WT/DS491/R/Add.1  
 
6 December  2017 
(17-6646) Page: 1/96 
  Original: English  
 
  
UNITED STATES – ANTI -DUMPING AND COUNTERV AILING MEASURES 
ON CERTAIN COATED PA PER FROM INDONESIA  
REPORT OF THE PANEL  
Addendum  
This addendum  contains Annexes A to E to the Report of the Panel to be found in document  
WT/DS491/R . 
 
 
_______________  
 
 WT/DS491/ R/Add.1  
 
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  LIST OF ANNEXES  
ANNEX  A 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  A-2 
Annex  A-2 Additional Working Procedures of the Panel concerning Business Confidential 
Information  A-7 
ANNEX B  
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 First integrated executive summary of Indonesia  B-2 
Annex  B-2 First integrated executive summary of the United States  B-17 
Annex  B-3 Second integrated executive summary of Indonesia  B-33 
Annex  B-4 Second integrated executive summary of the United States  B-48 
ANNEX C  
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of Brazil  C-2 
Annex  C-2 Integrated executive summary of Canada  C-5 
Annex  C-3 Integrated executive summary of the European Union  C-8 
Annex  C-4 Integrated executive summary of Turkey  C-12 
ANNEX D  
PROCEDURAL RULINGS O F THE PANEL  
Contents  Page  
Annex  D-1 Decision of the Panel concerning Canada's request for enhanced third -party 
rights   D-2 
Annex D -2 Decision of the Panel concerning the European Union's request regarding BCI   D-5 
ANNEX E  
INTERIM REVIEW  
Contents  Page  
Annex  E-1 Interim Review  E-2 
 
 
 WT/DS491/R/Add.1  
 
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  ANNEX  A 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  A-2 
Annex  A-2 Additional Working Procedures of the Panel concerning Business Confidential 
Information  A-7 
 
 WT/DS491/R/Add.1  
 
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  ANNEX  A-1 
WORKING PROCEDURES O F THE PANEL  
Adopted on 29 July 2016  
1.  In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules 
and Procedures Governing the Settlement of Disp utes (DSU). In addition, the following Working 
Procedures shall apply.  
General  
 
2.  The deliberations of the Panel and the documents submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Procedures shall preclude a party to the dispute (hereafter 
"party") from disclosing statements of its own positions to the public. Members shall treat as 
confidential information submitted to the Panel by another Member which the submitting Member 
has designated as confidential. Where a party submits a confidential version of its written 
submissions to the Panel, it shall also, upon request of a Member, provide a non -confidential 
summary of the information contained in its submissions that could be disclosed to the public.  
3.  The Panel shall meet in closed session. The parties, and Members having notified their interest 
in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU (hereafter 
"third parties"), shall be present at the meetings only when invited by the Panel to appear before 
it.  
4.  Each party and third party has the right to determi ne the composition of its own delegation 
when meeting with the Panel. Each party and third party shall have the responsibility for all 
members of its own delegation and shall ensure that each member of such delegation acts in 
accordance with the DSU and th ese Working Procedures, particularly with regard to the 
confidentiality of the proceedings.  
5.  The Additional Working Procedures of the Panel Concerning Business Confidential Information 
shall, once adopted, be a part of these Working Procedures.  
Submiss ions 
 
6.  Before the first substantive meeting of the Panel with the parties, each party shall submit a 
written submission in which it presents the facts of the case and its arguments, in accordance with 
the timetable adopted by the Panel. Each party shall  also submit to the Panel, prior to the second 
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by 
the Panel.  
7.  A party shall submit any request for a preliminary ruling at the earliest possible opportunity 
and in any event no later than in its first written submission to the Panel. If Indonesia requests 
such a ruling, the United States shall submit its response to the request in its first written 
submission. If the United States requests such a ruling, Indon esia shall submit its response to the 
request prior to the first substantive meeting of the Panel, at a time to be determined by the Panel 
in light of the request. Exceptions to this procedure shall be granted upon a showing of good 
cause.  
8.  Each party s hall submit all factual evidence to the Panel no later than during the first 
substantive meeting, except with respect to evidence necessary for purposes of rebuttal, answers 
to questions or comments on answers provided by the other party. Exceptions to thi s procedure 
shall be granted upon a showing of good cause. Where such exception has been granted, the Panel 
shall accord the other party a period of time for comment, as appropriate, on any new factual 
evidence submitted after the first substantive meeting .  WT/DS491/R/Add.1  
 
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  9.  Where the original language of exhibits is not a WTO working language, the submitting party or 
third party shall submit a translation into the WTO working language of the submission at the 
same time. The Panel may grant reasonable extensions of time  for the translation of such exhibits 
upon a showing of good cause. Any objection as to the accuracy of a translation should be raised 
promptly in writing, no later than the next filing or meeting (whichever occurs earlier) following 
the submission which c ontains the translation in question. The Panel may grant exceptions to this 
procedure upon a showing of good cause, including where the issue concerning translation arises 
later in the dispute. Any objection shall be accompanied by a detailed explanation o f the grounds 
of objection and an alternative translation.  
10.  To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submissions, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute. For example, exhibits submitted by Indonesia or the United States could be 
numbered IDN -1 and US -1, IDN -2 and US -2, etc. If the last exhibit in connection with the first 
submission was numbered IDN -5 and US -5, the first exhibit of the next sub mission thus would be 
numbered IDN -6 and US -6. 
Questions  
 
11.  The Panel may at any time pose questions to the parties and third parties, orally in the course 
of a meeting or in writing, including prior to each substantive meeting.   
Substantive meetings  
 
12.  Each party shall provide to the Panel the list of members of its delegation in advance of each 
meeting with the Panel and no later than 5.00  p.m. the previous working day.  
13.  The first substantive meeting of the Panel with the parties shall be con ducted as follows:  
a. The Panel shall invite Indonesia to make an opening statement to present its case first. 
Subsequently, the Panel shall invite the United States to present its point of view. Before 
each party takes the floor, it shall provide the Pane l and other participants at the 
meeting with a provisional written version of its statement. In the event that 
interpretation is needed, each party shall provide additional copies for the interpreters, 
through the Panel Secretary. Each party shall make ava ilable to the Panel and the other 
party the final version of its opening statement, as well a s its closing statement if 
available, preferably at the end of the meeting, and in any event no later than 5.00  p.m. 
on the first working day following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shal l send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to 
which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a dea dline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any qu estions to the parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford e ach party an opportunity to 
present a brief closing statement, with Indonesia presenting its statement first.  
14.  The second substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall ask the United States if it w ishes to avail itself of the right to present its 
case first. If so, the Panel shall invite the United States to present its opening statement, 
followed by Indonesia. If the United States chooses not to avail itself of that right, the WT/DS491/R/Add.1  
 
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  Panel shall invite In donesia to present its opening statement first. Before each party 
takes the floor, it shall provide the Panel and other participants at the meeting with a 
provisional written version of its statement. In the event that interpretation is needed, 
each party shall provide additional copies for the interpreters, through the Panel 
Secretary. Each party shall make available to the Panel and the other party the final 
version of its opening statement as well as its closing statement if available, preferably 
at the end of the meeting, and in any event no later than 5.00  p.m. of the first working 
day following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through th e Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to 
which it wishes to receive a response in writing. E ach party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any questions to the parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a dea dline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with the party that presented its opening statement 
first, presenting its closing statement f irst. 
Third parties  
 
15.  The Panel shall invite each third party to transmit to the Panel a written submission prior to 
the first substantive meeting of the Panel with the parties, in accordance with the timetable 
adopted by the Panel.  
16.  Each third pa rty shall also be invited to present its views orally during a session of this first 
substantive meeting, set aside for that purpose. Each third party shall provide to the Panel the list 
of members of its delegation in advance of this session and no later than 5.00  p.m. the previous 
working day.  
17.  The third -party session shall be conducted as follows:  
a. All third parties may be present during the entirety of this session.  
b. The Panel shall first hear the arguments of the third parties in alphabetical  order. Third 
parties present at the third -party session and intending to present their views orally at 
that session, shall provide the Panel, the parties and other third parties with provisional 
written versions of their statements before they take the fl oor. Third parties shall make 
available to the Panel, the parties and other third parties the final versions of their 
statements, preferably at the end of the session, and in any event no later than 
5.00 p.m. of the first working day following the session.   
c. After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third parties questions for clarification on any 
matter raised in the third parties' submissions or statements. Each party shal l send in 
writing, within a timeframe to be determined by the Panel, any questions to a third party 
to which it wishes to receive a response in writing.  
d. The Panel may subsequently pose questions to the third parties. Each third party shall 
then have an  opportunity to answer these questions orally. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the third parties to 
which it wishes to receive a response in writing. Each third party shall be invited to 
respond in writing to such questions within a deadline to be determined by the Panel.  WT/DS491/R/Add.1  
 
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  Descriptive part  
 
18.  The description of the arguments of the parties and third parties in the descriptive part of the 
Panel report shall consist of executive summaries provided  by the parties and third parties, which 
shall be annexed as addenda to the report. These executive summaries shall not in any way serve 
as a substitute for the submissions of the parties and third parties in the Panel's examination of 
the case.  
19.  Each party shall submit an integrated executive summary of the facts and arguments as 
presented to the Panel in its first written submission, first opening and closing oral statements, in 
accordance with the timetable adopted by the Panel. These summaries may also include a 
summary of responses to questions following the first substantive meeting. In addition, each party 
shall also submit a separate integrated executive summary of its written rebuttal, second opening 
and closing oral statements, which may inclu de a summary of its responses to questions following 
the second substantive meeting and comments thereon. Each integrated executive summary shall 
be limited to no more than 20 pages. The Panel will not summarize in a separate part of its report, 
or annex t o its report, the parties' responses to questions.  
20.  Each third party shall submit an executive summary of its arguments as presented in its 
written submission and statement in accordance with the timetable adopted by the Panel. This 
summary may also in clude a summary of responses to questions, where relevant. The executive 
summary to be provided by each third party shall not exceed 6  pages.  
21.  The Panel reserves the right to request the parties and third parties to provide executive 
summaries of fact s and arguments presented by a party or a third party in any other submissions 
to the Panel for which a deadline may not be specified in the timetable.  
Interim review  
 
22.  Following issuance of the interim report, each party may submit a written request to review 
precise aspects of the interim report and request a further meeting with the Panel, in accordance 
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no 
later than at the time the written request for re view is submitted.  
23.  In the event that no further meeting with the Panel is requested, each party may submit 
written comments on the other party's written request for review, in accordance with the timetable 
adopted by the Panel. Such comments shall be  limited to commenting on the other party's  written 
request for review.  
24.  The interim report, as well as the final report prior to its official circulation, shall be kept 
strictly confidential and shall not be disclosed.  
Service of documents  
 
25.  The following procedures regarding service of documents shall apply:  
a. Each party and third party shall submit all documents to the Panel by filing them with 
the DS  Registry (office No. 2047).  
b. Each party and third party shall file 2 paper copies of all documents (incl. submissions 
and exhibits) it submits to the Panel. The DS  Registrar shall stamp the documents with 
the date and time of the filing. The paper version shall constitute the official version for 
the purposes of the record of the dispute.  
c. Each party and third party shall also provide an electronic copy of all documents it 
submits to the Panel at the same time as the paper versions, preferably in Microsoft 
Word format, in the form of an e -mail attachment or in the form of 5 CD -ROMs, 5 DVDs 
or 5 USB keys. If the electronic copy is provided by e -mail, it should be addressed to 
DSRegistry@wto.org, with a copy to xxxxx.xxxxx@wto.org and xxxxx.xxxxx@wto.org. If 
a CD-ROM or a USB key is provided, it shall be filed with the DS Registry.  WT/DS491/R/Add.1  
 
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  d. Each part y shall serve any document submitted to the Panel directly on the other party. 
Each party shall, in addition, serve on all third parties its written submissions in advance 
of the first substantive meeting with the Panel. Each third party shall serve any 
document submitted to the Panel directly on the parties and all other third parties. Each 
party and third party shall confirm, in writing, that copies have been served as required 
at the time it provides each document to the Panel.  
e. Each party and third pa rty shall file its documents with the DS Registry and serve copies 
on the other party (and third parties where appropriate) by 5.00  p.m. (Geneva time) on 
the due dates established by the Panel. A party or third party may submit its documents 
to another par ty or third party in electronic format only, subject to the recipient party or 
third party's prior written approval and provided that the Panel Secretary is notified.  
f. The Panel shall provide the parties with an electronic version of the descriptive part , the 
interim report and the final report, as well as of other documents as appropriate. When 
the Panel transmits to the parties or third parties both paper and electronic versions of a 
document, the paper version shall constitute the official version for the purposes of the 
record of the dispute.  
26.  The Panel reserves the right to modify these procedures as necessary, after consultation with 
the parties.  
 
 WT/DS491/R/Add.1  
 
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  ANNEX A -2 
ADDITIONAL WORKING P ROCEDURES OF THE PAN EL CONCERNING  
BUSINESS CONFIDENTIA L INFORMATION  
Adopted on 29 July 2016  
1. For the purposes of these proceedings, BCI is defined as any information that has been 
designated as such by a party submitting the information to the Panel. The parties shall only 
designate as BCI information that is not available in the public domain, th e release of which would 
cause serious harm to the interests of the originator(s) of the information. BCI may include 
information that was previously treated by the U.S. Department of Commerce or the United States 
International Trade Commission as confiden tial or proprietary information protected by 
Administrative Protective Order in the course of the anti -dumping and countervailing duty 
proceedings at issue in this dispute. In addition, these procedures do not apply to any BCI if the 
entity which provided the information in the course of the aforementioned proceedings agrees in 
writing to make the information publicly available.  
 
2. If a party considers it necessary to submit to the Panel BCI as defined above from an entity 
that submitted that information i n any of the proceedings at issue, the party shall, at the earliest 
possible date, obtain an authorizing letter from the entity and provide such authorizing letter to 
the Panel, with a copy to the other party. The authorizing letter from the entity shall a uthorize 
both Indonesia and the United States to submit in this dispute, in accordance with these 
procedures, any confidential information submitted by that entity in the course of any of the 
proceedings. Each party shall, at the request of the other party , facilitate the communication to an 
entity in its territory of any request to provide an authorization letter referred to above. Each party 
shall encourage any entity in its territory that is requested to grant the authorization referred to in 
this paragr aph to grant such authorization.  
 
3. No person may have access to BCI except a member of the Secretariat or the Panel, an 
employee of a party, or an outside advisor to a party for the purposes of this dispute. However, an 
outside advisor is not permitted access to BCI if that advisor is an officer or employee of an 
enterprise engaged in the production, sale, export, or import of the products that were the subject 
of the proceedings at issue in this dispute, or an officer or employee of an association of su ch 
enterprises.  
 
4. A person having access to BCI shall treat it as confidential, i.e., shall not disclose that 
information other than to those persons authorized to receive it pursuant to these procedures. 
Each party shall have responsibility in this reg ard for its employees as well as any outside advisors 
used for the purposes of this dispute. BCI obtained under these procedures may be used only for 
the purpose of providing information and argumentation in this dispute and for no other purpose. 
All docum ents and electronic storage media containing BCI shall be stored in such a manner as to 
prevent unauthorized access to such information.  
 
5. A party submitting BCI shall mark the cover and/or first page of the document containing 
BCI, and each page of the document, to indicate the presence of such information. The specific 
information in question shall be placed between double brackets, as follows: [[xx,xxx.xx]]. The 
first page or cover of the document shall state "Contains Business Confidential Information  on 
pages xxxxxx", and each page of the document shall contain the notice "Contains Business 
Confidential Information" at the top of the page. A party submitting BCI in the form of, or as part 
of, an Exhibit shall, in addition to the above, so indicate by putting "BCI" next to the exhibit 
number (e.g. Exhibit IDN -1 (BCI)).  
 
6. Where BCI is submitted in electronic format, the file name shall include the terms "Business 
Confidential Information" or "BCI". In addition, where applicable, the label of the storag e medium 
shall be clearly marked with the statement "Business Confidential Information" or "BCI".  
 
7. In the case of an oral statement containing BCI, the party making such a statement shall 
inform the Panel before making it that the statement will contain  BCI, and the Panel will ensure WT/DS491/R/Add.1  
 
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  that only persons authorized to have access to BCI pursuant to these procedures are in the room 
to hear that statement. The written versions of such oral statements submitted to the Panel shall 
be marked as provided for in p aragraph 5.  
 
8. Where a party submits a document containing BCI to the Panel, the other party, when 
referring to that BCI in its documents, including written submissions, and oral statements, shall 
clearly identify all such information in those documents. All such documents shall be marked as 
described in paragraph 5.  
 
9. If a party considers that information submitted by the other party should have been 
designated as BCI and objects to such submission without BCI designation, it shall forthwith bring 
this objection to the attention of the Panel and the other party, together with the reasons for the 
objection. Similarly, if a party considers that the other party submitted information designated as 
BCI information which should not be so designated, it shall f orthwith bring this objection to the 
attention of the Panel and the other party, together with the reasons for the objection. The Panel 
shall decide whether information subject to an objection will be treated as BCI for the purposes of 
these proceedings on  the basis of the criteria set out in paragraph 1.  
 
10. The Panel will not disclose BCI, in its report or in any other way, to persons not authorized 
under these procedures to have access to BCI. The Panel may, however, make statements of 
conclusion drawn from such information. Before the Panel circulates its final report to the 
Members, the Panel will give each party an opportunity to review the report to ensure that it does 
not contain any information that the party has designated as BCI.  
 
11. Submissions , exhibits, and other documents or recordings containing BCI will be included in 
the record forwarded to the Appellate Body in the event of an appeal of the Panel's Report.  
 
 
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 WT/DS491/R/Add.1  
 
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ANNEX B  
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex B -1 First integrated exe cutive summary of Indonesia  B-2 
Annex B -2 First integrated exe cutive summary of the United States  B-17 
Annex B -3 Second integrated executive sum mary of Indonesia  B-33 
Annex B -4 Second integrated exe cutive summary of the United States  B-48 
 WT/DS491/R/Add.1  
 
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  ANNEX B -1 
FIRST INTEGRATED EXE CUTIVE SUMMA RY OF INDONESIA  
I. INTRODUCTION  
1. The Government of the Republic of Indonesia (Indonesia or GOI) brought this dispute to 
challenge the United States' unjustified imposition of anti-dumping and countervailing duties on 
coated paper from Indonesia.  The United States' actions are inconsistent with a number of 
obligations set out in the Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade 1994 (Ant i-Dumping Agreement), the Agreement on Subsidies and 
Countervailing Measures (SCM Agreement) and GATT 1994.  
2. In addition, the United States' disregard for its obligations is made more acute by its failure 
to accord any special regard pursuant to Article 15 of the Anti -Dumping Agreement and Article 27 
of the SCM Agreement towards Indonesia, a developing country Member.     
II. UNITED STATES' REQUE ST FOR A PRELIMINARY  RULING  
3. As part of its challenge to the United States' log export ban findings, Indonesi a cited to the 
panel's decision in US – Export Restraints .1 The United States asked the Panel to make a 
preliminary ruling that Indonesia was making a backdoor attempt  to bring a claim under 
Article  1.1(a) of the SCM Agreement.2 But as we informed the Pane l, Indonesia may rely on any 
appropriate authority and that does not change the claims into something different.3 Indonesia has 
not asked the Panel to make a finding under Article 1.1(a) of the SCM Agreement and for that 
reason, the United States' request should be rejected.  
4. The United States has made a separate request for a preliminary ruling in relation to 
Indonesia's challenges to USDOC's findings as inconsistent with Articles 2.1, 2.1(c), and Article 14 
of the SCM Agreement.4 According to the United  States, these claims should have been made 
under Article 22.3 of the SCM Agreement.5 The Panel should reject this reasoning for three 
reasons.  First, the fact that the US may also have violated Article 22.3 of the SCM Agreement does 
not mean it has not al so violated Articles 2.1, 2.1(c), and Article 14 of the SCM Agreement.  
Second, the Appellate Body in US – Countervailing Measures (China)  confirmed that Article 22.3 of 
the SCM Agreement does not have to be included for there to be violations of the nature  Indonesia 
has asserted under Articles 2.1, 2.1(c), and Article 14.  Third, Indonesia's claims were set forth 
clearly in the request for a panel which the Appellate Body has explained is sufficient.6 
III. USDOC'S FLAWED SUBSI DY DETERMINATION  
5. The GOI's ch allenge to the United States' subsidy determination concerns the following 
programs that USDOC found to be countervailable: 1) the alleged provision by the GOI of standing 
timber for less than adequate remuneration, 2) government prohibition of log exports  and 3) debt 
forgiveness through alleged debtors' buyback of its own debt from the GOI at a discounted rate.     
                                                
1 See Indonesia' First Written Submission (Indonesia's FWS), pp. 11 -12, 22 -23 (citing Panel Report, 
United States – Measures Treating Export Restraints as Subsidies , WT/DS194/ R and Corr.2, adopted 
23 August  2001, DSR 2001:XI, p. 5767).  
2 See US FWS, p. 11.  
3 See Indonesia's Response to the US Request for a Preliminary Ruling, p. 1.  
4 See US FWS, pp. 11 -12. 
5 See US FWS, p. 12.  
6 See Appellate Body Report, European Communities – Regime for the Importation, Sale, and 
Distribution of Bananas , WT/DS27/AB/R, adop ted 25 September 1997, para. 141.  WT/DS491/R/Add.1  
 
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  A. USDOC's Finding of Lack of Adequate Remuneration Is Flawed Because 
USDOC Made an Improper Per Se  Determination of Price Distortion Based 
Solely on the Predominant Market Share of Standing Timber from Public 
Forests  
6. USDOC improperly made a per se  determination of price distortion based solely on the 
predominant market share of standing timber from  public forests and failed to determine the 
adequacy of remuneration in relation to prevailing market conditions in Indonesia.  Instead of using 
Indonesian prices for pulpwood, USDOC resorted to aberrationally high out -of-country benchmarks 
for Malaysian ex ports of acacia pulpwood and mixed tropical hardwood as reported in the World 
Trade Atlas.   
7. Article 14(d) of the SCM Agreement states that a government provision of goods or services 
is considered to confer a benefit when it is made for less than adequate remuneration. The second 
sentence of Article 14(d) provides that "[t]he adequacy of remunera tion shall be determined in 
relation to prevailing market conditions for the good or service in question in the country of 
provision or purchase ." (emphasis added)  
8. In US – Carbon Steel (India) , the Appellate Body explained that the benchmark price would  
normally be found in the market for the good in question in the country of provision, and that 
these in -country prices could be from private or government -related entities.7  
9. The Appellate Body further stated that the issue of "whether a price may be r elied upon for 
benchmarking purposes under Article 14(d) is not a function of its source, but rather, whether it is 
a market -determined price reflective of prevailing market conditions in the country of provision."8 
10. The Appellate Body has made clear th at just because the government may be the 
predominant supplier of a good, a per se rule of price distortion is impermissible.  In US – 
Countervailing Measures (China) , the Appellate Body noted that, in previous cases, "the Appellate 
Body has cautioned again st equating the concept of government predominance with the concept of 
price distortion, and has highlighted that the link between the two concepts is an evidentiary 
one."9  
1. USDOC's finding that the GOI provided standing timber for less 
than adequate re muneration relies on an improper per se 
determination of price distortion based solely on the predominant 
market share of standing timber from public forests   
11. The USDOC investigated whether the GOI provided standing timber to companies harvesting 
it such that a benefit was passed through to producers of coated paper who use the pulpwood as 
an input to making the paper.  However, USDOC made it clear from the outset of the investigation 
that it was not interested in revisiting the benchmarks or calculation  methodology it had used in 
the 2006/2007 investigation of coated paper from Indonesia.  USDOC instructed the parties to 
provide new information only with respect to "changed circumstances in the GOI's administration " 
of the program.  Given USDOC's clear ins truction not to provide information on anything other than 
changes to the GOI's administration of the program, Indonesia and APP/SMG focused on USDOC's 
numerous other requests, including providing out -of-country benchmarks.  
12. The GOI requires that any en tity that wants to harvest wood forest products from the State 
Forest must obtain a license and pay fees for the forest products that are harvested.  In addition to 
the fees a licensee must pay, the licensee must perform a number of services at its own expe nse, 
including: forest management planning, seed and seedling procurement and planting, 
maintenance, fire and forest protection, social and environmental obligations, and infrastructure 
development. In other words, the licensee pays for the use of public l and, not the provision of 
standing timber.   
13. Private forests also exist in Indonesia.  In 2008, over 2 million cubic meters of logs were 
harvested from private forest land.  The GOI does not control how private forest land is used and it 
                                                
7 Appellate Body Report, US – Carbon Steel (India) , para. 4.515.  
8 Ibid., para. 4.154.  
9 Appellate Body Report, US – Countervailing Measures (China) , para. 4.51.  WT/DS491/R/Add.1  
 
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  does not charge a  fee for harvesting timber on such land.  Consequently, the licensing system, fee 
payment, and forest management system described above only applies to entities who harvest 
from the State Forest.  The only information the GOI maintains about private forest l and is the 
volume of logs that are harvested.  
14. USDOC's finding of price distortion rested entirely on the predominant market share of 
standing timber from public forests, which the USDOC (wrongly) equated with the fact that the 
GOI was the predominant s upplier of standing timber.  Almost all of the "standing timber" for which 
USDOC calculated a benefit was planted, grown, and harvested from a plantation and was not 
"pre-standing."  In short, nearly all of the "standing timber" the USDOC countervailed was not 
provided by the GOI.  Rather, it was planted, grown, and harvested by the plantation owners.  
15. USDOC had data on in -country prices available but chose not to examine it.  In addition, 
USDOC had information on timber purchase prices and sales prices.  Finally, USDOC had the names 
and addresses of log suppliers in Indonesia.  USDOC did not use any of this information to analyze 
price distortion or to seek to obtain additional information on that question.  
16. Contrary to the clear line of Appellate Body deci sions on the subject, USDOC made no 
evidentiary finding of price distortion, neither for standing timber from public forests, nor in the 
substantial private market that existed in Indonesia.  Indonesia has demonstrated that none of the 
other factors USDOC a llegedly relied on are persuasive.  Hence, in resorting to an external 
benchmark, USDOC acted inconsistently with Article 14(d) of the SCM Agreement.  
2. USDOC's finding that the GOI log export ban provides a benefit 
relies on an improper per se determination of price distortion 
based solely on the predominant market share of standing timber 
from public forests  
17. The USDOC investigated whether the GOI's log export ban provided a benefit.  As part of its 
benefit analysis, USDOC relied on the same aberrational Malaysian export data rather than 
Indonesian prices.   
18. As the GOI explained, to confront the growing problem of deforestation in Indonesia, the 
Minister of Forestry and the Minister of Industry and Trade issued a decree in 2001 to prohibit the 
export of logs and chipwood, but wood chips (that is, logs cut in smaller pieces, the way they are 
normally exported so as to facilitate transportation) have never been subject to the export ban.  
Nor was there ever a ban on the export of pulp.  In other  words, there was no ban on exports of 
the downstream products used to make paper.  USDOC found, however, without support, that a 
purpose of the log export ban was to develop downstream industries.  USDOC relied on its view of 
the purpose of the log export b an in deciding whether there was a benefit.    
19. Even if the effect (but not the purpose) of the log export ban were an increased domestic 
supply of logs potentially benefitting downstream industries in Indonesia, the panel on US – Export 
Restraints  found  that export restraints including export bans do not constitute countervailable 
subsidies as defined in the SCM Agreement.10 This finding was confirmed by the panel on China – 
GOES ,11 as well as the panel on US – Countervailing Measures (China) .12  
20. In US – Export Restraints , Canada did not contest the fact that its export restraints reduced 
domestic input prices, thereby conferring a benefit to local producers.  In the present case, the GOI 
disagrees with the very starting point that domestic input price s decreased because of an export 
ban limited to logs (and not preventing the export of wood chips and pulp, the products that 
matter). In addition, even if the Panel were to find reduced input prices (quod non), the alleged 
financial contribution in this c ase (i.e., the "provision of goods … by a government ") cannot be 
"considered as conferring a benefit" as, following the finding in US – Export Restraints  export 
restraints do not constitute a financial contribution.  In other words, if the log export ban do es not 
constitute a financial contribution neither can it bestow or "confer" a benefit under Article 14(d) of 
the SCM Agreement.  The causal link required in Article 14(d) -- between the "provision of goods … 
                                                
10 US – Export Restraints , para. 8.75.  
11 China – GOES , para . 7.90.   
12 Panel Report, US – Countervailing Measures (China) , para. 7.401.  WT/DS491/R/Add.1  
 
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  by a government " and any "benefit " -- is missing . As a result, any benefit that the Panel may find 
is not "conferred by " a financial contribution by the GOI.  
21. After errantly determining the GOI law's purpose was to develop downstream industries, 
USDOC found the existence of a countervailable subsidy without any analysis of Indonesian prices.  
USDOC's calculation of the benefit, however, suffers from the same WTO inconsistency as the 
calculation of the benefit for stumpage.  USDOC used the same second tier benchmark it had used 
for stumpage.  Consequently , USDOC's benefit finding with respect to the log export ban is 
inconsistent with Article 14(d) of the SCM Agreement for the same reasons as the findings on 
standing timber discussed above.  
B. USDOC Improperly Applied an Adverse Inference to Find the GOI 
Knowingly Sold Debt to an Affiliate of the Debtor in Contravention of 
Indonesian Law  
22. USDOC investigated whether the GOI provided a benefit to Indonesian coated paper 
producers by permitting the sale of debt to an alleged affiliate of the debtor in cont ravention of 
Indonesian law.  USDOC found a benefit had been conferred and supported its finding by taking an 
adverse inference based on the GOI's purported lack of cooperation.     
23. In the aftermath of the Asian financial crisis, the GOI created the Indonesian Bank 
Restructuring Agency ("IBRA") in January 1998 whose purpose was to manage the financial 
restructuring of the Indonesian economy.  In May 2003, the GOI established a special program 
operating within IBRA known as the Strategic Asset Sales Pro gram (its Bahasa acronym is "PPAS") 
to sell the GOI -owned assets involving large amounts of debt.  Because of its size, the debt of the 
Asia Pulp and Paper/Sinar Mas Group (APP/SMG) was designated to be sold as part of the PPAS.  
24. The only reason USDOC fo und the existence of a benefit was based on an adverse inference 
of affiliation between Orleans (the company purchasing the debt) and APP/SMG.  USDOC reasoned 
that this meant the GOI provided a benefit to APP/SMG by selling APP/SMG debt to an affiliate in 
contravention of Indonesian law.  USDOC reasoned that this constituted debt forgiveness equal to 
the difference between the value of the outstanding debt and the amount the alleged affiliate paid 
for it.  USDOC took an adverse inference because of Indonesia's  purported lack of cooperation.  In 
reality, what happened was that USDOC set a constantly moving target and then used it as a 
pretext for taking an adverse inference.   
1. Indonesia acted to the best of its ability and provided "necessary" 
information withi n a "reasonable period"  
25. Article 12.7 of the SCM Agreement states that where an interested party "refuses access to, 
or otherwise does not provide, necessary information within a reasonable period . . ., preliminary 
and final determinations, affirmative  or negative, may be made on the basis of the facts available."  
26. Article 6.8 of the Anti -Dumping Agreement is identical to Article 12.7 of the SCM Agreement 
with the addition of a reference to Annex II of the Anti -Dumping Agreement.  Annex  II:5 to the 
Anti-Dumping Agreement provides that "[e]ven though the information provided may not be ideal 
in all respects, this should not justify the authorities from disregarding it, provided the interested 
party has acted to the best of its ability."  In Mexico – Anti-dumping Measures on Rice , the 
Appellate Body noted that the conditions in Annex II of the Anti -Dumping Agreement existed in the 
SCM Agreement13 and that "it would be anomalous if Article 12.7 of the SCM Agreement were to 
permit the use of 'facts available ' in countervailing duty investigations in a manner markedly 
different from that in anti -dumping investigations. . . ."14 Hence, the conditions in Annex II apply 
in the context of USDOC's countervailing duty investigation.  
27. USDOC issued the original CVD  questionnaire to Indonesia on November 3, 2009.  USDOC's 
original questionnaire included a single specific question on the purchase of debt by an alleged 
affiliate . The GOI initially responded that it did not have new information or evidence of changed 
                                                
13 Appellate Body Report, Mexico – Definitive Anti -dumping Measures on Beef and Rice, Complaint with 
Respect to Rice,  WT/DS295/AB/R, adopted 20 December 2005, DSR 2005:XXII, 10853 , para. 291.  
14 Ibid., para. 295.  WT/DS491/R/Add.1  
 
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  circumstances but that it was continuing to review archived documents and would provide any new 
information that it located.  
28. USDOC issued a supplemental questionnaire to the GOI on January 29, 2010 asking for 
additional information.  The GOI submitted all  of the documents USDOC requested concerning 
Orleans, consisting of articles of association, certificate of incorporation, power of attorney, letter 
of compliance, and a statement letter.  The GOI also submitted documentation on IBRA's internal 
procedures a nd a narrative explanation of the same.  Finally, the GOI submitted addition 
information it located concerning the APP/SMG sale, including a letter notifying Orleans that it was 
the winning bidder, correspondence confirming Orleans' payment, an asset and sa le purchase 
agreement, and an opinion letter from outside counsel that Orleans complied with the conditions 
necessary to purchase the debt.   
29. USDOC issued a third supplemental questionnaire to the GOI on April 29, 2010.  USDOC's 
third supplemental questi onnaire contained twenty -nine questions, most of which had multiple 
subparts.  USDOC asked about documentation the GOI had provided and about how IBRA satisfied 
itself that the bidders were not affiliated with the debtor.  The GOI responded to that portion o f 
USDOC's third supplemental questionnaire in full, providing both a narrative response and the 
requested additional documents.   
30. But USDOC's third supplemental questionnaire contained a demand for documents designed 
to make it impossible for the GOI to  respond . Prior to the request, the GOI had no reason to 
expect USDOC would need documents from other sales.  With respect to this new demand for 
documents that USDOC knew about from the beginning of the investigation but waited to request 
nearly six months  after issuing the original questionnaire, the GOI responded that the documents 
were not available but explained that they were standard forms and would be substantially 
identical to those documents used in the APP/SMG transaction.  The GOI further explaine d that the 
articles of association would be unique but that all of the winning bidders were offshore 
companies.   
31. Importantly, what was on the record were all of the records concerning Orleans' purchase of 
the APP/SMG debt that USDOC requested.  None of those records suggested an affiliation between 
Orleans and APP/SMG.  In essence, USDOC said those records were irrelevant to the question of 
whether the GOI acted to the best of its ability because the GOI could not provide documents on 
all of the other PPA S sales within the short period of time USDOC provided and then based the 
adverse inference on two sentences from a newspaper article stating APP/SMG may have 
purchased its own debt.  Even the unnamed "expert " USDOC purportedly relied on stated he was 
merely speculating that APP/SMG purchased its own debt.  
32. As the Appellate Body found in US – Hot-Rolled Steel from Japan , Annex II of the Anti -
Dumping Agreement (which, as referred to earlier, applies also in the context of Article 12.7 of the 
SCM Agreement) is an expression of "the organic principle of good faith" which "restrains 
investigating authorities from imposing on exporters burdens which, in the circumstances, are not 
reasonable".15 At no stage in the  proceedings did the GOI "refuse access to" information it had in 
its possession, nor did it fail to "provide necessary information" (information relating to other PPAS 
debt sales was not "necessary" to assess the APP/SMG sale) or "significantly impede the  
investigation".  Instead, throughout, the GOI acted "to the best of its ability", considering, in 
particular, that Indonesia is a developing country member of the WTO, the special interests of 
which Article 27 of the SCM Agreement and Article 15 of the Ant i-Dumping Agreement recognize. 
For the USDOC, in these circumstances, to rely on "facts available" violates Article 12.7 of the SCM 
Agreement.     
2. The facts available do not "reasonably replace" the missing 
information  
33. USDOC's determination is also i nconsistent with Article 12.7 of the SCM Agreement because 
the facts available on the record that USDOC resorted to do not "reasonably replace" the 
information that Indonesia allegedly failed to provide.  
                                                
15 US – Hot-Rolled Steel from Japan , para. 101 (referring specifically to paragraph 2 of the Annex II to 
the Anti -Dumping Agreement).  WT/DS491/R/Add.1  
 
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  34. In US – Countervailing Measures (China) , the App ellate Body recalled its previous decisions 
in Mexico – Anti-dumping Measures on Rice16 and US – Carbon Steel (India)17 in stating that "an 
investigating authority must use those 'facts available' that 'reasonably replace the information 
that an interested  party failed to provide', with a view to arriving at an accurate determination."18 
The Appellate Body stated that, under the standard of review, the Panel was to examine whether 
USDOC's determination was "reasoned and adequate."19 In US – Carbon Steel (In dia), the 
Appellate Body stated that "where there are several 'facts available' from which to choose, it would 
seem to follow naturally that the process of reasoning and evaluation would involve a degree of 
comparison. . . ."20 
35. The facts available that  USDOC applied in this case did not "reasonably replace" the 
information that USDOC alleged the GOI failed to provide.  The GOI provided all of the information 
that USDOC requested on the APP/SMG transaction.  USDOC cannot deny that those documents do 
not sh ow an affiliation.  Likewise, the records USDOC sought for other debt sales would not have 
shed light on whether Orleans was an affiliate because those other transactions involved different 
companies.  In other words, while records from the other transaction s might have shown 
differences in how the sales were conducted, they would not have established the central fact of 
whether there was an affiliation between Orleans and APP/SMG.  Indeed, the newspaper article and 
expert report USDOC were speculative and mer ely "suggested" an affiliation.    
36. USDOC erred by giving more weight to speculative newspaper articles and rumor than the 
actual documents from the transaction leaving its determination inconsistent with Article 12.7 of 
the SCM Agreement.  
C. USDOC Did Not Demonstrate the Existence of a Subsidy Program  
37. The USDOC relied on de facto  specificity as referred to in Article 2.1(c). "Article 2.1(c) 
identifies factors that investigating authorities and panels are to evaluate in assessing whether, 
despite not  seemingly de jure  specific, a subsidy may still be specific in fact."21  
38. The second sentence of Article 2.1(c) provides a list of particular factors regarding the use of 
the subsidy.22 In US – Countervailing Measures (China) , the Appellate Body determ ined that the 
mere fact that financial contributions have been provided to certain enterprises is not sufficient 
and rather the investigating authority must have adequate evidence of the existence of a 
systematic series of actions pursuant to which financi al contributions that confer a benefit are 
provided to certain enterprises.23 
39. As the Appellate Body noted24, Article 2.1(c) of the SCM Agreement requires that there be "a 
plan or scheme" and "systematic series of actions" that confer a benefit.  USDOC d id not cite to 
evidence that the GOI or any regional or local government entity had in place a plan, scheme, or 
systematic  series of actions to confer a benefit.  None of the programs in question confer a benefit.  
As Indonesia noted in its First Written submission, the so -called provision of standing timber 
benefits the GOI because the GOI receives revenues from the use of the land.25 Notably, because 
GOI is not providing timber, it is not reasonable to characterize the fees as payments for timber.  
In add ition, the GOI receives services from the entities who hold licenses.26 Because there is no 
written plan that confers a benefit, USDOC needed to look at whether a systematic series of 
actions conferred a benefit.   
                                                
16 Appellate Body Report, Mexico – Anti-dumping Measures on Rice . 
17 Appellate Body Repo rt, US – Carbon Steel (India) . 
18 Appellate Body Report, US – Countervailing Measures (China) , para. 4.178 (footnotes omitted) 
(emphasis added).  
19 Ibid., para. 4.187.  
20 Appellate Body Report, US – Carbon Steel (India) , para. 4.435.  
21 Appellate Body Report, United States – Countervailing Measures on Certain Hot -Rolled Carbon Steel 
Flat Products from India , WT/DS436/AB/R, adopted 19 December 2014, para. 4.373.  
22 Ibid. 
23 Ibid., para. 4.143 (emphasis original).  
24 Ibid. 
25 See Indonesia  FWS, para. 77.  
26 See Indonesia FWS, paras. 76 -77. WT/DS491/R/Add.1  
 
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  40. The log export ban, similarly, does no t confer a benefit.  Indonesia enacted the log export 
ban in 2001 to protect against deforestation.27 The export ban never applied to pulp or wood 
chips.  Under those circumstances, where the law does not confer a benefit, USDOC needs to find a 
systematic se ries of actions that confer a benefit.  
41. The alleged debt buy back is perhaps the most extraordinary finding by USDOC of the 
existence of a subsidy program.  All of the written materials suggested no benefit was conferred.  In 
fact, Indonesian law made it illegal for an affiliate to purchase its own debt.28 USDOC found the 
existence of a subsidy program based on an alleged violation of the law.  Put differently, the 
Indonesian law, itself, was not the subsidy program.  Instead, it was the violation of the law  that 
USDOC found was a subsidy program.  But in the absence of a written law, USDOC needed to find a 
systematic series of actions that conferred a benefit which it did not do.  Rather, USDOC found a 
single illegal act (based on newspaper speculation) made i t specific.  
D. USDOC Did Not Identify the Relevant Jurisdiction  
42. Article 2.1 of the SCM Agreement sets forth the principles for determining whether a subsidy 
is specific to certain enterprises "within the jurisdiction of the granting authority."29 In US – 
Countervailing Measures (China) , the Appellate Body stated that an essential part of the specificity 
analysis us identifying the relevant jurisdiction.30  
1. USDOC did not identify the government entity that allegedly 
forgave debt  
43. USDOC found that t he "GOI" was the entity that provided a benefit to APP/SMG by allegedly 
forgiving debt.  But USDOC knew that the GOI's law prohibited the sale of debt to an affiliate of the 
debtor.  USDOC's theory of how the GOI conferred a benefit was that, in the APP/SMG asset sale, 
IBRA's procedures were violated and APP/SMG debt was sold to an affiliate of the debtor against 
the explicit rules imposed by the GOI.  By allegedly allowing debt to be sold to an affiliate, the GOI 
forgave debt to the extent of the difference b etween the outstanding debt and the purchase price.   
44. For USDOC's theory of how a benefit was conferred to work, the GOI had to know APP/SMG 
and Orleans were affiliated, otherwise there could not be a countervailable act.  The GOI 
established that the bi d package met the law's requirements.  In other words, USDOC could not 
point to anything on the face of the transaction that violated IBRA's procedures.  Instead, USDOC 
believed that an individual or individuals with authority to act on behalf of the GOI kne w that 
Orleans was affiliated with APP/SMG and allowed the sale to proceed.  The record, however, 
contained no evidence of this.  
45. Admittedly, this is an unusual situation because USDOC's theory of a benefit being conferred 
is through the alleged violatio n of a law.  In other words, GOI's law is not what conferred a benefit.  
Rather, it was the purported action of an individual or individuals who broke the law that conferred 
a benefit.  Under these circumstances, it is imperative for USDOC to identify the gov ernment entity 
and the individual or individuals who allegedly forgave debt and thereby knowingly violated 
Indonesian law.  By failing to do so, USDOC acted inconsistently wit h its obligations under 
Article  2.1 of the SCM Agreement.  
IV. USITC'S FLAWED THREAT OF INJURY DET ERMINATION  
46. The USITC is the agency charged with determining whether a US industry is materially 
injured or threatened with such injury.  In the underlying investigation, the USITC examined the 
2007 to 2009 period and also looked at t he first six months of 2009 and 2010 (the interim 
periods).  The USITC found that the US industry was not materially injured by subject imports.  The 
USITC found declining demand and the presence of non -subject imports broke the causal link 
between subject i mports and the US industry's poor performance during the period of 
investigation.  However, the USITC determined that those same factors made the US industry 
vulnerable and, within that context, subject imports threatened  injury.    
                                                
27 See Indonesia FWS, para. 13.  
28 See Indonesia FWS, para. 83.  
29 Article 2.1, SCM Agreement.  
30 Appellate Body Report, US – Countervailing Measures (China) , para. 4.166.  WT/DS491/R/Add.1  
 
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  47. The GOI challenges th e consistency of the USITC's threat of injury determination with Article 
3.5 of the Anti -Dumping Agreement and Article 15.5 of the SCM Agreement because the USITC 
attributed to the subject imports adverse effects caused by other factors.  The USITC's 
determ ination is also inconsistent with Article 3.7 of the Anti -Dumping Agreement and Article 15.7 
of the SCM Agreement, because the USITC based its threat findings on conjecture and remote 
possibility.  Finally, the USITC failed to exercise special care which is  inconsistent with Article 3.8 of 
the Anti -Dumping Agreement and Article 15.8 of the SCM Agreement.  
A. The USITC Did Not Establish a Causal Relationship Between the Subject 
Imports and the Alleged Threat to the Domestic Industry  
48. Article 3.5 of the Anti -Dumping Agreement and Article 15.5 of the SCM Agreement contain 
three principles for establishing causation that the USITC's determination violates: 1) non -
attribution, 2) a concrete examination of other factors using economic models or constructs, and 
3) isolation of factors other than subject imports that caused injury.    
1. The USITC Improperly Attributed the Effects of Other Factors to 
Subject Imports  
49. Articles 3.5 of the Anti -Dumping Agreement and 15.5 of the SCM Agreement state that 
"[t]he injurie s caused by […] other factors must not be attributed to the dumped [or subsidized] 
imports."  Investigating authorities must, in other words, ensure that the injurious effects of other 
factors are not "attributed" to dumped/subsidized imports.  
50. The USITC  improperly attributed the effects of three factors other than subject imports to 
the subject imports in the threat of injury analysis.  Those three other factors were (i) declining 
demand, (ii) non -subject imports, and (iii) the expiration of a subsidy to US producers in the form 
of a tax credit, the so -called "Black Liquor" tax credit, provided to US producers for reusing by -
products of pulp production ("black liquor") considered, from 2007 to 2009, as an alternative fuel 
derived from biomass benefitting f rom excise and income tax credits under the US Internal 
Revenue Code.  
51. On the effects of declining demand for the material injury analysis, the USITC stated that 
the deterioration in the domestic industry 's performance was caused by an economic downtur n 
and a decline in demand.  
52. On the effects of non -subject imports for the material injury analysis, the USITC found the 
increases in market share by the domestic industry and subject imports from 2007 -2009 came at 
the expense of nonsubject imports.  
53. On the effects of the tax credit for the material injury analysis, the USITC found it was a 
factor mitigating the significance of price depression by the subject imports because it spurred 
greater pulp production by domestic producers in 2009 and contribut ed to lower prices for 
fiber/pulp which is a key input to production of coated paper.  The USITC also found that the tax 
credit benefited the domestic producers' costs and production -related activities.  
54. To summarize, the USITC found that the economic do wnturn, declining consumption, non -
subject imports, and the tax credit were all crucial factors breaking causation and mitigating the 
significance of subject imports in various ways during the period of investigation.  
55. In its threat analysis, the USITC found that the US industry was "vulnerable" because 
consumption was likely to continue declining and a subsidy to the US industry in the form of a tax 
credit was expiring.   
56. Recalling that the USITC determined declining demand and not subject imports wa s 
responsible for the trends described above, a prime reason the US industry was found to be 
vulnerable is declining demand, not subject imports.  Likewise, another contributing factor to the 
US industry's vulnerability was expiration of the US tax credit f or "black liquor", a factor unrelated 
to subject imports. Here, the USITC basically found that there is threat of injury not because of 
subject imports being subsidized by the GOI, but because of the expiry of a US subsidy to US 
paper producers.  Effects on  US paper producers caused by the US government itself can hardly be WT/DS491/R/Add.1  
 
- B-10 - 
 
  attributed to paper exports from Indonesia. Indeed, the USITC candidly acknowledges that the 
condition of the US industry which was caused by other factors weighs heavily in its threat 
analysis.  The USITC's threat analysis is, thus, riddled with non -attribution issues, in violation of 
Articles 3.5 of the Anti -Dumping Agreement and 15.5 of the SCM Agreement.   
57. The USITC also failed to account for the role non -subject imports played in th e US market.  
There was no question that subject imports gained market share at the expense of non -subject 
imports during the investigation period.  Equally, there was no question that non -subject imports 
regained market share when subject imports declined i n the first half of 2010.  Despite those facts 
showing subject imports were swapping market share with non -subject imports, the USITC found 
that subject imports would gain share from the domestic industry.  The USITC made no meaningful 
attempt at analyzing t he degree to which market share would come from current suppliers that 
were non -subject imports.  But the USITC made no attempt at analyzing the significance of this 
other factor which renders its determination inconsistent with Articles 3.5 of the Anti -Dumping 
Agreement and 15.5 of the SCM Agreement.  
2. The USITC did not examine factors other than the allegedly 
dumped/subsidized products in concrete terms  
58. As the Panel in EC – Countervailing Measures on DRAM Chips  reasoned, Article 15.5 of the 
SCM Agree ment requires the administering authority to make a "better effort to quantify the 
impact of other known factors, relative to subsidized imports, preferably using elementary 
economic constructs or models."31 Consequently, investigating authorities must be concrete in 
their analysis of other factors that cause injury apart from subject imports, and a mere listing of 
factors without further justification is inconsistent with Articles 3.5 of the Anti -Dumping Agreement 
and 15.5 of the SCM Agreement.  
59. The USI TC applied a less rigorous and less concrete analysis in its threat analysis than it 
applied to evaluate material injury.  In its material injury analysis, the USITC identifies the "black 
liquor" tax credit as a factor having an effect on US prices in 2007 – 2009.  The USITC concludes 
that the significant price undercutting in that period is primarily because of the tax credit and not 
the subject imports.  In other words, the USITC applied economic constructs and found US 
producers were using the existence of the tax credit to drive down prices.  But in the context of the 
threat of injury analysis the USITC merely states that the loss of the credit in 2010 will have 
significant price diminishing effects in the future as a factor favoring an affirmative threat of  injury 
determination.  In contrast to its finding in the context of material injury, the USITC does not 
attempt to estimate what price effects expiration of the credit is likely to have, nor does it offer a 
quantitative analysis of the likely impact on the  US industry.  
60. The same deficiencies exist in the USITC's analysis of the role of declining consumption and 
the presence of non -subject imports.  Despite undertaking a concrete examination of them in the 
present injury analysis, which led to the conclusi on that those other factors broke the causal link 
between subject imports and the domestic industry's performance, the USITC does not engage in 
a meaningful examination of either factor in its threat analysis.  The USITC devoted a single 
sentence to the lik ely imminent impact of a decline in demand.  There is no way to evaluate 
whether the USITC's explanation is reasonable because its statement is altogether lacking 
analysis.  Articles 3.5 of the Anti -Dumping Agreement and 15.5 of the SCM Agreement require 
more.  
61. The USITC's discussion of non -subject imports is no more concrete.  The USITC recognizes 
that non -subject imports gained market share from interim 2009 to interim 2010 and that non -
subject imports were higher priced than subject imports.  But the USI TC concludes that subject 
imports will compete on price to regain the market share that they lost both to the domestic 
industry and to non -subject imports in interim 2010.  This conclusory finding cannot be reconciled 
with the USITC's earlier finding about subject imports taking market share from nonsubject 
imports but not the domestic industry.  
                                                
31 Panel Report, EC – Countervailing Measures on DRAM Chips , para. 7.405.  WT/DS491/R/Add.1  
 
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  3. The USITC did not isolate the injurious effects of allegedly 
subsidized/dumped imports from other factors  
62. The Appellate Body stated in US – Hot-Rolled Steel that the "investigating authorities must 
make an appropriate assessment of the injury caused to the domestic industry by the other known 
factors, and they must separate and distinguish the injurious effects of the dumped imports from 
the injurious effects o f those other factors."32 
63. For purposes of its present injury analysis, the USITC isolated factors other than subject 
imports, including the economic downturn and declining demand.  As a consequence, the USITC 
concluded there was not a sufficient causal nexus necessary to make a determination that subject 
imports are currently having a significant adverse impact on the domestic industry.   
64. In its threat analysis the USITC, collapsed, rather than isolated factors other than subject 
imports with the like ly effects of subject imports.  The way the USITC did this was through its 
vulnerability finding.  The USITC begins its vulnerability analysis by noting the downwards trends in 
virtually all of the domestic industry's performance indicators weighed heavily i n its consideration 
of the impact of subject imports in the imminent future.  But in its present injury analysis, the 
USITC had just found subject imports were not the cause of those downwards performance trends, 
rather it was the economic downturn and decl ining demand.  The USITC also found that the 
expiration of the black liquor tax credit, another factor unrelated to subject imports, made the 
domestic industry vulnerable.   
65. To comply with the non -attribution requirement, the USITC needed to do the oppos ite of 
what it did.  Rather than finding the domestic industry's vulnerability made it more likely that 
subject imports threatened injury, the USITC should have analyzed the impact of just the subject 
imports on the domestic industry during the period of in vestigation, after isolating out the other 
factors and, based on that analysis, determined whether a threat of injury was likely.   
B. The Findings of the USITC Were Improperly Based on Conjecture and 
Remote Possibility and Future Changes Were Not Clearly F oreseen and 
Imminent  
66. Articles 3.7 of the Anti -Dumping Agreement and 15.7 of the SCM Agreement require an 
investigating authority (i) not to base its threat of injury findings on allegation, conjecture and 
remote possibility  and (ii) to  demonstrate that  a change in circumstances, which will injure the 
industry in the future, is clearly foreseen and imminent.   
67. The Appellate Body has explained what Article 3.7 of the Anti -Dumping Agreement requires.  
In Mexico – HFCS , the Appellate Body reasoned that in vestigating authorities must proceed to a 
"proper establishment " of the "clearly foreseen and imminent" events.33 The Appellate Body 
reached a similar holding in Mexico – Anti-Dumping Duties on Rice .34 
68. The USITC made two central findings that were based on conjecture or speculation 
regarding events which were not clearly foreseen and imminent: (i) subject imports would have 
adverse effects on US prices and (ii) subject imports would gain market share at the expense of 
the domestic industry.    
C. The USITC Did Not Exercise "Special Care" in its Threat of Injury 
Determination  
69. Articles 3.8 of the Anti -Dumping Agreement and 15.8 of the SCM Agreement provide that 
"with respect to cases where injury is threatened by dumped [or subsidized] imports, the 
application of anti -dumping [or countervailing] measures shall be considered and decided with 
special care . . . ."   
                                                
32 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, 4697, para. 226.  
33 See Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) 
from the United States – Recourse to Article  21.5 of the DSU  by the United States , WT/DS132/AB/RW, adopted 
21 November 2001, DSR 2001: XIII,  6675, para. 85.  
34 Appellate Body Re port, Mexico – Anti-Dumping Measures on Rice, para. 205 (emphasis added).  WT/DS491/R/Add.1  
 
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  70. Indonesia claims that each of the above -identified deficiencies in the USITC's threat of injury 
determination renders that determinati on inconsistent with the United States' WTO obligations 
under Articles 3.5 and 3.7 of the Anti -Dumping Agreement and Articles 15.5 and 15.7 of the SCM 
Agreement.  Equally, and independently of these other violations, those deficiencies render the 
USITC thre at of injury determination inconsistent with Articles 3.8 of the Anti -Dumping Agreement 
and 15.8 of the SCM Agreement.   
71. In addition, the cumulative effect of the inconsistencies in the USITC's analysis resulted in a 
more robust and rigorous material in jury analysis than threat analysis, which demonstrates the 
USITC did not exercise special care pursuant to Articles 3.8 of the Anti -Dumping Agreement and 
15.8 of the SCM Agreement.  By resolving all issues of what the future held against the exporters, 
the USITC failed to exercise special care and the threat of injury determination rested on a lower 
threshold than the material injury determination; thus, turning the duty to exercise special care on 
its head.  
V. THE PROVISION OF US LAW THAT DEEMS A TIE  USITC VOTE ON THREAT  OF 
INJURY - THREE AFFIRMATIVE VO TES, THREE NEGATIVE VOTES – TO BE AN 
AFFIRMATIVE FINDING IS INCONSISTENT WITH  US WTO OBLIGATIONS  
72. Section 771 of the Tariff Act of 1930 , as amended, mandates that if the six USITC 
Commissioners are e venly divided as to whether a determination on threat of injury should be 
affirmative or negative, the Commission shall be deemed to have made an affirmative 
determination.  Whereas domestic petitioners only need three votes in favor of threat of injury, 
foreign exporters always need four votes to win.  In other words, a tie or "divided Commission" 
consistently favors domestic petitioners.  Besides contravening basic fairness principles, this 
provision of United States law is inconsistent with Articles 3.8 of the Anti -Dumping Agreement and 
15.8 of the SCM Agreement which specifically require that in threat of injury cases the application 
of AD or CVD measures "shall be considered and decided  with special care ". (emphasis added)     
73. A law stating that a tie o r "evenly divided" threat of injury decision means, in all cases, an 
affirmative determination that there is threat of injury is not a decision -making rule that exercises 
"special care".  On the contrary, threat of injury cases are thereby "decided" in an o penly biased 
manner that, rather than offering "special care" to the interests of all affected parties, consistently 
favors the interests of the domestic industry over those of exporters.  
74. Importantly, Indonesia challenges the US law "as such" (not its  application in a specific 
investigation).  Moreover, Indonesia only challenges the tie vote provision in US law as it applies to 
threat of injury cases, not other USITC decisions.  Last, Indonesia's claim is made within the 
context of Indonesia being a deve loping country Member.       
A. "Deciding" Threat of Injury Cases With "Special Care" Requires, At a 
Minimum, Basic Protection of Interests, Even -Handedness and 
Reasonableness  
75. Articles 3.8 Anti -Dumping Agreement and 15.8 SCM Agreement read as follows:  
With respect to cases where injury is threatened by dumped [or subsidized] imports, 
the application of anti -dumping [or countervailing] measures shall be considered and 
decided with special care.  
76. "Consider" is defined as " To view or contemplate attent ively, to survey, examine, inspect, 
scrutinize ".35 "Decide", in turn, is defined as " To come or bring to a resolution or conclusion ".36 
Hence, even if "considered" may refer to (or even be limited to) the ITC 's substantive 
consideration of the requirements under the SCM Agreement, the term "decided" unequivocally 
includes the way the ITC as a body brings the question of applying or not applying countervailing 
measures in threat of injury situations "to a resolu tion or conclusion", that is, including the way 
the ITC resolves a tie vote in those situations. By limiting Articles 3.8 and 15.8 to "substantive 
                                                
35 Oxford English Dictionary, online at 
http://www.oed.com/view/Entry/39593?redirectedFrom=consid er#eid .  
36 Oxford English Dictionary, online at 
http://www.oed.com/view/Entry/48173?rskey=cRJZ2R&result=1#eid . WT/DS491/R/Add.1  
 
- B-13 - 
 
  analysis"37 the United States reads the word "decided" out of the Anti -Dumping and the SCM 
agreements.  
77. The ordinary meaning of "shall be decided" with "special care" (" sera … décidée avec un soin 
particulier" in French; " decidirá con especial cuidado" in Spanish)  in Articles 3.8 Anti -Dumping 
Agreement and 15.8 SCM Agreement suggests, at a minimum, the followi ng inherent corollary 
principles: basic "protection of interests", "even -handedness" and "reasonableness." "Care" is 
defined as " oversight with a view to protection, preservation, or guidance",38 "attention 
accompanied by protectiveness and responsibility, "39; "protective", in turn, is defined as " [h]aving 
the quality, character, or effect of protecting someone or something; preservative; defensive",  
"[o]f an association or organized group: formed to safeguard the rights and interests of its 
members"40; "responsibility," in turn, is defined as " [a] moral obligation to behave correctly 
towards or in respect of a person or thing"41 and synonymous with "reasonableness."42 When 
coupled with the term "special," the term "care" requires one to demonstrate a high l evel of 
protectiveness, responsibility and reasonableness.  Further, "special care" needs to be interpreted 
in its immediate textual context: it must be exercised when considering and deciding the 
application of anti -dumping or countervailing measures, particularly in threat of injury cases . 
78. By consistently favoring the interests of domestic petitioners over and above those of 
exporters -- domestic petitioners only need three votes in favor of threat of injury, foreign 
exporters always need four votes to  win – the tie vote provision is not a "careful" decision -making 
rule, "protective" of the "rights and interests" of all those affected.  
79. To consider and decide with special care "the application of [anti -dumping or countervailing] 
measures" in threat of injury cases includes all the steps required or leading up to the actual 
imposition of duties in threat of injury cases.  What precise steps this includes may vary depending 
on the domestic laws of the investigating country in question.  In some countries , the decision that 
substantive requirements are met may be "separate" from a decision to actually levy anti -dumping 
and countervailing duties.  Under US AD/CVD law, however, once the ITC decides there is threat of 
injury (including by a split 3 to 3 vote),  anti-dumping and countervailing measures must 
automatically be imposed.  No discretion exists under US law not to impose anti -dumping and 
countervailing measures once the substantive requirements for such measures are found to be 
fulfilled.  In other words,  under US law, the decision that substantive requirements are met and the 
decision to impose duties are one and the same, and it is this ITC decision in a situation of a tie 
vote that the GOI challenges in this dispute.  
80. Moreover, even if the Panel wer e to find that the "special care" requirement in Articles 3.8 
and 15.8 applies only to what must be a separate decision of "application" of anti -dumping and 
countervailing duties after an earlier determination that the substantive requirements for such 
duties have been fulfilled then US law would a fortiori  be in breach.  Under US law no such separate 
decision even exists.  As a result, such decision is not, nor can it ever, be taken with "special care" 
and a breach of Article 15.8 must be found.  Put differen tly, "application of [anti -dumping and 
countervailing] measures" thus (narrowly) defined would then, under US law (including in a tie 
vote situation), be automatic and never leave any room for "special care" (that is, an assessment 
of whether or not to act ually impose the duties) and, therefore, by definition, the US tie vote rule, 
leaving no scope for any "special care" in a separate decision on whether or not to apply AD/CVD 
duties, would violate Article 3.8 of the Anti -Dumping Agreement and Article 15.8 of the SCM 
Agreement.  
81. The treaty context of Articles 3.8 of the Anti -Dumping Agreement and 15.8 of the SCM 
Agreement confirms the need for basic protection of all affected interests, reasonableness and 
even-handedness in threat of injury determinations .  
                                                
37 US FWS, para. 313.  
38 Oxford English Dictionary, < http://www.oed.com/view/Entry/27899?rskey=6I7Lh0&result=1#eid >. 
39 Merriam Webster’s Collegiate Dictionary (11th ed. 2003), available at < http://www.merriam -
webster.com/thesaurus/care >. 
40 Oxford English Dictionary, 
<http://www.oed.com/view/Entry/153138?redirectedFrom=protective#eid >. 
41 Oxford English Dictionary, 
<http://www.oed.com/view/Entry/163862?redirectedFrom=responsibility#eid >. 
42 Shorter Oxford English Dictionary (6th ed. 2007), available at 
<http://www.oxforddictionaries.com/definition/english -thesaurus/responsibility >. WT/DS491/R/Add.1  
 
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  82. The Appellate Body enunciated the concept of even -handed administration of discretion in 
the US – Hot-Rolled Steel  case, brought on the basis of the Anti -Dumping Agreement; facing a 
claim against the 99.5 percent test of USDOC for determining when sales are in the ordinary 
course of trade.  
83. In US – Hot-Rolled Steel , the Appellate Body examined  Articles 2.1 and 2.2 of the Anti -
Dumping Agreement, which list the circumstances under which an investigating authority can 
"consider" products as being dumped.  "Consider" also appears in Articles 3.8 Anti -Dumping 
Agreement and 15.8 SCM Agreement, whereby "the application of a nti-dumping [or countervailing] 
measures shall be considered  and decided with special care."43 The Appellate Body's decision 
recognizes that the standard of even -handedness generally underlies the WTO covered 
agreements and applies especially where members  are given discretion to act in certain ways 
(here, to make a determination on the existence of threat of injury).  
84. Applying the "even -handedness" requirement to the tie vote provision in threat of injury 
cases, there is a disadvantage imposed on export ers under the tie vote provision that is similar to 
that under the 99.5 percent test.  In particular, the balance is tilted against exporters by requiring 
them to win a 2/3 majority in the USITC vote.  That is, exporters must gain the votes of four 
Commissio ners, whereas petitioners need only convince three of them.  The tie vote provision 
therefore does not meet the standard of "even -handedness" established by the Appellate Body.   
85. Contextual support can also be found in Article 3.1 of the Anti -Dumping Agr eement which 
requires that "[a] determination of injury for purposes of Article VI of GATT 1994 shall be based on 
positive evidence  … " (emphasis added).  The counterpart provision in the SCM Agreement is in 
Article 15.1. Deeming a tie vote by the USITC to be an affirmative determination does not 
constitute a determination "based on positive evidence"; a balanced 3 -3 result is basically restated 
as a 4 -2 win for petitioners. Similarly, Article 3.1 of the Anti -Dumping Agreement and Article 15.1 
of the SCM Agr eement require that investigating authorities conduct "an objective examination ". 
In US – Hot-Rolled Steel , the Appellate Body explained that "[i]f an examination is to be 
'objective ', the identification, investigation and evaluation of the relevant factor s must be even -
handed. Thus, investigating authorities are not entitled to conduct their investigation in such a way 
that it becomes more likely that, as a result of the fact -finding or evaluation process, they will 
determine that the domestic industry is injured ".44 
86. Article X:3(a) of the GATT 1994 provides additional contextual guidance supporting the 
interpretation that Articles 3.8 of the Anti -Dumping Agreement and 15.8 of the SCM Agreement 
require threat of injury determinations to be made in a reas onable, even -handed and impartial 
manner. Article X:3(a) requires that measures be administered in a "uniform, impartial  and 
reasonable  manner."45 "Impartial" is defined as "favoring no one side or party more than another; 
without prejudice or bias; fair; just."46  
87. Article 31(3)(c) of the Vienna Convention on the Law of Treaties (VCLT) further requires that 
"[t]here shall be taken into account, together with the context: … (c) any  relevant rules of 
international law applicable in the relations between the parties."  One such rule of international 
law is the principle of good faith. In this regard, t he Appellate Body has said that the principle of 
good faith is "a general principle o f law and a principle of general international law" and "informs 
the provisions of the Anti-Dumping Agreement , as well as the other covered agreements."47 
Applying the principle of good faith here, it cannot be acting in "good faith" to set up rules that a re 
biased against foreign interests by "deeming" a determination to be affirmative when it is not.  That 
is, the "divided Commission" rule tilts USITC determinations in petitioners' interests by deeming a 
tie vote result to be an affirmative determination.  
88. Finally, as noted earlier, Article 15 of the Anti -Dumping Agreement provides additional 
support for Indonesia 's claim as it relates specifically to threat of injury determination by a 
                                                
43 (Emphasis added).  
44 Appellate Body Report, US – Hot-Rolled Steel , para. 196.  
45 (Emphasis added).  
46 Webster's New World Dictionary , p. 703, available at 
<http://www.yourdictionary.com/impartial#websters.  
47 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, 4697, para. 101.  WT/DS491/R/Add.1  
 
- B-15 - 
 
  developed  country WTO Member (the United States) in respect of expo rts from a developing  
country WTO Member (Indonesia).  Article 15 reads: "It is recognized that special regard  must be 
given by developed country Members to the special situation  of developing country Members when 
considering the application of anti -dumping  measures under this Agreement."48 Consequently, the 
"special care" requirement for threat of injury cases in Articles 3.8 of the Anti -Dumping Agreement 
and 15.8 of the SCM Agreement read in conjunction with Article 15 of the Anti -Dumping 
Agreement require s a degree of diligence higher than that displayed in threat of injury 
determinations involving developed countries.  
B. "Special Care" Requires a Degree of Protection and Attention Over and 
Above that Required in Material Injury Cases  
89. The Panel in US – Softwood Lumber VI, clarified the ordinary meaning of "special care" to 
mean investigating authorities must display greater care in threat of injury determinations, when 
compared to material injury findings.49   
90. US law mandates that a tie vote in the material injury context is an affirmative 
determination.50 By having the same forced result in material injury and threat of injury 
investigations when there is a tie vote, US law does not permit, indeed prohibits, a degree of 
attention in threat of in jury cases over and above what is required in material injury cases.  
91. The treaty context also suggests that the exercise of special care requires the exercise of 
additional diligence in threat of injury cases.  Specifically, according to Article 7, Anne x II to the 
Anti-Dumping Agreement investigating authorities must exercise special circumspection .51 
92. "Special circumspection" bears obvious textual and linguistic similarities with "special care" 
in addition to finding itself in the same agreement, thu s serving as interpretative context.52 An 
analogy can thus be drawn between obtaining information from secondary sources and 
determining threat of injury: in both situations, the authorities face an empirical uncertainty and 
need further tools for clarific ation.  In the case of "special circumspection," these tools are set out 
in the provision itself.  They consist of additional steps for the verification of the information, such 
as crosschecking with other independent sources. Similarly, a degree of attentio n over and above  
that required of investigating authorities in all anti -dumping and countervailing duty injury cases is 
required in the context of cases involving threat of material injury.53 
93. Instead of embodying a degree of heightened caution in the f ace of uncertainty ( i.e., three 
reasonable minds who disagree), the "divided commission" provision forces a decision that is not 
based on employing additional tools for clarification.    
C. Other Members' Practice Supports the Inconsistency of the USITC's 
Approach  
94. Indonesia understands the Republic of Korea is the only other Member with a provision of 
law similar to the United States ' in a threat of injury context ( i.e. that a tie vote must be an 
affirmative determination).  Indeed, a number of Members have adopted positions fundamentally 
different from that of the United States, which highlights the discordance of the measure at issue 
from other Members' practice and its inconsistency with Articles 3.8 of the Anti -Dumping 
Agreement and 15.8 of the SCM A greement.   
95. Article 32 of the VCLT provides for recourse to the "circumstances of [a treaty's] 
conclusion." Therefore, it is appropriate for the Panel to rely on the laws of other WTO members as 
"factual circumstances"54 and aids in interpreting the cov ered agreements.55 Domestic laws 
                                                
48 (Emphasis added).  
49 Panel Report, US – Softwood Lumber VI , para. 7.33.  
50 See 19 U.S.C. § 1677(11)(A) . 
51 (Emphasis added).  
52 Article 31(1) VCLT.  
53 Panel Report, US – Softwood Lumber VI , para. 7.33 (emphasis added).  
54 Panel Report, European Communities – Selected Customs Matters , WT/DS315/R, adopted 
11 December 2006, as modified by Appellate Body Report WT/DS315/AB/R, DSR  2006: IX, 3915, para. 7.130, 
fn. 267.  WT/DS491/R/Add.1  
 
- B-16 - 
 
  providing for different approaches to the "special care" requirement by other Members should 
provide interpretative guidance to the Panel.  Additionally, a Panel may look into laws that were 
enacted after the entry into forc e of the WTO Agreements as subsequent practice of Members by 
virtue of Article 31(1)(b) of the VCLT.   
96. Domestic laws of other WTO members indicate that the "special care" requirement under 
Articles 3.8 of the Anti -Dumping Agreement and 15.8 of the SCM Agreement respectively, is 
generally perceived to entail a greater degree of diligence than that designated by the "divided 
Commission" provision of the measure at issue.  Certain WTO Members have ensured against a tie 
by providing for an odd number of deci sion makers.  For example, Canada's International Trade 
Tribunal consists of 7 members.56 Having an odd number of decision makers ensures that the 
collective decision is taken in the exercise of higher diligence and in a reasonable and even -handed 
manner.  South Africa's International Trade Administration Commission decides by majority, but in 
case of a tie, the presiding Commissioner's vote counts double.57 Likewise, in Turkey, where the 
Board of Evaluation of Unfair Competition in Importation is faced with a tie vote, the Head of the 
Board has a double vote.58 Argentina's National Commission for Foreign Trade is composed of five 
members but if all members do not participate and there is a tie, the Chairman has a casting 
vote.59 
97. The same approach is embod ied in the Statute of the International Court of Justice:60 Article 
55(2) provides that " [i]n the event of an equality of votes, the President or the judge who acts in 
his place shall have a casting vote."  
98. It is not protective of all affected interests  nor reasonable or even -handed to appoint an 
even number of Commissioners and not provide for a proper, neutral mechanism to resolve tie 
votes.  In the context of US safeguard investigations, if there is a tie vote, the US President may 
review the USITC's d etermination and deem it to be affirmative if he chooses.  In effect, he acts as 
a tie-breaking vote.  By contrast, with anti -dumping and countervailing duties, this approach is not 
taken even in threat of injury cases which require "special care".  
99. By fo rcing an affirmative determination when there is a tie threat of injury vote, the 
measure at issue removes all discretion from the USITC and tips the balance in favor of the US 
industry.  The fact that the US measure also appears to be unique among those of  WTO Members 
further supports its inconsistency with Articles 3.8 of the Anti -Dumping Agreement and 15.8 of the 
SCM Agreement.    
VI. CONCLUSION  
100. Indonesia asks the Panel to find that the United States' measures, as set out above, are 
inconsistent with the United States' obligations under the GATT 1994, SCM Agreement, and Anti -
Dumping Agreement.  Indonesia further requests, pursuant to Article 19.1 of the DSU, that the 
Panel recommend that the United States bring its measures into conformity with the GATT  1994, 
SCM Agreement, and Anti -Dumping Agreement.  
  
                                                                                                                                                  
55 Appell ate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical 
Products , WT/DS50/AB/R, adopted 16  January 1998, DSR  1998: I, 9, para. 65; Appellate Body Report, 
European Communities – Customs Classification of Certain Computer Equi pment , WT/DS62/AB/R, 
WT/DS67/AB/R, WT/DS68/AB/R, adopted 22  June 1998, DSR  1998: V, 1851 , para. 94; Appellate Body Report, 
European  Communities – Customs Classification of Frozen Boneless Chicken Cuts , WT/DS269/AB/R, 
WT/DS286/AB/R, adopted 27  September 200 5, and Corr.1, DSR  2005: XIX, 9157, paras. 308, 317.  
56 Canadian International Trade Tribunal Act (R.S.C., 1985, c. 47 (4th Supp.) § 3(1)).  
57 International Trade Administration Act (No. 71) 2002 § 12(6), G overnment Gazette Vol. 451, 
No. 24287.  
58 Regulation on the Prevention of Unfair Competition in Imports ( 1999), Government Gazette, 
No. 23861, Article 44.  
59 Presidential Decree No. 766/94, 12 May 1994, Article 11.  
60 Statute of the International Court of Justice, 33 U.N.T.S. 993.  WT/DS491/R/Add.1  
 
- B-17 - 
 
   
ANNEX B -2 
FIRST INTEGRATED EXE CUTIVE SUMMARY OF TH E UNITED STATES  
EXECUTIVE SUMMARY OF  U.S. FIRST WRITTEN S UBMISSION  
1. The findings of the United States Department of Commerce ("Commerce" or "USDOC") and 
the U.S. International Trade Commission ("the USITC", "the Commission" or the "ITC") in the 
antidumping and countervailing duty proceedings at issue in this dispute were w ell reasoned, 
amply supported, and fully consistent with the relevant provisions of the WTO Agreement on 
Subsidies and Countervailing Measures  ("SCM Agreement" or "SCMA") and the WTO Agreement in 
the Implementation of Article VI of the General Agreement on  Tariffs and Trade  ("AD Agreement" 
or "ADA").  Indonesia's challenge to the statutory provision governing tie votes in the Commission, 
moreover, reflects a fundamental misunderstanding of the special care obligation in ADA 
Article  3.8 and SCMA Article 15.8.  
I. PRELIMINARY RULING R EQUEST  
2. In its first written submission, Indonesia raises an argument under the auspices of its SCM 
Article 2.1(c) and Article 14(d) claims, with respect to the log export ban, that in fact is a legal 
analysis of Article 1.1(a) of  SCM Agreement.  Article 1.1(a), which constitutes the "financial 
contribution" prong of defining a subsidy, is not one of the provisions enumerated in Indonesia's 
panel request – i.e. it is not the basis of any of Indonesia's claims.  
3. Articles 6 and 7 o f the DSU provide that the "request for the establishment of a panel shall 
… identify the specific measures at issue and provide a brief summary of the legal basis of the 
complaint sufficient to present the problem clearly," and that panels the matter refe rred to the 
DSB, make such findings as will assist the DSB in making the recommendations or in giving the 
rulings provided for in that/those agreement(s)."  Finally, "[p]anels shall address the relevant 
provisions in any covered agreement or agreements cite d by the parties to the dispute."  
4. The Appellate Body has explained that 1) "it is well settled that the terms of reference of a 
panel define the scope of the dispute and that the claims identified in the request for the 
establishment of a panel establi sh the panel's terms of reference under Article 7 of the DSU";  and 
2) "Article 6.2 of the DSU requires that the claims … must all be specified sufficiently in the 
request for the establishment of a panel in order to allow the defending party and any third parties 
to know the legal basis of the complaint."  The Appellate Body further stated in EC – Bananas III , 
"[i]f a claim is not specified in the request for the establishment of a panel, then a faulty request 
cannot be subsequently 'cured' by a complaining party's argumentation in its first written 
submission."    
5. Indonesia argues that the log export ban is a type of export restraint that is not a subsidy.  
Indonesia's argument and its heavy reliance on the panel report from US – Export Restraints  
pertains  to whether an export restraint is a financial contributio n within the meaning of 
Article  1.1(a),  not, as Indonesia claims in the panel request, whether "USDOC improperly found 
that Indonesia conferred a benefit by banning log exports using a per se determ ination of price 
distortion based on purported government intervention [or] failed to determine the adequacy of 
remuneration 'in relation to prevailing market conditions for the good . . . in question in the 
country of provision.'"  Similarly, Indonesia rep eats the same in its first written submission with 
respect to SCM Article 2.1(c)'s "subsidy programme" requirement as it applies to the log export 
ban. An export ban cannot constitute a "government -entrusted or government -directed provision 
of goods" (i.e.  a financial contribution), ergo, Indonesia argues, it is not a subsidy program within 
the meaning of Article 2.1(c). However, pleading an Article 2.1(c) claim in Indonesia's panel 
request does not satisfy the requirement to plead an Article 1.1(a) claim.  WT/DS491/R/Add.1  
 
- B-18 - 
 
  II. INDONESIA'S CLAIMS U NDER THE SCM AGREEME NT ARE WITHOUT MERIT  
A. USDOC's Rejection of In -Country Prices As Benchmarks for Indonesia's 
Provision of Standing Timber for Less Than Adequate Remuneration Was 
Consistent With Article 14(d) Of The SCM Agreement  
6. The chapeau of Article 14 refers to "any method" used by an investigating authority "to 
calculate the benefit to the recipient," and describes the subparagraphs of Article 14 as 
"guidelines."  The Appellate Body has explained that the reference to "any"  method implies that 
more than one method consistent with Article 14 is available to investigating authorities for 
purposes of calculating the benefit.  The second sentence of Article 14(d) specifies that "adequacy 
of remuneration" must be determined "in relation to prevailing market conditions ... in the county 
of provision."  
7. Although an investigating authority should first consider proposed in -country prices for the 
good in question, it should not rely on such prices if they are not market -determined as a result of 
governmenta l intervention in the market. Government intervention "may distort in -country private 
prices for that good by setting an artificially low price with which the prices of private providers in 
the market align."  Although there is no market share threshold above which an investigating 
authority may conclude per se price distortion, the more predominant a government's role in the 
market, the more likely that role results in the distortion of private prices.  The Appellate Body has 
explai ned that "[t]here may be cases … where the government's role as provider of goods is so 
predominant that price distortion is likely and other evidence carries only limited weight."  
8. To evaluate the viability of an in -country price, USDOC considered the G OI's market share.  
Indonesia reported that in 2008, nearly all standing timber was harvested on public lands, with 
private forests accounting for only about 6 percent of the harvest.  In addition, USDOC observed 
that the GOI controls approximately 99.5% of the harvestable forest land in Indonesia, i.e., all but 
233,811 of 57 million hectares.  USDOC also examined whether the principal fees at issue, PDSH 
for plantation timber, were market -driven.   
9. Clearly, private transactions in the relevant market are no minal.  This is not a situation in 
which an investigating authority could be expected to find and cite to significant market 
determined activity or other factors that undercut the likelihood of price distortion.  This is a 
situation in which the government i s overwhelmingly predominant, and, for all intents and 
purposes, the sole provider of the input.  Thus, Indonesia's imposition of a putative requirement to 
explain "how … market shares held by … [the government] … resulted in the government's 
possession and  exercise of market power, such that … price distortion occurred [and] … private 
suppliers aligned their prices with those of the government -provided goods [or] … were market 
determined,"  is inapposite to the factual situation in this dispute.  
10. USDOC's rejection of in -country price information was based on an analysis of the relevant 
facts before the agency.  USDOC examined the GOI's predominant role in the standing timber, or 
stumpage, market during the period of investigation, accounting for almost 94 p ercent of the total 
supply.  USDOC considered other relevant information submitted in the course of its investigation 
and identified additional grounds to support its finding of distortion of in -country prices for 
standing timber.  The GOI's overwhelming mar ket share was, justifiably, a major factor in that 
analysis, but USDOC assessed all of the evidence and identified other features of the market for 
standing timber that rendered it distorted.  These included the GOI's ownership of virtually all 
harvestable forest land, the presence of a log export ban, the negligible level of pulp log imports, 
and Indonesia's low prices for logs relative to the surrounding region.  Indonesia fails to identify 
what other record information was relevant to the distortion analys is, but not considered by 
USDOC.  USDOC based its rejection of in -country benchmark data "on positive evidence on the 
record," and adequately explained and supported its conclusion.  
B. Indonesia Fails to Prove Any WTO Breach With Respect to USDOC's Finding 
That the Log Export Ban Confers a Benefit at Less Than Adequate 
Remuneration  
 
11. Indonesia has failed to establish any breach of the SCM agreement with respect to USDOC's 
finding that the log export ban conferred a benefit (timber inputs at less than adeq uate WT/DS491/R/Add.1  
 
- B-19 - 
 
  remuneration).  Indonesia argues that (1) the ban's ostensible purpose (conservation) and scope 
(downstream carve -out) reveal that it is not a subsidy; and (2) export restraints as a rule cannot 
constitute a subsidy.  Nothing in the substance of these a rguments has an actual connection with 
the obligations set out in Article 14(d).  
12. USDOC was correct in its decision to determine that the benefit resulting from the log export 
ban to be the provision of inputs at less than adequate remuneration, measure d by comparing the 
price APP/SMG paid for logs purchased from unaffiliated logging companies to what they would 
have been expected to pay under normal market conditions.  
13. USDOC's analysis was based on record evidence, including that 94 percent of logs harvested 
during the period of investigation was from public land, and the fact that the GOI controlled over 
99 percent of harvestable forest land, in finding that the GOI distorted in - country prices for logs.  
The sole in -country prices urged by the respo ndents were certain import data from Sabah, 
Malaysia into Indonesia, which were offered for both the stumpage and log export ban programs.  
14. In addition, during the investigation, Respondents urged that the supply of logs in Indonesia 
was insufficient to  meet demand, and thus, even without a ban, all domestic production would be 
consumed internally.  USDOC explained that such reasoning ignored the essential fact "that without 
the ban domestic consumers would have to compete with foreign consumers."  Further more, 
USDOC explained that the empirical evidence on the record rebutted the respondents' claim, and 
demonstrated distortion in the Indonesian market.  Specifically, in the Malaysian export data 
available from the World Trade Atlas and as provided by the re spondents' consultant, a large 
disparity existed between timber prices paid from within Indonesia and the prices paid by oth ers 
purchasing from Malaysia. Thus, the World Trade Atlas data that USDOC relied on was not 
"aberrational," as Indonesia claims, but  rather is consistent with the Malaysian export data, once 
imports to Indonesia are subtracted, that Indonesia provided in the underlying investigation.   
C. In Applying Adverse Facts Available With Regard To The Debt Buy -Back, 
USDOC Acted Consistently With  Article 12.7 Of The SCM Agreement  
15. Article 12.7 "permits an investigating authority, under certain circumstances, to fill in gaps 
in the information necessary to arrive at a conclusion as to subsidization ... and injury."  Overall, 
Article 12.7 "is inte nded to ensure that the failure of an interested party to provide necessary 
information does not hinder an agency's investigation."  Article 12.7 contains similar obligations to 
those under Article 6.8 of the AD Agreement.  Article 6.8 of the AD Agreement states that:  "In 
cases in which any interested party refuses access to, or otherwise does not provide, necessary 
information within a reasonable period or significantly impedes the investigation, preliminary and 
final determinations, affirmative or negativ e, may be made on the basis of the facts available."  
16. One scenario which may trigger resort to Article 12.7 of the SCM Agreement is where 
information is not provided within "a reasonable period."  "[I]f information is, in fact, supplied 
'within a reasona ble period,' the investigating authorities cannot use facts available, but must use 
the information submitted by the interested party."  The SCM Agreement permits investigating 
authorities to establish deadlines for questionnaire responses to foreign produc ers or interested 
Members.  The Appellate Body has "recognize[d] that it is fully consistent with the Anti -Dumping 
Agreement for investigating authorities to impose time -limits for the submission of questionnaire 
responses."  
17. In resorting to "facts avail able" under Article 12.7 of the SCM Agreement, the missing 
information also must be "necessary."  This term "is meant to ensure that Article 12.7 is not 
directed at mitigating the absence of 'any' or 'unnecessary' information, but rather is concerned 
with o vercoming the absence of information required to complete a determination."  If such 
"necessary" information is absent, "the process of identifying the 'facts available' should be limited 
to identifying replacements for the 'necessary information' that is m issing from the record." An 
investigating authority must use those 'facts available' that 'reasonably replace the information 
that an interested party failed to provide', with a view to arriving at an accurate determination.  
Moreover, all substantiated fac ts on the record must be taken into account and a determination 
cannot be made on the basis of non -factual assumptions or speculation.  WT/DS491/R/Add.1  
 
- B-20 - 
 
  18. Finally, an interested party or Member's lack of cooperation is relevant to the investigating 
authority's selection o f particular "facts available" under Article 12.7.  ADA Annex II, paragraph 7, 
acknowledges that non -cooperation could lead to an outcome that is less favorable for the non -
cooperating party.  Non-cooperation creates a situation in which a less favorable res ult becomes 
possible due to the selection of a replacement of an unknown fact.   
19. The domestic petitioners alleged that the GOI provided countervailable debt forgiveness 
when it sold approximately $880 million worth of APP/SMG debt for $214 million to Or leans, and 
petitioners also alleged that those two companies were affiliated, rendering the debt buy -back 
program as it pertained to APP/SMG constituted a financial contribution in the form of debt 
forgiveness.  
20. USDOC had explained that "during verific ation, the Department met with an independent 
expert knowledgeable about the debt and the banking crisis in Indonesia," and that it was likely 
that Orleans was related to SMG/APP because "it [was] not uncommon for hedge funds to set up 
special purpose vehi cles (SPVs) for the purpose of participating in one particular deal and that 
these SPVs could easily be established in a way that would make their ultimate ownership 
unknowable.  USDOC also identified record evidence, including a World Bank report indicatin g that 
"some IBRA sales allegedly allowed debtors to buy back their loans at a steep discount through 
third parties, against its rules, raising further concerns about transparency."  
21. USDOC requested that, if the GOI disagreed with USDOC's prior CFS det ermination that 
Orleans was affiliated with APP/SMG, then the GOI must "provide documentation demonstrating 
that Orleans had no affiliation with APP/SMG or any of APP/SMG's other affiliated companies, or 
with any owners, family members or legal representat ives of APP/SMG."  In addition, USDOC asked 
the GOI to provide Orleans' registration and bid package, including Orleans' articles of association, 
and documentation regarding IBRA's internal procedures for reviewing and evaluating bids in 
general, and specif ically under the PPAS.  
22. The GOI provided the documents pertaining to the Orleans transaction, which "could not be 
located during the previous investigation."  However, the GOI explained that the articles of 
association, as with the other documents submi tted, did not disclose, or contain any information 
about, Orleans' ownership.  In that same questionnaire response, the GOI explained how the PPAS 
bidding process functioned, including that "[t]he mechanisms implemented by IBRA – the required 
certificate of  compliance, the buyers specific representation of non -affiliation in the asset sale and 
purchase agreement, and the opinion letter by outside counsel – all represent the procedures 
implemented by IBRA to ensure the prohibition against sale of debt to the original debtor was not 
happening."  
23. USDOC requested information concerning other debt sales conducted under the PPAS and 
any guidance provided to IBRA officials when evaluating the bidders.  USDOC highlighted that 
"failure to submit requested informatio n in the requested form and manner by the date specified 
may result in use of the facts available."  In response, the GOI articulated that the "IBRA did not 
have any written internal due diligence guidelines for evaluating the documentation and other 
inform ation submitted by potential bidders," but that "IBRA staff used the same basic approach to 
due diligence for all of the PPAS sales."  However, with regard to USDOC's document request 
pertaining to other PPAS debt sales, the GOI explained:  "These documents are not available at this 
time. Since those documents are unrelated to the APP/SMG transaction at issue in this 
investigation … the GOI is not sure of the relevance of these documents."  
24. The GOI's statement did not allow USDOC to confirm the extent to w hich IBRA staff had 
endeavored in other transactions to ensure debtors were not allowed to buy back their own debt or 
to determine the owners of debt purchasers.  This information was "necessary" within the meaning 
of Article 12.7 of the SCM Agreement becau se, without such PPAS transaction documents, USDOC 
could not determine whether claims that such efforts (beyond the requirement of certified 
statements) were not taken in the APG/SMG transaction were plausible or whether the lack of such 
an effort was typi cal. 
25. Despite two requests, the GOI failed to provide necessary information within a reasonable 
period of time that would have assisted USDOC in evaluating whether the "IBRA does not inquire 
into the ownership of bidders under this program and accepts v arious affirmations that the bidders WT/DS491/R/Add.1  
 
- B-21 - 
 
  are not affiliated with the debtor companies."  The GOI had ample opportunity to provide the 
requested information, within USDOC's deadlines, for which the GOI could  have requested an 
extension. But the GOI failed to pro vide this information.  
26. Finally, in selecting from the facts available, USDOC determined that an adverse inference 
was warranted because when USDOC specifically sought documents pertaining to other PPAS 
transactions, which the investigating authority co uld "compare with the information [it] had for the 
Orleans transaction," the GOI twice failed to provide that necessary information. The GOI failed to 
cooperate by not acting to the best of its ability considering it had seven weeks' notice and still 
failed to provide it.  
27. Indonesia faults USDOC for canceling a portion of the on -the-spot verification pertaining to 
the debt buy -back program.  However, verification took place from  June 28, 2010, through 
July 8, 2010, six days after the fifth supplemental qu estionnaire response deadline.  USDOC had 
placed the GOI on notice in its verification outline that if the fifth supplemental questionnaire 
response specifically was "deemed unresponsive on some issues, those issues may be deleted 
from the verification agen da." That GOI response was non -responsive with regard to the bidding 
documents.  It was entirely appropriate that USDOC canceled verification of the debt buy -back.  
Indeed, USDOC reasoned that "[p]roviding the opportunity to review the information at verific ation 
is not a substitute for providing the information for review beforehand."  USDOC also explained that 
"verification is not an opportunity to submit new information, but rather is intended only to 
establish the accuracy of the information already submit ted." Finally, USDOC articulated that 
"[b]esides the fact that neither the Department nor Petitioners will have adequate time to prepare 
probing verification questions or suggestions for questions, the resources available at verification 
are completely dif ferent from those available at Department headquarters" in that there are 
substantially less personnel at on -the-spot verifications to "examine the information firsthand."    
28. In addition, Indonesia claims that the "facts available" USDOC relied on in fi nding affiliation 
did not "reasonably replace" the missing in formation under Article 12.7. Underpinning Indonesia's 
argument is that USDOC unreasonably relied on "speculative" "newspaper articles and reports."  
The "facts available" refer "to those facts th at are in the possession of the investigating authority 
and on its written record."  An Article 12.7 determination "'cannot be made on the basis of non -
factual assumptions or speculation.'"  In this investigation, USDOC relied on "newspaper articles 
and repo rts suggesting that APP/SMG may have purchased its own debt, and that Orleans was an 
affiliate of APP/SMG."  These documents were "on the record."  
29. Indonesia opines that USDOC failed to employ a comparative approach to selecting facts 
available.  Indones ia accuses USDOC of giving more weight to "speculative newspaper articles and 
rumor than the actual documents from the transaction," yet the documents from the APP/SMG 
debt sale provided no information on Orleans' ownership in the first place.  Here, it wou ld not have 
been practicable to comparatively evaluate record information to determine the "best" facts 
available.  The question of whether APP/SMG and Orleans were affiliated was necessarily binary.  
Although the GOI placed information on the record to supp ort that they were not affiliated, the 
GOI failed to satisfy that evidentiary burden through its repeated failure to provide all the 
information necessary to allow USDOC to make a determination.   
D. The United States Acted Consistently with Article 2.1 of the SCM Agreement 
In Making Its De Facto Specificity Findings  
30. The chapeau and paragraph (c) of Article 2.1 of the SCM Agreement state that "[i]n order to 
determine whether a subsidy  …  is specific to an enterprise or industry or group of enterprises or 
industries … within the jurisdiction of the granting authority, … other factors may be considered 
[notwithstanding the appearance of non -specificity].  Such factors include "use of a subsidy 
programme by a limited number of certain enterprises."  
31. Article 2.1(c) addresses the principles for finding that a subsidy is de facto specific.  Thus, 
where an investigating authority clearly substantiates, on the basis of positive evidence, that use 
of a subsidy is limited to "certain enterprises," then the determ ination of specificity made by that 
authority is consistent with the requirements of Article 2.1(c) of the SCM Agreement.  This dispute 
solely involves Article 2.1(c) specificity determinations.  WT/DS491/R/Add.1  
 
- B-22 - 
 
  32. Standing timber . In US – Countervailing Measures (China) , the Appellate Body considered 
the significance of "programme" in paragraph (c) of Article 2.1, following "subsidy," and whether a 
"subsidy programme" (as distinct from a "subsidy") thus required the formalities of being reduced 
to writing or pronounced in some manner. In that case, SOEs consistently provided inputs at what 
USDOC found were less than adequate remuneration, pursuant to "unwritten measures."  The 
Appellate Body underlined that, generally, "[e]vidence regarding the nature and scope of a subsidy 
programme may be found in a wide variety of forms, for instance, in the form of a law, regulation, 
or other official document or act setting out criteria or conditions governing the eligibility for a 
subsidy" or by "a systematic series of actions pursuant to which financial contributions that confer 
a benefit have been provided to certain enterprises.  
33. Here, the record supports that the provision of standing timber for less than adequate 
remuneration is a "subsidy program" in the form of "a plan or schem e." Indonesia explained to 
USDOC that "[t]o harvest wood products from the State Forest, a harvester must obtain a license," 
and that a Ministry of Forestry regulation sets forth the application requirements to obtain a 
stumpage license. This also constitu tes a systematic series of actions.  
34. Indonesia does not otherwise contest USDOC's de facto specificity finding and USDOC's 
finding that "the provision of stumpage is specific …because it is limited to a group of industries," 
is sound.  Indonesia provided  a listing of harvesting license approvals for a three -year period.  
USDOC had asked Indonesia to "identify each company, and its industry, that were approved for 
harvesting licenses in each year from 2005 through 2008."  In response to another question 
concerning Indonesia's industrial classifications, Indonesia explained that "[w]ithin the category of 
large and medium companies, there are a total of 23 separate industry groupings," of which "the 
five industry groupings making use of timber account roughly [ sic] 22 percent of the number of 
industry groupings, and approximately 23 percent of the output of all such groups."  Paper 
production, in turn, constitutes two of the five users of timber, along with wood products, 
chemicals, and furniture.  This evidence s upports USDOC's de facto specificity finding.  
35. Log export ban . Indonesia claims that USDOC failed to explain how the log export ban 
constituted a "a plan or scheme and systematic series of actions that confer a benefit."  Indonesia 
argues that because th e GOI discontinued the ban on chipwood exports before the start of 
USDOC's POI, the "downstream input for making pulp, including pulp itself, could be freely 
exported."  During the investigation Indonesia informed USDOC that, pursuant to Government 
Regulati on No. 6 of 2007, Indonesia had "begun the process of legalizing the export of forest 
products," but that authority had "not to date been exercised to formally implement this 
regulation."  Indonesia also stated that Minister of Trade Decree No. 20/M -DAG/Per /5/2008, which 
referenced Regulation No. 6 of 2007, provided that "chipwood" may be exported, but that "logs 
(including pulpwood)"  may not be exported. USDOC confirmed during its on -the-spot verification 
of Indonesia that "neither of these laws have been i mplemented."  
36. Here, the "plan or scheme" is evinced by the log export ban itself.  Having identified the 
"subsidy program," the existence of which was also demonstrated by, inter alia , USDOC's 
questions to the GOI during the investigation, USDOC then examined whether the log export ban 
was de facto specific.  The Panel should reject Indonesia's argument that a subsidy program can 
only be demonstrated both by "a plan or scheme and systematic series of actions that confer a 
benefit."  The latter is simply one way of demonstrating the existence of a plan or scheme.  
37. Debt buyback . As discussed above, USDOC applied facts available on the issue of whether 
APP/SMG and Orleans were "affiliated."  USDOC determined that "[b]ecause the debt was sold to 
an APP/SMG affiliate, in violation of the GOI's own prohibition against selling debt to affiliated 
companies … the sale was company -specific."  
38. Indonesia claims that USDOC acted inconsistently with Article 2.1(c).  The Panel should 
reject Indonesia's argument that  an investigating authority must identify both "a plan or scheme 
and systematic series of actions that confer a benefit" for an Article 2.1(c) de facto specificity 
analysis.  As the Appellate Body has explained, "the starting point of an analysis of specifi city is the 
measure that has been determined to constitute a subsidy under Article 1.1."  Here, that "starting 
point" is the identified subsidy, namely, "debt forgiveness through APP/SMG's buyback of its own 
debt from the Indonesian Government."  The APP/SMG  debt buy -back constituted a plan or scheme 
as contemplated by the Appellate Body, and thereby constitutes a subsidy program consistent with 
Article 2.1 of the SCM Agreement.   WT/DS491/R/Add.1  
 
- B-23 - 
 
  39. Collectively, the documents on the record and findings of the investigating authority 
demonstrate that Indonesia was aware of Orleans' affiliation and obviously had knowledge of its 
own laws prohibiting the sale to an affiliated buyer.  Therefore, Indonesia had in place "a plan or 
scheme" to provide a financial contribution, which resulted i n a company -specific subsidy. This 
finding is consistent with Article 2.1 (c) and the Appellate Body's findings concerning the existence 
of a "plan or scheme."  Indeed, the subsidy that USDOC identified is company -specific because only 
the specifi c company debtor is "eligible to receive that same subsidy."  
40. 2.1 chapeau claims . Indonesia claims that USDOC failed to identify the "relevant jurisdiction" 
of the granting authority with regard to the provision of standing timber for less than adequate  
remuneration, the log export ban, and the debt buy -back.  
41. In US – Countervailing Measures (China) , the Appellate Body stated that:  "an essential part 
of the specificity analysis under Article 2.1 requires a proper determination of whether the relevant 
jurisdiction is that of the central government or whether it is that of a regional or local 
government, and whether the granting authority therefore operates at a central, regional, or local 
level."  However, if the investigating authority properly identifi es the jurisdiction of the granting 
authority when analyzing the nature of a financial contribution, such a finding would satisfy the 
analysis contemplated under Article 2.1's chapeau.  The Appellate Body also noted that the 
chapeau of Article 2.1 does not require an investigating authority to identify the jurisdiction of the 
granting authority in an explicit manner or in any specific form, as long as it is discernible from the 
determination.  
42. The jurisdiction of the granting authority for each subsidy is  "discernible from the 
determination."  More specifically, this was identified through USDOC's questionnaires to Indonesia, 
read in light of the coated paper final determination.  With respect to the provision of standing 
timber for less than adequate remune ration, the jurisdiction of the granting authority is the 
Government of Indonesia.  First, Indonesia's argument that USDOC failed to define "GOI" is simply 
false.  USDOC defined the acronym "GOI" as an abbreviation for the Government of Indonesia.  
USDOC also  identified the jurisdiction of the granting authority as Indonesia, evidenced by several 
statements in the final determination.  
43. Indonesia likewise argues that USDOC failed to identify the granting authority as it pertained 
to the log export ban.  Indon esia is incorrect for several reasons.  First, Indonesia concedes in its 
first written submission that "the log export ban was enacted at the national level."  Second, that 
finding is implicit in USDOC's final determination.  Thus, it is readily "discernible from the 
determination" that USDOC understood the "granting authority" to be the national government of 
Indonesia, i.e., "the GOI."  
44. Indonesia's argument that USDOC failed to "identify the government entity that allegedly 
forgave debt" is largely repeti tive of arguments made under Indonesia's Article 12.7 claim.  
Indonesia failed to provide information pertaining to other PPAS debt sales, which USDOC 
determined was "necessary to ensure that IBRA followed proper procedures in the Orleans -
APP/SMG transactio n in not inquiring further into the ownership of Orleans or any relationship 
between the entities."  Because USDOC could not determine whether the IBRA made further 
inquiries in this regard, USDOC resorted to facts available with adverse inferences in findi ng 
affiliation.  Contrary to Indonesia's arguments, the granting authority was "discernible from the 
determination."  USDOC found that "the GOI's sale of APP/SMG's debt to Orleans constituted a 
financial contribution, in the form of debt forgiveness."  Despit e the fact it had no obligation to do 
so, USDOC also identified the particular agency within Indonesia that provided the financial 
contribution, the IBRA, a national banking authority.  
III. THE INJURY DETERMINA TION IS CONSISTENT W ITH U.S. WTO OBLIGAT IONS  
A. Overview of the USITC Determination  
45. In its determination, the Commission separately discussed the volume, price effects, and 
impact of the subject imports, first considering present material injury and then threat.  In finding 
no present material inju ry, the Commission found that the increase in subject imports during the 
POI was significant both on an absolute basis and relative to apparent U.S. production and 
consumption.  Analyzing threat, the Commission found that absent antidumping and countervaili ng WT/DS491/R/Add.1  
 
- B-24 - 
 
  duty orders, a continuation of the increases in subject import volume that occurred during the POI 
was likely.  The Commission noted the historic increase in the volume and market penetration of 
the subject imports from 2007 to 2009, in spite of the 21.3  percent decline in apparent U.S. 
consumption; found that capacity and production in the subject countries would likely increase 
imminently; and found that the subject producers were likely to utilize the additional capacity to 
increase shipments to the Un ited States.   
46. Throughout the POI, APP, the predominant producer and exporter of subject merchandise in 
China and Indonesia, had attempted aggressively to increase exports to the United States.  In late 
2008 – while U.S. demand was declining – APP inform ed Unisource, a leading U.S. distributor, that 
it desired to double its coated paper exports to the United States and was willing to cut prices to 
increase volume.  When this attempt failed and APP lost the Unisource account, APP invested in its 
own distrib utor, Eagle Ridge, to retain and increase its presence in the U.S. market.  Additionally, 
despite declining demand, the U.S. market was relatively large, and offered higher prices than 
China or other Asian markets.  Exporters could easily increase their presence in the U.S. market 
due to their familiarity with the distribution network and the prevalence of spot market sales.  
Given the importance of price in purchasing decisions, aggressively priced subject imports would 
be able to quickly gain market shar e, or alternatively, force domestic producers to lower their 
prices substantially to retain volume.  
47. Regarding price effects, the Commission found that there was predominant underselling by 
the subject imports during the POI.  The Commission observed an apparent relationship between 
price declines for the subject imports beginning in the fourth quarter of 2008 and price declines for 
the domestic like product in early 2009 for products 1 and 4, which accounted for a majority of 
Chinese imports for which pr icing data were reported.  Domestic producers testified that they 
lowered their prices to compete with declining subject import prices, and numerous responding 
purchasers confirmed as much.  The Commission concluded that these trends, together with the 
significant underselling, "show that subject imports depressed domestic prices at least to some 
extent for part of the period under examination," but did not find significant price depression, as it 
could not ascertain whether subject imports contributed signif icantly to the price depression in 
light of two other factors that contributed to the price depression: significant declines in 
consumption and the "black liquor" tax credit, which effectively served to lower domestic 
producers' input costs.    
48. The Comm ission found that, as subject producers likely attempted to increase exports to the 
United States, they were likely to continue to use underselling and aggressive pricing to increase 
market share in the imminent future.  Given projections that demand would decline moderately, 
there would not be increased demand that could absorb the increased volume.  Factors other than 
subject imports that contributed to price depression and suppression during the POI would not play 
the same role in the imminent future.  The Commission concluded that continued underselling by 
subject producers, combined with increased volumes of subject imports, would likely cause the 
domestic industry to experience significant price depression in the imminent future.  
49. After analyzing the d omestic industry's declining performance according to most measures 
during the POI, the Commission found an insufficient causal nexus between the declines and 
subject imports to conclude that subject imports had a current significant adverse impact on the 
industry.  The record, however, indicated an imminent threat of material injury.  The Commission 
found the domestic industry to be vulnerable to material injury, and that this vulnerable state 
made it likely that the industry would continue to experience dec lining performance in the 
imminent future as subject imports continued underselling the domestic like product to 
significantly increase their sales and market share.  As the Commission explained, subject 
producers had demonstrated the ability and willingnes s to lower their prices to increase exports to 
the U.S. market, and would likely continue such behavior in the imminent future.  The U.S. market 
could not accommodate the likely increase in subject import volume without subject imports taking 
sales from cur rent suppliers including domestic producers, and causing material injury to the 
domestic industry.  
50. The Commission considered whether other factors would likely have an imminent impact on 
domestic industry, in particular: declining demand for CCP and n onsubject imports.  The 
Commission found that the modest decline in demand projected for 2011would limit sales 
opportunities and restrain prices, but was not of a magnitude that would render insignificant the 
likely impact of subject imports.  Similarly, it found that nonsubject imports would not render WT/DS491/R/Add.1  
 
- B-25 - 
 
  insignificant the likely impact of subject imports, as nonsubject import market share declined from 
25.4 percent in 2007 to 16.1 percent in 2009 and nonsubject import prices were generally higher 
than subject import prices.  The Commission observed that the do mestic industry also gained 
6.8 percentage points of market share during the interim period, and found it likely that, if 
preliminary duties were lifted, subject producers would seek to regain market share lost to both 
the domestic industry and nonsubject imports using low prices.  The Commission concluded that, in 
light of the domestic industry's vulnerability and its findings that subject import volume would 
likely increase significantly at prices likely to  depress and suppress domestic prices to a significant 
degree, material injury by reason of subject imports was likely to occur in the imminent future 
absent antidumping and countervailing duties.  
B. The Commission Complied With ADA Article 3.7 and SCMA Ar ticle 15.7  
51. Indonesia has failed to make a prima facie  case that the Uni ted States breached ADA 
Article  3.7 and SCMA Article 15.7 obligations.  Indonesia's arguments are based on the mistaken 
assumption that certain trends and factors during the POI, wh ich influenced the Commission's 
negative present material injury determination, would continue.  Yet several changes in 
circumstances made it likely that subject import volume would increase substantially in the 
imminent future: the projected increase in Ch inese capacity of at least 1.5 million short tons 
during the 2009 -11 period and APP's avowed determination to use low prices to increase 
substantially its exports of coated paper to the United States and establishment of Eagle Ridge as 
a means of doing so.  Factors other than subject imports that had adversely affected domestic 
prices during the POI would not have the same effect in the imminent future, as the steep decline 
in coated paper demand during the POI moderated and the black liquor tax credit expir ed. 
52. There is ample support for the Commission's finding that cumulated subject imports were 
likely to increase significantly in the imminent future, taking sales from existing suppliers such as 
the domestic industry.  Indonesia does not challenge the Co mmission's finding that subject import 
volume and market share was likely to increase significantly, or the Commission's finding that 
subject producers possessed both the ability and the incentive to increase their exports to the 
United States significantl y in the imminent future.  Chinese producers would have at least 750,000 
short tons of coated paper capacity available for export to the United States in 2011, equivalent to 
38 percent of appa rent U.S. consumption in 2009. Further, the record contained dire ct, unrebutted 
evidence concerning the dominant subject exporter's desire to increase sharply its presence in the 
U.S. market by reducing its already low prices.   
53. The Commission reasonably explained that the increase in subject import volume and 
market  share would likely take sales from current suppliers including the domestic industry.  The 
Commission found that the significant increase in subject import volume between 2007 and 2009 
came partly at the domestic industry's expense.  Moreover, of the declin e in subject import market 
share between interim 2009 and interim 2010 due to the investigations, the domestic industry 
captured 6.8 percentage points and nonsubject imports captured 6.0 percent.  Clearly foreseen and 
imminent changes in circumstances place d subject producers in an even better position to rapidly 
increase their penetration of the U.S. market than during the POI.   
54. The Commission also possessed ample support for its finding that the likely significant 
increase in subject import volume, dri ven by significant subject import underselling, would 
pressure domestic producers to lower their prices.  The Commission based the finding in part on 
evidence that significant subject import underselling had depressed domestic prices during the POI 
to some extent.  The Commission relied upon the relationship between subject import and domestic 
prices for products 1 and 4 during the period.  Further, domestic producers testified that they 
reduced prices to compete with subject imports during the period, and num erous purchasers 
reported that domestic producers had lowered prices to meet subject import prices.  The 
Commission also emphasized APP's willingness, evidenced by its late 2008 proposal to Unisource, 
to cut its already -low prices to increase substantially its exports to the United States.   
55. Two factors other than subject imports that depressed domestic prices in 2009, sharply 
declining demand and the black liquor tax credit, would play a reduced or no role in the imminent 
future.  The projected decline in  domestic consumption was modest compared to the drop between 
2008 and 2009.  Expiration of the black liquor tax credit in 2009 meant that the program would no 
longer depress domestic prices.   WT/DS491/R/Add.1  
 
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  56. There is no basis for Indonesia's assertion that subject import market share was unlikely to 
increase in the imminent future any more rapidly than during the POI.  Indonesia ignores the 
changes in circumstances identified by the Commission that gave subject producers the ability and 
incentive to increase their pe netration of the U.S. market in the imminent future more rapidly than 
during the POI.  Similarly misplaced is Indonesia's claim that subject import market share would 
likely remain too low in the imminent future to adversely impact domestic prices.  Indonesi a does 
not contest that significant subject import underselling was likely to continue in the imminent 
future.  Nor is there merit to Indonesia's contention that even a 12 percentage point increase in 
subject import market share in the imminent future (to 2 2 percent) could have no significant 
adverse impact on domestic prices, allegedly because such an increase could have no effect on 
prices in the other 78 percent of the market.  Indonesia's argument is based on the fallacy that 
subject imports could adverse ly affect domestic prices only by capturing market share.  As the 
Commission explained, however, "subject imports will put pressure on domestic producers to lower 
prices in a market with depressed demand in order to compete for sales and prevent an 
accelera ted erosion of their market share."  Indeed, the Commission found evidence that subject 
imports depressed domestic prices to some extent between 2008 and 2009 without taking any 
market share from the domestic industry.  These facts supported the Commission's  finding that 
continued subject import underselling would likely force domestic producers to lower their prices to 
defend their sales and market share.  
C. The Commission Properly Established a Causal Link Between Subject 
Imports and the Threat of Material Injury to the Domestic Industry, 
Consistent with ADA Article 3.5 and SCMA Article 15.5  
57. In concluding that the domestic industry was vulnerable to material injury, the Commission 
in no way attributed effects of declining demand or expiration of the blac k liquor tax credit to 
subject imports.  It was in the next step of the Commission's analysis, considering whether the 
domestic industry was threatened with material injury by reason of subject imports, that the 
Commission considered other known causal fact ors and ensured that any injury caused by such 
factors was not attributed to subject imports.  
58. The Commission properly separated and distinguished the effects of projected demand 
declines and nonsubject imports from the injury caused by subject imports by demonstrating that 
subject imports had injurious effects independent of those factors.  The Commission first 
demonstrated a strong causal link between subject imports and the threat of material injury to the 
domestic industry, and then explained how othe r known causal factors did not detract from the 
link. The Commission found that the modest decline in apparent U.S. consumption between 2010 
and 2011 would likely limit domestic producer sales opportunities and restrain potential price 
increases to some de gree, but would not render insignificant the likely effects of subject imports.  
In drawing this conclusion, the Commission necessarily relied upon its analysis of demand 
projections and the likely volumes and prices of subject imports in preceding sections  of the 
determination.  The Commission also demonstrated that subject imports had injurious effects 
independent of nonsubject imports.  Indeed, the Commission identified no injurious effects caused 
by nonsubject imports during the POI.  The Commission also ob served that nonsubject imports 
were generally priced higher than subject imports.  Absent relief, the Commission found, subject 
imports were likely to compete on price to recoup the market share lost to both the domestic 
industry and nonsubject imports in i nterim 2010, resulting in a more price -competitive market.  
Based on all of these considerations, the Commission concluded that the likely effects of 
nonsubject imports on the domestic industry were not of a magnitude that would render 
insignificant the lik ely effects of subject imports.  
59. Indonesia predicates its argument that the Commission's analysis of the projected decline in 
demand was insufficiently "concrete" on the misapprehension that the analysis consisted of a few 
sentences in the impact sectio n of the Commission's determination.  However, the Commission's 
analysis distinguishing the effects of subject imports from the effects of the projected decline in 
demand and nonsubject imports spanned the volume, price, and impact sections of the 
determina tion.  
60. Similarly unpersuasive is Indonesia's claim that the Commission somehow breached the 
non-attribution requirement by failing to reconcile its finding that the likely increase in subject 
imports would take sales from the domestic industry with its  alleged recognition that subject 
imports increased solely at the expense of nonsubject imports during the POI.  The Commission did WT/DS491/R/Add.1  
 
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  not find that subject imports increased solely at the expense of nonsubject imports during the POI.  
Rather, it found that the  increase coincided with declining domestic industry U.S. shipments.  
Indonesia claims that nonsubject imports would have benefitted  the domestic industry by serving 
as a buffer between the industry and the likely increase in subject import volume.  Having m ade no 
argument that nonsubject imports would injure the domestic industry, Indonesia fails to make a 
prima facie  case that the Commission attributed injury from nonsubject imports to subject imports.  
Indonesia also is mistaken that the Commission somehow attributed injurious effects of the black 
liquor tax credit's expiration in 2009 to subject imports.  Having expired in 2009, the black liquor 
tax credit was no longer a "known factor" that was "injuring the domestic industry at the same 
time as the dumped imports" in the imminent future for purposes of the Commission's non -
attribution analysis.  During the investigations, respondents did not argue that expiration of the 
credit would likely injure the domestic industry in the imminent future, or even make the  industry 
vulnerable.  
D. The Commission Complied With the Special Care Requirements Under 
Article 3.8 of the ADA and Ar ticle 15.8 of the SCM Agreement  
61. Indonesia's argument that the Commission's threat analysis was inconsistent with the 
special care requirement under ADA Article 3.8 and SCMA article 15.8 is purely derivative of its 
specific claims that certain aspects of the Commission's analysis were inconsistent with ADA 
Articles 3.5 and 3.7 and SCMA articles 15.5 and 15.7.  In US – Softwood Lumber V I, the Panel 
recognized that violations of the special care requirements will generally result from violations of 
the more specific obligations under ADA Article 3.7 and SCMA article 15.7.  That panel explained 
that while it did not consider that a breach o f the special care obligation could not be 
demonstrated in the absence of a breach of the more specific provision of the Agreements 
governing injury determinations, such a demonstration would require additional or independent 
arguments beyond the arguments  in support of the specific violations.  Indonesia made no 
independent argument that the Commission breached the special care requirements beyond its 
arguments in support of the specific breaches.  Accordingly, for the same reasons that Indonesia 
fails to es tablish a prima facie  case that the Commission breached ADA Articles 3.5 and 3.7 and 
SCMA articles 15.5 and 15.7, Indonesia fails to make a prima facie  case that the Commission 
breached the special care requirement.  
IV. THE TIE VOTE PROVISI ON IS NOT INCONS ISTENT, AS SUCH, WIT H ARTICLE 3.8 OF 
THE ADA AND ARTICLE 15.8 OF THE SCMA  
62. Articles 3 of the ADA and 15 of the SCMA set out substantive obligations that the decision -
maker must abide by in conducting injury analysis.  Nothing in these provisions curbs th e discretion 
of a Member regarding its framework for assigning these responsibilities and for counting votes.  
There is accordingly no merit to Indonesia's claim that the "tie vote" provision of the U.S. statute 
conflicts with the ADA Article 3.8 and SCMA A rticle 15.8 obligation that investigating authorities 
consider and decide threat of injury with "special care."   
63. The tie vote provision addresses one procedural aspect of the way that decisions are made, 
not the substance or rationale of any decision.  The WTO Agreement does not impose obligations 
on Members with respect to such internal decision making procedures.  The Appellate Body 
explicitly confirmed this in US – Line Pipe , finding that the internal decision making process of a 
Member is entirely wit hin that Member's discretion, as an exercise of its sovereignty.  Neither the 
ADA nor the SCMA require investigating authorities comprised of multiple decision -makers that 
decide injury investigations by vote, much less any particular approach to resolving issues arising 
from differences of opinion between individual members of a multi -member investigating 
authority.  The ADA and SCMA instead prescribe substantive considerations to be examined when 
making determinations of injury or threat thereof.  
64. The "s pecial care" provisions of each agreement, moreover, come at the end of articles – 
SCMA Article 15 and ADA Article 3 – both of which concern the necessary substantive 
considerations that must be taken into account when examining whether subject imports cau se 
material injury or threat thereof.  This placement is informative, showing that each "special care" 
provision concerns the substantive analysis that must be undertaken.  This is confirmed by the fact 
that, where the ADA and SCMA do discuss procedural matt ers – in connection with things other 
than decision -making – they are explicit.  Had the drafters wanted to prescribe the way that the WT/DS491/R/Add.1  
 
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  opinions of a multi -member body would be aggregated to ascertain the body's determination, they 
would have been similarly explicit.  
65. The panel's discussion in Softwood Lumber VI shows that the special care provisions concern 
the substantive analysis applied by an investigating authority.  Because investigating authorities 
must comply with the specific obligations under the AD and SCM Agreements in making threat 
determinations, it is in the satisfaction of those obligations that investigating authorities exercise 
special care under ADA Article 3.8 and SCMA Article 15.8.  Even if an independent breach of the 
special care obligation were possible, the demonstration of such a violation would require 
"additional or independent arguments," which would necessarily have to relate to an investigating 
authority's "establishment of whether the prerequisites for application of a measure exist" in its 
written determination.  
66. The drafting history of the "special care" provisions underscores that they concern the 
substantive standards for a threat determination, not procedure.  The "sp ecial care" language 
evolved from text about the forecasted level of effect of dumping on domestic industry, 
demonstrating that the concept relates to the substantive standards used to assess whether a 
threat of injury exists.  The ADA and SCMA "special car e" language is simply a shorter version of an 
originally -more-detailed discipline that has always been about the substance of determinations.   
67. The tie vote provision applies, if at all, only after the Commission has completed its analysis 
of threat fac tors and reached its determination, and the provision could therefore have no effect 
on the substantive analysis in the Commission's written determinations.  Because determinations of 
threat made by three Commissioners can certainly reflect special care – and because whether such 
determinations reflect special care is unrelated to the number of Commissioners voting in the 
affirmative – the provision is certainly not inconsistent as such with the special care provisions.  
68. Indonesia's arguments lack merit.  Indonesia claims incorrectly that the tie vote provision 
somehow violates a "concept of even -handed administration of discretion" that the Appellate Body 
allegedly "enunciated" in US – Hot-Rolled Steel . The Appellate Body's finding was expressly limited 
to how to address sales to affiliates when determining normal value.  Unlike Commerce's 99.5 
percent test, which the Appellate Body found inconsistent with ADA Article 2.1 because it 
"systematically" increased margins of dumping published in determinations, t he tie vote provision 
has no effect on the analysis in the Commission's threat determinations.   
69. Whether or not other Members with investigating authorities comprised of multiple decision -
makers may resolve tie votes differently than the United States i n no way suggests that the U.S. 
approach is invalid.  The variety of approaches to resolving or avoiding tie votes taken by different 
Members reflects that internal decision -making process is not prescribed by the ADA or SCMA.  
Indonesia's reference to its d eveloping country status makes no sense in the context of its claim 
about the Commission's tie vote provision.  Indonesia's arguments about ADA Article 3.1 and GATT 
Article X.3 are similarly illogical.  Similarly, the principle of "good faith" in no way sugg ests that a 
discipline on how investigating authorities comprised of multiple individuals must address tie vote 
situations can be read into the "special care" provisions of the ADA and SCMA.  Whether the 
Commission has exercised such care is purely a questi on of the reasoning provided in its 
affirmative threat determination.  The tie vote provision represents a legitimate exercise of the 
United States' sovereignty over the decision -making process in antidumping and countervailing 
duty investigations.  The Pane l should reject Indonesia's claims.  
EXECUTIVE SUMMARY OF  U.S. OPENING ORAL ST ATEMENT AT THE FIRST  SUBSTANTIVE 
MEETING OF THE PANEL   
I. INDONESIA AGREES WIT H THE U.S. PRELIMINA RY RULING REQUEST AN D THE 
REPORTS IT CITES ARE  NOT RELEVANT TO ITS CLAIMS  
70. In its response to the U.S. preliminary ruling request, Indonesia highlights paragraphs 44, 
45, and 79 of its first written submission, which, instead of clarifying how Indonesia's arguments 
pertain to benefit and specificity, underscore that Indonesia's argu ments relate to an analysis of 
concerning financial contribution under SCM Agreement Article 1.1(a).  The quote from the US – 
Export Restraints  panel report excerpted in paragraph 44 references Article 1.1(a) alone.  Similarly, 
paragraph 79 focuses on whether the GOI "directed" or "entrusted" log suppliers to sell at WT/DS491/R/Add.1  
 
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  suppressed prices.  "Entrust" and "direct" are terms used in Article 1.1(a) – i.e., with respect to 
financial contribution – not Articles 1.1(b) or 14(d) o n benefit, or Article 2.1 on specificity.  While 
the United States agrees with Indonesia that it is not precluded from citing to any source – 
including disputes discussing financial contribution – Indonesia is citing to the analysis and 
conclusions on finan cial contribution, not benefit or specificity.  Thus, these citations are not 
relevant to the claims that Indonesia has brought in this dispute.  
II. INDONESIA'S CLAIMS U NDER ARTICLE 14 OF T HE SCM AGREEMENT ARE  WITHOUT 
MERIT  
71. The facts attending Indonesia 's provision of standing timber align closely with the record in 
US – Anti-Dumping and Countervailing Measures (China)  and US – Softwood Lumber IV.  Through 
concessions and licensing, the government directly provides standing timber which is used to 
make co ated paper.  The government owns virtually all of the harvestable forests in Indonesia and 
administratively controls the stumpage fees charged.  This is a situation in which the facts 
demonstrate that the government's role as a supplier of the input in quest ion is overwhelmingly 
predominant, and nearly exclusive.  Through its setting of stumpage fees, Indonesia also effectively 
sets the price for standing timber.  As the Appellate Body has noted, circumstances in which fewer 
elements of a market analysis will b e necessary to arrive at a proper benchmark "include where 
the government is the sole provider of the good in question, and where the government 
administratively controls all of the prices for the goods at issue."  
72. Indonesia asserts that USDOC's selecti on of an out -of-country benchmark based on Malaysia 
export data was "aberrational."  USDOC selected the same benchmark data – species -specific 
World Trade Atlas statistics reflecting log exports from Malaysia – as an out -of-country benchmark 
for similar rea sons as in its evaluation of the stumpage benefit.  As explained, USDOC's analysis 
was based on record evidence, including that 94 percent of logs harvested during the period of 
investigation was from public land, and the fact that the GOI controlled over 9 9 percent of 
harvestable forest land, in finding that the GOI distorted in - country prices for logs.  USDOC also 
explained that "without the ban domestic consumers would have to compete with foreign 
consumers."  USDOC explained that a large disparity existed  between timber prices paid within 
Indonesia and the prices paid by purchasers in Malaysia, according to the Malaysian export data 
available from the World Trade Atlas and as provided by the respondents'  own consultant. Thus, 
the World Trade Atlas data tha t USDOC relied on was not "aberrational," as Indonesia argues, but 
rather is consistent with the Malaysian export data that Indonesia provided in the underlying 
investigation, after removing imports to Indonesia.  
III. INDONESIA'S CLAIMS R EGARDING ARTICLE 12 OF THE SCM AGREEM ENT ARE 
WITHOUT MERIT  
73. The necessity of the information that Indonesia failed to provide in connection with the debt 
buyback must be considered in light of the facts of this investigation.  Indonesia provided Orleans'  
bidding document s. These documents contained no ownership information for Orleans.  Thus, 
necessary information was missing for USDOC to analyze possible affiliation between APP/SMG and 
the successful bidder, Orleans.  Considering the absence of ownership information, and a lso that 
the IBRA was legally prohibited from selling debt back to the original debtor or an affiliated party 
of the original debtor, USDOC alternatively sought to develop further the record so that it could 
analyze the due diligence procedures that the IB RA employed under the PPAS, including on 
affiliation.  
74. Evident from Indonesia's reporting to USDOC was the substantial emphasis the IBRA placed 
on the bidding documents themselves in ex amining possible affiliation. Indonesia also asserted 
that the "IBR A did not have any written due diligence procedures for evaluating the documentation 
and other information submitted by potential bidders other than those listed in the terms of 
reference."  USDOC reasonably requested the bidding documents for other PPAS sa les to satisfy 
itself as to the accuracy of Indonesia's assertion that the IBRA would not sell the debt to an 
affiliated buyer and that the IBRA followed its own law with a level of diligence typical of other 
IBRA transactions.  That is, with no baseline fo r comparison, USDOC could not confirm whether 
IBRA's due diligence procedures were followed, or whether the Orleans transaction was subject to 
less scrutiny of whether the bidder and debtor were affiliated when the government of Indonesia 
itself was propos ing that USDOC accept that a lack of affiliation had been demonstrated on the 
basis of those procedures.  WT/DS491/R/Add.1  
 
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  75. Instead of providing the information or seeking an extension, Indonesia stalled USDOC's 
investigatory process and Indonesia's promise to keep searc hing for the documents did not 
constitute a response to USDOC' s information request. We underline that the decision as to what 
information was necessary to USDOC's investigation was not Indonesia's to make.   
76. USDOC nevertheless provided Indonesia with a nother opportunity to cure its evidentiary 
failure. USDOC also reiterated that should Indonesia continue to fail to submit the requested 
information, it may resort to relying on the fac ts available. USDOC provided some flexibility to the 
GOI. Indonesia cou ld have requested an extension.  However, Indonesia chose not to.  Given the 
reasonable period that Indonesia had – 7 weeks – "it was reasonable to expect the GOI to be more 
forthcoming with this information."  The Appellate Body has recognized the importance  of 
investigating authorities being able to set deadlines for the submission of information, and the 
timeline for this limited information request exceeds the 37 days unde r the "general rule" in 
Article  12.1.1 for replying to a full initial subsidy questio nnaire.    
77.  USDOC determined that Indonesia had not acte d to the best of its ability. Again, Indonesia 
had multiple opportunities to submit information on ownership and was aware affiliation would be 
key to the investigation.  Indonesia was provided seve n weeks to provide information on the other 
PPAS transactions.  From Indonesia's response that the PPAS inquiry was not "relevant," the U.S. 
determination on the GOI's failure to cooperate is consistent with the Appellate Body's recognition 
that "non -cooper ation creates a situation in which a less favourable result becomes possible due to 
the selection of a replacement of an unknown fact."  
78. Indonesia claims that the "facts available" USDOC relied on in finding affiliation did not 
"reasonably replace" the missing information under Article 12.7.  Indonesia's argument is that 
USDOC unreasonably relied on "speculative" "newspaper articles and reports," while ignoring 
record evidence that demonstrated the companies'  non-affiliation. This was not the case.  The bi d 
documents contained no ownership information.  In this investigation, USDOC relied on several 
newspaper articles and reports - including a consultant's report received at verification in CFS - as 
facts available in finding APP/SMG and Orleans affiliated.  This information was placed on the 
record in this investigation.   
IV. INDONESIA'S CLAIMS R EGARDING ARTICLE 2 A RE WITHOUT MERIT  
79. Indonesia claims that USDOC acted inconsistently with Article 2.1(c) because USDOC cited 
to no supporting evidence "that the GOI or any regional, or local government entity had in place a 
plan, scheme, or systematic series of actions to confer a benefit."  Indonesia again misunderstands 
the Appellate Body's analysis in US – Countervailing Measures (China).  There, the Appellate Bo dy 
underlined that, generally, "[e]vidence regarding the nature and scope of a subsidy programme 
may be found in a wide variety of forms."  In that dispute, which involved "unwritten measures," 
the Appellate Body envisioned that a subsidy program could be e videnced by "a systematic series 
of actions pursuant to which financial contributions that confer a benefit have been provided to 
certain enterprises."  However, here, the debt buyback constituted a written "plan or scheme."  
Imputing a requirement that the subsidy must be a "systematic series of actions" in all instances 
voids the definition of a subsidy under Article 1.1.  A "subsidy" under Article 1 is not limited in 
nature to a series of financial contributions.  In the fact -specific context where only the specific 
company debtor is "eligible to receive that same subsidy," the "limited number of enterprises" 
factor is relevant.  The subsidy that USDOC identified is a company -specific measure, as only the 
specific company debtor is "eligible to receive that sa me subsidy."   
V. INDONESIA'S CLAIMS R EGARDING THREAT ARE WITHOUT MERIT  
A. The Commission's Analysis was Fully Consi stent with AD Agreement 
Article  3.7 and SCM Agreement Article 15.7  
80. The Commission's analysis was based on facts and clearly foreseen and imminent changes in 
circumstances.  This is true both with respect to the likely impact of subject imports on domestic 
industry sales volume and the likely price effects of subject imports.  Indonesia's argument that the 
Commission provided no reasoned and a dequate explanation for its finding that the likely 
significant increase in subject import volume would come partly at the domestic industry's expense 
is belied by the Commission's determination.  Similarly, Indonesia's claim that the Commission WT/DS491/R/Add.1  
 
- B-31 - 
 
  failed to p rovide a reasoned and adequate explanation for its analysis of the likely price effects of 
subject imports on the domestic industry is disproven by its determination, which was based on 
and articulated the relevant facts and clearly foreseen and imminent c hanges in circumstances.  
The Commission found it likely that significant subject import underselling would continue in the 
imminent future, as a means of capturing market share, and Indonesia does not contest this 
finding.  The Commission also highlighted two changes in circumstances that would clarify the role 
of subject imports as a key driver of prices in the U.S. market in the imminent future: the 
expiration of the black liquor tax credit in 2009, and the projected moderation in the rate of the 
decline in CCP demand.  
B. The Commission's Analysis was Fully Consi stent with AD Agreement 
Article  3.5 and SCM Agreement Article 15.5  
81. The Commission examined other known factors in a manner fully consistent with WTO 
obligations.  An investigating authority's fi nding that an industry is vulnerable to material injury 
would reduce the magnitude of the change in circumstances necessary to cause the industry to 
experience material i njury in the imminent future. For this reason, the Commission considered the 
domestic industry's vulnerability as part of its threat analysis.  While recognizing that declining 
demand and expiration of the black liquor tax credit contributed to the domestic industry's 
vulnerability, the Commission in no way attributed the effects of these fa ctors to subject imports 
or mentioned subject imports in its discussion of vulnerability.  Acceptance of Indonesia's argument 
would create a Catch -22: factors other than subject imports that leave a domestic industry 
vulnerable would preclude attribution of  any subsequent injury sustained by the industry to subject 
imports, but where the industry was not shown to be vulnerable, Indonesia would presumably take 
the position that subject imports could not threaten the industry.  
82. The Commission properly separ ated and distinguished the effects of projected demand 
declines and nonsubject imports from the injury caused by subject imports.  The Commission 
demonstrated that subject imports would have adverse effects on the domestic industry 
independent of the modera te decline in demand that was projected, relying partly on the analysis 
contained in previous sections of the determination.  The Commission also demonstrated that 
subject imports had injurious effects on the domestic industry independent of nonsubject impo rts, 
which had no injurious effects on the industry during the POI, and were generally priced higher 
than subject imports.  There is no merit to Indonesia's criticisms of the Commission's non -
attribution analysis.   
VI. THE TIE VOTE PROVISI ON IS FULLY CONSI STENT WITH AD AGREEM ENT 
ARTICLE  3.8 AND SCM AGREEMEN T ARTICLE 15.8  
83. The tie vote provision is consistent with ADA Article 3.8 and SCMA Article 15.8.  Neither 
contains text relating to a Member's internal decision -making structure or processes.  The Appell ate 
Body made clear that the internal decision making process of a Member is entirely within the 
discretion of that Member.  Rather, panels are concerned only with the determination itself, which 
is a singular act for which a WTO Member may be accountable i n dispute settlement.  Consistently 
with US – Line Pipe , the panel's analysis in Softwood Lumber VI  shows that "special care" is about 
the substantive analysis used to make an affirmative threat determination.  The tie vote provision 
concerns the internal de cision -making process of the United States.  When the provision applies, 
nothing under it would prevent the Commissioners voting in the affirmative from demonstrating in 
their written determination that they exercised special care in reaching an affirmative  threat 
determination.   
84. Canada, a third party, takes the position that the provision breaches the "objective 
examination" requirement of ADA Article 3.1 and SCMA Article 15.1.  But Indonesia's panel request 
asserts no claims under ADA Article 3.1 and SC MA Article 15.1.  Those provisions are thus outside 
the Panel's terms of reference, and Indonesia's First Written Submission made no argument 
concerning the "objective examination" provisions.  The Panel may not accept Canada's invitation 
to opine on claims outside its terms of reference or to find a consequential breach of the "special 
care" provisions on the basis of such non -claims.   WT/DS491/R/Add.1  
 
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  EXECUTIVE SUMMARY OF  U.S. CLOSING ORAL ST ATEMENT AT THE FIRST  SUBSTANTIVE 
MEETING OF THE PANEL   
85. The standard of review f or the panel has been articulated as not a de novo  review, as the 
Panel is not the initial trier of fact.  The Panel's task is not a mechanical search for magic words.  
Rather, the Panel should look at the determinations as a whole, in the context of the entire record, 
as the Panel evaluates whether the conclusions reached were reasoned and adequate.  
  WT/DS491/R/Add.1  
 
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ANNEX B -3 
SECOND  INTEGRATED EXECUTIVE  SUMMA RY OF INDONESIA  
I.  INTRODUCTION  
1. Indonesia has challenged findings made by two separate U.S. agencies, USDOC' s subsidy 
determination and the USITC's threat of injury determination.  In addition, Indonesia has 
challenged on an as such basis the provision of US law that requires a tie vote to be treated as an 
affirmative threat of injury determination.   
2. With resp ect to USDOC's subsidy determination, Indonesia challenges USDOC's finding that 
the GOI provides standing timber for less than adequate remuneration and that the GOI log export 
ban confers a benefit.  USDOC's benefit finding for both programs was based on a  per se 
determination of price distortion based solely on the percentage of standing timber that is 
harvested from public forests in Indonesia.  This is inconsistent with Article 14(d) of the SCM 
Agreement.  In addition, the benchmark USDOC used was not for a similar good which is 
inconsistent with Article 14(d) of the SCM Agreement.  
3. Indonesia also challenges USDOC's finding that the GOI knowingly allowed an affiliate of a 
debtor to buy back its own debt in violation of Indonesian law.  USDOC relied on an a dverse 
inference but only by ignoring the information Indonesia provided and creating a moving target 
through a series of additional burdensome and irrelevant requests.  This was inconsistent with 
Article 12.7 of the SCM Agreement.  The facts USDOC used to r eplace the missing information were 
not reasonable replacements because they were based on speculation which is inconsistent with 
Article 12.7 of the SCM Agreement.  
4. USDOC's findings are also inconsistent with Article 2.1(c) of the SCM Agreement because 
USDOC did not determine that the collection of stumpage fees, the log export ban, or the alleged 
forgiveness of debt were part of a "plan or scheme" that confers a benefit.  
5. Finally, USDOC's findings concerning the alleged debt forgiveness are inconsiste nt with 
Article 2.1 of the SCM Agreement because USDOC did not identify the jurisdiction allegedly 
providing a benefit, thereby calling into question the specificity analysis.  
6. The USITC's threat of injury determination is inconsistent with US WTO obliga tions in several 
respects.  
7. First, the USITC attributed adverse effects to the subject imports that were caused by other 
factors which is inconsistent with Article 3.5 of the Anti -Dumping Agreement and Article 15.5 of 
the SCM Agreement. In its present in jury analysis, the USITC found a number of factors explained 
the domestic industry's performance during the period of investigation.  But in its threat of injury 
analysis the USITC attributed the effects of those other factors to subject imports.   
8. Second , the USITC based its threat findings on conjecture and remote possibility which is 
inconsistent with Article 3.7 of the Anti -Dumping Agreement and Article 15.7 of the SCM 
Agreement.  The USITC made two findings that were based on conjecture, that subject i mports 
would have adverse effects on US prices and would gain market share at the expense of the US 
industry.  
9. Third, the USITC failed to exercise special care in making a threat of injury determination 
which is inconsistent with Article 3.8 of the Anti-Dumping Agreement and Article 15.8 of the SCM 
Agreement.  The Commission reversed itself on every key finding it made in its present injury 
analysis which led to a no injury finding and then found against respondents to support a threat of 
injury deter mination.  As Brazil aptly notes, "the assumptions considered by the USITC in order to 
reach a positive conclusion in the threat of injury determination seem to deviate from the direction 
pointed by the facts already evaluated previously during the material  injury analysis."1 
                                                
1 See Brazil Res ponse to First Panel Questions, para. 7.  WT/DS491/R/Add.1  
 
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  10. US law contains a provision that mandates a tie vote be treated as an affirmative finding of 
threat of injury.  This is inconsistent with Article 3.8 of the Anti -Dumping Agreem ent and 
Article  15.8 of the SCM Agreement because it prec ludes the exercise of special care.  A law that 
openly and consistently disadvantages respondents is biased on its face and violates the obligation 
to exercise special care in reaching an affirmative threat of injury determination.     
II.  THE PANEL SHOULD  REJECT TH E UNITED STATES' REQ UEST FOR A PRELIMINARY 
RULING  
11. The United States claims "Indonesia appears to be concerned about the particular words 
USDOC used in its explanations and the amount of space taken up by them."2 According to the 
United States, this means Indonesia should have brought certain claims under Article 22 of the 
SCM Agreement.3 The United States misunderstands the nature of Indonesia's claims.  
12. The claims in paragraphs 33, 34, 41, and 42 of Indonesia's First Written Submissi on all 
relate to whether USDOC improperly based its finding of price distortion based on the GOI's 
purported dominance in the market.  Indonesia's challenge has nothing to do with the words 
USDOC used.  The claims in paragraphs 74, 78 -79, and 81 of Indonesia 's First Written Submission 
concern USDOC's failure to find a systematic series of actions to confer a benefit.  Finally, the claim 
in paragraph 95 of Indonesia's First Written Submission relates to USDOC's finding that the GOI 
conferred a benefit based on the allegation of a knowing violation of Indonesian law.   
III.  THE UNITED STATES' D EFENSE OF ITS FLAWED  SUBSIDY DETERMINATIO N 
A. USDOC's Improper Per Se  Determination of Price Distortion Based on Government 
Ownership Renders USDOC's Findings with Respect to the Provision of Standing 
Timber and Log Export Ban Inconsistent with Article 14(d) of the SCM Agreement  
13. The Appellate Body has said that the question of price distortion must be based on an 
evidentiary finding and not a per se  determination based o n a government's predominance in the 
market.4 While this governing principle should not be in serious dispute, the United States would 
have this Panel reach a finding that there are certain instances where a government's involvement 
in the market is so dom inant that price distortion is inevitable.5 In other words, the United States 
is asking the Panel to permit per se  findings of price distortion in direct contravention of the 
Appellate Body's holding in US – Countervailing Measures (China) .6 The Panel shou ld reject this 
invitation, especially in light of USDOC's complete failure to acknowledge that 93 percent of the 
countervailed timber was planted, grown, and harvested from a plantation and was grown and 
harvested by the license holder.7 
14. Indeed, the Un ited States continues to demonstrate and convey an inaccurate depiction of 
the GOI's role.8 For example, the United States claims that the facts of this dispute are more like 
those in US-Softwood Lumber IV "in terms of the government's role as a direct sup plier of the 
input . . . ."9 But the GOI does not sell standing timber.10 Rather, the GOI grants concessions to 
companies to use the land that is the subject of the concession.11 Moreover, the GOI only grants 
concessions on land that is heavily degraded, a f act USDOC has been aware of since its 2006/2007 
investigation.12  
                                                
2 See US Response to First Panel Questions, para. 28.  
3 See US Response to First Panel Questions, para. 29.  
4 See Appellate Body Report, US – Countervailing Measures (China) , para. 4.15.  
5 See Response by the Govern ment of the Republic of Indonesia to the Questions from the Panel 
Following the First Meeting with the Parties, para. 8 (Indonesia's Response to First Panel Questions).  
6 See Appellate Body Report, United States – Countervailing Duty Measures (China) , para . 4.15.  
7 See Indonesia's Response to First Panel Questions, para. 8.  
8 See US Response to First Panel Questions, para. 31.  
9 See US Response to First Panel Questions, para. 31.  
10 See Opening Statement by the Government of the Republic of Indonesia at the First Meeting of the 
Panel (Indonesia Opening Statement), paras. 19 -23. 
11 See Indonesia Opening Statement, para. 21.  
12 See Memorandum to David M. Spooner, Assistant Secretary for Imp ort Administration from 
Stephen  J. Claeys, Deputy Assistant Secretary for Import Administration: Issues and Decision Memorandum for WT/DS491/R/Add.1  
 
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  15. In its Second Written Submission the United States claimed, for the first time, that "[t]he 
GOI retains title to the standing timber cultivated by private companies until the applicable 
stumpage fees are paid."13 The United States' has no support for that conclusion in the record.  As 
Indonesia has argued, the GOI was not providing standing timber.  If the government does not own 
the good there cannot be a provision of goods pursuant to Artic le 14(d) of the SCM Agreement.  
16. The United States has disavowed itself of USDOC's clear statement that the GOI's 
predominant role was the reason for resorting to a second tier benchmark14 and defends the 
determination as based on more than just a per se finding of price distortion.  The United States 
claims USDOC evaluated other features of the market that rendered the market distorted and that 
Indonesia did not identify other factors USDOC should have examined.15 The other factors USDOC 
cites are merely va riations of the same theme of the GOI's allegedly dominant market share.   
17. Notably, the first factor the United States cites – the GOI's ownership of virtually all 
harvestable forest land – is not another factor at all.16 With respect to in -country prici ng 
information, the United States does not dispute that information was on the record showing the 
price per ton of acacia harvested from private land.17 The United States repeatedly, and without 
justification, faults Indonesia for not providing information on in-country pricing data.18 But why 
would Indonesia have prices from private transactions?  Nor did USDOC attempt to gather 
information from companies APP identified as log suppliers.  As Canada and China note in their 
respective responses to the Panel's qu estions, the investigating authority has an obligation to 
obtain evidence about in -country prices.19  
18. The second "other" factor the United States cites – the existence of the log export ban – also 
ultimately comes back to the finding about the GOI's all egedly predominant role in the market.20 
But USDOC altogether failed to acknowledge that wood chips and pulp – the direct inputs in paper 
making – were not subject to the export ban during the POI.21 The third "other" factor the 
United  States cites – the neg ligible level of log imports – again relies on the finding about the 
GOI's ownership of harvestable land.22 The fourth and final "other" factor the United States cites – 
alleged aberrationally low prices for logs in Indonesia relative to the surrounding reg ion – does not 
show price distortion because USDOC was not even looking at the prices of comparable products.23  
19. USDOC's analysis of log prices in Malaysia is fatally flawed because USDOC was unwilling to 
give fair consideration to any other evidence gi ven its (mistaken) view of the GOI's market share.  
As the United States explains in its First Written Submission, USDOC determined that by removing 
exports from Sabah, Malaysia to Indonesia from the Malaysian export data, the Malaysian export 
data supporte d USDOC's determination that prices in Indonesia were distorted.24 But USDOC had 
no reason to remove the export data from Sabah unless it was trying to prove what it had already 
concluded based on the GOI's ownership of harvestable forests.  The price data f rom Sabah came 
from two sources: 1) actual transaction data for numerous sales of identical merchandise in 2008 
and 2) export statistics reported by the Malaysian province of Sabah.25 In rejecting this data, 
USDOC stated merely that shipments to Indonesia w ere not a suitable benchmark.26 In other 
words, the GOI's share of harvestable forests served as the sole basis for USDOC's: 1) rejection of 
price data for actual transactions of identical merchandise and 2) conclusion that prices in 
                                                                                                                                                  
the Final Affirmative Countervailing Duty Determination: Coated Free Sheet Paper from Indonesia (Oct. 17, 
2007), Exhibit IDN -26, p. 60.  
13 See United States Second Written Submission (US SWS), para. 25. 
14 See Final CVD Decision Memorandum, Exhibit IDN -10, p. 8.  
15 See US FWS, para. 43.  
16 See US FWS, para. 43; see also US Response to First Panel Questions, para. 50.  
17 See US SWS, para. 30.  
18 See US Response to First Panel Questions, paras. 35 & 39.  
19 See Canada Response to First Panel Questions, para. 5; China Response to First Panel Questions, 
para. 3.  
20 See US FWS, para. 43; see also US Response to First Panel Questions, para. 50.  
21 See Indonesia's Response to First Panel Questions, paras. 24 -29. 
22 See US FWS, para. 61;  see also US Response to First Panel Questions, para. 50.  
23 See US FWS, para. 67; see also US Response to First Panel Questions, para. 50.  
24 See US FWS, para. 62.  
25 See US FWS, Exhibit US -44, p. 12.  
26 See Final CVD Decision Memorandum,  Exhibit IDN -10, p. 34.  WT/DS491/R/Add.1  
 
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  Indonesia were distorte d. As Brazil has noted, an investigating authority must be cautious about 
disregarding information provided by an interested party.27 
B. USDOC's Improper Application of Adverse Facts Available Is Inconsistent with 
Article 12.7 of the SCM Agreement  
20. USDOC  found that a long defunct agency of the Government of Indonesia knowingly 
permitted an alleged affiliate of the APP/SMG group called Orleans to buy back the APP/SMG debt.  
The sole support for USDOC's finding of affiliation between Orleans and APP/SMG are two 
sentences from a newspaper article.28 
21. The United States attempts to rely on an alleged unnamed expert but that expert's 
credentials were not even available to USDOC during the investigation because they had been 
redacted from the report and USDOC on ly had the redacted version.  Even so, the supposed expert 
opinion is just as speculative as the newspaper article cited above because the expert had no 
direct knowledge and based his belief on rumours.   
22. USDOC had all of the transaction documents from t he APP/SMG sale, USDOC had IBRA's 
regulations and internal procedures, and it had Indonesia's verified statements in the 
questionnaire response that Indonesian laws and IBRA's regulations had been satisfied.  USDOC 
even had its own expert's confirmation tha t this would have been all IBRA required.29 This should 
have been the end of USDOC's inquiry.  The United States had no reasonable basis to ask for more 
unless one accepts the proposition that an investigating authority has the unfettered ability to 
keep ask ing for information even after the question at issue has been definitively answered.30 
Indonesia respectfully submits that Article 12.7 speaks to this issue and says an investigating 
authority does not have such unfettered authority.  Indeed, giving an investigating authority the 
ability to keep asking for more and more information would create a dangerous precedent whereby 
an investigating authority could force a party into an adverse facts available situation by virtue of 
increasingly burdensome reques ts.  
23. One can even imagine that had Indonesia provided the documents USDOC requested 
concerning other transactions, USDOC would have said they were not sufficient.  In fact, it does not 
require imagination at all.  That is exactly what USDOC did after Ind onesia provided all of the 
information USDOC requested about the APP/SMG sale.  Indonesia respectfully submits that 
USDOC's resort to adverse facts available was unjustified based on the factual record as fully set 
forth in our First Written Submission and,  thus, inconsistent with the United States' obligations 
under Article 12.7 of the SCM Agreement.  In refusing to accept Indonesia's representations about 
the difficulties it had and was continuing to have in accessing information about a defunct agency, 
the United States' showed an utter lack of regard to Article 27 of the SCM Agreement.  
24. USDOC's decision to cancel verification is evidence of the degree to which USDOC had 
already decided the affiliation question against Indonesia and demonstrates USDOC's commitment 
to making that decision stick.  The United States claims it gave Indonesia ample time to respond.31 
On the question of the fairness of the timing, Indonesia asks the Panel to recall that USDOC 
requested information about other debt sales nearly 6 months after the original questionnaire.  
Indonesia also asks the Panel to recall that Indonesia was not able to locate complete information 
on the APP/SMG sale in the 2006/2007 investigation and it took Indonesia a considerable amount 
of time to locate com plete information on the APP/SMG sale in the CCP investigation.  
25. What the United States has not answered is why, despite the fact that USDOC was sending a 
team to verify the remainder of the GOI's questionnaire responses, USDOC would cancel just a 
portion of the verification.  In fact, USDOC possessed all of the transaction documents from the 
APP/SMG sale, had all of the Indonesian laws and regulations, and was going to be able to talk 
directly to former IBRA officials.  Had USDOC not already decided the i ssue of affiliation against 
Indonesia, verification would have been the perfect opportunity for USDOC to evaluate the 
                                                
27 See Brazil Response to First Panel Questions, para. 3.  
28 See US FWS, Exhibit US -40 (internal exhibit no. 33, p.2).  
29 See Exhibit US -81, p. 3.  
30 The United States appears to argue for such unfettered discretion.  See US Response to First Panel 
Questions, para. 86.  
31 See US Response to First Panel Questions, paras. 95 -113. WT/DS491/R/Add.1  
 
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  substantial information on the record and discuss it with former IBRA officials.  Finally, it is 
important to recall that the basis for wha t amounted to a witch hunt by USDOC consisted of two 
sentences in a newspaper article and a so -called "expert's" speculation whose credentials were not 
part of the record in the CCP investigation and which the United States has refused to provide to 
the Pa nel. 
26. The United States identifies two supposed "holes" in the record that needed to be filled.  The 
first is the alleged lack of ownership information concerning Orleans.32 As described above, 
Orlean's ownership information was not "missing" it simply wa s not part of the documentation 
IBRA required.  As discussed above, the relevant question was whether Orleans was affiliated with 
APP/SMG and the transaction documents IBRA required showed it was not.  The second alleged 
hole the United States identifies was  the GOI's claim that IBRA accepted affirmations from the 
bidders that they were not affiliated with the debtor companies.33 As discussed above, IBRA's 
regulations specified what documents were required and USDOC possessed those regulations and 
those docume nts from the APP/SMG sale.  In addition, USDOC's purported expert explained that 
IBRA did not undertake extensive investigation on this.  Further, the World Bank report which 
preceded  the sale of the APP/SMG debt spoke of other affiliated debt buy backs sugg esting IBRA 
did not inquire further.34 Finally, had USDOC proceeded with verification, USDOC would have had 
the opportunity to ask former IBRA officials about the procedures that were followed on the 
subject of affiliation.  In short, to the extent there was  a hole in the record it was of USDOC's own 
making by cancelling verification.    
27. The United States overstates the significance of differences between the PPAS and PPAS 2 
terms of reference.35 In fact, the differences highlight the limited relevance of t he PPAS 2 
transaction documents because they were part of a second round of bidding (known as PPAS 2) 
that occurred after PPAS (the original round of bidding in the APP/SMG debt sale occurred) – as 
USDOC was aware.36 In the original round of bidding under P PAS, all bids except for the APP/SMG 
debt were below the floor price and no one placed a bid for the Texmaco Group's assets.37 So 
while the PPAS 2 terms of reference may have been different from those of PPAS, the United 
States has not shown the PPAS terms of reference were different from one company to another.  
28. Finally, the United States' argument that the SCM Agreement does not require verification is 
largely semantic.  USDOC conducted an on -site verification of the GOI.  By cancelling the debt buy 
back portion of the verification, USDOC merely refused to verify anything having to do with debt 
buy-back, even information that undeniably was on the record long before USDOC requested all of 
the PPAS 2 documents.  The United States faults Indonesia for not pro viding the PPAS 2 document 
after USDOC cancelled verification on the debt buy back issue.38 But this reading of the agreement 
would produce unreasonable and absurd results.  According to the United States, a member would 
have to insist on providing every pie ce of rejected information or lose the right to a WTO 
challenge.    
29. The third parties are largely in agreement with Indonesia.  Brazil indicates that new 
information should be accepted at verification and that before cancelling verification, the 
investig ating authority should consider whether verification could be used to obtain additional and 
more detailed information.39 Canada agrees that nothing prohibits an investigating authority from 
accepting new information during the on -site verification.40 Finally , the EU explained that it 
routinely accepts new information at verification and whether it will rely on it depends on the 
circumstances.41 
                                                
32 See US Response to First Panel Questions, para. 114.  
33 See US Response to First Panel Questions, para. 115.  
34 See para. 51 below.  
35 See US SWS, paras. 62 -66. 
36 See Exhibit IDN -15, p. 5.  
37 See Exhibit IDN -15, p. 5.  
38 See US SWS, para. 78.  
39 See Brazil Response to First Panel Questions, para. 5.  
40 See Canada Response to First Panel Questions, paras. 7 -11. 
41 See EU Response to First Panel Questions, para. 19.  WT/DS491/R/Add.1  
 
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  C. USDOC's Failure to Make Specificity Findings in Accordance with Article 2.1 of the 
SCM Agreement  
 1. Article 2.1(c)'s Subsidy Program Requirement  
30. The United States defends USDOC's finding of a "subsidy program" largely by focusing on 
the question of whether "a systematic series of actions pursuant to which financial contributions 
that confer a benefit have be en provided to certain enterprises" must be found in every instance.42 
Indonesia is not suggesting that an investigating authority must, in every instance, find evidence 
of both a plan and a systematic series of actions.  But as the Appellate Body has recogn ized, it is 
not sufficient just to find that a financial contribution has been given to an entity.43 Indonesia is 
arguing that because none of the programs in question confer a benefit, USDOC had to rely on 
more than just a finding of a mere alleged financi al contribution.  
31. As Indonesia noted in its First Written submission, the so -called provision of standing timber 
benefits the GOI because the GOI receives revenues from the use of the land.44 Notably, because 
GOI is not providing timber, it is not reason able to characterize the fees as payments for timber.  
In addition, the GOI receives services from the entities who hold licenses.45 Because there is no 
written plan that confers a benefit, USDOC needed to look at whether a systematic series of 
actions confe rred a benefit.   
32. The log export ban, similarly, does not confer a benefit.  Indonesia enacted the log export 
ban in 2001 to protect against deforestation.46 The export ban never applied to pulp or wood 
chips.  The United States continues to misapprehend t he record on this point.  As the United States 
acknowledges, the ban never applied to pulp.47 The United States is mistaken when it states that 
the ban applied to wood chips.48 As Indonesia has explained, the log export ban never applied to 
wood chips, which fall under HS 4401.49 The United States agree s that wood chips fall under 
HS 4401 but claims they also fall under HS 4404.50 As Indonesia has explained, chipwood – not 
wood chips – falls under HS 4404 and the ban was amended in 2003 to allow the export of 
chipwood.51 USDOC appears to have mistaken the fact that the 2008 Decree No. 20/M -
DAG/Per/5/2008 reflected the fact that products falling under HS 4401 and HS 4404 already  were 
excluded from the ban as discussed above.  The further steps the United States disc usses about 
legalizing the export of forest products relate to the complete repeal of the ban,52 which did not 
occur.  Under those circumstances, where the law does not confer a benefit, USDOC needs to find a 
systematic series of actions that confer a benefi t. 
33. The alleged debt buy back is perhaps the most extraordinary finding by USDOC of the 
existence of a subsidy program.  All of the written materials suggested no benefit was conferred.  In 
fact, Indonesian law made it illegal for an affiliate to purchase  its own debt.53 USDOC found the 
existence of a subsidy program based on a violation of the law.  Put differently, the Indonesian law, 
itself, was not the subsidy program.  Instead, it was the violation of the law that USDOC found was 
a subsidy program.  But in the absence of a written law, USDOC needed to find a systematic series 
of actions that conferred a benefit which it did not do.  Rather, USDOC found a single illegal act 
(based on newspaper speculation) made it specific.   
 2. The Chapeau of Article 2.1's Requirement to Identify the Jurisdiction  
34. USDOC's specificity finding for the alleged debt forgiveness rested on speculation from a 
newspaper article.  But other newspaper articles suggested debt was sold to affiliates a number of 
times.  At bottom, USDOC specificity finding rests on a conclusion, albeit unsupported, that 
                                                
42 See US  FWS, paras. 174 (standing timber), 183 (log export ban), and 193 (debt forgiveness).  
43 Appellate Body Report, US – Countervailing Measures (China) , para. 4.143.  
44 See Indonesia FWS, para. 77.  
45 See Indonesia FWS, paras. 76 -77. 
46 See Indonesia FWS, para. 1 3. 
47 See US Response to First Panel Questions, para. 67.  
48 See US Response to First Panel Questions, para. 65.  
49 See Indonesia Response to First Panel Questions, para. 25.  
50 See US Response to First Panel Questions, para. 69.  
51 See Indonesia Response to First Panel Questions FSM, para. 26.  
52 See US Response to First Panel Questions, paras. 70 -71. 
53 See Indonesia FWS, para. 83.  WT/DS491/R/Add.1  
 
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  Indonesia knowingly and deliberately violated Indonesian law.  The United States argues that the 
jurisdiction was discernible from the determination.54 But that misses the p oint. On the one hand, 
USDOC claims the debtor is affiliated with the purchaser based on two sentences in a single 
newspaper report.  On the other hand, USDOC finds that the law was broken only with respect to 
the APP/SMG debt, despite other newspaper artic les (and a World Bank report that preceded the 
APP/SMG sale),55 related to other sales, implying that IBRA sales more generally (without any 
mention of APP whatsoever) may have allowed affiliates to buyback debt, indicating there was 
more than one instance of an affiliate of debtor buying back debt.  USDOC cannot have it both 
ways.  If newspaper reports are sufficiently credible to find a government violated its own law – 
Indonesia disagrees that they are – then newspaper reports are also sufficient to refute USDOC's 
specificity finding that the APP/SMG debt was the only instance where an affiliate bought back its 
own debt.  In these circumstances, USDOC must identify exactly what individual or individuals 
acted on behalf of the GOI to violate Indonesian law.  
35. Citing to a World Bank report, the United States argues debt buy -backs under the PPAS 
would have been specific even if other debtors bought back debt from affiliates.56 But the provision 
of the World Bank report the United States relies on was not discus sing sales under the PPAS , it 
was discussing sales of small loans  of which there were some 300,000 NPLs.57 Finally, it is worth 
noting that the Worl d Bank report is dated November  4, 2003,58 more than a month before the 
December 8, 2003 announcement of the s ale of the APP Group assets.59 Obviously the speculation 
in the World Bank report about affiliates repurchasing debt does not relate to APP.   
IV.  THE UNITED STATES' D EFENSE OF ITS FLAWED  THREAT OF INJURY DET ERMINATION  
36. The following key are points befor e the Panel with respect to the USITC's threat of injury 
determination: 1) whether the USITC established a causal connection between the subject imports 
and the threat of injury to the domestic industry as required by Article 3.5 of the Anti -Dumping 
Agreem ent and Article 15.5 of the SCM Agreement; 2) whether the USITC based its findings on 
conjecture and speculation in contravention of Article 3.7 of the Anti -dumping Agreement and 
Article 15.7 of the SCM Agreement; 3) whether the cumulative effect of the in dividual flaws in the 
USITC's determination render it inconsistent with Article 3.8 of the Anti -dumping Agreement and 
Article 15.8 of the SCM Agreement.  
A. The USITC's Failure to Establish a Causal Connecti on Is Inconsistent with 
Article  3.5 of the Anti -dumping Agreement and Article 15.5 of the SCM Agreement  
37. As Indonesia set forth in its First Written Submission, Articles 3.5 of the Anti -dumping 
Agreement and Article 15.5 of the SCM Agreement contain three principles which the USITC's 
determination viol ates: 1) non -attribution, 2) concrete examination of other factors, and 3) 
isolation of factors other than subject imports that caused or threaten injury.60 
38. With respect to non -attribution, the United States acknowledges that the vulnerability 
finding w eighed heavily in the USITC's "consideration of the impact of subject imports on the 
domestic industry in the imminent future."61 Indonesia submits this demonstrates violation of the 
non-attribution principle because subject imports were not what caused the  domestic industry to 
be vulnerable.  The USITC found that the domestic industry was vulnerable because all of its 
performance indicators exhibited a downward trend during the period of investigation.62 
Importantly, subject imports were not the cause of the downward trend, otherwise the USITC 
would have found present injury rather than a threat.  Two factors, unrelated to subject imports, 
were the sole underpinnings of the USITC's vulnerability finding: declining demand and expiration 
of the black liquor tax c redit.  In the paragraph of its determination in which it analyses 
vulnerability the USITC expressly identifies declining demand as the cause of the domestic 
                                                
54 See US FWS, para. 221.  
55 See para. 51 below.  
56 See US Response to First Panel Questions, para. 83.  
57 See Indonesia Response to First Panel Questions, para. 49.  
58 See Exhibit US -40, p. 38 of pdf.  
59 See Exhibit US -33, p. 110 of pdf; see also US Response to First Panel Questions, n. 109.  
60 See Indonesia FWS, para. 99.  
61 See US FWS, para. 246.  
62 See USITC Opi nion, Exhibit IDN -18, p. 38.  WT/DS491/R/Add.1  
 
- B-40 - 
 
  industry's declining performance.63 The USITC then discusses the black liquor tax credit noting it 
had propped up the domestic industry during the period of investigation but, because of its 
expiration, would no longer help the domestic industry which was another factor making the 
domestic industry vulnerable.64 There may be investigations where a vulner ability analysis 
suggests subject imports caused the domestic industry to be vulnerable – but this was not one of 
them. By heavily weighing the threat posed by subject imports in the context of a domestic 
industry which was vulnerable because of declining demand and an expiring tax credit, the USITC 
violated Article 3.5 of the Anti -Dumping Agreement and Article 15.5 of the SCM Agreement.  
39. The United States claims that the USITC never found the black liquor subsidy yielded a net 
benefit.65 Whether the subs idy was included in operating income or had a one -time financial 
benefit misses the point.  The subsidy affected normal market conditions, including pricing and 
costs and production -related activities.66 The USITC failed to give any consideration or devote a ny 
of its threat analysis to the fact that subject imports likely would respond differently in a market 
without the subsidy.  The USITC exacerbated its error by finding " it likely that subject imports 
would be priced aggressively so as to regain market shar e lost in interim 2010  due to the 
pendency of the investigations ."67 In other words, the USITC credited the lifting of the preliminary 
measures as a threat factor.  
40. The USITC also claims that expiration of the subsidy was not a known other factor causin g 
injury.68 But the USITC found that the expiration of the subsidy meant "any benefit that the 
domestic industry received from it in 2009 will not continue into the imminent future."69 The 
subsidy's expiration, along with declining demand, made the domestic industry vulnerable to 
injury.70 In other words, the expiration of the subsidy was a known other factor that made the 
domestic industry worse off than when the subsidy was in place.  Consequently, the United States' 
claim that the subsidy's expiration was no t a known other factor causing injury is a distinction 
without a difference.   
41. With respect to conducting a concrete analysis of factors other than subject imports, the 
United States argues that no specific methodology is required and that injury caused  by other 
factors need not be quantified.71 Indonesia is not suggesting that the United States must use a 
particular economic model or must quantify the effects of the black liquor tax credit's expiration, or 
of non -subject import and subject import market share swaps, or of declining consumption.  But 
where an investigating authority's present injury analysis is more concrete and rigorous than its 
threat analysis, there is a clear inconsistency with Article 3.5 of the Anti -Dumping Agreement and 
Article 15.5 of the SCM Agreement and disregard for the special care requirement when making a 
threat of injury determination.  
42. For example, the USITC's present injury findings contain a volume analysis consisting of 
precise measurements of the volume of subject imp orts, non -subject imports, domestic industry 
shipments, and market share.72 The USITC's present injury findings contain a pricing analysis 
based on four pricing products.73 Finally, the USITC's present injury findings contain an impact 
analysis that is based  on several trade and financial performance indicators.74 Yet the USITC 
concluded that none of the precise measures was sufficient to demonstrate a causal link between 
subject imports and injury to the domestic industry.75 But by applying less precise, amorp hous 
standards phrased in general terms like "increasing volumes of low -priced imports,"76"will take 
sales from current suppliers such as the domestic industry,"77 and "will gain additional U.S. market 
                                                
63 See USITC Opinion, Exhibit IDN -18, p. 38.  
64 See USITC Opinion, Exhibit IDN -18, p. 38.  
65 See US Response to First Panel Questions, para. 129.  
66 See USITC Opinion, Exhibit IDN -18, p. 33.  
67 See US FWS, para. 244. (Emphasis added ) 
68 See US Response to First Panel Questions, para. 134.  
69 See USITC Opinion, Exhibit IDN -18, p. 38.  
70 See USITC Opinion, Exhibit IDN -18, p. 38.  
71 See US FWS, para. 304.  
72 See USITC Opinion, Exhibit IDN -18, pp. 26 -27. 
73 See USITC Opinion, Exhibit IDN -18, pp. 31 -33. 
74 See USITC Opinion, Exhibit IDN -18, pp. 35 -38. 
75 See USITC Opinion, Exhibit IDN -18, p. 38.  
76 See USITC Opinion, Exhibit IDN -18, pp. 38.  
77 See USITC Opinion, Exhibit IDN -18, pp. 38.  WT/DS491/R/Add.1  
 
- B-41 - 
 
  share in the imminent future,"78 the USITC concluded subj ect imports would be a cause of injury in 
the future.  
43. With respect to the need to isolate injurious effects, the United States responds that the 
USITC was merely repeating the domestic law standard when the agency stated that it did not 
need to isolate  injury caused by other factors and that the USITC, in fact, performed a non -
attribution analysis.79 Indonesia does not doubt that the USITC was restating the domestic law 
standard and that is why it is troubling.  Irrespective of whether the USITC examined other factors, 
the key question is with what degree of rigor did the USITC do so, especially in the context of a 
threat analysis?  Indonesia respectfully submits that the analysis was without sufficient rigor.   
44. For purposes of its present injury analysi s, the USITC isolated factors other than subject 
imports, including the economic downturn and declining demand.80 As a consequence, the USITC 
concluded there was not a "sufficient causal nexus necessary to make a determination that subject 
imports are curre ntly having a significant adverse impact on the domestic industry."81  
45. In its threat analysis the USITC, collapsed, rather than isolated factors other than subject 
imports with the likely effects of subject imports.  The way the USITC did this was throug h its 
vulnerability finding.  The USITC begins its vulnerability analysis by noting the downwards trends in 
virtually all of the domestic industry's performance indicators "weigh heavily in our consideration 
of the impact of subject imports in the imminent future."82 But in its present injury analysis, the 
USITC had just stated found subject imports were not the cause of those downwards performance 
trends, rather it was the economic downturn and declining demand.  The USITC also found that the 
expiration of th e black liquor tax credit, another factor unrelated to subject imports, made the 
domestic industry vulnerable.83  
46. To comply with the isolation component of the non -attribution requirement, the USITC 
needed to do the opposite of what it did.  Rather than finding the domestic industry's vulnerability 
made it more likely that subject imports threatened injury, the USITC should have analyzed the 
impact of just the subject imports on the domestic industry during the period of investigation, after 
isolating out  the other factors and, based on that analysis, determined whether a threat of injury 
was likely.  
47. In short, the USITC found a threat of injury not based on subject imports but because of the 
expiration of a tax credit, a decline in consumption, and an increase in imports that had declined 
because of the investigation.  In reaching an affirmative threat of injury determination, the USITC 
attributed those effects to subject imports and violated US obligations under Article 3.5 of the 
Anti-Dumping Agreement  and Article 15.5 of the SCM Agreement.  
B. The USITC Relied on Conjecture and Speculation in Contravention of Article 3.7 of 
the Anti -dumping Agreement and Article 15.7 of the SCM Agreement  
48. Indonesia has challenged the USITC's threat determination as i nconsistent with Article 3.7 of 
the Anti -dumping Agreement and Article 15.7 of the SCM Agreement because it is based on 
conjecture or speculation regarding events which were not clearly foreseen and imminent.  The 
specific findings at issue are that subject  imports would have adverse effects on US prices and 
would gain market share at the expense of the domestic industry.84 The defences the 
United  States offers are without merit.  First, the United States claims that the USITC did not find 
the increase in subj ect import volume was innocuous for the domestic industry pointing to the 
finding that import volumes were significant and domestic shipments declined.85 Yet the USITC 
concluded, in spite of those two facts, that there was no causal connection between subje ct 
imports and the domestic industry's condition – even when subject imports were at their peak 
                                                
78 See USITC Opinion, Exhibit IDN -18, pp. 38.  
79 See US FWS, n. 630.  
80 See Certain Coated Paper Suitable for High -Quality Print Graphics Using Sheet -Fed Presses from 
China and Indonesia, Inv. Nos. 701 -TA-470-471 and 731 -TA-1169-1170 (Final), Pub. 4192 (Nov. 2 010) 
(USITC Opinion), Exhibit IDN -18, p. 37.  
81 See USITC Opinion, Exhibit IDN -18, p. 38.  
82 See USITC Opinion, Exhibit IDN -18, p. 38.  
83 See USITC Opinion, Exhibit IDN -18, p. 38.  
84 See Indonesia FWS, para. 124.  
85 See US FWS, para. 263; US Response to First P anel Questions, para. 137.  WT/DS491/R/Add.1  
 
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  market share.86 In addition, a decline in shipments (as opposed to market share) could be caused 
by declining demand.  Indeed, domestic shipments declined less th an demand.87  
49. Second, the United States makes much about the existence of a new distributor called Eagle 
Ridge, even claiming that it was established to double exports to the United States.88 In reality, 
Eagle Ridge was established in response to APP's l oss of business with Unisource.89 Unisource was 
a major paper distributor.90 APP had hoped to expand its business with Unisource but lost the 
account instead.91 If anything, Eagle Ridge is evidence of an attempt to recoup lost sales, not 
evidence of a major, planned expansion of sales.  
50. The underlying support is a single declaration that is questionable in a number of respects.  
One, the declaration is evidence that lower prices do not automatically mean exporters will gain 
market share.  Indeed, Unisource dr opped APP as a supplier.92 This contradicts the USITC's 
conclusion about the likelihood of lower priced subject imports gaining market share.93 Two, the 
declaration states that the conversations about doubling imports occurred in 2008.  Even if the 
declarant was truthfully and accurately relaying his conversations, the USITC's record showed that 
from 2008 to 2009 imports from China increased by seven percent and imports from Indonesia 
increased by fifteen percent – hardly doubling.94 Recall, too, that the USITC  found that the 
increase in subject imports from 2008 to 2009 did not materially injure the domestic industry.  
Three, the declaration is from a company official who is a competitor of APP and had a deep 
interest in seeing orders imposed.   
51. Third, the Un ited States refers to the domestic industry's market share gain of 6.8 
percentage points from subject imports.95 But that was not a market share gain in the traditional 
sense of competing for customers.  Rather, subject imports abruptly left the market which  the 
USITC attributed to the pendency of the investigation.96 Under those circumstances, a void simply 
needed to be filled and it says nothing about whether subject imports would compete with the 
domestic industry for market share if orders were not imposed .  
52. Fourth, the United States refers to new capacity coming online in China as evidence of 
imminent increases in the volume of subject imports.97 This was speculative and not imminent.  
The USITC found that after accounting for the additional capacity and  projected Chinese 
consumption growth, there would be 900,000 metric tons of excess capacity from 2009 -2011.98 
The USITC also found that consumption in the rest of Asia was likely to exceed capacity growth by 
160,000 tons from 2009 -2011.99 In other words, th ere would only be 740,000 metric tons 
available for export to the rest of the world.  But the USITC did not undertake any further analysis 
on other markets, excluding the United States, to which the Chinese industry might export.  The 
USITC appears to assume , without support or explanation, that the Chinese industry will export all 
of its excess capacity to the United States in an ambiguous 2009 -2011 timeframe which also calls 
into question the imminence of the alleged increase.  
53. Contrary to the United Sta tes' suggestion, Indonesia does not concede that the Chinese 
producers possessed 740,000 metric tons of capacity.100 Indonesia was merely citing to the figures 
on which the USITC relied.  Table VII -2 of the USITC's report, on which the United States also 
relies for projections,101 shows that the Chinese industry projected very little excess capacity in 
                                                
86 See USITC Opinion, Exhibit IDN -18, pp. 37 -38. 
87 See US Response to First Panel Questions, para. 137 (noting dome stic shipments declined by 
10.4 percent at the same time apparent U.S. consumption "plummeted" by 14.7 percent).  
88 See US FWS, para. 282.  
89 See USITC Opinion, Exhibit IDN -18, p. 24.  
90 See USITC Opinion, Exhibit IDN -18, p. 29.  
91 See US FWS, n. 612.  
92 See USITC Opinion, Exhibit IDN -18, p. 29.  
93 See USITC Opinion, Exhibit IDN -18, p. 35.  
94 See USITC Opinion, Exhibit IDN -18, Table C -1. 
95 See US FWS, para. 301.  
96 See USITC Opinion, Exhibit IDN -18, p. 27.  
97 See US FWS, para. 282.  
98 See USITC Opinion, Exhibit IDN -18, p. 28 & n. 181.  
99 See USITC Opinion, Exhibit IDN -18, p. 28 & n. 181.  
100 See US Response to First Panel Questions,  para. 154.  
101 See US Response to First Panel Questions, para. 154.  WT/DS491/R/Add.1  
 
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  2011.102 The point Indonesia was making is that the USITC undertook no analysis of other markets 
to which the Chinese industry might export.  Further, the Chinese industry had excess capacity 
during the POI.103 If the USITC's theory were correct, i.e., that the Chinese industry would get rid 
of excess capacity by exporting to the United States, then the Chinese industry would not have 
had excess capacity in any year o f the POI.  
54. Indonesia has demonstrated the inconsistency between the USITC's present injury finding 
that subject imports had not had adverse price effects despite underselling and the threat finding 
that subject imports likely would have adverse price e ffects.104 At the heart of the United States' 
defence is the argument that the expiration of the black liquor tax credit and a more moderate 
decline in consumption would no longer obscure the adverse effects subject imports were having 
on domestic prices.105 But this is pure speculation.  To the extent that the black liquor tax credit 
and declining consumption were affecting pricing behaviour throughout the period of investigation, 
as the USITC finds they were, the USITC lacks any basis to make a projection abou t how subject 
imports would perform in a market where those factors were not operating to lower prices.  In 
other words, those same factors that the USITC found were driving down the domestic industry's 
prices may be, indeed, likely were, responsible for dr iving down subject import prices.  In short, 
the USITC's conclusion about a threat of injury based on price depression is based on speculation 
and, thus, inconsistent with Article 3.7 of the Anti -dumping Agreem ent and Article 15.7 of the 
SCM Agreement.  
55. Indonesia has argued that the USITC did not point to facts that were going to change in the 
imminent future such that subject imports would take significant share from the domestic industry.  
As a factual matter, there was no correlation between subject imp ort volumes and the decline in 
the domestic industry's shipments.  The volume of the domestic industry's shipments declined in 
each year of the period of investigation, including from 2007 to 2008, when the volume of subject 
imports also declined.106 Indeed, the USITC found declining consumption and the economic 
downturn were responsible for the decline in the domestic industry's shipments.107   
56. The United States also relies on the increase in production capacity in China,108 which as 
addressed above the USITC  improperly concluded would all be used to export to the United States 
during the 2009 -2011 timeframe.  In addition, the United States relies on the establishment of 
Eagle Ridge as evidence of likely increases in subject import volumes.109 But as addressed ab ove, 
Eagle Ridge was established because APP lost a major customer.  This was a negative 
development.  While the United States points to the fact that subject import volumes increased 
even after APP lost the account,110 there is no evidence on the USITC's reco rd to support that 
conclusion.  The United States cites to page 26 of the USITC's report which reports that the volume 
of subject imports increased from 2008 to 2009.111 But Eagle Ridge was not even started to be 
established until the second half of 2009.112 The only way to see the impact of APP's loss of 
Unisource on subject import volumes would be to examine monthly imports before and after.  Data 
for whole year 2009 could mask a large volume of imports before the business was lost and a 
decline thereafter.  Indeed, the USITC even noted that import volumes were particularly high in 
January 2009.113 The USITC even appears to have had the data to perform this analysis but, for 
whatever reason, chose not to do so.114 
57. The United States argues that the USITC " found it  likely that subject imports would be 
priced aggressively so as to regain market share lost in interim 2010 due to the pendency of the 
                                                
102 See USITC Opinion, Exhibit US -1, Table VII -2. 
103 See USITC Opinion, Exhibit US -1, Table VII -2. 
104 Indonesia FWS, paras. 125 -126. 
105 See US FWS, para. 279.  
106 See USITC Opinion, Exhibit IDN -18, Table C -3. 
107 See USITC Opinion, Exhibit IDN -18, p. 37 ("The deterioration in almost all of the domestic industry's 
performance indicators between 2007 and 2009 coincided with the economic downturn and a sharp decline in 
demand for CCP.").  
108 See US FWS, para. 264.  
109 See US FWS, para. 265.  
110 See US FWS, para. 265.  
111 See USITC Opinion, Exhibit IDN -18, p. 26.  
112 See USITC Opinion, Exhibit IDN -18, p. 24.  
113 See USITC Opinion, Exhibit IDN -18, p. 30, n. 193.  
114 See USITC Opinion, E xhibit IDN -18, p. 30, n. 193 (referencing a document containing monthly 
import statistics for the period of investigation).  WT/DS491/R/Add.1  
 
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  investigations. "115 If this reasoning is sufficient, a threat finding will be compelled in nearly every 
case because the in vestigating authority can start an investigation, observe a decline in subject 
imports once preliminary measures are imposed, and then infer subject imports will increase 
significantly to regain lost market share.  Under that simplistic analysis, why should  exporters even 
bother to defend themselves?  As the EU stated, "[i]t would . . . mean that it would be within the 
control of the authority whether a change of circumstances would occur (by imposing preliminary 
duties) or not (by not imposing preliminary du ties). This cannot be correct."116 
58. The United States also relies on the increase in production capacity in China and the 
establishment of Eagle Ridge.117 As discussed above, neither point supports a finding of an 
imminent likely increase in the volume of s ubject imports.  Finally, the United States claims the 
USITC did not have to "pinpoint the precise volume of sales that subject producers were likely to 
capture from non -subject imports instead of the domestic industry."118 But if the USITC did not 
attempt su ch an analysis, as the United States concedes it did not, Indonesia respectfully submits 
that the USITC's conclusion is, by definition, nothing more than conjecture, which is inconsistent 
with Article 3.7 of the Anti -Dumping Agreement and Article 15.7 of t he SCM Agreement.    
C. The USITC Did Not Exercise Special Care in its Threat of Injury Determination  
59. The United States relies solely on the panel's statement in US – Softwood Lumber VI  to 
defend the inconsistencies Indonesia identified in the USITC's threat determination as also being 
inconsistent with Article 3.8 of the Anti -Dumping Agreement and Article 15.8 of the SCM 
Agreement.119 The reasoning, in turn, on which the United States han gs its defence consists of the 
following: "[W]e believe such a demonstration would require additional or independent arguments 
concerning the asserted violation of the special care requirement beyond the arguments in support 
of the specific violations."120 This Panel should reach a different result and one that is grounded on 
something more concrete than a mere "belief."  Indeed, the panel did not cite any authority to 
support its view.  Further, the panel's view would mean that a single action or finding could  not 
violate more than one WTO obligation which is not the case.  For these reasons, this Panel should 
find that the specific violations Indonesia has identified also violate Articles 3.8 Anti -Dumping 
Agreement and 15.8 of the SCM Agreement.  
60. Indonesia a lso has argued the USITC violated the special care requirement by resolving all 
key issues against respondents.  The United States attempts to dismiss this argument by relying on 
its defences to the specific violations Indonesia identified.121 The same panel in Softwood 
Lumber  VI on which the United States relies also stated that "a degree of attention over and above 
that required of investigating authorities in all anti -dumping and countervailing duty injury cases is 
required in the context of cases involving  threat of material injury."122 
61. Indonesia has argued that the each individual deficiency constitutes a violation of the duty 
to exercise special care pursuant to Article 3.8 of the Anti -Dumping Agreement and Article 15.8 of 
the SCM Agreement.123 Indonesia has argued that the cumulative effect of the deficiencies also 
amount to violations.124 The United States argues that the claims must go beyond those made 
under other provisions of the Anti -Dumping and SCM Agreement.125 In Indonesia's view, there is 
no textual  evidence that arguments made under other Articles cannot also constitute a violation of 
Articles 3.8 and 15.8.  Indeed, neither the panel in US Softwood Lumber VI  nor the United States 
offer such evidence.  
                                                
115 See US FWS, para. 244. (Emphasis added).  
116 See European Union's Responses to the Questions from the Panel to the Third Parties fol lowing the 
Third-Party Session, para. 36; see also Responses of Brazil to the Panel's Questi ons to the Third Parties, 
para. 10. 
117 See US FWS, para. 271.  
118 See US FWS, para. 272.  
119 See US SWS, para. 147.  
120 See Panel Report, United States – Investigation of the International Trade Commission in Softwood 
Lumber from Canada , WT/DS277/R, adopted 26 April 2004 (" US-Softwood Lumber VI "), para. 7.34.  
121 See US SWS, para. 148.  
122 See US – Softwood Lumber VI , para. 7.33.  
123 See Indonesia FWS, para. 131.  
124 See Indonesia FWS, para. 132.  
125 See US Response to First Panel Questions, para. 157.  WT/DS491/R/Add.1  
 
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  V.  THE TIE VOTE PROVISI ON OF UNITED STATES'  LAW I S INCONSISTENT WITH THE 
DUTY TO EXERCISE SPE CIAL CARE  
62. Indonesia has challenged, on as such basis, Section 771 of the Tariff Act of 1930  as 
contravening basic fairness principles and the special care provisions of Article 3.8 of the Anti -
Dumping Agreeme nt and Article 15.8 of the SCM Agreement.126 The effect of the law, which the 
United States does not dispute, means foreign exporters always need four votes to win a threat of 
injury determination while domestic petitioners only ever need three.  The United S tates responds 
that the tie vote provision is strictly a matter of internal decision -making that does not interfere 
with individual commissioners' exercise of special care.  
63. The United States response boils down to one point: that Articles 3.8 and 15.8 only address 
"substantive obligations" that, in this case, individual USITC Commissioners must abide by when 
conducting the threat of injury analysis; in the US view, the Anti -Dumping and SCM Agreements 
provide complete discretion as to the "internal -decision making procedure" of how the USITC adds 
up individual votes and comes to a final decision.  
64. Nowhere does the text of Articles 3.8 and 15.8 draw a line between substantive and 
procedural conduct.  On the contrary, these provisions explicitly refer to both the "consideration" of 
threat of injury measures and the "decision" itself related thereto.  Hence, meaning must be given 
to this, pursuant to the principle of effective treaty interpretation ( effet utile ) and Article  31.1 of 
the VCLT. The Panel cannot  read either "considered" or "decided" out of the WTO agreements, nor 
can it equate "considered" with "decided" on the assumption that they mean the same thing.  
65. "Consider" is defined as " To view or contemplate attentively, to survey, examine, inspect, 
scrutinize ".127 "Decide", in turn, is defined as " To come or bring to a resolution or conclusion ".128 
Hence, even if "considered" may refer to (or even be limited to) the ITC 's substantive 
consideration of the requirements under the SCM Agreement, the term "decided" unequivocally 
includes the way the ITC as a body brings the question of applying or not applying countervailing 
measures in threat of injury situations "to a resolution or conclusion", that is, including the way 
the ITC resolves a tie vote in tho se situations. By limiting Articles 3.8 and 15.8 to "substantive 
analysis"129 the United States reads the word "decided" out of the Anti -Dumping and the SCM 
agreements.  
66. WTO members must exercise "special care" not only in their substantive analysis or 
consideration, but also in how the final determination is "decided". Indonesia does not contest, in 
this dispute, that the individual USITC members may have cast their individual vote after 
considering the matter "with special care".  That is not the issue in  dispute.  Indonesia claims that 
the way US law tallies these individual votes to come to a final "decision" in the event of a 3 to 3 
vote is contrary to the "special care" obligation. As Canada points out in its third party 
submission130, this "special care"  obligation in Articles 3.8 and 15.8 must be interpreted in the light 
of the "objective examination" requirement in Articles 3.1 and 15.1 which, according to the 
Appellate Body, mandates an "examination process " that "must conform to the dictates of the 
basic principles of good faith and fundamental fairness" and precludes investigating authorities 
from conducting their investigation "in such a way that it becomes more likely that, as a result of 
the … evaluation process , they will determine that the domest ic industry is injured".131 As Canada 
puts it, the " structural bias" of the US tie vote rule "blatantly favours petitioners and prejudices 
respondents", "cannot be consistent with the obligation to conduct an 'objective examination'" and 
                                                
126 See Indonesia FWS, paras. 133 -165. The relevant provision of United States law has been codified at 
19 U.S.C. § 1677(11)(B) . 
127 Oxford English Dictionary, online at 
http://www.oed.com/view/Entry/39593?redirectedFrom=consider#eid .   
128 Oxford English Dictionary, online at 
http://www.oed.com/view/Entry/48173?rskey=cRJZ2R&result=1#eid . 
129 US FWS, para. 313.  
130 Canada, Third Party Submission, paras. 39 -44. 
131 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, paras. 193 and 196 (emphasis 
added).  WT/DS491/R/Add.1  
 
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  is also "manifestly inconsistent with the obligation to exercise 'special care' in the context of threat 
of injury determinations".132 
67. The US relies on the Appellate Body report in US – Line Pipe . But that decision reversed a 
panel finding that the ITC should have issued di screte safeguard determinations on either serious 
injury or threat of serious injury. It is in that context that the Appellate Body finding that the 
Agreement on Safeguards "does not prescribe the internal decision -making process" for safeguard 
determinati ons must be read.  Moreover, Indonesia is not arguing that the Anti -Dumping or SCM 
agreement mandate a specific "internal decision -making process", be it a unitary decision by a 
single entity or individual, or a decision by a multi -member body.  WTO members are, indeed, free 
to pick either option.  What Indonesia claims, however, is that once a WTO member has decided to 
make determinations by a multi -member body (as the US did), and decides to put 6 members on 
that body, to then mandate an affirmative finding of threat of injury even if the votes are tied 3 to 
3, is not a determination "decided with special care".  
68. To accept the US artificial bifurcation between "substance" and "procedure" would imply that 
WTO members can set up a multi -member body to make threat of injury determinations and then 
decide that all determinations by that body will be presumed affirmative as soon as one individual 
on, for example, a 15 member body decides in favour of petitioners.  It is hard to see how such 
determinations would be "decided with special care".  If a WTO member decides, like the US did, to 
give decision -making power to a body composed of 6 individuals, acting in a commission, it cannot 
then mandate an affirmative determination by that body as soon as one of these 6 individuals 
considers there is a threat of injury, even if that one individual is contradicted by the other 5.  Yet, 
that is exactly what the US argument in this dispute would allow for.  
69. "Special care" in threat of injury cases implies both an absolute standard and a relative one 
as compared to present injury determinations.  In absolute terms, and irrespective of what 
happens in present injury cases, threat decisions must be made not using standard due diligence 
and attention, but additional, extra care or protection.  Stating that one side (petitioners) only need 
three votes to win, the other side (exporters) need four, simply does not meet this heightened 
standard.  The obligation of "special care" implies also extra carefulness as compared to present 
injury cases.  This extra or special care can be expressed in many ways, both substantive and 
procedural.  It does obviously not mandate (as the EU third party submission seems to imply) that 
for threat cases respondents must win with fewer votes than what they  normally need in present 
injury cases.  Indonesia is not claiming here that USITC voting rules in threat cases must be 
skewed in favour of respondents or be more favourable to respondents than in present injury 
cases.  The only claim Indonesia is making in this dispute is that mandating an affirmative threat of 
injury determination where USITC votes are tied 3 to 3 is systematically discriminating petitioners 
and anything but a decision taken "with special care".  For the US to state, at para. 349 of its FWS,  
that "there is nothing partial … about the manner in which the Commission resolves tie vote 
situations" is simply not credible.   
VI.  CONCLUSION  
70. Indonesia brought this case not only to redress several U.S. violations of its WTO obligations 
but because  Indonesia believed it had been treated unfairly.  In the USDOC proceedings, USDOC 
inaccurately portrayed Indonesia as providing standing timber to paper manufacturers at distorted 
prices.  As Indonesia has demonstrated, nothing could be further from reality .  
71. USDOC found Indonesia's log export ban was designed to promote downstream industries in 
spite of the clearly expressed purpose of the law to prevent illegal logging.  The fact that the law 
may not have been 100 percent successful is not evidence of a  hidden intent but, rather, the 
pervasive nature of the problem the law is trying to solve.    
72. Perhaps the most remarkable and most disturbing USDOC finding concerns the express 
claim by USDOC that the Government of Indonesia broke its own law by allowi ng an affiliate to 
buy back debt.  As Indonesia has demonstrated, USDOC cites no actual evidence this occurred, just 
two speculative sentences from a single newspaper article.   
                                                
132 Canada, Third Party Submission, paras. 44 and 47.  WT/DS491/R/Add.1  
 
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  73. In the USITC proceedings, one of the unfavorable factual findings the Indone sian exporters 
faced was not because of a subsidy that Indonesia bestowed on them, but because of a subsidy 
the United States government was taking away from its domestic industry.   
74. Finally, Indonesia challenges a provision of U.S. law that always oper ates in favor of the 
U.S. domestic industry and against exporters/respondents.  The law, not the Commissioners, 
determines a threat of injury exists.   
75. Indonesia submits that as much as this case is about violations of U.S. WTO obligations, it is 
also ab out basic questions of fairness.  
 
  WT/DS491/R/Add.1  
 
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ANNEX B -4 
SECOND  INTEGRATED EXECUTIVE  SUMMARY OF THE UNITED STATES  
EXECUTIVE SUMMARY OF  U.S. SECOND WRITTEN SUBMISSION  
I. INDONESIA 'S ARGUMENTS CHALLENG ING USDOC 'S FINDINGS THAT THE 
PROVISION OF STANDIN G TIMBER AND THE LOG EXPORT BAN PROVI DED INPUTS 
AT LESS THAN ADEQUAT E REMUNERATION ARE B ASELESS AND SHOULD B E 
REJECTED  
 A. Indonesia 's Factual Arguments with Respect to the Operation of the Standing 
Timber Program and Log Export Ban Are Not Supported by the Evidence That 
Was Before USDOC in the Underlying Investigation  
1. Indonesia's arguments about stumpage licensing and royalties relate to financial 
contribution, not LTAR, and are not supported by record evidence.  For the first time at the 
panel 's December 6, 2016 meeting, Indonesia asserts that it provided only land access, and not 
standing timber, to the extent that logging companies cultivated timber under government 
concessions rather than clearing pre -existing timber.  This argument is not germane to issues of 
adequacy of remuneration, but instead Indonesia essentially argues that USDOC analyzed the 
wrong financial contribution.  As the United States has explained, however, Indonesia has not 
presented a claim under Article 1.1(a) and accordingly Indonesia has no b asis for asking the Panel 
to examine issues related to financial contribution.  Second, Indonesia points to no record evidence 
in the Coated Paper investigation that supported this assertion.  For example, Indonesia did not 
raise USDOC 's supposed "fundamenta l misconception of the nature of the alleged subsidy 
program" during the entirety of the underlying investigation.  The Panel must not conduct a de 
novo evidentiary review, but instead should "bear in mind its role as reviewer of agency action" 
and not as " initial trier of fact."  
2. Indonesia 's new argument is contradicted both by record evidence and prior representations 
by Indonesia.  USDOC learned in the underlying investigation that logging companies can obtain 
timber from GOI land in three ways:  harvesti ng pre -existing timber from the natural forest, clear -
cutting pre -existing timber to establish an area as a future plantation, or harvesting cultivated 
timber on a plantation.  Whether timber is pre -existing or cultivated, the harvesting company must 
pay sp ecies-specific "PSDH" cash stumpage fees as a royalty for harvesting the timber.  It is this 
stumpage rate that USDOC was examining for consistency with market principles.  The GOI 
regulated timber plantations in a manner consistent with providing standing t imber.  To obtain an 
"HTI license" to operate a timber plantation on GOI land, a logging company must meet a number 
of regulatory requirements and pay a concession fee.  Rather than payment of a lease based on a 
given acreage, the concessionaire pays stumpag e fees on the volume of wood harvested from the 
land. GOI officials accompany logging company officials into the fields at the time of the harvest to 
check the accuracy of the company 's volume reporting. The GOI retains title to the standing 
timber cultiva ted by private companies until the applicable stumpage fees are paid.  Only then are 
the logs officially the property of the logging company and permitted to exit the collecting area.  
The royalties are tied to stumpage, not land use.  GOI "provided" standing  timber even where it 
was grown by the concessionaire.  USDOC understood the nature of the GOI 's financial 
contribution, and characterized it in a manner consistent with the fact that the GOI provided both 
cultivated and pre -existing timber.  For instance, U SDOC stated that the GOI "allowed timber to be 
harvested from government -owned land," and noted the percentage of the harvest during the 
period of investigation attributable to or accounted for by government land.  These conclusions 
were clearly articulated  in the determination.  To determine whether standing timber provided a 
benefit, USDOC properly assessed whether the GOI 's stumpage fees were set in accordance with 
market principles.  The factors identified by USDOC in its analysis of distortion of the mark et for 
standing timber apply equally to both pre -existing and cultivated timber.  The GOI administratively 
set the applicable PSDH fee, which applied equally to pre -existing and cultivated timber, without 
regard for market principles.  Therefore, USDOC analy zed the correct measure and the relevant 
factors in its assessment of whether the market is distorted so that recourse to an out -of-country 
benchmark was necessary.  WT/DS491/R/Add.1  
 
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  3. Contrary to Indonesia 's assertions, USDOC considered all relevant pricing 
information . The Appellate Body has explained that the investigating authority 's analysis of 
whether in -country prices provide a proper benchmark "will vary depending upon the 
circumstances of the case … including such additional information an investigating authority s eeks 
so that it may base its determination on positive evidence on the record."  Pursuant to Article 12.1 
of the SCM Agreement, investigating authorities may require "Interested Members and all 
Interested Parties" to supply evidence, and must ensure that su ch parties have notice and "ample 
opportunity to present in writing all evidence which they consider relevant in respect of the 
investigation in question."  The SCM Agreement does not obligate investigating authorities to 
collect data from non -interested pa rties, who in any event lack the incentive to respond.   
4. USDOC asked both the GOI and APP/SMG to report stumpage fees paid for timber on private 
land. Neither responded to these questions with information on such fees.  The GOI stated that it 
did not coll ect price information on timber harvested from private land.  APP/SMG reported 
payments to the GOI of PSDH, DR, and PSDA fees, and none to private owners.  APP/SMG provided 
a partial response to a separate USDOC question regarding whether APP/SMG had an arra ngement 
to harvest private timber, and to indicate whether the arrangement was with an unaffiliated party, 
and if so, to provide a copy of the relevant contracts and other documents.  APP/SMG responded 
that its cross -owned company Wirakarya Sakti, PT (WKS) "purchased a small quantity of logs from 
private individuals in villages from the Jambi region, who individually grow trees on their private 
land" around the perimeter of WKS ' plantations.  APP/SMG did not identify whether these 
individuals were affiliated with it, and did not provide any documentation regarding the 
arrangement.  Neither did APP/SMG report any actual payments to such private individuals.  
APP/SMG responded to the initial questionnaire 's remaining questions that applied both to 
arrangements for  timber harvested from public and private land as if the private arrangement did 
not exist.   
5. In the first supplemental questionnaire, USDOC asked whether APP/SMG 's initial 
questionnaire response had included "the total fees paid or total fees accrued fo r all timber 
harvested by APP/SMG cross -owned companies in the POI."  In response, APP/SMG provided 
"detailed payment data for the timber harvested during annual 2008," which again did not reflect 
any payments to private individuals by WKS.  Accordingly, the  purported price of 20,000 IDR per 
ton of acacia to private individuals was 1) based on "a small quantity"; 2) was not reflected in the 
stumpage payment records APP/SMG provided to USDOC; 3) was not substantiated by any 
contract or other documentation; 4) was not confirmed to be arms -length; and 5) was based on 
an atypical type of commercial activity – i.e., was arranged merely because the private individual 's 
land abutted the cross -owned company 's plantation.  In addition, APP/SMG did not characterize the 
payment as a stumpage fee, instead stating that it was a "pure rental payment," while providing 
conflicting information regarding whether it was the private individuals or WKS that grew the 
timber.  The information had limited probative value and was of ques tionable reliability.  Neither 
APP/SMG nor the GOI argued that the information should be considered with respect to evaluating 
the viability of using an in -country price as a benchmark.  
6. The Issues and Decision Memorandum summarized the key issues and evi dence among a 
record spanning thousands of pages, and did not purport to discuss each and every bit of 
information on the record, especially information of little probative value, and for which no 
argumentation was submitted.  Consequently, there is no basi s for Indonesia 's statement that 
USDOC "had information on in -country prices but chose not to examine it."   
7. The other purported evidence of in -country prices that Indonesia says USDOC failed to 
consider was not on the record of the underlying countervai ling duty investigation.  Rather, 
Indonesia has submitted to the Panel documents pertaining to APP/SMG affiliates ' sales and 
purchases of logs, which was presented in the antidumping  duty investigation of coated paper 
from Indonesia but not in the CVD inves tigation.  Indonesia has no legal basis for arguing that 
USDOC somehow failed to comply with the  SCM Agreement by not considering a document never 
filed in the CVD proceeding.  
8. USDOC did not, as Indonesia argues, "refuse to consider evidence relating to f actors other 
than government market share."  Indonesia fails to identify a factor or facet of the domestic market 
that USDOC refused to consider.  The mere existence of a private price does not establish that such 
a price is market -determined or otherwise su itable as a benchmark, particularly where the record 
has been analyzed and found to be replete with evidence of market distortion and the WT/DS491/R/Add.1  
 
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  government 's role is "so predominant that price distortion is likely and other evidence carries only 
limited weight."  
9. Indonesia's explanation for its claim that wood chips were not within the scope of 
the log export ban is inconsistent with its statements to USDOC and is of no relevance.  
As Indonesia concedes, its case brief and questionnaire response incorrectly ident ified wood chips 
as being excluded from the ban under a 2007 regulation, i.e., Government Regulation No. 6 of 
2007.  Because Indonesia had also stated, and USDOC had verified, that the 2007 regulation had 
not been implemented, USDOC reasonably determined th at that wood chips remained subject to 
the log export ban.  Indonesia never informed USDOC of its view, shared for the first time in the 
response to the Panel 's questions that wood chips did not fall within the scope of the 2001 decree 
reinstating the prohi bition on log exports.  Similarly, it did not offer the explanation of Indonesia 's 
HS codes that it has provided the Panel.  USDOC was informed that the 2008 decree providing for 
the export of timber chips and the underlying 2007 regulation, were not yet in effect at its on -site 
verification, it had no basis to conclude that the GOI permitted export of "timber chips."  
Additionally, whether wood chips were covered by the ban during the period of investigation has 
little relevance.  USDOC did not countervail APP /SMG 's purchases of wood chips, or any other 
downstream product. Those products are distinct with distinct market considerations.  
 B. Indonesia 's Economic Theories About Whether Its Provision of Standing 
Timber and Log Export Ban Suppressed Log Prices and Distorted the Market 
Are Not Supported by Quali tative or Quantitative Analysis  
10. Indonesia 's arguments lack any analysis or facts – empirical or otherwise – to support them.  
Without proof and analysis, this exercise is hypothetical and academic.  The issue here is not 
whether new economic theories can be developed and elaborated during a WTO proceeding, but a 
question of whether USDOC 's determination was based on record evidence and adequately 
explained.  And here, the record evidence speaks for itself.  USDOC examined log prices, which 
refute Indonesia 's theories because they show that Indonesian log prices remained well belo w 
prevailing regional prices. USDOC also noted that the volume of log imports into Indonesia was 
negligible.  In examining the expor t ban specifically, USDOC further found that had the ban not 
been in place, domestic log customers would have had to compete with foreign buyers.  
 C. Indonesia Has No Basis for Claiming That USDOC Ignored Evidence or Did Not 
Act in Good Faith  
11. USDOC iss ued unabridged questionnaires (and multiple supplemental questionnaires), 
conducted verification, and addressed the respondents ' comments in detail.  Indonesia fails to 
identify what additional process it should have received from USDOC.  It is entitled to d isagree with 
USDOC, but that USDOC found the GOI 's ownership of virtually all forest land significant on its 
merits does not indicate that USDOC was "blinded" to other evidence.  Similarly, it is entitled to 
disagree with USDOC 's conclusions considering the  viability of using log import prices to Indonesia 
as a benchmark, but that does not indicate that USDOC gave the proffered evidence "no weight."  
Indonesia 's own data provided empirical support for the benchmark that USDOC employed to 
evaluate adequacy of remuneration.  Indonesia was required to provide complete, accurate 
responses to USDOC 's questions, and accordingly, its excuse that it did not correct USDOC 's 
supposed misconception of the financial contribution element of the provision of standing timber 
program because the CFS decision indicated that "USDOC was not interested" rings hollow.  
Indonesia 's argument that USDOC did not address private, domestic prices for standing timber is 
foreclosed by its failure to build a record that would support its clai ms. In the context of a case in 
which APP/SMG expended significant effort to develop evidence concerning import prices to 
Indonesia and argue for their applicability, it strains credulity for Indonesia to argue that reliable 
domestic private prices were av ailable, but it did not attempt to provide them because of a 
formality like some perceived instruction from USDOC.  WT/DS491/R/Add.1  
 
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  II. INDONESIA 'S ACCOUNT OF USDOCS ACTIONS IN APPLYING FACTS AVAILABLE IS 
NOT LEGALLY OR FACTU ALLY SOUND  
 A. Indonesia 's Description of the Factual and Procedural Circumstances 
Surrounding USDOC 's Actions is Erroneous  
12. Contrary to Indonesia 's assertions, during the CCP investigation, Indonesia did not 
cooperate to the fullest, and did not provide complete and timely information.  Further USD OC did 
not change course midstream to inquire into areas unrelated to the investigation and into which 
Indonesia could not possibly have been expected to look.  These matters are made clear by the 
timeline of events the United States presented during the first Panel meeting .  
13. In addition, as Indonesia itself acknowledges, USDOC inquired about only four debt sales out 
of thousands of transactions the IBRA conducted or oversaw.  Indonesia 's complaint that the 
supplemental questionnaire contained multipart  questions and required translation of documents 
provided is not convincing.  To the contrary, these are standard elements of any questionnaire in a 
trade remedies investigation.  Furthermore, the records should have been timely found – especially 
given that  although IBRA had dissolved, Indonesian law required recordkeeping for a period of 
years that extended further back than the IBRA 's dissolution.   
14. Moreover, the limited information on the additional terms of reference and bid protocol that 
Indonesia pr ovided to USDOC in response to the supplemental questionnaire actually appears to 
undercut Indonesia 's assertions.  The document revealed that the "PPAS 2" terms of reference were 
different than those which governed the APP/SMG sale.  This is shown by a comp arison between 
the "PPAS 2" terms of reference submitted in response to the supplemental questionnaire and the 
APP/SMG terms of reference and accompanying bid protocol.  The United States also notes that 
document containing the "PPAS 2" terms of reference r epresented only one document from one of 
four other PPAS transactions.  Other necessary information remained missing, namely, the actual 
bidding documents.  The identities of the bidders in the other PPAS sales revealed nothing about 
how the IBRA approached possible affiliation in those other transactions.  The bidding documents 
themselves were needed to understand whether the IBRA approached possible affiliation any 
differently in the APP/SMG debt sale compared to other sales under the PPAS.   
 B.  Indonesia U rges the Panel to Adopt Legal Standards That Have No Textual 
Basis.  
15. Article 15 of the AD Agreement is plainly irrelevant.  The measure at issue here is USDOC 's 
countervailing duty determination, and Indonesia 's claims are under the CVD Agreement.  
16. Indonesia has no basis for asserting that Article 27 modifies Article 12.7 in the event the 
subsidizing Member is a developing country.  Interpretation of treaty provisions begins with the 
ordinary meaning of the terms themselves.  Nothing in Article 27 states  that Article 12.7 is 
somehow modified.  Likewise, nothing in Article 12.7 of the SCM Agreement incorporates or cross 
references the obligations of Article 27 of the SCM Agreement.  Indonesia 's proposed interpretation 
is also unsupported by relevant context.  To the contrary, the relevant context further supports 
that Article 27 does not modify Article 12.7.  In particular, the relevant context here is the detailed 
nature of the obligations set out in Article 27.  That is, the drafters of Article  27 were explici t and 
precise in stating which provisions in the SCM Agreement would be affected by the developing 
country status of a subsidizing Member.  Article 27 contains technical modifications and 
qualifications to other provisions of the SCM Agreement for developin g country Members ' subsidies 
subject to certain disciplines under the Agreement, including some pertaining to the conduct of 
countervailing duty proceedings.  It contains certain express carve -outs and qualifications to 
application of other articles of the SCM Agreement to developing country Members, but contains 
no limitation or prohibition to an investigating authority having resort to Article 12.7.  Had the SCM 
Agreement drafters wished to include a qualification to Article 12.7 for developing country 
Memb ers in Article 27, they could have done so.  The fact that Article 27 is narrowly tailored with 
regard to "[s]pecial and [d]ifferential [t]reatment" for developing country Members, reflects the 
drafters ' intention that "special regard" be given to developin g country Members under certain, but 
not all, provisions of the SCM Agreement.  Any "special regard" to be given to developing country 
Members under the SCM Agreement is contained in Article 27 's specific rules.  This conclusion WT/DS491/R/Add.1  
 
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  comports with the interpretiv e principle that "a treaty interpreter is not free to adopt a meaning 
that would reduce parts of a treaty to redundancy or inutility."  
17. The United States also disagrees that "Article 15 of the Anti -Dumping Agreement applies 
mutatis mutandis  to the appli cation of CVD measures under the SCM Agreement, inc luding 
Article  12.7 thereof." There is nothing in Article 12.7 that references or incorporates any aspect of 
AD Agreement Article 15; there is therefore no legal basis to – as Indonesia argues – apply 
Article 15 of the AD Agreement to one or more provisions of the SCM Agreement.  Even were 
Indonesia 's argument to be construed as asserting that Article 15 is context for Article 12.7, the 
argument fails.  Both agreements have "special and differential treatment" provisions.  In this 
circumstance, it would be inappropriate to augment the rules in one agreement by using the 
"context" of another set of rules in another agreement to add substantive rights or obligations to 
the first agreement.  Second, a circ umstance in which the AD Agreement has provid ed relevant 
context for the SCM  Agreement is one in which both agreements have provisions on use of facts 
available.  The AD Agreement, of course, has a separate annex on facts available, which is absent 
in the SCM Agreement.  In those circumstances, the Appellate Body h as looked to Annex II of the 
AD Agreement for "additional context" in interpreting the facts available pro visions of the 
SCM Agreement.  Thus, the situations of use of facts available and special and  differential 
treatment are different.  Where both agreements have explicit text of their own governing a 
specific matter, Indonesia has provided no basis for reading into the SCM Agreement an obligation 
that may exist in the AD Agreement.  Even with respect  to Annex II of the AD Agreement, the 
Appellate Body has explained that it is not incorporated into the SCM Agreement.  We also agree 
with the European Union that "Indonesia has [not] specifically explained or demonstrated how its 
status as a developing cou ntry Member would be of relevance in the context of this particular 
dispute under Article 12.7" of the SCM Agreement.  
18. Indonesia is incorrect in arguing that USDOC's decision to allegedly refuse to 
accept certain documents on the affiliation issue at ve rification was inconsistent with 
obligations under the SCM Agreement.  In any event, Indonesia never attempted to submit 
these documents at the verification, or afterwards.  Additionally, Indonesia 's argument is undercut 
by the fact that Article 12.6 support s USDOC 's decision to cancel verification regarding the debt 
buy-back, and, by implication, USDOC 's choice not to solicit the missing information at verification.  
Article 12.6 of the SCM Agreement is prefaced by the word "may."  In the context of analyzing the 
similarly -worded Article 6.7 of the AD Agreement, panels have found that this term is precatory; it 
"makes clear that on -the-spot verifications in the territory of other Members are permitted, but not 
required."  Based on the presence of "may" in Articl e 12.6, USDOC was not required to perform an 
on-the-spot verification of Indonesia under the SCM Agreement.  The United States agrees with 
certain third parties ' statements that an investigating authority has the discretion to accept new or 
clarifying infor mation at verification, but this is not required in every instance.   
19. The Appellate Body explained in China – HP-SSST (Japan)  that "[c]ircumstances will vary, 
and investigating authorities have some degree of latitude in deciding whether to accept and u se 
information submitted by interested parties during on -the-spot investigations and thereafter."  
USDOC appropriately exercised its discretion in deciding to cancel verification pertaining to the 
debt buy -back.  When Indonesia failed for the second time to provide the bidding documents for 
the other PPAS sales, there remained only a few days prior t o the outset of verification. The 
United  States  explained why it was important to have these doc uments prior to verification. 
Furthermore, only a few months remai ned at that point to complete the investigation.  During that 
time, USDOC had to conduct verification of Indonesia and of APP/SMG, prepare and issue 
verification reports for both respondents, solicit and accept case and rebuttal briefs from interested 
parties, analyze all arguments raised in those briefs, and prepare the final determination and 
respond to all arguments raised by interested parties in their briefs.  
20. An investigating authority may satisfy itself as to the accuracy of submitted information " by 
conducting on the spot investigations . . . '[i]n order to verify information or to obtain further 
details. '" This obligation does not extend to "circumstances pro vided for in paragraph 7." The 
Appellate Body has explained that "it would not be possible  for investigating authorities to 'satisfy 
themselves as to the accuracy of the information ' in circumstances where interested parties refuse 
access to, or otherwise do no t provide, such information." The Panel should not interpret an 
investigating authori ty's obligations to include seeking "further details" regarding information 
necessary to its determination, where the party in possession of that information previously failed 
to provide it within a reasonable time.  If this were required, then an authority  would need to WT/DS491/R/Add.1  
 
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  satisfy itself as to the accuracy of information that was never provided , and this would nullify the 
qualifying language in Article 12.5 of the SCM Agreement.  
III.  INDONESIA 'S ARGUMENTS IN SUPPO RT OF ITS SPECIFICIT Y CLAIMS CONTINUE 
TO LACK MERIT  
 A. Indonesia 's Article 2.1(c) Claims Conflate the Separate Prongs of a Subsidy 
Analysis  
21. The requirements of Article 2.1(c) are not superfluous.  Indonesia charges that none of 
the subsidy measures at issue meet the requirements of de facto specif icity because they do not 
confer a benefit.  Whether a benefit has been conferred is a separate legal element from specificity.  
Indonesia simply ignores that USDOC examined the issue of benefit at length in its determinations, 
in USDOC 's benefit analysis, n ot in its specificity analysis.  Also, Indonesia 's argument appears to 
be premised on the contention that for a subsidy program to exist, the subsidizing Member must 
have adopted a specific written plan.  This premise is incorrect.  Nothing in the SCM Agreeme nt 
states or even implies that a subsidy program must be embodied in a written plan.  
22. Indonesia Misconstrues the Appellate Body 's Specificity Findings in US – 
Countervailing Duties (China) . The Appellate Body was looking at unwritten measures in US – 
Countervailing Measures (China) . The situation here is fundamentally different.  The subsidies here 
are evidenced by specific documents laying out a "plan or scheme."  When that is the case, there is 
no additional need to look for additional evidence of a prog ram in the form of a "systematic series 
of actions."  The United States also notes that even in the absence of written evidence, it is an 
overstatement to conclude that an investigating authority must in every case find a "systematic 
series of actions" to s upport its definition of a subsidy program.  This reads too much into the 
Appellate Body 's finding in that case.  
23. The provision of standing timber for less than adequate remuneration, the log export ban, 
and the debt buyback, all constituted written plan s or schemes.  There was no need for USDOC to 
additionally consider whether each subsidy constituted a "systematic series of actions" under 
Article 2.1(c).  With respect to the provision of standing timber for less than adequate 
remuneration and the log expo rt ban, both programs were reduced to writing.   
24. With respect to the debt buy -back, the subsidy itself – the financial contribution and benefit 
– stems from the forgiveness of debt, regardless of whether it violated Indonesian law.  Both the 
existence of  the regulation and its violation informed the "subsidy programme" analysis.  Other 
relevant documents also described the program.  The IBRA issued "terms of reference" in "early 
December 2003," which "sets out the process for bidder registration, due diligence, and 
submission of bids."  The IBRA also developed "a specific set of bid protocols for the bidding," 
which "described in some additional details the specific procedures that would be followed for the 
auctioning of the APP/SMG debt."  Those protoco ls also prohibited debt purchases from affiliated 
companies.  Thus, collectively, these documents constituted a written plan or scheme.   
25. Because affiliate Orleans purchased affiliate APP/SMG 's debt, only the specific company 
debtor is "eligible to recei ve that same subsidy."  If an unaffiliated company had purchased 
APP/SMG 's debt, there would be no financial contribution or benefit because there would be no 
debt forgiven.  The debt buy -back's structure demonstrates that, as a matter of fact, it w as de 
facto company -specific. A subsidy that is limited to one enterprise is clearly one that is provided to 
"a limited number of certain enterprises" as defined in Article 2.1(c).  Indeed, USDOC explained 
that "[a] benefit was received equal to the difference betwe en the value of the outstanding debt 
and the amount Orleans paid for it."  Indonesia 's contention that the buyback was not company -
specific because it consisted of "multiple companies" misses the point.  The terms of reference list 
the debt of "the APP Group ," "which comprises" five comp anies and their subsidiaries. All of these 
companies form the "APP Group" (or APP/SMG) and the debt for sale was aggregated.  For 
purposes of Article 2.1(c), APP/SMG constituted a "single company" whose debt was for sale.  
26. Indonesia 's suggestion that a written plan or scheme must evince an intent to 
confer a benefit is incorrect . The Appellate Body has acknowledged that "overarching purpose" 
is a factor to consider in determining whether a measure is part of a subsidy scheme,  but it does 
not follow that a subsidy cannot be de facto specific under Article 2.1(c) unless the intent of the WT/DS491/R/Add.1  
 
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  measure is clear in the plan or scheme.  Contrary to Indonesia 's argument, the SCM Agreement 
does not require that a finding of specificity is c ontingent upon intent.  Even where the written 
instruments do not on their face evince the exporting Member 's explicit intention to grant a 
subsidy, those documents can still evince a written plan or scheme if those instruments actually 
convey financial con tributions that confer benefits upon certain enterprises or industries.  That is 
the case here.  As discussed above, the licensing regime pertaining to the provision of standing 
timber for less than adequate remuneration is set forth in writing through regul ations and other 
government documents that make it possible for certain enterprises to acquire standing timber.  
The log export ban compelling logging entities to sell domestically is set forth in law.  The PPAS bid 
package that enables buyers to bid on the debt and the regulation and terms of reference that 
prohibit an affiliated sale all are reduced to writing.  
 B. USDOC Identified the Relevant Jurisdiction of the Granting Authority for the 
Debt Buyback Pursuant to the Chapeau of Article 2.1  
27. Indonesia 's remaining arguments are unpersuasive.  The jurisdiction of the granting 
authority was " 'discernible from the determination. '" Indonesia does not dispute that USDOC 
identified the particular agency within Indonesia that provided the financial contribution, the IBRA, 
which Indonesia reported "was responsible for administering the program," and which "the GOI 
created."  These findings are all that is relevant.  
28. Prior to its opening statement at the first Panel meeting, Indonesia never pointed to the 
newspape r article as supporting its specificity arguments in any way.  In any event, the points 
Indonesia cites are not mutually exclusive.  USDOC determined that certain information on the 
record of this investigation, including newspaper articles and a World Bank report, could be relied 
on as available facts under Article 12.7.   
IV. USITC 'S THREAT DETERMINATI ON IS CONSISTENT WIT H ARTICLE 3 OF THE A D 
AGREEMENT AND ARTICL E 15 OF THE SCM AGRE EMENT  
 A. The Commission 's Vulnerability Analysis Was Consistent With Article  3 of the 
AD Agreement and Article 15 of the SCM Agreement  
29. The Commission 's analysis of the domestic industry 's vulnerability to material injury in the 
imminent future was fully consistent with the non -attribution requirement under ADA Article 3.5 
and SCMA Article 15.5.  In Egypt – Rebar , the panel recognized that "[s]olely as a matter of logic, 
it would seem necessary, in order to assess the likelihood that a particular change in 
circumstances would cause an industry to begin experiencing present materi al injury, to know 
about the condition of the domestic industry at the outset."   
30. The Commission thus logically prefaced its threat analysis with a consideration of the 
condition of the domestic industry at the end of the period of investigation, which was necessarily 
the point of departure for its consideration of the likely impact of subject imports on the industry in 
the imminent future.  The conclusion that the domestic industry was vulnerable was based on 
industry 's condition at the end of the period  of investigation.  In its material injury analysis, 
moreover, the Commission expressly found that subject imports contributed to the domestic 
industry 's declining performance during the period of investigation.  The Commission noted that the 
domestic indust ry's financial indicators in 2009 may have been even worse but for the temporary 
existence of black liquor tax credit payments in that year.  The Commission considered the black 
liquor tax credit (BLTC) as a one -time event that might have obscured the full extent of the 
domestic industry 's vulnerability in 2009.  The Commission found that non -renewal of the credit 
eliminated a factor that had contributed to lower domestic like product prices in 2009, thereby 
obscuring the contribution of subject imports to pr ice depression in that year.  Given this, and the 
moderation of declining demand, the Commission found that subject imports would be a key driver 
of domestic prices in the imminent future.  
31. After it found the domestic industry vulnerable, the Commission then assessed whether the 
domestic industry was threatened with material injury by reason of subject imports, and in doing 
so considered other known causal factors and ensured that any threat from such factors was not 
attributed to subject imports.  Indones ia's argument appears to constitute nothing more than 
opposition to consideration of the vulnerability of a domestic industry in connection with threat WT/DS491/R/Add.1  
 
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  analysis.  Indonesia 's logic, moreover, seems to suggest that a finding of threat cannot be made 
absent a  finding of present injury – if vulnerability could be found only based on injury from 
subject imports, present injury caused by subject imports would be a pre -requisite.   
 B. The Commission 's Non -Attribution Analysis is Consistent With Article 3.5 of 
the AD Agreement and Article 15.5 of the SCM Agreement  
32. The Commission separated and distinguished the effects of other known factors that were at 
the same time threatening the domestic industry, consistent with the non -attribution requirement 
of ADA Articl e 3.5 and SCMA Article 15.5.  At the outset, the ITC established a causal link between 
subject imports and the threat of material injury.  The Commission then explained that subject 
imports threatened injury independent of other known causal factors.  While recognizing that the 
moderate decline in demand projected for 2011 and 2012 would limit the domestic industry 's sales 
opportunities and restrain price increases to some extent, the Commission reasoned that the 
decline would not discourage subject imports f rom significantly increasing their penetration of the 
U.S. market, given their aggressive pursuit of market share during the period of investigation 
despite declining demand, substantial new capacity to produce increased subject imports, and the 
attractive ness of the U.S. market.  The Commission also explained that the projected moderation of 
declining demand in 2011, coupled with the non -renewal of the black liquor tax credit – which 
depressed prices in 2009 – would likely make the significant increase in a ggressively -priced 
subject imports a key driver of domestic like product prices in the imminent future, likely 
depressing them to a significant degree.   
33. The Commission explained that the likely effects of nonsubject imports on the domestic 
industry wer e not of a magnitude that would render insignificant the likely effects of subject 
imports, based on the declining market share of nonsubject imports during the period of 
investigation and their higher prices relative to subject imports. Indeed, the Commis sion identified 
no injurious effects caused by nonsubject imports during the period of investigation, and 
respondents did not argue that nonsubject imports posed any threat of material injury.   
34. Indonesia concedes that respondents did not argue before t he Commission that expiration of 
the BLTC would injure the domestic industry in the future.  Rather, before the Commission, 
respondents asserted that the BLTC 's existence depressed prices, and the Commission found that 
the credit 's existence depressed price s in 2009.  The Commission also noted that the credit would 
no longer do so for subsequent years as it was not renewed.  The Commission also noted that the 
domestic industry 's financial indicators in 2009 may have been even worse than they were but for 
the temporary existence of BLTC payments in that year – a one -time factor that would not repeat.  
To the extent that the tax credits yielded any benefit to the industry, the Commission considered 
the BLTC as a one -time event that might have obscured the full ext ent of the domestic industry 's 
vulnerability in 2009.  
 C. The Commission 's Threat Analysis Was Based on Facts and Changes in 
Circumstances  
35. Indonesia 's criticisms of the Commission 's findings are based on a misreading of the 
Commission 's determinations,  and do not withstand scrutiny.  The Commission thoroughly 
explained how APP 's establishment of Eagle Ridge supported its finding that subject import volume 
was likely to increase significantly in the imminent future.  The Commission noted that in November 
2008, APP indicated to Unisource, a major purchaser, that it intended to double its exports of CCP 
to the United States from 30,000 short tons a month to 60,000 short tons per month, and was 
willing to reduce its already low prices to do so.  After Unisource  declined APP 's offer and dropped 
APP as a supplier in 2009, APP invested in the establishment of Eagle Ridge as a means of 
retaining and growing its U.S. market presence.  
36. The Commission supported with facts its conclusion that subject producers had bo th the 
ability, through excess capacity, and the incentive to increase significantly their exports to the 
United States.  Relying on authoritative RISI data, the Commission found that Chinese producers 
would likely possess 740,000 metric tons of excess capa city in 2011, equivalent to 815,709 short 
tons, even after satisfying all projected consumption growth in China and Asia.  Given this massive 
level of excess capacity, equivalent to 36.3 percent of apparent U.S. consumption in 2009, Chinese 
producers could have significantly increased their exports to the United States from 2009 levels WT/DS491/R/Add.1  
 
- B-56 - 
 
  using a fraction of their excess capacity.  Chinese producers themselves projected that exports to 
third country markets would increase by only 43,578 short tons, or 7.5 percen t, between 2009 and 
2011.   
37. The record facts also supported the Commission 's conclusion that subject producers had the 
incentive to use their excess capacity to increase significantly their exports to the United States.  In 
particular, the Commission found that APP, the leading exporter of CCP from China and Indonesia, 
was even in 2008 determined to double its exports to the United States from 2008 levels by 
reducing its already low prices, and established its own distribu tion network, Eagle Ridge, to retain 
and increase its market presence.  The Commission also found that the United States represented a 
highly attractive market to subject producers because prices in the United States were higher than 
in China or other Asian  markets, the U.S. market was large and well understood by subject 
producers, and the prevalence of spot sales and private label products would facilitate their 
increased shipments to the U.S. market.  
38. The Commission 's finding that subject imports were likely to depress domestic like product 
prices to a significant degree was also supported by facts in the record.  The Commission found 
that significant subject import underselling was likely to continue in the imminent future, thereby 
increasing demand for  subject imports, because subject imports pervasively undersold the 
domestic like product throughout the period of investigation.  In considering the likelihood of price 
depression, the Commission first noted that domestic like product prices were flat in i nterim 2010, 
and that the moderate decline in demand projected over the next two years meant that increased 
subject import volume could not be absorbed by additional demand.  The Commission then 
explained that the reduced influence of factors other than sub ject imports on domestic prices, 
meant that subject imports would become a key driver of U.S. market prices in the imminent 
future, noting that subject imports led domestic prices downward between 2008 and 2009.  The 
Commission further found that subject pr oducers were likely to use aggressive prices to increase 
their exports to the United States significantly and recoup market share lost in interim 2010 based 
on their substantial excess capacity, the attractiveness of the U.S. market to subject producers, 
APP's stated intention to double its exports to the U.S. market from 2008 levels using low prices, 
and establishment of Eagle Ridge.  As a consequence, the Commission concluded that subject 
imports would likely pressure domestic producers to lower their own prices to compete for sales 
and defend their market share, particularly given the prevalence of spot sales and the propensity 
of purchasers to quickly switch suppliers.  
39. Nor was there any inconsistency between the Commission being unable to find signifi cant 
adverse price effects in the present injury context and the Commission 's price effects findings in its 
affirmative threat determinations.  The Commission found that the moderation in declining demand 
and expiration of the black liquor tax credit would leave the likely significant increase in subject 
import volume as a key factor influencing market prices going forward.  Coupled with the likely 
intensification of subject import competition, these developments left the Commission 's well able 
to find that s ubject imports were likely to depress domestic prices to a significant degree in the 
imminent future.  
40. The Commission cited two changes in circumstances that made it likely that subject import 
competition would intensify in the imminent future.  First, t he Commission found that the massive 
excess capacity that Chinese producers were likely to possess in 2011, equivalent to 815,709 short 
tons or 36.3 percent of apparent U.S. capacity in 2009, would give them the ability and the 
incentive to increase their exports to the United States significantly.  Second, the Commission 
found that towards the end of the period of investigation, APP expressed its determination to 
double exports to the United States over 2008 levels by reducing its already low prices, and 
established Eagle Ridge to retain and expand its sales in the U.S. market.   
41. Facts also supported the Commission 's finding that the likely significant increase in subject 
import volume would come partly at the domestic industry 's expense.  The Commission f ound that 
the significant increase in subject import volume during the period of investigation coincided with a 
decline in the domestic industry 's U.S shipments.  The Commission found that subject producers 
were likely to use aggressive pricing in order to fill their massive excess capacity and recoup the 
market share lost during the interim period due to the pendency of the investigations, including 
6.8 percentage points of market share lost to domestic producers.  The Commission explained, 
moreover, that su bject producers were likely to do so, given, among other things, their massive 
excess capacity, the attractiveness of the U.S. market, the establishment of Eagle Ridge, and WT/DS491/R/Add.1  
 
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  APP's determination even in 2008, before the massive increase in Chinese producers ' capacity, to 
use lower prices to double exports from 2008 levels (this doubling in and of itself would result in 
an increase in APP shipments equivalent to over 109 percent of the volume of non -subject import 
shipments in 2009).  The ITC concluded that, in  a market with slightly declining demand, the likely 
significant increase in subject import volume, driven by significant subject import underselling, 
would likely force domestic producers to either lower their prices or relinquish market share to 
subject imports.  The Commission had ample reason for concluding that the likely significant 
increase in subject import volumes above the levels occurring during the period of investigation 
was likely to cause material injury.   
 D. The Commission Complied With the Special Care Requirement of Article 3.8 of 
the AD Agreement and Ar ticle 15.8 of the SCM Agreement  
42. For the same reasons that Indonesia fails to establish a prima facie  case that the 
Commission violated ADA Articles 3.5 and 3.7 and SCMA articles 15.5 and  15.7, Indonesia fails to 
make a prima facie  case that the Commission breached the special care requirement.  
V. THE TIE VOTE PROVISI ON OF THE U.S. STATU TE IS NOT INCONSISTE NT WITH 
ARTICLE 3.8 OF THE A DA AND ARTICLE 15.8 OF THE SCM AGREEMENT  
43. In U.S. – Line Pipe , the Appellate Body made clear that the internal decision making process 
of a Member is within the discretion of that Member, and hence not subject to dispute settlement.  
As the Appellate Body explained in Thailand – H Beams , "the focus of Articl e 3 [of the ADA] is thus 
on substantive obligations that a Member must fulfil in making an injury determination."  Not only 
do the ADA and SCMA not "mandate a specific 'internal decision -making process, '" they do not 
limit Members ' discretion in establishin g decision -making processes at all.  As the Appellate Body 
explained, it is "the determination itself" that matters, and it "is of no matter … whether that 
singular act results from a decision by one, one hundred, or —as here —six individual decision -
makers u nder the municipal law of that WTO Member."  
44. The tie vote rule is not like a substantive test that automatically excludes all low priced 
sales.  The tie vote rule operates —if at all —only after the substantive analysis and reasoning  has 
occurred.  Nor is t here any relevance to the fact that the tie vote rule determines the outcome in 
the infrequent circumstances where it applies.  Countless aspects of an authority 's structure and 
decision -making procedure can occasionally affect the outcome of an investigati on. But they do not 
change the fact that the determination 's substance is the analysis in the determination itself.   
45. The Vienna Convention on the Law of Treaties (VCLT) is clear that the terms of an 
agreement must be read "in their context" and not in isolation.  Viewed in context, the meaning is 
clear.  Special care in "consider[ing] and decid[ing]" the application of measures in cases involving 
threat of injury requires firm analytical grounding of both an investigating authority 's consideration 
of whet her a domestic industry is threatened with material injury and of the authority 's ultimate 
decision on whether such a threat exists.  In other words, the investigative and analytical steps 
that result in a measure must reflect special care both in "consider [ing]" often complex factual 
records, as well in decid[ing] the ultimate issue of whether material injury is in fact threatened.  
Special care in both "considering" and "deciding" can thus be reflected in the substantive analysis 
of the determination.  The t erm "decided" in no way suggests that the reach of the provision 
extends beyond substantive analysis.  
46. When the context of the provision is considered, it is clear that the provision requires special 
care in the substance of the decision, and that Artic les 3.8/15.8 are not addressed to the 
procedure used for ascertaining the final result of a vote.  The "special care" provisions of each 
agreement are parts of SCMA Article 15 and ADA Article 3.  The drafting history confirms the 
reading that is apparent fro m an understanding of the words in context and in light of the 
structure of the agreement: that the special care provisions concern the substantive analysis 
underlying a threat determination and not an investigating authority 's decision -making procedure.   
47. The absurd results that would follow from Indonesia 's position further confirm that special 
care does not apply to voting procedure.  A reading of the special care provision suggesting 
coverage of vote tabulation would necessarily imply structural requi rements for any investigating 
authority assigned to assess the existence of threat.  It would, for instance, call into question the WT/DS491/R/Add.1  
 
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  WTO-consistency of any authority in which a higher level official has the authority to override a 
negative recommendation on threat from one or more lower level officials.  A view of "special care" 
as implicating decision -making procedure could not logically be limited to the context of multi -
Member authorities, and thus would instead necessarily cover the process used by a singl e-
decision maker to gather and accept or reject the views of staff.  Indonesia 's understanding of how 
special care is reflected would also require intrusive examination of the decision -making process of 
individual decision -makers.  If Articles 3.8 and 15.8 d iscipline the manner in which the ultimate 
decision -making act is undertaken, determinations of threat of material injury could be subject to 
challenge in WTO dispute settlement on grounds such as that the decision -maker was not fully 
engaged in considerat ion of the matters at issue.  Such an absurd and intrusive result clearly could 
not have been what the drafters intended.  Indonesia 's proposed understanding of Articles 3.8 and 
15.8 also implies that a threat of injury determination requires a higher voting  majority than an 
injury determination.   
48. The vote aggregation practices of four other Members cited by Indonesia are irrelevant.  
Indonesia 's attempt to defend the point 's legal relevance is unavailing, and reflects 
misunderstanding of the VCLT and the Appellate Body 's understanding of the import of post -
agreement developments.  Further, the variety of approaches to resolving or avoiding tie votes 
taken by different Members simply serves to underscore that the internal decision -making process 
is not presc ribed by the ADA or SCMA.  Equally meritless is Indonesia 's defense of its invocation of 
developing country status.   
49. Nothing about the tie vote provision precludes the application of special care in any 
proceeding involving threat of material injury.  In the event that the Commission makes an 
affirmative threat determination, regardless of the vote tally, those Commissioners voting in the 
affirmative will draft a written determination explaining their reasons, which may then be reviewed 
by a WTO panel for  consistency with the ADA and SCMA.  Accordingly, even in the event of a tie 
vote, nothing in the tie vote provision would prevent the Commission from issuing an explanation 
for its affirmative threat determination that is fully consistent with the ADA and the SCMA, 
including the special care requirement.  For Indonesia 's as-such claim against the tie vote provision 
to succeed, Indonesia would have to establish that the tie vote provision compels the Commission 
to violate the special care provision.  Yet the C ommission retains the discretion under the tie vote 
provision to issue affirmative threat determinations that comply fully with the special care 
provision, even in the event of a tie vote.  Looking to the substantive analysis ensures that trade 
remedies hav e an appropriate substantive underpinning, regardless of the number of members of 
a multi -member investigating authority that endorsed the determination.   
50. A requirement to use "special care," even if included in some hypothetical treaty provision 
explicitly addressed to the process of administrative decision making, would not rule out a 
procedure in which a tie vote resulted in a certain outcome.  Under the ordinary meaning of 
"special care," there would be no basis to conclude that a tie -breaking rule s omehow means that a 
State had provided some sort of reduced level of care in its administrative process.  An 
administrative decision does not reflect any less care just because it results from a tie -breaking 
procedure.  A tie vote rule is simply a means of a nticipating and resolving in a uniform manner a 
possible situation (that is, a tie vote) that could occur when a decision is taken by an even number 
of people.   
51. Indonesia 's panel request asserts no claims under AD Agreement Article 3.1 or SCM 
Agreement  Article 15.1.  The claim that Canada seeks to have the panel resolve is thus 
fundamentally different from the one raised by Indonesia, and outside the panel 's terms of 
reference.  In any event, there is nothing about the tie vote provision that is inconsist ent with the 
"objective examination" requirement in Articles 3.1 and 15.1.  Like the remainder of Articles 3 and 
15, this requirement does not serve as a discipline on decision -making procedure.  Moreover, the 
tie vote rule certainly causes no "disregard[]"  for any vote when applied in the threat context.  The 
rule is simply a means of anticipating and resolving in a uniform manner a possible, albeit not 
common, situation that could occur when a decision is taken by an even number of people.   WT/DS491/R/Add.1  
 
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  EXECUTIVE SUMMARY  OF U.S. OPENING ORAL  STATEMENT AT THE SEC OND 
SUBSTANTIVE MEETING OF THE PANEL  
I. INDONESIA 'S CLAIMS REGARDING T HE COUNTERVAILING DU TY DETERMINATION 
ARE WITHOUT MERIT  
52. Whatever name Indonesia wishes to use for its stumpage program, USDOC 's well-reasoned 
determination properly found that this program confers a subsidy.  This stumpage program is very 
similar to the description of how Canadian provinces administered their stumpage programs in US 
– Softwood Lumber IV . The panel and Appellate Body  in that case found that Canada 's stumpage 
regime constituted a subsidy.  The fact that Indonesia now relies upon – namely, that plantation 
owners may undertake tasks associated with growing and harvesting cultivated timber (versus 
"pre-standing" timber)  – changes nothing.  Moreover, it is irrelevant whether the land for which 
concessions were granted is degraded.  Rather, the salient point is that without the government 's 
provision of timber for less than adequate remuneration, the logging companies would hav e had to 
procure it at market price.  This conclusion was drawn from the record evidence and was reasoned 
and adequate.  
53. USDOC, in accordance with Article 12.1 of the SCM Agreement, asked the interested parties 
to provide evidence of private sales that c ould be used to establish in -country benchmarks.  
Indonesia responded that it did not collect or maintain information that could be used for that 
purpose – i.e., the only data available was aggregate data, not species -specific data.  APP/SMG 
provided partial  information about a single, private arrangement, but its payment records do not 
support the existence of this arrangement.  Furthermore, APP/SMG never provided any underlying 
documentation that USDOC requested or argued that this arrangement was relevant t o USDOC 's 
benchmark analysis.  Clearly, Indonesia and APP/SMG are the parties in the best position to 
provide data that pertains to activity in their jurisdiction and sourced from primary sources in the 
Indonesian language.  The GOI and APP also had direct a ccess to other parties with whom they 
have commercial relationships or ties; and in APP/SMG 's case, its own company records.  Indonesia 
has not explained why USDOC is likely to succeed where the interested parties failed through 
requests for information fro m non -interested parties who have no obligation or incentive to 
cooperate.  By analogy, the Appellate Body 's finding in US – Wheat Gluten  is that investigating 
authorities do not have "an open -ended and unlimited duty to investigate all available facts that  
might possibly be relevant."  The question is not whether Indonesia might have conducted the 
investigation differently, or weighed the facts differently, but whether the USDOC provided a 
reasoned and adequate explanation for its determinations.  
54. With re gard to Indonesia 's Article 12.7 claim, it must be recalled that the bidding documents 
pertaining to the other PPAS sales were necessary for USDOC to have a baseline for understanding 
whether the IBRA 's due diligence procedures – of which there were no for mal written procedures – 
were applied more deferentially for the APP/SMG debt sale than other sales.  USDOC was only 
requesting those documents because Orleans ' ownership information was already missing from the 
record.  Thus, USDOC relied on the news articl es, report, and expert summary evidence in finding 
the companies affiliated.  They must be viewed collectively and not piecemeal for what they 
represent.  Read together, this evidence suggests that the IBRA was allegedly allowing debtors to 
buy back their de bt through third parties, and with specific regard to the Orleans transaction, that 
there were "long -running creditor suspicions that APP/SMG has been surreptitiously been buying 
back its debt."  Indonesia also claims that the independent expert summary is,  on its face, 
speculative.  Indonesia bases this claim on the diction in the report that the expert "believed the 
speculation" that affiliated parties are buying back debt. The word "speculation" in this excerpt 
refers to others ' opinions, which was one ele ment of the evidence examined by the expert.  Nothing 
in the report, which examined diverse sources of information, supports the view that the expert 's 
own opinion was speculation.  
55. Indonesia has not challenged the evidence upon which USDOC relied in fin ding the debt 
buyback de facto company -specific.  Indonesia 's Article 2.1(c) challenge in this dispute is whether a 
subsidy program exists as a precursor to USDOC 's de facto specificity analysis.  With regard to the 
issue Indonesia has challenged here, the s ubsidy program 's existence in the form of a plan or 
scheme is comprised of the terms of reference, the bid protocol, and other documents stipulating 
the conditions of sale.  WT/DS491/R/Add.1  
 
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  II. SYSTEMIC CONCERNS WI TH INDONESIA 'S ARGUMENTS  
56. First, Indonesia raises arguments that are tantamount to requests for a de novo  review of 
the factual record.  Second, Indonesia relies on supposed legal principles that are not applicable to 
the facts in this dispute, and/or that lack any basis in the cove red agreements.  Third, Indonesia 's 
arguments and theories have continued to change during the course of these Panel proceedings 
and are untimely.  
III. INDONESIA 'S CLAIMS REGARDING T HREAT OF MATERIAL IN JURY ARE WITHOUT 
MERIT  
57. Indonesia 's second written s ubmission reinforced that Indonesia 's claims concerning the 
threat determination rest on misreading of the ITC 's well -reasoned determination and on 
misunderstanding of the WTO disciplines concerning threat.  The ITC based its finding that the 
industry was v ulnerable on the industry 's weak condition at the end of the period of investigation, 
according to most measures of industry performance. Having established the baseline condition of 
the industry, the Commission proceeded to consider the questions of threa t and non -attribution.  It 
is obvious that the impact of subject imports going forward will depend on the baseline condition 
of the domestic industry.  Indeed, it is unclear as a matter of logic how one could construct a 
hypothetical, imaginary domestic indu stry where the only factor bearing on its performance was 
subject imports.  Indonesia 's alternative approach is also inconsistent with the requirement that 
investigating authorities address threat in the context of the economic factors set out in ADA 
Article 3.4 and SCMA Article 15.4 "to establish a background against which to evaluate the effects 
of future dumped and subsidized imports."  Acceptance of Indonesia 's position would as a practical 
matter eliminate the possibility that an investigating authority could ever find threat of material 
injury.   
58. Indonesia 's second written submission contains numerous mischaracterizations of what the 
Commission actually found.  These mischaracterizations form the foundation for Indonesia 's claims 
that the Commission 's analysis was flawed, or failed to account for relevant factors.  As explicitly 
set forth in the determination, the Commission based its vulnerability finding on the domestic 
industry 's declining performance during the POI, and not on declining demand or exp iration of the 
BLTC.  The Commission, moreover, noted connections between subject imports and the domestic 
industry 's declining shipments and prices.  It is simply not the case that BLTC was an aspect of 
"normal market conditions."  To the contrary, the credit paid benefits in only one year, 2009, and 
the Commission properly took that into account.  During the investigation, Indonesian respondents 
themselves argued that the credit harmed the domestic industry in 2009 by reducing prices, and 
the Commission agreed.   
59. The Commission considered the totality of the evidence and issued a well -reasoned 
determination.  APP itself stated – before losing the Unisource account – that its goal was to double 
shipments to the United States by reducing its already low p rices.  APP lost Unisource as a 
distributor after Unisource refused to assist, and Eagle Ridge provided a vehicle to accomplish 
APP's stated goal notwithstanding the loss of Unisource.  That APP did not immediately realize its 
goal of doubling shipments in n o way detracts from the Unisource affidavit.  Likewise, that the 
domestic industry 's market share gain in 2010 resulted from preliminary duties in no way 
undermines its significance, nor was that gain remotely the only basis for the Commission 's view 
that s ubject import volumes would increase significantly in the absence of orders.    
60. Facts supported the Commission 's conclusion that subject imports were likely to increase 
significantly in the imminent future, in significant part at the expense of domestic  producers.  The 
Commission found that subject imports adversely affected the domestic industry during the period 
of investigation.  The Commission explained that subject producers would be in a better position to 
take sales from domestic producers in the im minent future than they were during the 2007 -2009 
period due to clearly foreseen and imminent changes in circumstances; namely, the excess 
capacity that Chinese producers were likely to possess in 2011, and APP 's establishment of Eagle 
Ridge.  The Commissio n found it likely that subject producers would use their massive excess 
capacity to increase exports to the United States significantly based on their familiarity with the 
large U.S. market; the higher prices available there, relative to China and other ma rkets in Asia; 
the prevalence of spot sales and private label products in the U.S. market, which would enable 
subject producers to quickly gain market share; and crucially, APP 's stated intent to double its 
exports to the U.S. market by reducing its alread y low prices.  Because demand was projected to WT/DS491/R/Add.1  
 
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  decline, the significant increase in subject import volume that was likely would necessarily take 
sales from existing suppliers, including the domestic industry.  
IV. THE ITC 'S TIE VOTE PROVISION  IS FULLY CONSI STENT WITH AD AGREEM ENT 
ARTICLE 3.8 AND SCM AGREEMENT ARTICLE 15 .8 
61. The special care obligation applies to the substantive requirements for a determination of 
threat; it does not relate to an investigating authority 's decision -making procedure.  The spec ific 
placement of the special care provisions within the AD and SCM Agreements, as well as the text of 
other portions of those agreements, make this clear.  Nothing in the text of the ADA or SCMA 
requires investigating authorities to make affirmative threat  determinations by majority vote, or to 
treat tie votes in any particular way.  This is confirmed by the fact that, where the AD and SCM 
Agreements do discuss procedural matters – in connection with things other than decision -making 
– they are explicit.  It is further confirmed by the drafting history.  The process of determining the 
outcome where members of a multi -member body disagree is, as the Appellate Body explained in 
US – Line Pipe,  "entirely up to WTO Members in the exercise of their sovereignty."   
62.  "View[ing]," "contemplat[ing] attentively," "survey[ing]," "examin[ing]," "inspect[ing]," and 
"scrutinize[ing]," all involve non -decisional consideration and analysis.  This understanding of 
consideration is confirmed by the language of Articles 3.7/15.7 , which notes factors which must be 
"consider[ed]."  By contrast, "deciding" – "bring[ing] to a resolution or conclusion" – involves 
assessment of the ultimate question.  In other words, the special care requirement speaks to both 
the substantive analysis of  the ultimate question and the way that underlying or intermediate 
issues were viewed, contemplated, or scrutinized.  Understanding that the requirement is about 
substantive analysis is fully consistent with the wording of Articles 3.8/15.8 even when it is taken 
in isolation.  
63. The logic of Indonesia 's arguments would not permit a unitary decision -maker to determine 
threat.  A single, politically motivated individual 's vote would result in a threat determination in 
that context – even if countless professional staff serving under the political decision maker 
concluded that threat had not been established.  However, the number of decision makers at an 
investigating authority or the means of resolving disagreements among them are not addressed by 
the A D Agreement or SCM Agreement.  Those agreements have detailed provisions on the 
substance of determinations to ensure that they are adequately grounded.    
EXECUTIVE SUMMARY OF  SELECTED RESPONSES O F THE UNITED STATES TO THE 
PANEL 'S QUESTIONS FOLLOWIN G THE SE COND PANEL MEETING  
I. "AS APPLIED" CLAIMS WITH RESPECT TO THE USITC'S THREAT OF IN JURY  
DETERMINATION  
64. This proceeding is a review of whether the ITC based its threat determination on positive 
evidence on the administrative agency record, and whether ITC  presented a reasoned and 
adequate explanation for its determination.  This proceeding is not a de novo review, where 
disputing parties are entitled to present oral testimony on what may or may not have occurred 
with respect to the market.  The Commission 's threat analysis was supported by facts and clearly 
foreseen and imminent changes in circumstances.  
65. Indonesia 's claim that the Commission breached the special care requirement is derivative of 
its claims of "specific violations" under ADA Articles 3.5 a nd 3.7 and SCMA articles 15.5 and 15.7.  
Having failed to establish a prima facie  case that the Commission committed any of the specific 
violations alleged under ADA Article 3.5 and 3.7 or SCMA Article 15.5 and 15.7, Indonesia has also 
failed to establish a  prima facie  case that the Commission breached the special care requirement.  
There is no basis for suggesting that Articles 3.8 or 15.8 require an investigating authority to 
resolve some percentage of issues – or "key" issues – in an AD or CVD investigatio n in favor of 
respondents instead of resolving each based on analysis of the facts and application of the 
applicable legal standards.  To the extent that Indonesia is attempting at this point to assert any 
independent argument with respect to the Commission 's analysis of any subject, the moment for 
doing so has long passed.  But in any event, the Commission cited ample factual support for its 
analysis.   WT/DS491/R/Add.1  
 
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  II. "AS SUCH" CLAIMS UND ER ARTICLES 3.8 OF T HE ANTI -DUMPING AGREEMENT AN D 
15.8 OF THE SCM AGRE EMENT CONCERN ING SECTION 771 OF T HE TARIFF ACT OF 
1930  
66. With respect to ADA Article 3.8 and SCMA Article 15.8, the obligation is not that the 
investigating authority must reach a negative determination in the presence of finely balanced 
facts, but rather that the in vestigating authority is to consider and decide the application of duties 
in threat cases with special care.  Deciding with special care in the context of finely balanced facts 
does not imply reaching a negative determination.  Rather, one decides with speci al care by 
thinking carefully about the decision – evaluating relevant considerations thoroughly to reach a 
well-reasoned conclusion.  So long as an investigating authority 's decision reflects this kind of 
reasoning, there is no reason that "special care" w ould require one outcome or another in a 
situation presenting finely balanced facts.  
67. To prevail on an as -such claim, the complaining Member has the burden of establishing that 
the statute mandates a WTO -inconsistent result, and that absolutely no disc retion is providing to 
administering authorities to take decisions that comply with WTO rules.  The text of the agreement 
requires consideration and decision with special care; what it does not require is that special care 
be reflected in each step of the d ecisionmaking process.  So long as the obligation to apply special 
care at some point in the decisionmaking process is not precluded  by the statutory provision at 
issue, then there is no legal basis for finding that the statutory provision requires a breach  of the 
obligation stated in Articles 3.8/15.8.  The U.S. statute at issue does not forbid the Commissioners 
from exercising special care in their threat determinations.  Accordingly, and leaving aside that a 
tie breaking rule does not involve "special care"  or "regular care", the U.S. statute cannot be in 
breach of Articles 3.8/15.8, because the statute fully allows the decisionmakers to apply "special 
care" in every other aspect of the process.  Any finding that Articles 3.8/15.8 applied to each step  
in the decisionmaking process, and that a tie vote rule was somehow inconsistent with "special 
care," would amount to substantial over -reach by the WTO dispute settlement system.  It would 
not be credible for the DSB to find that ADA Article 3.8 and SCMA Article 1 5.8 could be expanded 
from beyond their plain text to support a determination that the United States ' choice to apply 
special care at the stage of Commissioners ' decisionmaking was somehow inconsistent with the 
ADA and SCMA.   
68. The "special care" provisions of the ADA and SCMA do not discipline decision -making 
procedure.  However, even if ADA Article 3.8 and SCMA Article 15.8 were deemed to set out a 
requirement that could be satisfied by means of a particular decision -making rule, the tie vote 
provision would still be fully consistent with the discipline, as there would be no need for any 
particular decision -making rule – and certainly no need for any particular rule concerning the 
handling of tie vote situations – to satisfy the requirement.  The ru le would be satisfied in any 
particular case provided that the requisite analytical rigor had been applied.  
 
_______________  
 
 WT/DS491 /R/Add.1  
 
- C-1 - 
 
  ANNEX  C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex C -1 Integrated exe cutive summary of Brazil  C-2 
Annex C -2 Integrated exe cutive summary of Canada  C-5 
Annex C -3 Integrated executiv e summary of the European Union  C-8 
Annex C -4 Integrated exe cutive summary of Turkey  C-12 WT/DS491 /R/Add.1  
 
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  ANNEX C -1 
INTEGRATED EXECUTIVE  SUMMARY OF BRAZIL  
INTRODUCTION  
1. In Brazil 's oral statement and answers to the Panel 's questions, the following aspects were 
highlighted:  
i) Whether export restrictions can be considered to accord a financial contribution in 
the sense of Article 1.1(a) of the SCM Agreement  
2. In Brazil 's view WTO law does not authorize equating the economic effects of export 
restrictions applied to inputs with  the granting of a subsidy to the upstream market. While it is 
likely that export restraints will result in increased supply of the restrained good, this is not 
sufficient, in and of itself, to establish government entrustment or direction.  
3. Brazil does  dispute that that export restraints can be associated with a subsidy. Whether 
there is entrustment or direction in the provision of goods subject to export restraints needs to be 
assessed on a case -by-case basis and cannot be inferred from a mere referenc e to the declared 
policy objective of the export restriction of adding value to a Member's exports.  
ii) To which extent the predominant presence of the Government in the market would 
authorize the rejection of in -country prices as benchmark  under Article 1 4(d) of the 
SCM Agreement  
4. Price distortion is a determinant factor to allow the departure of an in -country benchmark, 
as recorded by the Appellate Body in United States – Definitive Anti -Dumping and Countervailing 
Duties on Certain Products from China . However, a mere finding of the government's substantial 
presence in a given market is not a definitive feature to allow for the use of an out -of-country 
benchmark.  
5. In cases where the government has a predominant presence in the market as a provider of 
goods, it is likely that private suppliers would align their prices with those of the government in 
order to maintain their market share. However, the distortion analysis that the investigating 
authority has to make should be performed on a case -by-case bas is. Other evidence could be 
analysed when market conditions, including quality, availability, marketability, transportation and 
other conditions of purchase or sale, as described in Article 14(d) of the SCM Agreement, would 
allow a private supplier to devi ate from the government given price and still maintain its market 
share.  
6. Where the dominant presence of the government occurs in the initial stages of the chain of 
production, investigating authority should demonstrate the passing through effect in ord er to 
disregard domestic prices of the input. It is necessary to assess whether the price paid by the 
downstream producer for the input was effectively lower than it would have been in the absence of 
the government 's dominant presence in the initial stages  of the production chain. In some 
circumstances, the subsidy to the upstream producer may not result in lower prices charged to the 
downstream producer. Therefore, as per Article 14(d) of the SCM Agreement, there would not be a 
provision of goods for less than adequate remuneration, and thus no benefit would be conferred to 
the downstream producers.  
iii) The standard under Article 12.7 of the SCM Agreement with regard to the use of 
"facts available " 
7. Brazil considers that the "adverse facts available" met hodology recurrently employed by the 
United States is based on a biased interpretation of Article 12.7 of the SCM Agreement. 
Article  12.7 does not grant investigating authorities a blanket authorization to "select" facts 
available to worsen the situation o f the respondents. Although it indeed was conceived to "ensure 
that the failure of an interested party to provide necessary information does not hinder an 
agency 's investigation"1, as the United States recalled, it does not permit departing from the facts 
available to arrive at biased conclusions, in disfavour of the investigated party. The objective and 
                                                
1 US FWS p. 102.  WT/DS491 /R/Add.1  
 
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  rationale of Article 12.7 is to allow for the replacement of the missing necessary information with a 
view to arriving at an accurate determination2. 
8. It follows that the correct legal standard of this provision requires, first and foremost, a 
comparative evaluation of all available evidence with a view to selecting the best information that 
"reasonably replaces the information that an interested party fai led to provide"3. The proper 
application of Article 12.7 also requires a connection between what is required from the 
investigated party and what is necessary to carry out an investigation. Although the investigating 
authority enjoys some level of discreti on in conducting an investigation, it is not allowed to submit 
questions that are irrelevant or extraneous to the matter at hand, that are "not necessary", and 
then, when informed about such irrelevance or impertinence, simply reaches the conclusion that 
an interested party was non -responsive or that there was no cooperation, thus triggering the use 
of adverse facts available. The conditions under Article 12.7 to rely on "facts available" are limited 
and must be interpreted accordingly. As the Appellate Bod y had clarified "Article 12.7 is not direct 
at mitigating the absence of 'any' or unnecessary" information but rather is concerned which 
overcoming the absence of information required to complete a determination".4 The information 
required in this sense mu st be reasonable and in line with the necessity of the investigation, 
otherwise the burden to the investigated country is heavier than it should be.    
9. Moreover, in what concerns the submission of new evidence at verification, Brazil considers 
that addit ional clarifications may be submitted at the beginning of the on -the-spot verification and 
may be taken into account whenever it can be verifiable without excessive difficulties. Additionally, 
investigating authorities are required to consider new evidence  presented at verification whenever 
this evidence represents the "best information available". As the Appellate Body has explained in 
para 4.419 of US – Carbon Steel (India),  
"It would frustrate the function of Article 12.7, namely, to "replac[e] informat ion that 
may be missing, in order to arrive at an accurate subsidization or injury 
determination", if certain substantiated facts were arbitrarily excluded from 
consideration. In addition, we note that the participants agree that Article 12.7 should 
not be  used to punish non -cooperating parties by choosing adverse facts for that 
purpose. Rather, the participants agreed at the oral heari ng that the function of 
Article  12.7 is to replace the missing "necessary information" with a view to arriving at 
an accura te determination."   
10. In Brazil 's view, investigating authorities would not be justified in refusing to accept a piece 
of evidence at verification because it was arguably not provided in a timely fashion, and, at the 
same time, relying on evidence that d o not "reasonably replace the information that an interested 
party failed to provide".5 Therefore, the need to rely on the "best information available" when 
making a determination serves as relevant context for the interpretation of the obligations of 
investigating authorities regarding whether to allow new evidence during verification.  
11. Furthermore, the failure to provide information must be assessed in light of the amount and 
the specificity of information required by investigating authorities. In oth er words, the 
investigating authority should evaluate the amount of information required, the efforts applied by 
the interested party in gathering this information and what was in fact presented. The 
investigating authority must take into account that comp anies and Members may face some 
difficulties, such as complex organizational structure or legal constraints that may hinder the 
timely provision of the information requested.  
12. In situations such as these, and considering the extent of the information re quested, the 
assessment of compliance with Article 12.7 should take into consideration the effort applied by the 
interested party to provide the information. When investigating authorities require a large amount 
of information, an equivalent large amount o f effort will be required from a given country or 
company to provide such information. Thus, even though the information supplied may not be 
ideal in all aspects, this should not justify its disregarding - even less so resorting to facts that 
have no conne ction with the investigation - provided that the interested party has acted to the 
best of its ability.  
                                                
2 AB Report. United States – Countervailing Measures on Certain Carbon Steel Flat Products from India . 
p. 4.419.  
3 US FWS p. 109.  
4 AB Report US  – United States – Countervailing Measures on Certain Carbon Steel Flat Products from 
India. p. 4.416 . 
5 Appellate Body Report, Mexico  – Anti-Dumping Measures on Rice  (DS 295), para. 294.  WT/DS491 /R/Add.1  
 
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  iv) The analysis of causation and change of circumstances in the threat of injury 
determination  
13. On the matter of causation, Brazil finds that consid ering the lifting of preliminary duties 
among the factors that account for a change in circumstances is difficult to reconcile with a strict 
analysis of causation. For one thing, whenever preliminary duties are lifted, an increase of imports 
into the domes tic market is likely to happen. It is only natural that market will progressively return 
to the situation before the imposition of the duties. In this situation, one cannot properly speak of 
a change in circumstances.  
14. In addition, Brazil considers impo rtant that the Panel assess whether differences between 
the market situation and the behaviour of subject imports during the period of investigation, on 
the one hand, and the situation predicted to take place in the future, on the other hand, would 
amount to a change in circumstances. As Brazil sees it, the data on the record6 show that the 
market situation and the behaviour of subject imports were not expected to experience significant 
change. One could notice that a similar situation to the one foreseen f or the future periods has 
already happened during the period of investigation. In said period, none of the effects relied on 
by the Commission for the positive determination of threat of injury, price suppression and gain of 
market share for the subject im ports, occurred.  
v)  The obligation to consider and decide with special care in Article 3.8 of the ADA 
and 15.8 of the SCM  
15. Brazil is of the opinion that voting procedures are an internal matter left to the discretion of 
each WTO Member, and, as a rule,  are not directly addressed by the ADA and SCM Agreements. 
This understanding was corroborated by the Appellate Body in US – Line Pipe . However, Brazil 
considers that what is at stake in this dispute are not voting procedures per se , but rather the 
determi nation of the step in the US process of analysis in which the application of anti -dumping 
measures should be considered and decided with special care.   
16. In Brazil 's view, the ADA distinguishes the moment of fulfilment of substantive requirements 
and the  moment of the application of anti -dumping measures. The text of the ADA substantiates 
this understanding. First, the negotiators of the ADA chose to treat these two topics into two 
separate articles: article 5, Initiation and Subsequent Investigation; and  article 9, Imposition and 
Collection of Anti -Dumping Duties. As Article 9.1 specifies, once the requirements for the 
imposition of duties are fulfilled, there are still two separate decisions to be made: whether or not 
to impose an anti -dumping duty and t he amount of the anti -dumping duty to be imposed (full 
margin or lesser duty).  
17. For reference, in the Brazilian trade remedies system, this separation can be clearly 
observed, since there are two different institutions responsible for the anti -dumping,  subsidies and 
safeguard investigations and for the decision about the application of the measures.  
 
18. Brazil acknowledges the legislation of some Members, such as the US, may not distinguish 
between the moment of the fulfilment of the substantive requirements and that of the application 
of the measure. However, this does not exempt those Members from the o bligation of considering 
and deciding the application of anti -dumping duties with special care, even if it happens in the 
same moment as the fulfilment of the substantive requirements.  
 
19. What is before the Panel is whether the Commission is voting on t he application of anti -
dumping measures or on the fulfilment of substantive requirements. The former would entail the 
duty to exercise special care. As the Appellate Body has found "a degree of attention over and 
above that required of investigating author ities in all anti -dumping and countervailing duty injury 
cases is required in the context of cases involving threat of material injury "7. Independently of 
when those two determinations happen (in the same moment in time or not), the duty to exercise 
specia l care still exists.  
 
20. Based on this understanding, Brazil finds that a rule providing that a tie vote shall always 
result in the application of anti -dumping duties seems not to be in line with the obligation to 
exercise special care under Article 3.8 of the ADA.   
                                                
6 U.S. FWS, Exhibit US -1, table C -3. 
7 US – Softwood Lumber VI (Panel) , para. 7.33.  WT/DS491 /R/Add.1  
 
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ANNEX C -2 
INTEGRATED EXECUTIVE  SUMMARY OF CANADA  
I. INTRODUCTION  
1. Canada intervenes in these proceedings because of its systemic interest in the proper legal 
interpretation of certain provisions of the Agreement on Subsidies and Countervailing Measures 
(SCM Agreement) and the Agreement on Implementation of Article VI of the General Agreement 
on Tariffs and Trade 1994  (Anti-Dumping Agreement) that are raised in this dispute.  Canada's 
submissions address the following issues: the rejection of in -country prices as benchmarks under 
Article 14(d) of the SCM Agreement, the trea tment of export restraints as a subsidy, the use of 
facts available under Article 12.7 of the SCM Agreement, and the inconsistency of the 
United  States  International Trade Commission (USITC) tie vote rule with Article 3.8 of the Anti -
Dumping Agreement and Article 15.8 of the SCM Agreement.   
II. THE UNITED STATES DE PARTMENT OF COMMERCE  ACTED INCONSISTENTLY  WITH 
ARTICLE 14(D) OF THE  SCM AGREEMENT IN RES ORTING TO AN OUT -OF-COUNTRY 
BENCHMARK  
2. With respect to the appropriate benchmark, in the Coated Paper investigation the U.S. 
Department of Commerce (USDOC) rejected in -country standing timber prices and instead 
resorted to Malaysian pulp log export prices.  It justified its decision summarily in the following two 
sentences: "the [Government of Indonesia] cl early plays a predominant role in the market for 
standing timber.  As such, we determine that there are no market -determined stumpage fees in 
Indonesia" . 
3. This justification is insufficient to warrant resort to an out -of-country benchmark under 
Article 14 (d) of the SCM Agreement.   
4. The Appellate Body has indicated that an investigating authority must establish price 
distortion in a market based on the particular facts underlying each countervailing duty 
investigation before rejecting in -country prices on  that basis.  Even where evidence indicates that 
the government is a predominant supplier of goods, evidence other than government market share 
must be considered and analyzed before an investigating authority can conclude that there has 
been market distort ion. This may include evidence regarding the structure of the relevant market, 
the type of entities operating in that market and their respective market share, any entry barriers, 
and the behavior of the entities operating in that market.1 
5. The Appellate  Body has therefore cautioned against equating government predominance 
with price distortion.  Yet, this is precisely what the USDOC did in the Coated Paper investigation.   
III. EXPORT RESTRAINTS DO  NOT CONSTITUTE A SUB SIDY  
6. Regarding export restraints, C anada notes that Indonesia's panel request does not contain a 
claim that the USDOC improperly found that Indonesia's log export ban constitutes a financial 
contribution.  Accordingly, Canada requests that the Panel make no findings with respect to 
whether I ndonesia's log export ban constitutes a financial contribution.  
7. That said, Canada disagrees with the U.S. position that export restraints can constitute 
financial contributions.  
8. Previous panels have considered different forms of export restraints.  None has found them 
to constitute financial contributions.  Moreover, the panel in US – Countervailing Measures (China)  
                                                
1 Depending on the factual circumstances of a given case, different types of evidence may establish that 
the remaining portion of the market is not influenced by the predominant presence of the gove rnment as a 
supplier.  For example, evidence regarding the manner in which the government sets prices for the goods it 
supplies may indicate that the market is not influenced by its predominant presence.  In particular, a 
government that sets prices in a mar ket-determined manner, such as through an auction mechanism, would 
not, despite its predominant presence in the market, distort private prices in that market.   WT/DS491 /R/Add.1  
 
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  indicated that allegations predicated solely on the existence of the export restrictions and their 
suppressing effect on prices were an ins ufficient basis on which to even initiate a countervailing 
duty investigation.   
IV. THE USE OF FACTS AVA ILABLE UNDER ARTICLE  12.7 OF THE SCM AGRE EMENT IS 
SUBJECT TO RIGOROUS CONDITIONS  
9. In terms of the use of facts available in the Coated Paper investiga tion, Canada notes that 
the USDOC applied adverse facts available to conclude that Asia Pulp and Paper/Sinar Mas Group 
(APP/SMG) and Orleans were affiliated companies, which would mean that APP/SMG was 
effectively allowed to repurchase its own debt at a di scounted rate.  
10. When deciding whether the USDOC's use of facts available is consistent with Article 12.7 of 
the SCM Agreement, the Panel should pay particular attention to four elements of the applicable 
legal framework.  
11. First, Article 12.7 limits t he use of facts available to replace necessary information that is 
missing from the record of the investigation.  In this case, the Panel must determine whether 
detailed information pertaining to unrelated Government of Indonesia debt sales was necessary fo r 
ruling on the affiliation between APP/SMG and Orleans.  
12. Second, Article 12.7 requires that, before being entitled to apply facts available, an 
investigating authority afford a reasonable period of time for an interested party to respond to a 
request f or information.  The Panel must therefore determine whether the USDOC gave enough 
time to the Government of Indonesia to respond to the requests for information at issue.  
13. Third, in applying Article 12.7 to the facts of this case, the Panel should also t ake into 
account the fact that Article 12.7 is informed by the due process rights set out under Article 12 of 
the SCM Agreement, and the detailed guidance on the application of facts available set out under 
Annex II of the Anti -Dumping Agreement.  In accord ance with these protections, an investigating 
authority must take due account of the difficulties experienced by interested parties in supplying 
information requested.  An investigating authority must also refrain from rejecting information on 
the basis tha t it is not ideal in all respects, if an interested party acted to the best of its ability.  
14. Fourth, whether an investigating authority is affirmatively required to accept information 
provided at on -site verification will ultimately depend on the factu al circumstances of a given case.  
The Appellate Body in C hina – HP-SSST (Japan) / China – HP-SSST (EU)  indicated that an 
investigating authority’s latitude to reject information provided at on -site verification or thereafter 
is constrained by the obligatio n to ensure that the information relied upon is accurate and by the 
legitimate due process interests of the parties to an investigation.  
V. THE TIE VOTE PROVISI ON OF THE U.S. STATU TE IS INCONSISTENT W ITH 
ARTICLE  3.8 OF THE ANTI -DUMPING AGREEMENT AN D ARTICLE 15.8 OF THE 
SCM AGREEMENT  
15. With respect to Indonesia's "as such" claim, Canada recalls that U.S. law mandates that all 
tie votes among the six USITC Commissioners are resolved in favour of an affirmative finding of 
injury.  This rule is inconsist ent with key provisions of the Anti -Dumping and SCM Agreements 
concerning injury investigations.   
16. Article 17.6 of the Anti -Dumping Agreement mandates that investigating authorities conduct 
an "unbiased and objective" evaluation of facts on the record.  With respect to injury 
determinations, Article 3.1 of the Anti -Dumping Agreement and Article 15.1 of the SCM Agreement 
also require that investigating authorities base their findings on positive evidence and conduct "an 
objective examination" of the releva nt evidence concerning dumping or subsidization.2 
                                                
2 The "objective examination" obligation in Articles 3.1 and 15.1 is contextually relevant to th e special 
care requirement in Articles 3.8 and 15.8 because it informs the operation of all of the substantive rules 
governing injury determinations in Articles 3 and 15. In other words, the obligation to conduct an objective 
examination must be read into all of the rules governing injury determinations. This was confirmed by the 
Appellate Body in Thailand – H-Beams and by the panel in US – Softwood Lumber VI .  WT/DS491 /R/Add.1  
 
- C-7 - 
 
  17. The Appellate Body has repeatedly indicated that conducting an "objective examination" 
entails evaluating facts in an "even -handed" manner without prejudging the outcome of an 
investigation.  It is settl ed law that an investigating authority must not favour the interests of any 
interested party, or group of interested parties, when making injury determinations.  
18. The tie vote rule cannot be reconciled with the "objective examination" requirement.  It 
effectively creates two different standards for petitioners and respondents that appear before the 
USITC: affirmative injury determinations only require the support of three USITC Commissioners 
while negative injury determinations require the support of four.  In the event of a tie, the vote of 
one of the Commissioners in favour of a negative injury determination is effectively disregarded.  
In Canada's view, this structural bias, which blatantly favours petitioners and prejudices 
respondents, is clearly inconsi stent with the requirement to conduct an "objective examination".  
19. With respect to Indonesia's claim under Article 3.8 of the Anti -Dumping Agreement and 
Article 15.8 of the SCM Agreement, Canada submits that a legal rule that precludes an "objective 
examination" is also manifestly inconsistent with the obligation to exercise "special care" in the 
context of threat of injury determinations.  Indeed, given that the exercise of "special care" 
presupposes that an investigating authority has already exercised  the level of care required when 
making all determinations of injury, a failure to conduct an "objective examination" in a threat of 
injury determination also necessarily entails a failure to exercise "special care".  
20. Canada recognizes that voting proce dures for injury determinations are internal matters left 
to the discretion of each WTO Member, as neither the Anti -Dumping Agreement nor the SCM 
Agreement contains specific rules with respect to the organizational structure of investigating 
authorities.  This general principle is consistent with the Appellate Body's decision in US – Line Pipe . 
Yet, in that case, the Appellate Body recognized that while a WTO Member has considerable 
discretion with respect to the internal organization of its investigating au thority, it still must 
structure its authority and establish its decision -making rules in a manner that results in WTO -
compliant determinations.  In other words, matters of internal procedure are disciplined to the 
extent they impact the substance of an inv estigating authority’s final decision.  
21. Indeed, accepting the U.S. position that the decision -making procedure at the USITC is 
immune from the application of the Anti -Dumping and the SCM Agreements would lead to the 
unreasonable conclusion that it would be permissible for the United States to mandate an 
affirmative injury determination if only one of the six USITC Commissioners voted for such a 
determination.   
22. This cannot be the case.  The obligations pertaining to injury determinations are borne  by the 
investigation authority as a whole.  When making a determination, an investigating authority must 
respect all of the obligations in Articles 3 and 15.  Accordingly, if a voting procedure, or any other 
internal arrangement, prevents the investigating authority from conducting an objective 
examination and, consequently, from exercising special care, its threat of material injury 
determination cannot be consistent with the Anti -Dumping and SCM Agreements.   WT/DS491 /R/Add.1  
 
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ANNEX C -3 
INTEGRATED EXECUTIVE  SUMMARY OF THE EUROPE AN UNION  
I. CONCERNING THE ALLEG ATION OF USDOC'S FLA WED SUBSIDY DETERMIN ATION  
A. Concerning the alleged inconsistency with Article 14(d) SCM due to USDOC's 
improper per se determination of price distortion  
1. Under Article 14(d) SCM th e primary benchmark for the determination of benefit is the prices at 
which the same or similar goods are sold by private suppliers in arm's length transactions. However, 
prior Appellate Body Reports have accepted that the market of the subsidizing Member may be so 
distorted by the government's predominant role in it, that no market conditions in the country of 
provision exist as the government effectively determines the price at which private suppliers sell the 
same or similar goods.   
2. The EU considers that the extent to which an investigating authority needs to carry out an 
analysis of the market structure depends on the particular market characteristics. An in -depth market 
analysis of the market structure is not required in each and every case. The hig her the market share 
of the government the more likely it becomes that the government is predominant and that prices in 
the subsidizing Member's market are distorted.  While an investigating authority must also consider 
evidence relating to factors other t han government market share, such other evidence will carry only 
limited weight in case of very high government market shares.    
3. The EU considers that the Appellate Body's statements in US – Anti-Dumping and Countervailing 
Duties (China) provide for th e possibility that an investigating authority may - exclusively based on a 
government's predominant role - find price distortion, depending on the circumstances of the 
particular case. This may be the case, for example, where no other evidence is available  or where the 
government is the sole supplier of the good in question or effectively controls private prices, in which 
case there is no private price available.  
4. Market share is a key factor to demonstrate a government's predominance, although not 
necess arily the only factor. The higher the market share of a government (possibly in combination 
with other factors), the more likely predominance becomes and the less weight other evidence carries. 
In situations in which a government has a 100% market share it  is predominant and there is also price 
distortion as there are no private prices. It follows that no price distortion analysis on the basis of in -
country data collected by the authority is required.  
5. In situations in which a government holds less than 1 00% but very high market shares (e.g., 
90-95%) and is found to be predominant (on the basis of market shares, possibly in combination with 
other evidence on record), this may also in itself be sufficient to find price distortion in case no other 
relevant e vidence is on record. If other evidence is on record, it must be considered by the authority. 
No price -distortion analysis on the basis of in -country data collected by the authority is required by the 
authority to reject in -country prices if predominance c an be established.  
6. In view of these considerations, the EU takes the position that the Panel may take into account 
(i) how predominant the Indonesian government's role was, (ii) whether other evidence was available 
to the USDOC, (iii) how relevant (stro ng) such other evidence was and (iv) whether the USDOC 
considered such other evidence. The EU notes that in view of the factual circumstances (notably high 
market shares) it does not consider that the USDOC was under an obligation to ask for pricing data o f 
private suppliers and government prices in order to carry out a price distortion analysis.  
B. Concerning the alleged inconsistency with Article 12.7 SCM due to USDOC's 
improper application of an adverse inference to find the Indonesian government 
knowingly sold debt to an affiliate of the debtor in contravention of Indonesian law   
7. Status as developing country.  The EU does not consider that Indonesia has specifically 
explained or demonstrated how its status as a developing country Member would b e of relevance in 
the context of this particular dispute under Article 12.7 SCM. It should not be presumed that the 
preparation of responses to questionnaires will always be influenced by the development status of a 
Member. Indonesia did not allege any con crete difficulties arising from its invoked status as a 
developing Member that would have hindered it from providing the requested information.  WT/DS491 /R/Add.1  
 
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  8. Good faith arguments.  The EU takes the position that the use o f facts available under 
Article  12.7 is not ex cluded or restricted in case an interested party is able to provide a good faith 
explanation (reason) for not being able to provide certain documents (e.g. destruction by fire). 
Otherwise the purpose of Article 12.7 SCM - to "overcome a lack of information " and to enable 
investigating authorities to continue with the investigation and make determinations - could be easily 
nullified through "good faith" arguments e.g. of lost or destroyed documents that will be difficult for 
investigating authorities to veri fy and rebut. However, when assessing evidence and when using facts 
available (including the drawing of adverse inferences), the investigating authority may in its overall 
analysis take into account the underlying reasons for the non -provision of relevant information.  
9. Similar considerations apply in case of "difficulties" encountered by the company in providing 
information. It is correct that Article 12.11 ADA – which informs Article 12.7 SCM - requires an 
investigating authority to take "due account of any difficulties experienced by interested parties". 
There is no guidance in the case law on how such difficulties should be taken into account in practice. 
The EU considers that practical difficulties could be solved e.g. by providing an extension of the 
deadline to reply or by limiting the request to information that is strictly necessary, where appropriate. 
Furthermore, the fact that a party made good faith efforts to provide the information can be taken into 
account, as explained above, in the overall a ssessment of the available evidence. However, 
irrespective of the nature and extent of the difficulties, Article 12.7 remains applicable.    
C. Concerning the alleged inconsistency with Article 2.1(c) SCM due to USDOC's 
failure to demonstrate the existence  of a subsidy program   
10. The EU notes that the case law cited by Indonesia, according to which an investigating authority 
must demonstrate the existence of a "plan or scheme" and "systematic series of actions" for a de facto  
subsidy refers to a case in which no "written instrument" existed at all regarding the subsidy. In such 
situations, the need may indeed arise to prove the existence of a subsidy programme through other 
means than through direct documentary evidence. However, in situations in which th e subsidy 
programme is manifested in writing, e.g. through laws, decrees or other written documents (here e.g. 
for the log export ban and the provision of standing timber), there is no need to systematically 
require, in addition, a plan or systematic actio ns. The plan and the systematic actions may in such 
situations be expressed in the documents themselves.  
11. The EU would disagree with a proposition that where only one company is eligible to receive the 
subsidy, there is no need to otherwise base a findi ng of specificity on t he factors listed under 
Article  2.1(c). The EU sees no basis for such an interpretation in the wording of Article 2.1(c) which 
makes no distinction between a subsidy granted to one company versus a subsidy granted to more 
than one com pany. The phrase "limited number of certain enterprises" also covers the situation of the 
smallest number, i .e. one.       
D. Concerning the alleged inconsistency with Article 2.1 SCM due to USDOC's alleged 
failure to identify the relevant jurisdiction   
12. The EU considers that Indonesia's claim is based on an erroneous reading of the case law. An 
investigating authority must not in each and every case precisely determine the government entity 
that administers the subsidy nor, if a central government is a dministering the subsidy, must it assess 
the implementation of the subsidy at regional or local level. It suffices if the investigating authority 
makes an adequate finding whether the jurisdiction covers the entire territory of the Member or is 
limited to a designated geographical region and this will normally also identify the granting authority. 
The jurisdiction of the granting authority must be "discernible from the determination". The EU 
considers that it was clear from USDOC's determination that "GOI" referred to the Government of 
Indonesia and hence to the national (or central) government as opposed to any local or regional 
government. The jurisdiction of the granting authority therefore was the entire territory of Indonesia. 
The EU does not consider t hat Indonesia's claim under Article 2.1 SCM has legal merit.  
II. CONCERNING USITC'S A LLEGED FLAWED THREAT  OF INJURY DETERMINAT ION 
A. Concerning USITC's alleged failure to establish causation between the subject 
imports and the threat of injury under Articl es 3.5 ADA / 15.5 SCM   
13. The EU considers that the two factors that broke the causal link for present injury are either not 
present (i.e. the Black Liquor Tax which expired in 2009) or are not present to the same degree (i.e. WT/DS491 /R/Add.1  
 
- C-10 - 
 
  the decline in demand which  was forecast to be less pronounced for 2010 -2012 than for 2007 -2009) 
as regards threat of injury. Hence it could be argued that there was a change in circumstances as 
required under Article 15.7. However, the EU points out that there is a certain contradi ction between 
the USITC's finding that in 2007 -2009 subject imports took away market share from non -subject 
imports and that in 2010 -2012 subject imports will take away market share (also) from domestic 
producers.  
14. The EU considers that the removal of the US Black Liquor Tax – as tax credit temporarily 
counter -acting the effects of the subsidy – could not be qualified as the genuine and substantial cause 
of the injury as claimed by Indonesia. At the same time, the li fting of preliminary duties, without 
more, cannot be considered a change of circumstances within the meaning of Article 15.7 SCM.    
15. Alleged failure to carry out a "concrete" analysis.  The EU recalls that under the case law 
there is no obligation under  Article 15.5 to quantify the amount of injury caused by alleged subsidised 
and non -subject imports respectively. The EU agrees. It does not consider that a "concrete" (i.e. 
quantitative) analysis was required by USITC.  
16. Alleged failure to isolate injur ious effects. The EU recalls that no particular method or 
approach is prescribed under the case law for the isolation of injurious effects. The EU considers, on 
the basis of the available information, that USITC's analysis would prima facie  appear to conform to 
the requirements of Article 15.5 SCM. The non -attribution factors at issue – notably the predicted 
modest consumption levels and the non -subject imports - were recognised as possibly causing threat 
of injury to domestic producers. The ir effects were separated and distinguished by USITC from the 
effects of the subject imports. Ultimately, they were not considered to be so significant as to break the 
causal link, i.e. detract from the hypothesis that the subsidised imports are causing th reat of injury. A 
qualitative explanation was provided for that conclusion.  
B. Concerning the claim under Articles 3.7 ADA and 15.7 SCM that USITC's findings 
were improperly based on conjecture and remote possibility  
17. The EU considers that Articles 3.7  ADA / 15.7 SCM necessarily presuppose a certain degree of 
speculation regarding a finding of threat of injury as the future, even the imminent future, can never 
be predicted with absolute certainty. This interpretation is also supported by the texts of Ar ticles 3.7 
ADA / 15.7 SCM which state that threat of injury shall not merely  be based on allegation, conjecture 
or remote possibility. Whether a finding of threat of injury is "sufficiently" based on facts on record 
and adequately explained is a question t hat will have to be determined on a case -by-case basis.   
18. As a general matter, the EU considers that, under normal circumstances and absent significant 
market developments, solid evidence of pricing behaviour in the past may serve as a reasonable 
indicator of future pricing behaviour as was done by USITC. However, the EU also points out that the 
USITC's finding that subject imports would gain market share from domestic producers seems to be 
little supported by the facts as set out in the determinations since USITC found that the subject 
imports' (and domestic producers') increase of market share in 2007 -2009 "came at the expense of 
non-subject imports".      
C. Concerning the claim under Articles 3.8 ADA / 15.8 SCM that USITC did not 
exercise "special ca re" in its threat of injury determination  
19. The EU recalls that a previous panel stated that an inconsistency under the special care 
provision of Articles 3.8 ADA / 15.7 SCM could only be invoked as a separate violation under particular 
circumstances, n amely when specific additional or independent arguments would be brought compared 
to arguments made under the specific ADA / SCM provisions.  The EU agrees with this position and 
does not consider that Indonesia's arguments are sufficiently "independent".    
III. CONCERNING THE ALLEG ED AS SUCH CLAIM UND ER ARTICLES 3.8 ADA / 15.8 SCM  
20. The EU considers that the special care provisions of Articles 3.8/15.8 do not refer to procedural 
aspects such as voting requirements.  Notably, Articles 3.8/15.8 refer to the "consideration" of the – 
substantive - conditions for threat of injury under Articles 3.7/15.7 and to the – also substantive – 
discretionary "decision" by an authority whether to impose a measure or not under Articles 9.1/19.2. 
The texts of Articles 3. 8/15.8 do not make reference to any procedural provisions such as Article 6 
ADA or Article 12 SCM. Nor can the term "decision" in Articles 3.8/15.8 be interpreted to include 
procedural decision -making aspects since the term "decision" in Articles 3.8/15.8 and Articles 9.1 WT/DS491 /R/Add.1  
 
- C-11 - 
 
  ADA/19.2 SCM does not refer to procedural but only to substantive aspects, namely the discretionary 
power of authorities to abstain from imposing measures (e.g. in view of public interest 
considerations).  
21. Voting procedures are an inter nal matter that is left to the discretion of each WTO Member. The 
EU finds implicit support for its position in the fact that even though the SCM and ADA Agreements do 
provide for certain procedural rules (e.g. Articles 6 ADA and 12 SCM) they do not contai n rules as to 
how authorities must organise their decision/making process. This interpretation is also supported by 
the Appellate Body in US – Line Pipe . 
22. By basing its claim on the special care provisions, Indonesia is essentially arguing that in case of 
injury threat determinations a different (higher) standard must apply for voting requirements than for 
"normal" injury determinations (e.g. if a 4 -3 majority is required for present injury, a 5 -2 majority 
would be needed for threat of injury). Such a po sition would likely affect the voting systems of almost 
any Member and cannot be correct.  
 
 WT/DS491 /R/Add.1  
 
- C-12 - 
 
   
ANNEX C -4 
INTEGRATED EXECUTIVE  SUMMARY OF TURKEY  
I.  INTRODUCTION  
1.  The Republic of Turkey (hereinafter referred to as "Turkey") welcomes the opportunity to 
present its views as a third party in this case. Turkey is participating in this case because of its 
systemic interest in correct and consistent interpretation and imp lementation of the Agreement on 
Subsidies and Countervailing Measures (hereinafter referred to as "SCM Agreement").  
2.  Turkey will not elaborate on the particular facts presented by the Parties, rather, underlining 
its interest, Turkey will share its vie ws on issues addressed by the United States of America 
(hereinafter referred to as US) and the Republic of Indonesia (hereinafter referred to as Indonesia) 
in their first written submissions pertaining to Article 14 (d) of the SCM Agreement.  
II.  LEGAL INT ERPRETATION OF ARTIC LE 14(D) OF THE SCM AGREEMENT    
3.  In its first written submission Indonesia claims that the US Department of Commerce 
(hereinafter referred to as USDOC) improperly concluded per se that the predominant market 
share of standing timber  from public forests caused a price distortion and failed to determine the 
adequacy of remuneration based on prevailing market conditions in Indonesia. Thus, according to 
Indonesia, the use of out -of-country benchmarks, which is the benchmark value for Mal aysian 
exports of acacia pulpwood and mixed tropical hardwood, breached Article 14(d) of the SCM 
Agreement .1 Indonesia, specifically underlines that this per se determination tainted the conclusion 
of the USDOC since it is not legally permissible to reach,  without further inquiries, an outcome that 
the market of the investigated good is distorted for the sole reason that the government acts as 
the predominant provider .2 
4.  The US, replies in its first written submission that even though there is no thresho ld to 
determine whether the market power of the government amounts to a per se price distortion, it is 
reasonable to conclude that the more predominant a government's role is in the market, the more 
it is possible to observe distorted prices .3 Nevertheless , an investigating authority must consider 
the particular facts of the investigation and analyze factors other than the impact of government 
market share to determine whether the price distortion is caused by the influence of the 
government .4 The US stress es that in -country prices for the good in question is a starting point for 
the investigating authority and that the authority is not bound to use these prices if they are not 
determined by market forces due to government intervention. According to the US, the 
government intervention can be at such a level that it may distort in -country private prices by 
artificially lowering the prices which the private -providers are compelled to follow .5    
5. Article 14 (d) provides as follows:  
"The provision of goods or  services or purchase of goods by a government shall not be 
considered as conferring a benefit unless the provision is made for less than adequate 
remuneration, or the purchase is made for more than adequate remuneration. The 
adequacy of remuneration shall  be determined in relation to prevailing market 
conditions for the good or service in question in the country of provision or purchase 
(including price, quality, availability, marketability, transportation and other conditions 
of purchase or sale)".  
6.  Turkey understands that the government may act as a purchaser or provider of goods or 
services as long as this transaction is not made less (or more in the event of purchase) than the 
adequate remuneration. Despite this provision, the government has still di scretion to sell the 
                                                
1 Indonesia 's First Written Submission, para.  29. 
2 Ibid, para.  33. 
3 United States ' First Written Submission, para.  50. 
4 Ibid, para.51 . 
5 US First Written Submission, para.  49. WT/DS491 /R/Add.1  
 
- C-13 - 
 
  good/services in question less than the adequate remuneration by taking into consideration that 
such an option will lead to a "benefit" within the legal framework of the SCM Agreement. Since a 
separate analysis of benefit and remunerat ion are not required under Article 14(d), "benefit" will 
become evident at the point that the investigating authority determines that the provision is made 
less (or more) than the adequate remuneration.6 
7. Turkey opines that assessing the influence of the  government in the market under 
investigation is the first step to determine whether the in -country prices are useable to make an 
"adequate remuneration" analysis. Turkey shares the view that neither the SCM Agreement nor 
the case law provides a numerical value to be used to judge whether the economic weight of the 
government providers is at such a level that the prices charged by the government drives the 
prices of even private -providers out of ambit of unconstrained forces of supply and demand. The 
case l aw directs that, in the context of the Article 14 (d), a market need not to be  "pure" or 
"absent of any government intervention" .7 Thus, in a marketplace where government itself is a 
market actor, the evaluation on whether the influence of the government e nables it to set, directly 
or indirectly, all prices of the relevant good in the market should be made on a case -by-case basis 
considering, inter alia , the peculiarities of the market .8 As a final point, Turkey understands that 
the burden to explain adequately how the government's substantial involvement eventually leads 
to the significant distortion of the market is cardinal to ensure due process requirements.   
8. Even though Turkey un derscores that the circumstances considered in the investigation is 
central to the assessment on the economic weight of the government provider and its ability to 
influence the price level of the good in questions in the market; Turkey equally considers th at the 
"likelihood" of the government provider to set prices, which all market actors will be compelled to 
follow, may increment proportionally with its market power .9 The question whether these prices 
lead to distortion in market, however, shall be the su bject of a separate analysis.  
9. Turkey observes that there is a chain of same -toned Appellate Body decisions concerning 
the legal margin of using in -country -benchmarks to determine whether the provision is less than 
adequate remuneration. The case law in dicates that, prices at which the same or similar goods are 
sold by private suppliers in arm's -length transactions in the country of provision is the "primary 
benchmark" and a "starting point" 10 to be considered. As matter of interpretation, it is possibl e to 
use "secondary benchmarks" if it is established that the "primary benchmark" is not serving the 
legal objectives of Article 14(d) of the SCM Agreement provided that the investigating authority 
abides by the guidelines in this Article and the methodolo gy selected in line with the chapeau of 
Article 14 relates or refers to or is connected with the prevailing conditions in the country of 
provision or purchase11. Moreover, Turkey once again would like to emphasize that necessity for 
using the secondary ben chmarks needs to be established on a case -by-case basis according to the 
facts underlying each CVD investigation.  
III.  CONCLUSION  
10. With these comments, Turkey expects to contribute to the legal debate in this case, and 
would like to express again its a ppreciation for this opportunity to share its points of views.  
 
_______________  
 
                                                
6 US – Carbon Steel (India) .4.125 -4.126 . 
7 US – Softwood Lumber IV , para.  87; Canada – Renewable Energy/Feed In Tariffs , para.  7.274 . 
8 US – Softwood Lumber IV , para. 102. 
9 US – Carbon Steel (India) , paras.  4.152 -4.158 . 
10 Ibid, paras.  4.152 -4.158 . 
11 US – Softwood Lumber IV , para.  96; US – Carbon Steel (India) , paras.  4.197 -4.199 . WT/DS491 /R/Add.1  
 
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  ANNEX  D 
PRELIMINARY RULINGS OF THE PANEL  
Contents  Page  
Annex D -1 Decision of the Panel concerning Canada's request for enhanced third -party 
rights  D-2 
Annex D-2 Decision of the Panel concerning the European Union's request regarding BCI  D-5 WT/DS491 /R/Add.1  
 
- D-2 - 
 
  ANNEX D -1 
DECISION OF THE PANE L CONCERNING CANADA' S REQUEST FOR  
ENHANCED THIRD -PARTY RIGHTS  
3 November 2016  
The Panel refers to Canada's communication of  8 July 2016, in which Canada requests that 
the Panel grant it certain additional "passive" third -party rights in these proceedings, namely: 
(i) the right to receive an electronic copy of all submissions and statements of the parties, 
including responses to P anel questions, up to the issuance of the interim report; and  (ii) the right 
to be present for the entirety of all meetings of the Panel with the parties.1 
In its request, Canada submits that, in addition to having a legal and systemic interest  in 
these pr oceedings , it has significant economic interests in the present  dispute . Canada submits, in 
particular, that : (i) the forest products industry is of great importance to Canada's economy and 
the United States is the most  important market for its exports of forest products; (ii) Canada 
maintains measures similar to those at issue in this dispute  because, like in Indonesia, a significant 
portion of Canada's forests are publicly -owned and managed;  Canadian provincial and territorial 
governments maintain regimes to regulate the harvest of standing timber and to set the price of 
stumpage and other  fees; and Canada controls the export of logs through export permitting 
processes; and  (iii) Canada's stum page and other forest management measures have been the 
subject of several trade remedy actions by the United States in the past and could be the subject 
of further investigations in the near future in light of the expiry of the standstill period under the  
Canada – United States Softwood Lumber Agreement  of 2006 .  
For the foregoing reasons, Canada submits, its legal rights and economic interests are very 
much at issue in this dispute. Canada adds that , to ensure that its interests are fully taken into 
accou nt, it needs to be aware of the arguments and evidence presented in the later stages of 
these proceedings so that it can be fully informed of the arguments and issues that are before the 
Panel, that will be relied on by the Panel to reach its conclusions, and that may be subject to 
appeal . According to Canada, the nature of the additional rights it seeks  would not prejudice either 
of the parties or impose an undue burden on them, the Secretariat or the Panel as its request  
concerns only "passive" additional  third-party rights . Nor would granting its request raise 
confidentiality concerns or result in delays. Finally, Canada submits that a panel has discretion to 
grant enhanced third -party rights even in the absence of consent from the parties .2 
At the organi zational meeting , the Panel invited the parties to comment on Canada's 
request . Indonesia indicated that it supports  Canada's request3 whereas the United States opposes  
it.4 
The Panel has carefully considered  the reasons advanced by Canada to support its request , 
in light of the provisions of the DSU and relevant prior panel and Appellate Body decisions . In this 
respect, the Panel notes that Article s 10.2 and 10.3, and paragra ph 6 of  Appendix 3, of the DSU 
specify the rights of third parties : to receive the parties' submissions up to the first meeting of the 
panel, to make submissions to the panel, to present their views during a session of the first 
substantive meeting of the panel set aside for that purpose, and to be present during the entirety 
of such a session.  However, i t is well  established that panels have discretion to depart from the se 
standard rights and  grant so -called "enhanced" third-party  rights , subject to the requirements of 
due process and the need to guard against an inappropriate blurring of the distinction drawn in the 
DSU between the rights of parties and those of third parties.5 Prior panels have granted requests 
                                                
1 Canada's request for enhanced third-party rights, p. 1. 
2 Canada's request for enhanced third-party rights, p . 3 ( referring to Panel Report, EC – Tariff 
Preferences , p. A -2). 
3 Indonesia's statement at the organizational meeting .  
4 United States' statement  at the organizational meeting , and written comments  of 20 July 2016.  
5 Appellate Body Reports, EC – Hormones , para.  154; and US – 1916 Act , para. 150; Panel Reports, China 
– Rare Earths , para. 7.7; EC and certain member States – Large Civil Aircraft , paras. 7.166 -7.167; US – Large WT/DS491 /R/Add.1  
 
- D-3 - 
 
  for enhanced third -party rights in situations in which  third parties demonstra ted an interest  in the 
dispute  going beyond th e "substantial interest" that all third part ies may be presumed to have in 
the matter before a panel .6 Specifically, prior  panels have granted enhanced third -party rights on 
the basis of  one or several of the following factors: the significant economic effect of the measures 
at issue for certain third parties7, the importance of trade in the product at issue to certain third 
parties8, the significant trade policy impact that the outcome o f the case could have on third 
parties maintaining measures similar to the measures at issue9, claims that the measures at issue 
derived from an international treaty to which certain third parties were parties10, third parties 
having previously been granted  enhanced rights in related panel proceedings11, and certain 
practical considerations arising from a third party's involvement as a party in a parallel panel 
proceeding .12 
In the majority of instances in which enhanced third -party rights were granted in past  
disputes, the panel based its decision on the fact that third parties' rights or interests would be 
directly affected by the outcome of dispute. The measures at issue in the present dispute are not 
Indonesia's forestry management programmes, but the anti -dumping and countervailing measures 
imposed by the United States on imports of coated paper from Indonesia. Thus, the rights and 
interests alleged by Canada do not directly relate to the matter at issue before the Panel or to the  
outcome of the present dis pute.13 Moreover, t he Panel notes that Canada's alleged rights and 
interests in these proceedings depend on the occurrence of a number of events – that the US 
authorities will initiate countervailing duty  investigations on Canadian forestry products, that those 
investigations will target programmes similar to Indonesian programmes that were the subject of 
the investigation underlying this dispute, and that the United States will apply measures on the 
basis of findings and interpretations rega rding those programmes similar to the USDOC's findings 
and interpretations in the investigation underlying this dispute . Not only does this conditionality 
undermine the significance of Canada's alleged interests, t he Panel is also of the view that, should 
these assumptions materialize,  Canada will be able to defend its rights and interests by  bringing its 
own dispute and pursuing  its own claims, which would then be assessed on their own merits.14   
The Panel also notes that the United States opposes Canada's  request. In the absence of a 
demonstration of a specific  interest in the dispute, the Panel does not consider that the consent of 
one of the parties to the  dispute provides a sufficient basis for the granting of enhanced third -
party rights.15  
Finally, t he Panel notes that Canada does not seek the right to be granted additional active 
participatory rights , but only seeks to be apprised of the arguments and evidence put forward by 
the parties over the entire course of the proceedings . Canada has not explained why or how 
granting the additional "passive" third -party rights it seeks would ensure that its interests are 
"fully taken into account" in a way that the third -party rights provided for in the DSU and the 
Panel's Working Procedur es would not; at the end of the dispute, like all other third parties and 
WTO Members, Canada will be apprised of the relevant arguments and evidence relied on by the 
Panel in its Report and annexes attaching the executive summaries of the parties' argumen ts. 
Therefore, the Panel considers that its existing Working Procedures provide Canada and other third 
parties adequate opportunities to be made aware of the arguments and issues that will be 
addressed by the Panel.  
                                                                                                                                                  
Civil Aircraft (2nd complaint) , paras. 7.16 -7.17; EC – Export Subsidies on Sugar , para. 2.7; EC – Tariff 
Preferences , Annex A, para. 7;  and EC – Bananas  III, para. 7.9 .    
6 See Article 10.2 of the DSU.  
7 Panel Reports, EC – Bananas  III, para. 7.8; and EC – Tariff Preferences , Annex A,  para. 7. See also 
Panel Report,  EC – Export Subsidies on Sugar , para. 2.5.   
8 Panel Report, EC – Export Subsidies on Sugar , para. 2.5. 
9 Panel Report, EC – Tariff Preferences , Annex A, para. 7. 
10 Panel Report, EC – Bananas  III, para. 7.8.  
11 Panel Report , EC – Bananas  III, para. 7.8. 
12 Panel Report, EC – Hormones (Canada) , para. 8.17. 
13 In addition, t he Panel is not convinced that the fact that a third party maintains measures similar to 
the measures being challenged is, in itself, sufficient to justify t he granting o f enhanced rights to that third 
party. The panel in EC – Tariff Preferences  invoked this as one of several reasons in its decision to grant 
enhanced third -party rights in that dispute. However, the principal reason for the panel's decision in that case 
appears to have been that some of the third parties were direct beneficiaries of the challenged programme.  
14 See Panel Report, US – Washing Machines , para. 1.12.  
15 The Panel is not aware of any prior panel having granted enhanced third -party rights solely on the 
basis that one, or even both, of the parties agreed to the request.  WT/DS491 /R/Add.1  
 
- D-4 - 
 
  In sum, Canada has not demonstrated a sp ecific interest in the dispute sufficient to  justify 
granting that third party  additional participatory  rights beyond those provided to all third parties 
under the DSU and the Working Procedures adopted by the Panel . In light of the foregoing, the 
Panel de nies Canada's request for enhanced  third-party rights .  WT/DS491 /R/Add.1  
 
- D-5 - 
 
   
 
ANNEX D -2 
DECISION OF THE PANE L CONCERNING THE EUR OPEAN UNION'S  
REQUEST REGARDING BC I 
4 November 2016  
In its third -party submission, the European Union requested that third parties be given 
access to the exhibits containing BCI submitted by the parties, in addition to objecting to the fact 
that the Additional BCI Procedures adopted by the Panel do not prov ide for third party access to 
BCI submitted by the parties. The European Union argued, inter alia , that failure to provide such 
access to third parties is inconsistent with the DSU.1  
 
The Panel consulted with the parties regarding the European Union's req uest. The parties 
provided written comments on 2 November 2016. Indonesia opposed the request, stating that, in 
its view, limiting access to BCI to the parties is not inconsistent with the DSU. The United States 
was also of the view that limiting access to  BCI to the parties is not inconsistent with the DSU, but 
did not object to granting the third parties access to the BCI submitted by the parties in the 
present dispute.  
 
The Panel adopted its Additional BCI Procedures after consulting with the parties, wh o jointly 
proposed that the Panel limit access to BCI to the parties. The Panel considers that its Additional 
BCI Procedures as adopted are not inconsistent with the DSU and that it is therefore not required 
to modify them. Particularly as one of the parti es to the dispute opposes third party access to BCI, 
the Panel also considers it neither appropriate nor necessary to grant the European Union's 
request. In this context, the Panel notes that the parties submitted non -confidential versions of 
each exhibit containing BCI that they submitted to the Panel. Moreover, third parties were 
provided the same data concerning projections for US demand in 2010 -2012 – the only instance of 
BCI allegedly not provided to the third parties that the European Union specifical ly identified2 – as 
the Panel and the parties .3 Finally, the Panel notes that, of the 18 exhibits to which the European 
Union specifically requested access, as subsequently clarified by the United States, 11 of those 
exhibits do not exist.4  
 
 
____________ ___ 
 
                                                
1 European Union's third -party submission, para. 5. The European Union also took issue with the 
requirement in paragraph 2 of the Additional BCI Procedures that the party su bmitting BCI provide an 
authoriz ing letter from the entity that submitted that inform ation to the investigating authority in the 
underlying investigation, but made no concrete request in this regard. (Ibid. para. 4)  
2 European Union's third -party submission, para. 65.  
3 The Panel and the other party  received the same version of Exhibits ID N-18 and US -1 as the third 
parties. In addition, as indicated in footnote 491 of the United States' first written submission (corrected 
version), the US demand projections data, while redacted from Exhibit US -1 , p. II -12, was provided to the 
Panel, Indone sia and the third parties in Exhibit US -4 (pp. 1 and 21), and was discussed in paras. 229 and 243 
of the United States' first written submission (corrected version).  
4 As indicated in the list of exhibits submitted by the United States, these were "intenti onally omitted", 
i.e. there is no content associated with those exhibit numbers.  WT/DS491 /R/Add.1  
 
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  ANNEX E  
INTERIM REVIEW  
Contents  Page  
Annex  E-1 Interim Review  E-2 
 
  WT/DS491 /R/Add.1  
 
- E-2 - 
 
  ANNEX E -1 
INTERIM REVIEW  
1  INTRODUCTION  
1.1.  In compliance with Article 15.3 of the DSU, this Annex sets out the Panel's discussion of the 
comments and arguments made at the interim review stage by the parties. As explained below , we 
have modified certain aspects of the Report in light of the parties' comments where we considered 
it appropriate. In addition, we have made a number of changes of an editorial nature to improv e 
the clarity and accuracy of the Report or to correct typographical and other non -substantive errors, 
certain of which were suggested by the United States.  
1.2.  As a result of the changes that we have made, the numbering of footnotes in the Final Report 
has ch anged from the Interim Report. In the discussion below , we use the numbering in the Final 
Report.  
2  SPECIFIC REQUESTS FO R REVIEW  
2.1  Paragraph 1.3  
2.1.  The United States suggests that the Panel modify its characterization of the panel request 
submitted by Indonesia on 20 August 2015 after the filing of a prior panel request on 9 July 2015. 
The United States submits that, because Indonesia's panel request procedurally, was made ab 
initio, the Panel should  refer to it as a "new" panel request rather than as a "revised"  panel 
request in the second sentence of paragraph  1.3. Indonesia does not comment on the 
United  States' request.  
2.2.  We have modified paragraph 1.3 in accordance with the suggestion of the United States.  
2.2  Footnote 51 to paragraph 7.18  
2.3.  The United States request s that the Panel make two changes to the first sentence of 
footnote  51 to paragraph 7.18. Specifically, the United States suggests clarifying that in its request 
for ruling described in the footnote, the United States asked the Panel to find that Indonesia 's 
Article 14(d) and Article 2.1(c) claims with respect to the log export ban are in fact financial 
contribution claims  "not before the Panel", and that the United States made this request in the 
alternative. Indonesia does not comment on th is request.  
2.4.  To better reflect the ruling sought by the United States, we have amended the first sentence 
of footnote 51.  
2.3  Paragraph 7.68  
2.5.  The United States suggests adding a new footnote at the end of paragraph 7.68 following the 
Panel's statement that the USDOC establishe d that a benefit was conferred by comparing the price 
paid by APP/SMG to a benchmark price , citing page 13 of the USDOC Issues and Decision 
Memorandum . Indonesia does not comment on this request.  
2.6.  We have added the reference suggested by the United States,  but to paragraph 7.66 rather 
than paragraph 7.68.  
2.4   Paragraph 7.234  
2.7.  The United States requests that the Panel modify the second and third sentences of 
paragraph 7.234. In this respect, the United States submits that the USITC did not affirmatively 
find tha t subject imports caused no material injury during the POI but rather, the USITC "[did] not 
find a sufficient causal nexus necessary to make a determination that the subject imports [were] WT/DS491 /R/Add.1  
 
- E-3 - 
 
  having a significant adverse impact on the domestic industry".1 Accordingly, the United States 
requests that the Panel amend the language of the second sentence of paragraph 7.234 to indicate 
that the USITC "declined to make a finding of present material injury ". In the same vein, the 
United States requests that the Panel  change the language of the third sentence of 
paragraph  7.234 to state that the USITC determined that the deterioration in the domestic 
industry's condition coincided with an economic downturn and a sharp decline in demand in the 
course of "determining not  to find present material injury". Indonesia does not comment on the 
United States' request.  
2.8.  We have, in light of the United States' request, modified the second sentence of 
paragraph  7.234 to better reflect the USITC 's conclu sion concerning present materi al injury , albeit 
not in the specific terms requested by the United States .  
2.5  Paragraph 7.286  
2.9.  The United States suggests adding a footnote at the end of the final sentence of 
paragraph  7.286, referring to p age 38 of the USITC's f inal determination . Indonesia does not 
comment on this request.  
2.10.   We have added the reference suggested by the United States, as well as a cross -reference 
to a paragraph of the Report quoting the relevant language from the USITC's final determination.  
2.6  Paragraph 7.299  
2.11.   The United  States suggests that, to underscore the significance of APP's intentions, the 
Panel insert a footnote at the end of the second sentence of paragraph 7.299 to mention the 
USITC's finding, on page 24 of its final determination, that APP accounted for the la rge majority of 
subject merchandise produced and exported in 2009 . Indonesia objects to the United States'  
request. In Indonesia's view, the United States is asking the Panel to make an additional finding of 
fact, not to correct a factual error. Indonesia submits that the United States' request is not 
appropriate at this phase of the proceeding.  
2.12.   We have, in light of the United States' suggestion , provided a more complete quotation of 
the USITC's final determination  in paragraph 7.299 . We also consider it ap propriate to add a 
reference in the Report to the indication by the USITC that APP accounted for the large majority of 
the production and export of subject merchandise  in 2009. As the USITC made this statement in 
describing the conditions of supply in the market for coated paper, we have added this reference 
to the f ootnote attached to paragraph 7.197,  in the introduction to the claims pertaining to the 
USITC's final determination.  
2.7  Footnote 555 to paragraph 7.310  and paragraph 7.314  
2.13.   The United States requests that the Panel correct certain errors in the description of the 
USITC's price trends analysis in footnote 5 55 to paragraph 7.310. Indonesia does not comment on 
this request.  
2.14.   In addition, the United States requests that the Panel include, in the sa me footnote and in 
the second sentence of paragraph 7.314, a discussion of other evidence that the USITC relied on in 
conclud ing that subject imports depressed domestic prices "at least to some extent" for part of the 
POI. Specifically, the United States s uggests that the Panel add language to reflect the fact that, in 
its conclusion in this respect , the USITC also relied on "domestic producer testimony that domestic 
producers reduced prices to compete with subject imports during the POI, and on confirmatio n 
from numerous purchasers that domestic producers had lowered prices to meet subject import 
prices ", and the corresponding reference to the USITC 's final determination.  Indonesia objects to 
this request. In Indonesia's view, the United States is asking th e Panel to make an additional 
finding of fact, not to correct a factual error, and such a  request is not appropriate at this phase of 
the proceeding . 
                                                
1 The United States refers to USITC Final Determination, (Exhibit US -1), p. 38.  WT/DS491 /R/Add.1  
 
- E-4 - 
 
  2.15.   We have, in light of the United States' request, modified the description of the USITC's price 
trends anal ysis in footnote 555, including a more complete description of the USITC's findings 
regarding price depression and the evidence relied upon. In light of this change, we do not 
consider it necessary to amend paragraph 7.314 as suggested by the United States .  
2.8  Paragraph 7.341  
2.16.   The United States suggests  certain edits to the penultimate sentence  of paragraph 7.341  to 
more accurately reflect the United States'  argument concerning Article 9 of the Anti -Dumping 
Agreement and Article 19 of the SCM Agreement . Indonesia does not comment on this request.  
2.17.   We have made the changes suggested by the United States.  
2.9  Paragraph 7.344  
2.18.   The United States requests that the Panel clarify that the words "the two" in the penultimate 
sentence of paragraph 7.344 refer to ''subjec t imports and injury to the domestic industry'', to 
reflect that an investigating authority must consider whether subject imports cause or threaten 
injury to a domestic industry.  Indonesia does not comment on this request.  
2.19.   We have amended paragraph 7.344 i n light of the United States' request, albeit not in the 
specific terms requested by the United States.  
 
__________