investigating authority to simply decline to engage with the evidence that was the basis of the decision it is seeking to implement by making  a new determination based on the same record 
evidence.  
7.65.  In this case, given the nature and scope of the findings in the original proceeding, we would 
have expected MOFCOM, in making a new determination based on the same record evidence, to 
provide some analysis or explanation as to why the evidence regarding divergences in price levels 
between subject imports and the domestic like product did not affect its conclusions, or why it found it unnecessary to consider such evidence at all. However, MOFCOM chose not to address 
that question, and ignored the evidence altogether , relying on the Appellate Body's statement that 
price comparisons are not required as a matter of law.
128 Even if price comparisons are not 
required in order to make a determination regarding the price effects of imports as a matter of law, a failure to at least consider evidence of pr ice divergences where such evidence is before the 
investigating authority is difficult to understand. An analytical approach based on disregarding 
evidence which might lead to a different conclusion casts doubt on the reasonableness and objectivity of the investigating authority's examination of the evidence and its conclusions. This is 
particularly so in a case like the present one, wh en there were specific arguments advanced by the 
United States government that subject imports we re priced higher than the domestic like product 
in Q1 2009, both the panel and the Appellate Body  questioned the adequacy of MOFCOM's analysis 
of the pricing evidence in the original determination, the record evidence underlying the 
Redetermination is unchanged from the original proceeding, and the same ultimate conclusions were reached by MOFCOM. 
7.66.  Second, MOFCOM's conclusions seem even more questionable given that, as argued by the 
United States, subject imports declined from Q3 2008 to Q4 2008 and from Q4 2008 to Q1 2009, 
undermining the plausibility of a conclusion that the price suppression and depression in Q1 2009 were the effect of increases in subject import volumes.
129  
7.67.  China questions the United States' reliance on quarterly import statistics from China 
Customs, on the ground that quarterly data may have anomalies.130 China argues that such 
anomalies may arise because it takes time for subject imports to arrive in China and be counted, 
while decisions about how much to import and how much to charge for those shipments are based 
on information from an earlier time.131 However, China clarified that its arguments "relate more to 
                                               
126 Appellate Body Report, China – GOES , para. 226. 
127 See, e.g. Redetermination, (Exhibit US-1), p. 41; and Redetermination – China's translation, 
(Exhibit CHN-1), p. 42. 
128 In this regard, China argues that it did not co nsider the price differences between subject imports 
and the domestic like product because, in the original pr oceeding, the Appellate Body found deficiencies in the 
price data that was used for price comparisons. In the absence of new price data in the redetermination 
proceeding, MOFCOM could not have made price comparisons without using the same deficient price data. China's comments on the interim report, para. 6. In it s Redetermination, MOFCOM decided not to  collect new 
evidence and based its redetermination on the evidence from the original investigation and determination. While China may, in the first instance, seek to bring it s measures into conformity with its WTO obligations in 
whatever manner China deems appropriate, any measure taken to comply with its WTO obligations, in this case, MOFCOM's Redetermination, must itself be consistent with China's WTO obligations. In this case, for the reasons set out in this Report, we have found that MOFC OM's failure to make price comparisons, as well as 
other errors, resulted in findings and explanations  which were not "reasoned and adequate" to support 
MOFCOM's determination, and therefore concluded, inter alia , that the Redetermination is inconsistent with 
Articles 3.1 and 3.2 of the Anti-Dumping Agreement an d Articles 15.1 and 15.2 of the SCM Agreement. We do 
not consider that China's explanation as to why MO FCOM did not make price co mparisons between subject 
imports and the domestic like product justifies the errors  that we found in MOFCOM 's price effects analysis. 
129 United States' first written submission, para. 78. 
130 China's first written submission, para. 62; and re sponse to Panel question No. 35, paras. 108-110. 
131 China's response to Panel question No. 35, para. 108. WT/DS414/RW 
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  the price than the volume" and that given the clos er proximity to the market, domestic producers 
could react with a new price while the subject imports would react on a delayed basis.132 Since the 
United States' argument concerns the effect of th e declining volume of subject imports rather than 
their price, we do not consider that China's argument undermines the argument raised by the 
United States, that is, whether MOFCOM's redetermination could be considered reasonable since 
MOFCOM focused on shifts in market share in 2008 as a whole, while ignoring evidence that the 
volume of subject imports declined from Q3 2008 onwards.133 
7.68.  MOFCOM's Redetermination does not suggest  that this issue was considered by MOFCOM, 
nor has China argued to the contrary. In our view, a reasonable and unbiased investigating authority could not conclude that an increase in the volume of subject imports and a consequential market share gain of 5.56 percentage points in 2008 resulted in domestic price declines in 
Q1 2009 to avoid further loss of market share, wi thout taking into account the fact that subject 
imports actually declined from Q3 2008 to Q4 2008 and again from Q4 2008 to Q1 2009. In our view, this evidence is clearly relevant to asse ssing the linkages, if any, between market share 
shifts in 2008 and price declines in Q1 2009. 
7.69.  To be clear, we do not mean to suggest that it is impossible that the Chinese domestic 
industry experienced price depression in Q1 2009 in the face of a declining volume of subject 
imports from Q3 2008 to Q1 2009. However, we do co nsider that, faced with evidence of declining 
import volumes toward the end of the period, which could potentially affect any findings regarding the price suppressing and depressing effect of  subject imports, MOFCOM should have, at a 
minimum, considered and addressed this evidence. MOFCOM failed to do so. 
7.70.  Our review of MOFCOM's determination with respect to price suppression and price 
depression in 2008 and Q1 2009 based on subject im port volumes and market share has revealed 
serious errors in MOFCOM's analysis of the underlying evidence, which in our view call into 
question whether MOFCOM's conclusions regarding price effects could have been reached by an 
investigating authority considering the evidence objectively, and are supported by reasoned explanations. Nonetheless, we now turn to an exam ination of whether this evidence, considered in 
conjunction with evidence of price competition be tween the subject imports and the domestic like 
product is an adequate basis for MOFCOM's conclusions regarding the price suppressing and depressing effect of subject imports on domestic like product prices. 
7.3.5.2  MOFCOM's finding regarding price competition between subject imports and the 
domestic like product 
7.71.  Turning to MOFCOM's findings on price competition, we will first examine MOFCOM's 
consideration of evidence furnished by the US ex porter AK Steel that certain product categories 
manufactured by it could not be commercially suppl ied by the domestic industry. In our view, the 
inability of the domestic industry to meet the needs of certain specific end-uses may well affect a finding of price competition between subject imports and the domestic like product. Second, we 
will examine whether, as argued by China, MOFCOM's seven factual findings concerning price 
competition, taken as a whole, supported MOFCOM's conclusions regarding price competition between subject imports and the domestic like product.  Finally, we will consider whether, and if so 
how, MOFCOM's finding of price competition, taken together with its findings regarding the volume 
and market share of subject imports, reasonably explain and support its conclusions regarding the 
price effects of those imports. 
7.3.5.2.1  AK Steel's evidence of non-subs titutability of certain product categories 
7.72.  The United States argues that MOFCOM fail ed to adequately consider evidence submitted by 
AK Steel that [***].
134 Further, AK Steel also contended that lower grade Chinese-produced GOES 
was not readily substitutable for imported GO ES and that any substitution would require 
downstream users to make significant manufacturing changes, with consequent adverse effects on 
the final product and on manufacturing costs.135 In particular, the United States emphasizes that 
                                               
132 China's response to Panel question No. 35, paras. 108-109. 
133 See Redetermination, (Exhibit US-1), p. 50; and Redetermination – China's translation, 
(Exhibit CHN-1), p. 50. 
134 United States' opening statement at the meeting of the Panel, para. 30. 
135 Ibid. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 34 - 
 
  MOFCOM failed to consider evidence submitted b y  A K  S t e e l  t h a t  G O E S  p r o d u c e d  b y  d o m e s t i c  
producers was not certified for use in large tran sformers, i.e. transformers of 500kW and above.136 
The United States asserts that AK Steel was a much more significant participant in the Chinese market than the other participating US export er, Allegheny Ludlum, and that by ignoring 
AK Steel's submissions, MOFCOM disregarded eviden ce relating to a significant proportion of the 
imports under investigation.
137 
7.73.  China responds first that, while AK Steel submitted a questionnaire response during the 
original proceeding containing the assertions relied on by the United States, it did not make any 
comments on MOFCOM's factual disclosure or preliminary determination in the original investigation with respect to the issue of non-substitutability of certain product categories or any comments on this issue during the Redetermination proceedings.
138 Second, China contends that 
AK Steel's exports of high-end GOES accounted for only about ten per cent of total subject country 
exports to China and for that reason, would not have had any material impact on MOFCOM's analysis of the cumulated effect of subject imports as a whole.
139 Further, China asserts that while 
it may have been true that the Government of China did not expect test manufacturing of 500 kW 
transformers employing domestically-produced GOES  until the end of 2009, i.e. subsequent to the 
period of investigation, it did not necessarily follow that the domestic industry did not produce 
GOES capable of being used in such transformers.140 Finally, China submits that since AK Steel did 
not distinguish the product categories exported by  it from those exported by Allegheny Ludlum, 
MOFCOM was well within its rights to forego any further consideration of AK Steel's contentions.141 
7.74.  China referred to the following excerpt from MOFCOM's Redetermination, which China 
contends responded to the submissions of AK Steel regarding the inability of the domestic industry 
to manufacture certain product types in commercia l quantities, without explicitly referring to 
AK Steel by name: 
The interested parties that submitted responses to the questionnaire for overseas 
producers and domestic importers at one po int argued that laser scribing, low iron 
loss and other high-end products can only be produced in the U.S., Japan and other 
countries. During the verification of the domestic producers, the Investigating 
Authority verified their production lines of laser scribing, collected evidence such as their product catalogues, product testing reports and sales invoices, which prove that the domestic industry indeed did produce and sell laser-scribing and low-iron-loss 
grain GOES product. The domestic industry also provided use evaluation reports from 
the downstream users, proving that domestic like product is of similar quality to the subject merchandise and that the two are competitive and substitutable.
142 
7.75.  There is a considerable degree of factual dispute between the parties as to whether 
AK Steel's submissions were considered by MOFCOM and whether AK Steel's submissions were accurate in light of MOFCOM's conclusions concer ning the substitutability of different product 
types. While we will not undertake a de novo  review of the information provided by AK Steel, we 
will examine carefully whether the "explanations given disclose how the investigating authority treated the facts and evidence in the record" and whether the "explanations provided demonstrate that the investigating authority took proper account of the complexities of the data before it, and 
that it explained why it rejected or discounted al ternative explanations and interpretations of the 
record evidence".
143  
7.76.  First, we do not accept that merely because AK Steel did not advance specific arguments on 
an issue beyond providing information in its questionnaire, MOFCOM was entitled to disregard the 
                                               
136 United States' response to Pa nel question No. 40, para. 22. 
137 United States' opening statement at the meeting of the Panel, paras. 30, 32. 
138 China's comments on the United States' response to Panel question No. 40. 
139 Ibid. 
140 Ibid. 
141 Ibid. 
142 Redetermination, (Exhibit US-1), p. 51; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 51. 
143 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 93. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 35 - 
 
  relevant facts submitted by AK Steel. [***]144 We understand China to be arguing that in order for 
MOFCOM to consider whether this was in fact true, AK Steel was required to make some additional submission specifically raising an argument base d upon the facts presented in its questionnaire 
response. We disagree. If interested parties make available relevant evidence to the investigating 
authority, within prescribed timelines, there is no obligation on those parties to, in addition, make 
further arguments based on that evidence in the form of separate written or oral submissions. On the other hand, investigating authorities are required, in order to ensure an objective examination 
of the evidence, to consider all the evidence presen ted, and not merely that which is the subject of 
elaborated arguments. 
7.77.  Further, MOFCOM based the Redetermination on "record evidence submitted by interested 
parties as well as record evidence collected by the investigating authority in the original 
investigation".
145 It is clear that AK Steel was not required to resubmit its questionnaire response 
again in the Redetermination proceeding, and th e same consideration we discussed above means 
it was not required to make additional arguments on the basis of the facts it submitted originally in 
the Redetermination proceeding. Therefore, as the questionnaire response continued to be part of 
the evidence on record before MOFCOM in th e Redetermination proceeding, MOFCOM remained 
obligated to consider the information in its analysis and conclusions or explain why it was not 
relevant or probative.  
7.78.  Second, we reject China's argument that, ab sent an attempt by AK Steel to distinguish its 
steel from that shipped by Allegheny Ludlum, or any arguments on the issue, MOFCOM was 
entitled to forego any further consideration of AK St eel's contentions. Indeed, we find it difficult to 
understand this argument, given that it is entirely possible that one exporter simply has no 
knowledge of the product mix of another expo rter, and therefore could not make such an 
argument. Moreover, even if the exporter did have  this information, we cannot accept the view 
that the failure of an interested party to make certain arguments justifies an investigating 
authority's failure to consider relevant evidence submitted to it. China has pointed to no provision in the Anti-Dumping Agreement or the SCM Agreemen t, which would allow this. To the contrary, it 
is clear to us that the obligation of an investigating authority is to consider all the evidence 
presented to it, evaluate and weigh it, and draw conclusions supported by reasoned explanations. 
We fail to see how an investigating authority can satisfy this standard if it refuses to consider seemingly relevant information without a sufficient explanation. 
7.79.  Third, looking at MOFCOM's statement concerning arguments regarding [***], we observe 
that while MOFCOM took note of the assertions by interested parties that laser scribing, low iron loss and other high-end products could only be produced in the US, Japan and other countries, it is 
unclear to us how this responds to the specific assertions of AK Steel.
146 For instance, AK Steel 
stated that "HiB grades" manufactured by Wuhan were not certified for use in large transformers of 500 kW and above, and that based on AK St eel's feedback from its customers, Chinese 
transformer manufacturers were refusing to use domestically-produced GOES for these 
applications.
147 It is not discernible from MOFCOM's analysis or explanations how or if it considered 
this specific assertion. In our view, the fact that the domestic industry was allegedly unable to satisfy a specific end-use need in the Chinese market, i.e. supply GOES for use in large 
transformers of 500 Kw or above, was a relevant fact which should have been considered and 
resolved by MOFCOM in concluding that the domestic product and subject imports competed on price. 
7.80.  Finally, China contends that AK Steel did not quantify its shipments of GOES destined for 
use in transformers of capacity 500 Kw and ab ove and therefore questions the United States' 
                                               
144 United States' response to Pane l question No. 40, paras. 10-13 (quoting AK Steel Corporation, 
Supplementary Industry Injury Investigation Questionnaire Response, (AK Steel Supplementary Questionnaire Response), (Exhibit US-18) (BCI)). 
145 Redetermination, (Exhibit US-1) (this part of th e Redetermination contains no page numbering); and 
Redetermination – China's translation, (Exhibit CHN-1), p. 1. 
146 Redetermination, (Exhibit US-1), p. 51; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 51. 
147 United States' response to Pane l question No. 40, paras. 13, 22 (quoting AK Steel Supplementary 
Questionnaire Response, (Exhibit US-18)  (BCI), p. 4). See also News article, China encourages domestic 
production of grain-oriented elec trical steel for large transformers , (Exhibit US-19). This Exhibit was presented 
as evidence in the original investigation before MOFCOM and cited in AK Steel's supplementary questionnaire response. See AK Steel Supplementary Questionna ire Response, (Exhibit US-18) (BCI), p. 4. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 36 - 
 
  reliance on AK Steel's information.148 Further, China argues that high-end GOES accounted for only 
about 10% of total subject imports and for that re ason, United States' argument was not material 
t o  M O F C O M ' s  a n a l y s i s  o f  t h e  e f f e c t  o f  s u b j e c t  i m p o r t s  a s  a  w h o l e .149 W e  r e j e c t  b o t h  o f  t h e s e  
arguments. The fact that the volume of imports of a grade not produced by the domestic industry 
may be relatively small as a percentage of total imports may well be relevant in assessing the 
question of price competitiveness, but it does not justify an investigating authority's refusal to undertake an analysis on the issue. Further, it is not for the Panel to make de novo  findings as to 
whether MOFCOM's failure to consider such evidence was inconsequential in light of the limited 
volume of exports of such product categories into China.
150 There is nothing in the 
Redetermination that suggests that MOFCOM itself took this view. 
7.81.  In sum, MOFCOM's Redetermination does not explain how MOFCOM actually considered the 
information submitted by AK Steel in the context of its conclusion that the subject imports 
competed with the domestic like product on the basis of price.  
7.3.5.2.2  Seven factors supporting MO FCOM's finding of price competition 
7.82.  China argues that, in making its determination of price effects, MOFCOM considered the 
domestic industry's loss of market share to incr eased volumes of subject imports in conjunction 
with other evidence demonstrating a competitive relationship based on price between subject 
imports and the domestic like product.151 We agree that price competition may be a relevant 
element in determining whether subject imports had an effect on domestic like product prices. In that context, an investigating authority must be able to explain the connection between a factual finding of price competition between the domestic like product and subject imports and its ultimate 
conclusions concerning the price effects of those imports.  
7.83.  We now turn to consider each of the se ven factors which China argues supported MOFCOM's 
finding of price competition. We note that China acknowledges that each of these factors, viewed 
in isolation, may be insufficient to support a finding regarding price competition or price effects.
152 
Thus, while we review each of the factors individually, our conclusions will take into account all of them as a whole. 
Like product and cumulation 
 
7.84.  In the Redetermination, MOFCOM summarized its analysis of likeness as follows: 
In summary, the GOES produced by China's domestic industry and the subject 
merchandise are not different in terms of physical character, and aspects such as 
production techniques and processes, product use, product substitutability, evaluations by consumers and producers, and sales channel are fundamentally similar  
and the price trends are overall consistent . Being similar and comparable, they are 
substitutable. Therefore, the GOES produc ed by China's domestic industry and the 
subject merchandise are like products.
153 (emphasis added) 
With respect to cumulation, MOFCOM stated: 
 
Based on investigation, comparing the subject merchandise and the subject merchandise and the Chinese domestic like products, the physical characteristics, 
production techniques and processes and end uses are fundamentally the same , the 
sales channel and sale price trends are fundamentally the same , they all arose in the 
                                               
148 China's comments on the United States' response to Panel question No. 40. 
149 See, e.g. China's comments on the United States' response to Panel question No. 40. 
150 In this regard, we do not share China's view that  because AK Steel's exports [***] constituted only 
ten per cent of total subject imports, it would not mate rially affect MOFCOM's analysis of price competition 
between subject imports and the domestic like product. In our view, the non-substitutability of even ten per cent of subject imports with the domestic like product may well be relevant in assessing the extent of price competition. In any event, investigating authorities may not summarily reject arguments regarding non-substitutability solely because they affect a relatively small segment of the domestic market. 
151 China's response to Panel question No. 5, para. 21. 
152 China's response to Panel question No. 4, para. 19. 
153 Redetermination, (Exhibit US-1), p. 12; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 13. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 37 - 
 
  Chinese market at fundamentally the same time , product quality is similar , they 
satisfy customer requirements, they are substitutable, a competitive relationship exists between them, and the competition conditions are fundamentally the same .
154 
(emphasis added)  
7.85.  The United States argues that MOFCOM's determinations of likeness and cumulation did not 
go beyond very general similarities or include any meaningful consideration of the nature of price competition or lack thereof.
155 China contends that it is difficult to conceive that subject imports 
and the domestic like product which were (a) "fundamentally the same", in terms of physical 
characteristics and terms of use, (b) travelled through the same channels, (c) were directly competitive with each other, (d) and were subs titutes of each other, were not competing on 
price.
156 China argues that the finding of substitutability, in particular, strongly supported the 
notion of price competition.157 
7.86.  We agree that products which have similar physical characteristics and uses and are directly 
competitive and substitutable with each other are likely to compete on price. However, MOFCOM's 
findings are qualified, as indicated by the text italicized in the quotations above. Thus, in our view, 
the extent of similarities between subject imports and the domestic like product is less than clear, and thus the conclusion of price competition is somewhat attenuated. For instance, MOFCOM finds 
that the end uses of the domestic like product and the subject imports were "fundamentally the 
same". However, the extent and nature of the diffe rences might well give insight as to whether the 
domestic product and subject imports are only broadly similar or close substitutes which could be used interchangeably for many, most, or all commercial purposes. In particular, we recall the 
assertions of AK Steel that certain GOES manufactured by the domestic industry was not certified 
for use in large transformers, and thus did not compete with the imported product.
158 MOFCOM's 
qualified conclusions give no indication as to whether or how it considered these assertions, which 
in our view would be relevant to a conclusion that the domestic like product competed with subject 
imports on the basis of price.  
Statement by US producer Allegheny Ludlum 
 
7.87.  MOFCOM also relied on US producer A llegheny Ludlum's statement that the subject 
merchandise it produced and exported to China wa s highly substitutable and competitive with the 
domestic like product and the like product from other countries in its finding of price competition 
between subject imports and the domestic like product.159 The United States asserts that MOFCOM 
could not have properly drawn conclusions regarding price competition based on Allegheny Ludlum's statement, particularly because MOFCOM fa iled to consider the submission of AK Steel, a 
bigger participant in the Chinese market, which argued that [***].
160 
7.88.  While MOFCOM was entitled to take into account Allegheny Ludlum's statement that its 
exports were highly substitutable and competitive with the domestic like product, we note that 
there is nothing in MOFCOM's determination su ggesting that the product types exported by 
Allegheny Ludlum were representative of subjec t imports from the United States, or subject 
countries, as a whole. We recall our concerns with MOFCOM's failure to fully consider the information submitted by AK Steel, and the fact that AK Steel's exports accounted for a larger 
share of US exports than did those of Allegheny Ludlum. Since MOFCOM was making a finding with 
respect to subject imports as a whole, it is not clear to us why MOFCOM would rely on Allegheny 
Ludlum's statement without thoroughly considerin g the submissions of AK Steel, whose exports to 
China were greater than those of Allegheny Ludlum, and would thus seem to have been more 
likely to be representative of US imports, even  if not of subject imports as a whole. In these 
circumstances, we consider that Allegheny Ludlum's statements give little support to MOFCOM's 
conclusion of price competition.  
                                               
154 Redetermination, (Exhibit US-1), p. 21; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 22. 
155 United States' second written submission, para. 31. 
156 China's second written submission, para. 34. 
157 Ibid. 
158 United States' response to Pa nel question No. 40, para. 9. 
159 China's opening statement at the meeting of the Panel, p. 5 (quoting Redetermination, 
(Exhibit US-1), p. 51; and Redetermination – China's translation, (Exhibit CHN-1), p. 51). 
160 United States' opening statement at the meeting of the Panel, paras. 29-30. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 38 - 
 
  Parallel price trends from 2006 to 2008 
 
7.89.  MOFCOM also relied on parallel trends in th e prices of imports and the domestic like product 
in finding price competition. China argues that the divergence in the price trends of subject 
imports and the domestic like product in Q1 2009 did not undermine MOFCOM's conclusions 
because MOFCOM adequately explained the reasons for that divergence.161 According to MOFCOM, 
the domestic industry reduced prices in Q1 2009 in  order to regain market share lost to subject 
imports in 2008.162 The United States contends that MOFCOM's reliance on parallel price trends to 
show price competition was misplaced, especially in light of the substantial divergence in the price trends of subject imports and the domestic like product in Q1 2009.
163 
7.90.  MOFCOM relied on the following data concerning the average unit values (AUV)164 of subject 
imports and domestic like product over the period of investigation165: 
Percentage changes in AUV of subject imports and domestic like product 
 2007 2008 Interim 2009 
Subject imports +2.9% +17.57%  -1.25% 
Domestic like product  +6.66% +14.53% -30.25% 
Source: United States' second written submission166 
On the basis of this data, MOFCOM concluded: 
 
The Investigating Authority based on the investigation determines that the conclusion that the pricing trends are fundamentally consistent was arrived at from the analysis of the import price of the subject merchandise during the period of the investigation 
and domestic price of the Chinese domestic like product. From 2006 through the 
first quarter of 2009, the two prices first increased and then decreased. The trends are fundamentally consistent.
167 
7.91.  In response to arguments by the US government and AK Steel that the 1.25% drop in 
subject import price in Q1 2009, compared to the drop of 30.25% in domestic like product prices, indicated a lack of correlation between the prices of subject imports and the domestic like product, 
MOFCOM noted as follows: 
The Investigating Authority finds that the analysis in the price effects section of the 
redetermination comprehensively analysed the situation in 2008 and the first quarter of 2009. After taking into full consideration the import volume of the subject 
merchandise, corresponding changes in the market share of the subject merchandise 
and domestic like product and the corresponding changes in average price, the Investigating Authority finds that the continual substantial increase in the import 
volume of the subject merchandise caused the domestic [industry] to face a dilemma: 
if the domestic industry maintained the proper price level, the domestic industry would lose its market share; if the domestic industry wanted to avoid losing market 
                                               
161 China's first written submission, para. 43. 
162 Redetermination, (Exhibit US-1), p. 49; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 49. 
163 United States' second written submission, paras. 34-35. 
164 Average unit values or AUVs, as noted in the original proceeding, represented the volume weighted 
average unit values for all transactions duri ng a given calendar ye ar. See Panel Report, China – GOES , 
footnote 497. China clarified that the AUV data on domestic prices was the same data on domestic prices available and discussed in the original determination. See China's response to Panel question No. 7, para. 25. We understand that MOFCOM used AUVs as proxies for actual prices of the domestic like product. 
165 See United States' first written submission, p. 19. The United States provided, in table form, the 
percentage changes in prices of subj ect imports and the domestic like product, as considered by MOFCOM, in 
the Redetermination. 
166 United States' second written submission, para. 33.  The figures are based on percentage changes in 
price trends that were disclosed by  MOFCOM in the Redetermination. 
167 Redetermination, (Exhibit US-1), pp. 39-40; and Redetermination – China's translation, 
(Exhibit CHN-1), p. 40. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 39 - 
 
  share, then it had to lower the price. Th e evidence that the Investigating Authority 
obtained fully support[s] this determination.168 
7.92.  We recall that in the original proceeding the panel and the Appellate Body had questioned 
MOFCOM's failure to explain why the different rate s of decrease in the prices of subject imports 
and domestic like product did not affect its parallel price trends analysis or its overall price effects 
analysis.169 China argues that MOFCOM did explain this  in the Redetermination and that MOFCOM's 
analysis addressed trends both over the 2006 to 2008 period, as well as the divergence in 
Q1 2009, referring to the following: 
The domestic industry had no choice in the first quarter of 2009 but to substantially 
lower the price to avoid further losing its market share. Based on a comprehensive rather than isolated analysis of the situation in 2008 and the first quarter in 2009, the 
abovementioned evidence fully support the decision of the Investigating Authority, 
namely that in light of the impact of the large volume of the subject merchandise starting in 2008, the domestic industry was facing a the [ sic] loss of market share and 
the decline in profitability; if the domestic industry hoped to maintain its market 
share, it had to reduce price and bear a further decrease in profitability.
170 
7.93.  We have already explained our concerns with MOFCOM's conclusions regarding the price 
suppressing and depressing effects of the increa sed volume of subject imports and consequential 
gains in market share. For the same reasons, we find MOFCOM's explanation of the divergence in 
the prices of subject imports and the domestic like product in Q1 2009 to be unpersuasive, and 
thus the finding of parallel price trends lends little if any support to the finding of price 
competition.171  
Customer overlap 
 
7.94.  In the Redetermination, MOFCOM found a degree of overlap between the users of subject 
imports and the domestic like product: 
Based on the comparison of the top ten clients by purchase volume provided by the 
domestic importers and domestic producer s, the overlap ratio of the downstream 
users of the subject merchandise and domestic like product is around 50%. The sales contracts for the subject merchandise and the price negotiation documents between the domestic industry and the downstream c lients that were provided by the domestic 
producers also prove that the subject merchandise and domestic like product are 
directly competitive and price is an important factor in the purchasing decisions of the downstream clients.
172 
7.95.  The United States argues that MOFCOM's finding on consumer overlap does not support 
MOFCOM's conclusions on price competition, because the same customers may be buying different types of GOES for different applications from different sources.
173 China emphasizes that 
MOFCOM's finding was part of its overall evaluation and that MOFCOM reasonably established that 
                                               
168 Redetermination, (Exhibit US-1), pp. 48-49; and Redetermination – China's translation, 
(Exhibit CHN-1), pp. 48-49. 
169 Appellate Body Report, China – GOES , footnote 350. 
170 Redetermination, (Exhibit US-1), pp. 49-50; and Redetermination – China's translation, 
(Exhibit CHN-1), p. 49. 
171 In this regard, we also note China's assertion that from Q4 2008 to Q1 2009, domestic AUVs fell by 
31.11% while subject import AUVs fell by only 18.32%. On the other hand, subject import AUVs were 1.25% lower in Q1 2009 than in Q1 2008, while domestic AU Vs were 30.25% lower. China emphasizes that the 
difference in the decline in AUVs of subject imports and the domestic like product was less from Q4 2008 to Q1 2009 than it was from Q1 2008 to Q1 2009. China argu es that this quarterly data regarding changes in 
AUVs of subject imports and the domestic like prod uct from Q4 2008 to Q1 2009 was before MOFCOM but not 
discussed in the Redetermination, and strongly supports the finding of parallel pricing. Since we can find no reference in MOFCOM's Redetermination to such quarterly data, or any consid eration thereof, we  decline to rely 
on China's arguments in this regard, as  there is no indication that MOFCOM itself took this into account in the 
Redetermination. See China's response to Panel question No. 10, para. 42. 
172 Redetermination, (Exhibit US-1), p. 51; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 51. 
173 United States' first written submission, para . 72; and second written submission, para. 43. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 40 - 
 
  subject imports and the domestic like product had (a) common customers, (b) sold the same 
products and (c) there was no attenuated competition due to specialty products.174 
7.96.  In our view, MOFCOM's analysis on customer overlap is at a level of generality which is 
insufficient to shed light on the issue as to whether there was price competition between subject 
imports and the domestic like product. In particular, it is not clear to us from MOFCOM's analysis 
how it reached a conclusion that the subject imports and domestic like product competed on the basis of price, simply because half of the customers in a sample provided to MOFCOM purchased 
both the subject imports and the domestic like product. MOFCOM's analysis offers no insight as to 
whether individual customers were sourcing the same GOES from both subject imports and the 
domestic industry for the same  uses. It may very well be, as suggested by the United States, that 
customers purchased subject imports and domestic product for use in different applications. Thus, 
we conclude that MOFCOM's finding of consumer overlap lends little support to its finding of price 
competition. 
Market share recapture 
 
7.97.  In the Redetermination, MOFCOM stated that the domestic industry was able to regain some market share in Q1 2009 by reducing its prices.
175 China argues that the domestic industry was 
able, in Q1 2009, to regain 5.15 of the 5.65 percen tage points of market share that it had lost 
over 2008.176 China acknowledges  that there is no specific reference to the extent of market share 
recapture in Q1 2009 in MOFCOM's Redetermination but contends that recapture of market share, pursuant to a significant decline in domestic like product prices, was indicative of price competition 
between subject imports and the domestic like product.
177 The United States argues that 
MOFCOM's Redetermination does not refer to a 5.15 percentage point gain in market share in Q1 2009, and therefore, this line of argument is entirely ex post facto  rationalizations.
178 
7.98.  As noted, China itself admits that there is no reference in MOFCOM's Redetermination to the 
extent of market share regained in Q1 2009.179 Indeed, there is nothing in the Redetermination 
that would suggest that the extent or quantum of market share recaptured by the domestic 
industry in Q1 2009 was even considered by MO FCOM in finding price competitiveness between 
subject imports and the domestic like product.180 We agree with the United States that this focus 
on the amount of market share re-captured in Q1 2009 is an ex post facto  argument, and we will 
not consider it, but will rather focus on MOFCOM's actual findings as set out in the 
Redetermination. 
7.99.  MOFCOM did find that the domestic industry was able to regain "some" of the market share 
that it lost in 2008, as a result of a reduction in its prices.181 The question therefore is whether this 
finding supports MOFCOM's conclusions on pric e competition between subject imports and the 
domestic like product. 
7.100.  We recall that the domestic industry's pric es declined significantly in Q1 2009. In our view, 
the fact that the domestic industry is able to regain market share from subject imports when its 
prices decline, suggests that consumers were reacting to the price decline. This could indicate that customers were sensitive to price changes and were basing their purchasing decisions on price considerations. Therefore, in our view, it was plausible for MOFCOM to consider that the gain in 
market share in Q1 2009 supported the conclusi on of price competition between subject imports 
and the domestic like product.  
                                               
174 China's second written submission, paras. 50-51. 
175 China's opening statement at the meeting of the Panel, p. 5 (citing Redetermination, (Exhibit US-1), 
p. 28; and Redetermination – China's translation, (Exhibit CHN-1), p. 27). 
176 China's opening statement at the meeting of the Panel, para. 20. 
177 China's response to Panel question No. 18, para. 66. 
178 United States' comments on China's response to Panel question No. 18 (citing Panel Report, 
Argentina – Ceramic Tiles , para. 6.27). 
179 China's response to Panel question No. 18, para. 66. 
180 See, e.g. China's response to Panel question No. 18, paras. 66-68 (citing Redetermination, 
(Exhibit US-1), pp. 26, 34, 43; and Redetermination – Ch ina's translation, (Exhibit CHN-1), pp. 25-27, 32, 43). 
181 See Redetermination, (Exhibit US-1), p. 26; and Redetermination – China's translation, 
(Exhibit CHN-1), p. 27. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 41 - 
 
  Pricing policy documents 
 
7.101.  MOFCOM relied on a contract between a Russian supplier and a Chinese customer and price negotiation letters exchanged between dome stic producers and Chinese suppliers ("pricing 
policy documents") in support of its findings of price competition.
182 China clarified that MOFCOM 
also considered that these pricing policy documents demonstrated that prices were influencing purchaser decisions and that subject country exporters were attempting to set lower prices than 
those set by the domestic industry.
183 As we find MOFCOM's conclusions and the parties' 
arguments based on these documents to be interlinked, we examine them together below. 
7.102.  In the Redetermination, MOFCOM made the following findings on the basis of the pricing 
policy documents: 
During the verification period, domestic producers submitted to the Investigating 
Authority a contract concerning the foreign producers' sales of subject merchandise in the Chinese market, in which relevant provisions of the contract demonstrate that in 
the first quarter in 2009 Russian producers adopted a pricing strategy that set lower 
prices than those of the domestic like products. The domestic producers also submitted documents on price negotiations with downstream users, which 
demonstrated that the prices of subject merchandise imported from the United States 
in the first quarter of 2009 were lower than that of the domestic like products, forcing 
the domestic industry to lower its prices. The Investigating Authority finds that the aforementioned evidence reveals that the subject merchandise has a direct 
competitive relationship with the domestic like products in terms of sales and pricing, 
that prices have a marked influence on the purchasing decisions of downstream users, and that in the first quarter of 2009 the subject merchandise attempted to set the 
price in the Chinese domestic market lower than the domestic like product.
184 
7.103.  We turn first to the contract between a Russian producer and a Chinese purchaser 
("Russian contract"). MOFCOM considered that the Russian contract indicated that "in the first 
quarter in 2009 Russian producers adopted a pricing strategy that set lower prices than those of 
the domestic like products".185 The United States argues that [***].186 We agree with the 
United States, as in our view, the contract is clear that [***]. We do not consider that a reasonable investigating authority could have inferred from the cited provisions of the contract 
that the Russian exporter adopted a "price strategy  that set lower prices". Moreover, the contract 
certainly cannot be understood as providing any information as to the pricing policies of exporters in other subject countries, or even other Russian exporters. We do not consider that this contract 
demonstrates that subject country exporters atte mpted to set lower prices than those of the 
domestic industry.  
7.104.  In relation to MOFCOM's conclusions regarding price competition and the relevance of 
prices in consumers' purchasing decisions, the fact that [***]. Therefore, we consider that 
MOFCOM could have relied upon the contract as part of its overall evaluation of price competition between subject imports and the domestic like pr oduct. Nevertheless, since the Russian contract 
set out the terms and conditions applicable only  between one specific Chinese purchaser and the 
Russian supplier, the contract offered only very limited insight into the competition between 
subject imports and the domestic like product as a whole.  
7.105.  Second, [***] 
7.106.  The United States argues that the price negotiation letters, involving limited tonnage, 
provided nothing more than limited, anecdotal ev idence and that since these letters all pertained 
                                               
182 China's opening statement at the meeting of th e Panel, p. 5. See Contract between a Russian 
producer and a Chinese purchaser, (Rus sian contract), (Exhibit US-6) (BCI), p. 3 and Price negotiation letters 
exchanged between a Chinese producer and Chinese purchasers, (Price negotiation letters), (Exhibits US-7, US-8 and US-9) (BCI). 
183 China's response to Panel question No. 3, para. 13. 
184 Redetermination, (Exhibit US-1), p. 24; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 25. 
185 Ibid. 
186 United States' first written submission, para. 69. WT/DS414/RW 
BCI deleted, as indicated [***] 
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  to negotiations in Q1 2009, they offered no insight on price competition prior to that.187 China 
argues that the price negotiation letters indicate that the domestic consumers were using subject import prices to drive down domestic prices an d the pricing policy documents as a whole were 
further evidence of a competitive relationship between subject imports and the domestic like 
product.
188 
7.107.  MOFCOM stated that the "domestic producers also submitted documents on price 
negotiations with downstream users, which demons trated that the prices of subject merchandise 
imported from the United States in the first quarter of 2009 were lower than that of the domestic 
like product, forcing the domestic industry to lower its prices".189 In the absence of any 
comparison of the prices of subject imports and the domestic like product, we have serious concerns regarding a conclusion that the price negotiation letters "demonstrated" that the prices of 
subject merchandise imported from the United States in Q1 2009 were lower than those of the 
domestic like product. However, we can accept that, as suggested by China, MOFCOM's reference to the "lower" prices was only a description of the prices mentioned in the documents themselves, 
and not a finding as to the overall relationship between the price levels of subject imports and the 
domestic like product.
190 However, in this context, the reference to "lower" prices gives little 
support to MOFCOM's conclusions regarding price competition overall. 
7.108.  With respect to the conclusions reached by MOFCOM in light of these letters we consider 
that, like the Russian contract, they have some relevance to understanding the competitive relationship between prices of subject import and th e domestic like product. However, it is unclear 
from MOFCOM's Redetermination why it considered the price negotiation letters, which concern 
specific transactions of limited tonnage, to be representative of direct price competition between 
subject imports and the domestic like product as a whole. There is nothing in MOFCOM's Redetermination that would even suggest that these three groups of letters were somehow 
representative of the entire spectrum of comp etition between subject imports and the domestic 
like product. Given their limited scope, while they  do show that, in the transactions concerned, 
customers used the prices of subject imports in ne gotiating prices with Chinese suppliers, we have 
no basis on which to conclude that the facts represented in those letters, i.e., that subject import 
prices were lower than the originally quoted domestic like product prices, were true. Thus, these three groups of letters at most demonstrate the existence of price negotiations driven by customers, which suggests some degree of price competition in the transactions at issue. 
However, they lend at best little support to MOFCOM's overall conclusions.  
7.3.5.2.3  Conclusions on price competition 7.109.  While as set out above, we do have some concerns regarding the factual findings relied 
upon by MOFCOM in support of its conclusions on price competition between subject imports and 
the domestic like product, as well as MOFCOM's failure to adequately consider submissions made by AK Steel, the question before us is whether MOFCOM's conclusion regarding price competition 
between subject imports and the domestic like product, on the basis of the factual findings taken 
as a whole, is one an objective investigating authority could have reached based on the facts and explanations given.  
7.110.  We consider that the concerns highlighted above with respect to MOFCOM's price 
competition finding weaken MOFCOM's conclusion concerning price competition. In particular, 
MOFCOM's failure to engage with evidence furnishe d by AK Steel regarding [***], raises doubts as 
to whether subject imports and the domestic like  product were in competition with each other 
across at least some part of the spectrum of the GO ES like product. Nonetheless, we find that the 
facts overall, including the fact that the domestic industry was able to regain market share from subject imports (as well as from non-subject imports), provided a reasonable basis for MOFCOM to 
                                               
187 United States' comments on China's response to Panel question No. 3; and second written 
submission, para. 39. 
188 China's first written submission, para. 47;  and second written submission, para. 56. 
189 See Redetermination, (Exhibit US-1), p. 24; and Redetermination – China's translation, 
(Exhibit CHN-1), p. 25. 
190 China's response to Panel question No. 3, para. 13. In this regard, we also have concerns with 
MOFCOM's statement that prices of subject merchandise im ported from the United States in the first quarter of 
2009 "were lower" than those of the domestic like product, forcing the domestic industry to lower its prices, in 
light of the specific argument by the US government that subject imports we re priced higher than the domestic 
like product in Q1 2009, which was not examined by MOFCOM. WT/DS414/RW 
BCI deleted, as indicated [***] 
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  conclude that subject imports and the domestic like product competed on the basis of price. 
However, we recall that the core issue we are called upon to resolve is whether MOFCOM's conclusion that the volume and market share of subject imports had a suppressive and depressive 
effect on domestic like product prices is one that could be reached by a reasonable decision maker 
on the basis of the evidence and arguments be fore MOFCOM, and not simply whether subject 
imports and the domestic like product competed on price.  
7.111.  The concern that remains, having considered MOFCOM's Redetermination in light of the 
evidence and arguments presented to it and to us, is that it does not explain how MOFCOM's 
findings on price competition support its conclusions regarding the suppressive and depressive effect on domestic like product prices of the volume and market share of subject imports. We consider price competition to be an important analyt ical tool that goes to the question of whether 
subject imports have the potential to affect domestic prices – if subject imports and the domestic 
like product do not compete on price, it is unlik ely that subject imports will affect domestic like 
product prices. However, it does not necessarily follow, in our view, that just because subject 
imports and the domestic like product compete on price, increases in subject import volumes and 
market share will necessarily have a suppressive or depressive effect on the domestic like product prices.
191 Therefore, we consider that it is incumbent on an investigating authority to demonstrate 
how its factual findings concerning price competition support its conclusions regarding the price 
effects of subject imports on the domestic like product.192 MOFCOM failed to draw any such 
analytical linkage in this case.  
7.3.6  Conclusion 
7.112.  Based on the foregoing, we conclude that MOFCOM's conclusions regarding the price 
effects of subject imports are not consistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement. 
7.4  The United States' claim with respect to causation 
7.113.  In this section of our report, we consider the United States' claim that MOFCOM's finding of 
causation in the Redetermination is inconsistent with China's obligations under Articles 3.1 and 3.5 
of the Anti-Dumping Agreement and Articles 15. 1 and 15.5 of the SCM Agreement because it is 
not based on an "objective examination" and "positive evidence" as required by those provisions. The United States argues both that MOFCOM's determination of causation under Articles 3.5 
                                               
191 See, e.g. Japan's third-party submission, para. 9. Japan argues that factors such as increases in 
volume of subject imports or parallel price trends be tween subject imports and the domestic like product at 
best only establish the potential for subject imports to suppress or depress domestic prices. As explained, in 
our view, even the fact of price competition between subj ect imports and the domestic like product at best only 
establishes the potential for subject imports to suppress or depress domest ic prices. See also , Appellate Body 
Report, US – Tires (China) , para. 192. The Appellate Body in US – Tires  commented on the relevance of an 
analysis of the conditions of competition between subj ect imports and the domestic like product in the context 
of the causation analysis under paragraph 16.4 of China' s Accession of Protocol to  the WTO. We are mindful 
that the discipline under paragraph 16.4 which stipulates that market disruption shall exist when imports of an 
article, which is like or di rectly competitive with an Article produced  by the domestic industry, is increasing 
rapidly, either absolutely or relatively, so as to be a si gnificant cause of material injury, or threat of material 
injury to the domestic industry, is different from the consider ations set out in Articles 3.2 and 15.2 of the 
Anti-Dumping Agreement and SCM Agreement respectively. The Appellate Body also commented that unless there is actual or potential competition between import s and the domestic like prod uct, imports cannot be a 
significant cause of material injury to the domestic industry, but noted that the examination of the conditions of competition is an analytical tool which is not disposit ive on the question of causat ion. In other words, while 
competition may be a necessary element for causation of  material injury, it is not necessarily sufficient. 
Similarly, in our view, while price competition may be a necessary element of price suppression or depression, it is not necessarily sufficient. 
192 See, e.g. Panel Report, China – Autos , para. 7.265. In this regard, we find it relevant that the panel 
considered that although parallel pricing may provide some basis for a determination that subject imports depressed domestic like product prices, such a determination must explain the role of parallel pricing in the 
price depression found. In the case before us, MOFCOM relied on parallel pricing an alysis in support of its 
intermediate finding of price competition. However, we consider that as explained by the panel in China – 
Autos ultimately, the investigating authority must show how its findings on factors such as parallel pricing 
supports its ultimate conclusions regarding the suppressive or depressive effect of subject imports on domestic 
like product prices. In that sense, we find no analysis  in MOFCOM's Redetermination as to how its conclusions 
on parallel pricing or the other factors, on the basis of which it reached its intermediate finding of price 
competition, supported its conclusions regarding the su ppressive or depressive e ffect of subject imports. WT/DS414/RW 
BCI deleted, as indicated [***] 
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  and 15.5 of the Anti-Dumping and SCM Agreements  is undermined by its defective conclusions 
with respect to price effects under Articles 3.2 and 15.2 of the Anti-Dumping and SCM Agreements, and that MOFCOM's analysis of the effect of subject imports on the domestic 
industry under Articles 3.5 and 15.5 of the Anti-D umping and SCM Agreements is itself invalid. 
With respect to the latter aspect, the United States focusses on MOFCOM's conclusions regarding 
the industry's inability to benefit from economies of scale, and its failure to consider properly the effects of other causes of injury, i.e., domestic industry expansion and increased production, as 
well as non-subject imports. China counters that  none of the United States' arguments undermine 
MOFCOM's basic finding that the increasing volume and market share of the directly competitive subject imports caused material injury to the domestic industry. 
7.4.1  Provisions at issue 
7.114.  Articles 3.1 and 15.1 of the Anti-Dumpi ng and SCM Agreements are set out above at 
paragraph 7.28. 
7.115.  Article 3.5 of the Anti-Dumping Agreement provides: 
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. 
7.116.  Article 15.5 of the SCM Agreement is virtually identical to Article 3.5 of 
Anti-Dumping Agreement but for references to "subsidized imports" and "subsidies" in place of "dumped imports" and "dumping". 
7.4.2  Factual background 
7.117.  In the original dispute, the United States claimed that MOFCOM's analysis and conclusion 
regarding causation were inconsistent with Articles 3.5 and 15.5 of the Anti-Dumping and SCM Agreements, respectively, because MOFCOM's finding of a causal link was inadequate, and 
because MOFCOM failed to adequately consider the effects of other known factors causing injury to 
the domestic industry. We agreed, finding: 
a. With respect to price effects, MOFCOM's findings on price depression and price 
suppression suffered from a number of analytical shortcomings. As MOFCOM relied 
primarily on the price effects of subject imports in its finding that subject imports caused material injury to the domestic industry, these shortcomings undermined its conclusion. While MOFCOM had also considered the adverse effects of the volume of subject imports, 
the Panel concluded that it would be inappropriate to consider the possibility that 
MOFCOM's finding of causation might be upheld purely on the basis of MOFCOM's analysis of the effects of the volume of subject imports. 
b. With respect to other causes of injury, MOFCOM had concluded that the increase in the 
domestic industry's inventories was caused by the increase in subject imports rather than the increase in the domestic industry's  capacity and production. However, the Panel 
noted that the increase in the domestic industry's production was greater than the 
increase in subject imports. As a result, the increased domestic production would have accounted for at least some of the increase in inventories. As MOFCOM had failed to address the fact that domestic production in creased more than subject imports in this WT/DS414/RW 
BCI deleted, as indicated [***] 
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  context, the Panel concluded that MOFCOM had failed to adequately consider other 
factors possibly causing injury. 
7.118.  China did not appeal our finding that MOFCOM's causation determination was inconsistent 
with Articles 3.1 and 3.5 of the Anti-Dumping  Agreement and Articles 15.1 and 15.5 of the 
SCM Agreement. The Appellate Body observed that, as a result, the Panel's finding regarding 
MOFCOM's causation finding stands.193 
7.4.3  Legal framework 
7.119.  The interpretation of Articles 3.5 and 15.5 of the Anti-Dumping and SCM Agreements has 
been considered by a number of panels and th e Appellate Body. In addition, given the near 
identity of the texts of Article 3.5 of the Anti-Dumping Agreement and Article 15.5 of the 
SCM Agreement, we consider that the principles derived from these decisions are equally 
applicable in cases involving either.194 It is by now well understood that investigating authorities 
are required, as a part of their causation analysis, to examine all "known factors" other than dumped imports that are causing injury to the domestic industry. Where such other known factors 
are causing injury, the investigating authority must ensure that the injurious effects of these 
factors are not attributed to the dumped imports. The non-attribution analysis requires "separating and distinguishing the injurious effects of the other factors from the injurious effects of the 
dumped imports", rather than making "mere assumptions" about the effects of the imports and 
the other factors.
195 
7.120.  It is also well established that the role of a panel considering an investigating authority's 
causation findings is not to conduct a de novo review of the facts considered by the investigating 
authority in making its determination.196 However, neither may a panel simply defer to the 
conclusions of the investigating authority.197 Rather, we must determine whether the explanations 
given by the investigating authority for the conclusions reached are reasoned and adequate to 
support those conclusions, in the light of  other plausible alternative explanations. 
7.4.4  Price effects 7.4.4.1  Main arguments of the parties 
7.121.  The United States argues that MOFCOM's conclusion that a causal link exists between 
subject imports and the material injury suffered by  the domestic industry rests on a price effects 
analysis that is contrary to the evidence, lacks a discernible factual basis, and fails to reflect an objective examination of the record.
198 The United States claims the present case is analogous to 
China – Autos , in which the Panel concluded that MOFCOM's defective price effects analysis 
undermined its causation analysis.199 The United States argues that, far from being collateral to its 
injury determination, MOFCOM's price effects analysis was an important element of that 
determination in this case, as in China – Autos .200 The United States further argues that, as in 
China – Autos , it would be difficult for MOFCOM to have made its determination of causation in this 
case without relying on price effects.201 Absent a demonstration that subject imports had any 
significant price effects on the domestic like product, MOFCOM's causation analysis must therefore 
fail.202 
7.122.  China does not accept that MOFCOM relied on an allegedly defective analysis of price 
effects to establish causation. China first maintains MOFCOM was not required to, and did not in 
                                               
193 Panel Report, China – GOES , paras. 7.620-7.638; Appellate Body Report, China – GOES , para. 114. 
194 See also Declaration on Dispute Settlement Pu rsuant to the Agreement on Implementation of 
Article VI of the General Agreement on Tariffs and Tr ade 1994 or Part V of the Agreement on Subsidies and 
Countervailing Measures. 
195 See, e.g. Appellate Body Report, US – Hot-Rolled Steel , para. 226. 
196 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 93. 
197 Ibid. 
198 United States' first written submission, para. 109. 
199 United States' second written submission, para. 81 (citing Panel Report, China – Autos , para. 7.327). 
200 Ibid. para. 82. 
201 Ibid. 
202 United States' first written submission, para. 110. WT/DS414/RW 
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  fact, make price comparisons in considering price effects.203 Rather, MOFCOM considered the 
increased volume of imports, along with a number of other elements (i.e., product comparability and substitutability, price trends consistent with a competitive relationship, overlap in customers, and evidence of purchasers' attempts to use subject import prices to reduce the prices of the 
domestic like product) in its analysis, and made well-reasoned findings that properly establish the 
explanatory force of increasing subject import volumes and market share on domestic prices and thus establish the necessary causal link.
204 
7.4.4.2  Main arguments of the third parties 
7.123.  Japan agrees with the United States that a flawed price effects determination necessarily 
results in a flawed causation analysis, citing seve ral panels that have reached this conclusion, and 
argues that the Panel should follow the same approach in evaluating MOFCOM's determination in 
this proceeding.205 
7.4.4.3  Evaluation by the Panel 7.124.  As discussed above, MOFCOM found that the subject imports caused price suppression and 
depression based primarily on the volume and ma rket share of the subject imports, considered 
together with its findings regarding price competition between the subject imports and the domestic like product. Given the shortcomings we have identified in MOFCOM's findings regarding 
price effects, as set out above, we consider that  those findings cannot adequately support a finding 
that the subject imports caused material injury to the domestic industry. We recall that several panels have similarly found determinations of causation to be inadequate where underlying determinations of price effects were found to be inadequate.
206 It is clear to us that MOFCOM's 
causation determination rests, at least in part, on its conclusions regarding the price effects of 
subject imports. Accordingly, we find that, to the extent that it is based on the price effects of 
subject imports, MOFCOM's causation determination is inconsistent with Articles 3.5 of the 
Anti-Dumping Agreement and 15.5 of the SCM Agreement. 
7.125.  While this finding resolves the United States' claim with respect to its arguments regarding 
the element of price effects, the United States made further arguments regarding economies of 
scale, domestic industry expansion and incr eased production, and non-subject imports. 
Accordingly, we now proceed to consider specifically these additional elements below. 
7.4.5  Economies of scale 7.4.5.1  Main arguments of the parties 
7.126.  The United States argues that MOFCOM's  conclusion that the domestic industry was 
prevented by subject imports from reaping the benefi ts of economies of scale does not rest on an 
objective examination of positive evidence. The United States maintains that MOFCOM's findings in 
this context are merely conclusory assertions unsupported by any factual analysis.
207 The 
United States asserts that Baosteel commenced production of GOES in May 2008 and Wuhan's largest capacity expansion occurred in the first quarter of 2009.
208 Given that steel production 
facilities have high start-up costs, the United States asserts that it was unrealistic for MOFCOM to 
expect the domestic industry to realize economies of scale and attendant profits immediately upon bringing significant new capacity online.
209 The United States further argues that neither of the two 
separate and competing companies in the domestic industry could be expected to realize 
economies of scale as a result of an increase in the production capacity of the other.210 
                                               
203 China's first written submission, para. 97. 
204 Ibid. para. 98; and second written submission, para. 92. 
205 Japan's third-party writ ten submission, para. 16 (citing Panel Reports, China – GOES , para. 7.620; 
China – X-Ray Equipment , paras. 7.239-7.240; and China – Autos , paras. 7.327-7.328). 
206 Panel Reports, China – X-Ray Equipment , para. 7.239; China – Autos , paras. 7.327-7.328; and China 
– HP-SSST (Japan)/China – HP-SSST (EU) , para. 7.191. 
207 United States' first written submission, para. 112; and second written submission, para. 89. 
208 United States' first written submission, para. 113. 
209 Ibid.; and second written submission, para. 84. 
210 United States' first written submission, para. 115; and second written submission, para. 87. WT/DS414/RW 
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  7.127.  China counters that MOFCOM determined that the domestic industry reasonably invested 
in new or additional GOES production ca pacity in an expanding domestic market.211 China argues 
that investment in greater production capacity in an expanding domestic market should have 
allowed domestic producers to realize economies of scale and reduce per-unit costs.212 However, in 
the present case, unfairly traded subject imports captured a significant part of the expanding 
domestic market.213 Domestic producers' resulting inability to benefit from the expected economies 
of scale thus constitutes an adverse effect that reasonably supports a finding of causation.214 
7.4.5.2  Main arguments of the third parties 
7.128.  Japan argues that "even if MOFCOM's fi nding that the domestic industry was prevented 
from realizing the benefits of economies of scale had certain evidentiary support and was not a mere conclusory assertion, that finding cannot be sufficient to establish a causal link."
215 It argues 
that it would be untenable to allow investigating authorities to impose anti-dumping duties simply 
on the basis that the domestic industry was preven ted from realizing the benefits of economies of 
scale.216 Japan maintains that investigating authorities must base their causation determinations 
on examinations of the volume of du mped imports and their price effects.217 
7.4.5.3  Evaluation by the Panel 7.129.  Economies of scale may be defined generally as the cost advantages realized by an 
enterprise as a result of the size, output or scale of its operations. Assuming fixed costs that can 
be spread over additional units of output, economies of scale would generally cause the cost per unit of output to decrease as the size, output or scale of an enterprise's operations increases, and 
thus result in increased profits at the same price level. However, there are a number of underlying 
considerations as to the nature of the industry, product, market, etc. that must be taken into 
account in an analysis of economies of scale. MOFCOM's Redetermination does not address, much less establish, even basic premises and assumption s, such as the extent to which economies of 
scale may be realizable in this particular segment of the steel industry. 
7.130.  In the Redetermination, MOFCOM refers to the domestic industry's inability to realize 
economies of scale as evidence of the causal re lationship between the subject imports and injury 
to the domestic industry. However, the Redetermination contains only passing references to 
economies of scale.
218 MOFCOM does not analyze economies of scale in the same manner in which 
it analyzes the other principal indicators of injury in the Redetermination. 
7.131.  In its answers to our questions, China asserted that fixed costs for this industry "in the 
range of 30-40 percent of total costs" constitute "a  significant percentage of the total costs" and, 
based on "accounting truisms", concluded that a lower production volume necessarily results in higher fixed costs per unit.
219 However, China itself characterizes MOFCOM's consideration of 
economies of scale simply as a qualitative assessment and as establishing a qualitative 
connection.220 China concludes by confirming that MOFCOM did not perform any specific 
calculations in this regard.221  
7.132.  We also note that the impact of the timing  of the domestic industry's capacity expansions 
is important. Wuhan was the only domestic producer of GOES for much of the POI, until Baosteel's later entry into the market, with its capacity co ming online at the end of 2008 and in the first 
quarter of 2009. It is unclear what, if any, data MOFCOM had before it on the basis of which it 
could conclude that either Wuhan (which expanded its capacity steadily from 2006 through 2008, 
                                               
211 China's second written submission, para. 96. 
212 China's first written submission, para. 100. 
213 Ibid. 
214 China's second written submission, para. 95. 
215 Japan's third-party writ ten submission, para. 17. 
216 Ibid. 
217 Ibid. 
218 Redetermination, (Exhibit US-1), pp. 28, 29, 42, 43; and Redetermination – China's translation, 
(Exhibit CHN-1), pp. 29, 43, 44. 
219 China's response to Panel question No. 58, paras. 158-160. 
220 China's second written submission, paras. 94, 98. 
221 China's response to Panel question No. 57, para. 156. WT/DS414/RW 
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  with the greatest increase of 51.65% in 2008222) or Baosteel (which entered the market in 2008) 
individually were unable to benefit from economies of scale, or that the domestic industry as a whole was unable to benefit from economies of scale towards the end of the POI. Similarly, it is entirely unclear how MOFCOM linked this alleged inability to benefit from economies of scale to the 
subject imports. China argues that "when subject imports gained volume and market share at the 
expense of the domestic industry, subject imports by definition imposed higher per unit costs on 
the domestic industry."
223 However, while increased volume and market share of subject imports 
may well have affected the domestic industry's sales and profitability, this does not necessarily 
mean that unit costs increased as a result, particularly in view of continued increases in the domestic industry's output, which would tend to lead to lower unit costs. Nothing in the Redetermination explains how, or to what degree, unit costs for the industry increased as a result 
of the subject imports' increased market share, and thus we fail to see how MOFCOM linked the 
increased imports to the domestic industry's failure to achieve economies of scale. 
7.133.  Given the lack of underlying information an d the minimal nature of MOFCOM's analysis of 
economies of scale, we find MOFCOM's conclusions in this context insufficient to support its 
determination of causation. 
7.4.6  Domestic industry expa nsion and increased production 
7.4.6.1  Main arguments of the parties 
7.134.  The United States argues that the domest ic industry's overexpansion and overproduction 
caused injury that MOFCOM failed to attribute properly. It maintains that MOFCOM assumed that the domestic industry could have reasonably expected the domestic market to absorb all of its 
increased production from increased capacity
224, but that Baosteel and Wuhan in fact were forced 
to compete aggressively with each other for cust omers in the domestic market, as their expanded 
capacity and production far outstripped the growth in demand in the domestic market.225 The 
United States further argues that MOFCOM av oided acknowledging the role of the domestic 
industry's overexpansion and overproduction in the large increase in domestic inventories by attributing this increase instead to unspecified "sales obstacles".
226 
7.135.  The United States also challenges MOFC OM's use of 2007 as the baseline for its analysis, 
as it is the year in which the domestic industry had the highest market share, thus understating the domestic industry's contribution to inventory overhangs.
227 The United States further 
challenges MOFCOM's failure to consider the first quarter of 2009 separately from 2008.228 It 
argues that the domestic industry's contribution to inventory overhangs through overproduction 
was particularly significant in the first quarter of  2009, which was the only part of the period of 
investigation when the domestic industry's prices declined and the domestic industry was not 
profitable.229 
7.136.  China argues that the volume of GOES resu lting from Baosteel's entry into the market and 
Wuhan's production capacity expansion did not exceed the growth in overall demand on the 
domestic market, and that MOFCOM properly separa ted and distinguished the effect of this excess 
volume by identifying subject imports as the "sales obstacles" hindering the domestic industry.230 
It also contends that MOFCOM explained its choice of 2007 as the base year as being a reasonable basis for the industry's market forecasts, a comparable and representative year for evaluating 
changes in 2008, and a year in which imports were stable and the industry was not showing 
declines.
231 China also contends that MOFCOM explained its consideration of inventory build-up 
                                               
222 United States' first written submission, para. 123; China's response to Panel question No. 59, 
para. 162. 
223 China's second written submission, para. 95. 
224 United States' first written submission, para. 133. 
225 Ibid. paras. 122-123. 
226 Ibid. para. 124. 
227 United States' first written submission, para. 130; and second written submission, paras. 91-92. 
228 United States' second written submission, para. 93. 
229 United States' first written submission, para. 132. 
230 China's first written submission, paras. 105-106. 
231 China's second written submission, para. 105. WT/DS414/RW 
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  over the period 2008-Q1 2009 on the principle th at inventory accumulates over time, and thus 
requires a different approach to understand the reasons for increases.232 
7.4.6.2  Main arguments of the third parties 7.137.  Japan maintains that MOFCOM does not appear to have distinguished properly the 
injurious effects of the domestic industry's overexpansion and overproduction from those of the 
subject imports.
233 
7.4.6.3  Evaluation by the Panel 
7.138.  In the original proceeding, we found that the increase in production by the domestic 
industry from 2007 to 2008 was greater than the increase in subject imports, and would have 
accounted, at least in part, for the inventory accumulation, which thus could not be attributed entirely to the lesser increase in subject imports.
234 We were unable to verify MOFCOM's finding 
that total domestic capacity did not exceed total domestic demand because China failed to provide 
the underlying data.235 Nevertheless, we concluded that "even if this finding were accurate, it 
would not change the fact that subject imports did not account for the totality of the injurious 
inventory overhangs."236 We concluded that MOFCOM had failed to examine properly whether a 
known factor other than subject imports was simultaneously injuring the domestic industry, as "an objective and impartial investigating authority could not properly have found that the domestic 
industry's increase in production was not a cause of injury."
237 
7.139.  In the present compliance proceeding, the United States makes essentially the same 
argument it had made in the original dispute. The United States contends that "[t]he domestic industry's expansion of capacity and production ou tstripped the growth in demand for GOES in the 
Chinese market by wide margins."
238 In support of its argument, the United States relies on 
information on growth in demand, capacity and output in MOFCOM's original Determination and the Redetermination
239 to calculate and compare the percentage changes in these growth rates 
from 2006 to 2008. We have compiled this information, including the United States' calculation, in 
the chart below: 
Changes in demand, capacity, output and inventories 
 
 Demand Capacity Output Inventories 
2007 22.80%  35.33% 36.76%  -49.01% 
2008 18.09%  53.67% 23.91% 839.02% 
2006-08240 45.01% 107.96% 69.46% -- 
Q1 2009241 12.46%  80.13% 55.23% 978.81% 
Source: MOFCOM's Determination and Redetermination, United States' first written submission242 
7.140.  China faults the United States for making comparisons on the basis of percentage changes 
in demand, capacity and output, each with po tentially different base levels. However, the 
Redetermination does not contain the underlying data from which these changes were calculated, 
as MOFCOM treated the information as confidential. China has not pointed us to any additional information in the record before MOFCOM on these factors. Thus, the United States' argument is 
                                               
232 China's second written submission, para. 111. 
233 Japan's third-party submission, paras. 18-20. 
234 Panel Report, China – GOES , para. 7.632. 
235 Ibid. para. 7.635. 
236 Ibid. para. 7.635. 
237 Ibid. para. 7.632. 
238 United States' first written submission, para. 122. 
239 Original Determination, (Exhibit US-4), p. 60; Redetermination, (Exhibit US-1), p. 28; and 
Redetermination – China's translation, (Exhibit CHN-1), p. 29. 
240 United States' first written submission, para. 122. 
241 Compared with Q1 2008. 
242 Original Determination, (Exhibit US-4), pp. 60-61; Redetermination, (Exhibit US-1), pp. 28, 30; and 
Redetermination – China's translation, (Exhibit CHN-1), pp. 29, 31; United States' first written submission, para. 122. WT/DS414/RW 
BCI deleted, as indicated [***] 
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  based on the only information available to it, the percentage changes reported in the 
Redetermination. While it may well be that the underlying base values are different, which could affect the validity of the comparisons made, there is no better basis of information for either the United States' argument or our review. At a minimum, the United States' argument highlights 
seemingly relevant comparisons in the changes in the growth of demand, capacity, output and 
inventory that would have merited more detailed examination and explanation by MOFCOM. Indeed, even if the base levels from which the ch anges began were different, it is clear that the 
rate of increase in the domestic industry's capacity and output was notably greater than the 
growth in demand during the entire period examined. Unless demand was fairly high at the beginning of the period, and capacity and output we re very low, at these rates of increase it is 
difficult to envision a situation in which domestic industry capacity and output did not surpass 
domestic demand. 
7.141.  MOFCOM also compared percentage changes in demand and output in the 
Redetermination.
243 It found that domestic demand was "almost twice" the output of the domestic 
like product in 2007, and that the growth in do mestic demand of 18.09% in 2008 must therefore 
be "roughly equivalent" to a 36% increase in outp ut over the level of 2007. It then concluded that 
this 36% figure was greater than the increa se in output in 2008 over 2007 of 23.91%.244 This is 
simply an approximation of output relative to demand which we cannot verify from the limited 
information before us. Nothing in China's arguments in this proceeding persuades us that our original conclusion, that, relative to the increase in domestic demand, the increases in the domestic industry's capacity and production were at least partly responsible for the accumulation 
of inventory in 2008 and the first quarter of 2009, was wrong. 
7.142.  As to MOFCOM's choice of 2007 as the baseline year for its analysis of domestic demand 
and output, as well as the consideration of 2008 and the first quarter of 2009 as a whole for its 
analysis of inventories, China asserts that the WTO agreements do not specify any particular 
methodology. China also contends that MOFCOM sufficiently and reasonably explained its choices.
245 We agree with China that the Anti-Dumping and SCM Agreements do not specify a 
particular methodology in this context, especially not at the level of detail of how an investigating 
authority establishes a baseline year for its analysis. However, an investigating authority's choice of methodology or baseline year should not a ffect the objectivity of its analysis, as the 
United States argues happened in this case.
246  
7.143.  In this situation, an explanation is necessa ry to enable us to ensure that the choice of 
baseline year was appropriate. To justify MOFCOM's choice of baseline year, China argues that using 2006 as the baseline year would not have allowed MOFCOM to focus on the impact of subject 
imports at the end of the period of investigation an d specifically the effect of the surge in subject 
imports in 2008.
247 However, we fail to see how the use of 2006 as the baseline year could have 
prevented MOFCOM from focusing on these specif ic developments in 2008. China also reiterates 
MOFCOM's explanation that inventory accumulation is a continual process, warranting its analysis 
across time periods.248 However, production and sales could also be argued to be continual 
processes, yet MOFCOM did not analyse them across time periods as it did inventories. Moreover, companies are likely to assess these elements at specific times to gauge performance and 
establish accounts. In our view, inventories are not significantly different from production, sales, 
or indeed, other economic factors, and we find nothing further in the Redetermination that 
                                               
243 Redetermination, (Exhibit US-1), p. 52; and Redetermination – China's translation, (Exhibit CHN-1), 
p. 52. 
244 Ibid. 
245 China's first written submission, para. 116. China cites to pages 53 and 54 of the Redetermination, 
which provides the following main reasons for the choice  of 2007 as the baseline year for MOFCOM's analysis: 
(i) 2007 is the closest, most comparable and representative year to 2008, when the volume of subject imports and domestic inventories started to increase substantially; and (ii) 2007 can be regarded as a year of normal market conditions during which the volume of subject imports did not increase substantially and the domestic 
industry did not yet show sign s of being adversely affected. 
246 United States' second written submission, paras.  90-95. The United States argues that MOFCOM's 
choice of 2007 as the baseline year for its analysis minimizes the responsibility of the domestic industry's overproduction for inventory overhangs in 2008 and the first quarter of 2009, because the domestic industry's 
market share increased significantly in 2007. Had MOFCOM  used 2006 as the baseline year, its analysis would 
not have been distorted by the domestic industry's significant market share gain in 2007. The United States 
argues that MOFCOM modified its analysis in this context to obtain the result it wanted. 
247 China's first written submission, para. 116. 
248 Ibid. para. 117 (citing Redetermination, (Exhibit US-1), pp. 54-55). WT/DS414/RW 
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  explains why inventories, whether in this particular industry or more generally, should be treated 
differently. 
7.144.  While MOFCOM considered the fifteen months of 2008 and the first quarter of 2009 
together, it accorded particular weight to inventory data for 2008.249 However, in the first quarter 
of 2009, the volume of subject imports decreased while inventories skyrocketed. In our view, an 
objective and impartial investigating authority examining this evidence would not have considered the first quarter of 2009 together with the rest of 2008, and virtually disregarded the changes 
happening in the first quarter of 2009 for purposes  of its analysis. MOFCOM's approach fails to 
consider the changes in inventories in a manner that would ensure that any injurious effects of those inventories are not attributed to subject imports. 
7.145.  In the continued absence of underlying data regarding growth in domestic demand, 
capacity and output, even if only in summary form to preserve its confidentiality, and given the 
inconsistencies in MOFCOM's analytical approach to inventories and time periods, we conclude that MOFCOM's determination that the domestic indust ry's expansion and increased production did not 
cause injury to the domestic industry is not one that could have been reached on the basis of the 
information and arguments in this case. Accordingly, we find that MOFCOM failed to ensure that injuries caused by increased inventories were not attributed to the subject imports consistently 
with the requirements of Articles 3.5 and 15.5 of the Anti-Dumping and SCM Agreements. 
7.4.7  Non-subject imports 7.4.7.1  Main arguments of the parties 7.146.  The United States argues that, given the rising and substantial volumes and competitive 
prices of non-subject imports, MOFCOM should have considered more carefully whether it was 
attributing to subject imports injury actually caused by non-subject imports.
250 The 
Redetermination includes additional evidence in this context that was not in the original 
Determination, but the United States contends MOFCOM did not examine this evidence 
objectively.251 The United States questions how the increase in non-subject imports throughout the 
period of investigation could have had no injurious effects on the domestic industry.252 The 
United States also focuses specifically on the first quarter of 2009, during which the volume of 
subject imports decreased while that of non-subject imports increased.253 In addition, the 
United States argues that MOFCOM's analysis of market share conflates shifts in market share with absolute market share data.
254 The United States alleges that MOFCOM limited its analysis to the 
former and ignored the latter.255  
7.147.  China argues that the United States errs in focusing entirely on the absolute volume of 
non-subject imports and average sales values, whil e completely ignoring the market share shifts 
that MOFCOM emphasized in its analysis.256 China further argues that MOFCOM's emphasis on 
market shares was important because market share figures adjust for the changing size of the overall market when it is expanding and market share figures allow for a direct comparison of all 
the analytically relevant actors in the market (i.e., the domestic industry, subject imports and 
non-subject imports).
257 MOFCOM established that subject imports accounted for the vast majority 
of the increase in imports in 2008 and the first quarter of 2009, and that the condition of the 
domestic industry began to deteriorate when subject imports surged in 2008.258 By comparison, 
non-subject imports never gained market share and were fairly traded.259 China thus maintains 
that MOFCOM properly accounted for the effect of non-subject imports. 
                                               
249 China's second written submission, para. 113. 
250 United States' first written submission, para. 139. 
251 Ibid. para. 138. 
252 Ibid. para. 141. 
253 Ibid. para. 140; and second written submission, para. 96. 
254 United States' second written submission, para. 100. 
255 Ibid. 
256 China's first written submission, para. 121. 
257 Ibid. para. 120; and second written submission, para. 120. 
258 China's first written submission, para. 122; and second written submission, para. 121. 
259 China's first written submission, para. 124. WT/DS414/RW 
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  7.4.7.2  Main arguments of the third parties 
7.148.  Japan maintains that MOFCOM does not appear to have distinguished properly the 
injurious effects of the non-subject impo rts from those of the subject imports.260 
7.4.7.3  Evaluation by the Panel 
7.149.  It is apparent from the Redetermination that the volume of non-subject imports was 
greater than that of subject imports throughout the period of investigation. In fact, the volume of non-subject imports was twice that of subject im ports in 2007, more than twice that of subject 
imports in 2008, and almost three times that of su bject imports in the first quarter of 2009. Even 
in 2008, when the difference was the smallest, the volume of non-subject imports was one and one-half times that of subject imports. The pric e of non-subject imports was also below that of 
subject imports in 2006 and 2008. The volume of subject imports increased significantly in 2008, 
when they were priced higher than non-subjec t imports, and declined significantly in the 
first quarter of 2009 as compared to the first quar ter of 2008, when they were priced well below 
non-subject imports.
261 
7.150.  The data relied on by MOFCOM in the Redetermination, including those relating to 
non-subject imports which were not provided by MOFCOM in the original Determination262, are 
compiled in the chart below: 
Volumes and prices of subject and non-subject imports 
 
 Subject Imports 
Volume (tons) Subject Imports 
Price (RMB/ton) Non-Subject Imports 
Volume (tons) Non-Subject Imports 
Price (RMB/ton) 
2006  83,837 25,913 169,846 25,468 
2007  84,600 26,684 183,349 28,701 
2008 135,900 31,372 213,517 30,999 
Q1 2009  19,400 26,673  54,206 32,359 
Source: MOFCOM's Determination and Redetermination263 
7.151.  MOFCOM's reliance primarily on shifts in market share for purposes of assessing the causal 
link between subject imports and injury to the domestic industry causation in this context is perplexing. The data considered in the Redeterminat ion suggest that the price of the larger volume 
of non-subject imports fluctuated as much as th at of the smaller volume of subject imports. 
Subject imports recorded the most striking increase in terms of volume during the period of investigation (approximately 60% from 2007 and 2008), at a time when their price increased 
faster and to a higher level than that of non-su bject imports. In addition, the volume of subject 
imports dropped in the first quarter of 2009, at the same time as their prices declined from 2008 levels to approximately 18% below that of non-subject imports, which by contrast had increased 
from 2008 levels. 
7.152.  In our view, this relationship between vo lumes and prices, with volumes of subject imports 
increasing when their prices are higher than those of non-subject imports and vice versa, would seem to warrant a more careful examination and more detailed explanation than MOFCOM 
provided in the present case. For example, the vo lume of non-subject imports and the changes in 
their prices are such that it is conceivable respondents and members of the domestic industry occasionally may have established their volumes and prices in response to non-subject import 
trends. A simple comparison of percentage changes in the market share of the various sets of 
actors, rather than a comparison of actual or even indexed volume and price data established on clear bases, cannot serve to explain satisfactorily the trends in this market. 
                                               
260 Japan's third-party submission, paras. 18-20. 
261 Redetermination, (Exhibit US-1), pp. 23, 24, 36, 37; and Redetermination – China's translation, 
(Exhibit CHN-1), pp. 24, 37. 
262 Original Determination, (Exhibit US-4), pp. 57-58 (data on subject imports only); Redetermination, 
(Exhibit US-1), pp. 23, 24, 36, 37 (data on subj ect and non-subject imports, respectively); and 
Redetermination – China's translation, (Exhibit CHN-1), pp. 24, 37. 
263 Original Determination, (Exhibit US-4), pp. 57-58; Redetermination, (Exhibit US-1), pp. 23, 24, 36, 
37; and Redetermination – China's translation, (Exhibit CHN-1), pp. 24, 37. WT/DS414/RW 
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  7.153.  Given the shortcomings in MOFCOM's analytical approach to non-subject imports, we 
conclude that its determination that non-subject imports were not a cause of injury is flawed. Accordingly, we find that MOFCOM failed to examine properly whether non-subject imports injured the domestic industry at the same time as subject imports consistently with the requirements of 
Articles 3.5 and 15.5 of the Anti-Dumping and SCM Agreements. 
7.4.8  Conclusion regarding causation 7.154.  For all the above reasons, we conclude that MOFCOM's revised finding that subject imports 
caused material injury to the domestic industry is inconsistent with Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement and Articles 15.1 and 15.5 of the SCM Agreement. 
7.5  The United States' claim with respect to disclosure 7.5.1  Introduction 
7.155.  In this section of our report, we consider the United States' claim that MOFCOM failed to 
disclose facts under consideration that formed the basis for the Redetermination, inconsistent with China's obligations under Articles 6.9 of the Anti-Dumping Agreement and 12.8 of the 
SCM Agreement. The United States contends that the facts allegedly not disclosed were significant 
in MOFCOM's determination and formed part of the basis for its determination and decision to apply definitive measures. China contends that the United States has failed to demonstrate that 
these facts were "essential", and in any event argues that MOFCOM did disclose all the facts 
identified in the US claim, while striking a ba lance between necessary disclosure and the need to 
protect confidential information. 
7.5.2  Provisions at issue 
7.156.  Article 6.9 of the Anti-Dumping Agreement provides as follows: 
The authorities shall, before a final determination is made, inform all interested 
parties of the essential facts under consideration which form the basis for the decision 
whether to apply definitive measures. Such disclosure should take place in sufficient 
time for the parties to defend their interests. 
Article 12.8 of the SCM Agreement is identical to  Article 6.9 of the Anti-Dumping Agreement but 
for the addition of a reference to "all interested Members" as well as all interested parties in the 
first sentence, which is not relevant in this dispute.  7.5.3  Legal framework 
7.157.  The scope of the disclosure obligation under Articles 6.9 of the Anti-Dumping Agreement 
and 12.8 of the SCM Agreement has been discusse d in a number of previous panel and Appellate 
Body reports. Recently, the Appellate Body in China – GOES observed that "essential facts" are 
those that (a) form the basis for the decision to apply definitive measures and (b) ensure the 
ability of interested parties to defend their interests.
264 Further, Articles 6.9 and 12.8 do not 
require the disclosure of all facts before an investigating authority.265 Facts that do not form the 
basis of the decision to impose definitive measures do not constitute essential facts.266 Also, as we 
observed in the original proceeding, essential facts refer to facts that were actually under consideration by the investigating authority rather than facts that should have been considered by the authority.
267 
7.158.  The Appellate Body has indicated that what constitutes an "essential" fact must be 
determined in light of the findings an investigating authority must make to satisfy the substantive obligations of the Anti-Dumping and SCM Agreements in order to apply definitive measures under 
the Anti-Dumping and SCM Agreements.
268 Put differently, the relevant facts are those that are 
                                               
264 Appellate Body Report, China – GOES , para. 240. 
265 Ibid. 
266 Panel Report, Argentina – Poultry Anti-Dumping Duties , para. 7.223. 
267 Panel Report, China – GOES, para. 7.653. 
268 Appellate Body Report, China – GOES , para. 241. WT/DS414/RW 
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  essential to reach conclusions on the issues of dumping and/or subsidization, material injury and 
causation, as well as other issues the investigating authority must resolve in a particular case in concluding that whether to impose definitive measures.
269 However, essential facts are not limited 
to those facts that support a determination, but rather are the body of facts essential to any 
determinations that are being considered in the process of analysis and decision-making by the 
investigating authority.270 The obligation to disclose under these provisions applies only to facts, as 
opposed to reasoning. In addition, the obligation to disclose applies even where the essential facts 
in question are confidential, in which case investigating authorities may discharge their obligation 
through disclosure of non-confidential summaries of those facts. Investigating authorities may not, however, rely on confidentiality to justify a failure to disclose essential facts.
271 
7.159.  With this understanding of the relevant obli gations in mind, we turn to the specific facts at 
issue in the dispute before us. In our evaluation, we will address separately the allegedly 
undisclosed essential facts with respect to MOFCOM 's determination regarding price effects and the 
allegedly undisclosed essential facts regarding its determination of causation. As noted above, 
disclosure must come before the determination is final, so as to allow parties to defend their 
interests. Therefore, the relevant document for our consideration of whether MOFCOM disclosed the essential facts in this case is the Redetermination Disclosure provided to interested parties on 
4 July 2013.
272 
7.5.4  Failure to disclose essential facts re garding MOFCOM's price effects determination 
7.160.  The United States' claim of failure to disclose essential facts relating to MOFCOM's price 
effects determination focuses on the following three elements: 
a. Information underlying MOFCOM's assertion that the trends of the prices of the subject 
imports and the domestic like product were the same; 
b. Information regarding the evidence that MOFCOM allegedly considered, and the analysis 
that it allegedly conducted, in concluding that the domestic industry's loss of market 
share in 2008 led it to slash prices by over 30% in the first quarter of 2009; and 
c. Information regarding MOFCOM's assertion that the price-cost differential for Wuhan 
decreased in 2008. 
7.5.4.1  Main arguments of the parties  7.5.4.1.1  United States 7.161.  First, with respect to MOFCOM's statement that the price trends of subject imports and the 
domestic like product in 2007, 2008 and Q1 2009 were the same, the United States argues that 
MOFCOM failed to disclose the basis of MOFCOM's conclusions and in particular, takes issue with China's argument that some of the data could not be disclosed because it was confidential.
273 The 
United States argues that while there may be some complications where essential facts are 
confidential information, this does not excuse the investigating authority from its obligation to disclose the essential facts which formed the basis of the decision to apply definitive measures.
274 
7.162.  Second, the United States asserts that MOFCOM failed to disclose the essential facts under 
consideration with respect to its conclusion that the domestic industry's loss in market share in 
                                               
269 Panel Report, Mexico – Olive Oil , para. 7.110. 
270 Panel Report, EC – Salmon (Norway) , para. 7.796. 
271 Appellate Body Report, China – GOES , para. 247. 
272 MOFCOM, Notice of information disclosure before th e industry injury verdict of the anti-dumping on 
imported grain-oriented silicon electrical steel with the country of origin in the Un ited States and Russia and 
the anti-subsidy on the imported grain-oriented silicon electrical steel with the country of origin in the United States, Public Notice [2013] No. 327 (Redetermination Disclosure) (Exhibit US-3); and MOFCOM, Notice of Disclosure Prior to Industry Injury Determination in the Anti-Dumping Reinvestigation on Imports of Grain Oriented Flat-rolled Electrical Steel originating in the U.S. and Russia and the Anti-subsidy Reinvestigation on Imports of Grain Oriented Flat-rolled Electrical Steel originating in the U.S. SDCYCH [2013] No. 327 
(Redetermination Disclosure – China's translation) (Exhibit CHN-2). 
273 United States' second written submission, para. 107. 
274 Ibid. para. 109. WT/DS414/RW 
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  2008 led it to slash prices by over 30% in Q1 2009.275 The United States emphasizes that the 
information disclosed by China could not be considered to be essential facts but was, in fact, the reasoning provided by MOFCOM for its conclusions.
276  
7.163.  Third, the United States contends that China failed to disclose any essential facts in the 
Redetermination Disclosure relevant to MOFCOM's conclusions regarding a decline in Wuhan Iron 
and Steel's price-cost differential over 2008.277 It reiterates the view that claims of confidentiality 
do not justify failure to disclose essential facts.278 
7.5.4.1.2  China 
7.164.  China argues that the United States has failed to make a prima facie  case with respect to 
the specific claims made by the United States with regard to MOFCOM's alleged failure to disclose all essential facts that formed the basis of the Redetermination.
279 China contends that the 
United States' non-disclosure claim is factually, as well as legally, incorrect. 
7.165.  First, China contends that MOFCOM did disclose the essential facts relevant to MOFCOM's 
finding that the price trends of subject imports and the domestic like product were the same. The 
price trends or percentage changes in subject import prices were based on China Customs data 
and both the trends and the underlying data ar e set out in the Redetermination Disclosure.280 The 
price trends of the domestic industry were based on  verified data of the domestic industry and are 
set out in the Redetermination Disclosure. The un derlying data was treated as confidential and 
thus not disclosed.281 China asserts that the percentage changes in domestic like product prices, 
disclosed in the Redetermination Disclosure, constitute an adequate public summary of that confidential information.
282 
7.166.  Second, China argues that MOFCOM's conclusion that the domestic industry's loss in 
market share in 2008 led it to slash prices by over 30% in Q1 2009 was based on the following information, which was disclosed in the Redetermination Disclosure: 
a. subject imports surged in 2008 resulting in loss of market share for the domestic 
industry
283; 
b. one-to-one correlation between the market sh are lost by the domestic industry and the 
market share gained by subject imports284; and 
c. faced with a continued surge in the volume of subject imports in Q1 2009, the domestic 
industry was forced to lower prices by 30.25% to compete with the subject imports to regain market share.
285 
China submits that these statements and the specific  facts, upon which they were based, were the 
essential facts that were under consideration before MOFCOM.286 
 
7.167.  Third, China rejects the United States' assertion that MOFCOM failed to disclose essential 
facts regarding the extent of the decline in Wuhan's price-cost differential. In this regard, China asserts that MOFCOM did disclose the extent of decline in Wuhan's gross profit, and that gross 
profit is a common way of expressing the price-cost differential.
287 China contends that the 
                                               
275 United States' second written submission, para. 115. 
276 Ibid.; and comments on China's re sponse to Panel question No. 62. 
277 China's second written submission, para. 116. 
278 Ibid. 
279 United States' first written submission, paras. 130-135. 
280 China's first written submission, para. 138; and second written submission, para. 128. 
281 China's second written submission, para. 128. 
282 China's comments on the United States' response to Panel question No. 64. 
283 China's first written submission, para. 141 (quoti ng Redetermination Disclosure, (Exhibit US-3), 
p. 10); and response to Panel question No. 62, para. 175. 
284 Ibid. 
285 Ibid. 
286 China's response to Panel question No. 62, para. 175. 
287 China's first written submission, paras. 142-143; and second written submission, para. 132. WT/DS414/RW 
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  percentage figures showing the extent of decline in Wuhan's gross profit constituted an adequate 
non-confidential summary of the confidential information.288 
7.5.4.2  Main arguments of the third parties 7.168.  Japan supports the United States' claims regarding MOFCOM's failure to fulfill its disclosure 
obligations under Articles 6.9 and 12.8 of the An ti-Dumping and SCM Agreements. It contends that 
the facts identified by the United States were take n into consideration by MOFCOM in its injury and 
causation determination, and therefore should have been disclosed.
289 
7.5.4.3  Evaluation by the Panel 
7.5.4.3.1  Alleged non-disclosure of inform ation underlying MOFCOM's conclusion that 
the trend of the prices of the subject imports and the domestic like product were the same 
7.169.  With respect to the question of whether parallel price trends of subject imports and the 
domestic like product constituted "essential facts"  for the purpose of Articles 6.9 and 12.8 which 
MOFCOM allegedly failed to disclose, we recall that "essential facts" include all facts necessary to 
the process of analysis and decision-making by an investigating authority.  
7.170.  In the Redetermination Disclosure, MOFCOM  found that the prices of subject imports and 
the domestic like product first went up and then went down.
290 On this basis, MOFCOM concluded 
that the prices of subject imports and the domestic like product kept "in line", i.e., were parallel.291 
MOFCOM relied on this finding of parallel pricing in support of its finding of price competition, which MOFCOM relied on in turn in its final conclusions regarding the price effects of imports and causation. Indeed, this is precisely what China has argued before us. Thus, it is clear that the facts 
on which the finding of parallel pricing was based were part of the facts under consideration in 
MOFCOM's analysis and conclusions regarding the effect of subject imports on domestic like product prices. Put differently, they were essent ial facts under consideration which formed the 
basis of MOFCOM's decision to impose definitive measures.  
7.171.  The question raised by the United States' claim is whether MOFCOM failed to disclose these 
essential facts. In the Redetermination Disclosure , MOFCOM stated that the price of the subject 
imports was based on Chinese Customs data and that the price of the like products was based on 
the verified data of the domestic industry.
292 The price trends on which MOFCOM based its 
conclusion of parallel prices were based on the weighted average unit values of imports from the Russian Federation and the United States combin ed with respect to subject imports, and the 
weighted average unit values of the domestic like product. MOFCOM disclosed the weighted 
average prices of subject imports from the United States and the Russian Federation. Therefore, it 
is clear that information concerning subject import prices was disclosed to interested parties. 
However, we do not consider that this was sufficient to constitute disclosure of the essential facts 
underlying MOFCOM's conclusions on parallel pricing.  
7.172.  China maintains that price trends of the domestic like product over the period of 
investigation were based on confidential AUV data  of the domestic producers and therefore could 
not be disclosed to the interested parties.
293 We note that China provided, in the course of this 
proceeding, information on domestic price ranges on a confidential basis. While this information provides a better understanding of MOFCOM's findin g of parallel pricing, and apparently was part 
of the record before MOFCOM, it was not included in the Redetermination Disclosure. As a 
                                               
288 China's second written submission, para. 132. 
289 Japan's third-party submission, para. 24. 
290 Redetermination Disclosure, (Exhibit US-3), p. 10; and Redetermination Disclosure – China's 
translation, (Exhibit CHN-2), p. 11. 
291 Ibid. 
292 Redetermination Disclosure, (Exhibit US-3), pp. 9-10; and Redetermination Disclosure – China's 
translation, (Exhibit CHN-2), p. 11. 
293 China's first written submission, para. 138. In this  regard, we note that MOFCOM's parallel pricing 
analysis concerned price trends in 2007, 2008 and Q1  2009. The AUV data for 2007 was based on Wuhan's 
prices alone while the AUV data for 2008 and Q1 2009 reflected the weighted average of Baosteel's and Wuhan's prices. See China's response to Panel question No. 7, para. 27. WT/DS414/RW 
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  consequence, it cannot be considered in our evaluation of whether China complied with the 
disclosure obligations at issue.  
7.173.  Further, while we are sympathetic to the fact that in situations where there are only 
two domestic producers, disclosure of even average domestic sales prices may allow the 
competing producers in that two producer industry to calculate each other's information, this does 
not obviate the obligation to disclose essential facts, at least in some non-confidential summary form. There is no indication in the Redeterminatio n that MOFCOM even attempted to do so, and no 
explanation of why it was impossible to do so, if that was MOFCOM's view. We emphasize that we 
do not understand Article 6.9 or Article 12.8 to require an investigating authority to disclose 
confidential information which it is obliged to protect pursuant to Article 6.5 of the Anti-Dumping Agreement or Article 12.4 of the SC M Agreement. We note that the United States 
has not challenged MOFCOM's decision to treat the domestic price information as confidential. 
Nonetheless, we find that having failed to even attempt to provide a non-confidential disclosure of 
essential facts regarding domestic prices which formed the basis of its consideration of parallel 
pricing, MOFCOM acted inconsistently with Articles 6.9 and 12.8 of the Anti-Dumping and 
SCM Agreements. 
7.5.4.3.2  Alleged non-disclosure of essentia l facts regarding MOFCOM's finding that the 
domestic industry's loss in market share in 2008 led it to slash prices by over 30% in 
Q1 2009 
7.174.  In the Redetermination, MOFCOM found that  the domestic industry's loss of market share 
in 2008 led it to slash prices by over 30% in Q1 2009. MOFCOM relied on this finding in support of 
its conclusions regarding the price effects of imports and causation. Thus, again, it is clear that the 
facts on which the finding was based were part of the facts under consideration in MOFCOM's analysis and conclusions regarding the effect of subject imports on domestic like product prices. 
Put differently, they were essential facts under co nsideration which formed the basis of MOFCOM's 
decision to impose definitive measures. 
7.175.  China asserts that the following statements , along with the specific facts upon which they 
were based, are the "essential facts" which were under consideration and that formed the basis of 
MOFCOM's decision: 
a. subject imports surged in 2008 resulting in loss of market share for the domestic 
industry; 
b. there was a one-to-one correlation between the market share lost by the domestic 
industry and the market share gained by subject imports; and 
c. faced with a continued surge in the volume of subject imports in Q1 2009, the domestic 
industry was forced to lower prices by 30.25% to compete with subject imports and to 
regain market share. 
7.176.  We note that the United States contends that "MOFCOM fail[ed] to support its assertion 
that the domestic industry's loss of market share led it slash prices by over 30% in the 
first quarter of 2009".
294 Further, the United States submits that "obligations contained in the 
covered agreements apply to the disclosure of facts, and not reasoning".295 We understand the 
United States to argue that the three factors relied upon by China, set out in paragraph 7.175 
above, were in fact "reasons" provided by MOFCOM  for its conclusions rather than essential facts. 
As noted above, Article 6.9 of the Anti-D umping Agreement and Article 12.8 of the 
SCM Agreements require the disclosure of "essentia l facts", not the reasoning of the investigating 
authority.296 In this instance, it seems to us that the United States is arguing that MOFCOM 
disclosed reasoning, but not facts, and that the reasoning was unsupported by facts disclosed to the parties.  
                                               
294 United States' second written submission, para. 115. 
295 Ibid.; and comments on China's re sponse to Panel question No. 62. 
296 See, e.g. Panel Report, Argentina – Poultry Anti-Dumping Duties , para. 7.225. The panel in that case 
concluded that the "essential facts" within the meaning of Article 6.9 of the Anti-Dumping Agreement did not include motives, causes or justifications for the investigating authority's findings. We agree. WT/DS414/RW 
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  7.177.  As explained above, we do have serious concerns regarding MOFCOM's conclusions 
regarding the linkage between the domestic industry's market share loss in 2008 and the 30.25% decline in the domestic industry's price in Q1 2009. However, MOFCOM did disclose the essential facts under consideration on the basis of which it made these findings, i.e. percentage figures 
relating to market share shifts and price fluctuations. Moreover, we understand that subject import 
statistics from China Customs were available to the in terested parties. It is not clear to us from the 
United States' submissions what additional facts it contends MOFCOM should have disclosed, but 
did not. For these reasons, we reject th e United States' claim in this respect. 
7.5.4.3.3  Essential facts regarding MOFCOM's finding that the price-cost differential for 
Wuhan decreased in 2008 
7.178.  Before considering the United States' claim, we wish to clarify our understanding of why a 
decline in the price-cost differential for Wuhan in 2008 was relevant to MOFCOM's 
Redetermination. In the original proceeding, we expressed specific concerns regarding MOFCOM's failure to consider the possible effect of Baosteel's start-up costs in suppressing domestic like 
product prices in 2008.
297 We understand from China's argument that MOFCOM, in the 
Redetermination, examined this question, and concluded that Wuhan did not experience such 
start-up costs, and faced an even more significan t decline in its price-cost differential. On this 
basis, MOFCOM found that the effect of Baosteel's start-up costs on the domestic industry was 
relatively small.298  
7.179.  In light of China's argument, it seems to us that facts concerning the decline in Wuhan's 
price-cost differential were considered by MOFCOM in determining whether subject imports had a 
price suppressive effect in 2008, and in this cont ext, therefore, constituted essential facts under 
consideration by MOFCOM.  
7.180.  The United States argues that MOFCOM  failed to disclose facts underlying MOFCOM's 
finding that Wuhan's price-cost differential decreased in 2008. China asserts that the gross profit 
margin is the difference between price and costs and thus serves as a sufficient proxy for the 
price-cost differential.299 It further asserts that figures concerning the decline in Wuhan's gross 
profits were disclosed.300 The United States does not dispute that MOFCOM disclosed facts 
regarding the gross profit margins, but asserts that this is not a sufficient disclosure of the essential facts. However, the United States does not specifically explain why the disclosure of gross profit margins cannot be considered a sufficient non-confidential summary of a decline in 
Wuhan's price-cost differential. In light of United States' failure to rebut China's argument, we 
reject the United States' claim in this respect. 
7.5.5  Failure to disclose essential facts regarding MOFCOM's causation determination 
7.5.5.1  Main arguments of the parties  
7.5.5.1.1  United States 7.181.  The United States' claim of failure to disclose essential facts relating to MOFCOM's 
causation determination focuses on the following four elements: 
a. Information regarding the "sales obstacles" that allegedly prevented the domestic 
industry from making more sales in 2008 and the first quarter of 2009; 
b. Information underlying MOFCOM's assertion that the domestic industry was prevented 
by subject imports from realizing economies of scale; 
c. Information underlying MOFCOM's finding that the capacity and output of the domestic 
GOES industry did not exceed market demand; and 
                                               
297 Panel Report, China – GOES , para. 7.548; and Appellate Body Report, China – GOES , para. 168. 
298 China's first written submission, para. 30 (quoti ng Redetermination, (Exhibit US-1), p. 25). 
299 Ibid. para. 30. 
300 Ibid. WT/DS414/RW 
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  d. Information supporting MOFCOM's division of responsibility for the inventory overhang. 
7.182.  The United States argues the following with respect to these four elements: 
a. the Redetermination Disclosure does not make clear what were the sales obstacles to 
which MOFCOM referred301; 
b. MOFCOM failed to disclose any facts underlying its conclusion that the domestic industry 
was prevented by subject imports from realizing economies of scale302; 
c. MOFCOM failed to disclose any information underlying its finding that the capacity and 
output of the domestic industry did not exceed market demand303; and 
d. MOFCOM failed to disclose any information supporting its allocation of responsibility for 
the domestic industry's inventory overhang.304  
7.5.5.1.2  China 
7.183.  China maintains the following with respect to these four elements: 
a. MOFCOM's Redetermination Disclosure makes clear that the increase in subject imports 
that were the sales obstacle in issue305, and the United States does not clearly identify 
the facts regarding subject imports which MOFCOM purportedly failed to disclose306; 
b. MOFCOM explained the reasoning for its finding regarding economies of scale307; 
c. MOFCOM disclosed not only information on the percentage changes in capacity and 
output, adjusted for differences in the base amounts of each308, but also facts showing 
that domestic capacity from 2006 through 2008 remained significantly below the total market demand despite the growth in capacity during that period
309; and 
d. MOFCOM extensively discussed the cause of th e domestic industry's inventory overhang, 
relying on the percentage changes in the relevant factors, which were disclosed in the 
Redetermination Disclosure, to establish that inventories first declined while subject imports were steady in 2007 and then increase d when subject imports also increased in 
2008.
310 
7.5.5.2  Main arguments of the third parties 7.184.  Japan supports the United States' claims regarding MOFCOM's failure to fulfill its disclosure 
obligations under Articles 6.9 of the Anti-Dumping Agreement and Article 12.8 of the 
SCM Agreement. It contends that the facts identified by the United States were taken into consideration by MOFCOM in its injury and causation determinations, and therefore should have been disclosed.
311 
                                               
301 United States' second written submission, para. 114. 
302 United States' first written submission, para. 146; and second written submission, para. 111. 
303 United States' first written submission, para. 146; and second written submission, para. 117. 
304 United States' first written submission, para. 146; and second written submission, paras. 118-119. 
305 China's first written submission, para. 140; and second written submission, para. 130. 
306 China's second written submission, para. 130. 
307 China's first written submission, para. 139; and second written submission, para. 129. 
308 China's second written submission, para. 144, footnote 186. 
309 China's second written submission, para. 133. 
310 China's first written submission, para. 145; and second written submission, para. 134. 
311 Japan's third-party submission, para. 24. WT/DS414/RW 
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  7.5.5.3  Evaluation by the Panel 
7.5.5.3.1  Essential facts regarding "sales obstacles" 7.185.  China asserts in this proceeding that the "sales obstacles" to which MOFCOM made 
reference in the Redetermination were specifically subject imports.
312 While the Redetermination 
Disclosure does contain information on the volumes of subject imports, we see nothing that would 
connect that information to the notion of subject imports specifically constituting the "sales obstacles" referred to in the Redetermination. Thus, to the extent MOFCOM considered "sales 
obstacles" in making its determination of causation, we see nothing in the Redetermination 
Disclosure that could be understood to constitute the essential facts concerning those sales obstacles. In this respect, MOFCOM failed to comply with the obligations set out in Articles 6.9 and 12.8 of the Anti-Dumping and SCM Agreements. 
7.5.5.3.2  Essential facts re garding economies of scale 
7.186.  MOFCOM referred to economies of scale in the context of its injury and causation analyses 
in the Redetermination.
313 These references consist of the repeated statement that the increase in 
the domestic industry's output and capacity did not result in "corresponding economies of scale" 
for the domestic industry. However, the references  in the Redetermination appear unsupported by 
any specific underlying facts. China refers to the Redetermination Disclosure at pages 22-23 to 
argue that MOFCOM disclosed the essential facts regarding economies of scale and at page 13 to 
argue that the percentage changes in demand, ca pacity and output are the facts that were the 
basis for MOFCOM's findings regarding economies of scale. However, pages 22-23 appear to relate to US comments on the disclosure of information in the original investigation and the percentage 
changes at page 13 do not relate specifically to economies of scale. Thus, we fail to see the 
relevance of China's references to these pages of the Redetermination Disclosure in the context of 
this claim. 
7.187.  As discussed above, MOFCOM's findings with  respect to economies of scale rely on several 
premises that are not explained in the Redeterminat ion, and for which there are no facts set out in 
either the Redetermination itself, or in the Redetermination Disclosure. Indeed, China 
acknowledges that there are no facts other than the information concerning percentage changes in 
demand, capacity and output relevant to the issue of economies of scale set out in the Redetermination Disclosure.
314 Thus, it appears that MOFCOM did not actually have any other facts 
before it that could be under consideration with respect to this issue. 
7.188.  While we have concluded that MOFCOM's findings regarding economies of scale are not 
sufficiently explained, and therefore are not substantively adequate, it does appear that MOFCOM disclosed the essential facts under consideration with respect to that substantively inadequate 
determination. In this situation, we see no basis for a finding that MOFCOM failed to comply with 
the obligation to disclose essential facts set out in Articles 6.9 and 12.8 of the Anti-Dumping and SCM Agreements. 
7.5.5.3.3  Essential facts regard ing capacity, output and demand 
7.189.  In support of its conclusion that domestic  capacity and output did not exceed demand from 
2006 through 2008, MOFCOM referred only to the percentage changes in these factors and a 
statement that domestic demand in 2007 was "almost twice" domestic output.
315 China has not 
asserted that there was any other information in the record that formed the basis for MOFCOM's 
findings regarding capacity, output and demand. 
7.190.  While we find it difficult to understand how MOFCOM based its findings regarding these 
factors on the facts to which China refers, these facts are undisputedly set out in the 
Redetermination Disclosure. Accordingly, MO FCOM did disclose the essential facts under 
consideration with respect to its determination. In this situation, we see no basis for a finding that 
                                               
312 China's first written submission, para. 140; and second written submission, para. 130. 
313 Redetermination, (Exhibit US-1), pp. 28, 29, 42, 43; and Redetermination – China's translation, 
(CHN-1), pp. 29, 43, 44. 
314 China's second written submission, paras. 94, 98; and response to Panel question No. 57, para. 156. 
315 Redetermination, (Exhibit US-1), p. 52; and Redetermination – China's translation, (CHN-1), p. 52. WT/DS414/RW 
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  MOFCOM failed to comply with the obligation to disclose essential facts set out in Articles 6.9 
and 12.8 of the Anti-Dumping and SCM Agreements. 
7.5.5.3.4  Essential facts re garding inventory overhang 
7.191.  In support of its conclusion that subject imports caused the increase in the domestic 
industry's inventory in 2008, MOFCOM relied on the fact that the domestic industry's inventory and 
subject imports increased at commensurate rates during that period. China has not asserted that there was any other information in the record that formed the basis for MOFCOM's findings 
regarding inventory overhang. 
7.192.  While we consider that MOFCOM's findings regarding inventory overhang are not 
sufficiently explained, and therefore are not substantively adequate, it does appear that MOFCOM disclosed the facts under consideration with respect to that substantively inadequate 
determination. In this situation, we see no basis for a finding that MOFCOM failed to comply with 
the obligation to disclose essential facts set out in Articles 6.9 and 12.8 of the Anti-Dumping and SCM Agreements. 
7.6  The United States' claim with respect to public notice 
7.6.1  Introduction 7.193.  In this section of our report, we consider the United States' assertions that MOFCOM 
explained neither the matters of fact and law nor the reasons that led it to maintain anti-dumping 
and countervailing duties in the public notice of the Redetermination, and thus claims that its public notice is inconsistent with China's obligations under Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement and Articles 22.3 and 22.5 of the SCM Agreement. Specifically, the 
United States contends that MOFCOM's Redetermination does not explain: 
a. MOFCOM's finding that the trends of the pric es of the subject imports and the domestic 
like product were the same; 
b. the evidence that MOFCOM allegedly consid ered, and the analysis that it allegedly 
conducted, in concluding that the domestic industry's loss of market share in 2008 led it to slash prices by over 30% in the first quarter of 2009; 
c. its assertion regarding the "sales obstacles" that allegedly prevented the domestic 
industry from making more sales in 2008 and the first quarter of 2009; 
d. its assertion that the domestic industry was prevented by subject imports from realizing 
economies of scale; and 
e. MOFCOM's finding that the capacity and output of the domestic GOES industry did not 
exceed market demand. 
The United States contends that these findings and conclusions were material and thus subject to 
public notice requirements because they had to  be resolved before MOFCOM could make an 
affirmative determination.
316 
 
7.194.  China counters that the Redetermination is sufficiently clear as to the facts and reasoning 
that led MOFCOM to its conclusions, while also respecting the need to protect confidential information. China maintains that (i) MOFCOM fully respected the requirement to provide a reasoned account of the factual basis for its decision to impose definitive measures
317, (ii) the 
United States failed to establish a prima facie  case318, and (iii) some of the United States' claims 
                                               
316 United States' first written submission, para. 154. 
317 China's first written submission, para. 153. 
318 Ibid. WT/DS414/RW 
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  are factually inaccurate.319 In addition, in its second written submission, China contends that the 
United States abandoned some of its orig inal claims concerning public notice.320 
7.6.2  Provisions at issue 7.195.  Article 12.2 of the Anti-Dumping Agreement provides: 
Public notice shall be given of any preliminary or final determination, whether 
affirmative or negative, of any decision to accept an undertaking pursuant to Article 8, of the termination of such an undertaking, and of the termination of a definitive 
anti-dumping duty. Each such notice shall set forth, or otherwise make available 
through a separate report, in sufficient detail the findings and conclusions reached on all issues of fact and law considered material by the investigating authorities. All such notices and reports shall be forwarded to the Member or Members the products of 
which are subject to such determination or undertaking and to other interested parties 
known to have an interest therein. 
Article 22.3 of the SCM Agreement is virt ually identical to Article 12.2 of the 
Anti-Dumping Agreement but for references to "Article 18" and "a definitive countervailing duty" in 
place of "Article 8" and "a definitive anti-dumping duty" in the first sentence. 
 
7.196.  Article 12.2.2 of the Anti-Dumping Agreement further provides: 
A public notice of conclusion or suspension of an investigation in the case of an 
affirmative determination providing for the imposition of a definitive duty or the acceptance of a price undertaking shall contain, or otherwise make available through a 
separate report, all relevant information on the matters of fact and law and reasons 
which have led to the imposition of final measures or the acceptance of a price undertaking, due regard being paid to the requirement for the protection of 
confidential information. In particular, the notice or report shall contain the 
information described in subparagraph 2.1, as well as the reasons for the acceptance or rejection of relevant arguments or claims made by the exporters and importers, 
and the basis for any decision made under subparagraph 10.2 of Article 6. 
Again, Article 22.5 of the SCM Agreement is virtually identical to Article 12.2.2 of the 
Anti-Dumping Agreement. None of the di fferences are relevant in this dispute.
321 
7.6.3  Legal framework 
7.197.  We begin by recalling the difference in the obligations imposed by Articles 6.9 and 12.2.2 
of the Anti-Dumping Agreement and the analogous provisions, Ar ticles 12.8 and 22.5, of the 
SCM Agreement. As explained by the Appellate Body in the original proceedings, Article 6.9 
concerns the disclosure of essential facts prior to a definitive determination. Article 12.2.2 requires 
"public notice of conclusion" of an investigation, and thus applies once a final determination is made.
322 Therefore, in this case, the document to be considered in resolving the United States' 
claims is the Redetermination document issued by MOFCOM. 
7.198.  Further, the chapeau of Article 12.2.2 (i.e., Article 12.2) and the corresponding provision 
of the SCM Agreement, Article 22.3, require investigating authorities to make available, in sufficient detail, the findings and conclusions reached on all issues of fact and law "considered 
material by the investigating authorities." Therefore, if an issue of fact or law was not considered 
material to its determinations, MOFCOM would not be obliged to give public notice of findings and conclusions on that issue, regardless of its relevance or importance to the parties, or a reviewing 
panel. However, we also agree with the view taken by some panels that material issues of fact and 
                                               
319 United States' second written submission, para. 122. 
320 China's second written submission, para. 137. 
321 Article 22.5 refers to "an undertaking" rather than  "a price undertaking" in the first sentence, and 
refers to "paragraph 4" rather than  "subparagraph 2.1" and "interested Me mbers" in addition to " exporters 
and importers" in the second sentence. Article 22.5 of the SCM Agreement also omits the reference at the end 
of Article 12.2.2 of the Anti-Dumping Agreement to sampling under Article 6.10 of the latter Agreement. There 
is no corollary provision to Article 6.10 in the SCM Agreement. 
322 Appellate Body Report, China – GOES , para. 240. WT/DS414/RW 
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  law include issues that arisen in the course of an investigation and which must necessarily be 
resolved in order for the investigating authorities to make the necessary determinations.323 In 
other words, an investigating authority cannot simply conclude that an issue that arises in an investigation is not material and make no findings regarding it if, viewed objectively, that issue 
requires resolution in the context of the findings made by the investigating authority. 
7.199.  In addition, as we stated in the original proceedings, the public notice requirement under 
Article 12 of the Anti-Dumping Agreement and Ar ticle 22 of the SCM Agreement does not extend 
to confidential information.
324 Indeed, both provisions make clear that "due regard" must be paid 
to the requirement to protect confidential info rmation. Where the public notice requirement 
implicates information treated as confidential in an investigation, investigating authorities may reconcile their obligation to protect confidential information from disclosure with their obligations 
with respect to public notice by basing the public notice on non-confidential summaries of the 
relevant information.
325 As the public notice obligations only require investigating authorities to 
make available "findings" and "conclusions" on issues of fact, and "matters of fact" which have led 
to arguments being rejected, it is also not necessary to include all relevant underlying, or even 
supporting facts, in the public notice.326 
7.200.  Before we turn to the specific assertions of the United States regarding allegedly 
inadequate public notice, we have considered the application of judicial economy with respect to 
those assertions which relate to aspects of MOFCOM's Redetermination which we have, in this report, found to be inconsistent with China's substantive obligations under the Anti-Dumping and SCM Agreements. We note that where we have fo und such inconsistency, we have based that 
decision principally on the basis of the explanations of MOFCOM's analysis and conclusions in the 
Redetermination, consistently with the applicable standard of review. In this situation, we consider immaterial the question of whether the public notice of such an inconsistent determination is 
"sufficient". We find the question of whether it is necessary or appropriate for us to make findings 
on the adequacy of the public notice to be particularly relevant in this case as, where we have found substantive inconsistencies in MOFCOM's price effects and causation analysis, the primary 
basis for those findings is our conclusion MOFCOM failed, in the Redetermination, to engage 
adequately with relevant evidence before it, and/or failed to explain the basis of its finding. Therefore, where we have found that aspects of MOFCOM's Redetermination are inconsistent with China's substantive obligations we exercise judicial economy and make no finding on the 
corresponding claims under Articles 12 and 22 of the Anti-Dumping and SCM Agreements 
respectively. 
7.201.  Our decision is in keeping with that of several previous panels, which have concluded that, 
where there is a substantive inconsistency with th e provisions of the Anti-Dumping Agreement, it 
is neither necessary nor appropriate to make find ings on claims of violation of Articles 12 
and/or 22 of the Anti-Dum ping and SCM Agreements.
327 In this regard, we note in particular the 
findings of the panel in EC – Bed Linen :  
A notice may adequately explain the determination that was made, but if the 
determination was substantively inconsistent with the relevant legal obligations, the adequacy of the notice is meaningless. Further, in our view, it is meaningless to 
consider whether the notice of a decision that is substantive [ sic] inconsistent with the 
requirements of the AD Agreement is, as a separate matter, insufficient under Article 12.2. A finding that the notice of an inconsistent action is inadequate does not 
add anything to the finding of violation, the resolution of the dispute before us, or to 
the understanding of the obligations imposed by the AD Agreement.
328 
We agree with the findings of the panel in EC – Bed Linen  to this effect, in particular with respect 
to the lack of any additional value to be had from findings as to whether a notice of a substantively 
inadequate determination is consistent with the public notice requirements of the Anti-Dumping 
                                               
323 See Panel Reports, China – Broiler Products , para. 7.527; and EU – Footwear (China) , para. 7.844. 
324 Panel Report, China – GOES , para. 7.334. 
325 Ibid. para. 7.335; and Appellate Body Report, China – GOES , para. 259. 
326 See, e.g. Appellate Body Report, China – GOES , para. 256. 
327 Panel Reports, EC – Bed Linen , para. 6.259; and EC – Salmon (Norway) , para. 7.831.  
328 Panel Report, EC – Bed Linen , para. 6.259.  WT/DS414/RW 
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  and SCM Agreements. We therefore adopt them as our own, and will follow the same approach in 
evaluating the United States' public notice claims in this proceeding. 
7.6.4  Main arguments of the parties 7.6.4.1  United States 
7.202.  The United States contends that, inter alia , MOFCOM's Redetermination did not contain all 
relevant information on matters of fact and law which led MOFCOM to conclude that price trends of subject imports and the domestic like product were the same.
329 
7.203.  The United States further contends that MOFCOM's Redetermination explains neither its 
conclusions that the domestic industry was preven ted by subject imports from realizing economies 
of scale330 nor its finding that the capacity and output of the domestic industry did not exceed 
market demand.331 In its second written submission, the United States further argues that China's 
representations that increased imports are the "sal es obstacles" referred to in the Redetermination 
are not supported by the Redetermination itself.332 
7.6.4.2  China 
7.204.  China argues that by failing to establish that the facts referred to by the United States in 
its public notice claims were critical to an understanding of the factual basis that led to the imposition of final measures, the United States has failed to make a prima facie  case that MOFCOM 
violated Articles 12.2 and 12.2.2 of the Anti-Dum ping Agreement and Articles 22.3 and 22.5 of the 
SCM Agreement.
333 With regard to MOFCOM's conclusions regarding trends in prices of subject 
imports and the domestic like product, China argues that MOFCOM provided, in the Redetermination, the public version of the data supporting these conclusions.
334 In relation to 
MOFCOM's conclusion that the domestic industry's market share loss in 2008 led it to reduce prices 
significantly in Q1 2009, China submits that MOFCOM  disclosed all matters of fact and law that led 
to this conclusion.335 
7.205.  In addition, China contends that MOFCOM fully explained not only its analysis and findings 
regarding the domestic industry's failure to realize economies of scale due to subject imports, referring to pages 23 and 24 of the Redetermination
336, but also the basis for its finding that 
domestic capacity and output did not exceed market demand, referring to the Redetermination at 
page 52.337 China further contends that it was clear from MOFCOM's Redetermination that subject 
imports were the sales obstacles in issue, and how MOFCOM considered them, referring to the Redetermination at pages 24-26.
338 
7.6.5  Main arguments of the third parties 
7.206.  Japan argues that the facts identified by the United States in its public notice claims were 
material because they were taken into consideration by MOFCOM in its injury and causation 
determinations. Japan requests us to examine carefully whether MOFCOM complied with its 
obligations in this regard.339 
7.6.6  Evaluation by the Panel 
7.207.  Turning to the specific assertions of the United States regarding allegedly inadequate 
public notice, we note that each of these relates to aspects of MOFCOM's Redetermination which 
                                               
329 United States' second written submission, para. 122. 
330 United States' first written submission, para. 153. 
331 Ibid. 
332 United States' second written submission, para. 124. 
333 China's first written submission, para. 150. 
334 Ibid. para. 156. 
335 Ibid. para. 159. 
336 Ibid. para. 157; and second written submission, para. 143. 
337 China's first written submission, para. 161. 
338 Ibid. para. 158. 
339 Japan's third-party submission, para. 24. WT/DS414/RW 
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  we have found, in this report, to be substantively inconsistent with China's obligations. More 
specifically, the United States' claims regarding the adequacy of the public notice of MOFCOM's price effects and causation determinations relate to our substantive findings as follows: 
a. In relation to MOFCOM's conclusions regarding similar trends in the prices of subject 
imports and the domestic like product, we note that MOFCOM's conclusions were 
relevant to its factual findings on parallel trends in prices of subject imports and the 
domestic like product. The findings on parallel trends formed part of MOFCOM's 
intermediate findings concerning price competition and were part of MOFCOM's price 
effects analysis. We found MOFCOM's parallel pricing analysis to be erroneous, for the reasons described above.
340 It is also relevant to note that we found MOFCOM's overall 
price effects analysis to be inconsistent with China's obligations under Articles 3.1 
and 3.2 of the Anti-Dumping Agreemen t and Articles 15.1 and 15.2 of the 
SCM Agreement. 
b. With regard to the United States' claim concerning MOFCOM's alleged failure to provide 
in the Redetermination, relevant information on facts and law, which led MOFCOM to the 
conclusion that the domestic industry's loss of market share in 2008 led it to slash prices by over 30% in the first quarter of Q1 2009 we  highlighted specific errors in MOFCOM's 
analysis, in particular, in light of MOFCOM's failure to engage with probative evidence 
before it, which could have brought its conc lusions into question, and also because of 
MOFCOM's failure to adequately explain the basis for its finding.
341 We found MOFCOM's 
volume based price suppression analysis, in this case, to be flawed and inconsistent with 
China's obligations under Articles 3.1 and 3.2 of the Anti-Dumping Agreement and 
Articles 15.1 and 15.2 of the SCM Agreement.  
c. With respect to economies of scale, the US claim is based upon MOFCOM's failure to 
explain its conclusions that the domestic indu stry was prevented by subject imports from 
realizing economies of scale. Similarly, our finding that MOFCOM's conclusions regarding economies of scale do not support its determination of causation is based on the fact 
that MOFCOM's findings in this context rely on several premises that are not explained in 
the Redetermination, and for which there are no facts set out in either the Redetermination itself, or in the Redetermination Disclosure.
342 
d. With respect to capacity, output and demand, the US claim is based upon MOFCOM's 
failure to explain its finding that the capacity  and output of the domestic industry did not 
exceed market demand. Similarly, our finding that MOFCOM's conclusions regarding these three economic factors do not support its determination of causation is based on 
the continued absence of underlying data regarding growth in domestic demand, 
capacity and output.
343 
e. With respect to sales obstacles, the US claim is based upon the fact that China's 
representations that increased imports are the "sales obstacles" referred to in the 
Redetermination are not supported by the Redetermination itself. Similarly, we have found nothing that would connect the inform ation presented by MOFCOM on the volumes 
of subject imports to the notion of subject imports specifically constituting the "sales 
obstacles" encountered by the domestic industry.
344 
7.208.  As the United States' claims of inadequate public notice relate specifically to the aspects of 
MOFCOM's price effects and causation determinations that constitute the basis of our findings of 
inconsistency of those determinations with various provisions of the Anti-Dumping and 
SCM Agreements, we apply judicial economy based on the considerations set out above and make no findings on these public notice claims under Articles 12 and 22 of the Anti-Dumping and 
SCM Agreements respectively. 
                                               
340 See, above, paras. 7.89-7.93. 
341 See, above, paras. 7.40-7.112. 
342 See, above, paras. 7.129-7.133. 
343 See, above, paras. 7.138-7.145. 
344 See, above, para. 7.185. WT/DS414/RW 
BCI deleted, as indicated [***] 
- 66 - 
 
  8  CONCLUSIONS 
8.1.  For the reasons set forth in this Report, we conclude that the United States' claim regarding 
adverse effects under Articles 3.1 and 3.4 of the Anti-Dumping Agreement and Articles 15.1 and 15.4 of the SCM Agreement is not properly before us. 
8.2.  Further, and for the reasons set forth in this Report, we conclude that: 
a. MOFCOM's conclusions regarding the price effects of subject imports are not consistent 
with Articles 3.1 and 3.2 of the Anti-Dumpi ng Agreement and Articles 15.1 and 15.2 of 
the SCM Agreement; 
b. MOFCOM's revised finding that subject imports caused material injury to the domestic 
industry is not consistent with Articles 3. 1 and 3.5 of the Anti-Dumping Agreement and 
Articles 15.1 and 15.5 of the SCM Agreement; and 
c. MOFCOM acted inconsistently with Articl e 6.9 of the Anti-Dumping Agreement and 
Article 12.8 of the SCM Agreement with respect to the disclosure of essential facts regarding parallel pricing and sales obstacles. 
Accordingly, China's measures taken to comply with the DSB's recommendations and rulings, at 
issue in this proceeding, are inconsistent with the relevant covered agreements, and therefore China failed to comply with the reco mmendations and rulings of the DSB. 
 
8.3.  In addition, and for the reasons set forth in this Report, we conclude that the United States has failed to demonstrate that MOFCOM acted inconsistently with Article 6.9 of the Anti-Dumping Agreement and Article 12.8 of the SC M Agreement with respect to the disclosure of 
essential facts regarding the domestic industry's loss of market share in 2008 and price reduction 
in the first quarter of 2009, the decrease in Wuhan's price-cost differential in 2008, economies of scale, domestic capacity, output and demand, and inventory overhang. 
8.4.  Finally, in light of our findings of substa ntive violations, we exercised judicial economy and 
made no findings with regard to the United States' public notice claims under Article 12 of the Anti-Dumping Agreement and Article 22 of the SCM Agreement. 
8.5.  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 we have found the measures at 
issue inconsistent with the provisions of the An ti-Dumping and SCM Agreements cited above, they 
have nullified or impaired benefits accruing to the United States under these agreements. 
8.6.  We therefore conclude that China failed to implement the recommendations and rulings of 
the DSB to bring its measures into conformity with its obligations under the Anti-Dumping and 
SCM Agreements.
345 To the extent that China failed to comply with the recommendations and 
rulings of the DSB in the original dispute, thos e recommendations and rulings remain operative. 
__________ 
                                               
345 We recall that China asserts that the measur es at issue expired after the issuance of the 
Interim Report. However, there is no eviden ce properly before us in this regard.