WT/DS473/R/Add.1  
 
29 March 2016  
(16-1745)  Page: 1/130  
  Original: English  
 
   
 
EUROPEAN UNION – ANTI-DUMPING MEASURES ON BIODIESEL 
FROM ARGENTINA 
 
REPORT OF THE PANEL  
Addendum 
This addendum  contains Annexes A to D to the Report of the Panel to be found in document 
WT/DS473/R.  
 
_______________ 
 
 WT/DS473/R/Add.1 
 
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  LIST OF ANNEXES 
ANNEX A 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex A-1 Working Procedures of the Panel A-2 
Annex A-2 Additional Working Procedures of the Panel Concerning Business Confidential 
Information A-7 
ANNEX B 
ARGUMENTS OF ARGENTINA 
Contents Page 
Annex B-1 Executive Summary of the Firs t Written Submission of Argentina B-2 
Annex B-2 Executive Summary of the Second Written Submission of Argentina B-12 
Annex B-3 Executive Summary of the Statement of Argentina at the First Meeting of the 
Panel B-23 
Annex B-4 Executive Summary of the Statement of Argentina at the Second Meeting of 
the Panel B-29 
Annex B-5 Executive Summary of the Response  of Argentina to the European Union's 
Request for a Preliminary Ruling  B-34 
ANNEX C 
ARGUMENTS OF THE EUROPEAN UNION 
Contents Page 
Annex C-1 Executive Summary of the First Written Submission of the European Union C-2 
Annex C-2 Executive Summary of the Second Written Submission of the European Union C-11 
Annex C-3 Executive Summary of the Stat ement of the European Union at the 
First Meeting of the Panel C-21 
Annex C-4 Executive Summary of the Statemen t of the European Union at the 
Second Meeting of the Panel C-26 
Annex C-5 Executive Summary of the European Un ion's Request for a Preliminary Ruling  C-33  
ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Executive Summary of Third-Party Arguments of Australia D-2 
Annex D-2 Executive Summary of Third-Party Arguments of China D-5 
Annex D-3 Executive Summary of Third-Party Arguments of Colombia D-10  
Annex D-4 Executive Summary of Third-Party Arguments of Indonesia D-13 
Annex D-5 Executive Summary of Thir d-Party Arguments of Mexico D-17  
Annex D-6 Executive Summary of Third-Party Arguments of Norway D-21 
Annex D-7 Executive Summary of Third-Party Arguments of the Russian Federation D-23  
Annex D-8 Executive Summary of Third-Party Argume nts of the Kingdom of Saudi Arabia D-26 
Annex D-9 Executive Summary of Thir d-Party Arguments of Turkey D-30  
Annex D-10 Executive Summary of Third-Party Arguments of the United States D-32 
 
 
 WT/DS473/R/Add.1 
 
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  ANNEX A 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex A-1 Working Procedures of the Panel A-2 
Annex A-2 Additional Working Procedures of the Panel Concerning Business Confidential 
Information A-7 
 WT/DS473/R/Add.1 
 
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  ANNEX A-1 
WORKING PROCEDURES OF THE PANEL 
Revised on 27 January 2015 
 
1. In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules 
and Procedures Governing the Settlement of Disput es (DSU). In addition, the following Working 
Procedures shall apply. 
General 
 2. The deliberations of the Panel and the document s 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 parties and third parties shall treat business confidential information in accordance with the 
procedures set forth in the Additional Working Procedures of the Panel Concerning Business 
Confidential Information adopted by the Panel on 25 November 2014. 
4. The Panel shall meet in closed session. The parties, and Members who have 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.  
5. Each party and third party has the right to determine the composition of its own delegation 
when meeting with the Panel. Each party and third party shall have the responsibility for all the 
members of its own delegation and shall ensure that each member of its own delegation acts in accordance with the DSU and these Working Procedures, particularly with regard to the 
confidentiality of the proceedings an d the submissions of the parties.  
Submissions 
 6. Before the first substantive meeting of the Pa nel 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 preliminar y ruling at the earliest possible opportunity and 
in any event, no later than in its first written submission to the Panel. If Argentina requests such a 
ruling, the European Union shall submit its response to the request in its first written submission. 
If the European Union requests such a ruling, Ar gentina 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 sh all be granted upon a showing of good cause. 
8. Each party shall submit all factual evidence to the Panel no later than during the first 
substantive meeting, except with respect to ev idence necessary for purposes of rebuttal and 
answers to questions or comments on answers prov ided by the other party. Exceptions to this 
procedure shall be granted upon a showing of good cause. Where such exception has been 
granted, the Panel shall accord the other party a pe riod of time for comments, as appropriate, on 
any new factual evidence submitted after the first substantive meeting.  WT/DS473/R/Add.1 
 
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  9. Where the original language of an exhibit is  not a WTO working language, the submitting party 
or third party shall simultaneously submit a translation of it into a WTO working language. The Panel may grant reasonable extensions of time for the translation of such exhibit upon a showing of good cause. Any objection as to the accuracy of a translation should be raised promptly in 
writing, preferably no later than the next filing or meeting (whichever occurs earlier) following the 
submission which contains the translation in qu estion. Any objection shall be accompanied by a 
detailed explanation of 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 Argentina could be numbered ARG-1, 
ARG-2, etc. If the last exhibit in connection with the first submission was numbered ARG-5, the 
first exhibit of the next submission thus would be numbered ARG-6. 
Questions 
 
11. The Panel may at any time pose questions to the parties and third parties, orally or in writing, 
including in writing 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 conducted as follows: 
a. The Panel shall invite Argentina to make an opening statement to present its case first. 
Subsequently, the Panel shall invite the European Union to present its point of view. 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 any, 
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 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. Each 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 deadline 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 Argentina 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 European Union if it wishes to avail itself of the right to present 
its case first. If so, the Panel shall invite the European Union to present its opening 
statement, followed by Argentina. If the Eu ropean Union chooses not to avail itself of 
that right, the Panel shall invite Argentina 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 WT/DS473/R/Add.1 
 
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  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 any, 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 the 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. Each 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 deadline 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 first.  
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 party 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 floor. 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 shall 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/DS473/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 executive summaries of the facts and arguments as presented to the 
Panel in its written submissions, other than in re sponses to questions, and its oral statements, in 
accordance with the timetable adopted by the Panel. Each executive summary of a written submission shall be limited to no more than 10 pages, and each executive summary submitted by 
each party of opening and closing statements presented at a substantive meeting shall be limited 
to no more than 5 pages each. The Panel will not summarize in the descriptive part of its report, or annex to 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 include a summary of response s 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 facts 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 review 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 reques t 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 4 paper copies of all documents it submits to the 
Panel. However, when exhibits are provided on CD-ROMS/DVDs, 2 CD-ROMS/DVDs and 2 paper copies of those exhibits shall be filed. 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, either on a CD-ROM, a DVD or as an e-mail attachment. If the electronic copy is provided by e-mail, it should be addressed to DSRegistry@wto.org , with a copy 
to XXXX@wto.org , XXXX@wto.org  and XXXX@wto.org . If a CD-ROM or DVD is provided, 
it shall be filed with the DS Registry.  WT/DS473/R/Add.1 
 
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  d. Each party 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 party shall file its do cuments 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 party 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 part ies 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/DS473/R/Add.1 
 
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  ANNEX A-2 
ADDITIONAL WORKING PROCEDURES  OF THE PANEL CONCERNING  
BUSINESS CONFIDENTIAL INFORMATION 
Adopted 25 November 2014 
 
The following procedures apply to any business confidential information (BCI) submitted in the course of the Panel proceedings in DS473. 
 
1. For the purposes of these Panel proceedings, BCI is any information that has been designated 
as such by the party submitting the information and that was previously treated as BCI by the 
Commission of the European Union in the anti-dumping investigation at issue in this dispute. 
However, these procedures do not apply to any information that is available in the public 
domain. In addition, these procedures do not ap ply to any BCI if the person who provided the 
information in the course of the aforementioned investigation agrees in writing to make the 
information publicly available. 
 2. As required by Article 18.2 of the DSU, a party or third party having access to BCI submitted 
in these Panel proceedings shall treat it as confidential and shall not disclose that information 
other than to those persons authorized to receive it pursuant to these procedures. Any information submitted as BCI under these procedures shall only be used for the purposes of this dispute and for no other purpose. Each party and third party is responsible for ensuring 
that its employees and/or outside advisors comply with these working procedures to protect 
BCI. An outside advisor is not permitted access to BCI if that advisor is an officer or employee of an enterprise engaged in the production, export, or import of the products that were the 
subject of the investigation at issue in this dispute. All third party access to BCI shall be 
subject to the terms of these working procedures. 
 
3. No person may have access to BCI except a member of the Secretariat or the Panel, an 
employee of a party or third party under the term s specified in these procedures, or an outside 
advisor to a party or third party for the purposes of this dispute.  
 
4. The 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 sh all contain the notice "Contains Business 
Confidential Information" at the top of the page. 
 
5. Any BCI that is submitted in binary-encoded form shall be clearly marked with the statement 
"Business Confidential Information" on a label of the storage medium, and clearly marked with 
the statement "Business Confidential Info rmation" in the binary-encoded files. 
 
6. In the case of an oral statement containing  BCI, the party or third party making such a 
statement shall inform the Panel before making it that the statement will contain BCI, and the 
Panel will ensure 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 paragraph 4. 
 
7. If a party or third party considers that information submitted by the other party or a third 
party contains information which 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, the other party, and, where relevant, the third parties. The Panel shall deal with the 
objection as appropriate. Similarly, if a party or third party considers that the other party or a third party submitted information designated as BCI which should not be so designated, it shall 
forthwith bring this objection to the attention of the Panel, the other party, and, where 
relevant, the third parties, and the Panel shall deal with the objection as appropriate.  
 WT/DS473/R/Add.1 
 
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  8. Any person authorized to have access to BCI under the terms of these procedures shall store 
all documents containing BCI in such a manner as to prevent unauthorized access to such information. 
 
9. 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 opport unity to review the report to ensure that it 
does not contain any information that the party has designated as BCI. 
 10. Submissions 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/DS473/R/Add.1 
 
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  ANNEX B 
ARGUMENTS OF ARGENTINA 
Contents Page 
Annex B-1 Executive Summary of the Firs t Written Submission of Argentina B-2 
Annex B-2 Executive Summary of the Second Written Submission of Argentina B-12 
Annex B-3 Executive Summary of the Statement of Argentina at the First Meeting of the 
Panel B-23 
Annex B-4 Executive Summary of the Statement of Argentina at the Second Meeting of 
the Panel B-29 
Annex B-5 Executive Summary of the Response  of Argentina to the European Union's 
Request for a Preliminary Ruling  B-34 
 WT/DS473/R/Add.1 
 
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  ANNEX B-1 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN 
SUBMISSION OF ARGENTINA 
I. INTRODUCTION 
 
1. Argentina has initiated this dispute with regard to two different measures: first, Article 2(5) of Council Regulation (EC) No 1225/2009 (hereinafter, the Basic Regulation), that Argentina 
challenges as being inconsistent "as such" with several provisions of the Anti-Dumping Agreement 
(hereinafter, ADA), and the General Agreemen t on Tariffs and Trade 1994 (hereinafter, 
GATT 1994), and second, the anti-dumping measures imposed by the European Union (hereinafter, EU) on imports of biodiesel originating in Argentina
1, that Argentina submits that are 
inconsistent with several obligations under the ADA and the GATT 1994.  
 II. "AS SUCH" CLAIMS IN RELATION  TO ARTICLE 2(5) OF COUNCIL 
REGULATION (EC) NO 1225/2009 OF 30 NOVEMBER 2009 ON PROTECTION 
AGAINST DUMPED IMPORTS FROM COUNTRIES NOT MEMBERS OF THE 
EUROPEAN COMMUNITY 
 
A. Background, scope and content of Ar ticle 2(5) of the Basic Regulation 
 2. The original version of Article 2(5) of the Basic Regulation as adopted in 1994 to implement 
the ADA did not contain the provision currently set out in its second paragraph, which Argentina 
challenges in the present dispute. This paragr aph has been added by Council Regulation (EC) 
No 1972/2002 of 5 November 2002. The historical  overview of this provision shows that the 
second paragraph of Article 2(5) has actually b een introduced to keep the possibility in the 
calculation of normal value to disregard the "costs " of the producers when the authorities consider 
that these costs are " abnormally or artificially low ", because they do not reflect " market values " or 
are "distorted ".  
 3. According to Council Regulation (EC) 1972/2002 and the consistent practice of the EU authorities Article 2(5), second paragraph, of the Basic Regulation refers to situations where the 
prices of an input are "abnormally or artificially low" because they are set in a "regulated market" 
or because of the existence of some alleged "distortion" on the domestic market. This interpretation has been confirmed by the General Court of the EU. Article 2(5), second paragraph, 
requires, in such a situation, that these costs "be adjusted or established on the basis of the costs 
of other producers or exporters in the same country  or, where such information is not available or 
cannot be used, on any other reasonable basis, including information from other representative 
markets." Such a rule is inconsistent with various provisions of the ADA and of the GATT 1994. 
 B. Article 2(5) of the Basic Regulation viol ates Article 2.2.1.1 of the ADA and, as a 
result, Article 2.2 of the ADA and Article VI: 1(b)(ii) of the GATT 1994 
 
4. Article 2.2.1.1 of the ADA, correctly interprete d in accordance with the principles of treaty 
interpretation does not allow investigating authorities to reject or adjust costs of certain inputs 
used in the production of the product under cons ideration because the prices of these inputs in 
their domestic market are found to be "abnormally or artificially low", because they do not reflect market values or because they are allegedly distorted. 
 
The ordinary meaning of Article 2.2.1.1 of the ADA 
 
5. Article 2.2.1.1 establishes an obligation on the investigating authorities to calculate the costs "on the basis of records kept by the exporter" when  constructing normal value, provided that two 
                                               
1 Commission Regulation (EU) No 490/2013 of 27 May 2013 imposing a provisional anti-dumping duty 
on imports of biodiesel originating in Argentina and Indonesia, OJ 2013 L 141 and Council Implementing 
Regulation (EU) No 1194/2013 of 19 November 2013 imposing a definitive anti-dumping duty and collecting 
definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, OJ 2013 L 315. (Definitive Regulation). WT/DS473/R/Add.1 
 
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  conditions are fulfilled: (i) such records are in accordance with the generally accepted accounting 
principles (GAAP) of the exporting country and (ii) such records reasonably reflect the costs associated with the production and sale of the product under consideration.  
6. There are only two exceptions to the above ob ligation to calculate costs on the basis of the 
records kept by the exporters. It is only where th e records are inconsistent with GAAP or that they 
do not reasonably reflect the costs associated with the production and sale of the product under 
consideration that the authorities have the right not to use the data in the records. Whenever the 
records are consistent with GAAP of the exporting country and they reasonably reflect the costs associated with the production and sale of  the product, the investigating authorities must calculate 
the costs on the basis of the records kept by the exporter or producer. 
 
7. The second condition included in Article 2.2.1.1, first sentence, does not authorize the authorities to reject or adjust the data in the records because the prices are " abnormally or 
artificially low ", because they do not reflect " market values " or are " distorted ". This interpretation 
flows from the ordinary meaning of the words of  Article 2.2.1.1, first sentence and from the 
structure of that sentence. In providing that the records must reasonably reflect "the costs" 
associated with the production and sale of the pr oduct under consideration, Article 2.2.1.1 of the 
ADA expressly refers to the charges or expens e s  w h i c h  h a v e  a c t u a l l y  b e e n  i n c u r r e d  b y  t h e  
producer concerned for the production and sale of the product under consideration, regardless of whether such costs are lower than international prices or of whether they are, in the authorities' 
view, market-based. 
 8. Moreover, the word "reasonably" in Article 2.2.1.1 is attached to the verb "reflect" and not 
to the word "costs". This sentence does not provide that the records must reflect "reasonable 
costs" or "costs which are reasonable in light of prices on other markets". This analysis excludes an interpretation that refers to whether the costs included in the records are in line with 
international prices or prices on other markets. In other words, the sentence does not provide that 
the records must reflect costs which are reasonable, but that they must reflect "costs associated with the production and sale of the product under consideration" and in a reasonable way.  
The context of Article 2.2.1.1,  first sentence, of the ADA 
 
9. The second and third sentences of Article 2.2. 1.1 provide relevant context in construing the 
obligation set out in the first sentence. The second sentence provides what the authorities have to 
do if they use an alternative cost allocation methodology. This confirms that the second condition 
in the first sentence refers to a cost allocation issue.  
10. Article 2.2.2 of the ADA deals with "the amounts for administrative, selling and general costs 
and for profits" which are also central elements for constructing normal value. It flows from this rule that if the drafters of the ADA had intend ed to authorize the authorities to use, for the 
purposes of the calculation of the cost of producti on, data other than those of the producers, they 
would have explicitly provided so. Furthermore, the different ways set out in Article 2.2.2 to 
determine SG&A and profit all relate to data in the country of origin. This supports the view that a "reasonability" test under Article 2.2.1.1, first sentence, by reference to data outside the country 
of origin is not relevant and contrary to the principles found in the context of the dumping 
determination.  
11. Article 2.2 of the ADA and Article VI:1(b)(ii) of the GATT 1994 expressly refer to "the cost of 
production in the country of origin ". Since Article 2.2.1.1 of the ADA seeks to provide further 
details "for the purposes of paragraph 2", it is cl ear that the interpretation of Article 2.2.1.1 must 
be consistent with Article 2.2, to which Article 2.2.1.1 directly refers. The express indication in 
Article 2.2 of the ADA (and Article VI:1 of the GATT 1994) that the cost of production is the one "in 
the country of origin" does not allow to conclude  that the "costs" referred to in Article 2.2.1.1 
could be found to be "unreasonable" in view of benchmarks outside of the country of origin, such 
as prices in other markets. Since the construction of the normal value must be based on the "cost 
of production in the country of origin", it does not make any sense to reject costs on the ground that they would not reflect international prices or prices in other markets.  
 
12. An interpretation of the first sentence of Article 2.2.1.1 whereby the cost data could be rejected because they are lower than prices in other markets is inconsistent with the requirement WT/DS473/R/Add.1 
 
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  under Article 2.2 of the ADA that the constructed no rmal value be based on the "cost of production 
in the country of origin".  
The object and purpose of the ADA 
 
13. By providing that the records are not reasonable if the cost data reflect prices which are 
lower than the prices on other markets, Article 2(5), second paragraph, undermines the fundamental logic of "dumping" which is based on  a comparison between the export price of the 
product concerned and the price of the like product on the domestic market , as defined in 
Article VI:1 of the GATT 1994 and 2.1 of the ADA.  
Case law 
 
14. The interpretation according to which the first sentence of Article 2.2.1.1 of the ADA does 
not allow investigating authorities to reject or adjust costs of certain inputs used in the production of the product under consideration when the prices  of these inputs in their domestic market are 
found to be "abnormally or artificially low", because they do not reflect market values or because 
they allegedly are distorted is confirmed by the Panel Reports in US – Softwood Lumber V
2, EC – 
Salmon3, and Egypt – Steel Rebar .4 
 
C. Article 2(5) of the Basic Regulation is inconsistent with Article 2.2 of the ADA and 
Article VI: 1(b)(ii) of the GATT 1994 
 
15. Article 2(5) of the Basic Regulation violates Article 2.2 of the ADA and Article VI:1(b)(ii) of 
the GATT 1994 since those provisions expressly require that the margin of dumping must be 
determined by comparison with the cost of production in the country of origin. 
 16. Article 2.2 expressly provides that when the margin of dumping is established by comparison with a constructed normal value, the comparison shall be made with "the cost of 
production in the country of origin". Article VI:1 (b)(ii) of the GATT 1994 similarly refers to "the 
cost of production of the product in the country of  origin." Since Article 2(5), second paragraph, of 
the Basic Regulation provides that the costs shall be adjusted or established "on the basis of the 
costs of other producers or exporters in the same country, or, where such information is not 
available or cannot be used, on any other reasonable basis, including information from other 
representative markets", it is inconsistent with Article 2.2 and Article VI:1(b)(ii) of the GATT 1994 which require to use the cost of production "in the country of origin". 
 
D. The EU violates Article XVI:4 of the Marrakesh Agreement Establishing the WTO 
and Article 18.4 of the ADA 
 
17. Since Article 2(5), second paragraph, of the Basic Regulation violates Articles 2.2.1.1 and 2.2 of the ADA and Article VI:1 of the GATT 1994, it follows that the EU has not ensured the conformity of its laws, regulations and administrative procedures with the provisions of the ADA 
and of the GATT 1994 and, therefore, has also viol ated Article XVI:4 of the Marrakesh Agreement 
Establishing the WTO and Article 18.4 of the ADA.  
III. CLAIMS CONCERNING THE ANTI-DUMPING MEASURES IMPOSED BY THE 
EUROPEAN UNION ON IMPORTS OF BI ODIESEL ORIGINATING IN ARGENTINA 
 
A. The EU acted inconsistently with Arti cles 2.2.1.1 and 2.2 of the ADA and with 
Article VI:1(b)(ii) of the GATT 1994 in failin g to calculate the cost of production 
on the basis of the records kept by the producers under investigation 
 
18. Argentina submits that the EU acted inconsistently with the obligation laid down in the first 
sentence of Article 2.2.1.1 of the ADA since it ca lculated the exporting producers' cost of soybean 
on the basis of an average of the FOB reference price and not on the basis of cost of soybean 
                                               
2 Panel Report, US – Softwood Lumber V , para. 7.321. 
3 Panel Report, EC – Salmon (Norway) , para. 7.483. 
4 Panel Report, Egypt – Steel Rebar , para. 7.393. WT/DS473/R/Add.1 
 
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  included in the accounting records of those producers.5 If this Panel finds that Article 2(5) of the 
Basic Regulation is as such inconsistent with Article 2.2.1.1 of the ADA, it follows that its 
application in the anti-dumping investigation concerning imports of biodiesel originating in Argentina necessarily produced a result that is also inconsistent with Article 2.2.1.1 of the ADA. In 
any case, Argentina submits that the violation of th ese provisions is supported by five arguments. 
 19. First, Argentina submits that the finding th at the records of the Argentinean producers did 
not reasonably reflect the costs of "the main raw material" is based on an improper establishment 
of the facts. This finding ignores the fact that pr ices in Argentina are freely set and based on offer 
and demand, as recognized by the EU itself in both the Definitive Regulation and in the parallel anti-subsidy investigation. 
 
20. Second, in finding that the costs of the main raw material were not reasonably reflected in the records of the exporting producers, the EU ig nored the ordinary meaning of the terms of the 
first sentence of Article 2.2.1.1 of the ADA. By referring to the term "costs", Article 2.2.1.1 refers 
to the expenses actually incurred by the producer . Therefore, the fact that the cost of soybean 
incurred and reported by the exporters was lower th an the international price did not allow the EU 
to conclude that the records of the exporters do not reasonably reflect the costs of soybean 
associated with the production and sale of biodiesel.  21. Third, the interpretation of the first sentence of Article 2.2.1.1 of the ADA at the basis of the 
EU's refusal to base the cost of soybean on the records of the exporting producers cannot be 
reconciled with the structure of that provision. In  this sentence, "records" is the subject, "costs" 
the object, "reflect" the verb and "reasonably" the adverb which qualifies the term "reflect". The 
misplaced reading of "international prices" into the second condition of Article 2.2.1.1 of the ADA 
leads to the result that for "records" to reflect "costs" according to the interpretation of the EU, such records should have reflected costs that a producer actually never incurred, namely, in this 
case, the FOB reference price of soybean. 
 22. Fourth, the refusal of the EU to base the co st of soybean on the records of the producers 
under investigation is based on a reading of Articl e 2.2.1.1 of the ADA that is not supported by the 
context of this provision. The second and third sentences of Article 2.2.1.1, dealing with cost 
allocation issue, show that the "reasonably reflect" condition in the first sentence of Article 2.2.1.1 refers to the actual costs incurred by the producers instead of international prices. Furthermore, 
Articles 2.2 of the ADA and VI:1(b)(ii) of the GATT 1994 expressly refer to the cost of  production  
in the country of origin . Given that Article 2.2.1.1 of the ADA is aimed at further specifying that 
clause, Article 2.2.1.1 must be read in a manner th at is consistent therewith. Therefore, it does 
not make any sense to reject costs on the grounds that they would not reflect "international 
prices", since it implies a comparison with prices outside of the country of origin. Argentina also reiterates the reference to Article 2.2.2 of the ADA in this respect.  
23. Fifth, Argentina submits that, in finding th at the records of exporting producers "do not 
reasonably reflect costs" because they do not reflect international prices despite the fact that they reflect the costs actually paid by the exporting producer, and in replacing the costs reflected in 
those records by international prices, the EU und ermines the object and purpose of the ADA which 
is to counteract dumping that occurs when the export price is less than the comparable price, in the domestic  market and not on any other markets. The EU subverted the fundamental purpose of 
the ADA and used the Agreement to address differe nces in price between the export price of the 
product concerned and international prices, instead of comparable prices on the domestic market.  B. The EU acted inconsistently with Article 2.2 of the ADA and Article VI: 1(b)(ii) of 
the GATT 1994 in failing to construct normal value of biodiesel on the basis of the 
cost of production in Argentina 
 
24. In replacing the cost of soybean reported in  the records of the exporting producers by an 
average of the FOB reference price, the EU failed to construct normal value on the basis of the cost of production in the country of origin. Consequently, the EU acted inconsistently with Article 2.2 of 
the ADA and Article VI:1(b)(ii) of the GATT 1994. 
                                               
5 It is worth recalling that the Definitive Regulation confuses soybean and soybean oil as the direct input 
in the production of biodiesel. It thus deliberate ly blurs the distinction between the product concerned 
(biodiesel), the main input used in its production in Ar gentina (soybean oil), and in direct inputs used for the 
production of the direct inputs (soybean).  WT/DS473/R/Add.1 
 
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C. The EU acted inconsistently with Articl e 2.2.1.1 of the ADA by including costs not 
associated with the production and sale of biodiesel in the calculation of the cost 
of production 
 
25. By using the average of the reference FOB price minus fobbing costs during the investigation period (IP), the EU included in its calculation of the cost of production of biodiesel a cost which is 
not associated with the cost of production and sale of biodiesel within the meaning of 
Article 2.2.1.1 of the ADA. Since the producers under investigation did not pay the reference FOB price minus fobbing costs for soybeans but, instead an amount representing the actual cost of 
soybean included in their records, Argentina submits that, the price of soybean used by the EU to 
calculate the cost of production is not a price that is associated with the production and sale of the 
like product. Therefore, the EU acted inconsistently with Article 2.2.1.1 of the ADA.  
26. As a result of the inconsistencies mentioned in (A) to (C) above, the dumping margin 
determinations are inconsistent with Article 2.1 of the ADA and with Article VI:1 of the GATT 1994.  
D. The EU acted inconsistently with Arti cles 2.2 and 2.2.2(iii) of the ADA because 
the amounts for profits established by th e EU were not determined on the basis 
of a reasonable method 
 
27. When determining the reasonable amount for profits, the EU did not calculate the 
reasonable amount for profits on the basis of the chapeau of Article 2.2.2 of the ADA or on subparagraphs (i) or (ii) of that provision, choos ing instead to base it on "any other reasonable 
method" pursuant to Article 2.2.2(iii) of the ADA.  Argentina submits that the amount for profits 
established by the EU of 15% is not based on a reasonable method within the meaning of Article 2.2.2(iii) of the ADA and cannot be consider ed to be "reasonable" within the meaning of 
Article 2.2 in fine  of the ADA. 
 28. In both the Provisional and Definitive Regula tions, the EU failed to provide any explanation 
of how it determined a profit margin of 15%. The 15% figure does not result from any "method" 
within the meaning of Article 2.2.2(iii) of the ADA,  let alone a reasonable one. Argentina fails to 
see how a World Bank figure concerning the short to medium term lending rate can be understood to be a relevant justification of the 15% profit margin determination. Moreover, Argentina 
explained that it was unreasonable to consider that the Argentinean biodiesel industry is "young 
and innovative", at a time when production had peaked and the market had matured significantly. 
 
E. The EU acted inconsistently with Articl e 2.4 of the ADA in failing to make due 
allowance for differences affecting price comparability, including differences in 
taxation, and in precluding a fair comp arison between export price and normal 
value 
 
29. Argentina submits that the EU acted inconsiste ntly with Article 2.4 of the ADA in failing to 
make a fair comparison between normal value and export prices within the meaning of that 
provision, as a fair comparison would have required that due allowance be made for differences 
affecting price comparability. This inconsistency arose as a result of a comparison of, on the one hand, a constructed normal value that included an  average of the reference FOB price of soybeans 
(minus fobbing costs) with, on the other hand, an export price that incorporated the domestic 
price of soybeans.  30. In the Definitive Regulation, the EU dedu cted the expenses incurred for exporting the 
soybean from the reference FOB price. Therefore, the difference between the price of soybean 
included in the constructed normal value and the do mestic price of soybean reflected in the export 
price is approximately equal to the export tax on soybean. The EU itself acknowledged that its 
methodology yielded a result which, from a numerical point of view, was similar to simply adding 
the export tax to the cost of the raw material. WT/DS473/R/Add.1 
 
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  F. The EU acted inconsistently with Article 9.3 of the ADA and Article VI: 2 of the 
GATT 1994 in imposing and levying anti-dumping duties in excess of the margin of dumping that should have been established in accordance with Article 2 of the ADA 
 
31. In order to have the dumping margin determin ation made in conformity with Article 2 of the 
ADA, the EU should have based the cost of pr oduction on the records of the producers under 
investigation and it should have ensured that the profit margin determination was based on a 
reasonable method pursuant to Article 2.2.2(iii) of the ADA. Therefore, the EU has imposed and levied anti-dumping duties in excess of the margin of dumping that it should have calculated in conformity with Article 2 of the ADA. As a result, it acted inconsistently with Article 9.3 of the ADA 
and VI:2 of the GATT 1994. 
 G. The EU acted inconsistently with Arti cles 3.1, 3.4 and 3.5 of the ADA in its 
evaluation of the production capacity, th e utilization of capacity and the return 
on investment of the EU industry 
 
32. Argentina submits that the utilization of capacity was overstated and that a proper 
evaluation would have revealed that capacity utilization was in fact significantly lower than the figures reflected in the Definitive Regulation. Argentina claims that the EU failed to ensure that injury arising out of the overcapacity of the dome stic industry was not attributed to the dumped 
imports. This is the result of, among others, the EU's failure to properly evaluate the utilization of 
capacity of its domestic industry.  
33. Throughout the investigation, overcapacity was identified as a factor having an impact on 
the state of the industry by the investigated companies as well as by the Government of Argentina. In the course of the injury analysis conducted by the EU, the European Biodiesel Board 
(hereinafter, EBB) submitted information that showed  that capacity of the domestic industry grew 
throughout the investigation period. In a submission dated 17 September 2013, the EBB suddenly asserted that the figures concerning production capa city of the EU industry needed to be adjusted 
to exclude the "idle" capacity. On 1 October 2013, the EU issued the Definitive Disclosure where it 
accepted the resubmitted data and altered the findin gs on capacity and capacity utilization that it 
had made in the Provisional Regulation. However, the Definitive Disclosure did not contain further information on the methodology used by the EU to assess this information or further elaboration of 
what was meant by "close scrutiny of this resubmitted data". 
 34. Argentina claims that the EU acted inconsistently with Articles 3.1 and 3.4 of the ADA first, 
because the EU's definition of "utilization of capa city" is inconsistent with Article 3.4 of the ADA, 
second , because its analysis of the production capacity and the utilization of capacity of the EU 
industry was not based on positive evidence; third, because the injury determination did not 
involve an objective examination; fourth,  because the evaluation of the production capacity and of 
the utilization of capacity is not adequate and that the EU therefore acted inconsistently with 
Article 3.4 of the ADA and fifth, because the indicators "utilization of capacity" and "return on 
investment" were not evaluated in a consistent manner. 
 
 The EU's definition of utilization of capacity is inconsistent with Article 3.4 of 
the ADA 
 35. Argentina notes that the terms "utilization of  capacity" in Article 3.4 of the ADA contain no 
reference to a concept such as "availability for use" or "idleness". Consequently, in the framework 
of Article 3 of the ADA, the entirety of production  capacity must be taken into account regardless 
of whether it is allegedly "available for use" or not. It is undeniable that all of an industry's 
production capacity, whether it is available for immediate use or not, generates costs. Failure to 
take production capacity that is not ready for use or that is "idle" yields an inaccurate picture of the state of the domestic industry. In adopting a de finition whereby the evaluation of "utilization of 
capacity" excludes so-called "idle" capacity, the EU acted inconsistently with Article 3.4 of the ADA. 
 WT/DS473/R/Add.1 
 
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   The EU acted inconsistently with Article 3. 1 and 3.4 of the ADA in failing to base 
its analysis of the production capacity and the utilization of capacity on positive 
evidence 
 36. At a late stage in the proceedings, the EBB submitted a document requesting the exclusion 
of supposedly idle capacity, a change in production capacity figures by EBB that amounted 
to 26.53% of total production capacity in  the EU or 5,898,000 tons during the IP.
6 This amounts to 
almost three times the combined amounts of imports originating in Argentina and Indonesia during the IP. Argentina submits that the evidence on which the evaluation of the utilization of capacity is 
based is implausible first because the alleged "mistake" in EBB's submissions would have been 
impossible to overlook, and second, because if the "mistake" had existed, major inconsistencies in the data submitted by EBB concerning production capacity of non-EBB Members would have been 
evident, especially in view of the fact that the entirety of the alleged "idle capacity" of the EU 
industry was allocated to non-EBB Members, which are a minority sector of the EU industry.  37. In stark contrast to the multiplicity of pub licly available sources confirming the accuracy of 
the data in the Complaint and the Provisional Regulation, the data provided by EBB in its 
submission of 17 September 2013 appear to consist of mere assertions by EBB. The EU stated in 
the Definitive Regulation that it cross-referenced EBB's submission to "publicly available data 
concerning in particular idle capacity as well as capacity of producers that ceased operations due 
to financial difficulties" but it does not state what these publicly available data are. The reliance on undisclosed yet supposedly public sources further calls into question the reliability and 
creditworthiness of the evidence on which evaluati on of the capacity of the Union industry was 
based.  38. Argentina notes that (1) this "publicly available data" was not placed on the public file of the 
investigation, (2) it is contradicted by all other publicly available sources that do appear on the 
public file of the investigation and (3) the EU di d not clarify what the "cross-referencing" exercise 
entailed. As a result, Argentina submits that the data on which the evaluation of production 
capacity and capacity utilization is based, is not reliable. 
 39. Moreover, Article 3.4 of the ADA does not allo w for an exclusion of production capacity that 
is "idle" from the evaluation of the utilization of capacity. As a result, the "idleness" of production 
capacity is a fact that is neither relevant nor pertinent to the question of what constitutes production capacity within the meaning of Article 3.4 of the ADA; it is production capacity regardless of whether it is "idle" or "available for use." As a result, to the extent that the 
assessment of production capacity and utilization of capacity is based on evidence concerning the 
fact that part of the capacity is allegedly "not available for use", it is based on evidence that is irrelevant and impertinent. 
 
40. Therefore, the EU failed to base its injury  determination on positive evidence and acted 
inconsistently with Articles 3.1 and 3.4 of the ADA. 
 
 The EU acted inconsistently with Articles 3.1 and 3.4 of the ADA in failing to 
conduct an objective examination of the pr oduction capacity and the utilization of 
capacity of its domestic industry 
 
41. The unusual exclusion of production capacity that was "idle" had the effect of understating 
the production capacity of the EU biodiesel indust ry by 5,898,000 tons during the IP or 26.53% of 
total capacity. This understatement, in turn, overst ates the utilization of capacity and thus negates 
the significance of the overcapacity of the EU indu stry as a cause of injury that is different from 
that of the allegedly dumped imports. Argentina submits that in weighing and balancing the 
evidence before it, the EU did not act in an  even-handed manner. Indeed, the exclusion of 
production capacity that was "not available for use"  was based on evidence that is not credible and 
which at the same time favoured the interests of EBB in the investigation. As a result, the 
examination was not "objective" within the mean ing of Article 3.1 of the ADA. The EU has 
therefore acted inconsistently with Articles 3.1 and 3.4 of the ADA. 
                                               
6 The magnitude of the figures involved speaks fo r itself. While EBB was perfectly able to detect, 
examine and isolate the economic effect supposedly caused by imports less than 1,500,000 tons in a market 
almost ten times bigger, it was unable to detect that the total EU production capacity had been overstated by almost six million tons.  WT/DS473/R/Add.1 
 
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   The EU acted inconsistently with Article 3.4 of the ADA in failing to adequately 
evaluate the production capacity and utilization of capacity of the domestic 
industry of the EU 
 42. When stating that production capacity remained "relatively stable" the EU failed to properly evaluate production capacity at the provisional stage as it failed to properly analyze this factor by 
"placing it in context in terms of the particular evolution of the data".
7 Argentina submits that the 
EU equally failed to adequately evaluate the pr oduction capacity and utilization capacity of the 
EU industry at the definitive stage. Consequently , the EU acted inconsistently with Article 3.4 of 
the ADA. 
 
 The EU acted inconsistently with Articl e 3.4 of the ADA in failing to evaluate 
utilization of capacity and return on  investment in a consistent manner 
 
43. To the extent that the EU eliminated so-calle d "idle capacity" from the production capacity of 
the EU industry, while basing the evaluation of the return on investment on the basis of all assets 
employed in the production of biodiesel, it woul d appear that both factors were based on data 
which lack consistency. Indeed, while the "return on investment" appears not to exclude "idle" 
assets, the EU's evaluation of the utilization of capacity did. Thus, Argentina submits that the EU failed to evaluate the return on investments and the utilization of capacity in a consistent manner. Consequently, the EU acted inconsistently with Article 3.4 of the ADA. 
 
H. The EU acted inconsistently with Articles 3.1 and 3.5 of the ADA in failing to 
ensure that the injury caused by the ov ercapacity of the EU industry was not 
attributed to the allegedly dumped imports 

 Figures concerning production capacity and utilization of capacity are incorrect 
 
44. The EU made a determination concerning prod uction capacity and utilization of capacity 
based on a definition of utilization of capacity which is inconsistent with Article 3.4 of the ADA, which was not based on positive evidence, which did not involve an objective examination and 
which was not based on an adequate evaluation. The correct figures would have shown a much 
higher production capacity of the EU industry and, consequently, a much lower utilization of 
capacity. 
 
 Errors in the assessment of the overcapacity in the Provisional Regulation 
 
45. The EU appeared to assume, incorrectly, that the arguments of the interested parties 
concerned only the low capacity utilization, instea d of referring to overcapacity. The EU industry 
had expanded production capacity by 38% during the period 2008-2011, i.e. far beyond what the 
market could absorb and despite the already extrem ely low rates of utilization of capacity in 2008. 
Even a superficial consideration of these argument s on overcapacity would have shown that based 
on the figures of the Provisional Regulation, unused capacity increased from 11,613,000 tons 
in 2009 to 13,174,629 tons during the IP, an increase of 1,561,322 tons. 
 
 The findings relating to fixed costs are incorrect 
 
46. Argentina refers to the statement that fixed costs do not bear any relation to capacity 
utilization rates, which is one of the reasons why the EU rejected the allegation that there was a 
causal relationship between the overcapacity of th e EU industry and the injury it suffered. This 
statement appears to be based on a misunderstanding. Indeed, the fact that fixed costs remain 
constant at different capacity utilization rates is precisely the reason why the low capacity 
utilization rates result in fixed costs being disproportionately high on a per unit basis.  47. In addition to the fact that, contrary to the statements of the EU, the weight of the fixed 
costs in the total cost of production is impacted by the rate of capacity utilization, Argentina 
disputes the notion that fixed costs were low and that, therefore, the low rates of capacity utilization were not a "decisive" factor of injury, as stated in Recitals 164 and 166 of the Definitive 
Regulation. 

                                               
7 Panel Report, EC – Tube or Pipe Fittings , para. 7.314. WT/DS473/R/Add.1 
 
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   The findings that low capacity utilization rates are not a decisive factor cannot be 
reconciled with the EU's statements th at the biodiesel industry is capital 
intensive 
 48. The EU mentions repeatedly that the biodiesel industry is capital intensive. Capital-intensive industries require large financial commitments to produce the first unit of any good and thus 
require high capacity utilization to achieve econom ies of scale and achieve a return on investment. 
Argentina submits that the finding that the very si gnificant overcapacity of the EU industry was not 
a decisive factor of injury cannot be reconciled with the statements throughout the Provisional and 
Definitive Regulations that the biodiesel industry is capital-intensive. 
 I. The EU acted inconsistently with Articles 3.1 and 3.5 of the ADA in failing to 
ensure that the alleged injury caused by  the EU industry's long term commercial 
strategy of importing the product under consideration was not attributed to the allegedly dumped imports 
 
49. The EU failed to properly assess the injury  arising from the EU industry's strategy of 
importing the product under consideration, thereby failing to separate and distinguish the injurious effects of this commercial strategy from those of the allegedly dumped imports. 
 
50. The EU itself recognized that imports made by the EU industry were one of the reasons for 
the low capacity utilization rate. Therefore, the commercial strategy pursued by the EU industry, 
which consisted of sourcing the product under consideration in Argentina through related entities, 
was a cause of injury. The statement that the imports were temporarily made in self-defense is contradicted by their sheer volume: over 60% of  total imports by the EU's own recognition. 
 
J. The EU acted inconsistently with Articles 3.1 and 3.5 of the ADA in failing to 
ensure that the injury caused by the double-counting regimes was not attributed to the allegedly dumped imports 
 
51. The EU acted inconsistently with Articles 3.1 and 3.5 of the ADA as a result of the failure to 
recognize that the double-counting regimes injure d the EU industry at the same time as the 
allegedly dumped imports and/or of the failure to appropriately assess the injurious effects of 
those regimes. In failing to examine the effects of  the double-counting regimes in force in other EU 
Member States besides France, the EU failed to appr eciate the full extent of the injurious effects of 
those regimes. The EU misplacedly insisted that double-counting only shifts demand, although it 
also reduces demand. Finally, Argentina disputes the relevance of the contention that the double-
counting regime was in force only during a part of the IP in France.  
K. The EU acted inconsistently with Articles 3.1 and 3.5 of the ADA in failing to 
ensure that the injury caused by the lack  of vertical integration and the access to 
raw material of the EU industry was no t attributed to the allegedly dumped 
imports 
 52. Argentina contends that the EU failed to comply with the non-attribution obligation in relation to the lack of vertical integration and the lack of access to raw materials of the EU 
industry. The EU did not undertake any steps to separate and distinguish the injurious effects 
arising out of these factors from the injurious effe cts of the allegedly dumped imports. Therefore, 
the EU acted inconsistently with Articles 3.1 and 3.5 of the ADA. 
 
IV. CONCLUSION  
53. Argentina respectfully requests that this Panel find that:  
 
I.- Article 2(5) of the Basic Regulation is inconsistent as such , with the following 
provisions of the ADA and the GATT 1994: (A ) Articles 2.2.1.1 and 2.2 of the ADA and 
Article VI:1(b)(ii) of the GATT 1994 by provid ing that the authorities shall reject or 
adjust the cost data of the exporters as included in its records when those costs reflect prices which are "abnormally or artificially low", because the costs do not 
reflect market prices or because they are allegedly affected by a distortion; (B) 
Article 2.2 of the ADA and Article VI:1(b)( ii) of the GATT 1994 by providing that the 
costs shall be adjusted or established in certain cases "on any other reasonable basis, WT/DS473/R/Add.1 
 
- B-11 - 
 
  including information from other represen tative markets", even though neither 
provision allows for an establishment of the costs on this basis. As a result, the EU acted inconsistently with Article XVI:4 of the Marrakesh Agreement Establishing the WTO and Article 18.4 of the ADA, and  
II.- The anti-dumping measures imposed by th e EU on imports of biodiesel originating 
in Argentina are inconsistent with the following provisions of the ADA and the GATT 1994: (A) Articles 2.2.1.1 and 2.2 of th e ADA and with Article VI:1(b)(ii) of the 
GATT 1994 because the EU failed to calculate the cost of production on the basis of 
the records kept by the producers under investigation; (B) Article 2.2 of the ADA and Article VI:1(b)(ii) of the GATT 1994 because the EU failed to construct the normal value of the exports of biodiesel on the basi s of the cost of production in the country 
of origin; (C) Article 2.2.1.1 of the ADA be cause the EU included costs not associated 
with the production and sale of biodiesel in the calculation of the cost of production; (D) As a result of the inconsistencies mentioned in points (A) to (C) above, the 
dumping margin determinations are inconsistent with Article 2.1 of the ADA and with 
Article VI:1 of the GATT 1994; (E) Articles 2.2 and 2.2.2(iii) of the ADA because the EU failed to base the profit margin as a component of the constructed normal value on 
a reasonable method within the meaning of Ar ticle 2.2.2(iii) of the ADA; (F) Article 2.4 
of the ADA because the EU failed to make due allowance for differences affecting price comparability, including differences in taxation, thereby precluding a fair comparison between the export price and normal value; (G) Article 9.3 of the ADA and VI:2 of the 
GATT 1994 because the EU imposed and levied anti-dumping duties in excess of the 
margin of dumping that should have been established in accordance with Article 2 of the ADA; (H) Articles 3.1 and 3.4 of the ADA because the EU's injury determination is 
not based on positive evidence and does not involve an objective examination of the 
consequent impact of the allegedly dumped imports on domestic producers of the like product in relation to capacity, utilization of production capacity and return on 
investment of the EU industry; (I) Articles 3.1 and 3.5 of the ADA since the EU failed 
to conduct an objective examination, based on positive evidence, of known factors other than the allegedly dumped imports in its non-attribution analysis; hence, the EU failed to ensure that the injury suffered by  the domestic industry of the EU resulting 
from other factors was not attributed to the allegedly dumped imports. Argentina 
considers that the measures at issue should be withdrawn. 
54. Argentina respectfully requests the Panel to make use of its discretion under the 
second sentence of Article 19.1 of the DSU by  suggesting ways in which the European Union 
should implement the recommendations and rulings of the DSB to bring its measures into conformity with the Anti-dumping Agreement and the GATT 1994. 
 
 WT/DS473/R/Add.1 
 
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  ANNEX B-2 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN 
SUBMISSION OF ARGENTINA 
A. INTRODUCTION 
 
1. Argentina has demonstrated, and the European Union (hereinafter the "EU") has failed to rebut, that, under Article 2(5) second subparagraph of the Basic Regulation, as reflected in the 
consistent practice of the EU authorities and th e judgments of the General Court of the EU, when 
the prices of inputs are found to be "abnormally low" or "artificially low" in comparison to prices in other markets, as a result of an alleged "distortion", it is concluded that the costs are not reasonably reflected in the records of the producer concerned and are thus adjusted or replaced by 
data on any other reasonable basis, including information from other representative markets. This 
measure is clearly inconsistent with Articles 2.2.1.1 and 2.2 of the Anti-Dumping Agreement (hereinafter the "ADA").  
 
2. Argentina has also demonstrated that several aspects of the anti-dumping measures imposed by the EU on imports of biodiesel originating in Argentina are inconsistent with the 
provisions of the ADA, including the dumping margin determinations and the injury and causality 
determinations.  B. ARGENTINA'S CLAIMS AGAINST ARTICLE 2(5), SECOND SUBPARAGRAPH, OF THE 
BASIC REGULATION 
 The measure at issue 
 
3. Under its "as such" claims, Argentina is challenging one measure, namely Article 2(5), second subparagraph, of the Basic Regulation and not "two separate measures"
1 a s  t h e  E U  i s  
claiming.  
 4. Regarding the scope of the measure , the EU errs when claiming that "the 
second subparagraph of Article 2(5) of the Basic Regulation [only] describes what the authorities 
can do after it has been determined that the record s do not "reasonably reflect" costs, pursuant to 
the first subparagraph of Article 2(5) of the Basic Regulation".   
5. This is, first of all, contrary to the text  of Article 2(5), second subparagraph. Indeed, 
Article 2(5), second subparagraph, does not only provide to the authorities the legal basis to use 
information from other representative markets when information on the domestic market is not 
available or cannot be used but, at the very same time, it also provides the legal basis for 
disregarding the records of the producers in those situations.  
 6. The background, the consistent practice of the EU authorities and the judgements of the 
General Court of the EU, confirm that Article 2(5) , second subparagraph, provides the legal basis 
for rejecting the records of the producers/expo rters where prices are "artificially low" or 
"abnormally low" as a result of an alleged "distortion". 
 
7. Regarding the background, it must be noted that the first subparagraph of Article 2(5) was 
introduced through Council Regulation No 3283/94 of 22 December 1994 which sought to 
implement the EU's international obligations arising from the ADA adopted during the 
Uruguay Round. In particular, by means of Article 2(5) of that regulation, it intended to implement the particular obligations laid down by Article 2.2.1.1 of the ADA. The second subparagraph of 
Article 2(5) was introduced by Regulation No 1972/2002 at the same time that Russia was granted 
full Market Economy Status, to provide a legal basis for the authorities to reject the cost data 
included in the records of the investigated party in case those costs reflect a price which is "abnormally low" or "artificially low", in comparison to prices in other markets, because of a 
"distortion" and to adjust or replace such costs by data which are not affected by such "distortion", 
as clearly stated in Recital 4 of Regulation No 1972/2002.  
                                               
1 EU's first written submission, para. 63. WT/DS473/R/Add.1 
 
- B-13 - 
 
   
8. The scope of Article 2(5), second subpara graph, as described by Argentina has been 
expressly confirmed by the General Court in the judgments referred to by Argentina. 
 
In particular, in the second Acron  case (Case T-118/10), the General Court expressly noted that 
the assessment  "whether the records reasonably reflect the costs " is made pursuant to the 
second subparagraph of Article 2(5):2 
 
The institutions were therefore fully entitled  to conclude that one of the items in the 
applicants' records could not be regarded as reasonable and that, consequently, that item had to be adjusted by having recourse to other sources from markets which the 
institutions regarded as more representati ve and, consequently, the price of gas had 
to be adjusted.
3 
9. Finally, the consistent practice of the EU authorities which has developed after the 
introduction into the Basic Regulation of Article 2(5), second subparagraph, confirms the 
foregoing. The Aluminium Foil case  to which the EU refers is irrelevant since the determination was 
based in that case on Article 18 of the Basic Regulation. 
 
10. It is clear from the foregoing that Argentina does not confuse the scope of the second subparagraph of Article 2(5) with the scope of the first subparagraph of Article 2(5), as asserted by the EU.
4 Instead, it is the defendant that artificially creates a non-existent two-steps 
approach between Article 2(5) first and second subp aragraphs, on the basis of the allegation that 
the second subparagraph only describes "what the authorities are authorized to do in order to 
calculate the costs, when the company records cannot be used".5 The EU's position should not 
prevail. That position is based on a simplistic reading of Article 2(5), first and 
second subparagraphs, taken in isolation, and without consideration of their context. As demonstrated above, the text of Article 2(5), se cond subparagraph, together with its background 
makes evident that it is pursuant to that particular provision that the authorities determine that 
records do not reasonably reflect the costs where the prices are "abnormally low" or "artificially low", in comparison to prices in other markets, because of an alleged "distortion". This has been expressly confirmed by the General Court, and is  supported by the consistent practice of the 
EU authorities which has developed after the introduction into the Basic Regulation of Article 2(5), 
second subparagraph.  
11. As to the precise meaning and content of the measure challenged , Argentina notes 
that the "measure on its face" is only "the starting point" for an "as such" analysis.6 As the 
Appellate Body underlined, if "the meaning or content of the measure is not evident on its face, 
further examination is required"7, as Argentina claims, so it is needed that the Panel "undertake a 
holistic assessment of all relevant elements (…)"8 "(…) submitted by a party that the alleged 
inconsistency with the covered agreements arises from a particular manner in which a measure is applied".
9 
 
12. After reading the plain text of Article 2(5), second subparagraph, of the Basic Regulation, it 
is clear that this provision imposes an obligation on the authorities. Indeed, where information of 
the costs of other producers or exporters in the same country "is not available or cannot be used", 
then the costs must be adjusted or established on "any other reasonable basis, including information from other representative markets". The second part of that provision also directs the 
                                               
2 Judgment of the General Court in Acron OAO v Council of the EU , Case T-118/10, para. 72 
(Exhibit ARG-52). 
3 Judgment of the General Court in Acron OAO and Dorogobuzh v Council of the EU , para. 46 
(Exhibit ARG-23). 
4 EU's opening statement at the fi rst substantive meeting, para. 45. 
5 EU's opening statement at the fi rst substantive meeting, para. 50. 
6 Appellate Body Report, US – Corrosion-Resistant  Steel Sunset Review , para. 168. 
7 Appellate Body Report, US – Corrosion-Resistant  Steel Sunset Review , para. 168. See also 
Appellate Body Report, US – Carbon Steel (India),  para. 4.446 referring to Appellate Body Reports, US – 
Countervailing and Anti-Dumping Measures (China) , para. 4.101. 
8 Appellate Body Report, US – Carbon Steel (India) , para. 4.451 referring to Appellate Body Report, 
US – Countervailing and Anti-Dumping Measures (China) , para. 4.101. 
9 Appellate Body Report, US – Carbon Steel (India) , para. 4.454. WT/DS473/R/Add.1 
 
- B-14 - 
 
  authorities to reject the exporters' records for the same reason that they have to use information 
from other representative markets.  13. Furthermore, Recital 4 of Regulation No 1972/2002 explains the meaning and content of 
Article 2(5), second subparagraph. Recital 4 expl icitly acknowledges that, in situations where, 
because of a particular market situation, sales do not permit a proper comparison, the records do not reasonably reflect the costs associated with the production and sale of the product under 
consideration. The use of the words "in particular" demonstrates that the finding that the records 
do not reasonably reflect the costs is not limited to situations in which a particular market situation has been found to exist. The next sentence in Re cital 4 establishes that this is to be the case 
whenever the costs are "affected by a distortion". The EU itself has noted that Article 2(5), 
second subparagraph, is used by the authorities in cases where, like in the case at hand, normal 
value is constructed because of lack of sales in the ordinary course of trade. It cannot just argue thereafter that Recital 4, which precisely seeks to  explain the meaning and content of Article 2(5), 
second subparagraph, is not relevant for the interpretation of that provision. 
 14. The fact that Recital 4 is relevant for the interpretation of Article 2(5), second subparagraph 
in all circumstances is further supported by the fact that the General Court referred to Recital 4 
even with regard to situations in which the normal value was constructed pursuant to a finding that there was no or insufficient sales in the ordinary course of trade.
10  
 
15. In conclusion, Regulation No 1972/2002, and in particular its Recital 4, are highly relevant 
for the understanding of the content and meanin g of Article 2(5), second subparagraph. They 
demonstrate that Article 2(5), second subparagraph,  provides the legal basis for (a) rejecting the 
cost data included in the records when they are affected by a "distortion", in particular, when they 
reflect prices that are "artificially low" and (b) for adjusting or establishing the costs in such a case on the basis of data from sources which are not affected by such distortions. 
 
16. Argentina has also referred to the consistent practice of the EU authorities pursuant to 
Article 2(5), second subparagraph, of the Basic Regulation as a relevant element for the understanding of the meaning and conten t of Article 2(5), second subparagraph.
11 In all the cases 
referred to by Argentina, the EU authorities have described the prices of the input concerned as 
being "significantly lower" or "much lower" in comparison with prices in other markets, such as prices in the EU. The prices have been described as being "abnormally low" and/or "artificially low" 
prices. What is relevant is the consistency in the determinations made by the EU authorities, that 
is, where the prices of the inputs have been found to be "artificially low" or "abnormally low" because of an alleged distortion, the authorities have consistently concluded that the records did 
not reasonably reflect the costs associated with the production and sale of the product under 
consideration.  17. Finally, the judgements of the General Court are relevant for the understanding of the 
meaning and content of Article 2(5), second subparagraph, since the General Court has confirmed on the basis of Recital 4 of Council Regula tion No 1972/2002 that the key element in the 
determination that the data were not "reasonable" is the existence of a "distortion". 
 
18. In conclusion, when assessed in conjunction, these elements establish altogether that where 
the prices of the inputs are found to be "artificially low" or "abnormally low" in comparison to 
prices on other markets as a result of a "distortion", the records do not reasonably reflect the costs 
associated with the production and sale of the product under consideration and the costs included 
in the records are adjusted or replaced by in formation from other representative markets. 
 
The Mandatory / Discretionary distinction 
 19. Argentina first notes that there is no provision in the ADA or any other Agreements which 
establishes a mandatory/discretionary standard that the Panel would have to apply. In other 
words, the Panel is required to examine whether the measure is consistent with the relevant WTO 
obligations, not whether the measure is discretionary or mandatory. Thus, the 
mandatory/discretionary distinction is not a test that panels are required to apply. At best, it could 
                                               
10 Judgment of the General Court in Acron OAO and Dorogobuzh v Council of the EU , Case T-235/08, 
para. 30 (Exhibit ARG-23). 
11 See Argentina's first written submission, section 4.2.2. WT/DS473/R/Add.1 
 
- B-15 - 
 
  in certain cases be an "analytical tool", which, as established by the Appellate Body, should not be 
applied "mechanistically", and the significance of which would vary from case to case.12  
 20. Argentina submits that the starting point of the analysis in an "as such" claim is the 
provision with which the measure is claimed not to be consistent. Therefore, if the relevant 
WTO provision prohibits a certain conduct, the mere fact that the measure being challenged provides for such a conduct should lead to the conclusion that there is a violation. Thus, even if 
Article 2(5), second subparagraph, only provided for the possibility - and did not require – that the 
authorities reject the records in such situations, the mere possibility would render it inconsistent with Article 2.2.1.1 of the ADA. The same reasoning applies to Argentina's claim under Article 2.2 of the ADA.  
 
21. Second, and in any case, Argentina submits that Article 2(5), second subparagraph, is not discretionary as alleged by the EU. The text of  Article 2(5), second subparagraph, Regulation 
No 1972/2002, the consistent practice of the EU authorities as well as the judgments of the 
General Court show that the authorities do not have discretion with respect to situations in which the prices are found to be "abnormally low" or "artificially low" because of an alleged "distortion". 
In such cases, the authorities necessarily conclude that the records do not reasonably reflect the 
costs and replace or adjust the costs on the basis of information from other representative markets.  
Article 2(5), second subparagraph, of the Basi c Regulation violates Article 2.2.1.1 of the 
ADA and, as a result, Article 2.2 of the ADA and Article VI:1(b)(ii) of the GATT 1994  
22. Regarding the interpretation of Article 2.2.1.1 of the ADA , Argentina notes in relation to 
the text of that provision, that the structure of th e first sentence of Article 2.2.1.1 clearly excludes 
any reasonableness test of the cost elements themselves.13 This is supported by the fact that the 
sentence uses the adverb "reasonably" which relates to the verb "reflect" and not the adjective 
"reasonable" that would be used to describe the "costs". Thus, the test is not to determine whether the cost elements are "reasonable" in relation to any type of outside benchmarks, but whether the records of the producer/exporter inve stigated provide reasonable information of the 
costs that are associated with the production and sale of the product under consideration for that 
producer/exporter in the framework of that investigation.  
The definition of the term "costs" as "charges or expenses" refers to a concrete amount by 
opposition to a hypothetical value, such as an international price, while the term "associated" does not in any away imply "a broad range of rela tions between the "costs" and the "production""
14 such 
that it could "capture the costs that would normally be associated with the production and sale of 
the goods".15 The word "associated" simply means that the costs must "pertain"16 to the 
production and sale of the product under consideration.   
23. Regarding the context, Argentina notes that the second and third sentences of 
Article 2.2.1.1 confirm that the test under the firs t sentence is not about the reasonableness of the 
costs in relation to outside benchmarks but ab out the relationship between the costs and the 
production and sale of the product under investigation for each producer/exporter examined in the 
anti-dumping investigation at issue. Article 2.2 which refers to the "cost of production in the country of origin" means that Article 2.2.1.1 cannot imply a test whereby it is examined whether 
the "costs" are reasonable in light of benchmarks outside of the country of origin. As to 
Article 2.2.2 of the ADA, this provision which deals exclusively with the determination of the 
"amounts for administrative, selling and general costs and for profits" confirms that if the drafters had intended to authorize the authorities to use data other than those of the producers/exporters 
for the calculation of the "cost of production", they would have explicitly provided for that 
possibility in Article 2.2.1.1.  
24. Finally, Argentina submits that "dumping" is about the "pricing behaviour" of the 
exporters/producers concerned and that this app lies to both the "export price" and the "normal 
value" as the Appellate Body itself noted is US – Zeroing (Japan) . The European Union's view that 
                                               
12 Appellate Body Report, US – Corrosion-Resistant  Steel Sunset Review , para. 93. 
13 Argentina's first written submission, para. 107. 
14 EU's first written submission, para. 137. 
15 EU's first written submission, para. 139. 
16 Panel Report, Egypt – Steel Rebar , para. 7.393. WT/DS473/R/Add.1 
 
- B-16 - 
 
  the normal value is "the value that the products should have in normal circumstances" is 
inconsistent with the proposition that the normal value relates to the pricing behaviour of the exporter/producer investigated. Indeed, the dumping found in such circumstances would not result from the pricing behaviour of the exporter/pro ducer concerned but from the difference between 
the export price of the exporter/producer concerne d and a hypothetical value, namely the one that 
products should have in normal circumstances . This view departs from the definition of "dumping" 
which is said to relate to the pricing behaviour of the specific exporter/producer investigated.  
 
25. Regarding the object and purpose, Argentina notes that, by claiming that the authorities 
should be authorized to address costs of inputs which are not "normal", the EU appears to seek to 
address so-called "input dumping" which has been described as "situation where materials or 
components that are used in manufacturing an exported product are purchased internationally or 
domestically at dumped or below cost prices, whether or not the product itself is exported at dumped prices".
17 
 
26. This issue was discussed by the Ad-Hoc Grou p on the Implementation of the Anti-Dumping 
Code of the Committee on Anti-Dumping Practices just before the Uruguay Round. There was, 
however, no consensus on this issue. Furtherm ore, the Draft Recommendation prepared by the 
Ad-Hoc Group confirms that no provision in the GATT or in the Anti-Dumping code authorized the use of anti-dumping duties to address "input dumping". As Argentina explained in its response to Panel's question No. 18, the negotiating histor y of Article 2.2.1.1 shows that there was no 
intention amongst the Parties to introduce "the requirements that the costs reflected in the records 
should be reasonable", as claimed by the defendant.
18 Furthermore, the issue of "input dumping" 
was raised during the Uruguay Round negotiations but was not addressed in the ADA. 
 
27. In conclusion, the analysis of the text and context of Article 2.2.1.1 as well as of the object and purpose unambiguously demonstrates that this provision does not permit investigating 
authorities to reject data included in the exporter/producer's records because such data reflect 
"abnormally low" or "artificially low" prices because of a "distortion".   28. As to the claims , Argentina first submits that to the extent that the Panel confirms that 
Article 2.2.1.1 prohibits the rejection of data in the records merely because those data are found 
to be "abnormally low" or "artificially low" because of an alleged distortion, Article 2(5), second subparagraph, must be found to be inconsis tent with Article 2.2.1.1 because that rejection 
falls within the category of what is prohibited by Article 2.2.1.1. Second, and in any case, 
Argentina submits that pursuant to Article 2(5), second subparagraph, the authorities are required to conclude that the records do not reasonably reflect costs when prices are found to be 
"abnormally low" or "artificially low" because of an alleged distortion, thereby violating 
Article 2.2.1.1 of the ADA.  Article 2(5), second subparagraph, of the Ba sic Regulation violates Article 2.2 of the 
ADA and Article VI:1(b)(ii) of the GATT 1994 
 29. Regarding the interpretation  of Article 2.2 of the ADA, Arge ntina notes that the text of the 
provision is clear and necessarily requires that the data/evidence used must be data/evidence in 
the country of origin. Furthermore, even if evidence  outside the country or origin could be used, it 
would have to be demonstrated that the cost of production which is based on such data/evidence 
constitutes the "cost of production in the country of origin". 
 30. As to the claims , Argentina submits that Article 2(5), second subparagraph, violates 
Article 2.2 of the ADA and Article VI:1(b)(ii) of the GATT 1994 because it provides that, where the 
costs of other producers or exporters in the same country are not available or cannot be used, the 
costs shall be adjusted or established on any other reasonable basis, including information from other representative markets while Article 2.2 prohib its the construction of normal value on a basis 
other than "the cost of production in the country of origin". Furthermore, Argentina notes that the 
authorities do not have the "broad discretion" as  claimed by the EU. The text of Article 2(5), 
second subparagraph, as confirmed by the prac tice, shows that where information from the 
                                               
17 Draft Recommendation concerning treatment of the practice known as input dumping, 
ADP/W/83/Rev.2. 
18 EU's opening statement at the first meeting of the Panel, para. 40. WT/DS473/R/Add.1 
 
- B-17 - 
 
  domestic market is not available or cannot be used, the costs must be adjusted or replaced on any 
other reasonable basis including information from other representative markets.  C. CLAIMS AGAINST THE ANTI-DUMPING MEASURES ON IMPORTS OF BIODIESEL 
ORIGINATING IN ARGENTINA 
 As a preliminary matter, Argentina noted several factual inconsistencies in the EU's defense.  
 
Claims pursuant to Articles 2.2 and 2.2.1. 1 of the ADA and Article VI:1(b)(ii) of the 
GATT 1994 and consequential claim pursuant to Ar ticle 2.1 of the ADA and Article VI:1 of 
the GATT 1994 
 
31. In the biodiesel investigation, the EU first rejected the cost of soybean that was reported by the producers under investigation and that was used to determine the cost of soybean oil, on the 
basis that they were found to be artificially lower that the international prices due to the distortion 
created by the Argentine export tax system. After the rejection of the reported costs of soybean, the EU went on to replace those costs with the reference FOB prices of soybean. 
 
32. Argentina has claimed that the EU authorities were not entitled to examine whether the costs of soybeans "would pertain to the production and sale of biodiesel in normal circumstances, i.e. in the absence of the distortion caused by Argentina's export tax on the raw materials".
19 
Therefore, by rejecting the cost data of soybea ns as included in the records of the producers 
because they were "artificially lower than the international prices due to the distortion created by the Argentine export tax system"
20, the EU violated Article 2.2.1.1 of the ADA. 
 
33. It is important to emphasise that the EU au thorities not only wrongfully tested whether the 
costs reflected costs of soybeans that would normally be associated with the production and sale 
of biodiesel in normal circumstances, but they also  wrongfully carried out this test in comparison 
with "international prices". As Argentina has underlined previously, comparison with benchmarks outside the country of origin is clearly incompatible  with the express requirement in Article 2.2 that 
refers to the "cost of production in the country of origin ". 
 
34. The EU has explained that the international price of soybean - which has been used as benchmark - is the price that would have  pertained to the production and sale of biodiesel in the 
absence of the export tax on soybean.
21 It has also stated that the difference between the 
international price and the domestic price of soybean (which is the price that was reported by the producers under investigation) is the export tax and other expenses incurred for exporting it.
22 
 
35. Argentina submits that implicit in these statements is the consideration that, in fact, the international price of soybean did not pertain to the production and sale of the biodiesel under investigation in that investigation and in that case. Therefore, according to the EU's own findings in 
the biodiesel investigation, the international price of soybean that was used as benchmark to 
determine that the costs of soybeans were not reasonably reflected in the records
23 is not 
associated with the production and sale of biodie sel within the meaning of the second proviso of 
the first sentence of Article 2.2.1.1 of the ADA.  
 36. Given that the international price of soybean is not a cost of the Argentinean producers that 
is associated with the production and sale of biodiesel in that investigation, the EU was not 
allowed, under the second proviso of the first senten ce of Article 2.2.1.1, to test the records of the 
Argentinean producers against those costs.   
37. Therefore, in rejecting the cost of soybean reported by the exporting producers when 
constructing normal value on grounds that those costs "were found to be artificially lower than the international prices", the EU acted inconsistently with Articles 2.2.1.1 and 2.2 of the ADA and with 
Article VI:1(b)(ii) of the GATT 1994. 
 
                                               
19 EU's first written submission, para. 236. 
20 Definitive Regulation, Recital 38 (Exhibit ARG-22). 
21 See, for instance, EU's first written submission para. 236. 
22 Definitive Regulation, Recital 37 (Exhibit ARG-22). 
23 Definitive Regulation, Recital 38 (Exhibit ARG-22). WT/DS473/R/Add.1 
 
- B-18 - 
 
  38. With regard to Article 2.2, Argentina subm its that the ADA provides that the costs of 
production must be "the cost of production in th e country of origin". According to this, Argentina 
has demonstrated that the EU violated this obligation since in calculating the cost of production of the Argentinean exporters/producers, it did not use domestic prices of soybeans, but the reference 
FOB prices of soybeans, net of fobbing costs.
24 
 39. The reference FOB price of soybean minus fobbing costs, on the basis of which the EU 
calculated the cost of production, is not a "price to be paid for the act of producing" (i.e. cost of 
production) in Argentina (the country of origin), as it comprises the export tax on soybeans and because the domestic price of soybean is equivalent to the reference price minus fobbing costs and 
minus  export taxes. The reference FOB price is, at be st, a proxy of the export price of soybean but 
not a cost at which soybean is acquired domestically. It thus acted inconsistently with Article 2.2 of 
the ADA and with Article VI:1(b)(ii) of the GATT 1994.   
40. Finally, for the reasons expressed in its opening statement
25 and in its response to Panel 
question No. 55, Argentina maintains its claims under Article 2.1 of the ADA and Article VI:1 of the GATT 1994. 
 
The EU acted inconsistently with Articles  2.2 and 2.2.2(iii) of the ADA because the 
amounts for profits established by the EU were not determined on the basis of a 
reasonable method 
 
41. Argentina asserts that, contrary to what the EU pretends, the mere fact of establishing an 
amount and then testing its reasonableness is insufficient to comply with the terms of 
Article 2.2.2(iii) of the ADA. In order to fulfil the requirements of that provision, the selected 
amount needs to be arrived at following a reasonable method. Given that the EU did not establish the amount for profits pursuant to any method, let alone a reasonable one, it has violated 
Articles 2.2.2(iii) and 2.2 of the ADA. 
 The EU acted inconsistently with Article 2.4 of the ADA in failing to make due allowance 
for differences affecting price comparability, including differences in taxation, and in 
precluding a fair comparison between export price and normal value 
 42. Argentina has shown that the manner in which the EU constructed normal value whereby it 
disregarded the domestic price of soybean as a basi s to calculate the "oil share" (i.e. the value of 
the bean corresponding to the oil) and substituting it with the "FOB reference price" of soybean as 
a basis from which to calculate the "oil share" is  inconsistent with Articles 2.2 and 2.2.1.1 of 
the ADA. This WTO-inconsistent manner of substitu ting the cost of soybean resulted in a normal 
value applied to the exporting producers that reflected the international price of soybean oil, as if the exporting producers were located outs ide of the territory of Argentina.  
 
43. In subsequently calculating the dumping marg in, the EU compared this "non-domestic" or 
"international" normal value of biodiesel with an export price that was fully "domestic", i.e. without the substitution or the adjustment of the cost of soybean out of which the "oil share" was 
calculated. By proceeding in that way, the EU acted as if it were calculating dumping margins of 
the finished product based on differences between the domestic price and the export price not of 
the product under consideration, but of its primary input. Therefore, the EU generated an artificial 
imbalance between the export price and the normal value. 
 44. As a consequence, Argentina has claimed that a difference exists between normal value and export price
26 and that this difference affects price comparability.27 It consequently claims that the 
comparison between normal value and export pric e, absent an adjustment to account for this 
difference, is not a fair comparison and consequently it is inconsistent with Article 2.4 of the ADA.  
The EU acted inconsistently with Article 9.3 of the ADA and Article VI:2 of the GATT 1994 
in imposing and levying anti-dumping duties  in excess of the margin of dumping that 
should have been established in ac cordance with Article 2 of the ADA 
                                               
24 Argentina's first written submission, paras. 245-254. 
25 Argentina's opening statement at the firs t meeting of the Panel, paras. 18-22. 
26 Argentina's first written submission, paras. 298-299. 
27 Argentina's first written submission, para. 300; Argentina's opening statement at the first meeting of 
the Panel, para. 85. WT/DS473/R/Add.1 
 
- B-19 - 
 
   
45. Argentina's claim is that the EU has imposed and levied anti-dumping duties in excess of the 
margin of dumping that it should have calculated in conformity with Article 2 of the ADA and that, consequently, it acted inconsistently with Ar ticle 9.3 of the ADA and Article VI:2 of the 
GATT 1994.
28  
 46. The defense of the EU appears to suggest that the terms "margin of dumping" have a 
meaning under Article 9.3 that is different from the meaning assigned to those terms under 
Article 2 and that, therefore, the level of the duti es imposed or levied on the dumped imports may 
be tested against a margin of dumping which is not the margin of dumping established in conformity with Article 2 of the ADA. In line with the EU's contention, under Article 9.3, the 
"margins of dumping" against which the duties are to be tested would be those that are found by 
the investigating authority, regardless of their consis tency with Article 2. This line of thought runs 
counter to Article 2.1 of the ADA, which defines dumping "for the purpose of this agreement" and 
thus shows that the meaning is uniform throughout the agreement.
29 It is also inconsistent with 
the text of Article 9.3, which explicitly states "as established under Article 2" and not "as determined by the investigating authority". 
 
The EU acted inconsistently with Articles 3.1 and 3.4 of the ADA in its evaluation of the production capacity, the utilization of capaci ty and the return on investment of the 
EU industry 
 
47. Argentina first submits that the EU's definition of capacity and capacity utilization is 
inconsistent with Article 3.4 . Article 3.4 contains no basis for excluding capacity that is "idle" or 
"not available for use" from the assessment of capacity utilization.30 Moreover, the EU not only has 
not pointed to any textual or contextual basis that would support the exclusion of part of the production capacity from the analysis of the utilization of capacity, but has not offered any 
explanation of what this exactly means. Therefore,  the EU acted inconsistently with Article 3.4 of 
the ADA in excluding part of the production capacity, namely the "idle" capacity, from the assessment of the utilization of capacity.  
48. Second, Argentina submits that the EU's assessment of production capacity and 
capacity utilization is not based on positive evidence . Argentina notes that the domestic 
industry intended to exclude "idle" capacity from its production capacity from the beginning of the 
investigation, as indicated by the statement that idle capacity had already been excluded from the 
capacity figures of EBB members.31 Against this background, the fact that the production capacity 
figures for non-EBB members included both their idle capacity and that of EBB members appears 
to have been a mistake.32 The data, on which the evaluation of capacity utilization is based, 
appear not to be reliable because they are cont radicted by a multiplicity of available public 
sources, including EBB itself.33 In view of the foregoing, it must be concluded that the EU's 
evaluation of production capacity and capacity utilization was not based on positive evidence and 
was therefore inconsistent with Articles 3.1 and 3.4 of the ADA . 
 49. Third, the EU did not conduct an objective ex amination of the domestic industry's 
production capacity and utilization of capacity . The EU attempts to contradict Argentina's 
claims by stating that it selected a sample of EU companies and subjected their data to detailed 
examination and verification.34 However, all the sampled prod ucers were EBB members, whose 
production capacity figures excluded "idle capacity " from the beginning. Therefore, the verification 
of those EBB companies does not guarantee the accuracy of the figures relating to non-EBB  
members and to the industry as a whole, which concerns the figures that were adjusted.  
                                               
28 Argentina's first written submission, para. 309. 
29 See also, Appellate Body Report, US – Stainless Steel (Mexico) , para. 96. 
30 Argentina's first written submission, paras. 354-356. 
31 Submission by EBB of 17 September 2013, section 1.1 (Exhibit ARG-47). 
32 The fact that this is a mistake is also apparent from EBB's letter of 17 November 2013 which cautions 
that "… any calculation of non-EBB member production ca pacity would (…) still include idle capacity from EBB 
and non-EBB member and would lead to a false calculation". See Submission by EBB of 17 September 2013, 
section 1.3, Exhibit ARG-47. 
33 See Argentina's first written submission, para. 370. 
34 EU's response to  Panel question No. 62, para. 91. WT/DS473/R/Add.1 
 
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  50. Fourth, the EU did not consistently evaluate th e utilization of capacity and return on 
investment . In its answer to Panel question No. 63(b) and in its opening statement35, Argentina 
has addressed the EU's argument that there were no sampled companies with so-called "idle" 
capacity.36 As explained by Argentina, at least one of the sampled companies, Diester, appeared to 
have what would fall within the EU's vague definiti on of "idle" capacity, that is, capacity that was 
installed but which was not available for use. Therefore, Argentina maintains its claim that the EU acted inconsistently with Article 3.4 of the ADA in failing to evaluate the return on investments and 
the utilization of capacity in a consistent manner.  
 The EU acted inconsistently with Articles 3.1 and 3.5 of the ADA in failing to ensure that 
the injury caused by certain factors was not attributed to the allegedly dumped imports 
 
51. Regarding overcapacity , Argentina has demonstrated that the EU failed to make an 
appropriate assessment of the injury caused to the EU industry by its overcapacity. The EU's 
defense is entirely unconvincing for a number of reasons. 
 52. First of all, the EU confuses utilization of capa city as an injury indicator (under Article 3.4 of 
the ADA) and the overcapacity of its domestic indu stry as a cause of injury (under Article 3.5 of 
the ADA). Second, the confusion prevented the EU fr om ascertaining the impact of this cause of 
injury on capacity utilization as an injury indicator, thus understating the controlling importance of overcapacity as a source of injury. Third, th ere is a correlation between the increase in 
overcapacity and the decrease in profitability whic h, together with the decline in market share are 
the main injury indicators on which the EU has relied to come to the conclusion that the domestic industry was materially injured.
37 Therefore, contrary to the EU's assertions, the overcapacity is 
the cause of the declining profit and consequently, of the injury suffered by the domestic industry. 
Fourth, the profit of 3.5% of the domestic indust ry in 2009 to which the EU refers was, in fact, 
extremely low by the EU's own standards, namely a 15% injury elimination level set by the EU for 
the period April 2007 to March 2008.38 This level which is well below the injury elimination level 
set by the EU itself disproves the EU's contention that the industry could be healthy with high overcapacity. In any case, Argentina recalls that  between 2009 and the IP  overcapacity did not 
remain constant but instead increased by 1,561,322MT. Fifth, even if no increase in imports would 
have taken place at all during the IP, th e overcapacity would still be enormous. 
 53. To summarize, the continued overcapacity an d its significant increase between 2009 and the 
IP was the main factor injuring the domestic industry and not the imports originating in Argentina 
and Indonesia. The above shows that the EU's deci sion to attribute controlling importance to the 
allegedly dumped imports as a source of injury instead of to the overcapacity of the domestic 
industry amounts to a failure to appropriately separate and distinguish the injurious effects of the 
overcapacity from those of the allegedly dumped imports. Therefore, the EU acted inconsistently 
with Articles 3.1 and 3.5 of the ADA.  
54. Turning to the long-term commercial strategy of the EU industry , Argentina noted that 
the EU's arguments are unconvincing for various reasons. First, the EU's statement that the 
domestic industry was compelled to buy biodiesel from Argentina is not believable given that the 
imports from Argentina and Indonesia were not a marginal phenomenon in comparison to total 
imports. This argument also overlooks the fact that biodiesel production facilities in Argentina are either directly affiliated to the domestic industry or related through common ownership. 
 
55. Second, the EU has not provided evidence th at had the domestic industry not made those 
imports, traders would have made those imports. Finally, the argument about the maintenance of a customer base is unconvincing and contradicted by  the fact that the EU itself added the imports 
made by the Union industry to the market shar e of the allegedly dumped imports, instead of 
adding it to the market share of the domestic industry.
39 
 
56. In view of the above, Argentina submits that  the EU acted inconsistently with Articles 3.1 
and 3.5 of the ADA in failing to separate and di stinguish the injurious effects of the domestic 
                                               
35 Argentina's opening statement at the first meeting of the Panel, paras. 100 and 101. 
36 EU's first written submission, para. 318. 
37 Provisional Regulation, Recital 118 (Exhibit ARG-30)  and Definitive Regulation, Recitals 142 and 143 
(Exhibit ARG-22). 
38 See Exhibit EU-14, recitals 181 and 182. 
39 Definitive Regulation, Recital 156 (Exhibit ARG-22). WT/DS473/R/Add.1 
 
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  industry's own commercial strategy, in qualifying it as "self-defense" and in incorrectly attributing 
its effects to the allegedly dumped imports.  57. With regard to double-counting , Argentina has claimed that the EU failed to appropriately 
assess the injurious effects of the double-counting regimes and that it failed to separate and 
distinguish its effects from those of the allegedly dumped imports. In responding to this claim, the EU has stated that, double-counting shifts demand within the Union industry and does not 
generate demand for imports and that Union producers of double-counting biodiesel experienced 
negative performance, suggesting that the decline of non-double counting producers cannot be attributed to the performance of the double-counting producers.
40 
 
58. Argentina disagrees with these arguments for the following reasons. First of all, the fact that 
the financial situation of the producers declined only after double-counting had been repealed in France is irrelevant, as the effects of double-counting materialized during the IP. Consequently, 
the injurious effects of that scheme should have , but were not distinguished and separated from 
the injury caused by the allegedly dumped imports as mandated by Article 3.5 of the ADA. Second, Argentina notes that the EU failed to examine double-counting regimes other than the French 
regime
41, despite the fact that their existence was brought to the attention of the investigating 
authority.  59. In view of the above, Argentina submits that the EU violated Articles 3.1 and 3.5 of the ADA 
in failing to examine double-counting and to di stinguish and separate the injurious effects of 
double-counting from those of the allegedly dumped imports.  
60. Finally, Argentina has claimed that the EU's industry is at a disadvantage because of a lack 
of vertical integration and la ck of access to raw materials . The disadvantage results from 
the introduction of additional phase of transport into the production chain, which does not exist 
when the raw materials are processed on site. The significance of this disadvantage cannot be 
understated, especially in view of the fact that transport of the raw material is not only an additional phase, but occupies a much larger volume of cargo space.   
61. In consequence, in failing to separate and distinguish the effects of the lack of vertical 
integration and the lack of access to raw materials from the injury caused by the allegedly dumped imports, the EU acted inconsistently with Articles 3.1 and 3.5 of the ADA. 
 
62. For the reasons set out in this submissi on and in previous submissions, Argentina 
respectfully requests that this Panel find that:  
 
I.- Article 2(5) of the Basic Regulation is inconsistent as such, with the following provisions of the ADA and the GATT 1994: (A) Articles 2.2.1.1 and 2.2 of the ADA and Article VI:1(b)(ii) of the 
GATT 1994 by providing that the authorities shall reje ct or adjust the cost data of the exporters as 
included in its records when those costs reflect prices which are "abnormally or artificially low", 
because the costs do not reflect market prices or because they are allegedly affected by a distortion; (B) Article 2.2 of the ADA and Article VI :1(b)(ii) of the GATT 1994 by providing that the 
costs shall be adjusted or established in certai n cases "on any other reasonable basis, including 
information from other representative markets", even though neither provision allows for an establishment of the costs on this basis. As a resu lt, the EU acted inconsistently with Article XVI:4 
of the Marrakesh Agreement Establishing the WTO and Article 18.4 of the ADA, and  
 II.- The anti-dumping measures imposed by the EU on imports of biodiesel originating in Argentina are inconsistent with the following provisions of the ADA and the GATT 1994: (A) Articles 2.2.1.1 
and 2.2 of the ADA and with Article VI:1(b)(ii) of  the GATT 1994 because the EU failed to calculate 
the cost of production on the basis of the records kept by the producers under investigation; (B) Article 2.2 of the ADA and Article VI:1(b)(ii) of the GATT 1994 because the EU failed to 
construct the normal value of the exports of biodiese l on the basis of the cost of production in the 
country of origin; (C) Article 2.2.1.1 of the ADA because the EU included costs not associated with the production and sale of biodiesel in the calculat ion of the cost of production; (D) As a result of 
the inconsistencies mentioned in points (A) to (C) above, the dumping margin determinations are 
inconsistent with Article 2.1 of the ADA and with Article VI:1 of the GATT 1994; (E) Articles 2.2 
                                               
40 EU's first written submission, para. 339 and EU's response to Panel question No. 79. 
41 EU's response to Pa nel question No. 73. WT/DS473/R/Add.1 
 
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  and 2.2.2(iii) of the ADA because the EU failed to  base the profit margin as a component of the 
constructed normal value on a reasonable method within the meaning of Article 2.2.2(iii) of the ADA; (F) Article 2.4 of the ADA because the EU failed to make due allowance for differences affecting price comparability, including differences in taxation, thereby precluding a fair 
comparison between the export price and normal va lue; (G) Article 9.3 of the ADA and VI:2 of the 
GATT 1994 because the EU imposed and levied an ti-dumping duties in excess of the margin 
of dumping that should have been established in accordance with Article 2 of the ADA; 
(H) Articles 3.1 and 3.4 of the ADA because the EU's injury determination is not based on positive 
evidence and does not involve an objective examin ation of the consequent impact of the allegedly 
dumped imports on domestic producers of the like product in relation to capacity, utilization of production capacity and return on investment of the EU industry; (I) Articles 3.1 and 3.5 of the 
ADA since the EU failed to conduct an objective ex amination, based on positive evidence, of known 
factors other than the allegedly dumped imports in its non-attribution analysis; hence, the EU failed to ensure that the injury suffered by the domestic industry of the EU resulting from other 
factors was not attributed to the allegedly dumped imports. Argentina considers that the measures 
at issue should be withdrawn.  
63. Argentina respectfully requests the Panel to make use of its discretion under the 
second sentence of Article 19.1 of the DSU by  suggesting ways in which the European Union 
should implement the recommendations and rulings of the DSB to bring its measures into conformity with the Anti-dumping Agreement and the GATT 1994. WT/DS473/R/Add.1 
 
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  ANNEX B-3 
EXECUTIVE SUMMARY OF THE STATEMENT OF ARGENTINA  
AT THE FIRST MEETING OF THE PANEL 
1. Opening Remarks 
 
1. Argentina asserts that we are not here because export taxes are the source of unfair advantages for producers in countries where exports are taxed, as the narrative of the 
EU suggests. We are here because of structural  problems and lack of competitiveness in the 
EU industry of biodiesel. These structural problems are unfortunate in light of the huge subsidies granted to the biodiesel industry in Europe.  
2. Argentina believes that the investigating authorities in the EU have a mandate to challenge 
export taxes at any cost. And it is what they did, even knowing that Argentina and Indonesia 
would bring a case before the WTO. However, export taxes are not only legal (there are no 
disciplines for export taxes under WTO law) but also legitimate instruments broadly used by 
developing countries and mainly for fiscal purposes.   
2. Introduction 
 3. Despite being based on an intensely litigated agreement – the Anti-Dumping Agreement - this dispute is still unique on at least two counts: a) The first aspect is the fact that while dumping 
reflects the conduct of individual companies that export at prices below those in their own 
domestic market, in the case at hand, the European Union has targeted a series of practices that are very different from such price discrimination and are completely beyond the control of the 
exporting producers b) the second distinctive feature of this case which is derived from the 
first one, is the overt attempt by the European Union to expand the scope of application of the Anti-Dumping Agreement. According to the European  Union, dumping would no longer be confined 
to the well-known practice of pricing the same product differently for different markets. Instead, it 
would also encompass differences in costs at which producers in different countries obtain inputs. Hence, as of the moment there is a difference in the price at which a producer can have access to a given input, and provided that such difference is reflected in the price of the final product, then, 
according to the European Union, that product is being dumped.  
 4. According to the above said, Argentina first challenges "as such" Article 2(5), 
second subparagraph, of the Basic Regulation, which provides that where the costs of the inputs in 
the records reflect prices that are found to be artificially or abnormally low in comparison with the prices on other markets, the costs have to be adjusted or established on another basis, including 
on the basis of information from other representative markets. This measure is manifestly 
inconsistent with the provisions of the Anti-Dumping Agreement and, in particular, with its Article 2 which precisely lays down the rules that must be followed for the determination of the normal value. This measure is of significant concern to Argentina given that the investigating 
authority endows itself with a margin of discretion that goes well beyond what is allowed under the 
Anti-Dumping Agreement. The European Union is, in fact, trying to create a new category of 
"dumping" which does not exist under the Anti-Dumping Agreement. 
 5. Argentina also challenges the anti-dumping  measures imposed by the European Union on 
imports of biodiesel from, Argentina. These measures are based on manifestly flawed 
determinations of dumping since the European  Union erroneously rejected the Argentinean 
producers' cost data for soybean and replaced them by the average of the FOB reference price, thereby finding dumping or artificially inflat ing the margins of dumping of the Argentinean 
producers. Furthermore, these measures are also  based on manifestly flawed determinations 
relating to both injury and causality. 
 WT/DS473/R/Add.1 
 
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  3. Request for a Preliminary Ruling an d Preliminary Issues raised by the 
European Union 
 6. In Argentina's view, to the extent that the European Union cannot demonstrate that 
resolving these Article 6.2 claims would make any pr actical differences, these issues appear to be 
moot and, in Argentina's view, the Panel theref ore does not need to examine them any further.
1 
 
7. The same comment applies to the European Union's claim about Argentina's alleged failure 
to identify the "specific measures at issue" in which it argued that the references to the terms "implementing measures and related instruments or practices" and to "related measures and implementing measures" in Argentina's Panel Request were too vague.
2 Argentina noted that these 
words were not on their face inconsistent with the requirement to identify the specific measures at 
issue and that, in any case, this objection appeared to be premature and unnecessary.   
8. The European Union first asserts that the Panel must reject Argentina's claims pursuant to 
Article 2.1 of the Anti-Dumping Agreement an d VI:1 of the GATT 1994 because they are 
definitional provisions that do not impose independent obligations
3 and is not applicable to 
situations where there are no sales in the ordinary course of trade.4 However, Argentina 
remembers that in subparagraph 470 of its fi rst written submission has explained that the 
European Union's violations of Article 2.1 of th e Anti-Dumping Agreement and Article VI:1 of the 
GATT 1994 result from the numerous violations  of Articles 2.2 and 2.2.1.1 of the Anti-
Dumping Agreement. 
 
9. The European Union erroneously argues that Argentina claims that a violation of Article 2.2 
automatically constitutes a failure to comply with Article 9.3.5 This is not correct. Argentina is not 
taking issue with the calculation of the normal value under its Article 9.3 claim. What Argentina has submitted is that the European Union has imposed definitive anti-dumping duties which 
exceed the margins of dumping as established und er Article 2 of the Anti-Dumping Agreement.  
 4. Claims against Article 2(5), second subparagraph, of the Basic Regulation  
10. Argentina is not challenging "two separate "measures""
6, as claimed by the 
European Union, but only one measure, namely Article 2(5), second subparagraph.   
4.1 Claim under Article 2.2.1.1 of the Anti-Dumping Agreement 
 11. Argentina claims first that Article 2(5), second subparagraph, violates Article 2.2.1.1. In 
this sense, Argentina asserts that the introduction  of the second subparagraph in Article 2(5) by 
Regulation No 1972/2002 gave a specific meaning and content to the condition that the "costs associated with the production and sale of th e product under investigation are not reasonably 
reflected in the records of the party concerned". Under and pursuant to the new 
second subparagraph of Article 2(5), the authorities have to conclude that the records do not 
reasonably reflect costs associated with the production and sale of the product under consideration where they find that the costs of the inputs reflect prices that are "abnormally or artificially low" in 
comparison to prices on other markets.  
 12. Thus, it clearly flows from Regulation No  1972/2002 that, with the introduction of the 
second subparagraph of Article 2(5), a condition has been imposed on the authorities which must 
examine whether the costs of the inputs are not "abnormally or artificially low" in comparison to prices on other markets. This is actually su pported by the wording of the second part of 
Article 2(5), second subparagraph, which refers to  the adjustment or establishment of costs on 
any other reasonable basis including from other representative markets. The requirement to use 
information from other representative markets is rendered necessary precisely because the data on the domestic market are to be considered non-usable when they are found to be "artificially or 
abnormally low" in comparison with prices on other markets. 
                                               
1 Panel Report, US – Countervailing and Anti dumping Measures from China , paras. 3.9 – 3.10. 
2 European Union’s requ est for a preliminary ruling, paras. 8 – 9. 
3 European Union’s first written submission, paras. 48 and 53. 
4 European Union’s first writ ten submission, para. 49. 
5 European Union first written submission, para. 56. 
6 European Union’s first writ ten submission, para. 63. WT/DS473/R/Add.1 
 
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  13. This is further supported by the consistent practice of the authorities, because it has been 
found that there is an automatic link between, on the one hand, prices that are found to be "abnormally or artificially low" in comparison to prices on other markets and, on the other hand, the finding that the costs are not reasonably reflected in the records. There is no discretion, and 
the practice confirms that.  
 14. Contrary to what European Union affirms, Argentina is not required to demonstrate that 
the "abnormally or artificially low" prices of the inputs is the only reason justifying the conclusion 
that the company records do not reasonably reflect the costs. Argentina is only required to demonstrate that the measure at issue necessarily requires the authorities to conclude that the records do not reasonably reflect the costs when the costs reflect prices that are found to be 
abnormally or artificially low.  
 15. The European Union claims that under the second condition of Article 2.2.1.1, the 
authorities can examine whether the records reflect costs that would normally be associated with 
the production and sale of the goods in normal circumstances.
7 
 
16. To defend its position, the European Union is thus obliged to distort the ordinary meaning 
of the terms of Article 2.2.1.1, adding words that  are not there, such as "would normally be" and 
"in normal circumstances". As emphasized in Argentina's first written submission, such an interpretation is not only contrary to the ordinary  meaning of the words, but also to the structure 
of the sentence and the context of this provision.  
 17. There is nothing in Article 2.2.1.1 or ot her provisions of the Anti-Dumping Agreement 
suggesting that the cost data of producers can be  disregarded because they are lower than what 
they would be in other markets. Argentina underline d earlier, rejecting the costs of a producer on 
the ground that there are not "normal" in comparison to the prices in another country is 
fundamentally contrary to the concept of "d umping" in the Anti-Dumping Agreement.  
 4.2 Claim under Article 2.2 of the Anti-Dumping Agreement  
18. Argentina asserts that the wording of Article 2(5) second subparagraph is clearly WTO 
inconsistent: it "mandates" the authorities to adjust or establish the costs "where such information 
is not available or cannot be used", "on any other reasonable basis, including information from 
other representative markets". 
 19. Furthermore, the European Union errs when  it argues that it would be necessary to 
demonstrate that this provision requires "the investigating authority to use such information "in all 
cases"."
8 However, as the Appellate Body noted in an earlier case, in order to succeed with an "as 
such" claim,9 Argentina is not required to demonstrate that in each and every case where 
Article 2(5) second subparagraph will be used, it will end in a result which is inconsistent with WTO 
rules. It is sufficient for Argentina to demonstrate that this rule will necessarily lead to violations of 
WTO rules in certain specified circumstances.   
20. The European Union's interpretation that "[t]he possibility of using "any other reasonable 
method" in Article 2.2.2(iii) implies that Article 2.2, as a whole, does not impose an absolute 
prohibition on the use of data on the cost of production from countries other the country of origin, 
where the conditions of production and sale are not in the ordinary course of trade"10 is untenable. 
 
                                               
7 European Union’s first written submission, paras. 133, 139 and 144. 
8 European Union’s first written submission, para. 186. 
9 Appellate Body Report, US – OCTG Sunset Reviews , para. 172. 
10 European Union’s first written submission, para. 198. WT/DS473/R/Add.1 
 
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  5. Claims regarding the Anti-Dumping Meas ures on imports of biodiesel originating 
in Argentina 
 5.1  Claims under Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreement and 
Article VI:1(b)(ii) of the GATT 1994 
 5.1.1 The European Union misinterprets Arti cle 2.2.1.1 of the Anti-Dumping Agreement 
 
21. Argentina does not dispute that the costs against which the records must be tested are those that are "associated with the production and sale of the product under consideration". However, as Argentina has emphasized, the fact that the test refers to the "costs associated with 
the production and sale of the product under consideration" means that the determination must 
establish whether the costs in question effectively "pertain to the production and sale of the product in question", irrespective of whether the costs are lower than international prices or prices 
in other markets. In stating that it is entitled to consider "which costs would pertain to the 
production and sale of biodiesel in normal circumstances", the European Union is adding words which are not there, namely "would" and "in normal circumstances", and is thereby modifying the 
scope and meaning of this provision.  
 22. In the biodiesel anti-dumping investigation, the European Union did not examine whether the costs of soybeans in the producers' records reasonably related to the cost of producing and 
selling biodiesel in Argentina. Rather, it examined those costs against a hypothetical benchmark 
price and concluded that "the domestic prices of the main raw material used by the biodiesel producers in Argentina were […] artificially lower than the international prices due to the distortion 
created by the Argentine export tax system".
11  
 23. Furthermore, the panel report in EC – Salmon  confirmed that "the test for determining 
whether a cost can be used in the calculation of "cost of production" is whether it is "associated 
with the production and sale" of the like product", the costs being those of the "investigated party." The fact that the Panel in EC – Salmon  defines the expression "cost of production" as "the 
price to be paid for the act of producing" does not in any way mean that the word "costs" could be 
understood as hypothetical prices.  
 5.1.2  The European Union acted inconsistently with Article 2.2.1.1 in using costs that are not 
associated with the production and sale of biodiesel for the construction of normal value 
 24. Argentina has shown that for the exporting producers, the FOB reference price is not a 
price that is associated with the production and sale of biodiesel. In fact, the reference FOB price is 
a statistical tool which is calculated by averaging FOB prices of the previous day.   5.1.3 The European Union acted inconsistently wi th Article 2.2 of the Anti-Dumping Agreement 
and Article VI:1(b)(ii) of the GATT 1994 in failing to construct normal value on the basis of 
the cost of production in the country of origin 
 
25. In calculating the cost of production, the Eu ropean Union did not use the domestic price of 
soybeans, but the reference FOB price of soybeans , net of fobbing costs. By using the reference 
FOB price of soybeans, the European Union failed to construct normal value on the basis of the 
cost of production in the country of origin, thereby, acting inconsistently with Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994.   5.2 Claim under Article 2.4 of the Anti-Dumping Agreement: failure to make a fair comparison 
 
26. Argentina argues that the difference between  normal value and export price results from 
the use of the reference FOB price of soybean, which includes the export tax on soybeans in the 
construction of the normal value while the export  price does not include any export tax at all. 
Consequently, it affects price comparability and also has a huge impact on the dumping margins.  
                                               
11 Definitive Regulation, re cital (38), Exhibit ARG-22. WT/DS473/R/Add.1 
 
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  5.3 Claims under Articles 3.1, 3.4 and 3.5 of  the Anti-Dumping Agreement in relation to 
production capacity and utilization of capacity 
 5.3.1 The European Union's definition of production capacity and utilization of capacity is 
inconsistent with Article 3.4 of the Anti-Dumping Agreement 
 27. At the outset, and as also noted by China
12, since Article 3.4 of the Anti-Dumping 
Agreement contains no reference to availability for use or idleness when providing that the injury 
assessment includes an evaluation of the utilization of capacity, the European Union's failure to include idle capacity in its evaluation of the utilization of capacity is therefore inconsistent with Article 3.4 of the Anti-Dumping Agreement. Argentin a specifically notes that Article 3.4 of the Anti-
Dumping Agreement mandates that all relevant economic factors and indices having a bearing on 
the state of the industry must be evaluated in th e context of an injury assessment. The exclusion 
of capacity, which is a relevant economic factor, from the calculation of the utilization of capacity is 
thus inconsistent with this provision.
13 
 5.3.2 The evaluation of production capacity and ut ilization of capacity is not based on positive 
evidence 
 
28. Argentina maintains that the analysis of production capacity and utilization of capacity is not based on positive evidence, contrary to the requirements of Article 3.1 of the Anti-Dumping 
Agreement, for two reasons: a) the attribution of  the "idle" capacity of EBB members and non-EBB 
members to the capacity of non-EBB Members is implausible due to the magnitude of the mistake, which amounts to almost six million tons and b) the new evidence submitted by the 
European Union in Exhibit EU-10 does not appear to  directly relate to production capacity. Indeed, 
it only points to the fact that plants have stopped producing or have commenced insolvency proceedings. It does not demonstrate, however, that production capacity has ceased to exist. 
 
5.3.3 The European Union's evaluation of production  capacity and utilization of capacity does not 
involve an objective assessment 
 
29. Contrary to the general obligation assume d under WTO, the European Union favoured 
evidence produced by one party but which is co ntradicted by publicly available and reliable 
information over the evidence on the record until that point.  
 
5.3.4 The inconsistent evaluation of utilization of capacity and return on investment 
 
30. Argentina objects to the inconsistent evaluati on of both factors, since the so-called "idle" 
capacity was excluded from the evaluation of capacity utilization while it was included in the calculation of return on investment.
14 
 
5.3.5 Causation: overcapacity was a source of injury 
 
31. Argentina maintains that the improper eval uation of the production capacity of the 
European Union industry under Article 3.4 of the Anti-Dumping Agreement prevented it from 
properly assessing overcapacity as a source of inju ry pursuant to Article 3.5. Indeed, an objective 
evaluation of production capacity and capacity utilization based on positive evidence would not 
have allowed the European Union to find that capacity utilization was increasing.  
 32. Furthermore, it is illogical to assert that because the utilization rate was consistently low, it could not be the cause of the decline in pr ofitability or of the poor performance of the 
European Union industry, considering, especially in this case the gross level of the overcapacity.  
 33. To sum up, overcapacity was a factor known to the authorities, different from the dumped 
imports and also a source of injury, the effects of which the European Union was obliged to 
distinguish and separate from those caused by the allegedly dumped imports.   
                                               
12 China’s third party submission, para. 151. 
13 Argentina’s first written submission, para. 355. 
14 Argentina’s first written submission, paras. 387-391. WT/DS473/R/Add.1 
 
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  5.3.6 Causation: long-term commercial strategy of importing biodiesel originating in Argentina 
as a source of injury 
 
34. The facts show that rather than being forced to import biodiesel originating in Argentina, 
imports by the EU producers appear to have been a deliberate commercial strategy on their side. 
First of all, there is ample evidence on the record showing close relations, or even affiliation, to the 
same corporate groups of European and Argentinean producers, and secondly, the facts on the 
record show that 60% of total imports from Indonesia and Argentina during the IP were made by 
the EU industry itself.15 
 35. In conclusion, Argentina submits that the European Union was under the obligation to 
ensure that the injury resulting from the industry's long term commercial policy was not attributed 
to the domestic industry. Its failure to do so is  inconsistent with Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement. 
                                               
15 Provisional Regulation, recitals 132 to 136, Exhibit ARG-30 and Definitive Regulation, recital 151, 
Exhibit ARG-22. WT/DS473/R/Add.1 
 
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  ANNEX B-4 
EXECUTIVE SUMMARY OF THE STATEMENT OF ARGENTINA  
AT THE SECOND MEETING OF THE PANEL 
1. Preliminary Issues 
 
1. Regarding Argentina's claim under Article 2.4 , Argentina has demonstrated that a 
difference exists between normal value and export price1,that this difference affects price 
comparability2 and therefore that, absent an adjustment to account for this difference, the 
comparison is not fair. In this regard, the EC – Tube or Pipe Fittings  an the EU – Footwear (China)  
cases referred to by the European Union3 are not relevant and must be rejected. Therefore, the 
European Union errs when arguing that Argentina's claim is outside the scope of Article 2.4.   
2. Argentina's Claims against Article 2( 5), second subparagraph, of the Basic 
Regulation 
 2.1 The scope, meaning and content of Ar ticle 2(5), second subparagraph, of the 
Basic Regulation 
 
2. Argentina argues that the European Union makes an effort to purport an over-simplistic 
reading of Article 2(5), second subparagraph, in complete isolation from its context when stating 
that it only "describes what the authorities are authorized to do in order to calculate the costs, when the company records cannot be used".
4 The fact that the determination that the records do 
not reasonably reflect the costs when they reflect prices that are "abnormally or artificially low" in 
comparison to prices on other markets because of an alleged distortion is made pursuant to Article 2(5), second subparagraph, of the Basic Regulation, does not only flow from the text of the provision and its background.
5 It has been also expressly confirmed by the practice and the 
General Court in the second Acron case.6  
 3. With regard to the meaning and content  of Article 2(5), second subparagraph, the 
European Union had argued that the text of Article 2(5), second subparagraph, did not include the 
terms used by Argentina to describe the content and meaning of that measure.7 Argentina has 
emphasized that, pursuant to Article 11 of the DSU the Panel should undertake a holistic 
assessment of all relevant elements, not only the te xt of the law, but also the consistent practice 
and the judgments of the General Court.   4. The European Union has also raised a new argument, namely that Argentina did not 
"establish the "scope, meaning and content" of  the second subparagraph of Article 2(5) in 
general ".
8 According Argentina – Import Measures  in which the Appellate Body found that "in every 
WTO dispute, a complainant must establish that the measure it challenges is attributable to the 
respondent, as well as the precise content of that challenged measure, to the extent that such 
content is the object of the claims raised "9 this argument must be rejected. 
 
5. On the other hand, the US – Carbon Steel (India)  case10 does not support the 
European Union's position. Indeed, the statement quoted by the European Union that "it is not 
clear why a number of instances of the application of the measure should in this case conclusively 
establish the meaning of the measure at issue in general , which in this case is confined to [the 
                                               
1 Argentina's first written submission, paras. 298-299; Argentina's second written submission, 
para. 103. 
2 Argentina's first written submission, para. 300, Argentina's opening statement at the first meeting of 
the Panel, para. 85 and Argentina's second written submission, para. 203. 
3 European Union's second written submission, paras. 25-27. 
4 European Union's openin g statement, para. 50. 
5 Argentina's second written submission, paras. 16-33. 
6 Argentina's second written submission, paras. 34-41, 42. 
7 European Union's first writ ten submission, paras. 85-86. 
8 European Union's second written submission, para. 50. 
9 Appellate Body Report, Argentina – Import Measures , para. 5.104. 
10 European Union's second written submission, paras. 51-52. WT/DS473/R/Add.1 
 
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  defending party's legislation]"11, must be read in its context, since this statement12 does not have 
the meaning that the European Union pretends to read in it .  
 
2.2 Argentina has made a prima facie case  on its claims against Article 2(5), 
second subparagraph, of the Basic Regulation 
 
6. Argentina would like to emphasize that, in order to succeed with its "as such" claims, it is 
not necessary to demonstrate that the challenged measures requires the authorities to apply it in a manner inconsistent with the covered agreements " in all cases " as claimed by the 
European Union.13  
 7. Argentina has explained why, in its view, the discretionary/mandatory distinction is not relevant for the purposes of its claims and noted that, in any case, the measure at issue does not 
afford to the authorities the alleged "broad discretion" claimed by the European Union. 
 8. Firstly, and regarding as the discretionary/man datory as an irrelevant distinction Argentina 
has noted that, if the relevant WTO provision prohibits a certain conduct, the fact that the measure 
being challenged provides for the possibility to adop t such a conduct, should lead to the conclusion 
that there is a violation of the said WTO provision.
14 Since Article 2.2.1.1 does not permit 
determinations that the records do not reasonably reflect costs in case of "artificially low" or 
"abnormally low" prices in comparison to prices on other markets because of an alleged distortion, and Article 2.2 does not permit the use of information other than information in the country of origin, Article 2(5), second subparagraph, must be  found to be inconsistent with this specific 
provision as Argentina has argued.  
 9. Secondly, in order to make a prima facie  case, Argentina has demonstrated that the 
assertion that Article 2(5), second subparagraph, affords broad discretion to the authorities is 
simply not true. It flows from the various elements presented by Argentina that the authorities do not have the discretion alleged by the European Union. The use of the term "shall" indicates the 
clear mandatory nature of the rule, and flies on the face of the assertion that second subparagraph 
of Article 2(5) of the Basic Regulation is framed in "permissive terms".
15 Moreover, the absence of 
discretion is supported by the consistent practice referred to by Argentina contrary to that of US – 
Carbon Steel (India)16, and confirmed by the General Court. 
 
10. In relation to Argentina's claims under Article 2.2, the cases referred to by the European Union showing that the EU authorities sometimes make adjustments based on domestic 
sources are totally irrelevant as well since Argentina is not taking issue with that type of 
adjustment.  
3. Argentina's claims under Article 2. 2.1.1 of the Anti-Dumping Agreement 
 3.1 Legal Interpretation of Article 2.2.1.1 of the Anti-Dumping Agreement 
 
11. Argentina in the first place address an important preliminary issue, that is, the 
European Union claims that what the Panel has to do is to examine Argentina's interpretation and determine whether "this is indeed the proper interpretation of Article 2.2.1.1".
17 This is, however, 
an erroneous description of the Panel's task. The Panel has to determine whether Argentina has 
established that Article 2(5), second subparagraph, is inconsistent with Article 2.2.1.1. It is on the basis of all evidence and legal argumentation that the Panel has to determine whether Argentina 
has indeed demonstrated that Article 2(5), second subparagraph, is inconsistent with 
Article 2.2.1.1 of the Anti-Dumping Agreement.  
                                               
11 European Union's second written submission, para. 51. 
12 See the Appellate Body Report, US – Carbon Steel (India) , para. 4.480, first sentence. 
13 European Union's second written submission, para. 38. 
14 Argentina's opening statement at the first meeting of the Panel, para. 74; Argentina's second written 
submission, paras. 95 – 96. 
15 European Union's second written submission, para. 83. 
16 Appellate Body Report, US – Carbon Steel (India) , para. 4.480 in which the Appellate Body noted that 
"the United States placed a number of cases on the Pa nel records where the "worst possible inference" was not 
applied in instances of non-cooperation". 
17 European Union's second written submission, para. 90. WT/DS473/R/Add.1 
 
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  12. Argentina notes that, regarding the interpretati on of Article 2.2.1.1, the European Union, in 
its second written submission, has focused on certain specific aspects such as the negotiating history, the findings of the panel in US – Softwood Lumber V , among others, which do not appear 
to be central to the interpretative exercise which must focus on the ordinary meaning of the terms, 
their context and the object and purpose of the Agreement. 
 13. First, the findings in US – Softwood Lumber V . The European Union attempts, by selectively 
quoting the Panel Report in that case, to create parallelisms between the situations in that case 
and the measure we are discussing in the present case. The situations at issue in US – Softwood 
Lumber V  were, however, different from what  we are discussing in this case.  
 
14. Second, the reference to Note 2 Ad Article VI paragraphs 2 and 3 concerning the "multiple 
currency practices." The European Union´s reference to this Note has simply nothing to do with 
what we are discussing here. Therefore, this ar gument should be rejected. The definition of 
"dumping" in Article VI is contained in paragraph 1. The Ad Note, however, specifically refers to 
paragraphs 2 and 3. In fact, this Ad Note does not seek to change or have any influence on the definition of "dumping" which is included in Article VI:1, but only to authorize the levy of 
anti-dumping duties in the very specific circum stances identified therein. Lastly, Argentina's 
interpretation is confirmed by the negotiating history. The negotiating history makes clear that the drafters agreed that "only price dumping" as defined in Article VI would be allowed to justify the defensive duties which were an exception to GATT rules. For all the aforesaid, the attempt of the 
European Union to draw parallelisms between "mul tiple currency practices" and the characteristics 
of Argentina's export tax on soya beans
18 is manifestly inappropriate and unsupported by the 
proper interpretation of that provision.  
 
15. Third, the definition of "cos t" as provided by the Panel in EC – Salmon (Norway) , Argentina 
does not see much difference between a price that is "paid" and a price that is "incurred", since 
the word "cost" refers to a concrete amount and not to a hypothetical value. 
 
3.2 Argentina's claim under Article 2.2.1. 1 concerning anti-dumping measures on 
imports of biodiese l from Argentina 
 
16. In its second written submission, the European Union fails to rebut the claims raised by 
Argentina. Instead, the European Union has focused on some factual issues which are manifestly 
incorrect.   
17. First, the European Union argues that the export tax on soybeans "constitutes a mechanism 
for distorting the price of soya beans".
19 This is not so. Argentina has already explained.20 Second, 
the European Union continues to wrongly argue that the FOB reference price is the "price to be 
paid" by the Argentinean producers for domestic purchases of soybeans in Argentina.21 As 
emphasized several times, the FOB reference price is not a price that is payable on domestic transactions. Rather, it is a taxable basis for levying the corresponding export tax.   
4. Claims under Article 2.2 of  the Anti-Dumping Agreement 
 
18. On the basis of the definition provided by the Panel in EC – Salmon (Norway) , the "cost of 
production" means "the price to be paid for the act of producing". Therefore, the "cost of 
production in the country of origin" refers to the price to be paid for the act of producing biodiesel 
in the country of origin, that is, in Argentina.  
19. The EU authorities have used - and this is not disputed - an average of the FOB reference 
prices minus fobbing costs as the cost for soybeans when constructing normal value. The European Union in fact acknowledges that it is not the price at which soybean is purchased domestically, since it keeps on stating that the FOB reference prices reflect "the cost of soya beans 
that Argentine producers of biodiesel would have to incur, in the absence of the export tax".
22 
 
                                               
18 European Union's second written submission, para. 124. 
19 European Union's second written submission, para. 127. 
20 Argentina's first written submission, Section 5.2.4, paras. 209 and 210. 
21 European Union's second written submission, para. 126. 
22 European Union's second written submission, para. 142. WT/DS473/R/Add.1 
 
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  20. By not using the "cost of production in the country of origin" the European Union violated 
Article 2.2 of the Anti-Dumping Agreement.  
5. Background and Economic Context of the Antidumping Investigation Concerning 
Imports of Biodiesel. 
 
21. The background to this dispute shows that the fi rst full year of production of biodiesel in the 
European Union is 2005. By the end of 2007 EU's total consumption had slightly more than doubled. Interestingly the capacity utilization figures determined by the Commission for the 
sampled EU producers was 84%. There were imports from some countries but not from Argentina 
which, at that time, had no biodiesel industry.   22. Between 2007 and 2009, Community consumption literally exploded according to the 
Commission's own figures
23, but not as overwhelmingly as production capacity, which sky-rocketed 
in the same period and thereby creating huge overcapacity.24  
 
23. The European Union has argued that this di d not prevent the EU industry from still being 
profitable in 2009, suggesting that excess capacity is not a cause of injury such as to break the causal link. Interestingly enough however, the figures of profitability in the investigation 
concerning imports from the United States, show that in 2005 when overcapacity was not 
excessive yet, the profitability rate of the sampled producers was at 18.3% while by 2009, coinciding with an overcapacity of the Union industry of more than 11 million tons, profitability had dropped further by more than a third, to only 3.5%. 
 
6. Claims under Article 3 of  the Anti-Dumping Agreement 
 
24. The European Union acted inconsistently with Articles 3.1 and 3.4 because its definition of 
capacity and capacity utilization is inconsistent wi th Article 3.4 and its assessment of these factors 
is neither based on positive evidence nor include an objective examination. Additionally to these inconsistencies, the EU also failed to properly evaluate the effects of the enormous overcapacity on 
the EU industry, thereby violating Articles 3.1 and 3.5 of the Anti-Dumping Agreement. 
 25. Article 3.4 does not contain any rule allowing the exclusion of capacity that would be "idle" or "not immediately available for use". Argentina prefers to draw the Panel's attention to the fact 
that in the proceeding on photovoltaic modules from China as well as in the US biodiesel case the 
so-called "idle capacity" was not excluded from production capacity.
25  
 
26. In relation to this point Argentina explained in previous submissions that the 
European Union could simply not exclude part of the capacity from the assessment of the 
production capacity and utilization of capacity on the grounds that it was "idle" without violating 
Article 3.4 of the Anti-dumping Agreement. 
 27. The European Union's assessment of production  capacity and the utilization of capacity is 
not based on positive evidence and does involve an objective examination as Argentina has shown. 
With respect to the "desk analysis and checking against publicly available sources", the 
European Union has not yet been able to produce the alleged "publicly available data" that would support these new figures and that they are contradi cted by all publicly available data on record 
that appeared in the public file of the investigation. With respect to the verification of the data 
Argentina would like to highlight that, although the European Union did select a sample of Union producers and carried out a detailed examination of their data including on-the-spot verifications, 
this was done before the imposition of provisional duties. In any event, that early examination and 
verification actually confirmed the accuracy of th e production capacity figures that were reported 
in the Provisional Regulation.  
28. Finally, Argentina has demonstrated that the conclusions reached by the Commission as to 
why the effects of overcapacity did not break the causal link between dumped imports and injury, 
are not conclusions which could be reached by an unbiased and objective decision maker taking 
                                               
23 Provisional Regulation, Table 1 (Exhibit ARG-30). 
24 Provisional Regulation, Tables 1 and 4 (Exhibit ARG-30). 
25 Council Regulation 193/2009, recitals 125 – 128 (Exhibit EU-13) and Council Regulation 599/2009, 
recitals 148 – 152 (Exhibit EU-14). WT/DS473/R/Add.1 
 
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  into account the facts that were before the investig ating authority, and in light of the explanations 
given26 as explained in detail in Argentina's previous submissions.  
 29. The European Union thus failed to appropriately assess overcapacity and its effects on the 
situation of the domestic industry, leading to an erroneous conclusion about the causality between 
alleged dumped imports and the injury suffered by the EU industry.  
30. Regarding the long-term commercial strategy of the European Union industry, the figures 
are undisputed and are self-explanatory. As a matter of fact, if the three producers whose imports reached 63%, 85% and 71% of their own production had not been excluded from the definition of 
the "Union industry", the proportion of imports made by the European Union producers would have 
exceeded the overall 60% ratio determined for the Union industry. 
 31. The sole justification given by the European Union to the massive imports from the countries 
concerned was that if the domestic industry had not imported biodiesel from Argentina, "that role 
would have been filled by independent traders" . However, the European Union fails to offer a 
logical explanation as to why there was no increase  in imports by such independent traders during 
the IP. Surely if the European Union producers found an advantage in importing from Argentina – 
so much so that they actually managed to increase their market share in the Union if their own production is added to their imports, then one would also have expected independent traders to 
equally find it attractive to import into the European Union. The European Union does not offer a 
logical explanation that would explain in which way the European Union producers were hoping to 
prevent independent traders from importing to the EU by doing it themselves.  
 
 
                                               
26 Panel Report, EU – Footwear (China) , para 7.484. WT/DS473/R/Add.1 
 
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  ANNEX B-5 
EXECUTIVE SUMMARY OF THE RESPONSE OF ARGENTINA TO THE  
EUROPEAN UNION'S REQUEST FOR A PRELIMINARY RULING 
1. Introduction 
 1. The request for a preliminary ruling filed by the European Union is based on arguments that 
are formalistic in nature, that are based on a selective reading of fragments of Argentina's panel 
and consultations requests out of context, or on arguments that are obscure or inaccurate. Therefore, preliminary objections by the European Union should all be rejected by the Panel. 
Argentina considers that (i) it has identified the specific measures at issue in its panel request, 
(ii) that it has presented the problem clearly in its panel request and (iii) that its panel request does not expand the scope of the dispute. Argentina will address each issue in turn. 
 
2. Argentina has identified the specific measures at issue  2. The European Union takes issue with an alleged lack of clarity in the identification of the 
"specific measures at issue." In particular, the European Union takes issue with the references to 
"implementing measures and related instruments or practices" and to "related measures and implementing measures" in Section 1 of Argentina's panel request.
1 
 
2.1 The European Union's object ion is unclear and inaccurate 
 
3. The objection raised by the European Union falls short of accuracy and clarity.  
 4. Indeed, first, in relation to paragraph 1(A) of Argentina's panel request, the European Union 
notes that this paragraph refers to "any subsequent amendments, replacements, implementing 
measures and related instruments or practices". At paragraph 8 of its request for preliminary 
ruling, the European Union argues that the reference to " implementing measures and related 
instrument or practices " is too vague. However, in paragraph 9, the European Union argues that 
"Argentina's claims against "i mplementing measures and other related measures" in paragraph 
1(A) and footnote 7 of its Panel Request fall outside the Panel's terms of reference; that reference to "other related measures" is unclear since the panel request refers to "implementing measures 
and related instruments or practices". 
 5. Second, in relation to paragraph 1(B), the European Union states that "[f]ootnote 3 mentions Commission Regulation 490/2013, while footnote 2 mentions Council Implementing 
Regulation 1194/2013."
2 However, this is manifestly incorrect. In fact, footnote 3 refers to both 
Commission Regulation (EU) No 490/2013 and Council Implementing Regulation (EU) No 1194/2013, while footnote 5 refers to Council Regulation (EU) No 490/2013 and footnote 6 
refers to Council Implementing Regulation (EU) No 1194/2013. 
 2.2 The European Union's objectio n should be rejected entirely 
 
6. The European Union contends that, by refe rring to "implementing measures and related 
instrument or practices" and "related measures  and implementing measures" when describing the 
measures at issue, Argentina's panel request fails to comply with the provisions of Article 6.2, 
because it fails to "identify the specific measures at issue."
3 The requirements under Article 6.2 of 
the DSU to identify the specific measures at i ssue and provide a brief summary of the legal basis 
of the complaint sufficient to present the proble m clearly are central to the establishment of the 
jurisdiction of the Panel.4 
 7. As emphasized by the Appellate Body "complia nce with the requirements of Article 6.2 must 
be determined on the merits of each case, having  considered the panel request as a whole, and in 
the light of attendant circumstances."
5 The panel must therefore "scrutinize carefully the panel 
                                               
1 European Union's reques t for preliminary ruling, section 2, paras. 3-9. 
2 European Union's re quest for preliminary ruling, para. 6. 
3 European Union's re quest for preliminary ruling, para. 7. 
4 Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China) , para. 4.6. 
5 Appellate Body Report, US – Carbon Steel , para. 127. WT/DS473/R/Add.1 
 
- B-35 - 
 
  request, read as a whole, and on the basis of the language used, in order to determine whether it 
is "sufficiently precise" to comply with Article 6.2 of the DSU."6  
 8. The European Union's suggestion that there is something vague in the references to 
"implementing measures and related instruments or practices" and to "related measures and 
implementing measures" lacks merits.  
9. First of all, Argentina notes that these types of references are not uncommon in panel 
requests. As the Panel noted in Australia – Tobacco Plain Packaging (Indonesia) , the rulings in 
previous disputes in which this type of referenc es has been challenged "suggest to us that a 
reference to unnamed measures such as those discussed above is not per se inconsistent with the 
specificity requirement in Article 6.2."
7 Argentina notes that the European Union fails to 
substantiate why, in the present case, the references concerned would be inconsistent with the specificity requirement in Article 6.2 of the DSU. 
 
10. Argentina notes that "the obligation to identify the specific measure at issue does not oblige the complainant to set forth the "precise content" of the measure in its panel request."
8 As the 
Appellate Body emphasized, "although a measure cannot be identified without some indication of 
its contents, the identification of a measure within  the meaning of Article 6.2 needs be framed only 
with sufficient particularity so as to indicate the nature of the measure and the gist of what is at issue."
9 
 
11. Section 1, point A) of Argentina's panel request, refers to "Article 2(5) of Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries 
not members of the European Community as well as any subsequent amendments, replacements, 
implementing measures and related instruments or practices." Reading the sentence in its entirety, it is clear that the words "implementing measures and related instruments or practices" 
which are being challenged by the European Union necessarily refer to "Article 2(5) of Council 
Regulation (EC) No 1225/2009." Therefore, only measures relating to, that is having a sufficiently close nexus to, Article 2(5) of Council Regulation (EC) No 1225/2009 could fall within the scope of the "implementing measures and related instruments or practices." Therefore, this is not a "vague" 
reference as the European Union claims. 
 12. This is further supported by the narrative  description of the substantive content and 
operation of the measures at issue in Section 2, point A), the heading and first two paragraphs 
which provide the following description:  
Article 2(5) of Council Regulation (E C) No 1225/2009 of 30 November 2009 
on protection against dumped imports from countries of the European Community (the "Basic Regulation)
7 
Article 2(5) of the Basic Regulation inter alia  provides that if costs associated with the 
production and sale of the product under investigation are not reasonably reflected in 
the records of the party concerned, they shall be adjusted or established on the basis of the costs of other producers or exporters in the same country or, where such 
information is not available or cannot be used, on any other reasonable basis, 
including information from other representative markets. 
Pursuant to this provision, when the European Union considers that the costs of 
manufacturing the product under consideration actually incurred by the producer 
under investigation are artificially low or are otherwise distorted, it does not calculate the costs on the basis of the records of the producer under investigation although 
those records are in accordance with the generally accepted accounting principles of 
the exporting countries and reasonably reflect the costs associated with the 
production and sale of the product under consideration but adjusts those costs or 
                                               
6 Appellate Body Report, EC – Fasteners , para.562, referring to Appellate Body Reports, US - Carbon 
Steel, para.127; US – Oil Country Tubular Goods Sunset Reviews , paras.164 and 169, US – Continued Zeroing , 
para. 161 and US – Zeroing (Japan) (Article 21.5 – Japan) , para. 108. 
7 Preliminary Ruling of the Panel in Australia – Tobacco Plain Packaging (Indonesia) , para. 5.14. 
8 Panel Report, China – Raw Materials , Annex F-1, para. 8. 
9 Appellate Body Report, US – Continued Zeroing , para. 169. WT/DS473/R/Add.1 
 
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  establishes them on the basis of other data, including data pertaining to markets 
other than those of the exporting country. 
7 As well as any subsequent amendments, replacements, implementing measures and 
related instruments or practices 
13. Thus, the above constitutes the description of  the substantive content and operation of the 
challenged measures. It makes clear that the measures being challenged relate to Article 2(5) of the Basic Regulation. Thus, the only way to read "implementing measures and related instruments 
or practices" is in close connection to Article 2(5) of the Basic Regulation.  
 14. As to the reference to "related measures  and implementing measures" in Section 1, 
point B), these terms are placed at the end of point B) which identifies the primary measures 
being challenged as "the anti-dumping measures imposed by the European Union on imports of 
biodiesel originating in, inter alia, Argentina, as well as the underlying investigation.". Point B) then precisely identifies the anti-dumping measures ,  b o t h  i n  f o o t n o t e  3  a s  w e l l  a s  i n  t h e  n e x t  
paragraphs of point B as covering (i) the provisional anti-dumping duties on imports of biodiesel 
originating in, inter alia, Argentina, pursuant to Commission Regulation (EU) No 490/2013 of 27 May 2013 imposing a provisional anti-dumping duty on imports of biodiesel originating in 
Argentina and Indonesia and (ii) the definitive measures imposed pursuant to Council 
Implementing Regulation (EU) No 1194/2013 of 19 November 2013 imposing a definitive anti-
dumping duty and collecting definitively the prov isional duty imposed on imports of biodiesel 
originating in Argentina and Indonesia. The last paragraph then concludes that the measures at 
issue include the anti-dumping measures identified above "as well as any subsequent 
amendments, replacements, related measures and im plementing measures." It is clear that only 
measures relating to the anti-dumping measures imposed by the European Union on imports of 
biodiesel originating in Argentina could fall within the scope of the terms "related measures and 
implementing measures.  
15. Argentina notes that the situation in the present case is similar to the one addressed by 
panels in recent cases, namely India – Agricultural Products and Australia – Tobacco Plain 
Packaging (Indonesia) . In that case, the Panel rejected the objection that "the panel request is not 
sufficiently precise to meet the requirements of Arti cle 6.2 simply by virtue of the inclusion of the 
terms "related measures, or implementing measures."
10 In particular, the Panel emphasized that 
the "primary measures" were not broadly defined,  but rather limited in view of their context.11 
 
16. The references which the European Union takes issues with were necessary to protect the 
interests of Argentina as complaining party in order to avoid that a closely connected measure adopted after the establishment of the panel could be  claimed not to be within the panel's terms of 
reference merely because not mentioned in the pa nel request. The Appellate Body has recognized 
that this constitutes a legitimate objective and se rves the due process objective of preventing the 
complaining party from having to "adjust its pleading throughout dispute settlement proceedings in order to deal with a disputed measure as a "moving target"."
12 Hence, the aim of such 
references is to address the potential situation arising if the European Union were to adopt 
measures that are closely connected to, or change the legal nature of the existing measures during the course of the Panel proceedings. This situation arose in EC – Chicken Cuts (Brazil)  in which, 
since the complainants' panel requests were not worded sufficiently broadly, they could not be 
interpreted as containing the new measures.
13 
 
17. In EC – IT Products , the Panel also noted that: 
 
While we do not consider that the mere incantation of the phrase "any amendments or extensions and any related or implementing measures" in a panel request will permit 
Members to bring in measures that were clearly not contemplated in the Panel 
request, it may be used to refer to measures  not yet in force or concluded on the date 
of the panel request, or measures that th e complainants were not yet aware of, such 
as government procedures not yet published that have the same essential effect as 
                                               
10 Preliminary Ruling of the Panel in India – Agricultural Products , para. 3.51. 
11 Preliminary Ruling of the Panel in India – Agricultural Products , para. 3.48. 
12 Appellate Body Report, Chile – Price Band System , para. 144. 
13 Panel Report, EC – Chicken Cuts (Brazil) , paras. 7.28-7.29. WT/DS473/R/Add.1 
 
- B-37 - 
 
  the measures that were specifically identified. This is to prevent the possibility that 
the procedural requirements of WTO dispute settlement result in a situation where measures could completely evade review.
14 
18. In conclusion, Argentina requests the Panel to reject the European Union's objection that 
"Argentina's claims against "implementing measures and other related measures" in 
Paragraph 1(A) and footnote 7 of its Panel Request, as well as Argentina's claims against "related measures and implementing measures" in Paragraph 1(B) of its Panel Request, fall outside the 
Panel's terms of reference".
15 First of all, the European Union failed to substantiate its objection. 
Second, this claim is premature and unnecessary. Third, when interpreted in their context, the words challenged by the European Union cannot be found to be vague and therefore are not "on their face" inconsistent with the requirement under Article 6.2 of the DSU to identify the specific 
measures at issue. 
 3. Argentina's panel request provides a brief summary of the legal bases of the 
complaint sufficient to present the problem clearly 
 19. The European Union argues that Argentina's panel request fails to meet the requirement to 
"present the problem clearly" in two aspects: by failing to identify the "legal basis" of the 
complaint and by failing to "plainly connect the challenged measures with the provisions of the covered agreements claimed to have been infringed."
16 
 
20. Argentina notes that the requirement to "pre sent the problem clearly" is not a standalone 
requirement. Article 6.2 of the DSU contains two requirements: (i) the obligation to identify the 
specific measure(s) at issue and (ii) the obligation to provide a brief summary of the legal basis of 
the complaint sufficient to present the problem clearly. 
 3.1 The "inter alia" legal basis 
 
21. The European Union first takes issues with the use of the word "inter alia" in sub-section 2(A). It argues that because of the wo rds "inter alia", "[n]either the European Union, 
nor the Panel has any idea of what claims or legal bases Argentina will finally present in this case: 
the words " inter alia " make the list of claims in Argentina's panel request completely open-
ended."
17 
 
22. Sub-section 2(a) of Argentina's panel request provides that: 
 
A) Article 2(5) of Council Regulation (EC) No 1225/2009 of 30 November 2009 on 
protection against dumped imports from countries not members of the 
European Community (the "Basic Regulation") 
[…] Argentina considers that Article 2(5) of the Basic Regulation is inconsistent as such 
with, inter alia, the following provisions of the Anti-Dumping Agreement, the 
GATT 1994 and the Marrakesh Agreement Establishing the World Trade Organization ("Marrakesh Agreement"): 
[…] 
23. In the first place, Argentina notes that the scope of the European Union's objection is 
unclear. Indeed, the European Union claims that "[t]his is inconsistent with Article 6.2 of the DSU 
and places the relevant claims outside the Panel's terms of reference."
18 It is, however, unclear 
which "relevant claims" would, according to the European Union, be placed outside the Panel's 
terms of reference.  
                                               
14 Panel Report, EC – IT Products , para. 7.140. 
15 European Union's re quest for preliminary ruling, para. 9. 
16 European Union's re quest for preliminary ruling, para. 10. 
17 European Union's re quest for preliminary ruling, para. 12. 
18 European Union's re quest for preliminary ruling, para. 13. WT/DS473/R/Add.1 
 
- B-38 - 
 
  24. To the extent that the European Union were to argue that all the claims made by Argentina 
in Section 2, point A) would fall outside the Panel's terms of reference, this objection does not 
make any sense.  
 
25. In fact, the European Union is focusing on the words "inter alia" in the introductory 
paragraph in isolation, without examining the context in which these words are used and in 
particular the list of legal claims included thereafter. As is clear from the panel request, the 
introductory paragraph in which the words "inter alia" are included is nothing else but the 
introductory clause to a detailed description of the specific legal bases of the different "as such" claims, as indicated by the colon that is written right after the parenthesis and before the list of items 1 to 4.  
 
26. Furthermore, the claims made by Argentina and which are listed under points 1 to 4 of 
Section 2, point A) of Argentina's panel request, all precisely identify the provisions of the covered 
agreements that Argentina claims are being violated. For each claim, Argentina provides an 
explanation of the content of the claim so that the European Union knows the case it has to answer.  
 
3.2 Paragraph 2 (B) of Argentina's Panel Request  27. The European Union also takes issue with the following paragraph in Sub-section 2, B) of 
Argentina's panel request: 
 
Argentina considers that the anti-dumping measures imposed by the European Union 
on imports of biodiesel originating in, inter alia, Argentina and the underlying 
investigation are inconsistent with the following provisions of the Anti-Dumping Agreement and of the GATT 1994:  
6. Article 9.3 of the Anti-Dumping Agr eement and Article VI:2 of the GATT 1994 
because the European Union imposed and levi ed anti-dumping duties in excess of the 
margin of dumping that should have been es tablished in accordance with Article 2 of 
the Anti-Dumping Agreement. 
28. The European Union claims that "[t]his paragraph fails to meet the requirements of 
Article 6.2 of the DSU"
19 for four reasons which must all be rejected. 
 
29. First, the European Union claims that "Argentina's Panel Request fails to mention the specific 
sub-paragraph of Article 9.3, with which th e challenged measures are supposed to be 
inconsistent."20 There is, however, no such kind of general requirement "to refer to the specific 
sub-paragraph of the WTO treaty provision that is supposed to be infringed by the challenged 
measure".21 The Appellate Body Report to which the European Union refers, found that: 
 
There may be situations where the simple li sting of the articles of the agreement or 
agreements involved may, in the light of a ttendant circumstances, suffice to meet the 
standard of clarity in the statement of the legal basis of the complaint22 
30. Argentina's panel request indicates that the measures at issue are inconsistent with 
Article 9.3 and Article VI:2 of the GATT 1994 "because the European Union imposed and levied 
anti-dumping duties in excess of the margin of dumping that should have been established in accordance with Article 2 of the Anti-Dumping Agreement." While Article 9.3 indeed includes a 
chapeau and three sub-paragraphs, it is clear from  the description of the claim (just quoted) that 
Argentina is taking issue with the chapeau. This interpretation is in accordance with the Report of the Appellate Body in Thailand – H-Beams  which held that "a general reference to Article 3 of the 
Anti-Dumping Agreement without identifying the relevant paragraphs, was sufficient to fulfill the 
                                               
19 European Union's re quest for preliminary ruling, para. 15. 
20 European Union's re quest for preliminary ruling, para. 16. 
21 European Union's re quest for preliminary ruling, para. 16. 
22 Appellate Body Report, Korea – Dairy , para. 124. WT/DS473/R/Add.1 
 
- B-39 - 
 
  requirements of Article 6.2 of the DSU, considerin g that the panel request "referred explicitly to 
the specific language of Article 3."23 
 31. Second, the European Union argues that "Argentina fails to articulate the exact claims it 
advances."
24 According to the European Union, it is not clear whether Argentina actually challenges 
(a) the comparison between the an ti-dumping duty and the margin of dumping or (b) the method 
of calculation of the margin of dumping itself.25 
 
32. However, there is no ambiguity about the claim of Argentina. In fact, as is clear from the structure of the panel request, Argentina first takes issue with the dumping margin determination under points 1, 2, 3, 4 and 5 of its panel request which all refer to specific obligations under 
Article 2 of the Anti-Dumping Agreement. Under point 6 of the panel request, as a next logical 
step, Argentina then claims that the European Un ion violated Article 9.3 by imposing and levying 
anti-dumping duties in excess of the margin of dumping to be established pursuant to Article 2 of 
the Anti-Dumping Agreement. 
 33. Argentina further notes that its first written submission confirms the meaning of the words 
used in the panel request.
26 Indeed, it is clear from paragraphs 307 to 309 of Argentina's first 
written submission that Argentina's claim under Article 9.3 focuses on the imposition and levying of anti-dumping duties in excess of the du mping margin, had the dumping margin been 
determined in conformity with Article 2 of th e Anti-Dumping Agreement contrary to what the 
European Union did in this case as demonstrated in its previous claims 
 34. The third and fourth reasons submitted by the European Union are inapposite since they are 
based on the hypothetical assumption that "Argentina actually challenges the method of 
determining the dumping margin."
27 As Argentina has explained above, it is clear from both the 
wording of the panel request and the legal provision being challenged, namely Article 9.3, that 
Argentina's claim focuses on the fact that the duties have been imposed and levied "in excess" of 
the margin of dumping established in accordance with Article 2 of the Anti-Dumping Agreement.  
 4. The European Union's allegations concer ning the expansion of the scope of the 
dispute 
 4.1 Arguments of the European Union 
 
35. In section 4 of its request for a preliminary ruling, European Union alleges that Argentina has expanded the scope of the dispute in its panel request either as a result of the inclusion of new 
measures or as the result of the inclusion of new legal bases. The European Union notes that 
consultations circumscribe panel requests and, that, as a result, a panel request cannot include claims that were not included in the consultations request where these new claims expand the scope of the dispute or have the effect of changing the essence of the complaint.
28 
 
4.2 The applicable legal standard  
36. Although Article 6.2 requires the complainan t to indicate in its panel request "whether 
consultations were held", it does not require the measures and claims identified in the panel request as basis for the complaint to be identical  to those identified in the consultations request.
29 
 
37. In Brazil – Aircraft , the Appellate Body emphasized that Articles 4 and 6 of the DSU do not 
"require a precise and exact identity between the specific measures that were the subject of 
                                               
23 Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China) , para. 4.24 referring 
to Appellate Body Report, Thailand – H-Beams , para. 90. 
24 European Union's re quest for preliminary ruling, para. 17. 
25 European Union's re quest for preliminary ruling, para. 17. 
26 Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China) , para. 4.9 referring 
to Appellate Body Report, US – Carbon Steel , para. 127. 
27 European Union's re quest for preliminary ruling, para. 19. 
28 European Union's reques t for a preliminary ruling, para. 23, re ferring to Appellate Body Reports, 
Mexico – Anti-Dumping Measures on Rice and US – Upland Cotton . 
29 Preliminary Ruling of the Panel in Australia – Tobacco Plain Packaging (Dominican Republic) , 
para. 3.35. WT/DS473/R/Add.1 
 
- B-40 - 
 
  consultations and the specific measures identified in the request for the establishment of a 
panel"30 
 38. In relation to the "legal basis" of the complaint in particular, the Appellate Body found in 
Mexico – Anti-Dumping Measures on Rice  that "[i]t does not follow from the use of the same term 
[in Articles 4.4 and 6.2] […] that the claims made at the time of the panel request must be identical to those indicated in the request for consultations."
31 
 
39. It is important to underline that it is the panel request, not the consultations request, which determines the panel's terms of reference pursuant to Article 7 of the DSU. Moreover, as panels and the Appellate Body have consistently emphasized in past cases, the relevant provisions of the 
DSU do not require a "precise and exact" identity between the measures and claims identified in 
the request for consultations and those identified in the panel request.  
40. Argentina will show why, taking into account the above legal standard, all the claims made 
in the panel request fall within this Panel's terms of reference and neither expand the scope of the dispute nor change the essence of the complaint. 
 
4.3 The European Union's objection against the alleged inclusion of a new measure in 
the panel request  
41. The European Union claims that Argentina's panel request challenges for the first time 
"related practices ", in addition to Article 2(5) of Council Regulation 1225/2009 since the terms 
"related practices" were not included in Argentina's consultations request, thus expanding the 
scope of the dispute and changes the essence of Argentina's complaint.
32 
 42. Argentina submits that this objection of the European Union was unnecessary and is clearly 
moot. Argentina is not challenging the European Union's practice as a distinct measure. In other 
words, Argentina is not challenging "" related practices ", in addition to Article 2(5) of Council 
Regulation 1225/2009."
33 The measure being challenged is Article 2(5) of the Basic Regulation. 
Argentina refers to the practice of the European Union only to illustrate the content and scope of 
Article 2(5) of the Basic Regulation in view of its consistent application.34 Accordingly, Argentina is 
not challenging a "new measure" since it is not asking that this Panel rule on "related practices", as shown in paragraph 468 of its first written submission.  
 
4.4 The European Union's objections agains t the alleged inclusion of new legal bases 
in the panel request 
 
4.4.1 The allegedly new and unclear "as applie d" claim against Article 2(5) of the Basic 
Regulation  
43. The European Union argues that Argentina brings a new and unclear claim against 
Article 2(5) of the Basic Regulation in a "not- numbered" paragraph. The European Union appears 
to refer to the unnumbered paragraph between pa ragraphs 3 and 4 of section B of the panel 
request. 
 44. This paragraph is not a "new claim" that Argentina is bringing, as this claim is not different 
from the claims raised under points 1, 2 and 3. This paragraph merely emphasizes that the 
European Union's violations of the provisions cited in points 1, 2 and 3 occurred as a result of the 
application of Article 2(5) of the Basic Regulation in the imposition of the measures on imports of 
biodiesel of Argentina. Argentina notes in this respect that the European Union itself points out 
that Commission Regulation and the Council Impl ementing Regulation imposing the provisional 
and definitive duties are based on Article 2(5) of the Basic Regulation.
35 
 
                                               
30 Appellate Body Report, Brazil – Aircraft , para. 132. 
31 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 136. 
32 European Union's requ est for a preliminary ruling, paras.27 and 29. 
33 European Union's re quest for preliminary ruling, para. 27. 
34 Argentina's first written submission, section 4.2.2. 
35 European Union's re quest for a preliminary ruling, para. 38. WT/DS473/R/Add.1 
 
- B-41 - 
 
  4.4.2 The allegedly new claim against Articl e 2(5) of the Basic Regulation based on 
Article 9.3 of the Anti-Dumping Agreement  45. The European Union argues that Argentina's claim under Article 9.3 of the Anti-Dumping 
Agreement in section 2(A)(3) of the panel request falls outside of the Panel's terms of reference. It 
bases its argument on the fact that the request for consultations did not make any reference to Article 9.3 under section (b) and on the fact that section (b) of the consultations request did not 
refer to an alleged excess of the anti-dumping duty compared to the margin of dumping. The 
European Union thus considers that Argentina's claim under paragraph 2(A)(3) cannot be said to reasonably have evolved from the consultations.
36 Again, this objection lacks merit. 
 
46. Argentina strongly disagrees with the European Union's contention that Argentina's as such 
claim under paragraph 2(A)(3) cannot reasonably be said to have evolved reasonably from the consultations request. First, as the European Unio n itself points out in paragraph 38 of its request 
for a preliminary ruling, Argentina raised a claim based on Article 9.3 in its as applied claims 
concerning the provisional and definitive anti-dumping measures.
37 Therefore, the imposition of 
anti-dumping duties in excess of the margin of dumping as a result of the application of 
Article 2(5) of the Basic Regulation has been the object of consultations.  
 47. In any case, as shown by its first written submission, Argentina is not bringing an as such claim against Article 2(5) of the Basic Regulation based on Article 9.3 of the Anti-Dumping 
Agreement.
38 Indeed, Argentina considers that findings of inconsistency under Articles 2.2, 2.2.1.1 
and 18.4 of the Anti-Dumping Agreement, Article VI:1(b)(ii) of the GATT 1994 and Article XVI:4 of 
the Marrakesh Agreement Establishing the WTO with respect to Article 2(5) of the Basic Regulation 
would be sufficient to secure an e ffective resolution of this dispute. 
 4.4.3 The allegedly new claims against Articl e 2(5) of the Basic Regulation based on 
Article VI:1 of the GATT 1994 
 48. The European Union argues that the claims  based on Article VI:1 of the GATT 1994 in 
sections 2(A)1 and 2(A)2 of the panel request fall outside of the terms of reference of the Panel 
because this provision was not mentioned in the request for consultations. At the outset, Argentina 
notes that the claims it bring in this section are based Article VI:1(b)(ii) only.
39 Accordingly, 
Argentina limits its arguments to this specific provision. The objection raised by the 
European Union does not stand. 
 49. The European Union states that it cannot be argued that "adding new claims under 
Article VI:1 of the GATT does not chan ge the "essence" of the complaint."
40 It bases this on the 
allegation that if Article VI:1 of the GATT 1994 is  identical to the provisions of the Anti-Dumping 
Agreement that have already been cited, the addi tion of Article VI:1 wo uld be redundant and the 
Panel would exercise judicial economy.41 
 50. This argument does not stand to reason. Noth ing prevents Argentina from adding provisions 
that are identical in scope to an existing claim on which consultations were held. 
 
51. Moreover, if the European Union intends to  argue that Article VI:1(b)(ii) of the GATT 1994 
and Article 2.2 of the Anti-Dumping Agreement are different in scope and that the "essence" of 
both provisions is different, then this is direct ly contradicted by the text and context of both 
provisions. The European Union has failed to poin t out what the difference in scope between both 
provisions is.  
52. Article VI:1 of the GATT 1994 had been cited in the context of sections a.1 and a.2 of the 
consultations request in as applied  claims that are similar to the as such claims at issue. Moreover, 
as already pointed out by Argentina, the content of  Article VI:1(b)(ii) of the GATT 1994 is identical 
to Article 2.2 of the Anti-Dumping Agreement, wh ich was cited in Argentina's consultations request 
in the section concerning the as such claims . 
                                               
36 European Union's requ est for a preliminary ruling, paras. 36-40. 
37 See section (a)(6) of the Request for consultations by Argentina, WT/DS/473/1. 
38 Argentina's first written submission, para. 468. 
39 Argentina's first written submission, paras. 133, 141 and 468. 
40 European Union's re quest for preliminary ruling, para. 43. 
41 European Union's re quest for a preliminary ruling, para. 43. WT/DS473/R/Add.1 
 
- B-42 - 
 
   
53. Argentina submits Article VI:1 of the GATT 1994 had been cited in the context of sections a.1 and a.2 of the consultations request in as applied claims that are similar to the as 
such claims at issue. Moreover, as already pointed out, the content of Article VI:1(b)(ii) of the 
GATT 1994 is identical to Article 2.2 of the Anti-Dumping Agreement, which was cited in 
Argentina's consultations request in the section concerning the as such claims. Argentina therefore 
respectfully requests that the Panel reject the European Union's purely formalistic objection and 
confirm that Argentina's claims under Article VI;1  of the GATT 1994 in relation to Section 2(A) are 
within the Panel's terms of reference.  4.4.4 The allegedly new claims against Articl e 2(5) of the Basic Regulation based on 
Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreement 
 54. The European Union argues that the paragrap h of the consultations request corresponding to 
section 2(A)(2) of the panel request only includes a claim based on Article 2.2.1.1 of the 
Anti-Dumping Agreement. It also argues that the corresponding claim in the consultations request refers only to the obligation that costs be calculated on the basis of the records kept by the 
exporters. The European Union thus argues that section 2(A)(2) of the panel request expands the 
scope of the dispute because they introduce a new legal basis (i.e., Article 2.2 of the Anti-Dumping Agreement) and because they introduce "a new type of complaint", that is, the use of costs not associated with the production and sale of the product under consideration.
42 
 
55. Argentina submits that the European Union carries out an unduly narrow reading when it reads section 2(A)2 of the panel request with reference to section b.2 of the consultations request 
only. The issue of the calculation of costs for the purpose of the construction of normal value is 
also addressed in section b.1 of Argentina's request for consultations, which refers to Article 2.2 of the Anti-Dumping Agreement. The assertion that Argentina added a provision in the panel request 
is therefore incorrect.  
 56. Moreover, there is a clear and logical connection between Article 2.2.1.1 and Article 2.2 of the Anti-Dumping Agreement. Indeed, Article 2.2.1.1 is a specific provision governing the 
calculation of costs for the construction of normal value. Article 2.2 concerns, among other 
matters, the construction of normal value and its components, including the cost of production. Argentina submits that consultations on the calculation of costs for the construction of normal 
value pursuant to Article 2.2.1.1 logically also cover the construction of normal value pursuant to 
Article 2.2, when such costs are being included in the construction of normal value.   
57. Argentina also opposes the European Union's claim that it would have introduced in its panel 
request a "new type of complaint" when it refers to the use of costs not associated with the production and sale of the product under consideration. First of all, Argentina submits that this reference does not constitute a claim but an argument which is not required to be included in a 
panel request. Indeed, the Appellate Body emphasized that "Article 6.2 requires that the claims  – 
not the arguments  – be set out in a panel request in a way that is sufficient to present the problem 
clearly."
43 
 
58. Furthermore, even if it is part of the claim, the European Union's claim is premised on an incorrect reading of Argentina's request for consultations. Indeed, the request for consultations 
refers in relevant part to Article 2.2.1.1 of the Anti-Dumping Agreement "which requires that costs 
normally be calculated on the basis of reco rds kept by the exporter or producer under 
investigation." The request for consultations does not limit in any way Argentina's claim to certain aspects or parts of Article 2.2.1.1, first sentence. By referring to Article 2.2.1.1 "which requires 
that costs normally be calculated on the basis of records kept by the exporter or producer under 
investigation", Argentina refers to the first sentence  of Article 2.2.1.1. Therefore, the reference in 
the panel request to the use of costs not associated with the production and sale of the product 
under consideration cannot be said to be a "new claim". 
 59. In view of the above, the European Union's objections under section 4.2.4 of its request for 
a preliminary ruling must fail. 
 
                                               
42 European Union's requ est for a preliminary ruling, paras 45 and 46. 
43 Appellate Body Report, EC – Selected Customs Matters , para. 153. WT/DS473/R/Add.1 
 
- B-43 - 
 
  4.4.5 The allegedly new claim against the anti-dumping measures imposed by the 
European Union based on Article 2.1 of the Anti-Dumping Agreement  60. Finally, Argentina turns to the European Union' s objection against the inclusion of Article 2.1 
of the Anti-Dumping Agreement in section 2(B)4 of the panel request. 
 61. Argentina notes that it is a well-established principle of law that the burden of proof rests 
upon the party asserting the affirmative of a particular claim or defense. However, Argentina fails 
to see any substantiation by the European Union of why the addition of Article 2.1 of the Anti-Dumping Agreement results in an expansion of the scope of this dispute or why it cannot 
reasonably be said that the inclusion of this provision evolved from the consultations. In this 
respect, Argentina refers to paragraphs 51 to 53 of the European Union's request for a preliminary 
ruling, which contains only mere assertions but no substantiation. Consequently, the European Union's objection fails. 
 
62. In any case, Argentina notes that it is not basing its claim concerning the profit determination on Article 2.1 of the Anti-Dumping Agreement.
44 As already highlighted in 
section 4.4.2 above, it would therefore appear not to be necessary for the panel to rule on this 
issue.  5. Conclusion 
 
63. In light of the above, Argentina submits th at the European Union's request for preliminary 
ruling should be rejected entirely. 
 
64. First, the objection made by the European  Union about the references to "implementing 
measures and related instruments or practices" and "related measures and implementing 
measures" should be rejected: first, because the European Union failed to substantiate its 
objection; second, since this claim is premature and unnecessary; and third, since these references comply with the requirement under Ar ticle 6.2 of the DSU to identify the specific 
measures at issue. 
 
65. Second, Argentina provided a brief summary of the legal basis of the complaint sufficient to present the problem clearly in relation to the "as such" claims in section 2(A), as well as in relation 
to Argentina's claim under Article 9.3 of the Anti-Dumping Agreement in section 2(B)6. 
 66. Third, Argentina did not expand the scope of the dispute. Indeed, the "related practices" do 
not constitute a "new measure" that cannot be said to have "evolved" from the consultations and 
which, in any case, are not challenged by Argentina as a distinct measure. Furthermore, all the claims listed in the panel request were either included in the consultations request or can reasonably be said to have evolved from th e claims listed in consultations request. 
 
67. Accordingly, Argentina requests the Panel to find that the request for establishment of a Panel submitted by Argentina fully complies with the requirements of Article 6.2 of the DSU and 
that, consequently, all the measures and claims concerned fall within the Panel's terms of 
reference.  
_______________ 
   
                                               
44 Argentina's first written submission, para. 470. WT/DS473/R/Add.1 
 
- C-1 - 
 
  ANNEX C 
ARGUMENTS OF THE EUROPEAN UNION 
Contents Page 
Annex C-1 Executive Summary of the First Written Submission of the European Union C-2 
Annex C-2 Executive Summary of the Second Written Submission of the European Union C-11 
Annex C-3 Executive Summary of the Stat ement of the European Union at the 
First Meeting of the Panel C-21 
Annex C-4 Executive Summary of the Statemen t of the European Union at the 
Second Meeting of the Panel C-26 
Annex C-5 Executive Summary of the European Un ion's Request for a Preliminary Ruling  C-33  
 WT/DS473/R/Add.1 
 
- C-2 - 
 
  ANNEX C-1 
EXECUTIVE SUMMARY OF THE FI RST WRITTEN SUBMISSION  
OF THE EUROPEAN UNION 
1. I NTRODUCTION  
 
1. The EU demonstrates that both Argentina's claims with respect to the Basic Regulation and its claims with respect to the Provisional and the Definitive Regulations should be rejected as no 
inconsistency with the Anti-Dumping Agreement has been proved. 
 2. T
ERMS OF REFERENCE  
 
2.1. C LAIMS ABANDONED BY ARGENTINA  
 
2. Argentina has abandoned the following claims mentioned in its Panel Request: (1) any claim 
against " related practices "; (2) any claim under an " inter alia " legal basis; (3) the claim against 
Article 2(5) of the Basic Regulation based on Ar ticle 9.3 of the Anti-dumping Agreement; (4) any 
distinct " as applied " claim against Article 2(5) of the Basic Regulation; (5) the claim against 
Article 2(5) of the Basic Regulation because the costs used are allegedly not "associated with the 
production and sale of the product under consideration"; and (6) the claim against the "profit determination" based on Article 2.1. The EU und erstands that, as Argentina has abandoned and 
does not pursue these claims, it cannot establish a prima facie  case on them and that the Panel 
cannot make any findings on these claims. 
 
2.2. O
THER ARGENTINE CLAIMS CHALLENGED BY THE EU 
 
2.2.1. Argentina's failure to identi fy the "specific measure at issue" 
 
3. First, Argentina appears to have abandoned the claim. Second, Argentina's assertions must 
be rejected. The EU's Request for a Preliminary Ruling was timely and in full compliance with the Panel's Working Procedures. "Objections to jurisdiction" of a Panel " must be raised as early as 
possible ". On the substance of its Request, the EU ha s noted the Appellate Body's consistent case 
law, according to which references to "implementing measures and other related measures" do not 
identify the specific measures at issue. Accepting that all "measures" that "implement", or are "related" to Article 2(5) of the Basic Regulation fall within the Panel's Terms of Reference would 
have the perverse effect of bringing within the jurisdiction of this Panel all provisional and 
definitive Regulations of the EU based on Article 2(5).  
4. The inclusion of the terms "implementing measures" and "related measures or instruments" 
in Argentina's Panel Request (a) creates an open-ended list of challenged "measures", (b) confuses the limits between the jurisdiction of this Panel and the jurisdiction of other panels, and (c) is not necessary in order to protect any legitimate interest of the complaining party; such legitimate 
interests are protected by other terms in the Pane l Request, which are not challenged by the EU. 
Therefore, the challenged terms fail to meet the requirements of Article 6.2 of the DSU and fall 
outside the Panel's terms of reference. 
 
2.2.2. Argentina's other claims 
 
2.2.2.1 The claim against the Provisional and the Definitive Regulations based on 
Article 9.3 of the Anti-Dumping Agreement 
 
5. The EU has argued that Argentina's Panel Request fails to articulate clearly the exact claim 
that it advances, because it is not clear whether Argentina's challenge is directed against (a) the 
comparison between the anti-dumping duty and th e dumping margin, or (b) against the method of 
calculation of the dumping margin itself. The question of whether the claim under Article 9.3 is 
within the Panel's terms of reference is of limited value for the present dispute. 
 WT/DS473/R/Add.1 
 
- C-3 - 
 
  2.2.2.2 The claims against Article 2(5) of the Basic Regulation based on 
Article VI:1 of the GATT 1994 
 
6. Argentina's Panel Request includes claims against Article 2(5) of the Basic Regulation based 
on Article VI:1 of the GATT 1994, which were not included in Argentina's Request for 
Consultations. However, Argentina's first written submission does not develop these claims. The question of whether the claims against Article 2(5) based on Article VI:1 of the GATT 1994 are 
within the Panel's terms of reference is of very limited value for the present dispute. 
 3. P
RELIMINARY ISSUES  
 
3.1. T HE CLAIM UNDER ARTICLE 2.1 OF THE ANTI-DUMPING AGREEMENT  
 
7. Given that Article 2.1 does not impose an y independent obligation on WTO Members, it 
cannot serve as a legal basis for a distinct claim in WTO dispute settlement proceedings. 
Furthermore, Article 2.1 does not cover the situations where there are no domestic sales "in the ordinary course of trade". Therefore, the facts of this case fall outside the scope of Article 2.1 of 
the Anti-Dumping Agreement. 
 
3.2. T
HE CLAIMS UNDER ARTICLE VI:1  OF THE GATT  1994   
 
8. Since Article VI:1 of the GATT 1994 does not impose any independent obligation on 
WTO Members, it cannot serve as a legal basis for a distinct claim in WTO dispute settlement proceedings. Therefore, Argentina cannot base any claim on Article VI:1 of the GATT 1994.  
 
3.3. T
HE CLAIM UNDER ARTICLE 9:3 OF THE ANTI-DUMPING AGREEMENT  
 
9. Article 9.3 of the Anti-Dumping Agreement addresses the comparison  between (a) the 
anti-dumping duties and (b) the dumping margins. It does not address the calculation  of normal 
value . As a result, the complaining party must show something more than a simple erroneous 
c a l c u l a t i o n  o f  n o r m a l  v a l u e .  T h e  E U ' s  i n t e r p r e t a t i o n  i s  s u p p o r t e d  b y  t h e  r e l e v a n t  c a s e  l a w .  F o r  
example, in EC – Salmon , the Panel found that, in determining the dumping margin, the defending 
Member had acted inconsistently with a number of obligations imposed by Article 2 of the Anti-dumping Agreement. However, the Panel rejected the complaining Member's claims under 
Article 9.3 of the Anti-Dumping Agreement. Argentina's claim under Article 9.3 is conditioned upon 
the success of Argentina's claims under Article 2 of the Anti-Dumping Agreement. In these circumstances, Argentina's claims fall outside the scope of Article 9.3 of the Anti-Dumping 
Agreement and must be rejected. 
 4. A
RGENTINA 'S "AS SUCH" CLAIMS AGAINST THE SECOND SUBPARAGRAPH OF ARTICLE 2(5)  OF THE 
BASIC REGULATION  
 
4.1. T HE "AS SUCH" CLAIM UNDER ARTICLE 2.2.1.1  OF THE ANTI-DUMPING AGREEMENT  
 
4.1.1. The reasons for rejecting Argentina's claim 
 
4.1.1.1 Argentina is challenging "as such" a "measure" which does not exist 
 
4.1.1.1.1 The scope, meaning and content of the second subparagraph of 
Article 2(5) of the Basic Regulation are clear on its face 
 
10. Article 2(5) gives the anti-dumping authorities certain alternative options for establishing or 
adjusting the "costs associated with the production and sale of the product under investigation" when one of the provisos defined in the firs t subparagraph of Article 2(5) applies. The 
second subparagraph of Article 2(5) of the Basic Regulation describes what the authorities can do 
after it has been determined that the records do not "reasonably reflect" costs, pursuant to the first subparagraph of Article 2(5) of the Basic Regulation. 
 
11. Given that the scope, meaning and content of  the second subparagraph of Article 2(5) are 
clear "on its face", the consistency of the measure with the covered agreements must be assessed on the basis of the text of the legal instrument "alone".  WT/DS473/R/Add.1 
 
- C-4 - 
 
  4.1.1.1.2 Argentina distorts the scope, meaning and content of the 
second subparagraph of Article 2(5) of the Basic Regulation 
 12. The "measure" invented by Argentina simply do es not exist. This conclusion is supported by 
a number of considerations. First, the conditions that must be met in order to determine whether 
the company records "reasonably reflect" costs are outside the scope of the second subparagraph of Article 2(5) of the Basic Regulation. Second, the terms "reflect market values", "regulated 
market", "abnormally low", or "artificially distorted", which Argentina uses to describe the 
"measure" that it challenges, do not even exist in the text of the second subparagraph of Article 2(5).  
4.1.1.1.3 The "various elements examined" by Argentina do not give to the 
second subparagraph of Article 2(5) the scope, meaning and content asserted by Argentina 
 
13. The first "element" identified by Argentina is the "historical perspective" of the second subparagraph of Article 2(5) of the Basic Regulation. However, the introduction of the 
second subparagraph of Article 2(5) in 2002 had no impact on the scope, the meaning or the 
content of the terms "reasonably reflect costs" in Article 2(5), which already existed in the first subparagraph of Article 2(5). The second "element" identified by Argentina is the "EU's practice". Nevertheless, the examples presented by Argentina in its first written submission do not 
suffice to establish a purported "practice" of the EU in the application of the second subparagraph 
of Article 2(5). The third element presented by Argentina consists of four judgments of the 
General Court of the EU. However, these judgments do not support Argentina's assertions since 
none of these judgments provides that the dete rmination of whether company records "reasonably 
reflect costs" is made pursuant to the second subparagraph of Article 2(5).   
4.1.1.2 Argentina has failed to establish that the purported "measure" that it 
challenges is "as such" inconsistent with the covered agreements 
 
14. Argentina has asserted that it presents th is "practice" only to illustrate the scope and 
content of the purported "measure" that it challe nges. However, in order to achieve this result, 
Argentina would need to establish (a) that the "practice" is not "distinct from the measure itself", but, on the contrary, forms an "integral part of the measure itself" and is "necessarily applied in all 
instances"; and (b) that this "practice" is "required" by the measure, which must be "mandatory" 
and constitute a "binding requirement" to apply th e measure in the same way in all cases. In the 
present case, Argentina has failed to establish any of these two requirements for either the first, or 
the second subparagraph of Article 2(5). 
 15. With regard to the first requirement, the plai n text of the first subparagraph of Article 2(5) 
confirms that the provision affords broad discretion to the authorities to determine whether the 
records of a particular company "reasonably reflect costs", on the basis of their analysis of the 
facts in each individual case. With regard to the second, the evidence confirms the discretionary nature of Article 2(5). The use of the word " entitled " by the General Court confirms that, as a 
matter of municipal EU law, Article 2(5) is discretionary: it allows the authorities to take certain 
actions, but does not require them to do so in all cases.   
4.1.1.3 Argentina advances an erroneous legal interpretation of Article 2.2.1.1 of 
the Anti-Dumping Agreement 
 
4.1.1.3.1 The text of Article 2.2.1.1 of the Anti-Dumping Agreement 
 
16. First, Argentina's thesis is based on the a ssertion that the costs reflected in the company 
records do not need to be "reasonable". Argentina is wrong. It is counterintuitive to assert that 
Article 2.2.1.1 of the Anti-Dumping Agreement mandates the investigating authorities to base their 
calculations on costs that are "unreasonable". In any event, the Panel Report in Egypt – Steel 
Rebar  actually contradicts Argentina's thesis. The fact that the Panel required the relevant item to 
be "reasonably related to the cost  of producing and selling rebar" shows that the word 
"reasonably" is also attached to the word "costs" in Article 2.2.1.1.   17. Second, Argentina seeks to dissociate the term "costs" in Article 2.2.1.1 from the word 
"prices". However, the Panel Report in EC – Salmon  interpreted "costs of production" as "the price WT/DS473/R/Add.1 
 
- C-5 - 
 
  to be paid  for the act of producing". This shows that the "cost of production" is linked to the prices 
to be paid  for the act of producing. If the panel considered that the required costs are the 
expenses that have actually already been incurre d by the producer, it would have used the past 
tense of the verb "be" in its Report. By using the terms "to be paid", this panel finding confirms 
that the "reasonable costs" required by Article 2. 2.1.1 are not necessarily only the expenses that 
have already been incurred by the producer.  
18. Third, Argentina interprets the term "associat ed" in Article 2.2.1.1 as "actually incurred". It 
is submitted that the word "associated" has a broader meaning which captures a broader range of relations between the "costs" and the "production". Fourth, these terms "associated with the production and sale " are broad enough to capture the costs that would normally be  associated with 
the production and sale of the goods. Fifth, Article 2.2.1.1 refers to the "costs associated with the 
production". It is uncontroversial that the cost  of production depends on the cost of the raw 
material and other inputs used for the production and, hence to the prices of the raw material 
normally used for the production. Sixth, the use of the word "reflect" reinforces the conclusion that 
reasonableness in Article 2.2.1.1 is not limited only to the "expenses that have actually been incurred by the producer".  
 
4.1.1.3.2 The context of Article 2.2. 1.1 of the Anti-Dumping Agreement 
 19. Argentina's main thesis finds no support in the analysis of the context of the provision. First, 
where the Anti-Dumping Agreement wishes to refer to the expenses actually incurred by the 
producer, it expressly states so. Second, if Article 2.2.1.1 intended to have the records include only the "expenses actually incurred", then Articl e 2.2.1.1 would have included only the condition 
that records should be kept in  accordance with the GAAP.  
 20. Third, Argentina is wrong when it asserts that  the first sentence of Article 2.2.1.1 "refers to 
a cost allocation issue" and that "the second sentence provides what authorities have to do if they 
use an alternative cost allocation methodology". The first sentence of Article 2.2.1.1 uses the word "calculated" and not the word "allocation". Moreover, the first sentence of Article 2.2.1.1 refers to the records of the company as "data sources", while the second sentence refers to information that 
is not found in the records of the company, but that has been provided by the investigated 
companies in the course of the investigation. Finally, the second sentence of Article 2.2.1.1 allows the authorities to take into consideration "all ava ilable evidence on the proper allocation of costs, 
including that which is made available by respondents in the context of an anti-dumping 
investigation". This implies that the second sentence allows authorities to take into consideration cost information which is not found in the companies' records, but which has been provided later. 
 
4.1.1.3.3 The object and purpose of the anti-dumping rules 
 21. Article VI:1 of the GATT 1994 shows that th e object and purpose of the WTO anti-dumping 
rules is to prevent the industries of the export ing country from damaging the industries of the 
importing country through the use of prices that are artificially low, because of some abnormal 
condition (hence the reference to "normal" value). A cost of the raw materials used to produce the 
dumped goods which is not "normal" and which causes the "normal value" of the goods not to be 
"normal", falls squarely within the type of cond itions that the WTO anti-dumping rules aim to 
address. 
 
4.1.1.3.4 The case law of the WTO dispute settlement system 
 22. The Panel Report in Egypt – Steel Rebar  confirms that the word "reasonably" is also linked 
to the word "costs" and, therefore, Argentina is wrong when it asserts that the costs reflected in 
the records do not need to be "reasonable". Likewise, the Panel Report in EC – Salmon  establishes 
that "costs of production" means "prices to be paid for the act of producing" and not "expenses 
that have already been incurred by the produc er". Most importantly, the Reports of the 
Appellate Body and the Panel in US – Softwood Lumber V  clearly establish that Argentina's thesis 
is wrong. The Panel found that Article 2.2.1.1 does not impose on the investigating authorities any 
particular methodology in their assessing whether the records reasonably reflect costs. On appeal, 
the Appellate Body did not take issue with this interpretation of Article 2.2.1.1. 
 WT/DS473/R/Add.1 
 
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  4.2. T HE "AS SUCH" CLAIM UNDER ARTICLE 2.2 OF THE ANTI-DUMPING AGREEMENT  
 
4.2.1. The second subparagraph of Arti cle 2(5) of the Basic Regulation is 
not "as such" inconsistent with the covered agreements 
 
4.2.1.1 The meaning and content of the provision 
 
23. This broad discretion of Article 2.2 is established, inter alia , by the provision which allows 
investigating authorities to use "any other reasonable basis" in order to establish or adjust costs. At the same time, this provision does not "mandate" the authorities to use information from other representative markets. It only allows them to do so, if this is "reasonable". 
 
24. Such discretion is also to be found in the second paragraph of Article 2(5). This is confirmed by the authorities' practice in cases such as White phosphorus originating in Kazakhstan  or 
Okoumé plywood originating in China, which prove that the second subparagraph of Article 2(5) 
does not oblige the EU to seek production cost information outside the country of origin in all cases. This discretion is also confirmed by the ju dgments of the courts of the EU, where the use of 
the words " may" and " entitled " shows that the second subparagraph of Article 2(5) allows the 
investigating authorities a broad discretion in the choice of "reasonable sources of information".  
4.2.1.2 The second subparagraph of Article 2(5) is not "as such" inconsistent with 
the covered agreements 
 25. A fundamental characteristic of an "as such" challenge against a "measure" is that the 
complaining party must establish that the measure is "necessarily inconsistent" with the covered 
agreements. Irrespective of whether using "infor mation from other representative markets" is 
consistent with Article 2.2 of the Anti-Dum ping Agreement, the second subparagraph of 
Article 2(5) does not " require " the investigating authority to use such information " in all cases ".  
 
4.2.2. Argentina suggests an erroneou s interpretation of Article 2.2 of 
the Anti-Dumping Agreement 
 
26. Neither Article 2.2.1.1 nor any other part of the Anti-Dumping Agreement provides a rule that explicitly deals with how costs should be determined when this proviso applies. Article 2(5) of 
the Basic Regulation properly deals with this issue in a manner which is fully consistent with the 
requirements of Article 2.2 of  the Anti-Dumping Agreement. 
 
27. First, the notion of "cost of production in the country of origin" is a legal one, but 
establishing the cost of production in a particular case involves determinations of fact. Such determinations are made with the aid of evidence. It cannot be excluded that evidence relating to 
that determination might originate in other countries. Second, the possibility of using "any other 
reasonable method" in Article 2.2.2(iii) implies that Article 2.2, as a whole, does not impose an 
absolute prohibition on the use of data on the cost of production from countries other than the country of origin, where the conditions of production and sale are not in the "ordinary course of 
trade".  
 5. A
RGENTINA 'S CLAIMS REGARDING THE ANTI-DUMPING MEASURES ON BIODIESEL  
 
5.1. A RGENTINA 'S CLAIM IN RELATION TO THE USE OF THE RECORDS OF THE INVESTIGATED COMPANIES  
 
5.1.1. The application of a measure that is found to be "as such" 
inconsistent with the covered agreements. 
 28. Argentina asserts that a finding that a provisio n is "as such" inconsistent with Article 2.2.1.1 
of the Anti-Dumping Agreement would necessarily lead to a finding that the application of that 
provision in a particular situation is also inconsistent with Article 2.2.1.1. Given that the second subparagraph of Article 2(5) of the Basic Regulation is not "as such" inconsistent with 
Article 2.2.1.1, the issue raised by Argentina is moot in the present case. 
 WT/DS473/R/Add.1 
 
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  5.1.2. The alleged "improper establishment of facts" 
 29. In regard to trade, the notion of "distort ion" implies an interference with the normal 
operation of the market. The distortion identified in  the Definitive Regulation is that caused by the 
existence of an export tax on soya beans and oil.  This tax had the consequence that the prices of 
these products in the domestic market were lowere d, and that effect in its turn had consequences 
for those companies that used these products.  
 
30. The fact that, within the limits set by the state, market forces continue to operate, does not diminish or cancel the distortive effect on trade of  an export tax. Likewise, the fact that domestic 
prices follow the trends in international prices is irrelevant in so far as the distortion accounts for 
the difference between those prices.  
 31. As far as Argentina's assertions in relation to the "main raw material" for biodiesel are 
concerned, the EU notes that it based its calculation of the biodiesel's cost of production and 
normal value on the cost of soya bean already at the provisional stage and that the Argentine companies under investigation had not expressed any concern or other comment, following 
disclosure. 
 
5.1.3. The interpretation of Arti cle 2.2.1.1 of the Anti-Dumping 
Agreement 
 
5.1.3.1 The text of Article 2.2.1.1 of the Anti-Dumping Agreement 
 
32. Argentina repeats its main thesis that Article 2.2.1.1 allegedly refers to the "expenses 
actually incurred by the producer". First, Article 2.2.1.1 does not include the words "expenses actually incurred by the producer". Second, Article 2.2.1.1 uses the terms "costs associated with 
the production and sale of the product". The word "associated" has a broader meaning than the 
words "actually incurred" and captures a broader range of relations between the "costs" and the "production".   
33. Third, Argentina is wrong when it asserts that there is no relation between the word "costs" 
and the notion of "prices", for purpos es of Article 2.2.1.1. The Panel in EC – Salmon  has confirmed 
that the ordinary meaning of the terms "cost of pr oduction" may be considered to be the "prices to 
be paid for the act of producing".  
 34. Fourth, the Panel Report in EC – Salmon  confirms that the "cost of production" is linked to 
the prices to be paid  for the act of producing. By using the terms "to be paid", this Panel finding 
confirms that the costs captured by Article 2.2.1. 1 are not the expenses that have actually been 
incurred by the producer. Fifth, Article 2.2.1.1 uses the terms "costs associated to the production", which the Panel in EC – Salmon  has interpreted as the prices to be paid for the act of producing . 
The provision does not include the terms "incurred by the producer". Sixth, in US – Softwood 
Lumber V, both the Panel and Appellate Body accepted that an investigating authority is entitled to 
find that the company records do not "reasonably reflect costs", where they do not reflect prices 
charged at "arms-length" transactions.  
 
5.1.3.2 The context of Article 2.2.1.1 
 35. Argentina asserts that Article 2.2.1.1 does not require the costs to be "reasonable", but that it requires, instead, that "unreasonable" costs be  "reasonably" reflected in the company records. 
The EU has already shown that the Panel Report in Egypt – Steel Rebar , to which we refer, 
contradicts Argentina's assertion.  
 36. Article 2.2.1.1 does not impose any obligations on companies in relation to their accounting 
methods. It simply allows investigating authorities not to base their cost calculation on the 
companies' records, where either of the two condit ions is not met. Argentina repeats the assertion 
that Article 2.2.1.1 deals with a "cost allocation issue". The EU has already exposed the fallacy of 
Argentina's assertion in the relevant section of this submission on the "as such" claim, to which we 
refer.  37. Argentina also seeks to use as "context" the provisions of Article 2.2 of the Anti-Dumping 
Agreement and of Article VI:1(b)(ii) of the GATT 1994. The EU has already dealt with Argentina's WT/DS473/R/Add.1 
 
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  interpretation of Article 2.2 of the Anti-Dumping Agreement and the issue of "country of origin" in 
the relevant section of this submission on the "as such" claim under Article 2.2 of the Anti-Dumping Agreement and we refer to that section.  
38. Article 2.2.2 conditions the use of the "actual data pertaining to production" costs on the 
existence of ordinary course of trade . This supports the EU's thesis that it was not obliged to use 
the "actual data pertaining to production and sales" of biodiesel as recorded in the investigated 
companies' accounts, because the production and sale of biodiesel were not in the ordinary course 
of trade. Moreover, where the amounts cannot be dete rmined "on this basis", then Article 2.2.2(iii) 
allows the investigating authorities to use " any other reasonable method ". It is noted that 
Article 2.2.2(iii) does not impose any requirement that, in these circumstances, the data on the 
cost of production must be those prevailing in the country of origin.  
 
5.1.3.3 The object and purpose of the Anti-Dumping Agreement 
 39. Argentina asserts that the EU's interpretation "subverts the fundamental purpose of the Anti-Dumping Agreement and uses the Agreement to address differences in price between the 
export price of the product concerned and internatio nal prices, instead of comparable prices on the 
domestic market". Argentina's assertion is wrong for a number of reasons.  40. First, the Definitive Regulation's dumping determination is not based on the difference 
between the export price of biodiesel  and the international price of biodiesel  but on the comparison 
between the export price of the Argentine biod iesel and the normal value of the Argentine 
biodiesel. Second, the Definitive Regulation found that Argentine biodiesel was dumped into the EU 
and, as a result of that dumping, the EU's industry suffered material injury. This is precisely the 
object and purpose of the WTO anti-dumping rules, as expressed in Article VI:1 of the GATT 1994.  
 
5.2. A
RGENTINA 'S CLAIM IN RELATION TO "COUNTRY OF ORIGIN" 
 
41. On the basis of the observations previously mentioned, the EU considers that Article 2.2 of 
the Anti-Dumping Agreement and Article VI:1 of  the GATT 1994 entitles the EU's investigating 
authorities to use the data that they used in order to calculate the normal value of Argentine 
biodiesel.  
5.3. A
RGENTINA 'S CLAIM IN RELATION TO THE USE OF COSTS ALLEGEDLY "NOT ASSOCIATED WITH THE 
PRODUCTION AND SALE " OF BIODIESEL  
 42. The EU has already shown above that the term  "associated" has a broader meaning than the 
words "actually incurred", or "actually paid" and that the Panel Report in Egypt – Steel Rebar  uses 
the term " pertain to the production". Moreover, Article 2.2.1.1 mentions the costs associated with 
the production , as opposed to the expenses incurred by the producer . As the Panel in EC – Salmon  
has confirmed, the "costs of production" should be  understood as the prices to be paid "for the act 
of producing ".  
 
5.4. A
RTICLES 2.2 AND 2.2.2( III) OF THE ANTI-DUMPING AGREEMENT AND AMOUNTS FOR PROFITS  
 
43. In setting the 15% margin of profit that the EU applied in constructing the normal value of 
biodiesel for Argentinian exporters, the EU was ap plying Article 2(3), first subparagraph, of the 
Basic Regulation, which follows the rule in Article 2.2 of the Anti-Dumping Agreement by specifying 
that a constructed normal value "shall be calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for 
profits".  
 44. The EU submits that the method on the basis of which it determined the level of profits was 
reasonable and that the resulting margin was itself reasonable for the reasons stated below. 
Firstly, the figure is appropriate "on the basis of the reasonable amount of profit that a young and 
innovative capital intensive industry of this type under normal conditions of competition in a free 
and open market could achieve". Secondly, each situation must be assessed on its own merits 
taking into account the specific circumstances of the case. Thirdly, the figure was not out of line with that adopted in other investigations, for example that concerning biodiesel originating in the United States. Fourthly, the short and medium term borrowing rate in Argentina was around 14%, 
and it was reasonable to expect biodiesel producing companies to obtain a profit margin that WT/DS473/R/Add.1 
 
- C-9 - 
 
  exceeded this level. Fifthly, biodiesel companies enjoyed a level of profit higher than 15% during 
the investigation period, albeit that they benefite d from distorted costs. Sixthly, comparison with 
the target profit for the domestic industry in the absence of dumped imports is not relevant because it has a different purpose than the construction of the normal value. 
 
5.5. A
RTICLE 2.4 OF THE ANTI-DUMPING AGREEMENT AND ALLOWANCES FOR PRICE COMPARABILITY  
 
45. The EU does not argue that a constructed price can never be the subject of adjustment in 
order to secure a fair comparison. Furthermore, the whole of Argentina's case with regard to 
Article 2.4 amounts to no more than an asse rtion that the method adopted by the EU for 
constructing the normal value could not, without adjustment, result in a fair comparison. There is 
no attempt to set the claim in a context, or to find guidance in the factors listed in Article 2.4 as 
appropriate for consideration as justifying allowances for differences. Such neglect is not surprising since none of them lends any support to the argument that Argentina presents. 
 
5.5.1. Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the 
GATT 1994 vis-à-vis the level of anti-dumping duties imposed 
 
46. Argentina's claims under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 1994 are entirely consequential on the claims that the EU has answered in the preceding paragraphs. Since Argentina has failed to establis h the earlier claims these consequential claims 
must also fail. 
 
5.6. A
RTICLES 3.1, 3.4, 3.5 OF THE ANTI-DUMPING AGREEMENT VIS -À-VIS PRODUCTION CAPACITY , 
UTILIZATION OF CAPACITY AND RETURN ON INVESTMENT  
 
5.6.1. Legal arguments and claims 
 
47. Argentina claims that the EU's treatment of "i dle" plant in the context of capacity does not 
accord with the meaning of that word in the phrase  "utilization of capacity" in Article 3.4 of the 
Anti-Dumping Agreement. 
 
48. There is no definition of "capacity" in the Agreement. In its Definitive Regulation the EU 
excluded "idle" plant, that is to say plant that "was not in such a state that it would have been 
available for use during the IP". Such plant woul d make no contribution to the "maximum amount 
or number that can be … produced", and its exclusion therefore accords with the ordinary meaning of the term "capacity".  
 
49. The EU submits costs of relevant undertaking are taken into account when considering other factors in the list in Article 3.4, notably the factor of "actual and potential decline in … profits". "Utilization of capacity" is a factor distinct from costs and should be treated as such. 
 
50. Whether the "idle" plants are included in the production capacity, or are excluded, the 
implications regarding injury are the same. In the first case the low capacity utilization is an 
indication of injury, in the second the closing or mothballing of plants is an indication of injury.  
 51. Argentina accuses the EU of not making available the "publicly available material" relating to 
idle capacity. There is no such obligation in any of the provisions of the Agreement invoked by 
Argentina in its Panel Request, and it is therefore outside of the Panel's terms of reference.   52. Argentina alleges that the presentation of data in the Definitive Regulation obstructed the 
arguments that the exporters wished to make about the causes of the EU's injury. However, all the 
data, concerning both "idle" and non-idle capacity  were available to the exporters, and they were 
in no way inhibited from presenting arguments to the effect that the idle plants were a cause of 
injury. The factors listed in Article 3.4 are not exclusive.  
 53. Argentina also raises the issue of proper "eva luation" in regard to the issue of return on 
investment which it alleges was based on a different dataset to that used for production capacity. 
The EU has already shown that this issue is outside the terms of reference of the Panel.   54. Argentina argues that an assessment of "utilization of capacity" for the purposes of 
Article 3.4 that is based on a definition of capacity that is inconsistent with that provision, and was WT/DS473/R/Add.1 
 
- C-10 - 
 
  not based on positive evidence, etc., in some way disqualifies that assessment from contributing 
to a finding of causation vis-à-vis the utilization of capacity. However, Argentina cannot shortcut the requirements of Article 3.5, which addresse s the issue of causation, by invoking similar 
concepts in Article 3.4.  
 
55. Argentina also alleges that the EU gave inadequate consideration to the issues of low capacity utilization and overcapacity. The data show s that the EU industry installed more capacity 
than there was demand in the EU, and possibly more capacity than EU demand plus export 
demand. However, the data available for the Definiti ve Regulation showed that capacity utilization, 
although low, was actually increasing and conseque ntly could not have been a cause of injury in 
the sense of Article 3.5.  
 
56. Argentina also alleges that the capital intensive nature of the biodiesel industry aggravates its sensitivity to overcapacity as the cause of injury. However, this capital intensive nature is a 
constant feature of the industry, whereas the injury  to the EU industry has not been constant but 
has developed over the period of investigation.   
5.7. A
RTICLES 3.1 AND 3.5 OF THE ANTI-DUMPING AGREEMENT VIS -À-VIS LONG -TERM COMMERCIAL 
STRATEGY  
 
57. Argentina argues that the mere fact that imports by the EU industry from Argentina and 
Indonesia aggravated the low capacity utilization rate invalidates the conclusion that these imports 
did not break the causal link between the dumped imports and the injury to the EU industry. The 
fact that the chain of causation was indirect does not mean that it did not exist. Consequently, this 
was not an injury caused by an "other factor" wh ich, under Article 3.5, need to be separated and 
distinguished.   
5.8. A
RTICLES 3.1 AND 3.5 OF THE ANTI-DUMPING AGREEMENT VIS -À-VIS DOUBLE COUNTING  
 
58. The evidence in question (Exhibit ARG-37, p. 35) concerned only one country, France, and 
came from only one producer, Diester. The evidence presented by Argentina itself indicates that 
the fall in production attributed to the French scheme in year 2011 was expected to be more than 
cancelled in 2012. The Definitive Regulation no tes the financial performance of the sampled 
EU producers, which included Diester, dec lined only after the ending of the scheme. 
 
59. Argentina presents no evidence of detrimen tal consequences of double counting in other 
EU Member States, and, as it explains in the Definitive Regulation, the EU could find none.  
 
5.9. A RTICLES 3.1 AND 3.5 OF THE ANTI-DUMPING AGREEMENT VIS-À-VIS VERTICAL INTEGRATION , ETC. 
 60. Almost all of the features identified by Argentina are constant in their nature and effects and 
therefore do not qualify as "causes" of injury within the meaning of Article 3.5. They cannot 
therefore be responsible for the deterioration in the condition of the industry which the EU has 
determined constitutes "injury" within the meaning of Article 3.4. 
 
61. Even if consideration is given to these factors Argentina never explains why vertical integration is a more efficient way of operating in this industry. Nor is it clear whether the 
advantage is claimed because of common ownership (which in any case does not extend to 
growers of beans) or geographic proximity.  6. C
ONCLUSION  
 62. Argentina has failed to make a prima facie  case on any of its claims. The EU has shown that 
all of the claims pursued and developed in Argent ina's first written submission are unfounded and 
based on erroneous interpretations of the covere d agreements. The EU respectfully requests the 
Panel to reject all of Argentina's claims.  WT/DS473/R/Add.1 
 
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  ANNEX C-2 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN  
SUBMISSION OF THE EUROPEAN UNION 
1. I NTRODUCTION  
 
1. The European Union's second written submission focuses on the issues raised by Argentina in its Opening Statement and in its Replies to the Panel's Questions during the first substantive 
meeting with the Panel.  
 2. T
ERMS OF REFERENCE  
 
2. During the First Hearing, Argentina confirmed that it has abandoned the claims challenged 
by the EU as being outside the Panel's terms of reference. Argentina has also abandoned the claims against "implementing measures and related instruments" and "related measures and 
implementing measures". This confirms the co nsequences described in paragraph 13 of the 
European Union's first written submission.  
3. P
RELIMINARY ISSUES  
 
3.1. T HE CLAIMS UNDER ARTICLE 2.1 OF THE ANTI-DUMPING AGREEMENT AND ARTICLE VI:1  OF THE GATT 
 
3. Argentina accepts in essence that Article 2.1 of the Anti-Dumping Agreement (ADA) and 
Article VI:1 of the GATT cannot serve as a legal basis for "distinct" claims in WTO dispute settlement proceedings. Both parties agree on this point. However, Argentina asserts that its 
claims under these two provisions are "consequential" and dependant on its claims under 
Articles 2.2 and 2.2.1.1 of the ADA.   
4. First, the EU considers that the reasoning of the Panel in EU – Footwear  supports the 
rejection of Argentina's corresponding claims in the present case. In that case the Panel argued that "under China's approach all dumping related claims could be brought under Article 2.1 alone, supported by the assertion that the obligations as serted are 'created' elsewhere". Importantly, the 
Panel also rejected China's claims under Article VI:1 of the GATT, stating that its analysis on the 
claims under Article 2.1 of the ADA also applied.   
5. Second, Argentina's assertion that its claims  under these two Articles are "consequential" 
and dependant on other claims under different legal provisions essentially constitutes a request to the Panel to exercise judicial economy on these claims. Since Argentina recognizes that these 
claims do not aim at protecting some specific and distinct legal right or interest, the EU doubts 
whether raising them is compatible with the Members' obligations under Article 3.10 of the DSU.  6. Third, there is nothing in Argentina's Panel Request that would indicate that Argentina was 
making some claims as "distinct" and others as "consequential". Indeed, the references to 
Article 2.1 of the ADA and Article VI:1 of the GATT seem to be on an equal footing with the 
references to other Articles in Argentina's Panel Request. 
 
7. The conclusion is that Argentina's new assertions on the "consequential" nature of its claims under Article 2.1 of the ADA and Article VI:1 of th e GATT must be rejected for lack of proper legal 
basis. 
 8. Moreover, in the present case both parties agree that there were no sales of biodiesel in Argentina in the ordinary course of trade. However, in its response Argentina fails to discuss the 
importance of the terms "in the ordinary course of  trade" in Article 2.1 and the terms "when there 
are no sales of the like product in the ordinary co urse of trade" in the first line of the chapeau of 
Article 2.2. As a result, Argentina's statement fails to rebut the EU's objection that the facts of this 
case fall outside the scope of Article 2.1. 
 WT/DS473/R/Add.1 
 
- C-12 - 
 
  9. The conclusion is that Argentina's claims under  Article 2.1 of the ADA and Article VI:1 of the 
GATT are manifestly unfounded in law and must be summarily rejected by the Panel.  3.2. T
HE CLAIMS UNDER ARTICLE 2.4 AND ARTICLE 9.3 OF THE ANTI-DUMPING AGREEMENT  
 3.2.1. Argentina's claims fall outside the scope of these provisions  
10. The EU argues that Article 2.4 does not appl y to the investigating authority's establishment 
of normal value and supports its interpretation with the Panel Report in Egypt – Steel Rebar . In 
that case, the Panel found that Article 2.4 "refers to the comparison of export price and normal value; i.e., the calculation of the dumping margin" and has to do "not with the basis for and basic 
establishment of the export price and normal value (which are addressed in detail in other 
provisions), but with the nature of the comparison  of export price and normal value".  
 
11. In the case at hand, Argentina considers that investigating authorities have failed to 
calculate properly the product's normal value, resulting in a comparison between the normal value and the export price that was not "fair" (hence the alleged violation of Article 2.4) and a 
calculation of the "wrong" dumping margin. According to Argentina, the "wrong" dumping duty 
calculated was higher than the "correct" dumping margin (hence the alleged violation of Article 9.3).  
12. Therefore, Argentina is challenging the calculation  of the normal value itself (which falls 
within the scope of Article 2.2) and not the " nature of the comparison " between normal value and 
export price, which is the subject matter of Arti cle 2.4, or the comparison of the anti-dumping 
duties with the dumping margin, which is the su bject matter of Article 9.3. Argentina's claims 
consequently fall outside the scope of these articles.   
13. The EU draws further support for this view from the Panel Report in EC – Tube or pipe 
fittings . In that case, Brazil argued that the EU had used some "wrong" data when constructing 
normal value and, consequently, had calculated the "wrong" normal value in breach of Articles 2.2 and 2.2.2 of the ADA. Brazil also argued that the EU had "breached the requirement to make a fair 
comparison between normal value and export price", in violation of Article 2.4. Given the similarity 
of these claims with the present case, the EU re spectfully submits that the Panel should reject 
Argentina's claims under Article 2.4.  
 
14. In the specific circumstances of the present case, the rejection of Argentina's claims under Article 2.4 necessarily leads to the rejection of Argentina's claims under Article 9.3 because 
Argentina's case lies solely on the alleged "incorrect" calculation of the dumping margin.  
 3.2.2. Argentina has failed to make a prima facie case  
15. First, Argentina should have shown that the definitive anti-dumping duties are higher than 
the definitive dumping margins. Instead of that, Argentina compares the definitive  anti-dumping 
duties with the provisional  dumping margins.  
 
16. Second, in a Reply to a Panel's Question, Argentina reproduces an excerpt from the Panel Report in EU – Footwear (China)  which is not relevant for the present case, because it addressed a 
very different situation and a very different claim.  Indeed, China had only argued that Article 2.4 
imposed obligations on the investigating authority when it was constructing normal value whereas Argentina asserts that its Article 2.4 claim does not relate to the construction of normal value.  
17. Moreover, Argentina refers to that excerpt ou t of context. The sentence in the Panel Report 
immediately following Argentina's excerpt states that "these allowances can only be made after 
the normal value and the export price have been established".  
 
18. Third, the Panel Report in EU-Footwear (China)  actually supports the EU's position in the 
present case. That Panel Report confirms that Article 2.4 allows investigating authorities the 
discretion to make any "due allowances" that they consider necessary and to follow any 
"methodology" that they consider appropriate.   19. These Panel findings are in line with the Panel Report in EC – Tube or Pipe Fittings  which 
noted "the absence of any precise textual guidance in the Agreement concerning how adjustments WT/DS473/R/Add.1 
 
- C-13 - 
 
  are to be calculated", as well as the "absence of any textual prohibition on the use of any 
particular methodology adopted by an investigating authority with a view to ensuring a fair comparison".  
20. In the present case, Argentina has failed to show that the EU's investigating authorities have 
exercised their discretion in an arbitrary manner wh en comparing the normal value with the export 
price and establishing the dumping margin. This is an additional reason for which Argentina's 
claims under Article 2.4 must be rejected. 
 4. A
RGENTINA HAS FAILED TO MAKE A PRIMA FACIE  CASE ON ITS "AS SUCH" CLAIMS  
 
4.1. I NTRODUCTION  
 
21. The EU has argued that, in order to make a prima facie case on its "as such" claim under 
Article 2.2.1.1 and Article 2.2 of the ADA, Argentina had to establish inter alia  (a) the "precise 
content" of the measure that it challenges; and (b) that the challenged "measure" constitutes a binding requirement that requires the investigating authorities to apply it in all cases in a manner 
which is inconsistent with the covered agreements. 
 4.2. T
HE REQUIREMENT TO ESTABLISH THE "PRECISE CONTENT " OF THE WRITTEN "RULE OR NORM" 
 
22. In its recent Report in Argentina-Import Measures , the Appellate Body found that when 
bringing an "as such" challenge against a "rule or norm", the complaining party must clearly establish, inter alia , the "precise content of the challenged measure, to the extent that such 
content is the object of the claims raised". 
 23. In the present case, Argentina has confirmed that it challenges "as such" a written piece of 
legislation, namely the second sub-paragraph of Article 2(5) of the Basic Regulation. However, 
Argentina has failed to establish the "precise co ntent" of that written piece of legislation.  
 24. First, the EU showed that Argentina has co nfused the scope of the first sub-paragraph of 
Article 2(5) with the scope of the second sub-pa ragraph of Article 2(5) of the Basic Regulation. 
This is confirmed by the evidence that Argentina it self has put on the record of the case such as 
the judgment of the General Court in Acron . The judgments of the EU's courts clearly show that 
the second subparagraph of Article 2(5) does not have the "precise content" asserted by 
Argentina.  
25. Moreover, the EU's authorities were already ma king the same determinations with respect to 
company records on the basis of the first subparagraph of Article 2(5) at a time when the second subparagraph of Article 2(5) did not even ex ist. A good example of this is the Regulation 
concerning Aluminium foil originating in China and Russia which included the legal test found in the 
first sentence of Article 2.2.1.1 of the ADA and the first subparagraph of Article 2(5) of the 
Basic Regulation. Additionally, this regulation also included the term "reliable", used by the Panel in US – Softwood Lumber V  to describe the meaning of the terms "reasonably reflect costs" in 
Article 2.2.1.1 of the ADA.  
 26. Second, Argentina itself has acknowledged that the "measure" it challenges is not found in 
the text of the second subparagraph of Article 2(5) . Instead, it challenges the EU's application of 
Article 2(5) of the Basic Regulation only in certain specific circumstances, namely where "the prices of the inputs have been found to be artificially low or abnormally low because of an alleged distortion". Therefore, Argentina has failed to establish the "precise content" of the second 
subparagraph of Article 2(5) of the Basic Regulation.  
 27. In US – Carbon Steel (India) , India presented similar claims. However, the Appellate Body 
rejected India's claims and found that "it is not clear why a number of instances of the application 
of the measure should in this case conclusively establish the meaning of the measure at issue in 
general , which in this case is confined to [the defending party's legislation]". In the present case 
Argentina has also failed to establish the mean ing of the second subparagraph of Article 2(5) in 
general . Consequently, this prevents Argentina from making a prima facie case on any of its "as 
such" claims, including under both Article 2.2.1.1 and 2.2 of the ADA.  WT/DS473/R/Add.1 
 
- C-14 - 
 
  28. Third, Argentina has offered a number of different and inconsistent descriptions of the 
"content" of the measure that it is challenging both under Article 2.2.1.1 and under Article 2.2 of 
the ADA. For example, in paragraph 25 of its Opening Statement, Argentina asserts that the 
second subparagraph of Article 2(5) offers the authorities discretion  and does not oblige them to 
act in any specific way. In contrast, in paragraphs 54, 68, 70 and 72 of this statement, Argentina 
asserts that "there is no discretion " and that the provision is mandatory.  
 
29. The consequence is that Argentina fails to establish the "precise content" of the 
second subparagraph of Article 2(5). In these circumstances, it is impossible for the Panel to understand precisely what is the "matter" before it.   
30. When the Panel prompted Argentina to show the source of these varying descriptions in the 
text of the second subparagraph of Article 2(5), Argentina failed to do so. Indeed, its reliance on Recital 4 of Regulation 1972/2002 is misplaced. This Recital cannot be used as a source of 
interpretation of all the situations covered by Article 2(5) of the Basic Regulation because it refers 
to "particular market situation" and makes no reference to situations where there are "no sales in the ordinary course of trade", which is the situatio n of the present case. Also, the first sentence of 
Recital 4 clearly shows that the determinations of whether the records "reasonably reflect costs" 
were already being made under the first subparagra ph of Article 2(5), which already existed at the 
time of the introduction of Recital 4.   
31. Lastly, the European Union has provided exampl es of investigations to demonstrate that the 
second subparagraph of Article 2(5) does not oblige the investigating authorities to seek the cost-information outside the country of origin in all cases. In its response, Argentina argues that these 
examples are not relevant, because they do not "concern a situation in which the prices were 
found to be abnormally low or artificially low because of a distortion". This response confirms that Argentina does not challenge "as such" the second subparagraph of Article 2(5), but the purported 
application of that provision in certain specific examples.  
 32. The conclusion is that Argentina has failed to establish the "precise content" of the second subparagraph of Article 2(5) of the Basic Re gulation (or in the words of the Appellate Body 
the "meaning" of the second subparagraph of Article 2(5) " in general ") for purposes of its "as 
such" claims under either Article 2.2.1.1, or Article 2.2 of the ADA.  
4.3. T
HE REQUIREMENT TO ESTABLISH THAT THE CHALLENGED MEASURE MANDATES CONDUCT THAT IS NECESSARILY 
INCONSISTENT WITH THE COVERED AGREEMENTS  
 33. In US – Carbon Steel (India) , India had put forward two alternative claims. First, that the 
covered agreement did not allow the defending party's investigating authorities to take certain actions. Second, that although the measure at issue provided that a specific administrative action may be taken (i.e. "an inference may be drawn"), it more accurately meant that in all cases the 
defending party's investigating authorities necessarily  took that action. In support of its claims, 
India relied on the practice developed by the defending party's authorities but did not challenge "as such" that practice.  
 
34. In relation to India's first claim, the Appellate Body rejected it, noting that the measure was framed in "permissive terms". In relation to Indi a's second claim, the Appellate Body found that 
the challenged measure was "a discretionary measur e rather than a binding requirement" to act in 
a certain way. The Appellate Body also found that the "practice" identified by India was not required by the measure, but was rather develo ped pursuant to the discretion afforded by the 
measure. This meant that the "practice appeared to  be distinct and separate from the measure at 
issue" and was not necessarily applied in all instances. 
 35. In the present case, Argentina originally claimed that the second subparagraph of 
Article 2(5) "establishes a rule which is mandatory". However, according to its Opening Statement 
Argentina appears to have changed its claim. It now advances a new theory, pursuant to which "even if" the second subparagraph of Article 2(5) is discretionary and not mandatory, "the fact 
that the measure provides for the possibility" to act in a certain way "will necessarily be 
inconsistent with Article 2.2.1.1" of the ADA. Ar gentina has not provided further explanation about 
this new theory. Dealing with a similar situation in the case EC – Fasteners , the Appellate Body 
found that belated modifications of the nature of the complaining party's claims give rise to due 
process issues. WT/DS473/R/Add.1 
 
- C-15 - 
 
  36. In any event, this modification confirms th at Argentina has failed to establish the "precise 
content" of the second subparagraph of Article 2(5) of the Basic Regulation and, in contrast, offers two contradictory theories of that "content". Th e EU respectfully submits that the Panel should 
reject the "as such" claims of Argentina in the present case, just like the Appellate Body rejected 
India's "as such" claims in US – Carbon Steel (India) . 
 37. Argentina's first theory is that "the use of the verb 'shall' in Article 2(5), 
second subparagraph is evidence of the mandatory nature of the measure". Like India US – 
Carbon Steel (India) , Argentina relies on the EU's purported "practice" but does not make a claim 
that the "practice" itself constitutes a WTO-inconsistent measure.  
38. The Panel should apply the Appellate Body's legal test in US – Carbon Steel (India) , namely 
to assess whether the second subparagraph of Article 2(5) of the Basic Regulation is "a discretionary measure", or "a binding requirement" to act in the same way in all cases.  
 
39. Moreover, the Panel should also take into consideration the General Court judgments put on the record by Argentina and showing that, just like in US – Carbon Steel (India) , the exercise of 
the investing authorities' discretion is subject to "rules and disciplines separate from" the 
second subparagraph of Article 2(5), namely the general principles of the EU administrative law.  40. The Panel should conclude that Argentina has failed to show that the second subparagraph 
of Article 2(5) "mandates" the investigating authorities to act inconsistently with Article 2.2.1.1, or 
Article 2.2 of the ADA. Consequently, Argentina's "as such" claims must be rejected.  
41. Argentina's new second theory is that the "mere fact that Article 2(5), second subparagraph, 
provides for the possibility [to find that records do not reasonably reflect costs because they are 
artificially low or abnormally low] would necessarily render the measure inconsistent with 
Article 2.2.1.1. The same reasoning applies to Argentina's claim under Article 2.2". 
 42. If the Panel decides that it has the author ity to assess this new belated theory, then the 
Panel should apply the legal test of US – Carbon Steel (India) , namely to "assess whether, 
pursuant to the authorisation contained in the text of the measure, the investigating authority is 
required  to act inconsistently" with the covered agreements.  
 
43. In addition, the Panel should also take into consideration the fact that there have been 
examples where the authorities have used domestic sources from the country of origin (like in the 
case of Okoume Plywood Originating in China ), or the accounts of the parent company (like in the 
case of White Phosphorus Originating in Kazakhstan ) in order to establish the "reasonable" costs. 
This evidence shows that the authorities' use of  some "other reasonable basis" depends on the 
particular circumstances of each case. This means that the second subparagraph of Article 2(5) does not require  the investigating authority to act inconsistently with the covered agreements. 
 
44. The Panel shall conclude that Argentina's "as such" claims must be rejected.  
5. A
RGENTINA SUGGESTS AN ERRONEOUS INTERPRETATION OF ARTICLE 2.2.1.1   
 
5.1. A RGENTINA 'S MAIN THESIS 
 45. Argentina's claim is premised on the theory  that the terms "reasonably reflect the costs 
associated with the production and sale of the pr oduct under consideration" in Article 2.2.1.1 of 
the ADA mean that the records should include the expenses actually incurred by the company 
under investigation. Argentina's theory is that  the costs do not need to be "reasonable" 
themselves, but that the records need to reflec t "reasonably" the expenses actually incurred. 
 
46. Argentina has confirmed its claims and the fact that the first sentence of Article 2.2.1.1 
relates exclusively to a cost allocation issue, in its Replies to the Panel's Questions. Argentina also provided a list of the types of situations that, in its view, would allow an investigating authority to 
disregard the recorded costs; all of them relate to  the allocation of costs that have actually been 
incurred.   WT/DS473/R/Add.1 
 
- C-16 - 
 
  47. It is important to note that contrary to the view of certain Third Parties, Argentina's claim 
does not entertain the possibility of disregarding the recorded costs in situations where there have 
been intra-group transactions on a non-arms' length basis.   
48. Therefore, Argentina has confirmed that its claim is premised on a specific legal 
interpretation of Article 2.2.1.1: (a) that the proviso on "reasonably reflect the costs" relates exclusively to the records and not the costs, i.e. , that the costs themselves do not need to be 
reasonable; (b) that the records meet the condition of the proviso where they report the costs that 
have actually been incurred by the investigated company; (c) that the proviso of Article 2.2.1.1 relates exclusively to issues of proper allocation of the costs that have actually been incurred by the investigated company; and (d) that investigating authorities can never  disregard or adjust the 
costs that have actually been incurred by the investigated company for other reasons, even where 
these costs are distorted.  
49. This means that, in order to make a prima facie  case on its "as such" claim, Argentina must 
establish that this is indeed the proper interpreta tion of Article 2.2.1.1. This also means that the 
Panel is not required to assess whether the second subparagraph of Article 2(5) of the Basic 
Regulation is consistent with some other in terpretation of Article 2.2.1.1 of the ADA. 
 5.2. A
RGENTINA SUGGESTS AN ERRONEOUS INTERPRETATION OF ARTICLE 2.2.1.1  OF THE ANTI-DUMPING 
AGREEMENT  
 50. First, the EU notes that the "legislative history" leading to the adoption of Article 2.2.1.1 
actually contradicts: (a) Argentina's assertion that the proviso relates only to cost allocation 
issues; and (b) Argentina's excessively restrictive interpretation of the terms "reasonably reflect 
the costs". Therefore, Argentina fails to substa ntiate its interpretation of Article 2.2.1.1. 
 
51. Second, Argentina's discussion of the Panel Report in US – Softwood Lumber V  is not 
convincing because Argentina focuses on a statement of the Panel which it reads out of context. A 
more detailed analysis of the Panel's findings shows that they actually contradict Argentina's claims in the present case. Indeed, the Panel's finding was that Article 2.2.1.1 does not mandate , 
or require  investigating authorities to reject the recorded costs. In contrast, the Panel did not find 
that Article 2.2.1.1 does not allow investigating authorities to disregard the recorded costs, where 
they consider that they are not "reasonable" beca use they do not reflect market values. Therefore, 
the statement of the Panel, to which Argentina refers, has limited scope: the Panel finds that the 
investigating authorities are not obliged  to treat the recorded costs in a certain way; but the Panel 
does not find that the authorities are not allowed  to disregard the recorded costs as 
"unreasonable", where these costs do not reflect market values. 
 52. Quite to the contrary, the analysis of the entire reasoning of the Panel confirms that Article 2.2.1.1 allows  authorities to disregard the recorded costs, where they do not reflect market 
values. The Panel expressly acknowledged that the recorded costs would be "reasonable" for 
purposes of Article 2.2.1.1, only if it could be shown that they corresponded to market prices.  
53. In the case of Tembec, the investigating authority followed a methodology which used the 
"market values" as "benchmark" and compared the values recorded in the books with market values in order to determine whether the recorded values were "reasonable" for purposes of 
Article 2.2.1.1. The Panel's treatment of this methodology it important for the present case 
because it confirms that the notion of "reasonably"  in the first sentence of Article 2.2.1.1 is not 
limited only to the records, but also covers the recorded costs and values. It also confirms that 
investigating authorities can use market prices as "benchmarks" in order to confirm the 
"reasonableness" of the recorded costs and values. The same conclusions are drawn from the 
Panel's assessment of the West Fraser investigation which accepted that "an arm's length test" may be carried out in order to determine whether these costs are "reliable", and that the recorded 
costs may be adjusted accordingly. The Panel's a pproach was confirmed by the Appellate Body on 
appeal.  
54. The conclusion is that the Panel Report in US – Softwood Lumber V  directly contradicts the 
main thesis of Argentina's challenge and leads to the rejection of Argentina's claims under Article 2.2.1.1 of the ADA.  WT/DS473/R/Add.1 
 
- C-17 - 
 
  55. Third, Argentina's argumentation is based on the theory that a dumping determination 
cannot rest on "external factors unrelated to the exporter or producer". However, Article VI of the 
GATT does not limit the notion of dumping only to  situations that arise out of the exporters' 
"voluntary" pricing behaviour. Quite to the contrary, the notion of dumping also covers situations 
that are created by the action of governments and ar e, in that sense, "exogenous" or "external" to 
the "intention" of the exporters.   
56. This interpretation is supported by considering the Note 2 Ad Article 6 paragraphs 2 and 3 
(i.e. "Multiple currency practices can in certain circumstances constitute a subsidy to exports […] or can constitute a form of dumping  […] which may be met by action under paragraph 2 [of the 
Article VI of the GATT]. By "multiple currency pr actices" is meant practices by governments or 
sanctioned by governments") , with due regard to the negotiating history of the Note and the 
context in which it appears. Its purpose is filling  out the definitions contained in those provisions. 
 
57. This has two important implications. Firstly, the text of the GATT expressly provides that 
government action can lead to a situation of dumping and that importing countries may impose anti-dumping duties. The consequence is that Arge ntina's legal interpretation of Article 2.2.1.1 
fails. Given that this erroneous legal interpretation of Article 2.2.1.1 is the basis for both (a) the 
"as such" claim against the second subparagraph of Article 2(5) of the Basic Regulation; and (b) the claim against the specific anti-dumping measure on biodiesel, Argentina cannot make a prima 
facie case on either of these claims. 
 
58. Secondly, the fact that the GATT expressly refers to multiple currency practices as a type of government measure that may lead to a situatio n of dumping provides some insights on the 
nature and market effects that such measures should have in order to fall within the scope of the 
dumping provisions in Article VI and the ADA.  
59. Multiple currency practices involve a government induced manipulation of the ordinary 
operation of the market, which substantially affects and distorts pricing. These are precisely the characteristics of Argentina's export tax on so ya beans. Argentina has expressly acknowledged 
that (a) the export tax on soya beans is a measure of the Government of Argentina and (b) that 
the effect of the export tax on soya beans is to reduce the domestic price of soya beans in 
Argentina in comparison to the level that this domestic price would have in the absence of the export tax. Consequently, Argentina's export tax falls squarely within the types of 
government measures that may lead to dumping and that "may be met by action" under 
Article VI:2 of the GATT.  
60. Fourth, Argentina makes certain inconclusive statements in relation to the Panel Report in 
EC – Salmon . Firstly, Argentina fails to address the Panel's choice of words, contradicting its 
theory that Article 2.2.1.1 restricts the notion of "reasonably reflect costs" only to those that have 
actually already been incurred by the investigated company. 
 
61. Secondly, Argentina asserts that the price used by the EU's investigating authorities "is clearly not the price to be paid by the Argentinean producers for domestic purchases of soybeans 
in Argentina". This contradicts Argentina's previo us acknowledgements regarding the "price to be 
paid" by the Argentinian producers for domestic purchases of soya beans, in the absence of the government measure that distorts the price of soya beans. 
 
62. It is noted that the information provided by Argentina in its Replies to the Panel's Questions confirms that the export tax on soya beans indeed constitutes a mechanism for distorting the price of soya beans. Argentina has also confirmed that the reason for which it determines this "reference 
FOB price" is to "monitor possible pricing divergences  in the local market. The effect of that 
mechanism is to ensure that the resulting domestic price for soya beans is below the domestic price that would have prevailed in the absence of the export tax.  
 
63. Therefore, the way Argentina implements the export tax on soya beans constitutes, is in 
essence, a mechanism of intervention on  the domestic price of soya beans. 
 
64. Fifth, Argentina makes some statements in relation to the terms "associated with the costs" 
in Article 2.2.1.1 of the ADA, which are not conv incing. Indeed, Argentina qualifies the "reference 
FOB price" as a "hypothetical benchmark price" an d asserts that the FOB reference price is "not a 
'real' price in the sense that it is an average th at is used for the calculation of the export tax. WT/DS473/R/Add.1 
 
- C-18 - 
 
  Argentina thus contradicts its previous acknowledgeme nt that in the absence of the export tax, the 
domestic price of soya beans would have been th e "reference FOB price" less the transaction and 
fobbing costs.   
65. In the present case, the investigating authorities took as a basis the FOB reference price 
(which the Government of Argentina itself had determined) and followed exactly the methodology that Argentina itself acknowledges would lead to the calculation of the domestic soya bean prices 
in the absence of the export tax. 
 66. The conclusion is that Argentina's interpretation of Article 2.2.1.1 of the ADA is erroneous. Consequently, Argentina fails to make a prima facie  case on the claims that it bases on 
Article 2.2.1.1. 
 6. A
RGENTINA SUGGESTS AN ERRONEOUS INTERPRETATION OF ARTICLE 2.2 OF THE ANTI-DUMPING 
AGREEMENT  
 67. First, Argentina's main assertion is that the distinction between costs and evidence 
pertaining to the determination of costs suggested by the EU is "artificial" and has no basis in the text or the context of Article 2.2. However, the ADA itself makes such a distinction, when it contains a specific Article entitled "Evidence"(i.e., Article 6). Therefore, Argentina's assertion is unfounded. 
 
68. Second, Argentina advances various arguments on the interpretation of Article 2.2.2(iii) of 
the ADA. Its main argument is that "the use of data other than that of the country of origin must 
explicitly be provided for" and that Article 2. 2.2 of the ADA supposedly "does not provide for a 
similar exception or authorisation for the determination of the cost of production". Argentina also asserts that "Article 2.2.2 lays down the criteria for determining the reasonable amounts of SG&A 
and for profits only and not for the cost of production". As well as "the fact that Article 2.2.2(iii) 
refers to any other reasonable method for the de termination of SG&A and profits can certainly not 
be applied to the determination of the cost of production".  
69. Argentina's arguments are not convincing because the chapeau of Article 2.2.2 and 
Article 2.2.1.1 use the same terms to refer to the same production and sales costs. There is no reason for which the "any other reasonable method" of Article 2.2.2(iii) would relate only to the 
production and sales costs of the chapeau of Arti cle 2.2.2, but not the same production and sales 
costs mentioned in Article 2.2.1.1.  
70. Third, despites questions from the Panel, Argentina has failed to explain how an 
investigating authority could determine costs in a situation where there are no usable data from 
the country of origin.   
71. Consequently, Argentina has failed to substantiate its interpretation of Article 2.2 and has 
failed to make a prima facie  case on the claims that it bases on this provision. 
 
7. A
RGENTINA HAS FAILED TO MAKE A PRIMA FACIE  CASE ON ITS CLAIMS UNDER ARTICLE 2.2.1.1  AND 
ARTICLE 2.2 OF THE ANTI-DUMPING AGREEMENT AGAINST THE ANTI-DUMPING MEASURE ON 
BIODIESEL  
 
72. Argentina has failed to show that the prices used by the EU's investigating authorities were from "outside the country of origin". Argentina has simply asserted that "the EU did not use the domestic price of soybeans" and that "the EU failed to construct normal value on the basis of the 
cost of production in the country of origin". 
 73. The EU considers that, the prices used by  the investigating authorities were from the 
country of origin and reflected the cost of soya beans that Argentine producers of biodiesel would 
have to incur, in the absence of the export tax.  
74. Consequently, Argentina fails to make a prima facie  case on its claims against the anti-
dumping measure on biodiesel under Article 2.2 of the ADA, irrespective of whether that provision 
allows the use of evidence from outside the country of origin, or not.  WT/DS473/R/Add.1 
 
- C-19 - 
 
  8. A RGENTINA HAS FAILED TO MAKE A PRIMA FACIE  CASE ON ITS CLAIMS IN RELATION TO PROFITS  
 
75. In its Replies to the Panel's Questions, Arge ntina appears to draw a distinction between the 
"reasonable method" of Article 2.2.2(iii) and the figu re of profits to be established. Argentina notes 
that Article 2.2.2(iii) does not "use the terms 'any reasonable amount'" and, on that basis, 
Argentina appears to assert that the profit figure does not need to be "reasonable", but that the methodology must be "reasonable". This assertion that is clearly wrong. The chapeau of Article 2.2 
refers to a "reasonable amount for administrative, selling and general expenses and for profits". 
 76. In any event, the methodology followed by th e investigating authorities in the present case 
closely resembles the methodology followed by th e US authorities and approved by the Panel in 
US – Softwood Lumber V , albeit in order to calculate a different cost item. This is clearly a 
"method" for the calculation of the profits that is "reasonable".  
77. In these circumstances, the EU submits that the Panel should reject Argentina's claim, just 
as the Panel rejected Canada's " post hoc  rationalisation" objections in US – Softwood Lumber V . 
 
9. A
RTICLE 3 CLAIMS  
 
78. Argentina persists in accusing the EU of having adopted the wrong definition of capacity. In the provisional and definitive Regulations the EU described the state of the various EU biodiesel 
producing facilities, and gave a clear explanation of the criterion it applied in assessing utilisation 
of capacity. While rejecting the EU's explanation Argentina has quietly abandoned its own criterion of capacity based on the notion of what a plant was "designed to produce". Instead, it proposes a 
new criterion of "potential" for production. Its suggestion that the negotiating history contributes 
to the interpretation of the text lacks all conviction, and trails off into platitude.  
79. Argentina's only interest in the data on "capac ity utilisation" is to proceed to the further step 
of identifying it as an "other factor" cause of  injury. During the investigation the exporters 
suggested that the injury was caused through over-expansion. However, the evidence obtained by the EU and Argentina itself acknowledges that what it calls the "enormous overcapacity" is 
"continuous" and "existed in 2009", i.e. throughout the period considered. To the contrary, the EU 
believes that capacity utilisation is an indicator of the level of efficiency at which an industry is operating.  
 
80. Argentina again accuses the EU of failing to make an objective assessment in its evaluation of production capacity and utilisation of capacity. The best answer that the EU can give is to ask 
the Panel to examine the careful justification for its conclusions that was provided by the EU, in 
particular in the Definitive Regulation at Recitals 130 to 133, and 161 to 171. These passages speak for themselves.   
81. On the issue of causation, Argentina's argument hypothesises the "total elimination of 
imports originating in Argentina and Indonesia" as compared to the EU volume of production. The EU does not see what would be learnt from such  an exercise. Indeed, the aim of the causation 
analysis, in situations where there are said to be "other factors", is to separate and distinguish the 
various causes.   
82. Argentina suggests that these imports and the anti-dumping proceedings are being 
choreographed by multinational companies for ends of their own. It means that corporate groups "might have decided that their interests were better served by activating trade defence mechanisms in the European Union". Firms producing in the EU are, regardless of ownership, in 
principle entitled to the remedies provided by the anti-dumping legislation if the conditions set out 
there are satisfied. The idea that a firm might see an advantage in having its own goods subjected to anti-dumping duties seems somewhat far-fe tched. Furthermore, the EU (consistent with 
Article 4.1(i) of the ADA) has already excluded three producers from the definition of the 
EU industry because the high level of their imports from Argentina.   
83. The EU maintains that Argentina's claim that the EU, when examining injury in accordance 
with Article 3.4 of the ADA, failed to properly consider the factor 'return on investment' is outside the Panel's terms of reference because it was not mentioned in the Panel Request. The EU supports its contention referring to the Appellate Body Report China – Raw Materials in which the WT/DS473/R/Add.1 
 
- C-20 - 
 
  claimants "failed to present the legal basis for their complaints with sufficient clarity to comply 
with Article 6.2 of the DSU".  84. The importance of examining each of the fa ctors listed in Article 3.4 of the ADA has been 
stressed by the Appellate Body in Thailand-H-Beams . There are fifteen of these factors. Clearly it 
would not be sufficient for the panel request to merely state that they had not been properly 
examined without indicating which factors in particular the failure lay.  
 
85. Argentina's reference to the Appellate Body's report in the Wheat Gluten  case on the issue of 
"continuing" conditions has no bearing on the point that the EU has made. Rather it addresses the timing of injury caused by various factors. The EU makes provision for such issues of timing to be 
taken into account by tracking developments in the condition of the domestic industry, and the 
potential causes of injury, over a "period considered" of three and a half years, ending in the dumping "investigation period" of one year. It is just this approach that enables the EU to respect 
the obligation to separate and distinguish the various factors that may be causing injury. In 
particular, it permits the EU to distinguish those factors that are changing from those that are constant. 
 
10. C
ONCLUSION  
 86. Argentina has failed to make a prima facie  case on any of its claims. The European Union 
respectfully requests the Panel to reject all of Argentina's claims. 
  WT/DS473/R/Add.1 
 
- C-21 - 
 
  ANNEX C-3 
EXECUTIVE SUMMARY OF THE STATEMENT OF THE EUROPEAN UNION  
AT THE FIRST MEETING OF THE PANEL  
1. I NTRODUCTION  
 
1. The opening statement of the EU will focu s on some of the issues raised by certain 
Third Parties in their submissions. 
 
2. T HIRD-PARTY SUBMISSIONS REVEAL BROADER CONSENSUS ON CERTAIN ISSUES  
 2. A number of Third Parties, in particular the United States, Australia and Turkey, have 
expressed views that are very close to the legal interpretations and arguments put forward by the 
EU in its First Written Submission. This is also partially the case for Third Parties that have generally supported Argentina's claims like Chin a. The conclusion that the EU draws from the 
submissions of the Third Parties is that there is broad consensus that, in principle and in certain 
circumstances, Article 2.2.1.1 allows investigatin g authorities to disregard company records, where 
the costs recorded are not reasonable. There is also broad consensus that, in principle and in 
certain circumstances, Article 2.2 allows the authorities to use evidence from outside the country 
of origin in order to calculate the cost of production in the country of origin.   3. However, there seems to be a disagreement on which are the "certain conditions" that must 
be met, for these principles to apply. On that regard, the EU stresses that Article 2(5) of the Basic 
Regulation does not allow "unfettered discretion" to its authorities, which are required to act reasonably and are subject to judicial control. In any case, the EU argues that the present panel is 
not required to come up with any exhaustive lists of conditions.  
 4. More importantly, the panel only needs to determine whether Argentina has made a prima 
facie case on its claims. To do so, the Panel only needs to decide whether Argentina has met its 
burden of showing (a) that the specific provisions of Article 2(5) of the Basic Regulation, which it challenges "as such", fall within the category of what is not permissible under Article 2.2.1.1 and (b) that it is never permissible to use evidence  from outside the country of origin in order to 
calculate the costs of production. Since Article 2(5) of the Basic Regulation does not define the 
terms "reasonably reflects costs" nor define the conditions that would allow the investigating authorities to seek outside the country of origin the evidences for the costs, the EU does not see 
how it is possible for Argentina to succeed in its "as such" claims. 
 3. B
ROADER LEGAL POINTS RAISED BY SOME THIRD PARTIES  
 5. The EU considers that some broader legal inte rpretations advanced by certain third parties, 
which Argentina has not put forward, are outside the Panel's terms of reference, or fall outside the 
scope of the present dispute. In any case, these interpretations are also legally erroneous, as 
further explained. 
 4. E
XPORT TAXES OR DUTIES  
 6. Regarding the impact of export taxes and ex port duties on anti-dumping investigations, 
some Third Parties have expressed the view that anti-dumping rules cannot be used to address the 
distortive effects of export duties, asserting that Article XI:1 of the GATT allows the imposition of 
export duties. This view is legally incorrect because there is nothing in the GATT that would prevent an investigating authority from taking into consideration the distortive effects of export duties and export taxes when constructing the normal value of the product under consideration.  
 
7. More precisely, Article XI:1 does not allow anything, but only contains a prohibition. The definition of quantitative restrictions does not include export duties and export taxes. But, this 
does not mean that Article XI:1 authorises WTO Members to introduce export duties or export 
taxes.  WT/DS473/R/Add.1 
 
- C-22 - 
 
  8. The fact that export duties and export taxe s fall outside the scope of Article XI:1 of the 
GATT does not mean that the effects of such export  taxes and export duties fall outside the scope 
of Article VI of the GATT. Using a similar reasoning to that of Appellate Body in the case Argentina – Import Measures,  the EU notes that Article XI:1 does not contain any "express 
language identifying its relationship" with Article VI of the GATT. Moreover, there is no language in 
Article XI:1 or Article VI of the GATT stating that the anti-dumping authorities of WTO Members 
cannot take into account the distortive effects of export duties or export taxes in anti-dumping 
investigations. Lastly, there is no specific obligation or language in Article XI:1 that could be said 
to conflict with the provisions of Article VI of the GATT. The use of the forceful term "condemn" in 
Article VI provides further support for the conclusi on that export duties and export taxes and their 
distortive effects do not fall outside the scope of Article VI of the GATT and of anti-dumping 
investigations. 
 9. The Panel's rejection of Argentina's claims in the present dispute will not have the effect of 
indirectly declaring all export taxes or export duties as WTO-inconsistent because the investigation 
will still be subject to the strict procedural re quirements of the Anti-Dumping Agreement and not 
necessarily always lead to a finding of dumping.  
 
10. The distortive effects of export taxes and export duties are well known and well documented. They are the result of government inte rvention and of the protection afforded to the 
exporting country's downstream industry.  
 
5. T
HE NOTION OF DUMPING  
 
11. It has been argued by certain third parties that the anti-dumping rules are "only concerned 
with examining the private pricing behaviour of producers". As a consequence of this purported 
"nature" of dumping, "the investigation authority cannot reject the costs recorded in the 
producer/exporter's accounts on grounds exogenous to that producer/exporter", such as the "full 
range of governmental policy interventions that are entirely outside the control of the producer/exporter themselves". The EU believes that the panel should reject these erroneous assertions for a number of reasons. 
 
12. There is no textual basis in Article VI of  the GATT or in the Anti-Dumping Agreement for 
such a "subjective element" in the anti-dumping rules that would consider dumping as an 
intentional "price discrimination". To the contrary , both Article VI:1 of the GATT and Article 2 of 
the Anti-Dumping Agreement define dumping in obje ctive terms: introduction of products "into the 
commerce of another country at less than the normal value of the products".  
 
13. Dumping is not defined by reference to the domestic prices in the exporting country but by reference to the "normal value" of the products. Article VI:1 of the GATT lists certain types of 
evidence that could be used as proxy to identify  the "normal value". This article confirms that 
dumping is not related to exporters' purported "intention" but only to the value that the products 
should have in normal circumstances. Also, th e calculation of dumping would be deprived of 
practical effects if "exogenous" costs elements beyond the exporters own control would be 
excluded. Anti-dumping rules would thus be rendered ineffective.  
 14. Article VI:5 of the GATT acknowledges that ther e can be situations which could be subject of 
both a countervailing duty and an anti-dumping  duty. Therefore, the text of this article 
acknowledges that government actions may be at the source of dumping and material injury. To further support this conclusion, the EU relies on the Appellate Body report in the case United States – Anti-dumping and Countervailing duties (China)  in which it was established that 
"exogenous factors", such as the actions of the government of the exporting country, may very 
well be the source of dumping.   
15. The reliance of certain Third Parties on the Appellate Body Reports in the zeroing cases is 
misguided. Indeed, in this case the Appellate Body was not dealing with the construction of the normal value, but only whether the investigating authority should look at individual transactions 
separately, or whether it should look at the "aggregation of all export transactions". The 
Appellate Body discussed the export price part of the comparison and not the normal value. 
 WT/DS473/R/Add.1 
 
- C-23 - 
 
  6. T HE SITUATION UNDER THE ANTI -DUMPING CODE IN THE 1980 S 
 
16. Another Third Party referred to the situation that prevailed under the anti-dumping Code and especially views and documents from 1982 and 1984. The EU considers that the passages 
cited by Indonesia do not support its interpreta tion of Article 2.2.1.1 of the Anti-Dumping 
Agreement since the Code was very different fr om the current version of the Anti-Dumping 
Agreement and did not include any provision like Article 2.1.1.1.  
 
17. In the alternative, should those statements still have some relevance today, they would contradict Indonesia's and Argentina's interpretation of Article 2.2.1.1. Indeed, in its Article 1(4) the anti-dumping Code did not provide that the cost s should normally be calculated on the basis of 
the records kept by the investigated companies, or that these records should reasonably reflect 
the costs associated with the production and sale of the relevant goods. To remedy this omission, WTO members have included the first sentence of Article 2.2.1.1 in the Anti-Dumping Agreement: 
costs reflected in companies' records must be reasonable.  
 18. In any event, paragraph 5 of the draft reco mmendation on the implementation of the anti-
dumping Code, to which Indonesia refers, expres sly limits the scope of the recommendation to 
situations where the inputs are purchased "in the ordinary course of trade". However, Article 2.2.1.1 of the Anti-Dumping Agreement applie s to situations where there are no sales in the 
ordinary course of trade such as in the present dispute. 
 
7. A
RGENTINA HAS FAILED TO MAKE A PRIMA FACIE CASE ON ITS "AS SUCH " CHALLENGE UNDER 
ARTICLE 2.2.1.1  OF THE ANTI-DUMPING AGREEMENT  
 19. The EU considers Argentina's "as such" challenge against the second subparagraph of Article 2(5) of the EU's Basic Regulation is a more relevant point for the Panel's analysis. In the 
light of certain comments made by Third Parties in their submissions, the EU will submit the 
following: first, Argentina's failure to establish, as a matter of fact, the content and scope of the second subparagraph of Article 2(5); second, Argent ina's failure to articulate properly, let alone 
establish, the "precise content" of the "norm or rule" that it purports to challenge "as such" and 
third, Argentina's failure to establish that the "norm or rule" that it purports to challenge "as such" 
is the type of measure that can be the subject of an "as such" challenge.  
8. T
HE SCOPE OF THE SECOND SUBPARAGRAPH OF ARTICLE 2(5) 
 
20. It is by now clear to all participants in these proceedings that Argentina's challenge against 
the second  subparagraph of Article 2(5) of the Basic Regulation under Article 2.2.1.1 of the 
Anti-Dumping Agreement is factually wrong. In its First Written Submission, Argentina has simply confused the scope of the second subparagraph of Article 2(5) with the scope of the first 
subparagraph of Article 2(5). Any other theory advanced by China and Indonesia is factually 
untenable. This is made clear by the text of the two subparagraphs of the Article 2(5) of the Basic 
Regulation. It is also made clear by the fact that the EU had already made determinations similar to the ones challenged by Argentina in the present case, on the basis solely of the first 
subparagraph of Article 2(5), before the second su bparagraph of Article 2(5) was even introduced. 
Indonesia even acknowledges this latter fact in footnote 27 of its Third Party Submission.   
21. While the first subparagraph of Article 2(5) is repeating "verbatim the conditions on the 
first sentence of Article 2.2.1.1 of the Anti-D umping Agreement", the second subparagraph does 
not relate to Article 2.2.1.1, but simply fill s a gap, describing what actions authorities are 
authorised to take in order to calculate the costs when the company records cannot be used. In 
the Anti-Dumping Agreement, the closest provision to this second paragraph is 
subparagraph (iii) of Article 2.2.2, which refers to "any reasonable method" and to "any reasonable basis". This article was the inspiration for the drafting of the second subparagraph of 
Article 2(5). Therefore, the EU concludes that Argentina has simply directed its "as such" challenge 
under Article 2.2.1.1 of the Anti-Dumping Agr eement against the wrong provision of the Basic 
Regulation. 
 WT/DS473/R/Add.1 
 
- C-24 - 
 
  9. A RGENTINA HAS FAILED TO ESTABLISH THE "PRECISE CONTENT " OF THE "NORM OR RULE " THAT IT 
CHALLENGES  
 
22. The Appellate Body has confirmed that, in order to substantiate an "as such" claim, the 
complaining party must first establish, inter alia , the "precise content" of the "rule or norm" that it 
challenges. In the present case, Argentina has failed to articulate properly, let alone establish, the "precise content" of the norm that it challenges "as such" under Article 2.2.1.1 of the Anti-
Dumping Agreement. 
 23. If Argentina is challenging "as such" Article 2(5) of the Basic Regulation "and more specifically its second paragraph", this challenge must fail. Indeed, there is broader consensus that 
this subparagraph allows EU authorities to act in a certain manner but does not oblige them, or 
mandate them to do so. If Argentina does not challenge this provision, its position is inconsistent. It challenges the "condition" that "refers in particul ar to situations where the prices are 'artificially 
low' or 'affected by a distortion'", the purporte d "continuous and established practice" of the EU, 
and Article 2(5) second paragraph of the Basic Regulation" which purportedly "refers to situations where the prices of an input are 'abnormally or arti ficially low' because they are set in a 'regulated 
market' or because of the existence of some alleged 'distortion' on the domestic market". 
 24. Since Argentina has already acknowledged that it does not challenge "as such" any "practice" and consequently that any such challenge against a "practice" would be outside the 
Panel's terms of reference, it could assumed that Argentina challenges a written "norm or rule", i.e 
the second subparagraph of Article 2(5). Nonetheless, Argentina still does not offer consistency even in the description of the content of  that "norm or rule" it is "as such" challenging. 
The EU understands that Argentina considers that the challenged "measure" is to be found beyond 
the actual text of Article 2(5) of the Basic Regu lation. However, the EU submits that Argentina has 
failed to articulate properly and to establish with the requisite evidence the "precise content" of its 
claims.  
 10. A
RTICLE 2(5)  OF THE BASIC REGULATION ALLOWS THE INVESTIGATING AUTHORITIES DISCRETION  
 
25. The EU believes that it by now clear that  Art 2(5) does not mandates the investigating 
authorities to act in a particular manner and allows the authorities' discretion. In light of the recent Appellate Body Report in US – Carbon Steel (India) , the discretionary nature of Article 2(5) of the 
Basic Regulation is fatal to Argentina's "as such" claims against Article 2(5). 
 26. The EU finds problematic assertions like one made by China, which considers that in order to 
challenge "as such" a "rule or norm", it is "not necessary to show that it 'mandates' a 
WTO-inconsistent outcome in every case". First, China does not offer any textual basis. Second, China's reference to the paragraph 172 of the Appellate Body Report in US – Oil Country Tubular 
Goods Sunset Reviews  contradicts its position. Indeed, this paragraph does not refer to the 
"particular circumstances" asserted by China. Also China fails to explain how its assertion can be 
compatible with the nature of an "as such" claim, which according to the Appellate Body is directed against "laws and regulations". To the contrary, China's assertion transforms in essence every "as 
applied" claim to an "as such" claim, by renaming the application of the law in a specific case to an 
application in "particular", or "defined", or "at least certain" circumstances. Therefore, China's 
assertions must be rejected.  
 
11. T
HE MEANING OF THE TERM "ASSOCIATED " IN ARTICLE 2.2.1.1  OF THE ANTI-DUMPING 
AGREEMENT  
 
27. The EU in its First Written Submission no ted that the ordinary meaning of the term 
"associated" is broader than the meaning of the words "actually incurred". It also noted that the Panel Report in Egypt-Steel Rebar  supports its understanding of the ordinary meaning of the term 
"associated", because it uses the term "pertain", instead of the words "actually incurred". 
 28. Indonesia disagreed with EU interpretation an d noted that the chapeau of Article 2.2.2 of the 
Anti-Dumping Agreement also uses the term "pertain " to "refer to the actual data" of the company 
under investigation. The EU believes that its in terpretation is the preferable one for several 
reasons.  WT/DS473/R/Add.1 
 
- C-25 - 
 
  29. The ordinary meaning of the term "pertain" is "be appropriate" or "related". These terms are 
broader than the words "actually incurred". Therefore that ordinary meaning does not limit Article 2.2.1.1 to only those costs that have "actually been incurred" by the specific company under investigation.  
 
30. The EU's interpretation is confirmed by th e context in which these terms are used. Indeed, 
Article 2.2.1.1, which is the subject of the pres ent analysis, does not use the words "actual data" 
contained in the chapeau of Article 2.2.2 and refe rred by Indonesia, but the word "reasonably".  
 31. The chapeau of Article 2.2.2 of the Anti-Dumpi ng Agreement uses the term "pertaining to" in 
the context of the "ordinary course of trade". In contrast, the words "ordinary course of trade" are 
not found in Article 2.2.1.1 of the Anti-Dumping Ag reement. Therefore, the term "pertaining to" in 
the chapeau of Article 2.2.2 is used in order to convey a different meaning form the term "associated" in Article 2.2.1.1 of the Anti-Dumping Agreement.  
 
32. The EU notes that the chapeau of Article 2. 2.2, in combination with subparagraph (iii) of 
Article 2.2.2, provides that, in the absence of  "ordinary course of trade", the investigating 
authority may use "any other reasonable method". 
 12. I
SSUES RELATING TO ARGENTINA 'S "AS APPLIED " CLAIMS  
 
33. The EU disagrees with the argument made by China that it has used "an average of the FOB 
reference prices" without making any "adjustment to this evidence". The EU's position was acknowledged by Argentina. 
 
34. The EU also disagrees with certain Third Parties taking the view that the prices used by the investigating authority were not from the "country of origin" for a number of reasons: the 
investigation revealed that the prices used were actually fixed by the government of Argentina, the 
prices were applied in Argentina, paid in Argentina and ensured that Argentinian producers of soya bean and soya bean oil received the same net price irrespective of the destination of their goods. This is not a case of application of the proviso on  "information from other representative markets", 
but a case of application of the proviso on "any other reasonable basis", authorised by Article 2(5).  
 35. Consequently, Argentina's "as applied" clai m against the Definitive Regulation, based on 
Article 2.2 of the Anti-Dumping Agreement, must fail. And this, irrespective of whether Article 2.2 
allows investigating authorities to seek evidence from outside the country of origin in order to calculate the costs of production in the country of origin. 
 
 WT/DS473/R/Add.1 
 
- C-26 - 
 
  ANNEX C-4 
EXECUTIVE SUMMARY OF THE STATEMENT OF THE EUROPEAN UNION  
AT THE SECOND MEETING OF THE PANEL 
1. I NTRODUCTION  
 
1. The European Union's Opening Statement will address the points raised by Argentina in its 
Second Written Submission.  
 
2. T ERMS OF REFERENCE / PANEL'S FINDINGS  
 2. In relation to Argentina's "as such" claim, the only measure before the Panel is the second 
subparagraph of Article 2(5) of the Basic Regulation, as well as any subsequent amendments or 
replacements to that specific subparagraph. In relation to Argentina's "as applied" claims, the only measures before the Panel are the Provisional Regulation and the Definitive Regulation, as well as 
any subsequent amendments or replacements to these specific Regulations. 
 3. A
RGENTINA HAS FAILED TO MAKE A PRIMA FACIE  CASE ON ITS "AS SUCH " CLAIMS  
 
3.1. A RGENTINA HAS FAILED TO ESTABLISH THE PRECI SE CONTENT OF THE SECOND SUBPARAGRAPH OF ARTICLE 2(5)  
OF THE BASIC REGULATION  
 
3.1.1. Argentina misrepresents the sc ope of the second subparagraph of 
Article 2(5) of the Basic Regulation 
 
3.1.1.1 The text of the second subparagraph of Article 2(5) of the Basic Regulation 
 
3. In paragraph 26 of its Second Written Subm ission, Argentina acknowledges that the first 
subparagraph of Article 2(5) "implements the particular obligations laid down by Article 2.2.1.1 of 
the Anti-Dumping Agreement" and "closely mirrors the wording of Article 2.2.1.1". Paradoxically, 
Argentina continues to insist that it is the second subparagraph of Article 2(5) that provides the legal basis for the decision not to rely on the records of the investigated companies. 
 
4. In paragraphs 12 and 18 of its Second Wr itten Submission, Argentina draws a distinction 
between what it calls the "first part of Article 2(5) second subparagraph [and] the second part of 
that provision". Argentina also asserts that the options given to the investigating authorities under 
"the second part of Article 2(5) second subparagraph" "imply" that they also constitute the "reasons why information of the domestic market cannot be used". However, there is nothing in 
the text of either the first or the second subparagraph of Article 2(5) that could support 
Argentina's assertion.  3.1.1.2 The lack of similarity with the EC-Fasteners  case 
 
5. In paragraph 15 of its Second Written Submission, Argentina compares the present dispute with the situation faced by the Panel in EC – Fasteners . In that case, the Appellate Body found that 
in the absence of a specific provision, Article 9(5) of the Basic Regulation also concerned the 
calculation of dumping margins.   
6. In the present situation, the first subparagraph of Article 2(5) addresses precisely the 
question of the conditions that must be met in order to base the cost calculation on the company records.  
3.1.1.3 Recital 4 of Regulation 1972/2002 
 
7. Argentina has repeatedly referred to Recital 4 of Regulation 1972/2002, with which the 
second subparagraph was added to Article 2(5). Howe ver, the text of that Recital does not support 
Argentina's arguments.  WT/DS473/R/Add.1 
 
- C-27 - 
 
  8. First, the text of Recital 4 shows that Article 2(5) had already been the legal basis for the 
authorities' determination of whether the reco rds reasonably reflected costs, before the 
introduction of the second subparagraph of Article 2(5). Second, in paragraph 69 of its 
Second Written Submission, Argentina confuses the sales of the like product [governed by 
Article 2(3)] with the "records that do not reasonably reflect the costs" associated with the 
production and sale of the relevant product. Third, in paragraph 70 of its Second Written 
Submission, Argentina asserts that Recital 4 "emphasises that the records must be found not to 
reasonably reflect the costs". However, Recital 4 expr essly refers to guidance as to what has to be 
done after it has already been determined that the records do not reasonably reflect the costs. 
Fourth, Recital 4 does not have any impact on the interpretation of "reasonably reflect costs".  
 
3.1.1.4 The alleged "background" of the second  subparagraph of Article 2(5) of the Basic 
Regulation 
 
9. Argentina continues to insist that the "purpose" of the introduction of the 
second subparagraph of Article 2(5) "was to provide a legal basis for the authorities to achieve effects similar to those applied under NME treatment to Russia, although it was being granted 
full MES".  
 10. In support of its assertions, Argentina refers to several comments of scholars listed in paragraph 43 of its First Written Submission. However, at the time of the publications, all the 
scholars referred to were actively involved in defending Russian companies in anti-dumping 
investigations relating to the application of Article 2(5) of the Basic Regulation. In these circumstances, it is doubtful whether their statements can be used as a source of interpretation of 
Article 2(5).  
 3.1.1.5 The judgments of the General Court 
 11. Argentina has submitted as Exhibits certain judgments of the General Court which actually contradict its description of the scope of the second subparagraph of Article 2(5).  
12. The General Court's judgments in Cases T-235/ 08 and T-118/10 confirm three points. First, 
that the first subparagraph of Article 2(5) is the legal basis that authorises the investigating authorities to determine whether the records "reasonably reflect costs". Second, that the second 
subparagraph of Article 2(5) only provides the alternative sources of data that the investigating 
authorities may use when it has already been determined that the company records cannot be used, pursuant to the first subparagraph of Article 2(5). Third, that the first and the 
second subparagraphs of Article 2(5) authorise  the investigating authorities to take certain actions, 
but do not mandate  them to do so. 
 3.1.1.6 Examples of application of the firs t subparagraph of Article 2(5) of the Basic 
Regulation by the European Union's investigating authorities before 2002 
 
13. Argentina insists that the EU's investigating authorities had never determined that company 
records do not "reasonably reflect costs" before 2002.  
 14. First, the EU's investigating authorities routinely used the provision which today is the first 
subparagraph of Article 2(5) in order to determine whether the company records "reasonably reflect" the relevant costs between 1995 and 2002, at a period when the second subparagraph of Article 2(5) did not exist. Example are the 2000 investigation on Urea and Ammonium Nitrate 
originating in Algeria et al ., the 2001 investigation on certain Iron or steel ropes and cables 
originating in the Czech Republic, Russia, Thailand, et al., the  1996 investigation on Polyester 
textured filament yarn originating in Indonesia and Thailand , and the 2000 investigation on Tube 
or pipe fittings originating in Brazil, the Czech Republic, et al . 
 
15. Second, Argentina errs when it asserts that the investigations involving an application of 
Article 18 of the Basic Regulation are not relevant for purposes of Article 2(5). Even where they 
apply Article 18, the EU's investigating authorities still use the information supplied by the 
companies to the extent possible. Examples are the 2000 investigation on Synthetic staple fibres 
of polyester originating in Australia, Indonesia and Thailand  and the investigation on Aluminium 
foil originating in China and Russia .  
 WT/DS473/R/Add.1 
 
- C-28 - 
 
  3.1.2. Other shortcomings of Argentina's "as such" claims 
 16. To sum up, Argentina purports to challenge "as such" the second subparagraph of Article 2(5) of the Basic Regulation under Article 2.2.1.1 and Article 2.2 of the Anti-Dumping 
Agreement. Argentina's challenge under Article 2. 2.1.1 of the Anti-Dumping Agreement must be 
rejected for the simple reason that the scope of the second subparagraph of Article 2(5) has nothing to do with the content of the first se ntence of Article 2.2.1.1 of the Anti-Dumping 
Agreement. 
 3.1.2.1 The text of the second subparagraph of Article 2(5) of the Basic Regulation is clear 
 
17. In its Second Written Submission, Argentina refers to the Appellate Body Report in US – 
Corrosion Resistant Steel  and acknowledges that when a measure is challenged "as such" the 
starting point for the analysis "must be the measure on its face". Argentina also refers to the 
Appellate Body Report in US – Hot Rolled Steel  and acknowledges that "further examination is 
required", only if the "meaning or content of the measure is not evident on its face".  
 
18. The EU has explained the reasons for wh ich the scope, meaning and content of the 
second subparagraph of Article 2(5) are clear and evident on the basis of the provision's text. Argentina has actually acknowledged this fact in paragraph 50 of its Second Written Submission when it took issue with the EU's "exclusive ly focusing on the terms of Article 2(5), 
second subparagraph". 
 3.1.2.2 Argentina's description of the second  subparagraph of Article 2(5) of the Basic 
Regulation 
 
19. The text of Argentina's Second Written Submis sion in essence confirms the EU's objection: 
there is still no concise and uniform description of the meaning and content of the 
second subparagraph of Article 2(5), despite the clarity of the provision's text.  20. Argentina has also failed to identify the "p recise content" of the second subparagraph of 
Article 2(5). Therefore, Argentina cannot make a prima facie  case on an "as such" claim against 
the second subparagraph of Article 2(5) either under Article 2.2.1.1, or under Article 2.2 of the ADA. 
 
3.2. A
RGENTINA HAS FAILED TO SHOW THAT THE SECOND SUBPARAGRAPH OF ARTICLE 2(5)  OF THE BASIC 
REGULATION IS "AS SUCH" INCONSISTENT WITH THE COVERED AGREEMENTS  
 3.2.1. Argentina ignores the Appellate Body Report in US – Carbon Steel (India)  
 21. In its Second Written Submission, Argentina asserts that "there is no provision" in the 
covered agreements which "establishes a mandatory/discretionary standard that the Panel would 
have to apply". However, Arge ntina omits to mention that the Appellate Body has used the 
"discretionary" nature of particular measures as a ground for rejecting "as such" claims against 
them. The most recent example is the Appellate Body's Report in US – Carbon Steel (India) . 
 22. In its Second Written Submission, Argentina states that providing for the possibility of "the 
use of a basis other than the cost of production in the country of origin renders the measure 
inconsistent with Article 2.2 of the ADA". However, Argentina is not consistent in its description of the content of the second subparagraph of Articl e 2(5) and has failed to establish that this 
provision mandates any particular conduct which is necessarily inconsistent with the covered 
agreements. 
 3.2.2. Argentina's refusal of the discretion  afforded to the investigating authorities 
by the second subparagraph of Arti cle 2(5) of the Basic Regulation 
 3.2.2.1 The text of the second subparagraph of Article 2(5) of the Basic Regulation 
 23. The text of the second subparagraph of Article 2(5) says nothing about the determination of whether the company records can be used or not. Therefore, Argentina cannot assert that the text of the second subparagraph of Article 2(5) "mandates" any conduct in relation to the 
determination of whether company records reasonably reflect costs.  WT/DS473/R/Add.1 
 
- C-29 - 
 
  24. Argentina's arguments are based on the use of the word "shall" in the text of the 
second subparagraph of Article 2(5). However, the word "shall" in the text of the second subparagraph of Article 2(5) addresses the obligation of the investigating authorities to proceed with the construction of the normal valu e so that they can complete the anti-dumping 
investigation. It does not relate to any single method that the investigating authorities may use in 
order to establish or adjust the costs.  
3.2.2.2 The alleged "practice" of the European Union's investigating authorities 
 
25. In paragraphs 102 to 104 of its Second Written Submission, Argentina states that "in all cases which involved a situation of 'abnormally low' or 'artificially low' prices caused by an alleged 
'distortion', information on the domestic market could not be used and the authorities used 
information from other representative markets".   
26. As already noted, the investigations of th e EU's authorities do not support Argentina's 
arguments on the purported "absence of discretio n" afforded by the second subparagraph of 
Article 2(5).  
 
3.2.2.3 The judgments of the General Court 
 27. In paragraph 105 of its Second Written Subm ission, Argentina states that the "use of the 
word 'entitled'" in the judgments of the General Court "does not confirm that Article 2(5) is 
discretionary". However, the ordinary meaning of the word "entitle" is "to grant someone a right". The use of the word "entitled" means that the General Court considers that the second 
subparagraph of Article 2(5) grants to the investigating authorities the right to act in a certain 
way, without obliging them.   
28. Moreover, Argentina omits to mention that the relevant paragraph of the General Court's 
judgment, to which it refers, reads as follows: "The institutions were therefore fully entitled  to 
conclude that …". This makes clear that the General Court was actually examining whether the investigating authorities had gone beyond the discretion that both the first and the 
second subparagraphs of Article 2(5) affords them.  
 3.3. C
ONCLUSION  
 29. To sum up, Argentina has failed to make a prima facie  case on its "as such" claims against 
the second subparagraph of Article 2(5) under Article 2.2.1.1 and Article 2.2 of the ADA.  
 
4. A
RGENTINA ADVANCES AN ERRO NEOUS INTERPRE TATION OF ARTICLE 2.2.1.1  OF THE ADA 
 
4.1. T HE TEXT OF ARTICLE 2.2.1.1  OF THE ANTI-DUMPING AGREEMENT  
 30. Argentina reiterates that this provision requires the "records to reasonably reflect" the relevant costs and that there is no "reasonablen ess test of the cost elements themselves". In 
support of its assertions, Argentina inaccurately refers to paragraph 7.393 of the Panel Report in 
Egypt – Steel Rebar . The real text contradicts Argentina's understanding and confirms the EU's 
interpretation. 
 
31. In paragraph 113 of its Second Written Submission, Argentina asserts "the term 'costs' as 'charges or expenses' refers to a concrete amount by opposition to a hypothetical value". However, 
the use of these "hypothetical" amounts is allowed by Article 2.2 of the ADA in constructing the 
normal value.  
 32. In paragraphs 115 to 117 Argentina states that the relevant costs "are necessarily the costs 
of the specific exporter/producer" who is involved in the anti-dumping investigation. However, the 
ADA allows the investigating authority to use costs from outside the specific company.  
33. In paragraph 116 Argentina misrepresents the Panel's Report in Egypt – Steel Rebar . In 
reality, the Panel's findings are the opposite of what is asserted by Argentina, showing that the determination of whether company records "reasonabl y reflect costs" depends on the facts of each 
case.  
 WT/DS473/R/Add.1 
 
- C-30 - 
 
  34. In paragraph 117, Argentina misquotes paragraph 7.483 of the Panel Report in EC – 
Salmon . The Panel does not "note" that the costs "necessarily refer to the costs actually incurred" 
but referred to costs associated with the production and sale "of the like product".  
 
4.2. T HE CONTEXT OF ARTICLE 2.2.1.1  OF THE ANTI-DUMPING AGREEMENT  
 
35. In paragraph 119 of its Second Written Submission, Argentina asserts that the second and 
third sentences of Article 2.2.1.1 "illustrate the types of issues that may arise under the 
second condition of Article 2.2.1.1, first sent ence". However Argentina fails to take into 
consideration the important textual differences between these sentences.  
36. In paragraphs 122 to 126, Argentina asserts that "the costs associated with the production 
and sale' do not need to be reasonable. This argument fails on the basis of the texts of the chapeau of Article 2.2, Article 2.2.1.1 and Article 2.2.2(iii).  
 
37. In paragraphs 127 to 133, Argentina seeks to build certain arguments on the purported definition of dumping. However, in paragraph 127 Argentina omits to mention that the condition 
for the application of Article 2.1 is the existence of  domestic sales in the ordinary course of trade. 
Also, in paragraphs 128 to 134, Argentina refers to  the zeroing cases without mentioning that they 
did not involve the construction of normal value.   
4.3. T
HE OBJECT AND PURPOSE OF THE ANTI-DUMPING AGREEMENT  
 
38. Argentina discusses two points: (a) the ad ho c group on the implementation of the anti-
dumping code of the Tokyo Round; and (b) the nego tiating history of the Anti-Dumping Agreement 
in the Uruguay Round. However, none of them supports Argentina's position.  
39. In relation to the first point, the documents discussed by Argentina in paragraphs 142 
to 144 of its Second Written Submission are irreleva nt for the present dispute. In relation to the 
second point, the negotiating history of Article 2.2.1.1 actually supports the European Union's interpretation.  
 
5. A
RGENTINA ADVANCES AN ERRO NEOUS INTERPRE TATION OF ARTICLE 2.2 OF THE ADA 
 
40. Argentina's Second Written Submission does not provide any convincing factual evidence or 
legal arguments to support its excessively restrictiv e interpretation of the chapeau of Article 2.2 of 
the Anti-Dumping Agreement. For example, in para graph 152, Argentina's argument is circular. In 
paragraphs 153 and 156 Argentina contradicts itself with respect to paragraph 154.  
 6. F
ACTUAL ELEMENTS RELATING TO THE BIODIESEL INVESTIGATION  
 
41. There are no "factual inconsistencies" in th e EU's submissions and statements in the present 
dispute.   
42. Indeed, in paragraph 169 of its Second Written Submission, Argentina actually confirms that 
prices were "published by the government of Argentina". In paragraph 174, Argentina makes reference to the use of the term "particular market situation" in the Definitive Regulation. 
However, this notion is not relevant in the pres ent dispute. In this paragraph, Argentina also 
makes reference to the "DET system" and the "export tax on soybean and soybean oil" whereas there is no real difference between the two terms. In paragraph 172, Argentina asserts that there is a contradiction regarding the levels of imports between the figures in the Regulations and those 
presented in the Reply to the Panel's Question 78. However, there is non since Recital 133 of the 
Provisional Regulation refers to imports by EU's "producers" rather than to the "industry".   
7. P
ARAGRAPHS 175  TO 196  OF ARGENTINA 'S SECOND WRITTEN SUBMISSION  
 
43. In paragraphs 185 to 187, Argentina is relying on the wrong legal authority since the 
relevant findings of the Panel in Egypt – Steel Rebar , do not relate to the issue of "benchmarking". 
In paragraphs 188 and 189, Argentina contradicts it s Reply to Question 43. In paragraphs 191 and 
193 although the FOB reference prices "reflected" international prices, Argentine-determined FOB reference prices cannot themselves be "international prices". Finally, in paragraph 192 Argentina's WT/DS473/R/Add.1 
 
- C-31 - 
 
  theory is incorrect because the third sentence of Article 2.2.1.1 expressly provides that costs can 
be adjusted in certain circumstances.   8. A
RGENTINA 'S OTHER CLAIMS  
 8.1. T
HE ISSUE OF PROFITS  
 
44. Argentina has failed to make a prima facie  case on its claims against the amount of profits 
established by the investigating authorities. For example, in paragraph 145 Argentina appears to assert that it is the methodology that needs to be  "reasonable" and not the profit figure that needs 
to be "reasonable'. However Article 2.2 of the ADA expressly refers to a "reasonable amount 
for […] profits".   
 8.2. T
HE CLAIM UNDER ARTICLE 2.4 OF THE ANTI-DUMPING AGREEMENT  
 45. First, if Argentina refers to the concept of "differences affecting price comparability", in the sense of Article 2.4 of the ADA, the EU confirms th at it denies that such differences exist in the 
present case. 
 46. Second, Argentina has admitted during the First Hearing that it does not claim that the investigating authorities should have added the value of the export tax to the export price of 
biodiesel.  
 47. Third, Argentina reverses the order of the analysis by stating that the investigating 
authorities could have acted consistently with Article 2.4, while acting inconsistently with 
Article 2.2 of the ADA.  
8.3. T
HE CLAIM UNDER ARTICLE 9.3 OF THE ANTI-DUMPING AGREEMENT  
 
48. In paragraph 209, Argentina statement confirms that it is in reality challenging the construction of normal value. Such a challenge may fall within the scope of Article 2, but falls 
outside the scope of Article 9.3 of the Anti-Dumping Agreement. 
 49. In paragraph 213, Argentina states that the EU's interpretation could lead to a situation, 
which is not the type of situations that Article 9.3 covers.  
 50. Finally, in paragraph 213, Argentina refers to paragraph 132 of the Appellate Body Report in 
US – Zeroing (EC) . However these findings have no relation to the construction of normal value, or 
to a claim under Article 9.3 of the Anti-Dumping Agreement which is based on an allegedly erroneous construction of normal value, similar to the claims put forward by Argentina in the present case. 
 
9. A
RTICLE 3 CLAIMS  
 
51. In paragraph 216, Argentina continues to treat the issue of "utilisation of capacity" as a 
stand-alone issue, divorced from its context.   
52. Recital 131 of the Definitive Regulation sets  out the findings of the investigation. Since 
Argentina accepted the investigating authorities' provisional judgment on the matter, Argentina should also accept the authorities' final judgment.   
53. Argentina refers to the case of Diester. The verification of Diester took place before the 
Provisional Regulation had been adopted and when the issue of "idle" plants had not emerged as a 
serious factor.  
 
54. As regards causation and the role of overcapacity, the investigating authorities had made clear that the production figures presented in the Provisional Regulation could no longer be relied 
upon. 
 55. Argentina argues that the EU was in effect a trader in biodiesel. This contradicts Argentina's 
previous allegation that the industry vastly overextended its production capacity.  WT/DS473/R/Add.1 
 
- C-32 - 
 
  56. Argentina wrongly accuses the investigating authorities of failing to examine double-
counting regimes other than the French regime.   57. The investigating authorities' findings did not dispute that other factors had contributed to 
the situation of the EU industry. However, having analysed and distinguished those factors, they 
found that they did not undermine the conclusion that the dumped imports were a cause of the material injury that had been identified. 
 WT/DS473/R/Add.1 
 
- C-33 - 
 
  ANNEX C-5 
EXECUTIVE SUMMARY OF THE EUROPEAN UNION'S REQUEST  
FOR A PRELIMINARY RULING  
 
1. I NTRODUCTION  
 1. Article 6.2 of the Dispute Settlement Understanding  (DSU) requires that a request for the 
establishment of a panel (Panel Request) must, inter alia , (a) identify the specific measures at 
issue; (b) provide a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly; and (c) indicate whether consul tations were held. Argentina's Panel Request in 
the present case fails to meet these requirements . For this reason, the European Union requests 
the Panel to issue a preliminary ruling, confirmi ng that the claims identified in the present 
submission are outside the Panel's terms of reference.  2. The Panel's Working Procedures provide, in  paragraph 7, that a party shall submit any 
request for a preliminary ruling at the earliest po ssible opportunity and in any event no later than 
in its first written submission to the Panel. The Working Procedures also provide that, if the European Union requests such a ruling, Argentina sh all submit its response to the request prior to 
the first substantive meeting of the Panel, at a time to be determined by the Panel. Therefore, the 
European Union's request for a preliminary ruling is submitted timely and properly, in accordance 
with the Panel's Working Procedures. 
 
2. A
RGENTINA 'S FAILURE TO IDENTIFY THE "SPECIFIC MEASURES AT ISSUE" 
 3. The need for precision in panel requests flows from the two essential purposes of the terms 
of reference: (a) to define the scope of the disp ute and (b) to serve the due process objective of 
notifying the parties and third parties of  the nature of the complainants' case.
1 To meet this need 
of precision, a Panel Request must specify the measures challenged with sufficient particularity, so 
as to indicate the nature of the measure and the gist of what is at issue.2 
 4. Argentina's Panel Request contains a section entitled "1. The Measures at issue." This 
section purports to "enumerate" the "measures" which Argentina is challenging. The section 
contains two paragraphs.  5. Paragraph 1(A) of Argentina's Panel Request starts by mentioning Article 2(5) of Council 
Regulation (EC) 1225/2009 and continues by referring to "any subsequent amendments, 
replacements, implementing measures and related instruments or practices . "  T h i s  p h r a s e  a l s o  
appears in footnote 7 of Argentina's Panel Request, which compliments Argentina's definition of 
what Argentina calls the "Basic Regulation." 
 6. Paragraph 1(B) of Argentina's Panel Request lists certain "anti-dumping measures imposed 
by the European Union." Footnote 3 mentions Commission Regulation 490/2013, while footnote 2 
mentions Council Implementing Regulation 1194/2013. Paragraph 1(B) concludes by asserting that the "measures at issue" also include "any subsequent amendments, replacements, related 
measures and implementing measures ." 
 
7. These elements in Argentina's Panel Request fail to comply with the provisions of Article 6.2 of the DSU, because they fail to "identify the specific measures at issue." 
 
8. In particular, the references to " implementing measures and related instruments or 
practices " and to " related measures and implementing measures " are too vague and do not allow 
the identification of the specific instruments that  the references aim to cover. The Appellate Body 
has already found that references to " implementing measures and other related measures " do not 
                                               
1 For example, Appellate Body Report, EC-Chicken Cuts , para. 155, where there are further references 
to other Appellate Body Reports. 
2 Appellate Body Report, US-Continued Zeroing , para. 169. WT/DS473/R/Add.1 
 
- C-34 - 
 
  "identify the specific measures at issue, as required in Article 6.2 of the DSU and, therefore, fall 
outside the panels' terms of references.3 
 9. Consequently, Argentina's claims agains t "implementing measur es and other related 
measures" in Paragraph 1(A) and footnote 7 of its Panel Request, as well as Argentina's claims 
against "related measures and implementing measures" in Paragraph 1(B) of its Panel Request, fall outside the Panel's terms of reference. 
 
3. A
RGENTINA 'S FAILURE TO "PRESENT THE PROBLEM CLEARLY " 
 10. The requirement to "present the problem clearly" aims at enabling the Panel, the defending 
party and third parties to know which  obligations are allegedly violated, as well as how the 
challenged measures are allegedly inconsistent with these obligations. The general requirement to "present the problem clearly" has two aspects. Fi rst, the panel request must identify the "legal 
basis" of the complaint. In order to meet the re quisite standard of clarity, the panel request may 
be required to specify particular sub-paragraphs of a treaty provision.
4 Second, the panel request 
must "plainly connect the challenged measures with the provisions of the covered agreements 
claimed to have been infringed."5 Argentina's Panel Request fails to meet both these requirements. 
 
3.1. THE "INTER ALIA " LEGAL BASIS  
 
11. Argentina's Panel Request has a Section "2", entitled "Legal Basis for Claims." 
Sub-section 2(A) includes a paragraph that reads: "Argentina considers that [name of measure] is inconsistent as such with, inter alia , the following provisions of the [names of covered 
agreements]." 
 12. The use of the words " inter alia " indicates that the list of provisions of the covered 
agreements expressly listed in Sub-section 2(A) of Argentina's Panel Request is not exhaustive. 
Argentina retains for itself the possibility to add more, unspecified provisions of the covered agreements, as "legal bases" for its claims after the circulation of the Panel Request. Neither the 
European Union, nor the Panel has any idea of what claims or legal bases Argentina will finally 
present in this case: the words " inter alia " make the list of claims in Argentina's Panel Request 
completely open-ended.  
13. Consequently, Argentina's Panel Request fails to identify properly the legal basis of the 
complaint and fails to "present the problem clearly." This is inconsistent with Article 6.2 of the DSU and places the relevant claims outside the Panel's terms of reference. 
 
3.2. P
ARAGRAPH 2(B)6  OF ARGENTINA 'S PANEL REQUEST  
 14. Sub-section 2(B) of the Panel Request purports to present Argentina's views on the 
"anti-dumping measures imposed by the European Union on imports of biodiesel originating in, 
inter alia,  Argentina." The introduction of Sub-section 2( B) includes a footnote 8, which refers the 
reader to footnote 3. Footnote 3 refers to Commission Regulation 490/2013 and to Council 
Implementing Regulation 1194/2013. 
 15. Paragraph 2(B)6 of Argentina's Panel Request states that these two legal instruments are 
inconsistent with Article 9.3 of the Anti-Dumping  Agreement and Article VI:2 of the GATT, because 
"the European Union imposed and levied anti-dumping duties in excess of the margin of dumping that should have been established in accordance  with Article 2 of the Anti-dumping Agreement." 
This paragraph fails to meet the requirements of Article 6.2 of the DSU, for a number of reasons. 
 
16. First, Paragraph 2(B)6 alleges that the challenged measures are inconsistent with 
"Article 9.3 of the Anti-Dumping Agreement." Howe ver, Article 9.3 of the Anti-Dumping Agreement 
is composed of a chapeau  and three sub-paragraphs. Each of these deals with a different set of 
conditions. Argentina's Panel Request fails to mention the specific sub-paragraph of Article 9.3, with which the challenged measures are supposed to  be inconsistent. This runs against Article 6.2 
of the DSU, which requires Panel Requests to refe r to the specific sub-paragraph of the WTO treaty 
                                               
3  Appellate Body Report, EC-Selected Customs Matters , para. 152, footnote 369. See also, Panel 
Report, China-Raw Materials , Annex F-1, para. 17. 
4  For example, Appellate Body Report, Korea-Dairy , para. 124. 
5  For example, Appellate Body Report, China-Raw Materials , para. 220. WT/DS473/R/Add.1 
 
- C-35 - 
 
  provision that is supposed to be infringed by the challenged measure, where there are such 
sub-paragraphs containing different sets of obligations.6 
 17. Second, Argentina fails to articulate clearly the exact claim it advances. Paragraph 2(B)6 
alleges that the European Union "imposed and levi ed anti-dumping duties in excess of the margin 
of dumping that should have been established." From this wording it is not clear whether Argentina actually challenges (a) the comparison  between the anti-dumping duty and the margin 
of dumping (e.g., that there was some numerical mistake in the text of the Regulation resulting in 
the mentioned amount of the duty being higher  than the mentioned amount of the dumping 
margin); or (b) the method of calculation of the margin of dumping itself. In other words, it is not clear whether Argentina's challenge should be understood as being directed against the 
"in excess ", or against the " should have been established ." 
 18. In that context, it is noted that the calc ulation of the anti-dumping duty is discussed in 
paragraphs 214 to 219 and in Article 1 of the Council Implementing Regulation. In contrast, the 
calculation of the margin of dumping is discu ssed in paragraphs 59 to 65 of the Council 
Implementing Regulation. Paragraph 2(B)6 of Arge ntina's Panel Request fails to explain plainly 
which of these two different sections of the Counc il Implementing Regulation it challenges. The 
result is that the European Union does not understand the scope of the challenge against which it must defend itself and the Panel does not understand the scope of the challenge facing it.  
19. Third, even if we assume arguendo  that Argentina actually challenges the method of 
determining the dumping margin, then again Paragraph 2(B)6 fails to comply with the 
requirements of Article 6.2 of the DSU. The de termination of the dumping margin was based on 
(a) the calculation of the "normal value"; (b) the calculation of the "export price"; (c) the 
comparison between them; and (d) the analysis of certain requests presented by Argentinean exporters. Both the Commission Regulation and th e Council Implementing Regulation discuss each 
of these issues separately, in four different sections with four different titles.
7 Paragraph 2(B)6 
fails to explain plainly which of these issues (a nd which of the corresponding sections of the 
Regulations) it challenges. Again, the European Union and the Panel cannot understand the scope of the challenge facing them. 
 
20. Fourth, even if we further assume arguendo  that Argentina actually challenges only the 
fourth relevant section of the Regulations, i.e. , the one entitled "Dumping Margins", then again 
Paragraph 2(B)6 fails to comply with the requirements of Article 6.2 of the DSU. 
 21. The relevant section 2.4 of the Council Implementing Regulation discusses two different and 
distinct issues. First, in paragraphs 59 to 60, the Regulation discusses a request advanced by "all 
cooperating Argentine exporting producers" in relation to the imposition of a "single duty for all cooperating exporting producers." Second, in para graphs 61 to 64, the Regulation discusses a 
completely different request submitted by anot her three companies. These companies requested 
to "be included in the list of cooperating exporting producers." Their request was rejected because, 
either they were not exporting themselves to the European Union, or because they were not 
producing biodiesel during the investigation period. Paragraph 2(B)6 of the Panel Request does not 
provide the faintest indication of which of these two issues Argentina is actually challenging. Again, 
the European Union and the Panel cannot underst and the scope of the challenge facing them. 
 
22. Consequently, Paragraph 2(B)6 of Argentina's Panel Request falls outside the Panel's terms 
of reference.  4. A
RGENTINA 'S PANEL REQUEST EXPANDS THE SCOPE OF THE DISPUTE  
 23. Consultations requests constitute a prerequisite for panel requests and, as a result, they "circumscribe the scope of panel requests."
8 The Appellate Body has held that a panel request 
cannot include claims (either in relation to "challenged measures", or in relation to "legal bases"), 
which were not included in the corresponding consultations request, where these "new" claims 
                                               
6  Appellate Body Report, Korea-Dairy , para. 124. 
7  The Commission Regulation in paras. 40 to 46;  paras. 47 to 49; paras. 50 to 55 and paras. 56 
to 59 respectively. The Council Implementing Regulation in  paras. 35 to 48; paras. 49 to 54; paras. 55 to 58; 
and paras. 59 to 65, respectively. 
8  Appellate Body Report, Mexico – Anti Dumping Measures on Rice , para. 137. See also Panel 
Report, China-Broiler Products , para. 7.219. WT/DS473/R/Add.1 
 
- C-36 - 
 
  "expand the scope of the dispute",9 or have the effect of "changing the essence of the 
complaint."10 
 24. In the present case, Argentina's Panel Reques t includes a great number of such new claims, 
which expand the scope of the dispute and change the essence of the complaint set out in 
Argentina's request for consultations (Consultations Request).  
25. These new claims include the following: (1) a new claim against a new "measure", which 
Argentina calls " practices"  related to Article 2(5) of Council Regulation 1225/2009 ( Panel Request 
Paragraph 1(A) ); (2) an unclear "as applied" claim against Article 2(5) of Council 
Regulation 1225/2009 ( Panel Request Paragraph 2(B)3 ); (3) a new claim under Article 9.3 of 
the Anti-dumping Agreement against Article 2(5) of Council Regulation 1225/2009 ( Panel 
Request Paragraph 2(A)3 ); (4) a new claim under GATT Article VI:1 against Article 2(5) of 
Council Regulation 1225/2009, alleging use of information other than that in the country of origin 
(Panel Request Paragraph 2(A)1 ); (5) a new claim under GATT Article VI:1 against Article 2(5) 
of Council Regulation 1225/2009, alleging not using the records kept by the producers and, further alleging, using costs not associated with the production and sale of the product under 
consideration ( Panel Request Paragraph 2(A)2 ); (6) new claims under Articles 2.2 and 2.2.1.1 
of the Anti-dumping Agreement against Article 2(5) of Council Regulation 1225/2009, alleging 
using costs not associated with the production and sale of the product under consideration ( Panel 
Request Paragraph 2(A)2 ); (7) a new claim under Article 2.1 of the Anti-dumping Agreement 
against the Commission Regulation and the Council Implementing Regulation, alleging 
"unreasonable" determination of the amounts of profits ( Panel Request Paragraph 2(B)4 ).  
 
26. The sheer number and breadth of these new claims suffices to illustrate that Argentina's 
Panel Request seeks to expand the scope of the disp ute. The individual analysis of each of these 
new claims further establishes that Argentina's Panel Request changes the "essence" of the 
complaint. 
 
4.1. N
EW "MEASURES " PRESENTED BY ARGENTINA FOR THE FIRST TIME IN THE PANEL REQUEST  
 
27. Paragraph 1(A) of Argentina's Panel Request challenges for the first time " related practices" , 
in addition to Article 2(5) of Council Regulation 1225/2009. In contrast, Argentina's Consultations Request did not include any such reference. Argent ina's Consultations Request, in its Paragraph b., 
refers solely to Article 2(5) of Council Regu lation 1225/2009, i.e., a specific, written legal 
provision. The claim against " related practices " is a new claim, which expands the scope of the 
dispute and changes the essence of Argentina's complaint. 
 
28. There are no facts that could support a finding that this new claim might "reasonably be said to have evolved" from the consultations. Argentina was fully aware of the European Union's interpretation and application of Article 2(5) of Council Regulation 1225/2009 already at the time 
of its Consultations Request. This is evidenced, inter alia , by the fact that Argentina's 
Consultations Request included claims against the Commission Regulation and the Council Implementing Regulation, which were based on Article 2(5) of Council Regulation 1225/2009. 
Therefore, Argentina's decision to add the new claim against " related practices " in its Panel 
Request cannot be said to have "evolved" from the consultations.  
29. It is also noted that the Consultations Request expressly stated that Argentina challenges 
Article 2(5) of Council Regulation 1225/2009 " as such ." The reference to an " as such " claim further 
shows that Argentina was challenging a specific, written legal provision and not the application of that legal provision. Argentina's attempt to add a claim on the application of Article 2(5) of Council 
Regulation 1225/2009 changes the essence of the original complaint. 
 30. Consequently, the claim against "related practices" in Paragraph 1(A) of Argentina's Panel 
Request expands the scope of the dispute and changes the essence of the complaint and, 
therefore, falls outside the Panel's terms of reference.
11 
 
                                               
9 Appellate Body Report, US-Upland Cotton , para. 293. 
10 Appellate Body Report, Mexico – Anti Dumping Measures on Rice , paras. 137 and 138. 
11 As mentioned above, this new claim is also too vague and imprecise and fails to identify properly the 
specific measure at issue. Therefore, this new claim fail s to comply with the requirements of Article 6.2 of the 
DSU for a number of different reasons. WT/DS473/R/Add.1 
 
- C-37 - 
 
  4.2. N EW "LEGAL BASES" RAISED BY ARGENTINA FOR THE FIRST TIME IN THE PANEL REQUEST  
 
4.2.1. The new and unclear " as applied " claim against Article 2(5) of 
Council Regulation 1225/2009 
 
31. Between Paragraph 2(B)3 and Paragraph 2(B)4 of the Panel Request, Argentina has inserted a new, not-numbered paragraph which seems to introduces an " as applied " challenge against 
Article 2(5) of Council Regulation 1225/2009. The role of this not-numbered paragraph is 
ambiguous. The Consultations Request expressly stated in Paragraph b. that Argentina was challenging Article 2(5) of Council Regulation 1225/2009 only " as such ", without any reference to 
an "as applied " claim. The Panel Request repeats the reference to the " as such " claim in the last 
sub-paragraph of the chapeau  of Paragraph 2(A). 
 32. On its face, it is not clear whether this not-numbered paragraph is intended to introduce an 
"as applied " claim against Article 2(5) of Council Regulation 1225/2009. In any event, if we 
assume arguendo  that Argentina is introducing an " as applied " claim against Article 2(5) of Council 
Regulation 1225/2009, then such claim is new and expands the scope of the original dispute, as 
presented in Argentina's Consultations Request. In addition, it seems to be misplaced in section B, 
which rather deals with the provisional and the definitive regulations.  33. There are no facts that could support a finding that this new claim might "reasonably be said 
to have evolved" from the consultations. Argentina was fully aware of the European Union's 
interpretation and application of Article 2(5) of Council Regulation 1225/2009 already at the time of its Consultations Request. This is evidenced, inter alia , by the fact that Argentina's 
Consultations Request included claims against the Commission Regulation and the Council 
Implementing Regulation, which were based on Article 2(5) of Council Regulation 1225/2009. 
 
34. Therefore, all the elements that would have allowed Argentina to include the " as applied " 
challenge against Article 2(5) of Council Regulation 1225/2009 were at the disposal of Argentina already at the time it submitted its Consultations Request. However, Argentina did not advance these claims in its Consultations Request. Allowing Argentina to ignore the consequences of its 
own decision and put forward a completely new list of claims in its Panel Request would dilute the 
role of the Consultations Request.  
35. Consequently, this claim of Argentina falls outside the Panel's terms of reference. 
 
4.2.2. The new claim against Arti cle 2(5) of Council Regulation 
1225/2009 based on Article 9.3 of the Anti-dumping Agreement 
 36. Paragraph 2(A)3 of Argentina's Panel Request introduces a new claim against Article 2(5) of Council Regulation 1225/2009, based on Article 9.3 of the Anti-dumping Agreement. Argentina 
claims for the first time that Article 2(5) of Council Regulation 1225/2009 is " as such " inconsistent 
with Article 9.3 of the Anti-dumping Agreement,  because, allegedly, the "amount of the anti-
dumping duty to be imposed exceeds the margin of dumping." 
 
37. This claim did not exist in Argentina's Consultations Request. Paragraph b. of the 
Consultations Request (which dealt with Article 2(5) of Council Regulation 1225/2009) did not 
make any reference to Article 9.3 of the Anti-dum ping Agreement. Moreover, Paragraph b. of the 
Consultation Request did not make any reference to  an alleged "excess" of the anti-dumping duty, 
if compared with the margin of dumping. Therefore, there is no doubt that the claim in Paragraph 2(A)3 of the Panel Request is a new claim, which expands the scope of the dispute and 
changes the essence of Argentina's original complaint. 
 38. There are no facts that could support a finding that this new claim might "reasonably be said 
to have evolved" from the consultations. Argentina was fully aware of the European Union's 
interpretation and application of Article 2(5) of Council Regulation 1225/2009 already at the time of its Consultations Request. Argentina was also aware of all the facts that would have allowed 
Argentina to allege that the anti-dumping duty was in excess of the dumping margin. This is 
evidenced, inter alia , by the fact that Argentina's Consultations Request included claims under WT/DS473/R/Add.1 
 
- C-38 - 
 
  Article 9.3 of the Anti-dumping Agreement ag ainst the Commission Regulation and the Council 
Implementing Regulation, which were based on  Article 2(5) of Council Regulation 1225/2009.12 
 39. Therefore, all the elements that would have allowed Argentina to challenge Article 2(5) of 
Council Regulation 1225/2009 under Article 9.3 of the Anti-dumping Agreement were at the 
disposal of Argentina already at the time it submitted its Consultations Request. However, Argentina did not advance these claims in its Consultations Request. Allowing Argentina to ignore 
the consequences of its own decision and put forward a completely new list of claims in its Panel 
Request would dilute the role of the Consultations Request.  40. Consequently, Argentina's new claim against Article 2(5) of Council Regulation 1225/2009, 
alleging an inconsistency with Article 9.3 of the Anti-dumping Agreement, as well as that the anti-
dumping duty allegedly "exceeds" the dumping margin, falls outside the Panel's terms of reference. 
 
4.2.3. New claims against Article 2(5) of Council Regulation 1225/2009 
based on Article VI:1 of the GATT 1994 
 
41. Paragraph 2(A)1 and Paragraph 2(A)2 of Argentina's Panel Request include new claims against Article 2(5) of Council Regulation 1225 /2009 that are based on Article VI:1 of the 
GATT 1994. Argentina's Consultations Request did not include any claim based on Article VI:1 of 
the GATT. It also did no t include any claims agai nst Article 2(5) of Council Regulation 1225/2009 
based on the GATT 1994.
13 Therefore, these claims are new and they expand the original scope of 
the dispute. 
 
42. There are no facts that could support a finding that this new claim might "reasonably be said to have evolved" from the consultations. Already at the time of its Consultations Request, 
Argentina was fully aware that Article 2(5) of  Council Regulation 1225/2009 is part of the 
European Union's anti-dumping legislation. Ther efore, there was nothing preventing Argentina 
from challenging Article 2(5) of Council Regulation 1225/2009 under Article VI:1 of the GATT, which is part of the GATT Article dealing with anti-dumping. This is evidenced, inter alia , by the 
fact that Argentina's Consultations Request alread y included claims against Article 2(5) of Council 
Regulation 1225/2009 that were based on the Anti-dumping Agreement.  
43. Moreover, Argentina cannot argue that adding new claims under Article VI:1 of the GATT 
does not change the "essence" of the complaint, alleging that the original complaint was already based on the Anti-dumping Agreement and further alleging that its scope is the same with the 
scope of Article VI of the GATT. If Article VI:1 of the GATT and the provisions of the Anti-dumping 
Agreement included in Argentina's Consultations Request had identical scope, then the addition of a claim based on GATT Article VI:1 in the Panel Request would have been redundant and the Panel would simply exercise judicial economy on it. Th e fact that Argentina chose to add the new GATT 
Article VI:1 claim in its Panel Request shows that Argentina considers that the two sets of 
provisions have different scope and that the "essenc e" of GATT Article VI:1 is different from the 
"essence" of the provisions of the Anti-dumping Agreement included in the Consultations Request. 
Therefore, by adding the GATT Article VI:1 claim in its Panel Request, Argentina confirms that it 
changes the "essence" of its original complaint.  
44. Consequently, Argentina's new claims under Ar ticle VI:1 of the GATT fall outside the Panel's 
terms of reference.  
4.2.4. New claims against Article 2(5) of Council Regulation 1225/2009 
based on Articles 2.2 and 2.2.1.1 of the Anti-dumping Agreement 
 45. In Paragraph 2(A)2 of its Panel Request, Argentina alleges the violation of Articles 2.2 
and 2.2.1.1 of the Anti-dumping Agreement "for  two reasons." As "second reason", Argentina 
asserts that Article 2.2 and 2.2.1.1 of the Anti-dum ping Agreement "require that the costs used be 
associated with the production and sale of the product under consideration."  
 
                                               
12 See Paragraph a.6 of Argentina's Consultations Request. 
13 The Consultations Request included claims against Article 2(5) of Council Regulation 1225/2009 only 
based on the Anti-dumping Agreement and the Marrake sh Agreement; see Paragraph b. of Argentina's 
Consultations Request. WT/DS473/R/Add.1 
 
- C-39 - 
 
  46. These are new claims against Article 2(5) of Council Regulation 1225/2009, which were not 
included in Argentina's Consultations Request;  the corresponding paragraph in Argentina's 
Consultations Request appears to be Paragraph b.2, which (a) includes only a claim based on Article 2.2.1.1 of the Anti-dumping Agreement and (b) refers to the calculation of costs "on the 
basis of records kept by the exporter." The new claims in Argentina's Panel Request expand the 
scope of the dispute and change the essence of the complaint because (a) they introduce a new 
legal basis (i.e., Article 2.2 of the Anti-dumping Agreement); and (b) they introduce a new type of 
complaint (i.e., the alleged use of costs not "associated with the production and sale of the product 
under consideration").  47. There are no facts that could support a finding that these new claims might "reasonably be 
said to have evolved" from the consultations. Argentina was fully aware of the European Union's 
interpretation and application of Article 2(5) of Council Regulation 1225/2009 already at the time of its Consultations Request. Argentina was also aware of all the facts that would have allowed 
Argentina to articulate this claim in its Consultations Request. This is evidenced, inter alia , by the 
fact that Argentina's Consultations Request included claims against the Commission Regulation and the Council Implementing Regulation alleging a violation of Articles 2.2 and 2.2.1.1 of the 
Anti-dumping Agreement and referring to the alleged inclusion of "costs not associated with the 
production and sale of the product under consideration."
14 
 48. Therefore, Argentina could have made this claim against Article 2(5) of Council 
Regulation 1225/2009 in its Consultations Request, but did not do so. Allowing Argentina to ignore 
the consequences of its decision and put forward a completely new list of claims in its Panel Request would dilute the role of the Consultations Request. 
 
49. Consequently, Argentina's new claims against Article 2(5) of Council Regulation 1225/2009, based on Article 2.2 and Article 2.2.1.1 of the Antidumping Agreement and alleging the use of 
costs not associated with the production and sale of the product under consideration, are outside 
the Panel's terms of reference.  
4.2.5. The new claim against the Commission Regulation and the Council 
Implementing Regulation based on Article 2.1 of the 
Anti-dumping Agreement 
 
50. In paragraph 2(B)4 of its Panel Request, Ar gentina alleges that the European Union acted 
inconsistently with "Articles 2.1, 2.2 and 2.2.2( iii) of the Anti-dumping Agreement", because it 
failed to determine the "amounts of profit" on the "basis of a reasonable method." The 
corresponding paragraph in Argentina's Consultations Request is Paragraph a.5, where Argentina 
alleges that the European Union failed to determine the "amounts of profit" in "accordance with the rules established under" Articles 2.2 and 2.2.2 of the Anti-dumping Agreement.  
51. These two paragraphs provide a good exampl e of the difference between (a) "refining the 
contours" of a claim and (b) expanding the scope  of the dispute. The Panel Request relies on 
Article 2.2.2(iii) of the Anti-dumping Agreement, while the Consultations Request referred to 
Article 2.2.2 in general. This development can probably "reasonably be said" to have "evolved 
from the consultations." The same can be said for the description of the claim: the Panel Request alleges a determination not "on the basis of a reasonable method", while the Consultations 
Request mentioned more generally a determination not "in accordance with the rules established 
under" Articles 2.2 and 2.2.2. The text of the Panel Request is a more precise version of the more general text used in the Consultations Request.  
52. In contrast, Argentina's addition of a new claim under Article 2.1 of the Anti-dumping 
Agreement cannot "reasonably be said" to have "evolved from the consultations." Argentina was in 
possession of all the elements that would have allowed it to advance a claim under Article 2.1 of 
the Anti-dumping Agreement already at the time of the Consultations Request. The potential 
"refining of the contours" of Argentina's claims, brought about by the consultations, was the clarification of the precise sub-paragraph of Article 2.2.2 that would serve as legal basis for its 
claim. Argentina went farther than that in its Panel Request: it added a new legal basis for its 
claim. 
                                               
14 Argentina's Consultations Request, Paragraph a.3. WT/DS473/R/Add.1 
 
- C-40 - 
 
  53. At the time of the Consultations Request, Argentina decided not to challenge the 
European Union's determination of profits under  Article 2.1 of the Anti-dumping Agreement, 
although it could have done so. Article 6.2 of the DSU requires that Argentina be now held to the consequences of that decision. 
 
54. Consequently, Argentina's new claim under Article 2.1 of the Anti-dumping Agreement in paragraph 2(B)4 of its Panel Request is outside the Panel's terms of reference. 
 
5. C
ONCLUSION  
 55. The European Union requests the Panel to i ssue a preliminary ruling confirming that the 
claims of Argentina's Panel Request that are di scussed in the present submission are outside the 
Panel's terms of reference.  
56. The European Union also requests that this pr eliminary ruling be issued before the date on 
which the European Union's first written submission is due. This will allow the European Union to identify the precise claims to which it will need to defend itself in its first written submission. 
 
_______________ 
  
 
  
 WT/DS473/R/Add.1 
 
- D-1 - 
 
  ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Executive Summary of Third-party Arguments of Australia D-2 
Annex D-2 Executive Summary of Third-party Arguments of China D-5 
Annex D-3 Executive Summary of Third-party Arguments of Colombia D-10  
Annex D-4 Executive Summary of Third-party Arguments of Indonesia D-13 
Annex D-5 Executive Summary of Third-party Arguments of Mexico D-17  
Annex D-6 Executive Summary of Third-party Arguments of Norway D-21 
Annex D-7 Executive Summary of Third-party Arguments of the Russian Federation D-23  
Annex D-8 Executive Summary of Third-party Argume nts of the Kingdom of Saudi Arabia D-26 
Annex D-9 Executive Summary of Third-party Arguments of Turkey D-30  
Annex D-10 Executive Summary of Third-party Arguments of the United States D-32 
 
 WT/DS473/R/Add.1 
 
- D-2 - 
 
  ANNEX D-1 
EXECUTIVE SUMMARY OF THIRD-PARTY  
ARGUMENTS OF AUSTRALIA 
I. THE MEANING OF THE LANGUAGE "REC ORDS [THAT] REASONABLY REFLECT THE 
COSTS ASSOCIATED WITH THE PRODUCTION AND SALE OF THE PRODUCT UNDER 
CONSIDERATION" IN ARTICLE 2.2.1.1 OF THE ANTI-DUMPING AGREEMENT 
1. A material issue in this matter is the interpretation of the language "records [that] 
reasonably reflect the costs associated with the production and sale of the product under 
consideration" in Article 2.2.1.1 of the Anti-Dumping Agreement . This language derives from the 
first sentence of Article 2.2.1.1, which reads:   
For the purpose of paragraph 2, costs shall normally be calculated on the basis of 
records kept by the exporter or producer under investigation, provided that such 
records are in accordance with the generally accepted accounting principles of the 
exporting country and reasonably reflect the costs associated with the production and 
sale of the product under consideration.  
2. Two questions are of critical importance to  this analysis: what it means for records to 
reasonably reflect the costs associated with production and sale of the product under 
consideration; and, whether records that accurately  detail the actual expenses of the exporter or 
producer automatically constitute records that must be used in the calculation of costs (provided 
they also accord with generally accepted accounting principles (GAAP) – in this submission 
Australia assumes that the GAAP proviso is met). Relevantly, the Panel in China – Broiler 
Products (US)1 noted that:  
 
… although Article 2.2.1.1 sets up a presumption that the books and records of the 
respondent shall normally be used to calculate the cost of production for constructing 
normal value, the investigating authority retains the right to decline to use such books 
if it determines that they are either (i) inconsistent with [generally accepted 
accounting principles - GAAP] or, (ii) do not reasonably reflect the costs associated with the production and sale of the product under consideration. 
3. Argentina argues that records that detail th e actual expenses of the exporter or producer 
would reasonably reflect the costs associated with production and sale of the product under 
consideration, and so must be used in the production cost calculation under Article 2.2.1.1. In Australia's view, this may not always be the case. Rather, Article 2.2.1.1 permits investigating 
authorities to look beyond the records to consider whether the costs reflected therein are 
reasonably related to the cost of producing and se lling the product. The reasonableness of costs of 
inputs or raw materials would be relevant to this analysis. 
 
4. In this respect, Australia recalls the Panel's approach to analysing the calculation of cost of 
production in Egypt – Rebar (Turkey)
2, where the Panel considered that it must: 
 
… reach a conclusion as to whether…there was evidence in the record that the short-
term interest income was "reasonably" related to the cost of producing and selling r e b a r ,  a n d  t h a t  t h e  I A  t h u s  s h o u l d  h a v e  i n c l u d e d  i t  i n  t h e  c o s t  o f  p r o d u c t i o n  
calculation.  
5. This supports a reading of Article 2.2.1.1 whereby any element that "reasonably" relates to 
the cost associated with production and sale should be taken into account, including in relation to 
inputs or raw materials, and might lead to the adjustment or replacement of certain costs. Indeed, 
this appears to be the situation in US – Softwood Lumber , where the Panel did not take issue with 
                                               
1 Report of the Panel, China – Broiler Products (US), para. 7.164. 
2 Report of the Panel, Egypt – Rebar (Turkey) , para. 7.393. WT/DS473/R/Add.1 
 
- D-3 - 
 
  respect to testing for arm's length prices.3 In such cases, where the investigating authority has 
established that the records do not reasonably reflect the costs, there is no obligation under Article 2.2.1.1 to calculate costs using the records.
4  
 
6. This interpretation is consistent with the or dinary meaning of Article 2.2.1.1 and is the only 
sensible reading when considered in context, which is Article 2 on the determination of dumping. First, Article 2.1 of the Anti-Dumping Agreement  sets down the usual basis for the determination 
of dumping: namely, the proper comparison between  the normal value of the imported product in 
the ordinary course of trade in the country of orig in or export, and the export price of the product 
in the country of import. Such a comparison must be a fair comparison by virtue of Article 2.4 of the Anti-Dumping Agreement .  
 
7. Second, Article 2.2 of the Anti-Dumping Agreement  provides for situations where there are 
no sales in the ordinary course of trade, or where such sales do not permit a proper comparison 
because of the low volume of sales or a particular market situation. Pursuant to Article 2.2, the 
authorities in these circumstances are required to disregard these sales and use a comparable price of the like product when exported to an appropriate third country, or to construct normal 
value.  
 8. Given that the application of an anti-dumping  methodology should be assessed on a case by 
case basis, and the situations in which cost construction is required are determined by Article 2.2, 
Article 2.2 is central to this analysis.  
 9. As such, in situations where costs are being constructed under Articles 2.2 and 2.2.1.1, a 
holistic analysis of costs is warranted in order to arrive at a proper cost calculation that provides a 
point of comparison that is closest to a "normal" value.
5 All costs that would be reasonably related 
to the production of the goods, or at least those that are significant enough to affect the overall 
production costs, are relevant to such an analysis.  
 10. To suggest that the meaning of the first sentence of Article 2.2.1.1 prevents or limits investigating authorities from examining whether records reasonably reflect costs, having 
established that there are no sales in the ordinary course of trade or that such sales do not permit 
a proper comparison, would render this provision inutile. It would be circuitous in preventing authorities to address not being able to make a proper comparison in determining the margin of 
dumping. 
 II. THE OBJECT AND PURPOSE OF THE ANTI-DUMPING AGREEMENT 
11. In Australia's view, such a reading of Arti cle 2.2.1.1 is not contrary to the object and 
purpose of the Anti-Dumping Agreement , to the extent that one can be established.  
 12. The Panel in US – Zeroing (EC)  observed with respect to the Anti-Dumping Agreement  that 
"specific objectives are difficult to discern with any facility or compelling force due to the lack of 
anything that could properly be described as constituting a clear statement of the objectives of the AD Agreement ".
6 
 
13. Nevertheless, to the extent that guidance can be drawn from Article VI.1 of the GATT 1994, Australia notes that the practice condemned therein hinges on the introduction of a product into 
the commerce of an importing country at "less than its normal value" – that is, at less than the 
comparable price, "in the ordinary course of tr ade". While Article VI:1 establishes the point of 
comparison within the ordinary course of trade, th is does not preclude other points of comparison 
when normal value must be constructed because there are no sales within the ordinary course of 
trade. In Australia's view, an interpretation of  Article 2.2.1.1 that allowed an investigating 
authority to consider, in a holistic way, the reasonableness of costs, and to adjust them if appropriate, would not run counter to Article VI.1 of the Anti-Dumping Agreement . 
 
                                               
3 Report of the Panel, US – Softwood Lumber V , para. 7.332.  
4 Report of the Panel, US – Softwood Lumber V , para. 7.236. 
5 Anti-Dumping Agreement , Article 2.1. 
6 Report of the Panel, US – Zeroing (EC) , footnote 292. WT/DS473/R/Add.1 
 
- D-4 - 
 
  III. THE MANDATORY/DISCRETIONARY DI STINCTION IN "AS SUCH" CLAIMS  
14. In Australia's view, a Panel should be guided by the mandatory/discretionary distinction in 
assessing whether a Member's legal instrument is inconsistent with its WTO obligations "as such".  
15. The Appellate Body in US – 1916 Act  found that the mandatory/discretionary distinction was 
a threshold consideration in determining whether legislation could be challenged 'as such', endorsing the approach of GATT panels that only legislation which mandated  inconsistent action 
could be challenged 'as such'.
7 This approach appears to have been recently followed by the 
Appellate Body in US – Carbon Steel (India) , where it found that a US regulation was not 
inconsistent 'as such' with Article 12.7 of the Agreement on Subsidies and Countervailing Measures  
because the regulation did not require  inconsistent conduct but was of a 'discretionary nature'.8 
While other rulings have left open the question of whether a discretionary measure could be 
challenged 'as such'9, in US – Corrosion Resistant Steel Sunset Review , the Appellate Body 
maintained that the mandatory/discretionary na ture of a measure remained relevant to an 
assessment of whether a measure was 'as such' inconsistent with a Member's obligations, even if it 
did not have to be considered as a 'preliminary jurisdictional matter'.10 As the Appellate Body held 
in US – Section 211 , 'where discretionary authority is vested in the executive branch of a 
WTO Member, it cannot be assumed that the WTO Member will fail to implement its obligations'.11  
  
                                               
7 Appellate Body Report, US – 1916 Act , paras. 88-89. 
8 Appellate Body Report, US – Carbon Steel (India) , para. 4.483. 
9 Appellate Body Report, US – Corrosion-Resistant  Steel Sunset Review , paras. 89, 93; Appellate Body 
Report, United States – Countervailing Measures on Certain EC Products , footnote 334 to para. 159; 
Appellate Body Report, US – Zeroing (EC) , paras. 211, 214; Panel Report, US – Section 301 Trade Act , 
paras. 7.53-7.54. 
10 Appellate Body Report, US – Corrosion-Resistant  Steel Sunset Review , para. 89. See also Panel 
Report, US – Section 301 Trade Act , para. 7.53, where the panel stated that 'The question is then whether, on 
the correct interpretation of the specific WTO obligation at  issue, only mandatory or also discretionary national 
laws are prohibited'.  
11 Appellate Body Report, US – Section 211 Appropriations Act , para. 259.  WT/DS473/R/Add.1 
 
- D-5 - 
 
  ANNEX D-2 
EXECUTIVE SUMMARY OF THIRD-PARTY  
ARGUMENTS OF CHINA 
I. Introduction 
 
1. The People's Republic of China ("China") intervenes in this case because of its systemic interest in the correct interpretation of GA TT 1994 and the Anti-Dumping Agreement ("ADA"). 
Through its written submission, oral statement and responses to the Panel's questions, China has 
discussed the request of the European Union ("EU") for a preliminary ruling ("PRR"), presented its 
views on the interpretation of Articles 2.2.1.1 and 2.2 of the ADA, made observations on the 
meaning of Article 2(5) of the EU Basic Regula tion and its consistency with Articles 2.2.1.1 
and 2.2, and made observations on certain claims with respect to elements of the 
EU determination in the Biodiesel investigation, including the EU approach to cost adjustments, profit determination, price comparability, and injury and causation issues.  
 
II. The Request for a Preliminary Ruling  
2. First, as to the EU's objections in Section 2 of the PRR, China considers that the references 
to "implementing measures and related instrument or practices" and "related measures and 
implementing measures" in the Panel Request are not per se  inconsistent with the specificity 
requirement in Article 6.2. The Panel must cons ider the Panel Request as a whole, and, in 
particular, to examine whether the measures that are implemented or related were precisely 
identified in that Request. Second, as to the EU's objections in Section 3.2 of the PRR, China 
submits that there is no mandatory requirement to refer to a specific sub-paragraph of a treaty 
provision. A panel should examine whether a general reference to a treaty provision meets 
Article 6.2 on a case-by-case basis, taking into account the extent to which such reference sheds light on the nature of the obligation at issue. China also recalls that a "brief summary" of the legal 
basis should be distinguished from arguments in support of a particular claim,
 which are not 
required to be included in a panel request. Third, as to the EU's objection in Section 4.2.4 of the 
PRR, China notes that both provisions concerned have been invoked to challenge Article 2(5) of the Basic Regulation in both the request for cons ultations and the Panel Request. It thus appears 
that Argentina has not added new legal basis in the Panel Request, but just clarified the connection 
between the challenged measure and the legal basis.  Finally, China considers that PRR is not the 
only way to address preliminary issues. Parties may present views on many of these issues in their 
submissions and/or statements and expect panels to make findings in final reports. Unnecessary 
or premature requests should not be encouraged.   
III. Interpretation of Articles  2.2.1.1 and 2.2 of the ADA 
 
A. "Dumping" Reflects Pricing Behaviou rs of Individual Producers/Exporters 
 
3. To properly interpret Articles 2.2.1.1 and 2.2, it is appropriate to begin with the foundational 
concept of "dumping". Dumping is the result of th e "pricing behaviour of individual exporters or 
foreign producers". Thus, anti-dumping measures ca n be applied only to remedy injury caused by 
the pricing behaviour of an individual producer/exporter, which results in price discrimination 
between the producer's home market and the export market.   
4. In line with this foundational concept of dumping, an authority cannot reject the costs 
recorded in the individual producer/exporte r's records on grounds exogenous to that 
producer/exporter. Exogenous factors, such as the regulatory environment in which a producer operates, or the way in which duties or taxes affect market conditions for goods or services 
upstream to production of the product under consid eration are, by definition, entirely outside the 
control of a producer/exporter. The market outcom es of government policy measures have nothing 
to do with the commercial conduct of the producer /exporter. They cannot therefore be the grounds 
to reject the accurately recorded costs. Othe rwise, anti-dumping proceedings cease to be a 
remedy for the pricing behaviour of producers or exporters, and instead become a tool for 
authorities to penalize imports for cost advantages that foreign producers may enjoy.  WT/DS473/R/Add.1 
 
- D-6 - 
 
  B. Article 2.2.1.1 Does Not Permit Rejection of Recorded Costs on the Ground that 
They Are "Artificially Lower"  than Hypothetical Costs 
 5. Article 2.2.1.1 does not permit authorities to reject recorded costs on the ground that they 
are lower than they would be if sourced in a market that, unlike the country of origin, remains 
unaffected by governmental policy interventions that affect costs.   
6. First, a "reasonably reflect" assessment must be focused on the costs associated with 
production and sale of the product under consider ation by the specific producer/exporter, and not 
the costs of a hypothetical producer or exporter.   
7. This is made clear by the privileged status given to "records kept by the exporter or 
producer under investigation" under Article 2.2.1.1. It is also reflected in the explicit reference to the costs "associated with" the production and sale of "the product under consideration". To be 
"associated with" the production of the product under consideration, the costs must be connected 
with the product that is produced by the producer under investigation and exported to the importing Member. A cost taken from a hypothetical market does not in any way pertain to the 
production of the product by the investigated producer, and thus is not "associated with" the 
production of the product under consideration.   8. Furthermore, the circumstances identifi ed in the second and third sentences of 
Article 2.2.1.1, in which a producer's records migh t not be a reasonable reflection of the costs, 
confirm that the determination of reasonableness does not extend to factors exogenous to the producer/exporter. Specifically, the issues of "proper allocation" of costs, "amortization", 
"depreciation" and "capital expenditure" all concern cost accounting choices made by the specific 
producer/exporter and any related companies with which it shares costs.   
9. Article 2.2.2 provides further context. It also reflects the producer/exporter-specific focus 
when prescribing the basis for determination of administrative, selling and general (or "AS&G") 
costs, which are other cost components to be used in constructing normal value.   
10. Second, if a benchmark is used to assess wh ether records reasonably reflect costs, such a 
benchmark must relate to costs in the country of origin and not costs in some hypothetical market 
where the market and regulatory conditions of  the country of origin do not exist. Since 
Article 2.2.1.1 begins with the phrase "[f]or th e purpose of paragraph 2", the scope of the costs 
considered under both Articles 2.2.1.1 and 2.2 is the same, i.e. "costs of production in the country of origin". In addition, Article 2.2.2, another provision within "paragraph 2" of Article 2, also 
requires that AS&G costs be determined on the basi s of costs in the country of origin. In short, 
whether records reasonably reflect costs must be assessed within the boundaries of the country of origin. It is impermissible, as a matter of law, to benchmark a producer or exporter's recorded costs against an international market price or prices from other countries.  
 
11. Third, the object and purpose of the ADA is to discipline the rules governing anti-dumping 
investigations and measures, for which the foundation stone is the existence of dumping by 
exporters or producers. A determination of the existence of dumping requires analysis of the 
pricing behaviours of the individual producers/exporters. Government measures affecting the costs of a producer or exporter may be relevant for the application of other covered agreements if they 
are specific subsidies, or if they take the form of impermissible export restrictions. However, since 
dumping is a producer/exporter-specific concept, it is not consistent with the object and purpose of 
the ADA to seek to remove the impact of governmental policy interventions that are entirely exogenous to the producer/exporter under consideration.  
 
C. Article 2.2 Does Not Allow Use of Non-Country of Origin Costs  
 
12. Article 2.2 is clear and explicit in requiring that the "cost of production" used to construct 
normal value must be the cost "in the country of origin". The language of Article 2.2 is less flexible than the language of Article 14(d) of the SCM Ag reement. Thus, while the use of out of country 
benchmarks may sometimes be permissible under the SCM Agreement, a producer's costs under 
the ADA are, quite simply, the "costs of production in the country of origin".  
 13. The EU does not take issue with the requirement that "costs" under Article 2.2 reflect the 
"cost of production in the country of origin", bu t argues that the evidence required to establish WT/DS473/R/Add.1 
 
- D-7 - 
 
  such costs may originate in other countries. First, the issue regarding the appropriate source of 
evidence only arises when the costs recorded by  a specific producer or exporter need to be 
adjusted. Since authorities are not permitted to disregard recorded costs on the ground that they are "artificially low" because of governmental policy  intervention, there is no need to refer to any 
sources of evidence other than the producer's re cords themselves in these circumstances. Second, 
in cases where cost records of a specific producer/exporter need to be adjusted because of issues 
pertaining to that producer or exporter, an authority shall consider evidence from within the 
country of origin, which might include evidence regarding costs from other producers/exporters of 
the investigated product, or from a related sector or industry. Third, only in very exceptional cases 
where there is a complete lack of evidence availa ble in the country of origin, might an authority 
consider evidence of costs from third countries. In such a scenario, an authority could not simply 
deem out-of-country evidence to reflect the cost of production in the country of origin. Rather, 
such evidence could only be used as a starting point upon which to determine costs of production 
in the country of origin. In other words, if third country evidence is used, the specific market 
conditions in the country of origin must be factored in and the final costs of production must reflect 
the costs in the country of origin. Relevant market conditions that should be considered by an investigating authority include how policy or regulatory factors, including taxes and duties, impact 
on the price and availability of inputs and other factors of production.  
 IV. "As Such" Claims in Relation to Article 2(5) of the Basic Regulation  
14. At the outset, China recalls that in order for a rule or norm of general and prospective 
application to be found to be, as such, WTO-inconsis tent, it is not necessary to show that a rule or 
norm "mandates" a WTO-inconsistent outcome in every case. Rather, the complainant must 
provide evidence demonstrating that the application of the challenged rule will necessarily be 
inconsistent with that Member's WTO obligations in defined circumstances . China also recalls that 
the Appellate Body has provided guidance on how to examine the meaning of municipal law, 
requiring panels to undertake a holistic assessment of all relevant elements. China concurs with 
Argentina that the meaning of Article 2(5), second sub-paragraph, should be examined in a way taking into account elements other than the text, including: (i) its context and "logic", (ii) its consistent application by the EU authority, and (iii) the judgment of EU courts on its meaning.  
 
15. As an immediate context, the first sub-paragraph of Article 2(5) includes the same "reasonably reflect" clause. There exists a spec ial logical link between the two sub-paragraphs, 
i.e. the first sub-paragraph requires the authority to use the records of the parties concerned as 
the basis to calculate costs if this condition, together with another condition, is fulfilled, while the second sub-paragraph requires the authority not to use the records if the same condition is not 
met. Thus, the EU's argument that the conditions that must be met in order to determine whether 
the company records "reasonably reflect" costs are outside of the scope  of the 
second subparagraph fails by disregarding this special link.   
16. The context that should be taken into account also covers Recitals 3 and 4 of Council 
Regulation (EC) No 2972/2002, and Article 2(3), second sub-paragraph, of the Basic Regulation. Recital 4 clarifies that the circumstances in which records do not reasonably reflect costs cover the 
situations where "because of a particular market situation sales of the like product do not permit a 
proper comparison". According to Article 2(3), seco nd sub-paragraph, a particular market situation 
may be deemed to exist when "prices are artificia lly low". Recital 3 of the Council Regulation (EC) 
No 2972/2002 further clarifies that particular market situations cover "market impediments", 
which may result in domestic prices being out of line with world-market prices or prices in other representative markets. Reading these provisions together, Article 2(5), second sub-paragraph, appears to require the investigating authority to reject the records of the parties concerned on the 
ground that "prices are artificially low" or for reasons relating to the situation of the entire  market 
caused by governmental policy interventions, instead of a situation relating to or caused by conducts of a specific  producer/exporter.  
 
17. The above reading is confirmed by the app lication of Article 2(5). The practice of the 
EU authority indicates that it will disregard the costs correctly recorded by the specific 
producer/exporter under investigation if it determines that such costs are "artificially" lower than 
the "hypothetical" costs that would be borne in a theoretical market where the prices of relevant inputs were not affected by governmental policy interventions. In the investigation concerning imports of biodiesel from, inter alia , Argentina,
 the EU authority disregarded the actual cost of 
soya beans as recorded by the companies concer ned on the ground that such cost (domestic WT/DS473/R/Add.1 
 
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  prices of soya beans) was "artificially lower" than a "hypothetical" cost (international prices). It is 
clearly indicated by the authority that this determination is not unique, but falls well "[with]in the meaning of Article 2(5)". In Seamless Pipes and Tubes of Iron or Steel from Croatia, Romania, 
Russia and Ukraine , the EU determined that the correctly accounted gas prices "could not 
reasonably reflect the costs associated with the production and distribution of gas" because that 
price "was much lower than the average expo r t  p r i c e s  f r o m  R u s s i a  t o  b o t h  W e s t e r n  a n d  
Eastern parts of Europe". The authority also indicated that it reached this determination "as 
provided for in Article 2(5) of the basic Regulati on", which implies that the above practice appears 
to be an automatic application of Article 2(5).  18. In summary, Article 2(5), second sub-para graph, appears necessarily to require the 
EU authority to reject records of a producer/exporter under investigation that accurately account 
for the costs incurred by that producer/exporter, for the sole reason that the recorded costs are 
"artificially low" compared to the hypothetical costs that would be incurred in a market unaffected 
by governmental policy interventions; and appear s to require, in the above situations, that the 
costs be "adjusted or established" on the basis of information from "other representative markets", when the costs of other producers/exporters in the same country are also "artificially low" 
compared to the hypothetical costs and othe r "reasonable" bases are not available.  
 19. Therefore, Article 2(5), second sub-paragraph appears to be, as such, inconsistent with Article 2.2.1.1 of the ADA, under which an authority is not entitled to reject the producer's 
recorded costs simply because the costs incurred by the producer are lower than hypothetical 
costs unaffected by circumstances such as governmental policy interventions. It also appears to be, as such, inconsistent with Article 2.2 of the ADA, which requires that the costs of production 
used to construct normal value must be those "in the country of origin".  
 V. Claims with Respect to the Anti-Dum ping Measures on Argentine Biodiesel 
 
A. Claims with Respect to the Adjustment of Costs 
 20. As to Argentina's claims in relation to the EU's rejection of the producers/exporters' records, 
China notes that the Definitive Determination clearly stated that the sole reason for the 
EU authority to conclude that the costs of soya beans were not reasonably reflected in the records and to disregard the actual costs as recorded was that the domestic prices of soya beans used by 
biodiesel producers in Argentina were found to be artificially lower than international prices due to 
the "distortion" created by the Argentine export tax system. The EU thus violates Article 2.2.1.1 because under this provision an authority is not permitted to depart from accurately accounted 
costs, for the sole reason that such costs are "art ificially low" compared to the hypothetical costs 
unaffected by governmental policy interventions.  
 21. As to Argentina's second claim with respect to the adjustment of costs, China notes that 
the EU, having disregarded the recorded costs of soya beans, replaced this element of cost of 
production with an average FOB reference price. By definition, a FOB export price is not a price that is available to domestic Argentine producers,  but a price available to buyers in the export 
market. It is not reflective of the cost of soya beans "in the country of origin", but reflects market 
conditions in markets outside of Argentina. Thus, even if the EU authority had no other evidence regarding such costs in Argentina, and, instead, were justified in referencing evidence relating to 
market conditions in export markets, it would have been necessary to adjust this "raw" evidence 
to ensure that it elucidated, in a sufficiently prob ative way, the "costs of production in the country 
of origin". By simply replacing the recorded co st of soya beans with an average FOB reference 
price, without taking account of the significantly different conditions affecting the price for 
exported soya beans, the EU acted inconsistently with Article 2.2.  
 22. Argentina also claims that the EU acted inconsistently with Article 2.2.1.1 by including, in its 
calculation of the cost of production of biodiesel, a cost not associated with the cost of production 
and sale of biodiesel. As explained by the panel in EC – Salmon (Norway) , Article 2.2.1.1 requires 
costs of production used for purposes of constructing normal value to be the "costs associated with 
production and sale of the product under consider ation". Self-evidently, the price of soya beans 
exported from Argentina is not a cost associated with production and sale of biodiesel in Argentina, 
because exported soya beans are necessarily not available to producers of biodiesel in Argentina 
and the Argentine producers did not pay that price minus fobbing costs for soybeans. By including WT/DS473/R/Add.1 
 
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  a cost that was not associated with the cost of production and sale of biodiesel, the EU acted 
inconsistently with Article 2.2.1.1.   
B. Claims with Respect to the Determination of Profits 
 
23. China anticipates that the Panel, as required  under Article 17.6(i) of the ADA, will examine 
whether the EU authority's establishment and evaluation of the relevant facts was unbiased and 
objective. In addition, it appears that the authority failed to indicate the method it used to 
determine the profit margin. At most, it just gave a general rationale, which does not describe a "method". Finally, amounts of profit determined on  the basis of a method under Article 2.2.2(iii) 
are subject to further a reasonability test. An authority that adopts such a method is required to 
explain why it considers the method adopted to be reasonable.  
 
C. Claims with Respect to Fair Comparison 
 
24. China recalls that an authority bears a general obligation to ensure fair comparison and no 
differences that "affect price comparability" are precluded from being the object of an allowance. 
These requirements apply generally to the calculation of a dumping margin, and specifically, the 
construction of normal value does not preclude consideration of the making of various adjustments as between that normal value and the export price with which it is to be compared.   
25. There appears to be no disagreement between the parties with respect to the fact that the 
normal value and the export price that are used by  the EU incorporated different prices of soya 
beans, i.e. the former includes an average of th e reference FOB prices (minus fobbing costs) while 
the latter incorporates domestic prices. The different prices of soya beans, or the difference in the 
cost of inputs, fall within the scope of "other differences" affecting price comparability. Therefore, even assuming that the EU was entitled to disregard the domestic costs of soya beans and use 
international prices for the construction of normal value, it should have made due allowance for 
the above difference in order to ensure a fair comparison.   
D. Claims in Relation to Injury and Causation 
 
26. First, China wishes to draw the Panel's attention to some of the arguments and facts 
submitted by Argentina, particularly paragraphs 368, 376, 377, 378 and 390 of its first written 
submission. This material raises a question as to whether the EU based its determination on 
"affirmative, objective, verifiable, and credible" evidence, and whether the EU conducted the relevant examination in an unbiased manner, as required under Article 3.1 of the ADA.  
 
27. Second, China notes that the terms "utilization of capacity" in Article 3.4 of the ADA contain no reference to a concept such as "availability for use" or "idleness". There is no legal basis to overlook such capacity in the injury determination.  
 
28. Third, the key question for examining Argentina's Article 3.5 claims is whether the factors "other than dumped imports" identified by Argentina were injuring the EU industry at the same 
time as the dumped imports. To the extent that Argentina successfully establishes the facts of its 
case, the EU authority failed to undertake a proper non-attribution analysis.  WT/DS473/R/Add.1 
 
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  ANNEX D-3 
EXECUTIVE SUMMARY OF THIRD-PARTY  
ARGUMENTS OF COLOMBIA 
I. INTRODUCTION 
 
1. Members of the Panel and distinguished delegates, Colombia has a systemic interest in the application of several provisions of the WTO's Covered Agreements discussed by the parties to this 
dispute, and while not taking a final position on the specific merits of this case, Colombia will 
provide its views on some of the legal claims advanced by them.  1. "As such" Claim's legal standard 
 
2. According to Argentina's first written submission, there is a continued and consistent practice by the European Union, when applying Article 2(5) second paragraph of the EU Basic 
Regulation. In this respect, when the prices of raw materials included in the records of the 
producers, are considered to be "abnormally or arti ficially low", due to a regulated, or distorted, 
market, the European Communities have been adjust ing these prices in accordance with the costs 
of other producers in the same country, or any other reasonable basis, including information from 
other representative markets. This continued practice, in Argentina's view, constitutes an "as such" violation to certain articles of the Antidumping Agreement.   
3. Whenever a Member presents an "as such" cl aim, it must establish, through arguments and 
supporting evidence, at least that [1] the alleged measure - rule or norm- is attributable to the responding Member; [2] its precise content; and indeed, [3] that it does have a general and 
prospective application".
1 The AB further states that the "evidence [presented] may include proof 
of the systematic application of the challenged measure. According to the AB in US – Carbon Steel , 
"Such evidence, will typically be produced in the form of the text of the relevant legislation or legal 
instruments, which may be supported, as appropriate, by evidence of the consistent application of 
such laws, the pronouncements of domestic courts on the meaning of such laws, the opinion of 
legal experts and the writings of recognized scholars".2 Furthermore, when a complaining party 
substantiates an "as such" challenge against laws, regulations, or other instruments of a Member 
that have general and prospective application, a complainant may submit evidence of the 
application of such legislation.3 
 
4. Even though Colombia will not take a final position on the issue, it is of the opinion that in 
the present case, the Panel has to take into account  all evidence submitted by the Parties, in order 
to determine if Article 2(5) is "as such" contrary to Article 2.2.1.1 of the ADA. Hence, Colombia 
respectfully suggests the Panel to review this ma tter, bearing in mind the considerations above 
mentioned.   2. Construction of the term "reasonably reflects the costs" in Article 2(5)'s 
second paragraph  
 5. For the EU, the costs presented by the Argentinian producers of biodiesel, do not 
"reasonably" reflect the cost of production, given that soybeans have an export tax in Argentina, 
which makes the internal price lower than the international price. In the EU's view, since the records presented by the producers do not reflect what the cost would "normally be" they do not 
reasonably reflect the cost of production. Hence, the EU proceeds to calculate the biodiesel's 
"normal costs of production" by using the soyb eans' international prices. On the other hand, 
Argentina argues that Article 2.2.1.1 of the ADA's scope does not allow an investigating authority to reject the records on the basis of input price distortions. 
 
6. Argentina, in its first written submission, interprets the terms "costs" "reasonably" and "reflect", to determine that the combined phrase "reasonably reflects the costs" refers to the 
charges or expenses that have actually been incu rred in by the producer. The term "reasonably" 
                                               
1 Appellate Body Report, US — Zeroing (EC) , para. 198. 
2 Appellate Body Report on US – Carbon Steel , para. 157 (emphasis added); see also Panel Report on 
Mexico – Rice , para. 6.26. 
3 Panel Report EC — IT Products , para. 7.108. WT/DS473/R/Add.1 
 
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  acts as an adverb to the verb reflect. Thus , since the word "reasonably", which means "at a 
reasonable rate; to a reasonable extent", operates  on the verb reflect and not on the noun "costs". 
Therefore, it is reasonable to construe such provision, interpreting that it refers to "the way the costs are reflected in the records", rather than to "the costs reflected in the records", as the 
EU submits.  
 7. Taking into account the submissions of both parties, it is Colombia's opinion that the 
interpretation based on the ordinary meaning of th e term "reasonably reflects the costs" should be 
more similar to the one presented by Argentina, inasmuch as the ordinary meaning of this term 
refers to the actual cost of production a producer should reflect in its records, given the syntax of the phrase. Additionally, Article 2.2.1.1 refers to a situation in which the Member that imposes an 
antidumping measure is actually investigating the costs of production of producers of the exporting 
Member. Even if the text of Article 2.2.1.1 does not explicitly provide that the costs are actually 
the same that those charges incurred by the produc er, from the ordinary meaning of the terms, it 
is not possible to draw that the "costs" have to be the ones "normally associated with the 
production and sale of goods".
4  
 
8. Furthermore, it is relevant to consider that one of the purposes of the Antidumping 
Agreement is to provide a multilaterally agreed  framework of rules governing actions against 
injurious dumping practices.5 In Colombia's opinion, the issue that raised the investigating 
authority's concern i.e. products whose inputs have regulated markets, where the price of the 
i n p u t  i s  a f f e c t e d  b y  a  g o v e r n m e n t ' s  m e a s u r e ,  d o e s  n o t  s e e m  t o  f a l l  u n d e r  t h e  s c o p e  o f  t h e  
Antidumping Agreement. Under this premise, th e antidumping measures imposed by the EU to 
biodiesel from Argentina might be contrary to the object and purpose of the ADA. In any case, the 
Panel should address this matter carefully when ruling on this issue.  
 9. Colombia recognizes that the object and purp ose of the WTO is to liberalize trade and to 
eliminate distortions that provide unfair advantages to some goods over others. It also 
acknowledges the EU's power to conduct investigations on products that are imported under unfair conditions that favour them, causing damages to the national industry. However, Colombia is also aware that the WTO provides Members with differ ent tools, under different Agreements, designed 
to address different barriers to trade; thus Members should apply these tools accordingly. 
Consequently, in Colombia's opinion, the Panel should take into account the availability of these other tools, when determining if the EU acte d consistently when applying an antidumping 
measure. 
 3. Is the interpretation of the scope of Article 3.4 of the ADA, presented by the 
Parties, consistent with WTO law? 
 10. Article 3.4 of the ADA plays an important role  in setting out how an investigating authority 
must determine injury, listing the relevant economic factors that must be evaluated in the 
determination of injury.
6 However, it is important to highlight that Article 3.4 explicitly establishes 
that "this list is not exhaustive, nor can one or several of these factors necessarily give decisive guidance". 
 
11. Colombia considers that the standard set above, must guide the analysis of the Panel to assess the impact of the dumped imported products in the domestic industry, regarding: 
i) whether the exclusion of "idle" plants contributes to a satisfactory evaluation of the state of the 
industry, and; ii) whether the October 1
st 2013 Definitive Disclosure's resubmitted data obeys to 
the obligation, set forth in article 3.4 of the ADA,  to carry out an "objective examination" on the 
basis of "positive evidence". 
 
12. Thus, Colombia considers that the Panel must take into account all relevant factors at issue when evaluating the state of the industry in light of the last sentence of Article 3.4, rather than 
relying its analysis solely on the breach of Article 3.4, in accordance to the "production capacity 
and utilization capacity" factors.  
                                               
4 EU’s First Written Submission. Para 139. 
5 Panel Report, US — Zeroing (EC) , footnote 292. 
6 Van den Bossche, Zdouc, The Law and Policy of the World Trade Organization, Cambridge University 
Press, (2013), pag. 705. WT/DS473/R/Add.1 
 
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  13. Colombia submits that the terms "objective ex amination" and "positive evidence" included in 
Article 3.1 of the ADA serve as relevant context in the interpretation of the last sentence of Article 3.4, due to the fact that "objective examination" puts an obligation on Investigating Authorities to conduct an objective analysis, without favouring the interests of any interested 
party, but always based on "positive evidence". 
 14. In light of the above mentioned arguments, the sentence "this list is not exhaustive, nor can 
one or several of these factors necessarily give decisive guidance", when interpreted in accordance 
with its ordinary meaning, in its context and in light of the object and purpose of the ADA, does 
not allow the authorities to: i) base their decisions taking into account "one or several of these factors as decisive guidance" and; ii) to base their decision on unclear economic factors or to 
favour the interests of any interested party.  
 4. The Non Attribution Test obligations und er Article 3.5 of Antidumping Agreement 
 
15. Colombia notes that if, as stated by Argentina, "… even in the total absence of imports, the utilization of the EU's productive capacity would only have reached around 50% and the EU did not 
rebut or contradict that information …", it is necessary to question what motivated the EU's 
industry to increase its capacity of production , despite the allegedly dumped imports during the 
investigation period. In that sense, Colombia considers that the Panel's analysis should take into account the possibility that the EU misread the bi odiesel sector or had high expectations about 
future changes in the prices conditions, which in the end never materialized. 
 16. The decision to expand the capacity of produc tion, despite the real level of production that a 
market may absorb, results in an inadequate de cision and generates undesirable consequences, 
such as reductions in the utilization of that capacity. When facing these particular conditions, damage to the national industry becomes an expected result. This damage cannot be attributable 
to imports.  
 5. CONCLUSION  
17. Colombia considers that this case raises important questions on the application of certain 
provisions of the ADA Agreement and the GATT of 1994. While not taking a final position on all 
aspects of the merits of the case, Colombia requests the Panel to carefully review the scope of the 
claims in light of the remarks made in this hearing.  
 18. Mr. Chairman, distinguished members of Pa nel, and representatives of the Parties and 
Third Parties, with these comments Colombia hopes to contribute to the legal discussion of this 
case and would like to thank this opportunity to  express its views on the present dispute. Thank 
you for your kind attention and we remain at your disposal to answer any questions.  
 WT/DS473/R/Add.1 
 
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  ANNEX D-4 
EXECUTIVE SUMMARY OF THIRD-PARTY  
ARGUMENTS OF INDONESIA  
1. "AS SUCH" CLAIM CONCERNING ARTICLE 2(5) OF THE EUROPEAN UNION'S BASIC 
ANTI-DUMPING REGULATION 
 1.1 Scope and content of Article 2(5) of the Basic Anti-Dumping Regulation 
 
1. The construction of the contested measure in the present dispute has been supported by Argentina with evidence beyond its text. In line with the approach prescribed by the Appellate Body
1, the legislative background, administrative practice and domestic court rulings put 
forward by Argentina should be reviewed by the Panel.  
 2. As regards the scope and content of the measure at issue, Indonesia sees the second 
subparagraph of Article 2(5) as introducing a WTO-inconsistent condition or requirement - not 
provided for in the Anti-Dumping Agreement or any WTO-covered Agreements - which has to be met in order for the GAAP-consistent records of an exporter or producer which reflect the recorded 
costs associated with the production and sales of the product under consideration in the country of 
origin, to be used to calculate the cost of production. Failing the satisfaction of this condition, the European Union determines that the records do not reasonably reflect the costs associated with the production and sale of the product under consid eration, and adjusts the costs of production of 
the investigated exporter or producer in a WTO-inconsistent manner. 
 3. The contested provision obliges the European Union investigating authority to use input 
costs unaffected by "distortions" for establishing the cost of production, which is a requirement not 
provided for in the WTO-covered Agreements. In this pursuit, it requires the investigating authority to undertake the 'distortion test' and re place/adjust, in a WTO-inconsistent manner, the 
actual-recorded input costs of exporters or producers in case those costs are found to be distorted 
on the basis of out-of-country of origin prices of the inputs. These additional requirements have 
been woven into the reasonable reflection of costs criterion. The above scope and content is 
evident from the clear explanation in recital 4 of  Council Regulation (EC) No. 1972/2002, as well 
as a string of anti-dumping cases in which the contested provision was applied. In fact this practice 
has been applied consistently where the European  Union was presented with allegations by the 
complainants or was aware of a causal factor that could lead to a distortion of input costs in the 
investigated country. 
 4. Contrary to the European Union's claim of  the discretionary nature of the provision
2, the use 
of costs not affected by distortions is a norm set by the second subparagraph of Article 2(5) of the 
Basic Anti-Dumping Regulation and is necessarily WTO-inconsistent. Indeed, this is supported by the European Union's vehement justification of the WTO-consistency of the assessment of reasonableness of costs per se  and of the use of reasonable costs in constructing the normal 
value
3, as well as the adjustment/rejection of raw material costs that are " not "normal" ".4 
 1.2 Violation of Article 2.2.1.1 of the Anti-Dumping Agreement 
 
5. If an investigating authority decides to construct the normal value, Article 2.2.1.1 comes into play.  
 
6. First, previous Panel reports
5 have established that the first sentence of Article 2.2.1.1 sets 
out a rule and imposes a positive obligation on investigating authorities to calculate costs of 
                                               
1 Appellate Body Report, US – Carbon Steel  (India), paras. 4.446, 4.451, 4.454; Appellate Body Report, 
US – Carbon Steel , para. 157 ; Appellate Body Report, US – Corrosion Resistant Steel Sunset Review , 
para. 168. 
2 European Union, first Written Submission, paras. 113-114, 119-124. 
3 European Union, first Written Submission, paras. 131-133. 
4 European Union, first Written Submission, para. 157. 
5 Panel Report, China – Broiler Products , paras. 7.160, 7.161; Panel Report, EC – Salmon (Norway) , 
para. 7.483; Panel Report, US – Softwood Lumber V , paras. 7.237, 7.310, 7.316. WT/DS473/R/Add.1 
 
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  production on the basis of the records kept by  the exporter or producer under investigation6, 
provided  that two cumulative conditions are met, namely that the records of the investigated 
exporter or producer are consistent with the G AAP of the exporting country, and they reasonably 
reflect the costs associated with the production and sale of the product under consideration. 
Therefore, the second subparagraph of Article 2( 5) of the European Union's Basic Anti-Dumping 
Regulation is WTO-inconsistent in so far as it imposes an additional condition to use undistorted input costs.  
 
7. Second, a literal reading of the first sentence of Article 2.2.1.1 indicates that both the conditions apply to the records . The negotiating history of the provision supports such 
interpretation. Moreover, the drafters while modi fying the various pre-Uruguay round texts of the 
Anti-Dumping Agreement starting from the Carlisle I text, did not insert the word "costs" after the 
conjunction "and" in the first sentence of Article 2.2.1.1 or indicate in any other manner that the reasonable reflection criterion is related to the costs. Therefore, the interpretation of the 
European Union that the word "reasonably" is attached to the word "costs" is untenable and is 
based on reading words into the text of the provision that do not exist.
7 
 
8. Third, the two conditions enumerated in the first sentence of Article 2.2.1.1 are aimed at 
assessing the reliability of the records tout court  and as indicated by the structure of 
Article 2.2.1.1 were not meant to be mutually exclusive. The GAAP-consistency criterion is 
concerned with the reliability of the records of th e investigated exporter/producer (or group) from 
an overall accounting perspective and costs are a part of the whole set of financial accounting 
data. If a company does not satisfy this condition, the investigating authority is not obliged to use the records of the investigated exporter or pr oducer and it would not even test whether the 
records reasonably reflect costs associated with the production of the product under consideration. 
The next condition that records reasonably reflect the costs associated with the production and sale of the product under consideration is not linked to the issue of reasonability of costs but to the 
fact that from the perspective of product-specific costs involving allocations, the cost of production 
of the product under consideration should be reasonably reflected in the records. This is indicated by the specific reference to the words "product  under consideration" in the context of the 
reasonable reflection of costs criterion. In fact such an interpretation is also supported by the 
second and third sentences of Article 2.2.1.1 whic h function within the ambit of the requirement 
set forth by the first sentence that records reasonably reflect the costs associated with the production of the product under consideration. Indeed, from a practical perspective, allocations 
would be necessary or relevant only in the context of product-specific cost accounting, 
since otherwise, the full/unallocated/aggregated company-wide costs would anyway exist in the 
GAAP-consistent records pertaining to the whole company.  
 
9. Fourth, Article 2.2.1.1 and Article 2.2 do not require an assessment of the reasonableness of the costs of inputs recorded in the accounting re cords of the investigated exporter or producer per 
se, nor do these articles mandate that costs of inputs should be "reasonable" in comparison to any 
benchmark. This is attested by the fact that a reasonability condition is only specified with regard 
to SG&A costs and profits in Article 2.2 of the Anti-Dumping Agreement. Moreover, the concept of 
individual dumping margins as a means to address the individual pricing behaviour of exporters or 
producers
8 would lose meaning if the reasonability of  each exporter or producer's cost of 
production were to be assessed on the basis of a standard cost of production or a standard cost for inputs as done by the European Union in the Biodiesel  investigation. 
 
10. Fifth, the text of Article 2.2.1.1 read in light of footnote 6 and the last sentence of Article 2.2.1 sets a parameter that the reasonable re flection of costs is to be assessed on the basis 
of the actual costs incurred by an exporter or producer in the investigation period. The enquiry 
under the first sentence of Article 2.2.1.1 does not allow the inclusion of costs that have not been 
incurred (in the investigation period) by the investigated exporter or producer, and that cannot be linked in any manner to the actual act of producti on by the exporter or producer concerned since 
such costs would never be recorded in the exporter or producer's records at the company-wide 
level or product-specific level. Moreover, it would be illogical to talk of allocation of costs that have not been incurred but should have been incurred. Indeed, the reference to start-up costs in 
                                               
6 Panel Report, US – Softwood Lumber V , para. 7.236. 
7 European Union, First Wr itten Submission, para. 133. The United States also seems to hold a similar 
view as the European Union. United States , First Written Submission, paras. 18, 21. 
8 Appellate Body Report, US – Zeroing (Japan) , para. 111. WT/DS473/R/Add.1 
 
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  footnote 6 and the recovery of costs in  the last sentence of Article 2.2.19 leaves no room for doubt 
that the costs concerned by these provisions are those that would have already been incurred by 
the exporter or producer/group.  
11. Last, investigating authorities need to assess individually in every case to the extent 
individual exporters or producers are investigated , as to whether or not their records reasonably 
reflect the costs associated with the production of the product under consideration by them. 
However, the parameters that are to be applied as regards the assessment of the reasonable 
reflection of the costs in the records cannot be determined by authorities on a case-by-case basis. This is because the clear parameters as identified above have been set out in the covered agreements in an unambiguous manner. Moreover, if investigating authorities were permitted to 
determine the parameters on a case-by-case basis,  it would induce legal uncertainty as regards 
the application of Article 2.2.1.1 and could easily result in the same situation being treated differently by different WTO Memb ers or different situations being treated in the same manner 
which is contrary to the fundamental principle of non-discrimination that is a pillar of the 
WTO Agreements.  
1.3 Violation of Article 2.2 of  the Anti-Dumping Agreement 
 12. In US – Softwood Lumber V, the Panel considered that Article 2.2 "concerns the 
establishment of an appropriate proxy for the pric e of the like product in the ordinary course of 
trade in the domestic market of the export ing country when that price cannot be used".
10 Thus, 
the purpose of the constructed normal value is to create a "comparable price" for the like product if it were sold on the domestic market of the country of origin in the ordinary course of trade to 
comply with the definition of dumping within the meaning of Article 2.1 of the Anti-Dumping 
Agreement and Article VI:1 of the GATT 1994. The de finition of dumping will lose meaning if the 
normal value is constructed using out-of-country of origin input costs as it will not yield a 
"comparable price" and a finding of dumping w ill in most cases be a foregone conclusion, 
particularly where low cost  countries are targeted. 
 13. If an investigating authority decides to constr uct the normal value on the basis of the cost of 
production in the country of origin  plus SG&A costs and profits, it does not have the discretion to 
use third country prices or cost data for any purpose including for the sort of 'non-distortion test' as done by the European Union or the calculation of  the costs of production if it deems that these 
are not reasonable/undistorted. The text and context of Article 2.2 do not permit any exceptions to 
this rule. Thus, an investigating authority cannot directly or indirectly - by means of using evidence as suggested by the European Union - adopt international prices or third country prices 
to adjust the costs of an exporter or producer if it considers that the records of that investigated 
party do not reflect "reasonable" costs associated with the production of the product under consideration.  
14. Moreover, if the European Union's interpretation and practice were to be upheld, legally it 
implies that in each case that an investigating authority would resort to out-of-country of origin input costs, it would be working on the basis of an assumption that an exporter or producer would 
have different input costs if there were sales of the like product in the ordinary course of trade in 
the domestic market. Such assumption cannot be justified on the basis of any provision in the WTO-covered agreements and flies in the face of the requirement for an investigating authority to 
base its determination on a proper establishment of facts. In fact the European Union itself admits 
that it aimed at determining a cost of production in the country of origin in the Biodiesel  case in 
the absence of distortion and thus calculated a figure which was a " hypothetical one ".
11 
 
                                               
9 The final sentence of Article 2. 2.1 states that sales below costs in the country of export may be 
considered as not being in the ordinary course of tr ade and may be disregarded in determining the normal 
value provided that they are made within an extended period of time, in substant ial quantities and are at 
"prices which do not provide for the recovery of  all costs within a reasonable period of time ". The reference to 
"recovery of all costs " can only be intended when such costs have been incurred in the first place.  
10 Panel Report, US – Softwood Lumber V , para. 7.278. 
11 European Union, First Wr itten Submission, para. 205. WT/DS473/R/Add.1 
 
- D-16 - 
 
  2. CLAIM UNDER ARTICLES 3.1 AND 3.4 OF THE ANTI-DUMPING AGREEMENT – 
DEFINITION OF "UTILIZATION OF CAPACITY" 
 15. In the Shorter Oxford English Dictionary, the meaning of the term "capacity" is " ability to 
receive, contain, hold, produce or carry ".
12 This is the generic definition that should be considered. 
According to this definition, the reference is to the ability to produce tout court  regardless of the 
fact that the ability to produce is immediate or is useable subject to some 
investments/upgrading/overhauling etc. In any even t, as long as the production capacity remains 
installed, it cannot be excluded that it can be put back into production.    16. Additionally, the term used in Article 3.4 of the Anti-Dumping Agreement is "utilization of 
capacity" and not utilization of 'productive' capacity or 'useable' capacity or 'operative' capacity. 
Therefore, the clear reference is to all capacity, including capacity that may not be used or be useable at a particular point in time. If the drafters had intended that only the utilization of 
'productive' or 'useable' or on-line 'operative' capacity be assessed, implying in other words the 
exclusion of "idle capacity", this would have been specified in Article 3.4 through the use of any of 
the terms noted above.  
 
17. Indonesia also notes that there is no definition of "idle capacity" in the Anti-Dumping Agreement. Thus, if the Panel were to agree with the European Union's theory, and consider that "idle capacity" be excluded from the definition of the term "utilization of capacity", there would be 
extreme ambiguity in the interpretation of this indicator. Per the Shorter Oxford English Dictionary, 
the meaning of the word "idle" is " inactive, unoccupied, not moving or in operation ".
13 Thus the 
term "idle capacity" can be interpreted very widely. 
 
18. To summarize, the full installed capacity of the domestic industry should be considered for the assessment of "utilization of capacity" and this was also supposedly the intention of the 
drafters of the Anti-Dumping Agreement. A contra ry interpretation would make the assessment of 
this injury indicator un-objective and discriminatory as authorities or complainants could apply different definitions of "idle ca pacity" in different contexts.  
 
                                               
12 Shorter Oxford English Dictionary, Sixth Edition, A. Stevenson (ed.) (Oxford University Press, 2007), 
Vol. 1, p. 341.  
13 Shorter Oxford English Dictionary, Sixth Edition, A. Stevenson (ed.) (Oxford University Press, 2007), 
Vol. 1, p. 3487.  WT/DS473/R/Add.1 
 
- D-17 - 
 
  ANNEX D-5 
EXECUTIVE SUMMARY OF THIRD-PARTY  
ARGUMENTS OF MEXICO1 
MEXICO'S THIRD-PARTY SUBMISSION ON THE EUROPEAN UNION'S REQUEST FOR A 
PRELIMINARY RULING  
 I. INTRODUCTION 
 
1. Mexico thanks the Panel for this opportunity to submit comments regarding the preliminary objections and the parties to the dispute for giving access to their respective submissions.  
2. The foregoing is very important for third-party Members, as it enables them to gain a better 
understanding of the dispute and, where appropri ate, to submit comments prompted by systemic 
interest. 
 
II. RELATED MEASURES AND IMPLEMENTING MEASURES  
3. In its request for a preliminary ruling dated 24 November 2014, the European Union 
observes that the references made by Argentina in its request for the establishment of a panel to "implementing measures and related instruments or practices" and "related measures and implementing measures" should be considered as falling outside the Panel's terms of reference, 
since, in the opinion of the European Union, these terms do not comply with the provisions of 
Article 6.2 of the Understanding on Rules and Pr ocedures Governing the Settlement of Disputes 
(DSU) in that they fail to specifically identify the measures at issue.
2 
 
4. Mexico does not share the European Union' s view. The phrase that includes related and 
implementing measures is a common phrase that complainants usually include in panel requests – 
precisely to avoid respondents from subsequently issuing a measure related to or deriving from 
the original measure at issue that is also non-compliant and goes beyond the panel's terms of reference. In previous disputes, complainants have incorporated this type of phrase and the panels have considered within their terms of reference fu ture measures issued in relation to those being 
challenged.
3 
 5. In this case, as regards "related measures and implementing measures", Argentina explains 
that the terms "related measures and implementing measures" are at the end of Section 1, point 
(B), which identifies the primary measures being challenged. It is therefore clear that only the 
measures related to the imposition of anti-dumping measures (" medidas compensatorias ") by the 
European Union with respect to imports of biodiesel originating in Argentina could fall within the 
scope of the terms "related measures and implementing measures".
4 
 6. Argentina further points out that the purpos e of including such terms is to prevent the 
potential situation of the European Union issuing new measures related to those challenged by 
Argentina that would fall outside the Panel's te rms of reference because they have not been 
expressly and individually identified by the comp laining party. Consequently, the terms used by 
Argentina are necessary to protect its interests as complaining party, in order to avoid that a 
measure that is adopted after the establishment of the panel and is closely connected to the measure at issue may be excluded from the panel's terms of reference.
5 
 
                                               
1 Mexico indicated that its two submissions to the Panel (third-party submission on the European Union's 
request for a preliminary ruling and re sponse to Panel question No. 2) should serve as the executive summary 
of its third-party arguments. 
2 Request for a preliminary ruling by  the European Union, paras. 8-9. 
3 Appellate Body Report,  China - Raw Materials , paras. 245 and 246. See also the Panel's ruling in 
India - Agricultural Products (DS430), which specifically analyses the question of whether the "related 
measures" and the "implementing measures" mentioned in  the panel request are included within the Panel's 
terms of reference, prelimin ary ruling by the Panel, India - Agricultural Products (DS430) 
(document WT/DS430/5), paras. 3.40 and 3.51. 
4 Response of Argentina to the request for a prel iminary ruling by the European Union, para. 21. 
5 Response of Argentina to the request for a prel iminary ruling by the European Union, para. 29. WT/DS473/R/Add.1 
 
- D-18 - 
 
  7. Mexico considers that the Panel should recognize these measures as falling within its terms 
of reference.  III. CLAIMS THAT EXPAND THE SCOPE OF THE DISPUTE 
 
8. The European Union observes that Argentin a's request for the establishment of a panel 
expands the scope of the dispute as presented in Argentina's request for consultations. According 
to the European Union, the panel request includes a great number of new claims, which changes 
the essence of the complaint raised in the consultations. The European Union requests that the following claims be considered as falling outside the Panel's terms of reference:
6 
 
a. The inclusion of " related practices " in the claim relating to Article 2(5) of 
Council Regulation (EC) No. 1225/2009, in paragraph 1(A) of the panel request. The European Union adds that the request for consultations expressly stated that what was 
being challenged was the above provision " as such ", which means that what is being 
referred to is a specific, written legal provision and not the application of that provision.
7 
 
b. It is not clear whether the insertion of a paragraph between paragraphs 2(B)3 and 2(B)4 
of the panel request is intended to introduce an " as applied " claim against Article 2(5) of 
Council Regulation (EC) No. 1225/2009.8 
 
c. Argentina claims for the first time that Article 2(5) of Council Regulation (EC) 
No. 1225/2009 is " as such " inconsistent with Article 9.3 of the Anti-Dumping Agreement, 
because, allegedly, the amount of the anti-dumping duty (" cuota compensatoria ") to be 
imposed exceeds the margin of dumping.9 
 
d. Paragraphs 2(A)1 and 2(A)2 of the panel request include new claims against Article 2(5) 
of Council Regulation (EC) No. 1225/2009 that are based on Article VI:1 of the General 
Agreement on Tariffs and Trade 1994 (GATT 1994). Argentina's request for consultations did not include any claim based on Article VI:1.
10 
 
e. A new claim is introduced in relation to the scope of Article 2(5) of Council Regulation 
(EC) No. 1225/2009, based on Article 2.2 an d 2.2.1.1 of the Anti-Dumping Agreement 
and referring to the inclusion as "costs not associated with the production and sale of the 
product under consideration".11 
 
f. Argentina's claim regarding the European Union's determination of profits under 
Article 2.1 of the Anti-Dumping Agreement.12 
 9. Mexico recalls that the Appellate Body has noted that Articles 4 and 6 of the DSU do not 
require a "precise and exact identity between th e specific measures that were the subject of 
consultations and the specific measures identified in the request for the establishment of a panel, 
provided that the 'essence' of the challenged measures had not changed".
13 In US - Upland Cotton , 
the Appellate Body made clear that it did not intend to impose too rigid a standard for the "precise 
and exact identity" between the scope of consulta tions and the request for the establishment of a 
panel, as this would substitute the request for consultations for the request for the establishment 
of a panel, which according to Article 7 of the DSU is that which governs the panel's terms of 
reference.14 
                                               
6 Request for a preliminary ruling by  the European Union, paras. 23-26. 
7 Request for a preliminary ruling by  the European Union, paras. 27-30. 
8 Request for a preliminary ruling by  the European Union, paras. 31-35. 
9 Request for a preliminary ruling by  the European Union, paras. 36-40. 
10 Request for a preliminary ruling by the European Union, paras. 41-44. 
11 Request for a preliminary ruling by  the European Union, paras. 45-49. 
12 Request for a preliminary ruling by the European Union, paras. 50-54. 
13 Appellate Body Report, Brazil - Aircraft , para. 131. In this case, the Appellate Body considered that 
the measures at issue (export subsidies for regional aircraft) were the subject of consultations and were 
referred to the DSB for consideration. The regulatory  instruments that came into effect in 1997 and 1998 
(following the cons ultations held on 18 June 1996) did not change the essence of the export subsidies at issue. 
The Appellate Body accordingly concluded that the ex port subsidies for regional aircraft, including the 
instruments that came into effect after consultations were held between Canada and Brazil, were properly 
before the Panel (Appellate Body Report, Brazil - Aircraft , paras. 132 and 133). 
14 Appellate Body Report, US - Upland Cotton , para. 293. WT/DS473/R/Add.1 
 
- D-19 - 
 
   
10. In Mexico – Anti-Dumping Measures on Rice , the Appellate Body established that the same 
standard concerning the degree of identity that must exist between the request for consultations 
and the panel request applies with respect to the "legal basis" of the complaint. A complaining 
party may learn of additional information during consultations that could warrant revising the list 
of treaty provisions with which the measure is alleged to be inconsistent. Such a revision may lead to a narrowing of the complaint, or to a reformulation of the complaint that takes into account new 
information such that additional provisions of the covered agreements become relevant. The 
claims set out in a panel request may thus be expected to be shaped by, and thereby constitute a natural evolution of, the consultation process. It is not necessary that the provisions referred to in the request for consultations be identical to those set out in the panel request, provided that the 
addition of provisions (in the panel request) does not have the effect of changing the essence of 
the complaint.
15 
 
11. Argentina's conclusion in each particular case is that each of the assumptions contested by 
the European Union concerns claims that evol ved out of those raised in the request for 
consultations but that "some connection" exists between the two.16 Hence, the Panel should look 
at whether the allegedly "new claims" noted by th e European Union actually derive from claims 
previously identified by Argentina in the request for consultations. In any event, the Panel should 
consider an analysis such as that referred to by the Panel in India - Agricultural Products  in order 
to determine whether "some connection" exists: 
 
[W]e recall the words of the Appellate Body in US - Carbon Steel  that "compliance 
with the requirements of Article 6.2 must be  determined on the merits of each case, 
having considered the panel request as a whole, and in the light of attendant 
circumstances".17 
                                               
15 Appellate Body Report, Mexico - Anti-Dumping Measures on Rice,  para. 138. The Appellate Body 
stated the following: 
"In our view, the same logic applies with resp ect to the legal basis of the complaint. A 
complaining party may learn of additional info rmation during consultations - for example, a 
better understanding of the oper ation of a challenged measure - that could warrant revising the 
list of treaty provisions with which the measure is alleged to be inconsistent. Such a revision may lead to a narrowing of the complaint, or to a reformulation of the complaint that takes into 
account new information such that additional provisions of the covered agreements become 
relevant. The claims set out in a panel request may thus be expected to be shaped by, and 
thereby constitute a natural evolution of, the consultation process. Reading the DSU, as Mexico does, to limit the legal basis set out in the panel request to what was indi cated in the request for 
consultations, would ignore an important rational e behind the requirement to hold consultations - 
namely, the exchange of information necessary to refine the contours of the dispute, which are 
subsequently set out in the panel request. In this light, we consider that it is not necessary that the provisions referred to in the request for cons ultations be identical to those set out in the 
panel request, provided that the 'l egal basis' in the panel request may reasonably be said to have 
evolved from the "legal basis" that formed the subject of consultations. In other words, the 
addition of provisions must not have the effect of changing the essence of the complaint." 
16 Response of Argentina to the request for a prel iminary ruling by the European Union, para. 66. 
17 Preliminary ruling by the Panel, India - Agricultural Products (DS430) (document WT/DS430/5), 
para. 3.48. WT/DS473/R/Add.1 
 
- D-20 - 
 
  MEXICO'S THIRD-PARTY RESPONSE TO PANEL QUESTION NO. 2 
 CLAIMS UNDER ARTICLE 2.2.1.1 AND 2.2 OF THE ANTI-DUMPING AGREEMENT AND ARTICLE VI:1(B)(II) OF THE GATT 1994 
 
Interpretation of the provisions of the covered agreements invoked by Argentina 
(…) 
 
2. (to all third parties) What are the parameters or criteria under Article 2.2.1.1 or any other provision of the covered agreements governing the manner in which an investigating authority shall determine whether the records reasonably reflect the costs associated with the production 
and sale of the product concerned? Or are the investigating authorities free to make this 
determination on case-by-case basis? 
Mexico's response: 
Mexico sees nothing in Article 2.2.1.1 of the An ti-Dumping Agreement that would enable it to 
conclude that there are any fixed parameters for making such a determination. Nor does it see any contextual elements that would enable it to conclude that such parameters exist. Consequently, 
Mexico considers that the investigating authorities have a measure of discretion to reach this 
determination on a case-by-case basis.  WT/DS473/R/Add.1 
 
- D-21 - 
 
  ANNEX D-6 
EXECUTIVE SUMMARY OF THIRD-PARTY  
ARGUMENTS OF NORWAY 
1. Norway welcomes this opportunity to present its views on the issues raised in these panel 
proceedings. We will not comment upon all the issues raised by the Parties. Rather, we will confine 
ourselves to offer some views on the interpretation  of the first sentence of Article 2.2.1.1 of the 
Anti-Dumping Agreement. 
 
2. As we know, the first sentence provides that:   
[f]or the purposes of paragraph 2, costs sha ll normally be calculated on the basis of 
records kept by the exporter or producer under investigation, provided that such 
records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and 
sale of the product under consideration. 
3. The parties disagree, amongst others, on whether Article 2.2.1.1 allows the "investigating 
authorities to reject or adjust costs of certain inputs used in the production of the product under 
consideration because the prices of these inputs in their domestic market are found to be 
'abnormally or artificially low'".
1 
 4. A legal analysis of a WTO provision starts, of course, with an inquiry into the ordinary 
meaning of the terms. Article 2.2.1.1 uses the word "shall", which indicates that it establishes an 
obligation of some sort. In this case, the word "shall" is qualified by the terms "normally" and "provided that". We understand "normally" in this context to point to the existence of conditions, 
rather than to "alter the characterization of [the] obligation as constituting a 'rule'".
2  
 5. The obligation on the investigating authorities according to Article 2.2.1.1, is subject to 
two cumulative conditions: 
 
i) that the records kept by the exporter or producer are in accordance with the generally 
accepted accounting principles (GAA P) of the exporting country; and  
 
ii) that such records reasonably reflect the costs associated with the production and sale 
of the product under consideration.  
 
6. If these two conditions are fulfilled, the investigating authorities "shall normally" calculate the costs on the basis of records kept by the exporter or producer under investigation.  
 
7. In light of the ordinary meaning of the term s in Article 2.2.1.1, Norway notes that both 
conditions seem to relate to the quality of the records as such. It is the records that must be in accordance with the GAAP, and the records that must "reasonably reflect the costs associated with 
the production and sale of the product under consideration". The European Union, however, argues 
that the second condition should be interpreted to mean that the costs themselves need to be 
reasonable. The European Union submits, amongst others, that "it would be counterintuitive to 
assert that Article 2.2.1.1 […] mandates the invest igating authorities to base their calculations on 
costs that are 'unreasonable'".
3  
 
8. In our view, by asserting this, the European Union is reading into Article 2.2.1.1 words that 
are simply not there. The structure of the first sentence of Article 2.2.1.1 does not suggest an interpretation that the records must reflect costs that are reasonable – or not "abnormally or artificially low". Rather, the structure and the ordinary meaning of the terms suggest that the 
second condition only concerns whether the records in a reasonable way reflects the costs 
associated with the production and sale of the product under consideration.   
                                               
1 Argentina' First Written Submissi on, paras. 87 and 88. See also Argentina's First Written Submission 
para. 195. European Union's First Written Su bmission, for instance, paras. 154 and 254. 
2 See Appellate Body Report, United States – Clove Cigarettes, para. 273. 
3 European Union's First Written Submission, para. 131. WT/DS473/R/Add.1 
 
- D-22 - 
 
  9. Accordingly, Norway is of the opinion that  Article 2.2.1.1 does not allow investigation 
authorities to disregard the records in situations where the authorities find that the costs reflected in the records are "abnormally or artificially low", as long as the two explicitly mentioned conditions are met.  
 
10. This concludes Norway's statement. I thank you for your attention.   WT/DS473/R/Add.1 
 
- D-23 - 
 
  ANNEX D-7 
EXECUTIVE SUMMARY OF TH IRD-PARTY ARGUMENTS  
OF THE RUSSIAN FEDERATION 
Introduction 
 
1. The Russian Federation intervened in this case  because of its systemic interest in the correct 
and consistent interpretation and application of the covered agreements, in particular the 
Anti-Dumping Agreement. The Russian Federation wo uld like to provide its views on: a) the input 
cost adjustment practice used by the European Union in its anti-dumping investigations; b) the legal interpretation of the words "reasonably reflect" in the first sentence of Article 2.2.1.1 of the Anti-Dumping Agreement; c) Article 2.2 of the An ti-Dumping Agreement that requires construction 
of normal value on the basis of costs in the count ry of origin of the product under consideration; 
and d) the concept of "dumping" in the context of the Anti-Dumping Agreement.  
A. The Input Cost Adjustment Practice Us ed by the European Union in Its Anti-
Dumping Investigations 
 
2. The Russian Federation strongly condemns the practice of input cost adjustment and 
considers it to be inconsistent with both the pr ovisions of the WTO agreements and the spirit of 
the WTO in general.   
3. This practice, based on Articles 2(3) and 2(5) of the Basic Regulation
1, is very similar to the 
treatment of non-market economies that the European Union applied in its antidumping procedures to imports from the Russian Federation when it had non-market economy status. As 
Argentina concludes in section 4.1 of its First written submission, the amendments introduced to 
the Basic Regulation in 2002 allow the investigatin g authorities of the European Union to continue 
using non-market economy techniques with respect to countries that have been granted full 
market economy status and even to countries that have always been recognized as market 
economies and have been WTO members. Thus, the European Union has widely expanded the application of the cost adjustment practice, and uses it for protectionist purposes. The present 
case clearly demonstrates this. 
 
4. It is worth noting that the General Court of the European Union has found that the non-market economy techniques which, as it was mentioned, create the same consequences for the 
exporters as the practice of input cost adjustment violate Article 2 of the Anti-Dumping 
Agreement.
2 
 
B. The Legal Interpretation of the Words "Rea sonably Reflect" in Article 2.2.1.1 of the 
Anti-Dumping Agreement 
 5. Based on the ordinary meaning of th e words "reflect" and "reasonably", the 
Russian Federation is of the position that the prop er reading of the phrase "reasonably reflect" in 
the first sentence of Article 2.2.1.1 of the Anti-Dumping Agreement is that records reasonably depict expenses incurred by the producer for the production and sale of the product under 
consideration.  
 6. In Article 2.2.1.1, the word "reasonably" is  attached to the verb "reflect" and not to the 
word "costs". As Argentina correctly concluded, "this sentence does not provide that the records 
must reflect 'reasonable costs' or 'costs which are reasonable in light of prices on other markets'. 
                                               
1 Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped 
imports from countries not members of the European Community (codified version), OJ L 343, 22.12.2009, p. 51 and corrigendum to Council Regulation (EC) No 1225/2009, OJ L 7, 12.1.2010, p. 22 as amended by Regulation (EU) No 765/2012 of the European Parliament and of the Council of 13 June 2012 (OJ L 237, 3.9.2012, p. 1), Regulation (EU) No 1168/2012 of the European Parliament and of the Council 
of 12 December 2012 (OJ L 344, 14.12.2012, p. 1) and Regulation (EU) No 37/2014 of the 
European Parliament and of the Council of 15 January 2014 (OJ L 18, 21.1.2014, p. 1). 
2 Case T-512/09, Rusal Armenal ZAO v Council of the European Union, Judgment of the General Court of 
the European Union of 5 November 2013. WT/DS473/R/Add.1 
 
- D-24 - 
 
  Rather, the issue is only whether the records refl ect the costs associated with the production and 
sale of the product under consideration in a reasonable manner".3  
 7. Moreover, the plain meaning of the term "cost" focuses on what is actually paid, rather than 
on the value or reasonableness of what is paid. Taking into account that Article 2.2.1.1 of the Anti-
Dumping Agreement refers to GAAP, the term "cost" is used in an accounting sense. The focus of the inquiry is on whether the costs are reasonably reflected in the records , and not whether the 
costs per se  were reasonable having regard to some extraneous economic considerations. 
 8. Article 2.2.1.1 of the Anti-Dumping Agr eement does not provide that investigating 
authorities can reject or adjust the costs reasonably reflected in exporter's records on the basis 
that prices for the product under consideration or its inputs are lower in comparison with 
international prices or prices in other markets. If negotiators had agreed on the inclusion of such an option, they would have explicitly described it in the text of this provision. However, the 
drafters have neither mentioned it, nor set any criteria, or defined the circumstances in which 
costs associated with the production and sale of the product concerned accurately reflected in the records of the producer may be considered as not being "reasonable". 
 
9. The interpretation advocated by the Euro pean Union when the prices of certain raw 
materials are considered to be "abnormally or artificially low" in comparison with prices in third countries or international prices not only erodes the comparative advantage of a Member, but is 
discriminatory towards countries which enjoy comparative advantages in different areas. The 
European Union's approach undermines the concept of comparative advantage, which is recognized to be the basis for international trade. Countries should not be discriminated against 
for having a comparative advantage, whether it is the cost of raw materials or labor etc. 
 10. It should be stressed that the Anti-Dumping Agreement does not envisage the use of 
"international prices" in anti-dumping investigations. Prices for inputs are determined in national 
markets depending on local market conditions and may vary considerably. With this in view, the question arises as to in which market prices for inputs are supposed to be chosen as benchmarks (to be considered "at the world level") for comparison with the costs actually incurred by the 
producer/exporter under investigation in order to conclude that they are "reasonable" or not. Even 
prices of commodities that are set at exchanges (for example, the London Metal Exchange) cannot 
be viewed as international prices in the context of  anti-dumping investigations. The use of abstract 
"international prices" as a basis for determination of normal value or export price contradicts both 
the letter and the spirit of the Anti-Dumping Agreement.  
11. Thus, the European Union's interpretation of the term "reasonably reflect" is neither 
supported by the text of Article 2.2.1.1 of the Anti-Dumping Agreement, nor does it reflect the 
intention of the drafters.  
C. Article 2.2 of the Anti-Dumping Agreement Requires Construction of Normal Value 
on the Basis of Costs in the Country of Origin of the Product under Consideration 
 
12. The Russian Federation considers that Articl e 2.2 of the Anti-Dumping Agreement, including 
Article 2.2.1.1, expressly and unambiguously requires that the margin of dumping must be determined by comparison with the cost of production in the country of origin . By providing the 
possibility to determine the cost of production to construct normal value on "information from 
other representative markets", Article 2(5) of the Basic Regulation is in sharp contrast with the requirement of Article 2.2.1.1 of  the Anti-Dumping Agreement. 
 
13. Article 2.2 of the Anti-Dumping Agreement contains a chapeau and several paragraphs. The 
chapeau provides a general rule, and paragraphs describe more specific rules related to the construction of normal value. The connection between the chapeau and other paragraphs is 
explicit, in particular through the numbering and the opening phrases "[f]or the purpose of 
paragraph 2" that appear in Articles 2.2.1.1 an d 2.2.2. This fundamental structure and logic of 
Article 2.2 as a whole indicates that interpretation of its paragraphs should remain within the 
parameters of the chapeau and therefore the source  of information for calculation of normal value 
is the domestic market of the exporting country. 
                                               
3 Argentina’s First Written Submission, para. 104. WT/DS473/R/Add.1 
 
- D-25 - 
 
  14. The support for this interpretation is found, in  particular, in Article 2.2.2 of the Anti-Dumping 
Agreement that describes several ways to determine "the amounts for administrative, selling and general costs and for profits", all of which relate to data in the country of origin .  
 
D. The Сoncept of "dumping" in the Сontext of the Anti-Dumping Agreement 
 15. The Panel should interpret provisions of the Anti-Dumping Agreement in their context, 
including the definition of "dumping" reflected in Article 2.1 of the Anti-Dumping Agreement.
4  
 16. The Appellate Body has confirmed in several cases that the opening phrase of this Article – "For the purpose of this Agreement" – means that th is definition of 'dumping' applies to the entire 
Anti-Dumping Agreement, and is central to the interpretation of other provisions of the 
Agreement.
5 They "relate to a product  because it is the product that is introduced into the 
commerce of another country at less than its normal value in that country".6 
 
17. It follows from the interpretation of the Appellate body that: (1) the definition of "dumping" in Article 2.1 of the Anti-Dumping Agreement must be applied in a coherent fashion, and cannot be 
of variable content or application;
7 (2) the term "dumping" relates to a product , meaning the 
product under consideration as a whole. Moreover, it is the exporter's pricing behaviour that may result in dumping. Thus, the concept of "dumping " in the context of the Anti-Dumping Agreement 
does not deal with the price of the product's inputs. 
 
18. Finally, the Russian Federation supports Argentina's understanding that Article 2.2.1.1 refers to the "costs" which are "associated with the production and sale of the product under 
consideration". Argentina states, inter alia,  that "it shows that this condition deals with the costs 
relating to 'the product  under consideration' and not with the costs of the inputs ".
8  
 
19. As Argentina, the Russian Federation is deeply concerned that the European Union's 
erroneous interpretation of Articles 2.2 and 2.2. 1.1 of the Anti-Dumping Agreement, reflected in 
the measure at issue, results in broadening the circumstances under which WTO Members may apply anti-dumping duties and thus undermines the concept of "dumping" provided for in 
Article 2.1 of the Anti-Dumping Agreement.  
 Conclusion 
 
20. In sum, the legal analysis of Article 2.2 of  the Anti-Dumping Agreement as a whole reveals 
that Article 2.2, including Article 2.2.1.1, does not permit the use of the data of a third country for 
the purpose of calculation of constructed normal va lue. The European Union's interpretation of the 
term "reasonably reflect" is neither supported by the text of Article 2.2.1.1 of the Anti-Dumping 
Agreement, nor does it reflect the intention of the drafters. The European Union's interpretation 
broadens the circumstances under which the WTO Members may apply anti-dumping duties and 
thus undermines the concept of "dumping" provided in Article 2.1 of the Anti-Dumping Agreement. 
In its legal interpretation of Article 2.2.1.1, the Panel should examine the text of this provision in the context of Articles 2.2, 2.2.2 an d 2.1 of the Anti-Dumping Agreement. 
 
                                               
4 Argentina's First Written Submission, paras. 125-126. 
5 Appellate Body Reports, US – Softwood Lumber V , para. 93; US – Corrosion-Resistant Steel Sunset 
Review , paras. 109 and 126; US – Zeroing (Japan) , para. 109; US – Zeroing (Japan) , para. 140. 
6 Appellate Body Report, US – Zeroing (Japan) , para. 109 (emphasis original). 
7 Appellate Body Report, US – Continued Zeroing , para. 280. 
8 Argentina's First Written Submission, para. 103 (emphasis added). WT/DS473/R/Add.1 
 
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  ANNEX D-8 
EXECUTIVE SUMMARY OF TH IRD-PARTY ARGUMENTS  
OF THE KINGDOM OF SAUDI ARABIA 
I. INTRODUCTION 
 
1. The Kingdom of Saudi Arabia focuses its co mments on a number of important systemic 
issues that are central to the dispute relating to  (A) the requirement to ba se the determination of 
costs on the records of the investigated foreign exporter or producers, (B) the requirement to base 
the normal value on the costs in the country of origin rather than on an out-of-country benchmark, (C) the WTO consistency of export duties as a legitimate policy instrument and (D) the need for a proper injury and causation analysis. 
 
II. ANALYSIS  
2. Saudi Arabia considers that the anti-dumping instrument requires Members to examine 
private pricing behaviour of foreign producers in a given set of circumstances. It does not concern the comparison of a foreign producer or exporter's  export price against an undefined international 
reference price or "normal" value that does not reflect the prices or conditions in the producer or 
exporter's country of origin. There is no text ual basis in the Anti-Dumping Agreement for an 
investigating authority to question the reasonableness of input costs simply because these may be lower in the country of origin than in a third country or world market. 
 
A. Recorded Cost Data Reasonably Associa ted With The Production And Sale Of The 
Product Concerned Cannot Be Rejected Ba s e d  O n  A n  A l l e g a t i o n  T h a t  T h e y  A r e  
"Artificially Low" or "Distorted" 
 3. Article 2.1 of the Anti-Dumping Agreement reflects the fundamental principle that a dumping 
determination must be made on the basis of the "comparable price, in the ordinary course of 
trade, for the like product when destined for consumption in the exporting country". Domestic prices can only be disregarded when there are no sales of the like product in the ordinary course of trade or when the sales do not permit a proper  comparison because of the particular market 
situation or the low volume of sales in the dome stic market of the exporting country. Article 2.2 
dictates the alternative bases for determining the normal value in such situations and offers only two options: either the comparable price of the lik e product when exported to an appropriate third 
country, provided that this price is representative or "the cost of production in the country of origin 
plus a reasonable amount for administrative, selling and general costs and for profits".
1 In terms of 
"the cost of production in the country of origin ", Article 2.2.1.1 of the Anti-Dumping Agreement 
imposes an obligation to calculate the costs on th e basis of the records kept by the exporter or 
producer under investigation. The only conditions for using such records are that the records are kept "in accordance with the generally accepted accounting principles of the exporting country" and that the records "reasonably reflect the costs associated with the production and sale of the 
product under consideration". If that is the case, the records of the producer under investigation 
must be used.
2 
 
4. Article 2.2.1.1, first sentence, thus reflects the producer-specific and country-specific nature 
of the anti-dumping instrument which is only concerned with examining the private pricing behaviour of producers based on their recorded costs actually incurred in association with the 
production and sale of the product under considerat ion. The second part of the first sentence of 
Article 2.2.1.1 provides the exceptional circumstances under which the general rule does not apply. First, if the records are not kept in a ccordance with the generally accepted accounting 
principles of the exporting country, there is no re quirement to use them. This is another reflection 
of the country-specific nature of the anti-dumping instrument. Second, if the records in question 
do not "reasonably reflect" the costs "associated with the production and sale of the product under consideration," the recorded costs do not have to be used either. This condition goes to the 
relationship between the recorded costs and the production and sale of the product under 
consideration, and not of a different or larger group of products.  
                                               
1 See Article 2.2 of the Anti-Dumping Agreement. 
2 See Article 2.2.1.1 of the Anti-Dumping Agreement. WT/DS473/R/Add.1 
 
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  5. The analysis may consider which costs are sufficiently associated with the production and 
sale of the product under consideration. So, the "r easonableness" test in Article 2.2.1.1 does not 
allow an investigating authority to question the general "reasonableness" of the costs recorded, such as by comparing them to costs of producers in other countries or to an international 
reference price. It merely concerns the association of the recorded costs with the product under 
consideration as compared with other products of the exporter to which certain costs may also be associated. 
 
6. Saudi Arabia is of the view that the text of Article 2.2.1.1, when read in its ordinary meaning 
and in the context of Articles 2.1 and 2.2 of the Anti-Dumping Agreement, confirms that an 
investigating authority is not allowed to adjust, let alone reject, the cost data of foreign producers 
and exporters merely because it considers those costs to be "artificially low" when compared to an 
international benchmark or otherwise "distorted". In EC – Salmon (Norway), the panel noted that 
"the test for determining whether a cost can be used in the calculation of 'cost of production' is 
whether it is 'associated with the production and sale' of the like product".
3 Similarly, in US – 
Softwood Lumber V , the panel noted that there is no textual basis in Article 2.2.1.1 to conclude 
that for the "requirements of Article 2.2.1.1 to be met, it is necessary that the [costs] reflect the 
market value of those [costs]," and that to accept the "argument that Article 2.2.1.1 requires an 
investigating authority to ensure that the [cost] reasonably reflects the market value 'would require us to read into the text words which are simply not there'".
4 This interpretation is also 
supported by the object and purpose of the Anti-Dumping Agreement which, among others, is to 
introduce disciplines on WTO Members when conducting anti-dumping investigations. It allows 
Members to protect their producers from material injury caused by the private pricing behaviour of foreign producers. It is not aimed at preventing  Members from adopting WTO consistent measures 
or undoing Members' comparative advantages by correcting the reported costs of production in 
light of international reference prices and costs different from those actually incurred by the producer that are reasonably associated with the product under consideration. Other multilateral 
or unilateral instruments are available to address measures that are alleged to distort the market 
environment and trade.   7. In sum, the exporter or producer's recorded costs are to be used when constructing the 
normal value as long as the records are kept in accordance with the generally accepted accounting 
principles of the exporting country and as long as the records reflect costs that are reasonably 
associated with the production and sale of the pr oduct concerned. There is no legal basis in the 
Anti-Dumping Agreement that would allow an investigating authority to question the 
reasonableness of the level of the recorded costs or to examine these costs in the light of an 
international reference price. 
 
B. An Investigating Authority Is Not Perm itted To Construct Normal Value On The 
Basis Of A Cost That Is Not The Cost In The Country Of Origin 
 
8. Article 2.2 of the Anti-Dumping Agreement imposes an obligation to calculate the normal 
value on the basis of the costs of production in the country of origin. Saudi Arabia considers that the text of this provision when read in its context is clear and does not allow the imposition of an 
artificial cost of production that reflects an inte rnational reference price. This provision reflects the 
country-specific nature of an anti-dumping investigation that is limited to examining whether the export price is lower than the normal value of the product concerned of the in the country of origin 
from the exporter under investigation. The immediate context of Article 2.2 of the Anti-Dumping 
Agreement confirms this reading that requires "normal value" to be constructed based on in-country data. First, Article 2.2.1.1 requires the use of the recorded costs of the foreign exporter for constructing normal value. Second, Article 2.2.2 co ncerning construction of administrative, selling 
and general costs and profits provides that such amounts shall be linked to the country of origin. 
Therefore, both elements of the constructed norm al value need to be based on information from 
the country under investigation and cannot be established by way of reference to out-of-country 
benchmarks such as international reference prices. Given that the producer's cost of production 
will be the same whether it exports or sells domestically, the level of the costs compared to other markets is simply irrelevant for purposes of the price discrimination question in a dumping 
investigation. 
 
                                               
3 Panel Report, EC – Salmon (Norway) , para. 7.483. 
4 Panel Report  US – Softwood Lumber V , para. 7.321 and footnote 446. WT/DS473/R/Add.1 
 
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  9. Finally, the obligation to consider and accept cost data of exporting producers is also 
relevant for the comparison of the normal value an d the export price under Article 2.4, which sets 
out the general obligation that any comparison has to be "fair" thus connoting "impartiality, even-handedness, or lack of bias".
5 Article 2.4 thus requires that "due allowances" shall be made "for 
differences which affect price comparability". This means that "allowances should not be made for 
differences that do not affect price comparability".6 Accordingly, no adjustments should be made 
when there are no differences in terms of costs of production of the goods whether destined for 
domestic or export sale. In addition, allowances for factors affecting price comparability should 
reflect costs actually incurred by exporting producers. Adjustments that do not reflect actual costs but are rather imposed to adjust the actual cost s in the light of some abstract and theoretical 
"normal cost" benchmark are not appropriate under Article 2.4 and would skew the comparison 
and violate the important obligation of making a "fair comparison". 
 10. In sum, the text of Article 2.2 of the Anti-D umping Agreement, when read in its context and 
in the light of the object and purpose of the Anti-Dumping Agreement, is unequivocal and requires 
that the costs used for constructing normal value are those of the country of origin. An investigating authority is not to impose international reference prices of what they consider the 
costs ought to be in the country of origin and cannot "adjust" costs to reflect such an international 
reference price.  C. Export Duties Are Permitted Under GATT Article XI And Cannot Be Contravened By 
Anti-Dumping Measures 
 11. Saudi Arabia recalls that it is clear from the text of the WTO Agreements, Article XI:1 of the 
GATT 1994, and from the relevant WTO jurisprudence that Members are permitted to maintain 
export duties. In China – Raw Materials, there was consensus among the panel, the 
Appellate Body and the disputing parties that WTO Members have the right under the GATT 1994 
to impose export duties.
7 In the past, proposals were made to ban or strictly discipline the use of 
export duties. However, these proposals did not receive the support of the Membership. In the 
context of accession negotiations, the question of  limiting the use of ex port duties is also 
frequently raised, and sometimes clear commitments have been made. Absent such commitments, 
however, export duties remain a permitted policy instrument, just like import duties. Import 
tariffs, export taxes, and other tariff and non-tariff related regulatory measure together constitute the market environment in which the producer operates. In an anti-dumping investigation, they 
are to be taken as a given. There is no basis for effectively seeking to prevent Members from 
employing a WTO consistent instrument like expo rt duties through the imposition of dumping 
duties. The only "adjustments" that can be made under Article 2.4 relate to the differences 
affecting price comparability. Export duties do not affect this comparison. The anti-dumping 
instrument shall not be used to prevent Govern ments from adopting WTO-consistent measures 
(such as export taxes) or to undo Members' comp arative advantages, simply because it is more 
difficult or impossible to do so under other instruments like the Agreement on Subsidies and 
Countervailing Measures. The anti-dumping instrument permits Members to protect domestic 
industries from the injurious effects of discriminatory pricing practices of foreign exporters and not from differences in market environments. 
 
D. The Requirement To Conduct An Objectiv e Examination Based On Positive Evidence 
Of Injury And Causation 
 
12. Saudi Arabia wishes to underline the importance of a proper injury analysis in preventing abuse of the anti-dumping instrument. If there is no  positive evidence of material injury resulting 
from the dumped imports and if the authority has failed to separate and distinguish the injury 
caused by other factors so as to make sure that it did not attribute such injury to the dumped 
imports, there is no basis for the imposition of anti-dumping measures. The injury analysis in an anti-dumping investigation is not a "tick-the-box exercise" where the authorities merely look at the 
injury factors in Article 3 and make a simple non-attribution analysis. The investigating authorities 
must engage in a critical and searching analysis of the facts on the record and conduct an 
                                               
5Appellate Body Report, US – Softwood Lumber V  (Article 21.5 – Canada),  para. 138 (quoting the 
relevant dictionary meaning of "fair" as "just, unbiased, equitable, impartial; legitimate, in accordance with the 
rules or standards", and "offering an equal chance of success". ( Shorter Oxford English Dictionary , 5th Ed., 
W. R. Trumble and A. Stevenson (eds.) (Oxford University Press, 2002), Vol. I, p. 915)). 
6 Appellate Body Report, US – Zeroing (EC) , para. 156. 
7 Appellate Body Reports, China – Raw Materials, para. 293.  WT/DS473/R/Add.1 
 
- D-29 - 
 
  unbiased and proper evaluation of the facts. It  must make sure to address and analyze "all 
relevant economic factors" and to engage with interested parties on the other factors that are affecting the domestic industry at the same time. If the injury is caused by other factors, there is no basis for imposing anti-dumping duties. It would not be permitted by the text of the Agreement 
and it would not make sense to impose a trade restriction on foreign producers to address a 
problem not caused by these producers. Consumers would pay the price for an unlawful and ineffective measure. The causation analysis is thus a particularly important part of the 
investigating authority's injury determination. 
 III. CONCLUSION  
13. First, Saudi Arabia considers that a cost determination has to be made on the basis of the 
producer's cost data as reflected in the records of the exporting producer, if such records are kept in accordance with generally accepted accounting principles in the exporting country and have not 
been demonstrated to be a manifestly inaccurate reflection of the costs borne by the producer in 
question with respect to the production and sale of the product under consideration. The proviso in Article 2.2.1.1 of the Anti-Dumping Agreement that recorded cost data "reasonably reflect costs" 
does not permit the rejection of the producer's recorded costs simply because the investigation 
authority considers those costs to be "artificially low". Second, Article 2.2 of the Anti-Dumping Agreement imposes a clear obligation to base the normal value on the costs in the country of origin rather than on an out-of-country benchmark such as an international reference price. This is 
in line with the country-specific and producer-specific nature of the anti-dumping investigation. 
Third, export duties are a legitimate policy instrument that is expressly permitted by Article XI:1 of the GATT 1994. This must be taken into consideration when examining the disciplines imposed on 
Members under the Anti-Dumping Agreement. Fourth, if there is no positive evidence of material 
injury resulting from the dumped imports and if the authority has failed to separate and distinguish the injury caused by other factors so as to make sure that it did not attribute such 
injury to the dumped imports, there is no basi s for the imposition of anti-dumping measures. 
  WT/DS473/R/Add.1 
 
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  ANNEX D-9 
EXECUTIVE SUMMARY OF THIRD-PARTY  
ARGUMENTS OF TURKEY 
I. RECORDS KEPT BY PRODUCER/EXPORTERS UNDER ARTICLE 2.2.1.1 OF THE ADA 
 
1. Article 2 is considered to be as one of the cornerstone articles of the ADA which sets comprehensive and detailed rules concerning the components of dumping and how the dumping 
margin should be calculated.  
 2. As dumping is determined through a fair co mparison between the normal value and export 
price, the source and calculation methodology of these two sets of data is at the heart of an ADA-
consistent determination of the dumping margin.  
 3. At this point, Article 2.2.1.1 of the ADA elevat es itself to critical level which designates the 
source of the primary element of the normal value, namely the costs of production and sales of the 
product under consideration.   
4. The Article reads as:  
 
2.2.1.1 For the purpose of paragraph 2, costs shall normally  be calculated on the basis 
of records kept by the exporter or producer under investigation, provided that  such 
records are in accordance with the generally accepted accounting principles of the 
exporting country and reasonably  reflect the costs associated with the production and 
sale of the product under consideration. (emphasis added)   
5. As discussed in the rulings of EC – Salmon
1 and China – Broiler2, Article 2.2.1.1 necessitates 
that, for the purpose of establishing normal value, the investigating authority is normally obliged to use the records kept by the producer or export er if these records are in accordance with the 
generally accepted accounting principles, and reasonably reflect the costs associated with the 
production and sale of the product under consideration (POC). Turkey understands that the drafters of the article presume that the reco rds found in the books of the company should 
"normally" mirror costs associated with the produc tion and sales of POC. The word "normally", in 
this context, indicates that the investigating authority has less room to maneuver if the conditions, 
indicated in the second half of the sentence, are met. The article displays a comprehensible mechanics and necessitates the investigating authority to provide reasoned and adequate 
explanation to deviate from the "rule" and opt into work with the "derogation"
3 if it decides to do 
so.  
6. Confirmed by the latest rulings in the WTO case law, the investigating authority has the 
discretion not to take legal path stipulated in the first part of the sentence and use alternative sources if the records are either inconsistent with the generally accepted accounting principles (GAAP) of the exporting country or do not reasonably reflect the costs associated with the 
production and sale of the product under consideration. As pointed out in the case law the 
conditions of GAAP-consistency and reasonableness  do not overlap in every case and that GAAP-
consistency per se  does not necessarily lead to the conclusion that the records reasonably reflect 
costs of production and sales.
4 To our understanding even if the records of the producers or 
exporters are in line with the GAAP, the invest igating authority may still examine whether the 
records of the exporter or producer reasonably reflect the costs associated with the production and 
sale POC. 
 7. The point to be clarified in Article 2.2.1.1 is the definition of the word " reasonably ". The 
ordinary meaning of " reasonably " encompasses, inter alia, "sufficiently ", "legitimately ", "justly ", 
"suitably " and " fairly".
5 In Turkey's view " reasonableness " is established if there is no implausible 
                                               
1 Panel Report EC – Salmon , para. 7.483.  
2 Panel Report China – Broiler , para. 7.164.  
3 Panel Report China – Broiler , paras. 7.161-164.  
4 Panel Report China – Broiler , para. 7.166.  
5 The Oxford English Dictionary, OED Online, Oxford University Press, accessed 9 January 2015, 
<http://www.oed.com/view/Entry/159074  WT/DS473/R/Add.1 
 
- D-31 - 
 
  discrepancy between records and costs associated wi th the production and sales of the POC and as 
long as these costs and records reflect sufficiently reliable price levels. Under this legal interpretation, Turkey underlines that every case involving the " reasonableness " test should be 
handled on its own merits through the assessment of the peculiarities of the exporting country's 
market.  
 8. In regard to the discussion concerning the contextual margin of the phrase "... [c]osts 
associated with the production and sale of produc t under consideration", Turkey would like to note 
that, Turkey does not share the approach that an expense can only be considered as a "cost", if 
this expense is incurred by the producer/exporter.
6 Depending on the cost recording methodology 
and characteristics of the production and sale of the POC, certain expenses may become subject to 
realization at the end of the financial year. For coherency in their records, companies often set 
benchmark figures reflecting actual realizations of last financial year. Any figure that is above or below of this benchmark is recorded accordingly.  Turkey understands that, disregarding expenses 
that are not incurred may lead to an asymmetry in a comprehensive evaluation of the costs.  
 9. In connection with these discussions, Turkey would also like to briefly comment on the 
second sentence of Article 2.2.1.1. In Turkey's vi ew, this provision does not necessarily compel the 
investigating authority to use cost allocation method of the producer/exporters. The sentence reads as:   
[A]uthorities shall consider all available evidence on the proper allocation of costs, 
including that which is made available by the ex porter or producer in the course of 
investigation provided that such allocations have been historically utilized by the 
exporter or producer, in particular in relation to establishing appropriate amortization 
and depreciation periods and allowances for capital expenditures and other development costs. (emphasis added)   
10. The word " including " indicates that the cost allocation methodology of producer or exporter 
is one of the available evidences that the investig ating authority may resort. There is no indication 
that the investigating authority has to start its evaluation by considering the cost allocation system of producer or exporter. From a different point of view, the drafters of the article formulated a step 
by step approach stipulating that the cost allocati on methods of producer or exporter can be used 
if such allocations have been historically utilized by the producer or exporter particularly concerning amortization, depreciation, capital expe nditures and development costs. Therefore, the 
rule does not require the investigating authority to use the cost allocation methodology of the 
producer or exporter unless the mentioned conditions are met.   
 
                                               
6 Argentina's first written submission, para. 102. WT/DS473/R/Add.1 
 
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  ANNEX D-10 
EXECUTIVE SUMMARY OF THIRD-PARTY  
ARGUMENTS OF THE UNITED STATES 
I. A RGENTINA 'S CLAIMS REGARDING THE INTERPRETATION OF ARTICLE 2 OF THE AD AGREEMENT  
 
A. "As Such" Inconsistency Requires Examination of Whether the Measure 
Necessarily Requires WTO-Inco nsistent Action or Precludes WTO-Consistent Action 
 
1. The United States agrees that a complainant may allege that another Member's legislation or regulation is inconsistent with a covered agreement "as such" or "independently from the application of that legislation in specific instances". To prove an "as such" claim, the complainant 
must demonstrate that the identified measure requires the responding party to act in a WTO-
inconsistent manner or precludes that party from acting in a WTO consistent manner. In this context, the EU emphasizes the express discretion  of the investigating authorities under 
Article 2(5) of the Basic Regulation to adjust costs. In particular, the European Union observes 
that: (i) text of paragraph one of Article 2(5) does not require  that investigating authorities depart 
from exporter or producer cost data, and (ii) the "rest of the evidence" ( e.g., judgments of the 
General Court of the European Union and determinations in other investigations) does not 
demonstrate that the investigating authorities are mandated  to act in a particular manner.  
 2. The United States considers the Appellate Body's recent analysis in US – Carbon 
Steel (India)  informative. The Appellate Body report in US – Carbon Steel (India)  reviewed 
whether the text of the measure "reveals its discretionary nature," or identifies "elements requiring an investigating authority to engage in conduct inconsistent with" the relevant 
WTO agreement. The Appellate Body ultimately co ncluded that these materials did not "establish 
conclusively that the measure requires an investigating authority to consistently" act contrary to the relevant WTO obligation.  
 
B. The Panel's Analysis of Article 2.2.1.1 of the AD Agreement Should Be Informed by 
the Text and Context of the AD Agreement 
 
3. Both Argentina's "as such" and "as applied" claims are dependent on the interpretation and 
meaning of Article 2.2.1.1 of the AD Agreement. As explained below, the United States considers 
that Article 2.2.1.1 requires an investigating authority to "normally" rely on producers' or 
exporters' books and records, but, as permitted by the text of the provision, the authority may 
look beyond these records in limited circumstances.  
1. Investigating Authorities Shall Normally  Calculate Costs on the Basis of Records 
Kept by Producers or Exporters 
 4. As a preliminary matter, the United States considers that Article 2.2.1.1 requires an 
investigating authority to normally calculate costs on the basis of records kept by an exporter's or 
producer's books, provided that (i) the books and records are in accordance with the GAAP of the 
exporting country, and (ii) reasonably reflect the costs associated with the production and sale of 
the product under consideration. This view was adopted by panel in China – Broiler Products . Thus, 
in situations where books and records are kept in accordance with GAAP and reasonably reflect the costs associated with the production and sale of the product under consideration, the investigating 
authority is normally obligated to use those records pursuant to Article 2.2.1.1.  
 5. The qualification to the obligation in Article 2.2.1.1 is reinforced by the use of the term "normally," which is defined as "in the usual way" or "as a rule". Thus, the term "normally" in 
conjunction with the two conditions ("provided th at") in Article 2.2.1.1 indicates that use of a 
producer's or exporter's books or records is no t necessary in every case and the investigating 
authority has the ability to consider other available evidence in limited instances. To that end, as 
the China – Broiler Products  panel report noted, if the investigating authority finds that the books 
and records do not meet the stated conditions, the authority is "bound to explain why it departed from the norm and declined to use a respondent's books and records". WT/DS473/R/Add.1 
 
- D-33 - 
 
  2. Article 2.2.1.1: "Costs" 
 6. With respect to the interpretation of the second condition, "reasonably reflect the costs associated with the production and sale of the pr oduct under consideration," the parties attribute a 
number of differing meanings to these terms. Argent ina fails to explain how the use of "costs" over 
an analogous term, like "prices," implies that "costs " must then refer exclusively to the "charges or 
expenses that have been actually incurred by producer". Moreover, the panel in EC – Salmon 
(Norway)  did not find any meaningful distinction be tween "costs" and "prices" when it defined 
"cost of production" as the "price to be paid for the act of producing". In the context of Article 2, 
the United States considers the difference between "cost" and "price" to be a matter of perspective, and not one of substance.  
 
7. Argentina's argument that "costs" relates only to expenses "actually" incurred by producers is undermined by adjacent text in Article 2. The drafters of the AD Agreement chose to utilize an 
express limitation – to amounts actually incurred by the producer – elsewhere in Article 2. For 
instance, Article 2.2.2(i) references "the actual amounts incurred and realized by the exporter or 
producer in question." Further, Articles 2.2.2(i) and 2.2.2(ii) both pertain to the determination of 
"general costs". According to Argentina, the term "costs" is inherently specific to expenses 
"actually incurred by the producer". Argentina's interpretation would therefore render superfluous the "actually incurred and realized" by the "exporter or producer" language utilized in Articles 2.2.2(i) and 2.2.2(ii).  
 
8. For these reasons, the United States does not consider the use of the term "costs" in the context of Article 2.2.1.1 to be indicative of a limitation with respect to the "actual amount 
incurred" as reflected by the producer's own books and records. 
 3. Article 2.2.1.1: "Reasonab ly" in Relation to "Costs" 
 
9. In Argentina's view, Article 2.2.1.1 requires the use of an exporter's or producer's records 
whenever that exporter or producer transposes, within reason, its actual expenses to its records. Argentina's argument is contrary to the ordinary meaning of Article 2.2.1.1. The plain language 
provides that the "costs" used for the calculatin g normal value shall "normally" be based on the 
exporter's or producer's records, but that the costs need not be used if they do not reasonably reflect the costs associated with the production and sale of the product under consideration. The 
panel report in Egypt – Rebar  supports this interpretation. 
 10. Argentina's argument also would seem to render redundant the first and second conditions 
in Article 2.2.1.1. Specifically, the first condition of Article 2.2.1.1 permits costs to be rejected 
based on books and records not in accordan ce with GAAP. However, under Argentina's 
interpretation, the second condition would establish yet another requirement that producer records faithfully reflect the costs incurred by producers. Although GAAP may serve as an indicia that costs 
are reasonable, because accounting principles typically ensure costs are properly sourced and 
recorded, this may not in all instances be sufficient. Further, the United States does not understand Article 2.2.1.1 to solely refer to "cost allocation" issues. The first sentence of 
Article 2.2.1.1 refers to costs "calculated", rather than "allocated". That "allocated" is explicitly 
mentioned elsewhere in the text, but not in the fi rst sentence of 2.2.1.1, contradicts Argentina's 
argument.  
 
11. When read together with other terms in Articl e 2.2.1.1 – and in particular "reflect the costs 
associated with" – the term "reasonably" can be understood to establish a substantive reasonableness standard for the costs reflected in the producer's or exporter's records. The 
United States notes that the language of Article 2.2.1.1 leaves open what costs may be 
"unreasonable" such that the records do not reasonably reflect the costs associated with the production and sale of the product. The panel reports in China – Broiler Products  and US – 
Softwood Lumber V  do not provide further guidance on this issue. Further, in US – Softwood 
Lumber V  the panel found that Article 2.2.1.1 did not obligate  the investigating authority to reject 
unreasonable costs, or to use producer cost data , as reflected in their books and records, if 
demonstrated to be unreasonable. In fact, the panel noted that "Article 2.2.1.1 does not require 
that any particular methodology be used by an investigating authority to assess whether records 'reasonably reflect the costs associated with the production and sale of the product under consideration'".  
 WT/DS473/R/Add.1 
 
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  12. As demonstrated by US - Softwood Lumber V , it is clear that, on an individual-respondent 
basis, adjustments are permitted to account for "unreasonable" costs, the recordation of which nonetheless complies with GAAP. For instance, in puts purchased from a related or affiliated 
supplier that do not reasonably reflect a respondent's costs may require an adjustment to the cost 
as recorded in the exporter or producer's books and records. This adjustment – to ensure that the 
data reasonably reflect the costs associated with production or sale of the product – is typically based on record evidence including sales to the first non-affiliated party, costs incurred by other 
exporters or producers, or other evidence of the appropriate costs.  
 13. The United States further notes that the co ntext provided by the language of Article 2.2 
supports the understanding that market conditions may lead to records reflecting "unreasonable" 
costs. Article 2.2 provides that where there exis ts a "low volume of the sales in the domestic 
market of the exporting country" or a "particular market situation," sales in the domestic market 
do not permit a proper comparison. The text of Article 2.2 therefore contemplates circumstances 
where some peculiarity, structure, distortion, or other occurrence of the domestic market makes a 
direct comparison to home market prices impossible.   
14. The United States understands Article 2.2.1.1 to permit investigating authorities to consider 
whether a particular cost is unreasonable, and whether it may be adjusted, so long as the investigating authority sufficiently explains its determination.   
4. Article 2.2.1.1: "Associated with the Pr oduction and Sale of the Product Under 
Consideration" 
 
15. Finally, it is revealing that, rather than modify "reasonably reflects costs" with the phrases 
"actually incurred" or "by the exporter or producer in question," Article 2.2.1.1 references costs "associated with  the production and sale of the product under consideration". The term "associated 
with" suggests a more general connection between the relevant costs and the production or sale of 
the product. Further, the use of the term "associ ated with" conveys a conception of costs more 
general than just those borne by the specific respondent.   
16. Prior panel reports support this view. For instance in Egypt – Rebar , the panel described the 
analysis of "costs associated with the production and sale of the product under consideration" as "hing[ing] on whether a particular cost element does or does not pertain, in that investigation, to 
the production and sale of the product in question in that case ". The second condition of the first 
sentence of Article 2.2.1.1 is not simply a reform ulation of the requirement that records be GAAP 
compliant. Specifically, the United States understan ds that Article 2.2.1.1 does not require the use 
of a particular respondent's records where the costs documented in those records are determined 
to be "unreasonable" or otherwise unrelated to the production of the product under review. While the United States takes no position on the facts underlying this dispute, it does consider there to be a range of reasons related to individual respondents, as well as larger market conditions, which 
may render particular costs to be unreasonable. Pursuant to Article 2 of the AD Agreement, with 
adequate supporting record evidence and explanation regarding its departure from the exporter or producer's records, an investigating authority may address that cost when determining a 
reasonable normal value.  
 C. Article 2.4 of the AD Agreement Addres ses Issues of Price Comparability and Not 
the Proper Determination of Normal Value 
 17. Argentina argues that the EU did not establish the existence of a margin of dumping for the respondents on the basis of a fair comparison between the export price and the normal value. 
Argentina's claim under Article 2.4 is intended to  address the "clear difference between normal 
value and export price". The United States consider s the issue of the calculation of a proper normal 
value a matter for claims under Article 2.2.1.1, while issues related to the comparison between 
normal value and export prices should be considered under Article 2.4.  
 18. It is clear that Article 2.4 obligates an investigating authority to make a "fair comparison" 
between the export price and the normal value when determining the existence of dumping and 
calculating a dumping margin. However, the text of Article 2.4 presupposes that the appropriate normal value has been identified. The United States  in this context agrees in principle with both 
complainant and respondent, that the use of constructed normal value does not preclude the need 
for due allowances or adjustments where necessary. However, the United States submits that the WT/DS473/R/Add.1 
 
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  Panel should consider: first, whether there is a relevant difference between the constructed value 
and the export value, and second, whether such a difference has an effect on "price comparability".  
E
XECUTIVE SUMMARY OF U.S.  THIRD PARTY ORAL STATEMENT  
 
I. D ISCUSSION OF EXAMINATION OF ARTICLE 2.2.1.1  OF THE AD AGREEMENT  
 
A. Interpretive Approach to the "Rea sonably Reflects the Costs" Analysis 
 19. The United States would like to highlight its concerns with the interpretive approach to 
Article 2.2.1.1's "reasonably reflect" clause sugges ted by Argentina and some of the third parties. 
Nothing in the text of Article 2.2.1.1 limits th e various possible rationales or reasons why, in 
exceptional circumstances and when warranted by record evidence, an investigating authority may 
find that the costs set out in a producer's or exporter's records do not reasonably reflect the costs 
associated with the production and sale of the product under consideration. Thus, the United States understands that the proper way to apply the "reasonably reflect" clause – and 
indeed the only way consistent with the text of the provision – is to examine, on a case-by-case 
basis, the rationale provided by an administering authority when it makes a determination that the costs set out in the records of the producer or exporter do not reasonably reflect the costs associated with production and sale. 
 
20. In contrast, Argentina and some of the third parties to this dispute are advocating the position that Article 2.2.1.1 must be interpreted to include various proposed a priori  limitations. 
That is, regardless of any record evidence that may demonstrate that a producer's records do not 
reflect costs associated with production and sale, and prior to any finding by an investigating authority, Argentina suggests Article 2.2.1.1 im poses certain limitations on the investigating 
authority's analysis. In the following paragraphs, the United States will examine some of these 
proposed a priori  limitations, and explain how they ca nnot be supported under the rules of 
interpretation applicable to the WTO Agreement.   
21. First, Argentina argues that the text of Arti cle 2.2.1.1 restricts the investigating authority's 
"reasonably reflect" analysis to the books of the ex porter or producer directly involved in the anti-
dumping investigation. That is, the analysis is limited to expenses that have been "actually 
incurred by the producer". This argument, however, has no basis in the text of Article 2.2.1.1. The 
language "associated with" in the "reasonably reflects" clause similarly implies a less rigid connection between the relevant costs and the parties to the investigation than suggested by 
Argentina and several third parties.  
 22. Further, the AD Agreement also refutes th e proposed interpretation that a "reasonably 
reflect" determination must be based only on information related to the specific producer or 
exporter responding to the anti-dumping investigation. For instance, the GAAP of each 
WTO Member is a factual matter, to be determined based on information that is necessarily exogenous to a producer's or exporter's records.  
 
23. In addition to the context provided by Article 2.2.1.1, other text in Article 2 is contrary to Argentina's proposed interpretation. Given the express directions as to "actual data" in 
Article 2.2.2 and its proximity to Article 2.2.1.1, it is difficult to conclude that the drafters intended 
to include the a priori  limitation in Article 2.2.1.1 that Argentina suggests. The United States also 
notes that although, in this particular dispute, the exporting Member is arguing against the use of 
the "reasonably reflect" clause, this may not be the case in every dispute. As was the case in US – 
Softwood Lumber V , there may well be circumstances in which an exporter or producer would 
argue against the use of its own books and records an d in favour of an alternative source of cost 
information.  
 
24. For all these reasons, a proposal to limit the information examined in a "reasonably reflect" determination cannot be supported. Neither the text of Article 2.2.1.1, nor context provided by 
other provisions of the AD Agreement, require an investigating authority to ignore any type of 
potentially relevant evidence.   25. Second and more broadly, it has been sugge sted that "dumping" relates exclusively to the 
behaviour of the exporter or producer, and it is a priori  inappropriate to consider information not WT/DS473/R/Add.1 
 
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  directly related to the exporter's or producer's conduct. However, Article 2.2 of the AD Agreement 
refers to the existence of a "particular market situation" where sales in the domestic market do not permit a proper comparison. That a factor external to a specific exporter or producer – the particular market situation – governs normal value directly refutes the proposition that, as a 
number of third parties contends, dumping relates ex clusively to the behaviour of the exporter or 
producer. Additionally, recorded costs related to inputs purchased from related corporate 
enterprises are regularly viewed as potentially unreasonable. 
 
B. Relation to other WTO Agreements  26. It has been suggested in this dispute that because the issue of recorded costs that do not 
"reasonably reflect" the cost of producing the product under investigation might also be 
addressable under other covered agreements (such as the Agreement on Subsidies and Countervailing Measures), the AD Agreement therefore does not permit departure from such 
recorded costs when calculating normal value. However, the fact that one covered agreement 
could, in theory, address a given practice does not mean that the other covered agreements cannot do so as well. Indeed, the WTO Agreement contains many instances of overlapping 
obligations. To the extent this argument is intended as a reference to the "double-counting" issue 
addressed in US – Anti-Dumping and Countervailing Duties (China) , the reference in fact 
undercuts the argument for an a priori  limitation with respect to finding recorded costs to be 
unreasonable.  
 
C. Relevance of "Input Dumping" Discussions  
27. Finally, the United States does not agree that certain pre-Uruguay Round discussions of 
"input dumping" – a term never used in the AD Agreement – is in any way relevant to the factors that may be examined in making a "reasonably reflect" determination under Article 2.2.1.1. "Input 
dumping" pertains to the narrow issue of whether materials or components used in manufacturing 
an exported product are purchased at dumped or below cost prices. Conversely, this dispute centers on the broader issue of whether investigating authorities must a priori  limit the factors 
examined in deciding whether recorded costs reasonably reflect the associated cost of production 
and sale of the product. 
 
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