WT/DS437/R/Add.1  
 
14 July 2014  
(14-3949)  Page: 1/171  
  Original: English  
 
  
UNITED STATES – COUNTERVAILING DUTY MEASURES  
ON CERTAIN PRODUCTS FROM CHINA 
REPORT OF THE PANEL 
Addendum 
This addendum  contains Annexes A to H to the Report of the Panel to be found in document 
WT/DS437/R. 
  
_______________ 
 
  
 
 WT/DS437/R/Add.1 
 
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  LIST OF ANNEXES 
 
ANNEX A 
REQUEST FOR A PRELIMINARY RULING 
PARTIES AND THIRD PARTIES SUBMISSIONS OR 
EXCECUTIVE SUMMARIES THEREOF 
Contents Page 
Annex A-1 Executive Summary of the Request of the United States for a Preliminary 
Ruling A-2 
Annex A-2 Executive Summary of the Response of China to the United States Request for 
a Preliminary Ruling A-9 
Annex A-3 Comments of the United States on China's Response to the United States 
Preliminary Ruling Request A-12 
Annex A-4 Comments of China on the United States Request for a Preliminary Ruling A-19 
Annex A-5 Third Party Comments of Brazil on the United States Request for a Preliminary 
Ruling A-24 
Annex A-6 Executive Summary of Third Party Comments of the European Union on the 
United States Request for a Preliminary Ruling A-28 
Annex A-7 Response of the United States to Third Party Comments on the United States 
request for a Preliminary Ruling  A-33 
Annex A-8 Communication from the Panel - Preliminary Ruling (WT/DS437/4)  A-34 
ANNEX B 
EXECUTIVE SUMMARIES OF  THE FIRST WRITTEN  
SUBMISSIONS OF THE PARTIES 
Contents Page 
Annex B-1 Executive Summary of the First Written Submission of China B-2 
Annex B-2 Executive Summary of the First Written Submission of the United States B-9 
ANNEX C 
THIRD PARTIES WRITTEN SUBMISSIONS OR  
EXECUTIVE SUMMARIES THEREOF 
Contents Page 
Annex C-1 Third Party Written Submission of Australia C-2 
Annex C-2 Executive Summary of the Third Party Written Submission of Brazil C-5 
Annex C-3 Executive Summary of the Third Party Written Submissi on of Canada C-6 
Annex C-4 Executive Summary of the Third Party Written Submission of the 
European Union C-9 
Annex C-5 Third Party Written Submission of Norway C-14 
Annex C-6 Executive Summary of the Third Party Written Submission of the 
Kingdom of Saudi Arabia C-20 WT/DS437/R/Add.1 
 
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  ANNEX D 
ORAL STATEMENTS OR EXECUT IVE SUMMARIES THEREOF OF 
THE PARTIES AT THE FIRS T SUBSTANTIVE MEETING 
Contents Page 
Annex D-1 Executive Summary of the Opening Statement of China at the First Meeting of 
the Panel D-2 
Annex D-2 Opening Statement of the United States at the First Meeting of the Panel D-7 
Annex D-3 Closing Statement of the United States at the First Meeting of the Panel D-14 
ANNEX E 
THIRD PARTIES ORAL STATEMENTS AT  
THE FIRST MEETING OF THE PANEL 
Contents Page 
Annex E-1 Third Party Oral Statement of Aust ralia at the First Meeting of the Panel E-2 
Annex E-2 Third Party Oral Statement of Brazil at the First Meeting of the Panel E-4 
Annex E-3 Third Party Oral Statement of Cana da at the First Meeting of the Panel E-6 
Annex E-4 Third Party Oral Statement of India at the First Meeting of the Panel E-9 
Annex E-5 Third Party Oral Statement of Japan at the First Meeting of the Panel E-13 
Annex E-6 Third Party Oral Statement of Korea at the First Meeting of the Panel E-15 
Annex E-7 Third Party Oral Statement of Norw ay at the First Meeting of the Panel E-17 
Annex E-8 Third Party Oral Statement of the Kingdom of Saudi Arabia at the First Meeting 
of the Panel E-19 
Annex E-9 Third Party Oral Statement of Turk ey at the First Meeting of the Panel E-22 
ANNEX F 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN  
SUBMISSIONS OF THE PARTIES 
Contents Page 
Annex F-1 Executive Summary of the Second Written Submission of China F-2 
Annex F-2 Executive Summary of the Second Written Submission of the United States F-11 
ANNEX G 
ORAL STATEMENTS OR EXECUT IVE SUMMARIES THEREOF OF 
THE PARTIES AT THE SECO ND SUBSTANTIVE MEETING 
Contents Page 
Annex G-1 Executive Summary of the Opening Stat ement of the United States at the 
Second Meeting of the Panel G-2 
Annex G-2 Executive Summary of the Opening Statement of China at the Second Meeting 
of the Panel G-12 
Annex G-3 Closing Statement of the United States at the Second Meeting of the Panel G-19 
ANNEX H 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex H-1 Working Procedures of the Panel H-2 
 WT/DS437/R/Add.1 
 
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  ANNEX A 
REQUEST FOR A PRELIMINARY RULING 
PARTIES AND THIRD PARTIES SUBMISSIONS OR 
EXCECUTIVE SUMMARIES THEREOF 
Contents Page 
Annex A-1 Executive Summary of the Request of the United States for a Preliminary 
Ruling A-2 
Annex A-2 Executive Summary of the Response of China to the United States Request for 
a Preliminary Ruling A-9 
Annex A-3 Comments of the United States on China's Response to the United States 
Preliminary Ruling Request A-12 
Annex A-4 Comments of China on the United States Request for a Preliminary Ruling A-19 
Annex A-5 Third Party Comments of Brazil on the United States Request for a Preliminary 
Ruling A-24 
Annex A-6 Executive Summary of Third Party Comments of the European Union on the 
United States Request for a Preliminary Ruling A-28 
Annex A-7 Response of the United States to Third Party Comments on the United States 
request for a Preliminary Ruling  A-33 
Annex A-8 Communication from the Panel - Preliminary Ruling (WT/DS437/4)  A-34 
 WT/DS437/R/Add.1 
 
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  ANNEX A-1 
EXECUTIVE SUMMARY OF THE REQU EST OF THE UNITED STATES  
FOR A PRELIMINARY RULING  
I. Introduction 
 
1. The dispute outlined in China's panel request is one of the most extensive in the history of the World Trade Organization.  China's request challenges the WTO-consistency of various aspects 
of 22 separate subsidy investigations, including 18 "public body" determinations; 
18 determinations that the provision of inputs for less than adequate remuneration were specific; 18 determinations that subsidies conferred a benefit, as well as the investigating authority's calculation of that benefit; eight determinations that the provision of land and land-use rights for 
less than adequate remuneration were specific; and two determinations that export restraints 
provided a financial contribution.  The panel request also presents 26 claims related to certain aspects of the initiation of investigations into particular subsidies.   
 
2. In addition to all of these claims, China's panel request makes the general allegation that "each instance" of the investigating authority's use of facts available "to support its findings of 
financial contribution, specificity, and benefit in the investigations and determinations" across the 
22 covered investigations breached the obligation under Article 12.7 of the Agreement on 
Subsidies and Countervailing Measures ("SCM Agreement").
1  This allegation is so broad and so 
vague as to fall well short of the requirement under DSU Article 6.2 that the panel request state 
the problem clearly.   
 3. The 22 investigations involve over 50 indi vidual respondents, approximately 650 different 
subsidies, and potentially hundreds of separate applications of facts available in relation to 
contribution, specificity and benefit.  China's description of its challenge as one based on "each instance in which the [investigating authority] used facts available" fails to indicate what are those 
instances China considers to be uses of facts available and which of the potentially hundreds of 
applications of facts available are of concern for purposes of the dispute.  As a result, the Panel 
and the United States have no meaningful notice of China's facts available claims and no basis to discern the scope of the problem China wishes to pr esent.  Further, the United States cannot even 
begin to prepare a defense with respect to thes e claims.  In these circumstances, the United 
States hereby requests that the Panel find at the outset of this dispute that China's facts available claims are so vague as to fail to meet the requirement in Article 6.2 of the DSU that a panel 
request must "present the problem clearly."  As the Appellate Body recently explained in China – 
Raw Materials , if a panel request fails to provide a panel and the respondent the basis on which "to 
determine with sufficient clarity what 'problem' or 'problems' were alleged to have been caused by 
which measures," the claimant has "failed to present the legal basis for [the] complaint[] with 
sufficient clarity to comply with Article 6.2 of the DSU."
2 
 4. Furthermore, in these circumstances, it is appropriate that this issue be dealt with as a 
preliminary matter.  As the Appellate Body found in China – Raw Materials ,
3 it is most appropriate 
for a panel to address the defects in a request at the outset of the dispute in sufficient time for the respondent to know the case to which it must reply and for the complaining party to determine 
what steps it may wish to take in response.   
 II. Overview of Article 6.2 of the DSU  
 
A. General Requirements of Article 6.2 of the DSU  
 5. Article 6.2 of the DSU provides the following, in relevant part: 
 
                                               
1 Request for the Establishment of a Panel by China at note 1, WT/DS437/2, circulated 21 August 2012 
(“Panel Request”). 
2 China – Raw Materials  (AB), para. 231. 
3 Id. at para. 233. WT/DS437/R/Add.1 
 
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  The request for the establishment of a panel shall be made in writing.  It shall indicate 
whether consultations were held, identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. 
6. The Appellate Body has observed that Articl e 6.2 of the DSU "serves a pivotal function in 
WTO dispute settlement and sets out two key requirements that a complainant must satisfy in its panel request"
4 – the requirement to identify the specific  measures at issue" and the requirement 
to "provide a brief summary of the legal basis of the complaint sufficient to present the problem 
clearly."  The Appellate Body has repeatedly ob served that these elements serve two purposes, 
namely: (i) "they form the basis for the terms of reference of panels" and (ii) "they ensure  due 
process  by informing the respondent and third participants of the matter brought before a panel."5 
 
7. First, the identification of the specific meas ures at issue and the brief summary of the legal 
basis of the complaint sufficient to present the problem clearly "comprise the 'matter referred to 
the DSB,' which forms the basis for a panel's term s of references under Article 7.1 of the DSU."6  
As a result, "[f]ulfillment of these requirements is not a mere formality."  Rather, "if either of them is not properly identified, the matter would not be within the panel's terms of reference."
7  Panels 
"are inhibited from addressing legal claims falling outside their terms of reference."8  Further, "a 
defective panel request may impair a panel's ability to perform its adjudicative function within the strict timeframes contemplated in the DSU and, thus, may have implications for the prompt settlement of a dispute in accordance with Article 3.3 of the DSU."
9 
 
8. Second, the panel request serves "the due process objective of notifying the parties and 
third parties of the nature of a complainant =s case."10  In particular, Article 6.2 requires that a 
complainant's claims "be specified sufficiently in the request for the establishment of a panel in 
order to allow the defending party and any th ird parties to know the legal basis of the 
complaint."11  Absent compliance with Article 6.2 a defending party may be prejudiced by the lack 
of clarity because it has not been "made aware of  the claims presented by the complaining party, 
sufficient to allow it to defend itself."12  Article 6.2 also serves the important function of notifying 
Members of the matter to be considered by the panel so that Members can make an informed decision as to whether they have a substantial interest in the dispute and therefore would want to 
become third parties. 
 9. For these reasons, "it is incumbent upon a panel to examine the request for the 
establishment of the panel very carefully to ensure its compliance with both the letter and the 
spirit of Article 6.2 of the DSU."
13  Such compliance with Article 6.2 must be "demonstrated on the 
face"14 of the panel request, considering the reques t "as a whole, and in light of the attendant 
circumstances."15  In other words, the examination of the panel request requires a "case-by-case 
analysis"16 considering the context and nature of the dispute.  Further, because a panel request 
must be compliant with Article 6.2 "on its face", any deficiencies cannot be "cured" in subsequent submissions.
17  Rather, where a panel request fails to adequately identify a measure or specify a 
claim, such measure or claim will not form part of a panel's terms of reference.18 
                                               
4 Australia – Apples (AB) , para. 416.  See also China – Raw Materials (AB) , para. 219; EC – Large Civil 
Aircraft (AB) , para 786; US – Carbon Steel (AB) , para. 125. 
5 Id. See also  US – Zeroing (Japan) (Article 21.5 – Japan) (AB) , para. 108; US – Continued Zeroing  
(AB), para. 161; US – Carbon Steel  (AB), para. 126; EC – Bananas III (AB) , para. 142; China – Raw Materials 
(AB), para. 219.  
6 US – Carbon Steel (AB) , para. 125 (citing Guatemala – Cement I (AB) , paras. 69-76).  See also 
China – Raw Materials (AB) , para. 219; US – Continued Zeroing  (AB), para. 160; and US – Zeroing (Japan) 
(Article 21.5 B Japan) (AB) , para. 107. 
7 Australia – Apples (AB) , para. 416. 
8 EC – Hormones (AB) , para. 156.   
9 China – Raw Materials (AB) , para. 220. 
10 US – Carbon Steel (AB) , para. 126 (emphasis in the original).  See also  supra note 5. 
11 EC – Bananas III (AB), para. 143.   
12 Thailand – Steel (AB) , para. 95. 
13 EC – Bananas III  (AB), para. 142. 
14 US – Carbon Steel (AB) , para. 127. 
15 Id. 
16 China – Raw Materials (AB) , para. 220. 
17 US – Carbon Steel (AB) , para. 127. 
18 Id., para 171; Dominican Republic  – Cigarettes (AB) , para. 120. WT/DS437/R/Add.1 
 
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  B. A Panel Request Must Provide a Brie f Summary of the Legal Basis of the 
Complaint Sufficient to Present the Problem Clearly  
 10. As is explained above, "the 'measure' and th e 'claims' made concerning the measure are the 
two distinct components of a panel request which together constitute the 'matter referred to the 
DSB' forming the basis for the panels terms of re ference."  It is clear from the text of the 
provisions that these two components impose somewhat different requirements on complaining 
parties. In particular, a party must "identify" the specific measures at issue; with respect to the 
legal basis of the complaint, a party must "provide a brief summary ... sufficient to present the problem clearly."   
11. The Appellate Body explained, in EC – Selected Customs Matters , how complaining parties 
should address these two key requirements in a panel request:  
The 'specific measure' to be identified in a panel request is the object of the challenge, 
namely, the measure that is alleged to be causing the violation of an obligation contained in a covered agreement.  In other words, the measure at issue is what is 
being challenged by the complaining Member.  In contrast, the legal basis of the 
complaint, namely, the 'claim' pertains to the specific provision of the covered agreement that contains the obligation alleged to be violated.  A brief summary of the legal basis of the complaint required by Article 6.2 of the DSU aims to explain 
succinctly how or why the measure at issue is considered by the complaining Member 
to be violating the WTO obligation in question.  This brief summary must be sufficient to present the problem clearly.
19  
As explained by the Appellate Body, the "legal ba sis" pertains to the provision of the covered 
agreement that is alleged to be violated, and the "brief summary" must address why or how the measure is alleged to violate that provision.  In addition, the brief summary must present the 
problem clearly.    
 12. The Appellate Body in Korea – Dairy  also emphasized the importance of the requirement to 
"present the problem clearly."  The Appellate Body explained that a "claim" under Article 6.2 is "a 
claim that the respondent party has violated, or nu llified or impaired the benefits arising from, an 
identified provision of a particular agreement," while distinguishing it from the " arguments  
adduced by a complaining party to demonstrate that the responding party's measure does indeed 
infringe upon the identified treaty provision."
20  In summary, 
 
Article 6.2 demands only a summary – and it may be a brief one – of the legal basis of 
the complaint; but the summary must, in any event, be one that is 'sufficient to 
present the problem clearly'.  It is not enough , in other words, that 'the legal basis of 
the complaint' is summarily identified; the identification must 'present the problem clearly'.
21 
Whether a party has in fact provided a brief summary that is sufficient requires a case-by-case 
analysis taking into account the context and scope of the panel request.22 
 
III. China's Panel Request Fails to Comply with Article 6.2 of the DSU 
 13. In its panel request, China failed to present the problem clearly with respect to its "facts 
available" claims.  In particular, China's "facts available" claims are so broad and so vague as to 
make it impossible for the Panel or the United States to know what problem China seeks to present.  This makes it impossible for the Panel to understand what matters fall within its terms of reference, or for the United States to even begin preparing its defense.  As a result, China's panel 
request is inconsistent with the requirements of DSU Article 6.2. 
 
                                               
19 EC – Selected Customs Matters  (AB), para. 130.   
20 Korea – Dairy (AB) , para. 139 (emphasis in the original). 
21 Id. para. 120. 
22 See, e.g. , China – Raw Materials (AB) , para. 220. WT/DS437/R/Add.1 
 
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  A. Broad and Indeterminate Scope of the Facts Available Issues Raised in the 
Panel Request 
 14. China identifies the "Specific Measures at Issue" in Section A of the request, as "the 
preliminary and final countervailing duty measures identified in Appendix 1,"
23 which in turn lists 
22 separate countervailing duty investigations conducted by the United States Department of Commerce (USDOC) between 2008 and 2012, as well as 44 Federal Register notices of initiation, 
preliminary determinations and final determinations.  The narrative in Section A provides the 
following further description:  
The measures include the determination by the USDOC to initiate the identified 
countervailing duty investigations, the conduct of those investigations, any 
preliminary or final countervailing duty determinations issued in those investigations, any definitive countervailing duties imposed as a result of those investigations, as well 
as any notices, annexes, decision memoranda, orders, amendments, or other 
instruments issued by the United States in connection with the countervailing duty measures identified in Appendix 1.
24 
15. The panel request describes the "Legal Basis of the Complaint" at Section B, and in 
Subsection B.1, addresses "'As Applied' Claims."25  The introductory paragraph to Subsection B.1 
provides:  
1. China considers that the initiation and conduct of the identified countervailing 
duty investigations, as well as the countervailing duty determinations, orders, and any definitive countervailing duties imposed pursuant thereto, are 
inconsistent, at a minimum, with the obligations of the United States specified 
below.
26 
Subparagraph (d), addressing the use of facts available, states the following:   
 
d. In connection with all of the identified countervailing duty investigations in 
which the USDOC has issued a preliminary or final countervailing duty determination: 
(1)  Article 12.7 of the SCM Agreement, because the USDOC resorted to facts 
available, and used facts available, incl uding so-called "adverse" facts available, 
in manners that were inconsistent with that provision.
10  
_______________________________ 
10 This claim arises in respect of each instance in which the USDOC used facts available , including 
"adverse" facts available, to support its findings of financial contribution, specificity, and benefit in the investigations and determinations identified in Appendix 1.
27  
16. The phrase "all of the identified countervail ing duty investigations" in the introduction to 
subparagraph d refers back to the "measures" that are "identified in Appendix 1", and described in 
the narrative of Section A of the panel request.  In Appendix 1 and the narrative description, China 
identified preliminary countervailing duty determinations, final countervailing duty determinations, notices of initiation, definitive countervailing duty determinations, and virtually any other 
document or notice related to those investigations, as well as the "conduct" of the investigations.   
 17. Thus, the panel request appears to assert th at each "instance" in which the investigating 
authority "used facts available" establishes a breach.  It is not clear what China means by an 
"instance."  Potentially it could mean any of the hundreds of the investigating authority's applications of facts available in support of its findings of financial contribution, specificity, and benefit at any stage of the investigation, wherever made, and whether that determination was 
preliminary or final in nature.  And it is not possible to discern what are those "instances" in which 
                                               
23 Panel Request at 1. 
24 Id. at 2. 
25 Id. 
26 Id. 
27 Id. at 4 (italics added). WT/DS437/R/Add.1 
 
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  China considers the investigating authority "used facts available"; these may or may not 
correspond to what are labeled "facts available" in the investigating authority's investigation.  18. As noted above, the Appellate Body has found that DSU Article 6.2 must be applied on a 
case-by-case basis.  A consideration of the tremendous scope of this dispute is crucial for the 
necessary case-by-case analysis.  The 22 investigations listed above involve over 50 individual respondents, and approximately 650 different subsidies.  In the course of these investigations, the 
investigating authority considered that it applied facts available (of various types) hundreds of 
times.  Yet China's panel request provides no information on what are the "instances" in which it considers facts available to have been used and which applications of facts available are the source of the "problem" (to use the term in Article 6.2) that China seeks to challenge.   
 
19. The case-by-case analysis must also recognize that the individual investigations involved a number of disparate circumstances that warranted various applications of facts available.  For 
example, in dozens of separate cases, the investigating authority applied facts available when 
respondents failed to respond at all to the author ity's questionnaires.  Each of these failures to 
respond in turn resulted in multiple applications of facts available with respect to each of the 
elements of a subsidy – financial contribution, specificity and benefit.  In dozens of other cases, 
the investigating authority applied facts available with respect to individual subsidy programs, or with respect to an element of a program, wher e a respondent – though participating in the 
investigation – failed to respond, or only partiall y responded, to particular questions posed by the 
investigating authority.   
 20. The United States further notes that China's decision to present a panel request with an 
extremely broad scope in relation to the multiple st ages of each proceeding also contributes to the 
panel request's lack of clarity.  In addition to final determinations, the panel request includes within its scope each time facts available were applied in the preliminary determination, or at any 
other stage of the investigation.  This dimension further increases the universe of "instances" of 
facts available that might be a source of the problem claimed by China.     21. Finally, the United States notes yet another source of ambiguity in China's panel request.  
China alleges a breach of Article 12.7 of the SCM Agreement.  This provision contains a number of 
distinct obligations related to facts available.  China's panel request, however, contains no information on which of those obligations the unspe cified "instances" of the use of facts available 
have allegedly breached.
28  The United States does not assert that this lack of clarity, standing 
alone, necessarily renders this or any other panel request deficient.  However, in the context of 
this massive panel request with unspecified challenges to potentially hundreds of uses of facts 
available, this absence of specificity further supports a finding that China has failed to present the 
problem clearly.    
B. China Does Not Provide a Sufficient Summary of Its Complaint or Identify 
What is "At Issue" and Thus Fails to "Present the Problem Clearly" 
 22. As described above, the "facts available" section of China's panel request fails to notify the 
Panel, the United States, and other Members of the nature of the dispute with respect to the 
investigating authority's separate applications of facts available.  The extremely broad scope of China's panel request together with its vague reference to "each instance in which [the 
investigating authority] used facts available" does not clearly present what are the "instances" in 
which China considers facts available to have been used and which applications of facts available are the "problem" which the Panel must examine.  To use the terminology of the Appellate Body in 
the recent Raw Materials dispute, in light of the fact that the panel request does not provide any 
information on which of the uses of facts available – out of the potentially hundreds of uses of 
facts available at various stages of the 22 covered countervailing duty investigations – that China means to challenge, the panel request fails to "plainly connect" the cited WTO obligation 
(Article 12.7 of the SCM Agreement) and the measures listed in the panel request.   
 
                                               
28 For example, the panel request does not specify whether China alleges that: parties who failed to 
respond where not interested Members or interested parties; and/or that those parties did not “refuse access 
to” or otherwise “not provide” inform ation; and/or that the information was not “necessary”; and/or that a 
“reasonable period” of time was not provided; and/or that respondents did not “significantly impede[] the 
investigation.”   WT/DS437/R/Add.1 
 
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  23. The Appellate Body has explained that in order to "present the problem clearly," a panel 
request must "plainly connect the challenged measure(s) with the provision(s) of the covered agreements claimed to have been infringed".
29 The Appellate Body found that this obligation was 
not met in Raw Materials because the panel request at issue did not make it clear "which 
allegations of error pertain[ed] to which particular measure or set of measures identified in the 
panel requests."30  The ambiguity presented in this dispute is analogous to that in Raw Materials .   
 
24. Here, one side of the ledger – the Member's ac tions that are the subject of the challenge – is 
obscured by the fact that China has essentially pointed to nearly every countervailing duty investigation undertaken by the United States wi th respect to China since 2008 that China has not 
previously challenged, including investigations that did not ultimately result in the imposition of 
countervailing duties, and said that Article 12.7 was violated somewhere in the course of those 
investigations.  This description is not sufficient to "plainly connect" the 22 covered investigations with the alleged breach of Article 12.7.  Accordingly, as in Raw Materials,  China has failed to 
comply with the requirement to "provide a brief summary" of its claim "sufficient to present the 
problem clearly", as required by Article 6.2 of the DSU.   
25. China's Panel Request also falls short of th e articulation of the requirement to provide a 
"brief summary" of the legal basis "sufficient to present the problem clearly" given in the reports in EC – Selected Customs Matters  and Korea – Dairy.  As the Appellate Body found in its Customs 
Matters  report , "A brief summary of the legal basis of the complaint required by Article 6.2 of the 
DSU aims to explain succinctly how or why the measure at issue is considered by the complaining 
Member to be violating the WTO obligation in question.  This brief summary must be sufficient to present the problem clearly."
31  Here, by failing to indicate what portions of the various documents 
in the 22 covered investigations are the alleged breach of the facts available obligations in Article 
12.7, China's panel request includes no explanatio n – succinct or otherwise – on how or why these 
measures violate Article 12.7.  Accordingly, the panel request fails to present the problem clearly.   
 
26. China's panel request likewise fails to satisfy the key requirement of Article 6.2 of the DSU to "identify" what is "at issue."  China's panel request does not identify the specific "instances" (the term used in the panel request) of the us e of facts available that are the source of the 
problem raised by China, but rather alludes to what would appear to be hundreds of "instances" 
(depending on what China means by that term) of th e use of facts available.  China then leaves it 
to the Panel, the United States, and other Members to speculate as to which of these instances or 
others China in fact considers to be "at issue."  China knows what instances it considers to be at 
issue, but China declined to identify them.  Thus, by failing to set out what is "at issue", China has obscured what is the problem rather than "present the problem clearly."   
 
27. One of the main purposes of Article 6.2 is  to safeguard the rights of defense of the 
responding party.  As the Appellate Body has stated, "[a] defending party is entitled to know what case it has to answer, and what violations have been alleged so that it can begin preparing its 
defense," as are potential third-parties.
32  For this reason, the requirement of describing the legal 
basis of the complaint with sufficient clarity "is fundamental to ensuring a fair and orderly conduct of dispute settlement proceedings."
33  China's failure to present the problem clearly undermines 
the conduct of this proceeding.  
 28. Article 6.2 also protects the rights of other Members:  both those Members that are 
considering whether to participate as third parties, as well as those Members that have become 
third parties.  As noted above, consideration of each challenge to a use of facts available involves the establishment and analysis of its own set of facts, as well as an identification of the specific obligation in Article 12.7 that is the alleged source  of the breach.  Based on China's panel request, 
however, other Members will have no information on the issues involved until the time that China 
files its first written submission.  For this reason also, China's panel request fails to present the scope and nature of the "problem" concerning facts available that China seeks to raise, and 
therefore does not provide the notice required und er the DSU to permit Members to exercise their 
rights under DSU Article 10.  
                                               
29 US – Oil Country Tubular Goods Sunset Reviews (AB) , para. 162.  See also China – Raw Materials 
(AB), para. 220. 
30 China – Raw Materials (AB) , para. 226. 
31 EC – Selected Customs Matters  (AB), para. 130. 
32 Thailand – H-Beams (AB) , para. 88. 
33 Id. WT/DS437/R/Add.1 
 
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  29. China has brought a broad, far-reaching dispute.  Its panel request challenges a large 
number of countervailing duty investigations, each with a unique fact pattern and procedural history, including with respect to the use of fact s available.  The large scope of the panel request 
does not dilute China's responsibility "to provide a brief summary of the legal basis of the 
complaint sufficient to present the problem clearly, " but rather enhances it.  China has chosen to 
describe its "facts available" allegations in a general and completely vague manner.  While, if accepted, this form of pleading would serve to preserve for China the maximum flexibility to assert 
which actions by the investigating authority were "instances" of using facts available and to select, 
or not select, certain uses of facts available, at the same time it provides no meaningful notice to the United States, to third parties, or to the Panel of the scope of the problem, much less the 
actual issues that will be addressed.  Furthermor e, this form of pleading seriously prejudices the 
United States, which cannot even begin to prepar e a defense for a set of facts available claims 
potentially so large in scope as to eclipse the rest of an already massive dispute.    
IV. The Panel Should Decide Whether Chin a's Panel Request Complies with the 
Requirements of Article 6.2 before the Parties Submit their First Written Submissions 
 
30. The United States respectfully requests th e Panel to make a preliminary ruling (that is, 
before China makes its first written submission) on whether the panel request complies with the requirements of Article 6.2 of the DSU.  A findin g on this Article 6.2 claim will bring necessary 
clarity to the Panel's terms of reference.  And kn owledge of the terms of reference, of course, is 
fundamental to the task of the Panel and to the parties' participation in this proceeding.  Thus, it is important to resolve this claim as a threshold issue. 
 
31. A finding by the Panel at an early stage is also important to avoid serious prejudice to the United States.  Without clarification on this issue, the United States will continue not to know what 
China may consider to be "instances" in which the investigating authority "used" facts available 
and which applications of facts available to review and to prepare to defend.  Further, there is no need to delay a finding in order to obtain further information regarding the compliance of China's panel request with Article 6.2 of the DSU.  As a general matter "compliance with the due process 
objective of Article 6.2 cannot be inferred from a respondent's response to arguments and claims 
found in a complaining party's first written submission,"
34 nor can they be "cured" in subsequent 
submissions.35  Rather, "[i]n every dispute, the panel's terms of reference must be objectively 
determined on the basis of the panel request as it existed at the time of filing."36    
 32. A preliminary finding by the Panel on this request would also serve China's interests.  A 
failure to present a panel request that meets the requirements of DSU Article 6.2 limits the scope 
of the matter within the Panel's jurisdiction.  Ther efore, early resolution of this procedural issue 
would give China clarity on the options available to it and permit China to act according to its interests, knowing the legal consequences of its choice.  
 
V. Conclusion  
 
33. For the reasons cited above, the United States respectfully requests that the Panel find that 
China's "as applied" challenge to "instances" in which the investigating authority's "used facts available" is not within its terms of reference.  In order to save the time and resources of the 
Panel, the Secretariat, and the parties, and to avoid further prejudice to the United States, the 
United States also respectfully requests that the Panel issue its preliminary ruling as soon as possible, and in any event well before China's first submission is due.  
                                               
34 China – Raw Materials (AB) , para. 233. 
35 US – Carbon Steel (AB) , para. 127. 
36 EC – Large Civil Aircraft (AB) , para. 642. WT/DS437/R/Add.1 
 
- A-9 - 
 
  ANNEX A-2 
EXECUTIVE SUMMARY OF THE RESPONSE OF CHINA TO THE UNITED STATES  
REQUEST FOR A PRELIMINARY RULING  
1. The U.S. request for a preliminary ruling is unfounded and should be rejected.  Reduced to 
its essential feature, the U.S. request is based on the proposition that the large number of 
instances in which the United States Department of Commerce (“USDOC”) used facts available in the determinations at issue required China to go beyond the ordinary requirement of connecting 
the challenged measures to the provision of the covered agreements claimed to have been 
infringed.
1  The United States cites no authority for this proposition, and the United States has 
failed to identify any respect in which China’s statement of its claim is inconsistent with the requirements of Article 6.2 of the DSU.  
 
2. The Appellate Body has observed that Arti cle 6.2 of the DSU requires the complaining 
Member to “identify the specific measures at issue” and to “provide a brief summary of the legal 
basis of the complaint sufficient to present the prob lem clearly.”  There is no question that China 
has “identif[ied] the specific measures at issue” as required by Article 6.2.  With respect to the single claim set forth in subsection (d)(1) of China’s panel request, the relevant “specific measures 
at issue” are the nineteen final and three preliminary countervailing duty determinations listed in 
Appendix 1.  3. In order for a complainant’s panel request to “present the problem clearly” within the 
meaning of Article 6.2, the Appellate Body has said that it must “plainly connect the challenged 
measure(s) with the provision(s) of the covered agreements claimed to have been infringed, so 
that the respondent party is aware of the basis fo r the alleged nullification or impairment of the 
complaining party’s benefits.”  
 4. China’s claim under Article 12.7 of the SCM Agreement “plainly connects” the measures at 
issue with the provision of the covered agreements claimed to have been infringed.  It is clear 
from subsection (d)(1) of the panel request that China’s claim under Article 12.7 relates to “each instance” in which the USDOC used “adverse” facts available for the purpose of reaching a finding of financial contribution, specificity, or benefit.  The legal basis of China’s complaint under this 
subsection – i.e., its “claim” – is that each instance in which the USDOC used “adverse” facts 
available for these purposes was inconsistent with  the requirements of Article 12.7.  The United 
States need only identify those instances in wh ich the USDOC used “adverse” facts available for 
the purpose of reaching a finding of financial contribution, specificity, or benefit in the preliminary 
and final countervailing duty determinations listed in Appendix 1, and then read the plain language of subsection (d)(1) to know that China considers each of those instances to be inconsistent with 
Article 12.7.   
 5. In this respect, there is absolutely no reason why the United States cannot “discern” the instances in which the USDOC used “adverse” facts available for the purpose of reaching a finding 
of financial contribution, specificity, or benefit.  The instances in which the USDOC used “adverse” 
facts available in respect of these findings are clearly identified in each I&D memo (in the case of final determinations) and Federal Register notice (in the case of preliminary determinations).   
 
6. It is apparent that the United States’ actual concern in this case relates not to its ability to identify the instances in which the USDOC used “adverse” facts available (which is as simple as 
reading the USDOC’s own I&D memos), but rather to the number of instances  in which the USDOC 
used “adverse” facts available in the determinations at issue.  The U.S. complaint has no basis in law.    
                                               
1 China notes at the outset that although its claim un der subsection (d)(1) of it s panel request refers to 
the instances in which the USDOC “used facts available, including ‘adverse’ facts available”, there are only a 
small number of instances in the determinations at issue in which the USDOC used anything other than “adverse” facts available (or “adverse inferences”) for the purpose of reaching a finding of financial 
contribution, specificity, or benefit.  As demonstrated be low, this fact is apparent on the face of the relevant 
measures under challenge.  For this reason, China will re fer in this submission to the USDOC’s use of “adverse” 
facts available when referring to the USDOC’s use of facts available in su pport of its findings of financial 
contribution, specificity, and benefit. WT/DS437/R/Add.1 
 
- A-10 - 
 
  7. A complaining Member is free to advance a claim in respect of numerous instances of what it 
considers to be the same violation of an identifi ed provision of the covered agreements.  Whether 
the claim involves one instance of a violation or hundreds of instances of the same violation, the complaining Member is required to connect the challenged measures to the provision(s) of the 
covered agreements claimed to have been infringe d.  China has fulfilled that requirement in its 
panel request by indicating that its claim under  Article 12.7 of the SCM Agreement relates to each 
instance in the identified determinations in which the USDOC used “adverse” facts available to 
reach a finding of financial contribution, benefit, or specificity.   
 8. The fact that there are many instances in which the USDOC used “adverse” facts available for these purposes does not detract from the clarity and precision of China’s claim.  “Each” means 
“each”.  China had no “enhance[d]” obligation under Article 6.2 of the DSU to provide page 
citations to, or otherwise specify, the many instances in which the USDOC unlawfully used “adverse” facts available to reach a finding of financial contribution, benefit, or specificity in the 
determinations at issue.  China considers all of these applications of “adverse” facts available to 
have been contrary to Article 12.7 of the SCM Ag reement, and that claim is clearly presented in 
the panel request. 
 
9. The only other assertion that the United States makes in its request for a preliminary ruling is that China’s claim concerning the use of “adverse” facts available is somehow “vague”.  The suggestion, apparently, is that China was required to identify in its panel request the specific 
respects in which the USDOC’s use of “adverse” facts available was inconsistent with Article 12.7.   
 10. The additional information that the United States claims was required in the panel request – 
such as whether China alleges that information was not “necessary”, or that a “reasonable period” 
of time was not provided – would clearly amount to arguments  as to why China considers Article 
12.7 to have been violated.  It is well established that a complainant is not required to present its 
arguments in its panel request.   
 11. One of the more striking features of the U.S. request for a preliminary ruling is its failure to 
identify any prior decision under Article 6.2 of th e DSU that is even remotely analogous to what 
the United States is asking the Panel to find in th is case.  The United States contends that China’s 
claim concerning the use of “adverse” facts available is similar to the provisions of the panel requests at issue in China – Raw Materials , which the Appellate Body found to be deficient under 
Article 6.2 of the DSU.  China’s claim in subsection  (d)(1) of the panel request is nothing at all like 
the provisions of the panel requests at issue in China – Raw Materials.    
 
12. China’s claim is based on only one subparagraph of one provision of the covered 
agreements, Article 12.7 of the SCM Agreement, in contrast to the 13 different treaty provisions 
involved in China – Raw Materials involving a “wide array of dissimilar obligations”.  Similarly, 
while there were 37 disparate measures at issue in China – Raw Materials , ranging from “entire 
codes or charters … to specific administrative measures”, the 22 measures at issue in this case are 
essentially identical in nature – all are preliminary or final countervailing duty determinations issued by a single agency, the USDOC.  Unlike the circumstance in China – Raw Materials , there is 
no uncertainty about how the allegation of error set forth in subsection (d)(1) relates to the 
identified measures.    
13. As China explained in its letter to the Panel dated 18 December, this dispute concerns 
recurring issues of law and legal interpretation that arise in U.S. countervailing duty investigations of Chinese products.  China’s claim concerning the USDOC’s use of facts available is precisely the type of cross-cutting, horizontal issue of law at issue in this dispute.  As is evident from the 
manner in which China drafted its claim in subsection (d)(1) of the panel request, China’s principal 
concern with regard to the USDOC’s resort to fact s available is the notion of “adversity” on which 
these determinations are based.  By referring to “so-called ‘adverse’ facts available” in the panel 
request, China clearly indicated that it considers the USDOC’s concept of “adverse” facts available 
to be inconsistent with Article 12.7 of the SCM Agreement.  China even went so far as to place the word “adverse” in quotes, plainly highlighting th e concept of “adversity” as part of the subject 
matter of this claim.   
 14. China’s claim in respect of “adverse” facts av ailable should be one that is well understood by 
the United States and other Members, considering that the United States recently litigated this 
issue – successfully – against China.  In China – GOES , the United States argued, and the panel WT/DS437/R/Add.1 
 
- A-11 - 
 
  agreed, that Article 12.7 of the SCM Agreement does  not permit an investigating authority to draw 
adverse inferences or reach conclusions that have  no factual foundation in the record evidence.  
China is doing nothing more than bringing a clai m under the same interpretation of Article 12.7 
that the United States successfully advocated in China – GOES .   B y  r e f e r r i n g  t o  “ s o - c a l l e d  
‘adverse’ facts available” in the panel request, Ch ina provided more than sufficient notice to the 
United States of what this claim entailed.  
15. The U.S. request for a preliminary ruling is entirely unsupported by Article 6.2 of the DSU 
and by the panel and Appellate Body reports which have interpreted that provision.  The Panel must therefore reject the U.S. request.  
 WT/DS437/R/Add.1 
 
- A-12 - 
 
  ANNEX A-3 
COMMENTS OF THE UNITED STATES ON CHINA’S RESPONSE TO THE UNITED STATES 
PRELIMINARY RULING REQUEST  
 
Table of Reports  
 
Short Form Full Citation 
China – GOES (Panel) Panel Report, China – Countervailing and Anti -Dumping Duties on Grain 
Oriented Flat-rolled Electrical Steel from the United States , WT/DS414/R, 
adopted 16 November 2012 
China – Raw Materials (AB) Appellate Body Report, China – Measures Related to the Exportation of 
Various Raw Materials , WT/DS394/AB/R, WT/DS395/AB/R, WTDS398/AB/R, 
adopted 22 February 2012 
EC – Selected Customs Matters (AB) Appellate Body Report, European Communities – Selected Customs Matters , 
WT/DS315/AB/R, adopted 11 December 2006 
US – Oil Country Tubular Goods Sunset Reviews (AB)  Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R, 
adopted 17 December 2004 
 
 WT/DS437/R/Add.1 
 
- A-13 - 
 
  I. Introduction 
 1. China's response to the U.S. preliminary ruling request (the "Response") fails to demonstrate that China's panel request "provide[s] a brief summary of the legal basis of the 
complaint sufficient to present the problem clearly"
1 with respect to China's claims concerning the 
use of "facts available."  Rather, China's Respon se provides further explanations of its facts 
available claims, and these explanations only serve to confirm that the actual descriptions of these 
claims in the panel request fail to identify the actions of the U.S. Department of Commerce 
("Commerce") that China intends to challenge, and therefore do not "present the problem clearly."  
Even with China's attempts to clarify its panel request in its Response, the United States still does not know which of the hundreds of possible claims China will pursue.  China also argues that some 
sort of a lower standard for describing the claim applies in this dispute because the United States 
should, somehow, anticipate the nature of China's claims.  However, there is no basis for any lower standard in this dispute.  In fact, becaus e the dispute raised by China is of tremendous 
scope, it is particularly important for the panel request to present the problem clearly.  Finally, 
China's Response both mischaracterizes the U. S. legal arguments, and misunderstands the 
Appellate Body's findings in China – Raw Materials.  In doing so, China's Response fails to provide 
any support for its assertions that China has met its obligations under Article 6.2.  Thus, China's 
Response only confirms that the Panel should grant the preliminary ruling request with respect to China's facts available claims.    
II. The Explanations in China's Response of  its "Facts Available" Claims Demonstrate 
that the Claims Actually set out in the Panel Request Fail to Present the Problem 
Clearly  
 
2. In its Response, China recasts its "facts available" claims in three different ways.  The fact that China, in responding to the U.S. request,  provides new descriptions of its facts available 
claims only demonstrates that the claims, as actually described in the panel request, fail to present 
adequately the problem.    3. First, China states in its Response that the panel request is confined to those instances in 
which Commerce used facts available that are identified under "a section entitled 'Application of 
Facts Available, Including the Application of Adverse Inferences,' or a similar title to the same effect"
2 in the "Issues and Decisions Memoranda" ("I&D Memos") issued by Commerce in 
connection with final determinations for the 19 investigations where there has been a final 
determination, and the Federal Register notices announcing preliminary determinations for the 
three investigations where there has been no final determination.3 This explanation is not 
something that can be drawn from the text of Ch ina's panel request.  Instead, the panel request 
alleges violations, on an "as applied basis,"4 with respect to "each instance in which [Commerce] 
used facts available . . . in the investigations and determinations"5 at issue.  Furthermore, even if 
a subsequent explanation could be used to cure a defective panel request (and it cannot), this 
explanation does not in fact provide much, if any, additional clarity.  The I&D Memos and Federal 
Register  notices are made up of hundreds if not thousa nds of pages, and the identification of uses 
of "facts available" (of which there are hundreds) is not limited to those sections of the I&D Memos 
identified by China.6  It is noteworthy that, even though China can now define what it means by 
such an instance, China did not do so in its panel request.  China's Response illustrates that its panel request was inadequate to present clearly what constituted the "instances" to which China 
referred.   
 
                                               
1 Understanding on Rules and Procedures Governing th e Settlement of Disputes (“DSU”), Article 6.2. 
2 Response, para. 16. 
3 Id. paras. 16-17. 
4 Request for the Establishment of a Panel by Ch ina at 2, WT/DS437/2, circulated 21 August 2012 
(“Panel Request”) (using the header “As Applied Claims” with respect to the section containing the facts available claim). 
5 Id. at n. 10. 
6 Contrary to China’s assertions, uses of “facts avai lable” are described elsewhere than in the identified 
sections of the I&D Memos.  See, e.g. , Aluminum Extrusions I&D Memo  at 28 (identifying a use of “facts 
available” for an export rebate program not described in either the “Use of Facts Otherwise Available And 
Adverse Inferences” section or the comments section); Thermal Paper I&D Memo at 21-22 (identifying a use of 
“facts available” for land-use taxes an d fee exemptions not identified in any “facts available” or “adverse facts 
available” section, or the comments section). WT/DS437/R/Add.1 
 
- A-14 - 
 
  4. China's response also includes a second description of the "facts available" claims.  In 
particular, China appears to explain that it intends to challenge an alleged practice or policy, "that it considers the USDOC's concept of 'adverse' facts available to be inconsistent with Article 12.7."
7  
Nothing in the text of the panel request, however, could lead the reader to understand that China's 
facts available claims are tied to "a concept of adverse facts available."  (Nor does that description 
itself provide much, if any, clarity.)  Rather, the panel request frames the facts available claims as many individual challenges to "instances" of the use of facts available, whether "adverse" or not.  
China's evolving characterization of its claim de monstrates the inadequacy of the panel request 
and raises due process concerns.   5. Third, after stating that its "principal concern" is the "concept" of adverse facts available, the 
Response also notes that this concept is only "part of the subject matter of this claim,"
8 and that 
China's facts available claim "relates, at least in part," to the use of "'adverse' facts available."9  
Again, none of this information can be gleaned from the text of the panel request itself.  Moreover, 
even China's new explanation does little, if anything, to present any problems clearly.  China's 
statements that "part" of its facts available claim relates to the concept of "'adverse' facts available" begs the question of what other issu es China would like to address.  The fact that 
China's explanation of its own claims shifts from the challenge in the panel request to unspecified 
individual instances to a "concept", and then to other unknown aspects of the uses of facts available further demonstrates the failure of the panel request to provide "a brief summary of the 
legal basis of the complaint sufficient to present the problem clearly" in compliance with Article 
6.2.   
 III. China Has No Basis for its Argument that the Panel Request Does Not Need to 
Present the Problem Clearly  
 6. China argues that the nature of this disput e somehow enables China to meet its Article 6.2 
obligation under a lower standard than has been applied in other disputes because its claim 
"should be one that is well understood by the United States."
10  China has no basis for this 
assertion.  Moreover, China's argument would seem  to imply that even China recognizes that the 
description of its facts available claim in the panel request fails to meet the standard set out in the 
DSU. 
 7. China's argument for some sort of lower standard seems premised on the assertion that its 
"facts available" claim is a "cross-cutting, horizontal issue of law."
11  There are two fundamental 
problems with this argument.  First, even if China's panel request did address "cross-cutting, horizontal" issues, China would have no basis for claiming that the panel should apply any sort of 
lower standard.  Regardless of whether the issues are fact-specific and individual, a panel request 
must "present the problem clearly."    8. Second, and equally important, nothing about the face of the panel request indicates that 
China's facts available claims are in fact "cross-cutting" or "horizontal."  To the contrary, the panel 
request states that China is challenging "each instance" of the use of facts available on an "as applied" basis.   
 
9. "Each instance," however, is anything but "c ross-cutting "or "horizontal."  To the contrary, 
there are a wide variety of types of applications of facts available involved in the investigations at 
issue in this dispute.  These applications range, for example, from complete failures by 
respondents to provide information, to the provision of partial information, to the provision of inaccurate information.  By way of illustration, in Aluminum Extrusions , there was a total lack of 
participation by the three mandatory respondents, who all failed to respond to Commerce's initial 
questionnaire.
12  In Lawn Groomers , the accuracy of China's questionnaire responses regarding the 
hot-rolled steel industry could not be confirmed during Commerce's on-site verification.13  In both 
these cases, Commerce applied facts available because the interested parties significantly impeded 
the investigation or refused access to necessary information.  There are also determinations in 
                                               
7 Response, para. 41. 
8 Id.  
9 Id. para. 43. 
10 Id. para. 42. 
11 Id. para. 41. 
12 Aluminum Extrusions  I&D Memo  at 9-10. 
13 Lawn Groomers I&D Memo  at 13-14. WT/DS437/R/Add.1 
 
- A-15 - 
 
  which Commerce applied the facts available when Commerce had incomplete information.  For 
example, in Thermal Paper , there was insufficient information on the record, and Commerce 
applied facts available, to calculate the benefit conferred in a manner that raised no objection by the cooperating respondent.
14  In Drill Pipe , China did not provide the requested information about 
the green tubes industry, and Commerce applied facts available to make its determination.15 As 
these examples demonstrate, the determinations made by Commerce based on facts available varied from investigation to investigation.  Although China may claim that there are common 
issues of law, any analysis of an authority's application of Article 12.7 must involve an examination 
of issues of fact.  This can be seen from the panel's consideration of one of the two uses of "facts 
available" at issue in China – GOES  where the factual analysis consumed the vast majority of the 
twelve pages of discussion the panel dedicated to that claim.16  For these reasons, it is clear that 
China's "facts available" claims are not "cross-cutting" or "horizontal," but rather must be 
examined on a case-by-case basis.  
10. China also argues that the United States should have understood that China's facts available 
claim relates to the use of "adverse" facts available.
17 Even if that were the case, the request still 
would not be limited to "cross-cutting" or "horizontal" issues – adverse facts available, just like 
other uses of facts available, can arise from a wide variety of factual situations.  But regardless, 
China has no basis for its contention that the panel request reveals the fact that China is principally challenging Commerce's use of "adverse" facts available.      
11. China argues that the United States should be able to discern the content of China's facts 
available claims, based on the content of the U.S. claim against China  in China – GOES.  This 
argument is inexplicable.  The claims in GOES have no relationship to the claims brought by China 
in this dispute.  In particular, GOES certainly involved no challeng e to any "concept of adverse 
facts available."  Rather, the U.S. made two facts available claims – one addressing MOFCOM's rejection of necessary information submitted by  respondents, and one addressing MOFCOM's 
determination of rates for exporters that were no t known at the time of the investigation.  In 
short, nothing in the GOES  dispute in any way is instructive in construing the vague panel request 
that China submitted in the current dispute.  
12. Moreover, the description of claims brought under Article 12.7 in the U.S. panel request in 
GOES  provides a contrast to the description provided by China in this dispute.  The GOES panel 
request describes two claims related to two uses of facts available by MOFCOM:  
 
Article 12.7 of the SCM Agreement, because China improperly made its subsidy rate determinations based on the facts available.  In particular, China was not entitled to 
reject necessary information submitted by respondent producers.  The respondent 
producers submitted the necessary information in a reasonable period of time, and did 
not significantly impede the investigation.  In addition, China applied facts available in a punitive manner, and disregarded its own findings in doing so. 
. . .  
Article 12.7 of the SCM Agreement, because China improperly applied facts available 
in determining the duty rate applicable to exporters that were not known at the time 
of the investigation, including potential "new shippers" and exporters that were not 
given notice of the information required by the investigating authority.  In addition, 
                                               
14 Thermal Paper I&D Memo  at 21-22. 
15 Drill Pipe I&D Memo  at 10, 23.   
16  China – GOES (Panel) , paras. 7.266-7.310. 
17 China explains its reasoning as follows:  
China’s principal concern with regard to the USDO C’s resort to facts available is the notion of 
‘adversity’ on which these determinations are base d.  By referring to “so-called ‘adverse’ facts 
available” in the panel request, China clearly indicated that it considers the USDOC’s concept of “adverse” facts available to be in consistent with Article 12.7 of the SCM Agreement.  China even 
went so far as to place the word “adverse” in  quotes, plainly highli ghting the concept of 
“adversity” as part of the subject matter of this claim. Response, para. 41. WT/DS437/R/Add.1 
 
- A-16 - 
 
  China applied facts available in a punitive manner, and disregarded its own findings in 
doing so.18  
In contrast, China's panel request describes its claim involving potentially hundreds of uses of 
"facts available" as follows:  
 
Article 12.7 of the SCM Agreement, because the USDOC resorted to facts available, and used facts available, including so-called "adverse" facts available, in manners that 
were inconsistent with that provision.
19 
China alleges that Commerce takes a "cookie cutter" approach to countervailing duty 
investigations,20 but it is China's panel request that has taken such an approach.  The result is that 
China's claim related to the use of "facts availa ble" has been obscured, and not presented clearly 
in compliance with Article 6.2. 
 IV. China's Response Mischaracterizes th e Arguments in the Preliminary Ruling 
 
13. In its Response, China mischaracterizes two of  the arguments made by the United States in 
its preliminary ruling request.  First, contrary to China's assertions,
21 the United States does not 
dispute China's right to bring a claim against a large number of instances of the use of facts 
available.  Rather, the United States maintains that China must provide some identification, in the panel request, of the "instances" in order to "plainly connect"
22 the challenged action to the legal 
provision it has cited and meet the standard im posed by Article 6.2 to "present the problem 
clearly."   
 14. China also mischaracterizes the U.S. preliminar y ruling request as asserting that China must 
set forth its argument in its panel request.
23  To support this characterization, China points to an 
observation in the U.S. request that Article 12. 7 of the SCM Agreement contains a number of 
distinct obligations.24  Even though the United States explains that it "does not assert that this lack 
of clarity," regarding which obligations the United States is supposed to have breached "standing 
alone, necessarily renders this or any other panel request deficient,"25 China spends two pages in 
its Response rebutting one paragraph and a footnote.  
V. The Appellate Body's Findings in China – Raw Materials Support a Finding that 
China's Panel Request is Deficient  
 
15. In its preliminary ruling request, the United States made an analogy between the instant 
dispute and China – Raw Materials.  In its Response, China essentially argues that because the 
facts here are different than those in Raw Materials , the Panel must come to the opposite 
conclusion as the Appellate Body did in that dispute.
26  China's response simply misses the point of 
the U.S. citation to Raw Materials , and thus China has failed to provide any meaningful rebuttal.  
The U.S. request did not contend that the facts in Raw Materials are exactly the same as in the 
present dispute; rather, the United States explained that the ambiguity presented by China's panel 
request in this dispute is analogous to that identified in Raw Materials , and that the Appellate 
Body's findings in Raw Materials  thus support a finding that China's facts available claims as set 
out in the panel request do not meet the Article 6.2 standard.   
 
16. The analogy between this dispute and Raw Materials  is described in the preliminary ruling 
request as follows: 
 
                                               
18 Request for the Establishment of a Panel by the United States at 2, WT/DS414/2, circulated 14 
August 2011. 
19 Panel Request at 4-5. 
20 Response, para. 40. 
21 See id.  paras. 19-22. 
22 See, e.g. , Preliminary Ruling Request of the United States, paras. 23-24 (citing US – Oil Country 
Tubular Goods Sunset Reviews (AB) , para. 162).  See also China – Raw Materials (AB) , para. 220. 
23 See Response, paras. 23-29.   
24 Id. at paras. 24-25 & n. 16. 
25 Preliminary Ruling Request of the United States, para. 22. 
26 See Response, paras. 34-37.  WT/DS437/R/Add.1 
 
- A-17 - 
 
  The Appellate Body has explained that in order to "present the problem clearly," a 
panel request must "plainly connect the challenged measure(s) with the provision(s) of the covered agreements claimed to have been infringed". The Appellate Body found that this obligation was not met in Raw Materials because the panel request at issue 
did not make it clear "which allegations of error pertain[ed] to which particular 
measure or set of measures identified in the panel requests."  The ambiguity presented in this dispute is analogous to that in Raw Materials .   
Here, one side of the ledger – the Member 's actions that are the subject of the 
challenge – is obscured by the fact that China has essentially pointed to nearly every countervailing duty investigation undertaken by the United States with respect to China since 2008 that China has not previously challenged, including investigations 
that did not ultimately result in the imposition of countervailing duties, and said that 
Article 12.7 was violated somewhere in the course of those investigations.  This description is not sufficient to "plainly connect" the 22 covered investigations with the 
alleged breach of Article 12.7.  Accordingly, as in Raw Materials,  China has failed to 
comply with the requirement to "provide a brief summary" of its claim "sufficient to present the problem clearly", as required by Article 6.2 of the DSU.
27 
In other words, the United States does not allege  that China's panel request suffers from the exact 
same defect as the panel request in Raw Materials , but rather that its failure to adequately identify 
the actions ("instances") at issue results in a similar inability to "plainly connect" the 22 investigations to the claim.   
 
17. Furthermore, China's Response not only fails to rebut the U.S. citation to Raw Materials, but 
confirms the U.S. position.  China states that the "22 challenged measures identified in Appendix 
1" are "plainly connect[ed]" to the legal provision at issue, Article 12.7.
28 China's panel request, 
however, failed to provide any identification of the "instances" of the use of facts available, which are the type of action subject to the facts availa ble claim, pointing instead generally to the 22 
investigations, which together contain hundreds of instances.  China's Response also states that 
China is challenging the "concept of adverse facts available," which only further obscures the necessary connection between the challenged measure and the covered agreements.  China's arguments related to China – Raw Materials therefore only confirm that China has failed to present 
the problem clearly in compliance with Article 6.2. 
 18. In addition, China fails to respond to the standard articulated in the various other reports of 
the Appellate Body cited in the U.S. requ est.  As stated in the U.S. request: 
 
China's Panel Request also falls short of the articulation of the requirement to provide 
a "brief summary" of the legal basis "sufficient to present the problem clearly" given in 
the reports in EC – Selected Customs Matters  and Korea – Dairy.  As the Appellate 
Body found in its Customs Matters  report , "A brief summary of the legal basis of the 
complaint required by Article 6.2 of the DSU aims to explain succinctly how or why the 
measure at issue is considered by the complaining Member to be violating the WTO 
obligation in question.  This brief summary must be sufficient to present the problem clearly."
29 
China does not attempt to dispute the U.S. reliance on these statements by the Appellate Body 
because China's panel request reveals essentially nothing about how or why the measures at issue have breached Article 12.7.  For this reason, China has failed to meet the standard in Article 6.2.   
 
VI. Conclusion  
 19. For the reasons set out above and in its request for a preliminary ruling, the United States 
respectfully requests that the Panel find that China's "as applied" challenge to "each instance" in 
which the investigating authority "used facts available" is not within the Panel's terms of reference.  
                                               
27 Preliminary Ruling Request of the United States, paras. 24-25 (footnotes omitted). 
28 Response, para. 35. 
29 Preliminary Ruling Request of the United States, para. 26 (citing EC – Selected Customs Matters  (AB), 
para. 130). WT/DS437/R/Add.1 
 
- A-18 - 
 
  Further, the United States also respectfully requests that the Panel issue its final determination on 
this matter on February 1, rather than defer a decision until some later point in the proceeding.    20. The United States thanks the Panel for its consideration of this request, and would welcome 
the opportunity to respond to any questions it may have, whether in oral argument or in writing. 
  
 WT/DS437/R/Add.1 
 
- A-19 - 
 
  ANNEX A-4 
COMMENTS OF CHINA ON THE UNITED STATES REQUEST  
FOR A PRELIMINARY RULING  
Table of Reports Cited in this Submission 
 
Short Title Full Report Title and Citation 
China – GOES  Panel Report, China – Countervailing and Anti-Dumping Duties on Grain 
Oriented Flat-Rolled Electrical Steel from the United States, WT/DS414/R, circulated to WTO Members 15 June 2012 
China – Raw Materials  Appellate Body Report, China – Measures Related to the Exportation of Various 
Raw Materials , WT/DS394/AB/R, WT/DS395/AB/R, WTDS398/AB/R, adopted 22 
February 2012 
Japan – DRAMs (Korea) Panel Report, Japan – Countervailing Duties on Dynamic Random Access 
Memories from Korea , WT/DS336/R, adopted 17 December 2007, as modified 
by Appellate Body Report WT/DS336/AB/R, DSR 2007:VII, 2805 
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections 
of Iron or Non-Alloy Steel and H-Beams from Poland , WT/DS122/R, adopted 5 
April 2001, as modified by Appellate Body Report WT/DS122/AB/R, DSR 2001:VII, 2741 
US – Oil Country Tubular Goods Sunset Review Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R, adopted 17 December 2004 
 WT/DS437/R/Add.1 
 
- A-20 - 
 
  I. Introduction 
 1. China demonstrated in its response to the U.S. request for a preliminary ruling that the United States had failed to show that subsection (d)(1) of China’s panel request does not “present 
the problem clearly” as required by Article 6.2 of  the DSU.  Contrary to the U.S. assertion that 
China’s claim under Article 12.7 of the Agreement on Subsidies and Countervailing Measures ("SCM Agreement") was too “broad” and “vague”, th at claim on its face unambiguously relates to 
each instance in the identified determinations in which the USDOC used “adverse” facts available 
to reach a finding of financial contribution, benefit, or specificity.1  China’s panel request “presents 
the problem clearly” because it “plainly connects” the challenged measures to the single provision of the covered agreements claimed to have been infringed.
2 
 
2. In its comments on China’s response (the  “Comments”), the United States has merely 
confirmed that its request for a preliminary ruling is unfounded.  The United States effectively 
abandons its argument that China’s claim in subsection (d)(1) is impermissibly “vague” because 
China did not explain which “aspects” of Article 12.7 China considers the United States to have violated.
3  In relation to its claim that China’s panel request is overly “broad”, the United States 
“does not dispute China’s right to bring a claim against a large number of instances of the use of 
facts available.”4  Nor does the United States continue the pretence of being unable to “discern” 
those instances within the measures at issue in which the USDOC used “adverse” facts available for the purpose of making findings of financial contribution, specificity, and benefit.
5 
 
3. The sole source of the U.S. complaint, as is evident from the Comments, is that China’s panel request “fail[s] to identify the actions of  the U.S. Department of Commerce (“Commerce”) 
that China intends to challenge.”
6  According to the United States, “China must provide some 
identification, in the panel request, of the ‘instances’ [at issue] in order to ‘plainly connect’ the challenged action to the legal provision it has cited and meet the standard imposed by Article 6.2 
to ‘present the problem clearly.’”
7  Because of this alleged failure, the United States asserts that it 
“still does not know which of the hundreds of possible claims China will pursue”.8   
 4. China is baffled by these assertions.  The United States repeatedly acknowledges that China 
is challenging “each instance” in which the USDOC used “adverse” facts available for the purpose 
of making findings of financial contribution, specificity and benefit.
9  The ordinary meaning of 
“each” when used as an adjective is “every”.10  By identifying “each instance” in which the USDOC 
used “adverse” facts available to support these findings, China has provided more than “some identification” of the relevant instances – it has identified these instances with unambiguous precision. 
 
5. Contrary to the United States’ assertion that China has used its response to “recast” its claim in subsection (d)(1), China’s claim was, and remains, that the United States acted inconsistently with Article 12.7 of the SCM Agreement in respect of each ( i.e., every) instance in 
which the USDOC used facts available, including “adverse” facts available, to support its findings of 
financial contribution, specificity, and benefit in the investigations and determinations identified in Appendix 1 of China's panel request.  The United States apparently believes that Article 6.2 
required China to provide page citations to each instance in the determinations at issue in which 
the USDOC used adverse facts available, but no such obligation exists.   
                                               
1 As China explained in footnote 1 of its response to  the U.S. request for a preliminary ruling, there are 
only a small number of instances in th e determinations at issue in which the USDOC used anything other than 
“adverse” facts available (or “adverse inferences”) for the purpose of reaching a finding of financial 
contribution, specificity, or benefit.  The United States does not dispute this fact. Ac cordingly, China refers to 
the USDOC’s use of “adverse” facts available when referring  to the USDOC’s use of facts available in support of 
its findings of financial contribution, specificity, and benefit. 
2 See Appellate Body Report, US – Oil Country Tubular Goods Sunset Review , para. 162. 
3 U.S. Comments, para. 14. 
4 U.S. Comments, para. 13. 
5 See Part 0, infra. 
6 U.S. Comments, para. 1. 
7 U.S. Comments, para. 13.  See also  id., para. 16 (asserting that Ch ina’s panel request fails “to 
adequately identify the actions (‘instances’) at issue”). 
8 U.S. Comments, para. 1. 
9 U.S. Comments, para. 30. 
10 New Shorter Oxford English Dictionary, (Oxford: Clarendon Press, 1993), p. 773. WT/DS437/R/Add.1 
 
- A-21 - 
 
  II. China Has Not “Recast” Its Claim in Su bsection (d)(1) of Its Panel Request 
 6. The United States claims that China’s response to the U.S. preliminary ruling request “recasts” its claim in subsection (d)(1) of the panel request in three ways, thereby demonstrating 
that “the claims actually set out in its panel request fail to present the problem clearly”.
11  China 
will address each of the U.S. arguments in turn, in order to demonstrate that China’s claim is unchanged from the face of its panel request. 
 
7. First, the United States argues that China has “confined” its panel request to those instances in which the USDOC used facts available and identified that use in a specific section of the Issues 
and Determinations Memoranda ("I&D memos") or the Federal Register notices (for preliminary 
determinations).12  In essence, the United States asserts that China has somehow narrowed its 
claim by referencing the I&D memos and Federal Register notices.  China has done no such thing.    
8. China cited the USDOC’s I&D memos and Federa l Register notices to rebut the preposterous 
U.S. assertion that it could not “discern” the specific instances in which the USDOC used “adverse” facts available for the purpose of reaching a finding of financial contribution, specificity, or benefit 
in the determinations at issue.  China explained that each of the relevant determinations cited in 
Appendix 1 of the panel request contains a sect ion entitled “Application of Facts Available, 
Including the Application of Adverse Inferences”, or a similar title to the same effect.
13  C h i n a  
further explained that in this “AFA section”, the USDOC identifies the instances in which it uses 
“adverse” facts available and often sets forth or elaborates upon its rationale for using “adverse” 
facts available in the section of the I&D memo that addresses specific comments raised by interested parties during the course of the investigation.
14   
 
9. In so doing, China did not “confine” its Panel Request to those instances of “adverse” facts available identified in the “AFA section” of the I&D memos and Federal Register notices.  China 
referenced the structure of the USDOC’s I&D memos and Federal Register notices to demonstrate 
that the United States should have no trouble identifying the relevant instances in which the USDOC used “adverse” facts available, because the USDOC generally acknowledges such use in the “AFA section”.  Notably, the United States does not dispute that the I&D memos and Federal 
Register notices do, in fact, identify all instances in which the USDOC used “adverse” facts 
available in making findings of financial contribution, specificity and benefit.  It is only quibble, apparently, that there are some limited instances in which the USDOC relies on “adverse” facts 
available in its determinations, but discusses that reliance in a section of the I&D memo other than 
the “AFA section”.  But China never argued otherwise.  Moreover, as the United States amply demonstrates in footnote 6 of its Comments, it had no difficulty identifying instances in which the 
USDOC used facts available anywhere in the I&D me mo, even not in a specific section.  Contrary 
to its earlier protestations, it is evident that th e United States is, in fact, perfectly capable of 
reviewing the USDOC’s own determinations and “di scern[ing]” those instances in which the USDOC 
used “adverse” facts available.   
 
10. Second, the United States argues that China has “recast” its claim by “appear[ing] to explain that it intends to challenge an alleged prac tice or policy” of using “adverse” facts available, 
which China considers to be inconsistent with Article 12.7.
15  According to the United States 
“[n]othing in the text of the panel request … could lead the reader to understand that China’s facts available claims are tied to ‘a concept of adverse facts available.’”
16   
 
11. This is sophistry.  Subsection (d)(1) of China’s panel request states that China is challenging “each instance” in which the USDOC used facts available, “including so-called ‘adverse’ facts available” in making findings of financial contribution, specificity, and benefit.  The reference to 
“each instance” makes clear that China is presenting an “as applied” claim, and not challenging 
some “alleged practice or policy” of the USDOC “as such”.  Moreover, the term “adverse” appears 
on the face of the panel request (in quotation mark s, no less), plainly highlighting that the subject 
matter of China’s claim includes the consistency of the USDOC’s use of “adverse” facts available 
with Article 12.7.  The notion that “[n]othing in the text of the panel request … could lead the 
                                               
11 U.S. Comments, Header II. 
12 U.S. Comments, para. 3.   
13 China’s Response, para. 16.  China will refer to this section as the “AFA section”. 
14 China’s Response, para. 16. 
15 U.S. Comments, para. 4. 
16 U.S. Comments, para. 4.     WT/DS437/R/Add.1 
 
- A-22 - 
 
  reader to understand that China’s facts available claims are tied to ‘a concept of adverse facts 
available’” is belied by the plain language of the request.17 
 12. Finally, in a similar vein, the United States argues that China has recast its claim by stating 
that its “principal concern” is the concept of “adverse” facts available, “while also stating that this 
concept is only ‘part of the subject matter of this claim’”.
18  The United States argues that “none of 
this information can be gleaned from the text of the panel request itself.”19   
 
13. Without wanting to beat a dead horse, China’s panel request states on its face that it is challenging “each instance in which the USDOC used facts available, including ‘adverse’ facts 
available, to support its findings of financial contribution, specificity, and benefit in the 
investigations and determinations identified in Appendix 1”.  “Each instance” means just what it 
says.  As it turns out, virtually all of the instances in which the USDOC used facts available involved the use of “adverse” facts available – a fact manifestly evident on the face of the 
determinations at issue.  This is why the USDOC’s use of “adverse” facts available is China’s 
principal concern.  The United States should have had no trouble “glean[ing]” this information from the plain language of China’s claim. 
 
III. China’s Responsibility to “Present the Problem Clearly” Under Article 6.2 Is 
Neither “Enhance[d]” Nor “Lowered” By  the Nature of China’s Claim in 
Subsection (d)(1) 
 
14. In its request for a preliminary ruling, the United States suggested that China had an “enhance[d]” responsibility under Article 6.2 to “p rovide a brief summary of the legal basis of the 
complaint” in light of the large number of instances in which the USDOC used “adverse” facts 
available in the identified determinations.
20  The United States cited no authority to support this 
proposition, and does not purport to do so in its Comments.   
 
15. Instead, the United States now seeks to ch ange the subject by asserting that China has 
argued that “some sort of lower standard” applies to its panel request,21 and that, as a result, 
China does not need to “present the problem clearly”.22  China has made no such argument. 
 
16. As China explained in its initial response, whether a claim involves one instance of a violation or hundreds of instances of the same violation, a complaining Member has the same 
obligation under Article 6.2 – to “plainly connect” the challenged measures to the provision(s) of 
the covered agreements claimed to have been infringed.
23  China has fulfilled that requirement in 
its panel request by indicating that its claim und er Article 12.7 of the SCM Agreement relates to 
“each instance” in the identified determinations in which the USDOC used “adverse” facts available 
to reach a finding of financial contribution, benefit, or specificity.  China considers all of these 
applications of “adverse” facts available to ha ve been contrary to Article 12.7 of the SCM 
Agreement, and that claim is clearly presented in the panel request. 
 
17. Despite the clear connection between the measures at issue and China’s claim under Article 12.7, the United States continues to argue that China has failed to “plainly connect” the 
challenged measures to Article 12.7, in a manner “analogous” to the deficient panel requests at 
issue in China – Raw Materials .
24   
                                               
17 As China discussed in its earlier response, the United States was plainly aware of the issue of whether 
it is consistent with Article 12.7 of the SCM Agreemen t to use “adverse” facts available, given that it had 
litigated the same issue in China – GOES  only several months prior to the filing of the panel request in the 
present dispute.  The U.S. resp onse to this point is incohe rent.  If “[t]he claims in GOES have no relationship 
to the claims brought by China in this dispute”, as  the United States contends in paragraph 11 of its 
Comments, how, then, did the panel in that dispute make a finding that it is inconsistent with Article 12.7 for 
an investigating authority to use “adv erse inferences” or make  findings that have no basis in the record 
evidence?  The question of whether Article 12.7 permits the use of “adverse” facts available was very much at issue in that dispute, just as it is clearly at issue in this dispute based on the plain language of the panel request.   
18 U.S. Comments, para. 5.  
19 U.S. Comments, para. 5. 
20 U.S. Preliminary Ruling Request, para. 30. 
21 U.S. Comments, para. 7. 
22 U.S. Comments, Header III. 
23 China’s Response, para. 21. 
24 U.S. Comments, para. 15. WT/DS437/R/Add.1 
 
- A-23 - 
 
  18. China explained at length in Part III.D of its initial response that the panel requests in China 
– Raw Materials  are not remotely “analogous” to China’s panel request in this dispute, and in fact 
have nothing in common.25  While the United States reluctantly acknowledges that the facts in 
China – Raw Materials are not “exactly the same as in the present dispute”,26 it persists in arguing 
that China’s “failure to adequately identify the actions (‘instances’) at issue results in a similar 
inability to ‘plainly connect’ the 22 investigations to the claim.”27  The only reasoning that the 
United States provides in support of this conclusory assertion is a verbatim  quotation of the same 
two paragraphs from its request that China has already demonstrated to be baseless precisely 
because the facts in this case bear no resemblance to those in China – Raw Materials .28  
 19.   China is at a loss to know what more can be said on this issue, and will not repeat in full all 
of the reasons why China – Raw Materials  provides no support whatsoever for the U.S. assertion 
that China’s panel request is inconsistent with Arti cle 6.2.  In the first instance, the failure of the 
complainants in China – Raw Materials to “plainly connect” the challenged measures with the 
numerous legal instruments identified in the panel requests has no analogy to the panel request in 
the present dispute.  The panel requests in China – Raw Materials failed to provide any connection 
at all between the 37 identified measures and the 13 identified treaty provisions.  It was unclear, 
for example, if each measure violated a single treaty provision, violated some of the treaty 
provisions, or violated all of the treaty provisions.  In contrast, in subsection (d)(1) of China’s panel request in this dispute, China has identifi ed 22 measures and exactly one treaty provision 
that is set forth in a single sentence.  Accordingly, the United States should have no problem 
determining which treaty provision has been violated by the measures in Appendix 1.29 
 20. Moreover, the U.S. argument that China has failed to “plainly connect” the 22 measures at 
issue to its claim in subsection (d)(1) is premised on the idea that China “fail[ed] to adequately 
identify the actions (‘instances’) at issue”.  As  explained above, the United States apparently 
cannot countenance the idea that China has challenged “each instance” in which the USDOC 
resorted to “adverse” facts available to reach a finding of financial contribution, benefit, or specificity, so the United States insists that China has failed to adequately identify the “instances” a t  i s s u e .   B u t  n o  a m o u n t  o f  i n s i s t i n g  w i l l  c h a n g e  t h e  f a c t  t h a t  C h i n a  h a s ,  w i t h  t h e  r e q u i s i t e  precision and clarity, identified exactly which “ins tances” of the use of “adverse” facts available are 
at issue in this dispute. 
 IV. Conclusion 
 
21. As China demonstrated in its initial response to the U.S. request for a preliminary ruling and in the comments above, the United States has failed to show that subsection (d)(1) of China’s 
panel request is inconsistent with Article 6.2 of the DSU.  The U.S. Comments make clear that the 
source of the U.S. complaint is that China’s panel re quest “fail[s] to identify the actions of the U.S. 
Department of Commerce (“Commerce”) that China intends to challenge.”
30  This claim has no 
merit.  By challenging “each instance” in which the USDOC resorted to “adverse” facts available to 
reach a finding of financial contribution, benefit, or specificity, China has specifically identified “the actions of the U.S. Department of Commerce” that are at issue.  The Panel should therefore reject 
the U.S. request. 
 
22. China welcomes the opportunity to respond to any questions posed by the Panel in connection with the U.S. request, and is prepared to participate in whatever other procedures the 
Panel considers appropriate.  China thanks the Panel for its consideration of this matter. 
 
                                               
25 See China’s Response, paras. 30-37. 
26 U.S. Comments, para. 15. 
27 U.S. Comments, para. 16. 
28 U.S. Comments, para. 16. 
29 As China discussed in its response to the U.S. re quest for a preliminary ruling, the small number of 
instances in which panels or the Appellate Body have fo und a claim to be inconsistent with the requirement in 
Article 6.2 to “present the problem clearly” have involved instances in which the complaining Member alleged that one or more measures we re inconsistent  either with multiple provisions  of the covered agreements or with 
a single provision containing multiple obligations, without providing any explanation as to how the multiple provisions and obligations alleged to ha ve been violated related to the measures identified as the source of the 
violation.  See, e.g. , Panel Report, Japan – DRAMs (Korea) , para. 7.21; Panel Report, Thailand – H-Beams , 
paras. 7.27-7.31. 
30 U.S. Comments, para. 1. WT/DS437/R/Add.1 
 
- A-24 - 
 
  ANNEX A-5 
THIRD PARTY COMMENTS OF BRAZIL ON THE UNITED STATES REQUEST 
FOR A PRELIMINARY RULING  
TABLE OF CASES 
 
 
Short Title Full Case Title and Citation 
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167.  
Canada – Wheat Exports and 
Grain Imports Panel Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/R, adopted 27 September 2004, 
upheld by Appellate Body Report WT/DS276/AB/R, DSR 2004:VI, 2817.  
China – Raw Materials Appellate Body Reports , China – Measures Relate d to the Exportation of 
Various Raw Materials, WT/DS394/AB/R/ WT/DS395/ AB/R/ WT/DS398/AB/R, 
adopted 22 February 2012  
Colombia – Ports of Entry Panel Report , Colombia – Indicative Prices and Restrictions on Ports of Entry, 
WT/DS366/R and Corr.1, adopted 20 May 2009. DSR 2009:VI, 2535.  
Dominican Republic – Import 
and Sale of Cigarettes Appellate Body Report, Dominican Re public – Measures Affecting the 
Importation and Internal Sale of Cigarettes, WT/DS 302/AB/R, adopted 
19 May 2005, DSR 2005:XV, 7367. 
EC – Fasteners  Appellate Body Report, European Comm unities – Definitive Anti-Dumping 
Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R, adopted 28 July 2011. 
EC – Large Civil Aircraft Appellate Body Report, European Comm unities and Certain Member States – 
Measures Affecting Trade in Large Ci vil Aircraft, WT/DS316/AB/R, adopted 
1 June 2011. 
EC – Selected Customs Matters Appellate Body Report, European Communities – Selected Customs Matters , 
WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, 3791.  
EC — Trademarks and 
Geographical Indications (US) Panel Report, European Communities – Protection of Trademarks and 
Geographical Indications for Agricultur al Products and Foodstuffs, Complaint 
by the United States, WT/DS174/R,  adopted 20 April 2005, DSR 2005:VIII, 
3499. 
Korea – Dairy Appellate Body Report, Ko rea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3. 
Thailand – H-Beams Appellate Body Report, Thailand – Anti -Dumping Duties on Angles, Shapes 
and Sections of Iron or Non-Alloy Steel and H-Beams from Poland, WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, 2701. 
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Stee l Flat Products from Germany, 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779. 
US – Continued Zeroing Appellate Body Report,  United States – Continue d Existence and Application 
of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009, 
DSR 2009:III, 1291.  WT/DS437/R/Add.1 
 
- A-25 - 
 
  1. Brazil welcomes the opportunity to present its views on the issues raised by the United 
States in its request for a preliminary ruling. The comments advanced by both parties within these proceedings touch upon fundamental questions concerning the Understanding on the Rules and 
Procedures Governing the Settlement of Disputes  (“DSU”) and, in this sense, are of great concern 
for Brazil. 
 2. With this consideration in mind, and without prejudice to other issues that it may raise 
further on in this case, Brazil would like to avail itself of this opportunity to offer its comments on 
the interpretation and scope of two key aspect s of Article 6.2 of the DSU concerning the 
requirements for the establishment of a panel, in order to try to contribute with the Panel’s work regarding the preliminary matter before it. 
 
3. Article 6.2 of the DSU sets out that “The request for the panel shall (…) identify the specific 
measures at issue  and provide a brief summary of the legal basis of the complaint sufficient to 
present the problem clearly”.
1 Thus, in order to fulfill the conditions set out in this provision the 
request must meet two requirements, namely, the identification of the measures targeted in the dispute and the provision of a brief summary an d legal basis of the claims. Together, as the 
Appellate Body confirmed in the China – Raw Materials  “these two elements constitute the ‘matter 
referred to the DSB’, so that, if either of them is not properly identified, the matter would not be within the panel’s terms of reference.”
2 
 
4. As Panels and the Appellate Body have frequently underscored, these two requirements 
fulfill an important role in the proceedings established under the DSU.3 Not only they set the limits 
of the WTO adjudicating bodies jurisdiction, by defi ning the precise claims at issue, but also they 
are meant to provide the parties, and third parties, sufficient information concerning the claim in 
order to allow them an opportunity to respond to the complainant’s case.4 
 
5. Given its importance both in terms of due process and for the definition of the Panel’s 
jurisdiction, the language in Article 6.2 of the DSU has generated a significant amount of discussion that, in due time, helped to streamline the debate thereon. In this regard, in Brazil’s view, the fundamental question in this procedure is whether the panel request submitted by China 
satisfies the objective of providing notice to the defendant and to third parties regarding the 
precise nature of the dispute.   
6. At the outset, Brazil would like to highlight th at nothing in the text of Article 6.2 of the DSU 
imposes a stringent obligation on the complaining party to develop in the panel request the legal arguments that support its claims. Nor does it require a panel request to contain detailed 
explanation as to why and how the measures that are being challenged are inconsistent with the 
provisions of the relevant WTO Agreements.
5 As put forward by the Appellate Body in EC–Selected 
Customs Matters6, for the purposes of Article 6.2 of the DSU, it suffices that the panel request sets 
out the “claims” with enough precision to allow the responding party to understand with clarity the 
allegedly violations presented against it.  
 7. In the light of the above, and having in mind that such an analysis must be done in a case-
by-case basis, the Panel, in order to properly addr ess the questions raised by the United States in 
its request for a preliminary ruling, will have to assess whether the complainant, in its request for a panel, was able to clearly identify the measures at stake and to define with sufficient precision 
the allegedly breaches of the covered agreements.  
 
                                               
1 Emphasis added. 
2 China – Raw Materials  (Appellate Body Report, paragraph 219). 
3 Among others, Brazil – Desiccated Coconut  (Appelate Body Report, paragraph 22); China – Raw 
Materials  (Appellate Body Report, paragraphs 220 and 233). 
4 As the Appellate Body has said in EC–Large Civil Aircraft (Appellate Body Report, paragraph 640), the 
panel request provides notice not only to the respondent but also to third parties, inasmuch as to fundament due process in the dispute. 
5 See Canada-Wheat Exports and Grain Imports  (Panel Report, paragraph 6.10). 
6 “[t]he “specific measure” to be id entified in a panel request is the object of the challenge, namely, the 
measure that is alleged to be causing the violation of an obligation contained in a covered agreement. In other words, the measure at issue is what is being challenged  by the complaining Member.  As for the legal basis of 
the complaint, namely the “claim”, it pertains to the specific provision of the covered agreement that contains 
the obligation alleged to be violated.” ( EC – Selected Customs Matters: Appellate Body Report, paragraph 130 
– original emphasis). WT/DS437/R/Add.1 
 
- A-26 - 
 
  8. With respect to the first requirement, it mu st be noted that, although China’s submission 
refers indeed to a large number of complex measures, they all seem to be discernible not only by their content
7 (instances in which the investigating authority used facts available as the basis for 
its decision), but also by their respective legal instruments, including their number and date of 
adoption. In this regard, the measures appear to have been framed with sufficient particularity so 
as to allow the defendant to identify their “nature and the gist of what is at issue”, which, accordingly to the Appellate Body in US – Continued Zeroing , should be sufficient to fulfill the 
requirement of the identification of a measure within the meaning of Article 6.2 of the DSU.
8 
 9. As for presenting a brief summary of the legal basis of the complaint, Brazil shares the view 
that the mere listing of provisions of the relevant covered agreements allegedly violated may not 
satisfy the standard of Article 6.2 of the DSU in all cases, since this provision calls for sufficient 
clarity with respect to the legal problem identified by the complainant, so as to enable the other party to begin preparing its defense. That is a condition that cannot always be met by simply 
referring to a provision of a covered agreement, with no further information thereon. This is 
particularly the case when a treaty provision embodies multiple obligations.  
10. In this specific case, however, the language of Article 12.7 of the Agreement on Subsidies 
and Countervailing Measures (“SCM”) raises no doubt regarding the legal problem identified by 
China in its assessment of the measures brought before the Panel. Article 12.7 of the SCM specifically requires that, whenever any interested  Member or interested party refuses access to or 
otherwise does not provide necessary information or impedes a countervailing duty investigation, 
preliminary and final determination must be made on the basis of the facts available. By challenging a set of measures adopted by the defe ndant on the basis of Article 12.7 of the SCM, 
the complainant seems to fairly indicate the legal problem it envisaged to address in the 
proceeding. In this sense, read in its entirety, the panel request put forward by China seems to be 
sufficiently clear to identify the matter referred to the Panel. 
 
11. Brazil does not dispute, however, that greater precision and clarity in panels request would contribute to better define the boundaries of the Panel jurisdiction, to the great benefit of both 
parties. And it certainly does not advocate that permissive standards of specificity should prevail in 
the DSU proceedings. On the contrary: in Brazil’s view, in order to respect the letter and the spirit 
of Article 6.2 of the DSU, a careful analysis of the requirement of specificity is due in each and every case submitted to a Panel, in order to ensure the proper functioning of the dispute 
settlement mechanism. 
 
12. Nonetheless, as it stands now, it is clear that Article 6.2 of the DSU does not impinge upon 
the complainant an obligation to provide length details, at this early stage of the procedure, on 
how and why the measure at stake should be considered inconsistent with a particular disposition of the Covered agreements.
9 As long as the challenged measure is discernible in the panel request 
and the legal basis of the complaint is clearly identified there seems to be no solid reason to 
                                               
7 See EC — Trademarks and Geog raphical Indications (US)  (Panel Report, paragraph 7.2.11):  “The 
Panel considers the ordinary meaning of the terms of the text in Article 6.2 of the DSU, read in their context 
and in the light of the object and purp ose of the provision, to be quite cl ear. They require that a request for 
establishment of a panel ‘identify the specific measures at  issue’. They do not require the identification of the 
‘specific aspects’ of these ‘specific measures’.” 
8 US – Continued Zeroing  (Appellate Body Report, paragraphs 168 – 169): “[…] the specificity 
requirement means that the measures at issue must be identified with sufficient precision so that what is 
referred to adjudication by a pane l may be discerned from the panel re quest […]. Moreover, although a 
measure cannot be identified without some indication of its contents, the identification of a measure within the meaning of Article 6.2 need be framed only with sufficie nt particularity so as to indicate the nature of the 
measure and the gist of what is at issue.” 
9 The Appellate Body has consistent ly distinguished the “claims” of a party from “arguments” presented 
in support of those claims. In Dominican Republic – Import  and Sale of Cigarettes (Appellate Body Report, 
paragraph. 121), the Appellate Body st ated that “[c]laims, which are typically allegations of violation of the 
substantive provisions of the WTO Agreement, must be set out clearly in the request for the establishment of a panel. Arguments, by contrast, are the means whereby a party progressively develo ps and support its claims. 
These do not need to be set out in detail in a panel request; rather, they may be developed in the submissions 
made to the panel.” In Korea – Dairy (Appellate Body Report (DS98), paragraph 139), the Appellate Body 
further clarified what it unde rstood by “claim”: “[…] By ‘claim’ we me an a claim that the respondent party has 
violated, or nullified or impaired the benefits arising fro m, an identified provision of a particular agreement.” 
Also in EC – Selected Customs Matters (Appellate Body Report (DS315), paragraph 153), the Appellate Body 
reiterates that “[a]rticle 6.2 of the DSU 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.” (o riginal emphasis).   WT/DS437/R/Add.1 
 
- A-27 - 
 
  dismiss the request and impede the procedure to take its course, where the specifics arguments 
put forward by both parties should entail an objective assessment of the case by the Panel. 
 13. In Brazil’s view, in light of the principles embodied in Article 3.3 of the DSU, the threshold 
examination of the panel request, relating to its “due process” and “jurisdictional” functions, 
should not be conflated with the substantive analysis of the complainant’s claims, which should take into account the arguments and the evidence produced by the parties later on in the 
proceedings. In this connection, Brazil recalls that whereas defects in panel requests cannot be 
“cured” by later clarification, panels are entitled to rely on the parties written submissions in order to interpret the panel request and define the precise scope of its jurisdiction.
10 
 
14. Brazil appreciates the opportunity to comment on the issues at stake in these proceedings, 
and hopes the viewpoints furthered hereby may assist the Panel in examining the matter before it.  
  
                                               
10 See Colombia – Ports of Entry  (Panel Report, paragraph 7.33), Thailand – H-Beams (Appellate Body 
Report, paragraph 95) and US – Carbon Steel (Appellate Body Report, paragraph 127). WT/DS437/R/Add.1 
 
- A-28 - 
 
  ANNEX A-6 
EXECUTIVE SUMMARY OF THIRD PARTY COMMENTS OF THE EUROPEAN UNION  
ON THE UNITED STATES REQUES T FOR A PRELIMINARY RULING  
 
 
Table of Contents 
 
I.  Introd uction  .............................................................................................................. .. 29 
II.  The right of Third Parties to be he ard on preliminary ruling requests .................................. 29 
III.  The substance of the US pr eliminary ruling  reques t ........................................................ 30 
IV.  Whether or not these issues are ripe for a prelimin ary ruling ............................................ 32 WT/DS437/R/Add.1 
 
- A-29 - 
 
  I. I NTRODUCTION  
 1. The European Union provides these comments on the US request for a preliminary ruling because of its systemic interest in the correct and consistent interpretation and application of the 
covered agreements and other relevant documents, in particular the Agreement on Subsidies and 
Countervailing Measures  (the SCM Agreement ) and the Understanding on Rules and Procedures 
Governing the Settlement of Disputes  (the DSU). 
 
II. T
HE RIGHT OF THIRD PARTIES TO BE HEARD ON PRELIMINARY RULING REQUESTS  
 2. The European Union refers to the Panel's communication of 21 January 2013, which refers to 
the Parties agreement  that the Third Parties be given an opportunity to comment on the US 
preliminary ruling request, and the Panel's agreement, without prejudice  to the arguments 
advanced by the Third Parties to that effect. The European Union considers that, subject to any 
issues of confidentiality , the Third Parties have a right to be heard on the US preliminary ruling 
request before  the Panel makes any decision with respect to it (acceptance, rejection or deferral), 
which right flows directly from Article 10 of the DSU, and is not subject to the agreement of the 
Parties or the Panel. 
 3. In the evolving practice of preliminary ruli ngs, which are not expressly provided for in the 
DSU, but would appear to be a (legitimate) exampl e of the exercise of the inherent jurisdiction 
that WTO adjudicators have to deal with matters arising during a particular dispute, some issues 
still remain to be clarified.   
4. On one view, such documents are not in the nature of binding and irreversible judicial 
determinations when they are made or issued. It is only when they are incorporated in the panel 
report (and eventually adopted by the DSB) that they acquire that status. In the meantime, they 
are rather in the nature of guidance to the parties and third parties about how to organise their 
briefs in the most efficient manner. Indeed, sometimes, a panel merely issues the ruling without any reasoning, deferring the reasoning to the panel report.  
5. This means that, in theory, a panel could change its mind between making such a 
preliminary ruling and the final panel report. Thus, having previously found a particular matter to be within the scope of the proceedings, and requ ired briefing on it from the parties and third 
parties, a panel could nevertheless change its mind in the panel report and decide that, after all, 
such matter should be considered outside the scope  of the proceedings. This would not appear to 
be particularly problematic from a due process poin t of view, or otherwise. Panels are free to make 
whatever determinations they wish in their repo rts, including with respect to the scope of the 
proceedings. Conversely, this would imply that a panel could find a matter outside the scope of the 
proceedings in a preliminary ruling, but change its mind and bring it back into the scope at a later stage. Obviously, this would raise due process issues. Parties and third parties would have to be 
given an opportunity to be heard on the enlarged substance, and this would likely delay the 
proceedings.  
6. Consistent with this model, the right to appeal a preliminary ruling arises only with the 
circulation of the final report and expires 60 days later. Also consistent with this model, it would not matter if third parties were heard only after the preliminary ruling (or guidance) would have 
been issued because, in theory, a panel could always change its mind. This model also implies that 
a panel should bear in mind the risk that its pr eliminary ruling could be reversed on appeal, and 
consider making any additional factual findings th at the Appellate Body might eventually require to 
complete the analysis. 
 
7. A different view is that the preliminary ruling is decisional in nature when made, notwithstanding the fact that the panel may have the possibility of revising such ruling at a later 
date. Based on the proposition that the substance rather than the form of a document is 
determinative as to its nature, that could imply that it should be considered for adoption by the DSB or appealed within 60 days. This approach woul d be consistent with the proposition that it is 
desirable, in terms of the efficiency of dispute pr oceedings, that preliminary issues be definitively 
and finally  settled at an early stage. It would alleviate panels from the need to make additional 
factual findings to cover the eventuality of preliminary rulings embedded in panel reports being reversed by the Appellate Body. It would imply that third parties must be heard before  any ruling 
would be issued. WT/DS437/R/Add.1 
 
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  8. For the time being, the WTO dispute settlement system appears to be continuing to operate 
on the basis of the first model outlined above. However, there are elements of the recent Appellate Body ruling in Raw Materials  that emphasise the desirability of settling preliminary issues at an 
early stage, where possible. This appears to be reflected in developments in some panel 
proceedings. For example, in the present proceeding s, the panel has timetabled two sets of briefs 
from the Parties on the preliminary issue, and has also expressly timetabled its intention to issue a 
communication on the US preliminary ruling request  (acceptance, rejection or deferral) before  the 
time limit provided for Third Parties to file their written submissions on the substance. 
 9. The European Union's view is that, even if th e WTO dispute settlement is, for the time being, 
continuing to operate on the basis of the first model outlined above, nevertheless, for all practical 
purposes , the guidance provided by panels in preliminary rulings remains essentially unchanged in 
final reports. The European Union is not aware of any case in which a panel has changed its mind about a preliminary ruling. In these circumstances, panels should provide third parties with an 
opportunity to be heard on the preliminary issues before a communication (acceptance, rejection, 
deferral) is issued, in line with the requirem ents of  Article 10 of the DSU. Otherwise, de facto , a 
third party would stand little if any chance of persuading a panel to change its mind. And in any 
event the panel would have lost the opportunity to reflect the views and arguments of third parties 
in perhaps more subtle ways in the reasoning of its preliminary ruling. This would inevitably mean that third party rights would, in effect, be diminished . In this respect, the European Union would 
point to the term "fully" in Article 10.1 of the DSU, which also features in the jurisprudence 
relating to third party rights on compliance proceedings (they have the right to receive all 
submissions to the first and only hearing). The European Union considers that effectively diminishing  third party rights (by hearing third parties only after the horse has, for all practical 
purposes, left the stable) would not be consistent with the requirement that the interests of third 
parties should be fully taken into account. This is particularly so since there does not as yet appear 
to be any firm clarification of what types of issue are fit for preliminary adjudication. WTO disputes 
settlement leads to a multilateral  clarification of the covered agreements, and in order to justify 
that description as a matter of substance  and not just as a formal label, it is imperative that 
Members wishing to participate as third parties retain their full and effective right to be heard on all matters decided by a panel. 
 
10. The European Union recognises that, pursuant  to Article 10.2 of the DSU, this means that 
the submissions of the third parties on th e preliminary issues must be reflected in the panel 
report . This is a burden for the Secretariat and may require some additional time. Nevertheless, it 
is a burden that may be to a considerable extent alleviated by the practice of requesting and receiving executive summaries from third parties, including with respect to their comments on any 
preliminary issues. Having regard to the need to find a reasonable balance between the interest of 
prompt settlement and the role of third parties, the European Union would not understand that, at 
this stage of the development of the dispute settl ement system, the views of the third parties on 
the preliminary issues must necessarily be reflected in the preliminary ruling itself , provided that 
they are reflected in the panel report. 
 III. T
HE SUBSTANCE OF THE US PRELIMINARY RULING REQUEST  
 
11. The European Union is not persuaded that th e mere fact that the scope of a particular 
proceeding is broad, in the sense that it refers to a relatively large number of measures, is 
particularly relevant to the discussion. The number of measures is not necessarily a matter for 
which the complaining Member is responsible. It may equally be a function of the number of WTO inconsistent measures that the defending Member has chosen to adopt. If the defending Member 
has adopted twenty WTO inconsistent measures, then it does not appear unreasonable for the 
complaining Member to seek review of those twen ty measures. Nor would it appear particularly 
efficient or desirable for the complaining Member to commence twenty separate panel proceedings. Although Article 9 of the DSU refers to situations where there is more than one 
complaining Member, at least by analogy, it indicates a preference for efficiency where possible in 
the conduct of DSU proceedings, including the use of a single panel.  
12. For similar reasons, the European Union is not particularly persuaded that the fact that each 
measure might contain more than one instance of inconsistency is particularly relevant to the discussion. The complaining Member does not have to start a panel proceeding for each instance of inconsistency. Rather, it may start one panel proceeding, referring to the measure, and 
referring to each instance of inconsistency. WT/DS437/R/Add.1 
 
- A-31 - 
 
  13. The European Union considers that, when referring to more than one instance of 
inconsistency in a measure, there may be different ways of complying with the requirements of Article 6.2 of the DSU. One approach might be to cite to the page, paragraph number, line, 
column, etc. where the instance of inconsistency is to be found. That appears to be what the 
United States would have preferred in this case, and the European Union does have some 
sympathy with that observation, insofar as one may reasonable ask why China did not do that in its panel request. On the other hand, there might be other reasonable ways of directing the 
defending Member to the instances of inconsistency without citations. For example, if all the 
instances of inconsistency would be associated with the term "adverse", as essentially appears to be the case here (the other instances are further discussed below), then it would appear to be a relatively simple matter for the defending Member to review the measure or measures and identify 
the instances where that term is used. Current software contains search functions that 
substantially facilitate that process. For these reasons, the European Union considers that, whilst it might have been preferable for China to provide citations, this is not expressly required by 
Article 6.2 of the DSU, provided that some othe r method has been used that reasonably directs 
the defending Member to the instances of inconsistency.  
14. Claims that do not relate to the use of facts available may be relatively less complex. They 
may involve pointing at one particular statement in the measure at issue and a particular WTO obligation, from which the alleged inconsistency may more or less speak for itself, and thus be susceptible to brief summary in a panel request. On the other hand, one of the difficulties with 
respect to claims regarding the use of facts available is that, in order to adjudicate the claim, it 
may be necessary to have a thorough overview  of the relevant investigation and measure, 
including the procedural context. A number of different but related factors may need to be taken 
into consideration. The European Union does not consider that Article 6.2 of the DSU requires a 
panel request to set out all these factual and procedural matters that might be relevant to such a 
claim. 
 
15. On the other hand, as the United States observes, there are different issues that might arise under Article 12.7 of the SCM Agreement  in connection with the use of facts available or adverse 
facts available. For example, it might be alleged that the entity was not an interested Member or 
party; that it did not refuse access to or otherwise not provide – either because it was not asked 
or asked precisely enough or did in fact provide; that the information was not necessary; that the time provided was not reasonable; that the set of facts used was under or over inclusive; that the 
inferences drawn were excessively attenuated; or that there is no a basis in that provision for 
drawing adverse inferences. One might have thought that, if the complaining Member would have already at the time of its panel request itself worked out which of these issues best describes the 
problem (and there might be more than one) it might indicate that in its panel request. 
 16. That said, looking at China's panel request, it is clear that China did expressly refer to the issue of adversity. Thus, it seems that, on the one hand, the instances of inconsistency (labelled 
with the term "adverse") have been identified, an d, on the other hand, the nature of the problem 
under Article 12.7 of the SCM Agreement  (adversity) has also been identified. The United States 
complaint therefore appears to reduce to the point that China should have somehow connected 
these two elements in its panel request. And yet China's panel request does contain the term 
"because". In other words, it appears to result from China's panel request that China is complaining about each instance where the term "adverse" is used because  this is inconsistent 
with Article 12.7 of the SCM Agreement . Since China's point is that this is something that is not 
provided for in Article 12.7 of the SCM Agreement , it is not clear why China would have been 
expected to refer to other elements of that provis ion in its panel request. In these circumstances, 
the European Union would have some difficulty to reach the conclusion that China's panel request 
is inconsistent with Article 6.2 of the DSU. 
 17. The position with respect to the use of facts available other than adverse facts available, of 
which China states there are some instances, is  slightly different. Here, the European Union 
considers that the United States may have a point. Even if the United States would be able to identify the instances of inconsistency in the measures at issue (perhaps a slightly more difficult 
but certainly not impossible task), nevertheless, the question remains, which element or elements 
of Article 12.7 of the SCM Agreement  best encapsulates the problem? As indicated above, the 
European Union does not consider that China should have set out all the facts and procedural context. Nevertheless, some further effort to spec ify the problem, in the light of the language of 
Article 12.7 of the SCM Agreement  might have been reasonable, assuming that China had itself WT/DS437/R/Add.1 
 
- A-32 - 
 
  already formed a view on this issue, and having regard to the interest of the United States to 
prepare its defence.  IV. W
HETHER OR NOT THESE ISSUES ARE RIPE FOR A PRELIMINARY RULING  
 
18. The European Union notes that Article 6.2 DSU issues are fairly typical preliminary issues, relating as they do to a jurisdictional question, and a document that is usually of manageable 
length. As indicated above, in cases involving facts available, some caution may need to be 
exercised as to whether a matter is ripe for a preliminary ruling, one way or the other.  19. However, in this particular case, and taking into account the recent guidance from the 
Appellate Body in Raw Materials , the European Union considers that the Panel is in a position to 
rule. The European Union considers that, whilst the Parties have engaged in some somewhat spirited exchanges, it is tolerably clear that the instances of use of adverse facts available may be 
located by the United States, and that China's complaint is clear enough. On the other hand, it is 
also tolerably clear that, with respect to the use of facts available other than adverse facts available, China has not done all it might reasonab ly have done, having regard to the terms of the 
provision pursuant to which it is making its claims. 
 WT/DS437/R/Add.1 
 
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  ANNEX A-7 
RESPONSE OF THE UNITED STATES TO THIRD PARTY COMMENTS ON  
THE UNITED STATES REQUEST FOR A PRELIMINARY RULING  
1. The United States received comments from Australia, dated January 24, 2013, and from 
Brazil, dated January 25, 2013. The United States does not have any response to Australia’s 
communication, but will take the opportunity to briefly address the comments of Brazil.  
2. In its submission, Brazil correctly calls for a careful analysis of the panel request and 
emphasizes the importance of the panel request for providing notice to the other party(ies) and other Members of the matter that is the subject of the dispute.    
3. As a third party, Brazil cannot be expected to have the same level of understanding of the 
facts involved in the dispute as the Panel and the parties. Accordingly, Brazil’s statement that the 
“large number of complex measures” referenced in China’s panel request “seem” to be “discernible 
not only by their content … but also by their respective legal instruments”
1 understandably does 
not reflect a full appreciation of the facts presented. For the reasons that have been set out in the prior submissions of the United States, China’s panel request does not present the problem clearly 
given the broad scope of the measures referenced in the panel request (which include 
determinations to initiate investigations; the conduct of investigations; any preliminary or final countervailing duty determinations, as well as “any  notices, annexes, decision memoranda, orders, 
amendments or other instruments issued” in conjunction with the 22 investigations)
2 as well as the 
lack of any description of the claim.3 As the United States has explained, China’s reference to 
22 investigations, containing hundreds of “uses” of facts available does not identify the “problem” which is the subject of the panel request. For that reason, the panel request fails to meet the 
standard set out in Article 6.2. 
 
                                               
1 Brazil’s Comments on the U.S. Reques t for a Preliminary Ruling, para. 8. 
2 Panel Request at 2. 
3 Id. at 4-5. WT/DS437/R/Add.1 
 
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  ANNEX A-8 
COMMUNICATION FROM THE PANEL 
PRELIMINARY RULING 
 
 
 
UNITED STATES – COUNTERVAILING DUTY MEASURES  
ON CERTAIN PRODUCTS FROM CHINA 
 
COMMUNICATION FROM THE PANEL 
 The following communication, dated 14 February 2013, was received from the Chairperson 
of the Panel with the request that it be circulated to the Dispute Settlement Body ("DSB"). 
 
_______________ 
 
  On 14 December 2012, the United States submitted to the Panel a request for a preliminary 
ruling concerning the consistency of China's request for the establishment of a Panel 
(WT/DS437/2) with Article 6.2 of the Understa nding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU").  
On 8 February 2013, the Panel issued the encl osed preliminary ruling to the parties. The 
preliminary ruling will become an integral part of the Panel's final report, subject to any changes that may be necessary in the light of comments received from the parties during Interim Review. 
 
After consulting the parties to the dispute, the Panel decided to inform the DSB of the 
content of its preliminary ruling. Therefore, I woul d be grateful if you would circulate the body of 
this letter and the enclosed preliminary ruling as document WT/DS437/4. 
 WT/DS437/R/Add.1 
 
- A-35 - 
 
  COMMUNICATION FROM THE PANEL 
PRELIMINARY RULING 
  
1  PROCEDURAL BACKGROUND 
1.1.  On 14 December 2012, the United States submitted to the Panel a request for a preliminary 
ruling concerning the consistency of China's request for the establishment of a Panel 
(WT/DS437/2) with Article 6.2 of the Understa nding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU").  
1.2.  The United States requested that the Panel ru le on the preliminary issue before the filing of 
first written submissions. In contrast, China argued that the Panel should rule on the preliminary 
request at a later stage of proceedings. Ultimately, the Panel decided it would issue a 
communication to the parties on the preliminary ruling request prior to the filing of first written submissions. As a result of this decision, some third parties communicated concerns to the Panel 
about their rights to participate in the preliminar y ruling process. The Panel sought the views of 
the parties on this issue, and both the United St ates and China supported third parties being given 
the opportunity to comment during the preliminary ruling process. 
1.3.  The Panel decided to allow third parties the opportunity to comment on the preliminary ruling 
request. In reaching this decision, the Panel reas oned that, while Article 10.2 of the DSU provides 
third parties with an "opportunity to be heard", it does not explicitly state whether this extends to commenting on a preliminary review process, in circumstances where a panel has decided to make 
its ruling prior to the receipt of the first written submissions of the parties and third parties. 
Therefore, the Panel was of the view that it had some discretion in this regard. The Panel decided 
to exercise its discretion in favour of the third pa rties in this dispute for a number of reasons. In 
particular, the Panel noted that neither party had objected to this course of action. Further, the 
Panel was of the view that the jurisdictional issue before it was a systemic one and that the consequences of the Panel accepting the United States' request not to assume jurisdiction on a 
particular issue would be serious.
1 Finally, in the particular circumstances of this dispute, the Panel 
noted that one of the United States' arguments in its preliminary ruling request was that Article 6.2 protects the rights of third partie s, and that these third party rights had been 
prejudiced due to China's allegedly deficient panel request.
2 In the Panel's view, given that the 
issues of substance relate to third party rights, it  was particularly important that third parties be 
given the opportunity to comment on the preliminary ruling request. 
1.4.  Finally, although the United States proposed  that the Panel meet with the parties to consider 
the preliminary ruling request, the Panel did not consider this necessary. 
2  ARGUMENTS OF THE PARTIES 2.1  United States 
2.1.  The United States requests the Panel to find that China's "as applied" challenge to "instances" 
in which the United States Department of Commerce ("USDOC") "used facts available" is not within its terms of reference because China's pa nel request does not meet the requirements of 
Article 6.2 of the DSU.  
2.2.  The United States' request relates to the se ction of China's panel request that sets out the 
"legal basis of the complaint" in relation to China's "as applied" claims. This section of the panel request commences with the following paragraph: 
China considers that the initiation and conduct of the identified countervailing duty 
investigations, as well as the countervailing duty determinations, orders, and any definitive countervailing duties imposed pursuant thereto, are inconsistent, at a 
minimum, with the obligations of the United States specified below. 
                                               
1 In this regard, see also Panel Report, Canada – Wheat Exports and Grain Imports, para. 6.6. 
2 United States' preliminary ruling request, para. 29. WT/DS437/R/Add.1 
 
- A-36 - 
 
  2.3.  The United States' position is that subparagraph (d), following the above introductory 
paragraph, does not satisfy Article 6.2 of the DSU. It provides: 
In connection with all the identified countervailing duty investigations in which the 
USDOC has issued a preliminary or final countervailing duty determination: 
(1) Article 12.7 of the SCM Agreement, because the USDOC resorted to facts 
available, and used facts available, includ ing so-called "adverse" facts available, in 
manners that were inconsistent with that provision.10 
_______________ 
10 This claim arises in respect of each instance in which the USDOC used facts 
available , including "adverse" facts available, to support its findings of financial 
contribution, specificity, and benefit in the investigations and determinations identified 
in Appendix 1. 
2.4.  The United States' principal complaint is that China's panel request does not adequately 
identify the "instances" of the use of facts av ailable by USDOC that China is challenging and 
consequently, does not present the problem clearly. According to the United States, the reference 
to each "instance" in which facts available were used could refer to any of the hundreds of applications of facts available by USDOC in support of its findings of financial contribution, benefit 
and specificity, at any stage of the investigation, wherever made, and whether the determination 
was preliminary or final in nature. The United States contends that China's decision to present a panel request with an extremely broad scope in relation to the multiple stages of each investigation contributes to the panel request's lack of clarity.  
2.5.  The United States variously complains that China has failed to "plainly connect" the cited 
WTO obligation and the measures listed in the panel request
3; has failed to "provide a brief 
summary" of the legal basis of its claim "sufficient to present the problem clearly"4; and has failed 
to explain "how or why" the measure at issue is considered by China to be inconsistent with 
Article 12.7 of the Agreement on Subsidies an d Countervailing Measures ("SCM Agreement").5 The 
United States contends that each of these defici encies in the panel request arises because of the 
failure to identify the "instances" of the use of facts available challenged by China. 
2.6.  We note that in its preliminary ruling requ est, the United States submits that an explanation 
of "how or why" the measures at issue violates  Article 12.7 of the SCM Agreement required China 
to "indicate what portions of the various documents … are the alleged breach of the facts available 
obligations in Article 12.7".6 However, in response to a Panel question, the United States adds that 
in order to explain "how or why" a measure has breached Article 12.7, a complainant could state, for example, that "a Member has breached Article 12.7 because it improperly rejected necessary 
information provided by an importer in an investigation".
7  
2.7.  The United States also refers to "another  source of ambiguity in China's panel request", 
namely that China did not specify which of the obligations found within Article 12.7 of the 
SCM Agreement USDOC is alleged to have breached.8 However, in its preliminary ruling request, 
the United States "does not assert that this lack of clarity, standing alone, necessarily renders this or any other panel request deficient".
9  
                                               
3 United States' preliminary ruling  request, paras. 23 and 25 and Unit ed States' comments on China's 
response to the preliminary ruli ng request, paras. 13 and 16. 
4 United States' preliminary ruling request, paras. 3, 23, 25, 26 and 27 and United States' comments on 
China's response to the preliminary ru ling request, paras. 1, 3 and 17. 
5 United States' preliminary ruling  request, para. 26 and United Stat es' comments on China's response 
to the preliminary ruli ng request, para. 18. 
6 United States' preliminary ruling request, para. 26. 
7 United States' response to Panel question 4, para. 7. 
8 United States' preliminary ruling request, para. 22. 
9 United States' preliminary ruling request, para. 22.  In response to China's rebuttal about whether it 
needed to specify which obligations under Article 12.7 of the SCM Agreement it is challenging, the United States again reiterates that it  does not assert the "lack of clarity" surrounding the obligations at issue WT/DS437/R/Add.1 
 
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  2.8.  Finally, in relation to China's submissions on the preliminary ruling request, the United States 
argues that China provides new descriptions of its facts available claims, which only serve to demonstrate that the claims, as described in the panel request, fail adequately to present the problem. The United States also refutes the suggestion from China that it should be able to discern 
the content of the facts available claims on the basi s of the content of the United States' claims in 
China – GOES . According to the United States, the claims in China – GOES  have no relationship to 
China's claims in this dispute. 
2.2  China 
2.9.  China argues that the United States' prelim inary ruling request is essentially based upon the 
proposition that the large number of instances in which USDOC used facts available in the determinations at issue imposed an enhanced obligation under Article 6.2 of the DSU. China 
contends that the United States has no authority for this proposition. Rather, China's position is 
that the instances in which USDOC used facts available are identified within each of the determinations at issue. Further, the panel request plainly states that "each" such instance is 
inconsistent with Article 12.7 of the SCM Agreement. Therefore, China has met its obligations 
under Article 6.2 of the DSU. 
2.10.  In its first submission to the Panel, many  of China's submissions refer to USDOC's use of 
"adverse" facts available. However, in its second submission, China clarifies that its position is that 
the panel request states that China is challenging "each instance" in which USDOC used facts available, "including so-called 'adverse' facts available". However, virtually all of the instances in which USDOC used facts available involved the use of "adverse" facts available, as is evident on 
the face of the determinations at issue. This is why it is China's principal concern. 
2.11.  According to China, the specific instance s in which USDOC used "adverse" facts available 
are simple to discern. The only measures at i ssue in which USDOC would have used "adverse" 
facts available for any purpose are the 19 final determinations and the three preliminary 
determinations listed in Appendix 1 to the panel request. China notes that USDOC releases an "Issues and Decision Memorandum" and a Federal Register notice to explain its reasoning in 
relation to final and preliminary determinations respectively. These documents set forth USDOC's 
rationale for the use of facts available, including "adverse" facts available. Therefore, China argues 
that it is preposterous for the United States to argue that "it is not possible to discern" the "instances" in which China considers USDOC to have used facts available. 
2.12.  According to China, it is apparent that the United States' actual concern is not its ability to 
identify  the instances in which USDOC used "adverse" facts available, but rather the number of 
instances  in which USDOC did so. However, China notes that regardless of the number of instances 
of a violation involved in a claim, a Member is only ever required to connect the challenged 
measures to the provision of the covered agreemen ts claimed to have been infringed. China has 
fulfilled this requirement by indicating that "each instance" of the use of "adverse" facts available 
infringes Article 12.7 of the SCM Agreement, wher e the ordinary meaning of "each" is "every". 
2.13.  China asserts that it was not required to explain in its panel request which aspects  of 
Article 12.7 it considers the United States to have violated. This would amount to arguments, 
which are not required in a panel request. 
2.14.  According to China, the United States fails to identify any prior decision under Article 6.2 of 
the DSU that is even remotely analogous to what th e United States is requesting from the Panel in 
this case. Further, China submits that the United States should understand China's "adverse" facts 
available claim, given that it recently successfully litigated the same issue against China in China – 
GOES. Therefore, it should have been obvious to the United States that China's claim in 
subsection (d)(1) of the panel request relates, at least in part, to the issue of whether an 
investigating authority may resort to "adverse" facts available under Article 12.7 of the 
SCM Agreement. 
                                                                                                                                               
under Article 12.7 necessarily renders the panel request in consistent with Article 6.2 of the DSU (United States' 
comments on China's response to the pr eliminary ruling request, para. 14). WT/DS437/R/Add.1 
 
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  3  ARGUMENTS OF THE THIRD PARTIES 
3.1  Australia 3.1.  In Australia's view, due process requires that responding parties receive details about the 
complaint that are sufficient to enable them to frame their response, particularly in the light of the 
tight timeframes associated with panel proceedings. 
3.2  Brazil 3.2.  Brazil contends that in order for a panel request to comply with Article 6.2 of the DSU, it 
must identify the measure targeted in the dispute and must provide a brief summary of the legal 
basis of the claims. There is no obligation under Article 6.2 for the complaining party to develop in the panel request the legal arguments that support its claims or to provide a detailed explanation of why and how the measures at issue are inconsistent with a provision of a covered agreement. 
However, Brazil does not advocate that permissive  standards of specificity should prevail in DSU 
proceedings and notes that greater precision and clarity in panel requests would contribute to better define the boundaries of a panel's jurisdiction. 
3.3.  In Brazil's view, China's panel request identifies the measures at issue with sufficient 
particularity to allow the defendant to identify their "nature and the gist of what is at issue".
10 
Brazil notes that merely listing the provisions of the covered agreements allegedly violated may 
not always satisfy Article 6.2 of the DSU. However,  in the circumstances of this case, the language 
of Article 12.7 of the SCM Agreement raises no doubt regarding the legal problem identified by 
China.  
3.3  European Union 
3.4.  The European Union provides detailed submissions regarding why, in its view, third parties 
have a right to be heard on a preliminary ruling  request before any communication on the request 
is issued by the panel.  
3.5.  Regarding the substance of the preliminary ru ling request, the European Union notes that it 
is not persuaded that the mere fact that the scope of a particular proceeding is broad is relevant to the analysis under Article 6.2 of the DSU. 
3.6.  The European Union observes that there are different issues that might arise under 
Article 12.7 of the SCM Agreement in connection with the use of facts available. According to the European Union, if at the time of submitting the panel request the complaining member has already worked out which of the issues best describes the problem, it might indicate this in the 
panel request. In relation to China's panel reques t, the European Union notes that China expressly 
referred to the use of "adverse" facts available and indicated that this was inconsistent with Article 12.7. Therefore, in the European Union's view, China's challenge to the use of adverse facts 
available falls within the Panel's jurisdiction. However, with respect to the use of facts available 
other than the use of adverse facts available, the European Union is of the view that "some further 
effort to specify the problem … might have been reasonable".
11 
4  EVALUATION BY THE PANEL 
4.1  The provision at issue 4.1.  Article 6.2 of the DSU provides, relevantly: 
The request for the establishment of a panel shall be made in writing. It shall indicate 
whether consultations were held, identify the specific measures at issue and provide a 
brief summary of the legal basis of the complaint sufficient to present the problem clearly. 
                                               
10 Brazil's comments on the preliminary ruling request, para. 8. 
11 European Union's commen ts on the preliminary ruling request, para. 17. WT/DS437/R/Add.1 
 
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  4.2  The measures at issue 
4.2.  At the outset, we note that the "specific measures at issue" in relation to China's claims 
under Article 12.7 are identified in the panel request. While the introduction to the "as applied" section of China's panel request refers to the initiation and conduct of investigations, the 
determinations, orders and definitive duties, it is clear that for the purposes of a facts available 
claim under Article 12.7 of the SCM Agreement, the only measures in which USDOC could have applied facts available are the final and preliminary countervailing duty determinations. Therefore, 
the "specific measures at issue" are the 19 final and the three preliminary countervailing duty 
determinations listed in Appendix 1 to the panel request. 
4.3  Did China adequately identify the "instanc es" of the use of facts available that it is 
challenging? 
4.3.  The United States' principal complaint is that China's panel request does not adequately 
identify the "instances" of the use of facts av ailable by USDOC that China is challenging and 
therefore does not "present the problem clearly". The United States variously complains that China 
has failed to "plainly connect" the cited WTO obligation and the measures listed in the panel 
request
12; has failed to "provide a brief summary" of the legal basis of its claim "sufficient to 
present the problem clearly"13; and has failed to explain "how or why" the measure at issue is 
considered by China to be inconsistent with Article 12.7 of the SCM Agreement.14 The 
United States contends that each of these defici encies in the panel request arises because of the 
failure to identify the "instances" of the use of facts available that are challenged by China. 
4.4.  The Panel notes that the measures at issue in relation to the facts available claims include 
the Issues and Decisions Memoranda and Federal Register Notices, which are incorporated by 
reference into the final and preliminary determinations respectively.15 The Panel has examined the 
memoranda and notices which are incorporated into the determinations listed in Appendix 1 to the 
panel request, and which are publicly available. In our view, in these documents the "instances" in 
which USDOC applied facts available are readily identifiable. Consequently, we are not persuaded by the United States' argument that "it is not possible to discern what are those 'instances' in 
which China considers the investigating authority used facts available".
16  
4.5.  The United States' complaint that China did not adequately identify the "instances" of the use 
of facts available at issue appears to be premised upon an assumption that China is not intending to challenge every application of facts available by USDOC. For example, the United States argues 
that China fails to indicate "which of the potentially hundreds of applications of facts available are 
of concern for purposes of the dispute".
17 However, the panel request states that China will 
challenge "each" instance of the use of facts avai lable and China insists that this should be read 
literally. In particular, China argues that it will challenge "each", in the sense of "every", use of 
facts available by USDOC.18 If the panel request were to state that China challenges "some" or 
"numerous" applications of facts available, we would consider the United States to have a valid 
argument. However, in our view, the panel request is clear that all "instances" of the use of facts 
available will be challenged, and China confirms this in its submissions to the panel. 
4.6.  Therefore, in our view, it is possible to iden tify the specific aspects of each measure that will 
be challenged by China under Article 12.7 of the SCM Agreement, namely, all instances of the use 
of facts available, as found in the relevant I ssues and Decisions Memoranda and Federal Register 
notices. Although the number of applications of facts available is indeed large, as argued by the 
                                               
12 United States' preliminary ruling  request, paras. 23 and 25 and Unit ed States' comments on China's 
response to the preliminary ruli ng request, paras. 13 and 16. 
13 United States' preliminary ruling  request, paras. 3, 23, 25, 26 and 27 and United States' comments 
on China's response to the preliminary ruling request, pa ras. 1, 3 and 17. 
14 United States' preliminary ruling  request, para. 26 and United Stat es' comments on China's response 
to the preliminary ruli ng request, para. 18. 
15 The panel request expressly states that the preliminary and countervailing duty measures include 
"any notices [and] decision memorand a … issued by the United States in connection with the … measures" 
("WT/DS437/2, p.1, part A). 
16 United States' preliminary ruling request, para. 18. 
17 United States' preliminary ruling request, para. 3. 
18 See China's response to the United Stat es' preliminary ruling  request, para. 4. WT/DS437/R/Add.1 
 
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  United States, this does not prevent the United St ates, third parties and the Panel from being able 
to identify all of the "instances" in which USDOC applied facts available. 
4.7.  The Panel is not convinced that the situation before the Panel is equivalent to that before the 
Appellate Body in China – Raw Materials. In that case, it was not clear on the face of the panel 
request which of the listed measures allegedly vi olated which of the listed provisions of the 
covered agreements. However, in the case before  the Panel, it is clear that every final and 
preliminary determination listed in Appendix 1 to the panel request is alleged to be inconsistent 
with a single provision of the SCM Agreement, namely 12.7. Therefore, in our view, the panel 
request "plainly connects" the measures to the provision at issue. 
4.4  Did China otherwise "provide a brief su mmary of the legal basis of the complaint 
sufficient to present the problem clearly"? 
4.8.  In its preliminary ruling request and its comments on China's response to the request, the 
United States' argument that China did not "provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly" is based upon the contention that China did 
not adequately identify the "instances" of the use of facts available that are at issue. For example, 
the United States' reliance on the Appellate Body's statement in EC – Selected Customs Matters, 
namely  that Article 6.2 of the DSU requires a succinct explanation of "how or why" the measure at 
issue is considered to be violating the WTO obligation in question, is rather limited.
19 It does not 
suggest that, in order to explain "how or why" the measure was inconsistent with Article 12.7 of the SCM Agreement, China was required to include further details of which aspects of the obligations under Article 12.7 it would be challenging in the dispute. Rather, the United States 
argues that "by failing to indicate what portions of the various documents in the 22 covered 
investigations are the alleged breach of the facts available obligations in Article 12.7, China's panel request includes no explanation - succinct or otherwise - on how or why these measures violate 
Article 12.7".
20  
4.9.  However, in response to a Panel question, the United States perhaps presents a broader view 
of how the "instances" of application of facts available could have been identified. In particular, the 
United States notes that: 
China might have described the uses of fact s available (e.g., the specific proceeding, 
respondent, and type of fact) that it wished to challenge and the bases for challenging those uses. Or, perhaps China could have described a specific class or type of facts 
available determination that it intended to challenge and the basis for that 
challenge.
21 
Further, in responding to a Panel question regarding the distinction between, on the one hand, 
"how and why" a measure violates a WTO obligation and, on the other hand, the arguments 
supporting a claim of violation, the United States argues:  
A complaining party bringing a facts available claim could summarize it in a number of 
ways, depending on the facts and legal theori es at issue. For example, a complainant 
could state that a Member has breached Article 12.7 because it improperly rejected necessary information provided by an importer in an investigation, or because it applied facts available to an importer who was not a respondent in an investigation. 
Such a description would explain how or why a Member is alleged to have breached 
Article 12.7 but does not involve argumentation.
22 
4.10.  The United States' responses to these panel questions appear to be related to the 
United States' submission in its preliminary ruling request in which it refers to "another source of 
ambiguity in China's panel request", namely that China did not specify which of the obligations found within Article 12.7 of the SCM Agreement USDOC is alleged to have breached.
23 However, 
                                               
19 United States' preliminary ruling  request, para. 26 and United Stat es' comments on China's response 
to the preliminary ruli ng request, para. 18. 
20 United States' preliminary ruling request, para. 26. 
21 United States' response to Panel question 3, para. 6. 
22 United States' response to Panel question 4, para. 7. 
23 United States' preliminary ruling request, para. 22. WT/DS437/R/Add.1 
 
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  this argument is not forcefully pursued by the United States. In particular, the United States "does 
not assert that this lack of clarity, standing alone, necessarily renders this or any other panel 
request deficient".24  
4.11.  We note that the Appellate Body has arti culated various means by which a panel request is 
able to "provide a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly". In particular, the Appellate Body has noted that a panel request must "plainly connect" the challenged measures with the provisions of the covered agreements at issue.
25 
Further, the Appellate Body has stated that a brief summary of the legal basis of the complaint 
"aims to explain succinctly how or why the measure at issue is considered by the complaining 
Member to be violating the WTO obligation in question".26 However, the Appellate Body has 
consistently held that "Article 6.2 of the DSU requires that the claims , but not the arguments , 
must all be specified sufficiently in the request for the establishment of a panel".27 Finally, the 
Appellate Body has noted that whether a particular panel request meets the requirements of Article 6.2 must be assessed on a case-by-case basis.
28 
4.12.  While the Appellate Body has articulate d these broad statements, the precise manner in 
which they should be applied is not entirely clear. In particular, it is not always clear how a summary of claims should be distinguished from arguments in support of a claim. In our view, 
some guidance on the application of these stat ements, and the requirement to "provide a brief 
summary of the legal basis of a complaint" can be found by examining the Appellate Body's own 
application of Article 6.2 in specific cases.  
4.13.  In US – Carbon Steel, the Appellate Body noted that whether merely listing a treaty 
provision is sufficient to constitute a brief summary of the legal basis of the complaint under 
Article 6.2 of the DSU "will depend on the circumstances of each case, and in particular on the extent to which mere reference to a treaty provision sheds light on the nature of the obligation at 
issue".
29 In US – Certain EC Products, the panel request stated that the "European Communities 
considers that this US measure is in flagrant breach of…Article 23 of the DSU".30 The 
Appellate Body held that this was sufficient to include a claim of violation of Article 23.2(a) of the 
DSU within the panel's terms of reference. The Appellate Body reasoned that there is a close link 
between the all the obligations listed in the sub-pa ragraphs of Article 23, in that they all concern 
the obligation on WTO members not to have recourse to unilateral action, and so concluded that the general reference to Article 23 of the DSU was sufficient to include a claim under 
Article 23.2(a) of the DSU within the panel's jurisdiction.
31 Therefore, it seems the Appellate Body 
accepted the reference to the "flagrant breach of Article 23" as sufficient to "provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly". Similarly in 
Thailand – H-Beams, both the Panel and the Appellate Body held the panel request at issue to be 
consistent with Article 6.2 of the DSU. The panel request provided, relevantly, that "Thai authorities initiated and conducted this investigation in violation of the procedural and evidentiary 
requirements of … Article 5 … of  the Anti-Dumping Agreement".
32 Ultimately, Poland's claims under 
Article 5 were brought under Articles 5.2, 5.3 and 5.5 of the Anti-Dumping Agreement. However, the Appellate Body held that due to the "interlinked nature of the obligations in Article 5, we are of 
the view that, in the facts and circumstances of this case, Poland's reference to 'the 
procedural…requirements' of Article 5 was sufficient to meet the minimum requirements of 
Article 6.2".
33 
4.14.  In a more recent case, EC – Fasteners (China), the Appellate Body held that although a 
complainant need not provide arguments in a panel request, in the circumstances of the case 
before it, it did not consider the mere listing of Articles 6.2 and 6.4 of the Anti-Dumping 
                                               
24 United States' preliminary ruling  request, para. 22 and United Stat es' comments on China's response 
to the preliminary ruli ng request, para. 14. 
25 Appellate Body Reports, US – Oil Country Tubular Goods Sunset Reviews, para. 162 and China – Raw 
Materials, para. 220. 
26 Appellate Body Report, EC – Selected Customs Matters, para. 130 . 
27See, for example, Appellate Body Report, EC – Bananas III, para. 143. 
28 See, for example, Appellate Body Report, Korea – Dairy, para. 127. 
29 Appellate Body Report, US – Carbon Steel, para. 130. 
30 See, Appellate Body Report, US – Certain EC Products, para. 109. 
31 Appellate Body Report, US – Certain EC Products, para. 111. 
32 See Appellate Body Report, Thailand – H-Beams, para. 89. 
33 Appellate Body Report, Thailand – H-Beams, para. 93. WT/DS437/R/Add.1 
 
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  Agreement as adequate to "provide a brief summary of the legal basis of the complaint sufficient 
to present the problem clearly". The Appellate Body reasoned that the obligations in Articles 6.2 and 6.4 of the Anti-Dumping Agreement are "relat ively broad in scope and apply on a continuous 
basis throughout an investigation".
34 
4.15.  Therefore, the Appellate Body has held that  merely listing the provision that forms the legal 
basis of the complaint will not always be sufficien t to meet the requirement of Article 6.2 of the 
DSU to provide a brief summary of the legal basis of the complaint, but that in some 
circumstances it may be. We note that many panels have made similar statements and in certain 
circumstances have found that the listing of a provision is sufficient to satisfy the obligations encompassed in Article 6.2 of the DSU.
35 
4.16.  In the circumstances of this case, we no te that China has provided more detail than the 
complainants in, for example, US – Certain EC Products and Thailand – H-Beams, in that it has not 
merely listed the Article at issue, but has referenced the specific sub-paragraph of Article 12 under which it brings its claim (namely, 12.7 of the SC M Agreement). In our view, in the circumstances 
of this case, the reference to Article 12.7 sheds suffi cient "light on the nature of the obligation at 
issue" to satisfy Article 6.2 of the DSU.
36 Article 12.7 sets out a relatively limited range of 
circumstances in which it is permissible for an investigating authority to apply "facts available". In 
addition, the panel request indicates that China will challenge the manner that USDOC resorted to 
and used facts available. It also provides a higher  level of precision with respect to one aspect of 
its claim, namely that China will challenge USDOC's use of "adverse" facts available. 
4.17.  While we have some sympathy for the Un ited States' position, namely that more detail 
could have been provided in the panel request regarding what in particular about the manner in 
which the United States resorted to and used facts available is allegedly inconsistent with Article 12.7 of the SCM Agreement, we are not conv inced that Article 6.2 of the DSU requires this. 
We also note that the United States itself concedes that this is not necessarily required under 
Article 6.2.
37 Our analysis of the application of Article 6.2 in previous cases seems to suggest that 
relatively general summaries of the "legal basis of complaint" have been accepted as sufficient to 
"present the problem clearly". Further, providing more precise details regarding what aspects of 
the resort to and use of facts available are ch allenged under Article 12.7 of the SCM Agreement 
could perhaps best be characterized as the argume nts in support of the claim, rather than the 
summary of the claim itself.  
4.18.  We note that Article 6.2 of the DSU has been characterized by the Appellate Body as serving 
the due process objective of notifying the part ies and third parties of the nature of the 
complainant's case38. We concur with this view and believe that Article 6.2 serves an important 
function in this regard. In the circumstances of this case, in our view, China has met the minimum 
requirements to fulfil this due process objective. While more precision in the panel request may have allowed the United States to prepare a detailed defence prior to receiving China's first written 
submission, we are of the view that the summary of the legal basis of the complaint provided by 
China was sufficient to put the United States on notice of the case against it to allow the United States to "begin" preparing its defence.
39 Therefore, we are not convinced that the 
United States' ability to defend itself has been prejudiced.  
4.19.  Finally, we note that the Appellate Body in EC – Selected Customs Matters held that the 
summary of the legal basis of the complaint "aims to explain succinctly how or why the measure at 
issue is considered by the complaining Member to be violating the WTO obligation in question".40 
                                               
34 Appellate Body Report, EC – Fasteners (China), paras. 597-598. 
35 See, for example, Panel Reports, EC – Approval and Market ing of Biotech Products, para. 7.47 (sub-
paragraphs 51-86) and EU – Footwear, para. 7.50. 
36 Appellate Body Report, US – Carbon Steel, para. 130. 
37 United States' preliminary ruling  request, para. 22 and United Stat es' comments on China's response 
to the preliminary ruli ng request, para. 14. 
38 See, for example, Appellate Body Reports, US – Carbon Steel, para. 126 and EC – Selected Customs 
Matters, para. 130. 
39 See, for example, Appellate Body Report, Thailand – H-Beams, para. 88. In particular, in our view the 
United States was in a position to "begin" preparing a defence to an allegation that the manner in which it 
applies "adverse" facts available is inconsistent with Article 12.7 of the SCM Agreement and to consider the 
consistency of its other uses of facts available with Article 12.7.   
40 Appellate Body Report, EC – Selected Customs Matters, para. 130. WT/DS437/R/Add.1 
 
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  In our view, this is merely one articulation of a way in which a complainant can provide a brief 
summary of the legal basis of the complaint under  Article 6.2 of the DSU and does not add a new 
element to the Article 6.2 obligation. For the foregoing reasons, we are of the view that China has indeed provided an adequate summary of its complaint.  
4.20.   Consequently, we conclude that China was not required under Article 6.2 of the DSU to 
provide more precision about its challenge to the Un ited States' use of and resort to facts available 
in order to provide "a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly". 
5  CONCLUSION 5.1.  While we do not endorse a cursory approach to panel requests and acknowledge the 
important due process objectives served by Articl e 6.2 of the DSU, in the circumstances of this 
case, we are of the view that China has met the minimum requirements of the provision. For the 
foregoing reasons, we reject the United States' preliminary ruling request and conclude that China's panel request, as it relates to the facts available claim under Article 12.7 of the 
SCM Agreement, is consistent with Article 6.2 of the DSU. 
6  DISSENTING OPINION ON WHETHER CHINA PROVIDED A SUMMARY OF THE LEGAL 
BASIS OF THE COMPLAINT SUFFICIENT TO PRESENT THE PROBLEM CLEARLY 
6.1.  While I agree with the Panel majority that China adequately identified the "instances" of the 
use of facts available that it is challenging, in my view, China did not provide a summary of the legal basis of the complaint sufficient to present the problem clearly. 
6.2.  The Appellate Body has repeatedly noted that the identification of the specific measures at 
issue and the provision of a brief summary of the legal basis of the complaint sufficient to identify 
the problem clearly under Article 6.2 of the DSU are two "key" requirements because they 
comprise the "matter referred to the DSB", which forms the basis for a panel's terms of reference 
under Article 7.1 of the DSU.
41 It has explained further that these are distinct requirements that 
should not be confused.42 Moreover, the fulfilment of these requirements is not a mere formality 
because a panel request forms the basis for the terms of reference of the panel and, serves the 
due process objective of notifying the respondent and third parties of the nature of the 
complainant's case. Compliance with these two requirements is therefore central  to defining the 
scope of the dispute.43 Consequently, a panel "must scrutinize carefully the language used in the 
panel request".44 
6.3.  In the circumstances of this case, the United States does not contest that China has identified 
the specific measures at issue in its panel request. However, the United States alleges that China failed to present the problem clearly with respect to its "facts available" claims. 
6.4.  Since it is not contested that China has listed the measures at issue, we must ascertain, in 
light of the circumstances of this case: 
a. if China has done more, by way of providing a brief summary of the legal basis of the 
complaint; and 
b. if so, whether that brief summary is sufficient to present the problem clearly; or c. whether the mere listing of the measures provides a brief summary sufficient to present 
the problem clearly. 
6.5.  The Appellate Body explained in Korea – Dairy that "Article 6.2 demands only a summary – 
and it may be a brief one – of the legal basis of the complaint"
45. In fact, what Article 6.2 demands 
is a " brief summary " which suggests that it can be minimal, but not insignificant. A summary is 
                                               
41 Appellate Body Report, US – Carbon Steel, para. 125. 
42 Appellate Body Report, EC – Selected Customs Matters, para. 132. 
43 Appellate Body Report, China – Raw Materials, para. 219. 
44 Appellate Body, China – Raw Materials, para. 220. 
45 Appellate Body Report, Korea - Dairy, para. 120. WT/DS437/R/Add.1 
 
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  already brief — a brief statement or account of the main points of something; an abstract, 
abridgment, or compendium of facts or statements  — and Article 6.2 requires that the summary of 
the legal basis of the complaint contained in the request for the establishment of a panel be brief. 
However, the summary cannot be insignificant because it must be sufficient to present the 
problem clearly. 
6.6.  Article 6.2 requires a brief summary  of the legal basis of the complaint; not simply that the 
legal basis of the complaint be stated . In other words, Article 6.2 requires more than simply 
stating the legal basis of the complaint or, put in other terms, more than simply stating the claim. 
Because Article 6.2 expressly requires a summary  - albeit a brief one - it would be contrary to the 
principle of effectiveness ( ut res magis valeat quam pereat ) to strip that word of its meaning and 
equate the requirement to provide a brief summary  of the legal basis of the complaint to a 
requirement to provide a statement  of the legal basis of the complaint. Nonetheless, the 
Appellate Body has suggested that, depending on the circumstances of a case, a mere listing of 
the provisions of the covered agreement alleged to have been violated might serve as a brief 
summary of the complaint sufficient to explain the problem clearly. Thus, it would appear that in 
certain circumstances the Appellate Body would accept that stating the claim might also serve as a brief summary of the complaint sufficient to pres ent the problem clearly. In my view, these must 
be rare cases and, per force, a model of clarity, in order to avoid depriving the words "brief 
summary" of any meaning, contrary to the principle of effectiveness. Thus, if there is doubt as to whether the mere listing of the provisions alleged to be breached constitutes a brief summary of the legal basis of the complaint sufficient to present the problem clearly, in my view the conclusion 
would have to be that it does not. 
6.7.  In this case, China specifically claims: 
China considers that the initiation and conduct of the identified countervailing duty 
investigations, as well as the countervailing duty determinations, orders, and any 
definitive countervailing duties imposed pursuant thereto, are inconsistent, at a minimum, with the obligations of the United States… 
(d) In connection with all of the identified countervailing duty 
investigations in which the USDOC has issued a preliminary or final countervailing duty determination: 
(1) Article 12.7 of the SCM Agreement, because the USDOC resorted to 
facts available, and used facts available, including so-called "adverse" 
facts available, in manners that were  inconsistent with that provision.
10 
_______________ 
10 This claim arises in respect of each instance in which the USDOC used facts 
available , including "adverse" facts available, to support its findings of financial 
contribution, specificity, and benefit in the investigations and determinations identified 
in Appendix 1. 
6.8.  China’s specific complaint is not a model of clarity. The chapeau is a general statement that 
serves to introduce all of China’s claims, but the elements that it contains do not necessarily apply to all of them. In the instant case, for example, the reference to the "initiation … of the identified 
countervailing duty investigations" obviously does not apply to China’s "facts available claim", 
because the resort to, and use of, facts available by the investigating authority would only come 
later in the investigation. 
6.9.  Thus, in order to scrutinize and fully understand China’s claim, it would appear that it could 
be rephrased as follows: 
The conduct of the identified countervailing duty investigations, as well as the 
countervailing duty determinations, and any definitive countervailing duties imposed 
pursuant thereto, are inconsistent with Article 12.7 of the SCM Agreement, insofar as in each instance in which USDOC resorted to facts available, and used facts available, WT/DS437/R/Add.1 
 
- A-45 - 
 
  including so-called "adverse" facts available, it did so in a manner that was 
inconsistent with that provision. 
6.10.  It should be noted that China’s claim is circular: in essence, its allegation is that the 
identified measures are inconsistent with Article 12.7 because certain actions of USDOC - the 
resort to, and use of, facts available, including so-called "adverse" facts available - are inconsistent 
with that provision. The footnote simply adds that this is the case of each instance in which the USDOC used (or resorted to) facts available. Thus, it appears that China is essentially stating its 
claim: in each instance that USDOC resorted to, and used, facts available, including so-called 
"adverse" facts available, it acted inconsistently with Article 12.7 of the SCM Agreement and, therefore, the identified measures are inconsistent with that provision. 
6.11.  A review of Appellate Body reports addressing Article 6.2 of the DSU reveals that in general 
there are three elements that the complaining party must meet to satisfy the second "key" 
requirement in Article 6.2 of the DSU (unless in the circumstances of the case the mere reference to the provision(s) alleged to be breached would suffice): 
a. it must state "the legal basis of the complaint" or, put another way, state its claim that 
an obligation contained in a specific provision of a covered agreement has been violated
46; 
b. it must provide a brief summary of the legal basis of the complaint, which is more than 
simply stating the claim as it requires the complaining party to explain succinctly how or why the measure at issue is considered to be violating the WTO obligation in question
47; 
and 
c. the brief summary must be sufficient to present the problem clearly, by plainly 
connecting the challenged measure(s) with the provision(s) of the covered agreements claimed to have been infringed.
48 
6.12.  In the circumstances of this case, China has certainly stated its claim: it alleges that the 
obligation contained in Article 12.7 of the SCM Agr eement has been violated in each instance in 
which USDOC used or resorted to facts available. China has also plainly connected the challenged 
measures with Article 12.7 of the SCM Agreement, as found by the Panel majority. The question is 
whether in the circumstances of this case, by plainly connecting the challenged measures with Article 12.7 China has satisfied the requirement to "explain succinctly how or why the measure at issue is considered by the complaining Member to be violating the WTO obligation in question". 
6.13.  Article 12.7 of the SCM Agreement provides: 
In cases in which any interested Member or interested party refuses access to, or 
otherwise does not provide, necessary information within a reasonable period or 
significantly impedes the investigation, preliminary and final determinations, 
affirmative or negative, may be made on the basis of the facts available. 
6.14.  It contemplates different situations that may justify making affirmative or negative 
preliminary and final determinations on the basis of facts available: 
a. an interested Member or an interested pa rty may refuse access to necessary information 
within a reasonable period; 
b. an interested Member or an interested party may otherwise not provide necessary 
information within a reasonable period; or 
c. an interested Member or an interested party may significantly impede the investigation. 
                                               
46 Appellate Body Report, EC – Selected Customs Matters, para. 130. 
47 Appellate Body Report, EC – Selected Customs Matters, para. 130. 
48 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 162. WT/DS437/R/Add.1 
 
- A-46 - 
 
  6.15.  With reference to the Appellate Body's decision in EC – Fasteners (China), I note that 
Article 12.7 of the SCM Agreement is not as broad in scope as Articles 6.2 and 6.4 of the Anti-
Dumping Agreement. However, Article 12.7 does contemplate several situations and applies on a continuous basis throughout an investigation.
49  
6.16.  In light of this: is China’s statement in item B(1)(d) of its panel request, including the 
reference to Article 12.7 of the SCM Agreement, a brief summary of the claim sufficient to present the problem clearly?  
6.17.  Having carefully examined the Appellate Body cases, I find it difficult to conclude that 
China's statement that the identified measures are inconsistent with Article 12.7 of the SCM Agreement is anything other than simply statin g the claim; and, in the light of the content of 
that provision, in my view that is not enough to serve as a summary of the legal basis of the 
complaint sufficient to present the problem clearly. I would add that in this respect, China’s claim 
concerning facts available is different from the other claims included in its request for the establishment of the panel. 
6.18.  Consequently, I disagree with the Panel majority regarding whether China's panel request 
provides a brief summary of the legal basis of the complaint sufficient to present the problem clearly. In my view, China's panel request is not sufficient in this regard. 
 
_______________ 
  
 
  
 
                                               
49 Appellate Body Report, EC – Fasteners (China), para. 598. WT/DS437/R/Add.1 
 
- B-1 - 
 
  ANNEX B 
EXECUTIVE SUMMARIES OF  THE FIRST WRITTEN  
SUBMISSIONS OF THE PARTIES 
 
 
Contents Page 
Annex B-1 Executive Summary of the First Written Submission of China B-2 
Annex B-2 Executive Summary of the First Written Submission of the United States B-9 
 
 WT/DS437/R/Add.1 
 
- B-2 - 
 
  ANNEX B-1 
EXECUTIVE SUMMARY OF THE FIRST 
WRITTEN SUBMISSION OF CHINA 
I. Introduction 
 
1. This dispute concerns 17 countervailing duty investigations of Chinese products that the United States Department of Commerce (“USDOC”) initiated between 2007 and 2012. These 
investigations were initiated after the four countervailing duty investigations at issue in 
United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China  
(DS379). In DS379, the panel and Appellate Body found that the USDOC’s affirmative subsidy determinations were inconsistent in multiple respects with the Agreement on Subsidies and 
Countervailing Measures (the “SCM Agreement”). Unfortunately, the United States has continued 
to engage in the same unlawful conduct in subsequent countervailing duty investigations of Chinese products, even after the adoption of the Appellate Body report in DS379.   
 
2. This dispute largely entails the application of the findings in DS379, as well as other well-settled jurisprudence, to the countervailing duty measures that China identified in its panel 
request. As demonstrated in this submission, China’s claims in this dispute are based on issues of 
law and legal interpretation that panels and the Appellate Body have addressed in prior disputes. 
The application of those prior interpretations to the measures at issue leads to the conclusion that the United States has continued to act inconsistently with the SCM Agreement in its investigations 
of Chinese products. The United States has even taken actions that it has openly acknowledged in 
other disputes to be inconsistent with the SCM Agreement. It is the systematic and ongoing failure of the United States to adhere to its obligations under the SCM Agreement that has forced China to 
bring the present dispute.   
 3. China has decided to focus its claims in this dispute on the alleged provision of inputs for 
less than adequate remuneration. These alleged “input subsidies” are the foundation of the 
USDOC’s unlawful approach to imposing countervailing duties on Chinese products. In the 14 input subsidy investigations at issue, the USDOC found that Chinese state-owned enterprises (“SOEs”) sold various types of industrial inputs, such as steel and chemicals, to downstream producers of 
the product under investigation. In nearly every instance, the USDOC found that SOEs sold these 
inputs to downstream producers at prices that were lower than a benchmark price selected by the USDOC. The countervailing duty margins that the USDOC calculated for these alleged input 
subsidies often represented the largest portion of the total countervailing duty margin for the 
product under investigation.  
4. China has decided to focus this dispute on th e alleged input subsidies because they are, by 
far, the most unlawful and unfounded of all the subs idies that the USDOC has claimed to identify in 
respect of Chinese products. As China will demonstrate in this submission, the USDOC’s input subsidy determinations are inconsistent with the rules of the SCM Agreement with respect to each 
of the three elements of an actionable subsidy – financial contribution, benefit, and specificity.  
 II. The USDOC’s Input Subsidy Determinatio ns in Each of the CVD Investigations 
Under Challenge Were Based on “Public Bo dy” Determinations That Are Facially 
Inconsistent with the Legal St andard Established in DS379 
 
5. Article 1.1 of the SCM Agreement provides th at “a subsidy shall be deemed to exist if … 
there is a financial contribution by a government or any public body within the territory of a Member … and a benefit is thereby conferred.” In its report in DS379, the Appellate Body addressed an important issue of first impressi on: the meaning of the term “public body” in 
Article 1.1(a)(1). The Appellate Body’s interpretati on of this term in DS379 is dispositive of the 
claims that China has raised under Article 1.1 of the SCM Agreement in the present dispute.  
6. In the four investigations at issue in DS379,  none of the financial contributions deemed to 
confer countervailable input subsidies were provided by the Government of China or any of its organs. Rather, they were made by SOEs, i.e., corporate entities with separate legal personality, WT/DS437/R/Add.1 
 
- B-3 - 
 
  owned in part or in whole, directly or indirectly, by the Government of China. The sales at issue 
were garden-variety transactions between suppliers and producers involving the purchase and sale of basic inputs – steel, rubber, and petrochemicals. They were the kind of ordinary commercial transactions that occur countless times in every industry, in every country, all over the world. 
 
7. The USDOC nonetheless concluded that all of the SOEs at issue in the four investigations were “public bodies” within the meaning of Arti cle 1.1(a)(1) of the SCM Agreement. The USDOC 
reached this conclusion by applying a “rule of majority government-ownership”. Under this 
approach, if a state-owned entity was majority-o wned by the Government of China or another 
state-owned entity, the USDOC found that entity to be a “public body” on the grounds that majority ownership demonstrated government co ntrol over the entity. Accordingly, the USDOC 
determined that each sale of inputs by these majority government-owned SOEs was a “financial 
contribution” within the meaning of Article 1.1(a)(1).   
8. The Appellate Body categorically rejected the USDOC’s approach. After a comprehensive 
interpretative analysis, the Appellate Body determ ined that “being vested with, and exercising, 
authority to perform governmental functions” is the “core feature” that defines a public body. 
Under this standard, evidence of government ow nership “cannot, without more, serve as a basis 
for establishing that the entity is vested with authority to perform a governmental function”. Likewise, “control of an entity by a government, by itself, is not sufficient to establish that an entity is a public body”. Accordingly, the Appella te Body concluded that the USDOC’s public body 
determinations in respect of SOEs in the investigations at issue were inconsistent with 
Article 1.1(a)(1).  
9. Since the completion of the investigations at issue in DS379, the USDOC has conducted 
numerous additional CVD investigations involving allegations that Chinese producers received inputs for less than adequate remuneration, 14 of which are under challenge in this dispute. In all 
of these investigations, as was true in DS379, none of the alleged inputs was provided by the 
Government of China or any of its organs. Rather , in each case, the inputs deemed to confer 
subsidies were sold to downstream producers of subject merchandise by SOEs, which the USDOC concluded were public bodies using the same “majority ownership” control-based test that the 
Appellate Body rejected in DS379. These determinations are thus inconsistent, as applied, with 
Article 1.1(a)(1) of the SCM Agreement for the same  reasons that the Appellate Body identified in 
its report in DS379.   
 
10. The USDOC’s stated “policy” underlying the majority of these determinations is also 
inconsistent with the covered agreements, “as such”. Shortly after the investigations at issue in 
DS379, the USDOC explained that in order to deal wi th the “recurring issue” of whether an entity 
is an “authority” in investigations involving imports from China, its “policy” would be to apply “a rebuttable presumption that majority-government-owned enterprises are authorities”. This “rebuttable presumption” is inconsistent with the covered agreements, “as such”, because it is a 
rule of general and prospective application that is inconsistent with the legal standard established 
by the Appellate Body in DS379. Under that standard, neither government control of an entity nor government ownership of an entity alone is sufficient to support a finding that an entity is a public 
body. It necessarily follows that a “rebuttable presumption” that an entity is an authority based 
solely on government ownership is inconsistent with Article 1.1(a)(1) of the SCM Agreement.  
11. The USDOC has refused to abandon this “reb uttable presumption” even after the Appellate 
Body held in DS379 that a “rule of majority ownership” is inconsistent with Article 1.1(a)(1). The USDOC has deemed it unnecessary to change its unlawful approach to “public body” determinations on the grounds that “the decision s of the panel and the appellate body regarding 
whether a producer is an authority (a “public body” within the WTO context) were limited to those 
four investigations [at issue in DS379].” The USDOC has refused to acknowledge that the Appellate Body’s report in DS379 established a definitive interpretation of the term “public body” 
that the USDOC (and other Members) were required  to apply in all subsequent countervailing duty 
investigations in which the issue arose.   
12. True to its word, in the investigations that the USDOC initiated after the issuance of the 
Appellate Body report in DS379, the USDOC did not require petitioners to present any evidence relevant to whether the SOEs at issue had been vested with and were exercising authority to perform governmental functions. The USDOC’s decisi on to initiate investigations with respect to 
petitioners’ claims that SOEs provided inputs fo r less than adequate remuneration, in the absence WT/DS437/R/Add.1 
 
- B-4 - 
 
  of any additional evidence indicating that these entities were “public bodies” under the proper legal 
standard, is in violation of Articles 11.2 and 11.3 of the SCM Agreement.  III. The USDOC’s Determinations That SOEs Provided Inputs for Less Than Adequate 
Remuneration Are Inconsistent, as Applied,  with Articles 1.1(b) and 14(d) of the 
SCM Agreement in Each of the Cases Under Challenge 
 
13. China has demonstrated above that the USDOC’s financial contribution determinations in the 
input subsidy investigations are inconsistent with the SCM Agreement, because they are all predicated on unlawful public body determinations. These unlawful public body determinations also taint the USDOC’s benefit findings in the input subsidy investigations at issue, because they serve 
as the essential factual predicate for the USDOC’s near-constant recourse to out-of-country 
benchmarks in its benefit calculations.  
14. Notwithstanding the Appellate Body’s assessmen t that recourse to an outside benchmark is 
permissible only under “very limited” circumstances, the use of an out-of-country benchmark has become standard practice for the USDOC in investigations involving imports from China. In all 
14 investigations at issue in this case in which the USDOC concluded that SOEs provided inputs for 
less than adequate remuneration, the USDOC’s bene fit determination was based on the use of an 
out-of-country benchmark. Without these contrived benchmarks, the alleged input subsidies would not exist at all.  
 
15. In each of these cases, the USDOC applied the same framework for evaluating whether market prices for a particular input in China are distorted: it inquires whether the government 
provides the majority, or even a “substantial port ion” of the market for a good, and if the answer 
is affirmative, it concludes that the government is playing a “predominant role” in the market, and on that basis alone concludes that private prices are distorted.  
 
16. The fundamental flaw in the USDOC’s fram ework is that the USDOC’s finding that the 
“government” is playing a “predominant” role in the market for a good is based exclusively on the percentage of the relevant input produced by SOEs. In each investigation at issue, the USDOC 
found that SOEs provided at least a “substantial po rtion” of the market for the input, and on that 
basis, concluded that private prices in the Chinese market for that input were distorted due to the government’s “predominant” role in the market , hence justifying recourse to an outside 
benchmark. 
 17. The USDOC’s equation of SOEs with the government was premised, in the investigations 
under challenge, on the USDOC’s flawed determination that entities majority owned or controlled 
by the Government of China constitute public bo dies. On the basis of this determination, the 
USDOC deemed the market share held by SOEs equivalent to the market share held by the 
government itself. As discussed above, however, government ownership or control is insufficient 
evidence on which to base a finding that an SOE is a public body.  
 18. Accordingly, in the 14 input subsidy investigations under challenge, the mere fact that SOEs 
provided a “substantial” portion of the relevant input provides an insufficient basis on which to 
conclude that the government played a “predominant role” in those markets. Therefore, the USDOC had no lawful basis for rejecting Chinese prices as a benchmark. For this reason, the 
USDOC’s use of an out-of-country benchmark and the resulting benefit determinations in these 
investigations are inconsistent with Articles 1.1(b) and 14(d) of the SCM Agreement.  IV. The USDOC’s Affirmative Determinations of Specificity in Respect of the Alleged 
Input Subsidies Are Inconsistent with Article 2 of the SCM Agreement 
 19. As China has demonstrated above, the first fiction in the USDOC’s input subsidy 
determinations is that the sale of an input by a commercial entity in China is a “financial 
contribution” if that entity is majority-owned by the Government of China. The second fiction is that these alleged “financial contributions” confer a benefit, a conclusion premised in each instance 
on a “distortion” finding that is based on the US DOC’s erroneous interpretation of the term “public 
body”. The third fiction, to which China now turns, is that these “subsidies” are specific to certain enterprises or industries within the meanin g of Article 2 of the SCM Agreement.   
 WT/DS437/R/Add.1 
 
- B-5 - 
 
  20. The centrepiece of the USDOC’s flawed approach  to specificity is to imagine that each type 
of allegedly subsidized input is provided pursuant to its own “program”, such as the “hot-rolled steel for less than adequate remuneration program”. The USDOC has provided no evidence whatsoever to demonstrate that these programmes actually exist. Having imagined these input-
specific programmes into existence, the USDOC then finds that the “users” of each non-existent 
programme are “limited in number”. On this basis, the USDOC concludes that each input-specific programme is “use[d] … by a limited number of certain enterprises” within the meaning of 
Article 2.1(c) of the SCM Agreement, and that th e subsidies provided pursuant to the programme 
are therefore specific.  21. The circularity of the USDOC’s approach should be apparent. By assuming that the non-
existent subsidy programme is limited to a specific type of input, the USDOC can then find that the 
users of the programme constitute “a limited number of certain enterprises”. The USDOC’s self-identification of the programme determines who th e users of the programme are, which, in turn, 
determines whether the USDOC considers the users of the programme to represent “a limited 
number of certain enterprises.” The USDOC first summons the financial contribution and the benefit into existence in order to find a “subsidy”, and then it summons the “program” into 
existence in order to find that the “subsidy” is specific. The USDOC’s identification of a non-
existent, input-specific subsidy programme serves  one purpose and one purpose only – to support 
an affirmative determination of specificity. It has no basis in reality.    
22. The USDOC’s approach suffers from four major flaws: 
 
 First, in all of the determinations at issue, the USDOC has failed to identify who the 
relevant “granting authority” is in respect of the alleged input subsidies. Without 
knowing who the relevant granting authority is, it is impossible to undertake the basic inquiry of Article 2.1, i.e., to determine whether the alleged subsidy “is specific to an 
enterprise or industry or group of enterprises or industries … within the jurisdiction of 
the granting authority ”.  
 Second, the USDOC has failed to follow the order of analysis prescribed by Article 2.1. 
In all of the determinations at issue, the USDOC has proceeded directly to the “other 
factors” under Article 2.1(c) without first identifying a subsidy that is facially non-
specific under the principles of Articles 2.1(a) and 2.1(b). The USDOC’s failure to follow the correct order of analysis corrupts its entire  approach to the issue of specificity. The 
inquiry under the first factor of Article 2.1(c) is whether a facially non-specific  subsidy 
programme is, in practice, “use[d] … by a limited number of certain enterprises”. The 
USDOC has never identified a facially non-specific subsidy programme relating to the 
provision of inputs. Instead, it has taken the first of the “other factors” under 
Article 2.1(c) entirely out of context and used it as a vehicle for evaluating specificity based exclusively on the end uses of specific types of inputs. This is plainly inconsistent with the purpose of Article 2.1( c) within the broader framework of Article 
2.1. 
 Third, even if the USDOC had followed the proper order of analysis under Article 2.1, it 
has failed to demonstrate the existence of any “programme” to provide input subsidies 
in China, either with regard to specific types of inputs (as the USDOC has assumed, 
but not demonstrated) or with regard to all types of inputs sold by Chinese SOEs. Having failed to demonstrate the existenc e of a relevant subsidy programme, it is 
impossible for the USDOC to evaluate properly whether a subsidy programme is 
“use[d] … by a limited number of certain enterprises” within the meaning of Article 2.1(c). 
 Finally, in all of the specificity determinations at issue, the USDOC has failed to take 
into account “the extent of diversification of economic activities within the jurisdiction 
of the granting authority, as well as of the length of time during which the subsidy programme has been in operation.” These are mandatory considerations under 
Article 2.1(c). Thus, even if the USDOC ot herwise had a proper basis to evaluate 
specificity under Article 2.1(c) – which it didn’t – its determinations are facially inconsistent with this requirement.  
 
23. Each one of these flaws, by itself, renders the USDOC’s input specificity determinations inconsistent with Article 2. Collectively, they reveal an approach to specificity that is completely out of alignment with the structure, purpose, interp retation, and proper application of Article 2.   
 WT/DS437/R/Add.1 
 
- B-6 - 
 
  24. Furthermore, the USDOC’s initiation of countervailing duty investigations in respect of the 
alleged provision of inputs for less than adequate remuneration, in the absence of sufficient evidence in the petition to support an allegation that any such subsidy would be specific under Article 2 of the SCM Agreement, and in absence of a sufficient review of the petition by the USDOC 
in respect of this allegation, is inconsistent with Articles 11.2 and 11.3 of the SCM Agreement in 
the input subsidy investigations at issue.  
V. The USDOC’s Use of “Adverse Facts Availa ble” Is Inconsistent with Article 12.7 of 
the SCM Agreement Because the USDOC Uses “Adverse Inferences” Instead of “Facts Available” 
 
25. The USDOC’s legal analysis with respect to financial contribution, benefit, and specificity 
bears no resemblance to that envisioned in the SCM Agreement. In the majority of the investigations at issue, however, the USDOC does not even apply its flawed legal framework to the 
facts on the record. Instead, the USDOC resorts to so-called “adverse facts available” (“AFA”), and 
bypasses factual analysis altogether. Once the USDOC finds that there is non-cooperation by a respondent, the USDOC uses this finding as an excuse to simply pronounce the ultimate legal 
conclusion that is supposed to be at issue. 
 26. The USDOC’s use of AFA is completely divorc ed from the application of “facts available” 
envisioned by the SCM Agreement. The Appellate Bo dy has interpreted Article 12.7 to permit “the 
use of facts on record solely for the purpose of replacing information that may be missing, in order 
to arrive at an accurate subsidization or injury determination.” In other words, as the panel in China – GOES recently emphasized, recourse to facts available requires the use of “facts on 
record”, and does not permit an investigating authority to reach a subsidization determination 
without any support in the record evidence.    
27. But the USDOC does exactly that. After making a threshold finding of non-cooperation, the 
USDOC jumps to the legal conclusion that was the entire point of the inquiry. The USDOC has interpreted the gap-filling provision in Article 12.7 as providing it with blanket authority to draw legal conclusions that have no factual support. This practice is plainly inconsistent with 
Article 12.7.  
 28. Exhibit CHI-2 identifies all of the uses of AFA that are the subject of China’s claim under 
Article 12.7 of the SCM Agreement. There are 48 such instances across 15 different investigations. 
Most of these instances relate to the USDOC’s findings of financial contribution, benefit, and specificity in respect of the alleged input subsidies. It is not surprising that the USDOC frequently 
relies upon AFA in connection with the alleged input subsidies, since the USDOC is seeking 
information from respondent parties about subsidies that do not actually exist. Unable to demonstrate the existence of these alleged subsidie s on the basis of information on the record, the 
USDOC resorts to AFA to assume that the subsidies do exist. In some instances, the USDOC’s 
entire subsidy analysis in the case of the alleged input subsidies is premised on a series of AFA-
based findings.    
29. The USDOC has recognized in some of its investigations that its AFA-based conclusions are 
without factual support, because it has sought to “corroborate” those conclusions. This is where the systemic flaw in the USDOC’s use of AFA be comes evident, because the USDOC “corroborates” 
its findings on the basis of AFA findings in other investigations. In sum, when the United States 
applies AFA, it is resorting to “adverse inferences”, and its resulting determinations are without a factual foundation. These baseless determinations are then used to bolster other baseless determinations, such that the USDOC’s subsidy findings have become entirely separated from the 
facts.   
 30. The Appellate Body explained that “Art icle 12.7 of the SCM Agreement permits an 
investigating authority, under certain circumstances, to fill in gaps in the information necessary to 
arrive at a conclusion as to subsidization … and injury.” When the United States resorts to AFA, it does not do so to “fill in gaps” in the information necessary to reach a conclusion. Instead, the 
United States uses its AFA findings to arrive at sweeping legal conclusions that have no factual 
basis. For these reasons, the Panel should find th at the USDOC’s use of adverse facts available in 
the investigations identified in CHI-2 is inconsistent with the obligations of the United States under Article 12.7 of the SCM Agreement. 
 WT/DS437/R/Add.1 
 
- B-7 - 
 
  VI. The USDOC’s Regional Specificity Findings Are Inconsistent with Article 2 of the 
SCM Agreement 
 31. Article 2.2 of the SCM Agreement provides th at “[a] subsidy which is limited to certain 
enterprises located within a designated geographical  region within the jurisdiction of the granting 
authority shall be specific.” As explained by the Appellate Body in DS379, “[t]he necessary limitation on access to the subsidy can be effected through an explicit limitation on access to the 
financial contribution, on access to the benefit, or on access to both.”   
 32. The USDOC’s regional specificity findings with respect to the provision of land use rights for less than adequate remuneration are all inconsistent with Article 2.2 of the SCM Agreement, 
because in none of these determinations did the USDOC demonstrate that either the financial 
contribution or the benefit was “limited to certain enterprises located within a designated geographical region”. Instead, the USDOC based its findings on the same flawed logic that the 
U S D O C  r e l i e d  o n  i n  t h e  Laminated Woven Sacks  investigation, and its findings suffer from the 
same deficiency identified by the panel in DS379.  
33. The panel in DS379 found fault with the USDOC’s regional specificity determination, because 
the USDOC’s finding was based on the fact that the land at issue was physically located inside the industrial park. The panel explained that pursuant  to the U.S. regional specificity analysis, the 
provision of land-use rights in China would always be regionally specific “given that land is by 
definition always limited by and to its geographic location.”   
 34. The USDOC’s regional specificity determinations with respect to the provision of land use 
rights for less than adequate remuneration have continued to suffer from the same circular 
reasoning identified by the panel in DS379. In each investigation, the USDOC determined that 
respondents were provided land-use rights by the government within an industrial park or 
economic development zone. Frequently citing its determination in Laminated Woven Sacks , the 
USDOC found that the provision of land-use rights was regionally specific in each investigation because “the land is in an industrial park located within the seller’s (e.g., municipality’s or county’s) jurisdiction”. For the same reasons cited by the panel in DS379, the Panel should find 
that the USDOC’s regional specificity findings in these determinations are inconsistent with 
Article 2 of the SCM Agreement.  
VII. The USDOC’s Decisions to Initiate Countervailing Duty Investigations into 
Allegations that Export Restraints Co nfer a Countervailable Subsidy, and its 
Determinations that Export Restraints  Provide a Financial Contribution, Are 
Inconsistent with Articles 11 and 1.1 of the SCM Agreement, Respectively 
 35. China’s final claim in this proceeding concerns the USDOC’s decision in Magnesia Bricks  and 
Seamless Pipe  to initiate countervailing duty investigations into allegations that export restraints 
imposed by China on certain raw material inputs (magnesia and coke) confer a countervailable 
subsidy, and its subsequent determinations that such restraints provide a financial contribution in the form of the provision of goods.  
 
36. In US – Export Restraints , the panel addressed whether an export restraint could be deemed 
to constitute a financial contribution within the meaning of Article 1.1(a)(1) of the 
SCM Agreement. For purposes of its analysis, it defined an export restraint as “a border measure 
that takes the form of a government law or regulation which expressly limits the quantity of exports or places explicit conditions on the ci rcumstances under which exports are permitted, or 
that takes the form of a government-imposed fee or tax on exports of the product calculated to 
limit the quantity of exports.”  
 37. After a comprehensive interpretative analysis , the panel concluded that an export restraint 
does not constitute a financial contribution within the meaning of Article 1.1(a) of the 
SCM Agreement. Nothing in the ten years of intervening WTO jurisprudence has undermined the persuasiveness of the panel’s decision. To the cont rary, both panels and the Appellate Body have 
frequently endorsed the reasoning that the panel employed in reaching its conclusion, as well as 
the central legal holding in that case.   WT/DS437/R/Add.1 
 
- B-8 - 
 
  38. The export restraints at issue in Magnesia Bricks  and Seamless Pipe  fall within the definition 
of an export restraint relied upon by the panel in US – Export Restraints . It follows that the USDOC 
acted inconsistently with Articles 11.2 and 11.3 when it decided to initiate investigations into petitioners’ allegations that these export restraints confer a countervailable subsidy, and further 
acted inconsistently with Article 1.1 when it determined that such export restraints provided a 
financial contribution in the form of the provision of goods. WT/DS437/R/Add.1 
 
- B-9 - 
 
  ANNEX B-2 
EXECUTIVE SUMMARY OF THE FI RST WRITTEN SUBMISSION  
OF THE UNITED STATES  
I. INTRODUCTION 
 
1. In this dispute, which is one of the largest in the history of the WTO, China advances claims with respect to 97 individual alleged breaches of the SCM Agreement concerning 17 different CVD 
investigations, and involving 31 initiations of investigations or preliminary or final determinations. 
Despite the enormous scope of this case, in its first written submission, China follows a pattern – established in its consultations and panel requests  –  o f  t a k i n g  s h o r t c u t s .  I n  p a r t i c u l a r ,  C h i n a  
makes sweeping factual generalizations regarding the various investigations and fails to 
adequately link its broad legal arguments with the specific facts of the determinations. China 
asserts that its claims “largely entail the applicat ion of the findings in DS379, as well as other well-
settled jurisprudence.” In fact, this dispute involves several novel interpretations of the 
SCM Agreement that were not addressed in DS379, or any other dispute. Additionally, China 
inappropriately relies on the findings of other panels relating to the facts of other disputes . China 
declines to include in its submission virtually any discussion of the facts at issue in the 
determinations it challenges. Accordingly, China’s claims have no merit, as it (1) has failed to 
establish its prima facie case with respect to its claims and (2) China’s legal arguments lack 
support in the text of the SCM Agreement.    
II. THE PRELIMINARY DETERMINATIONS IN WIND TOWERS  AND STEEL SINKS  ARE 
NOT WITHIN THE PANEL'S TERMS OF REFERENCE 
 
2. China’s panel request lists the preliminary determinations in Wind Towers  and Steel Sinks  as 
measures at issue. These measures, however, are not listed in China’s request for consultations. As such, these measures were never subject to consultations, and thus, as a matter of law, these 
measures are not within the terms of reference of this proceeding. The inclusion of claims related 
to these determinations would inarguably expand the scope of this dispute as compared to the matter described in the request for the consultati ons. Under the DSU and Appellate Body findings, 
the terms of reference of this proceeding cannot extend to these two determinations.  
 
III. CHINA HAS FAILED TO ENGAGE IN TH E CASE-SPECIFIC ANAL YSIS REQUIRED TO 
ADVANCE CLAIMS  
 
3. China’s submission lacks legal arguments and evidence sufficient to establish China’s prima 
facie case. Throughout its first written submission, China follows a pattern established in its panel 
request of taking numerous shortcuts in the presentation of its case. China, as the complaining 
party in this dispute, must make a prima facie  case for each of the 97 alleged breaches of the 
relevant provisions of the WTO agreements. It has failed to do so.    
4. China must demonstrate, with evidence, that Commerce’s determinations in each 
investigation were inconsistent with the SCM Agreement. Despite the fact that China advances 97 individual claims that Commerce’s findings were inconsistent with the SCM Agreement, it barely 
discusses Commerce’s determinations at all, providing a few cursory descriptions as examples, and 
leaving the task of explaining how each one of these “as applied” claims violates the 
SCM Agreement to the Panel. In addition, China fails to link its legal challenges to the facts and 
evidence of each of the investigations it challenges. China merely argues that the “as applied” 
findings of a prior WTO dispute should be applied to the investigations at issue in the instant dispute. This line of reasoning is inadequate. China must apply the relevant provisions of the SCM Agreement to the facts in this dispute , but it has failed to do so. Both the legal arguments 
and evidence must be present for a panel to address a claim, because “when a panel rules on a 
claim in the absence of evidence and supporting arguments, it acts inconsistently with its obligations under Article 11 of the DSU.”   
 WT/DS437/R/Add.1 
 
- B-10 - 
 
  IV. CHINA’S PUBLIC BODY CLAIMS ARE FOUNDED ON AN ERRONEOUS 
INTERPRETATION OF THE SCM AGREEMENT AND MUST BE REJECTED 
 5. Interpreted according to the customary rules of interpretation of public international law 
pursuant to Article 3.2 of the DSU, “public bo dy” means an entity that is controlled by the 
government such that the government can use that entity’s resources as its own.    
6. The ordinary meaning of the composite term “p ublic body” according to dictionary definitions 
would be “an artificial person created by legal authority; a corporation; an officially constituted organization” that is “of or pertaining to the people as a whole; belonging to, affecting, or concerning the community or nation.” These defini tions convey two primary elements: first, that 
there is an entity; and second, that this body belongs to, pertains to, or is “of” the community or 
people as a whole. These elements point toward s ownership by the community as one meaning of 
the term “public body.” If an entity “belongs to” or is “of” the community, it also suggests that the 
community can make decisions for, or control, that entity. 
 7. The context of the term “public body” reveal s that it is indeed government ownership or 
control that is central to a proper interpretation, for these elements mean that the government can 
use the entity’s resources as its own. In Article 1. 1(a)(1), “public body” is part of the disjunctive 
phrase “by a government or any public body within the territory of a Member ...”. The 
SCM Agreement thus uses two different terms – “a government” and “any public body” – to 
identify the two types of entities that can directly provide a financial contribution. The use of the 
distinct terms “a government” and “any public body” together this way suggests that the terms have distinct and different meanings. Treaty interp retation should give meaning and effect to all 
terms of a treaty, and “public body” cannot be interpreted in a manner that would render it 
redundant.  
8. The use of “a”, “any”, and “or” in Article 1.1(a)(1) suggests that there might be different 
types  of public bodies.  Some entities might be mo re akin to government agencies, while others 
might be corporations engaging in business activi ties. The unifying characteristic of all public 
bodies is that they are controlled by the gove rnment, such that the government can use their 
resources in the same manner as its own. 
 9. The use of the term “government” as a shorthand reference does not require a narrow 
interpretation of “public body.” While the terms “government” and “public body” are related, the 
question is: what is the nature of their relationship? Understanding the relationship as one of control of a “public body” by “a government” (on behalf of the community it represents) gives 
meaning to both terms and avoids reducing the term “public body” to redundancy. It is also 
consistent with the dictionary definitions relevant to the term “public body.”  10. The context provided by the term “private body” in Article 1.1(a)(1)(iv) supports an 
understanding of the term “public body” as an en tity controlled by the government such that the 
government can use the entity’s resources as its ow n. Logically, since the ordinary meaning of the 
term “public” is the opposite of “p rivate,” the term “public” means “ provided or owned by the State 
or a public body rather than an individual .” 
 11. The context provided by “financial cont ribution” in Article 1.1(a)(1) supports an 
understanding of “public body” as an entity controlled by the government such that the 
government can use the entity’s resources as its own. Financial contributions are one part of a definition of “subsidy,” and those subsidies are granted or maintained by Members. A Member can 
make the financial contribution underlying the subsidy directly through its “government” or also 
through entities that it controls.  
 12. Further context in Article 1.1(a)(1), such as “payments to a funding mechanism,” supports 
this understanding of the scope of transactions th at are “financial contributions.” When a financial 
contribution flows to a recipient through the econ omic activity of an entity controlled by the 
government, value is conveyed from a Member to that recipient in the same way as if the 
government had provided the financial contribution directly. Article 1.1(a)(1) is designed to 
capture such flows within its definition of “financial contribution.”  13. The context provided by the “entrusts or dire cts” language in Article 1.1(a)(1)(iv) does not 
weigh against an understanding of “public body” as an entity controlled by the government such WT/DS437/R/Add.1 
 
- B-11 - 
 
  that the government can use the entity’s resource s as its own. The fact that an entity has the 
“authority” or “responsibility” to do a task, such as selling steel or chemicals, which can be entrusted to another entity if the first entity so chooses, does not mean that the entity has “authority” or “responsibility” to perform governmental functions. Further, even assuming 
arguendo that the authority or responsibility to entrust or direct is the same as the authority or 
responsibility to perform governmental functions, it does not follow that all public bodies must 
have this authority. In other words, it does not follow that all public bodies must be homogeneous 
in their possession of authority to entrust or direct private bodies.   
 14. Additionally, the suggestion that th e reference to government functions in 
Article 1.1(a)(1)(iv) relates to the “authority to ‘regulate, control, supervise or restrain’ the 
conduct of others” is unsupported by the te xt. The language in subparagraph (iv) of 
Article 1.1(a)(1) simply refers back to the function s described in subparagraphs (i) through (iii). It 
is circular to read Article 1.1(a)(1)(iv) as requiring that the term “public body” be interpreted as 
meaning an entity vested with or exercising authority to perform governmental functions. 
 15. The Working Party Report on China’s WTO accession also provides relevant context. China’s 
acceptance in the Working Party Report that ac tions by its state-owned enterprises constitute 
financial contributions is recognition that Chinese state-owned enterprises are “public bodies” within the meaning of Article 1.1(a)(1).  
16. The object and purpose of the SCM Agreement support an interpretation of “public body” as 
meaning an entity controlled by the government such that the government can use the entity’s resources as its own, without the additional requ irement that the entity must be vested with 
authority from the government to perform governme ntal functions. Interpreting “public body” in 
this way preserves the strength and effectiveness of the subsidy disciplines and inhibits circumvention. Such an interpretation ensures that governments cannot escape those disciplines 
by using entities under their control to accomplish tasks that would potentially be subject to those 
disciplines were the governments themselves to undertake them. In any event, such an interpretation is consistent with the broad range of meanings suggested by the ordinary meaning of “public” and “body,” and reading “public body ” in context supports that interpretation.   
 
17. When interpreting Article 1.1(a)(1), it is not necessary to take into account the ILC Articles, because they are not relevant rules of international law applicable in the relations between the 
parties. Even assuming arguendo  that the ILC Articles can be considered “applicable,” they are not 
helpful in determining whether  the United States breached its obligations. They would only be 
helpful in determining whether the United States was responsible for any alleged breach, for 
example, if there was some question about whethe r the action of Commerce is attributable to the 
United States.  18. We note that three prior WTO dispute settlement panels – in Korea – Commercial Vessels, 
EC and certain member States – Large Civil Aircraft, and US – Anti-Dumping and Countervailing 
Duties (China) – have interpreted “public body” an d concluded that a “public body” is an entity 
controlled by the government. During the meetin g of the WTO Dispute Settlement Body at which 
the panel and Appellate Body reports in US – Anti-Dumping and Countervailing Duties (China) 
were adopted, seven WTO Members joined the United States in raising concerns about the Appellate Body’s findings with respect to the interpretation of the term “public body.” And 
three prominent participants in the Uruguay Round negotiations have penned an article in the 
Journal of World Trade raising concerns about the Appellate Body’s findings with respect to the interpretation of the term “public body.” 
 
19. While the parties are in agreement that the fi ndings of the Appellate Body on “public body” 
are important and need to be taken into account in this dispute, China does not and cannot assert that the Panel may merely rely on or apply those findings. The Panel should consider the 
interpretation of “public body” by applying th e customary rules of interpretation of public 
international law, taking due account of previous interpretations of that term.    
20. Finally, because China’s as applied claims are premised on a flawed interpretation of 
Article 1.1(a)(1) and China has advanced no arguments supporting the conclusion that the United States has breached Article 1.1(a)(1), as that provision is correctly interpreted, China has failed to make a prima facie  case, and the Panel should reject China’s claims. WT/DS437/R/Add.1 
 
- B-12 - 
 
  V. CHINA HAS FAILED TO  ESTABLISH THAT THE KITCHEN SHELVING  DISCUSSION 
NECESSARILY RESULTS IN A BREACH, NOR HAS CHINA SHOWN THAT DISCUSSION IS A “MEASURE” 
 
21. China raises an “as such” challenge to Commerc e’s discussion of the public body issue in the 
final determination in the Kitchen Shelving  investigation. China claims that Commerce established 
a policy of a “rebuttable presumption” that majori ty government-owned entities are public bodies. 
Regardless of the Panel’s finding regarding the proper  interpretation of the term “public body,” the 
Panel should find that the Kitchen Shelving  discussion does not necessarily  result in a breach of 
the SCM Agreement and, thus, China has not established that the Kitchen Shelving discussion is a “measure.” Accordingly, China’s “as such” challenge must fail. 
 
22. In Kitchen Shelving , Commerce merely discussed its historic approach to public body issues 
and explained how it viewed the issues at the time. The discussion is simply that – a discussion. It 
does not commit Commerce to any future course of action, and therefore does not necessarily lead 
to any action inconsistent with any WTO provision.    
23. China argues that Kitchen Shelving  established a “policy” or “practice” of a rebuttable 
presumption that majority government-owned entities are public bodies, which Commerce then followed in subsequent determinations. However, even labeling the Kitchen Shelving  discussion as 
a “policy” or “practice” by Commerce, would not necessarily result in a breach of the 
SCM Agreement. Because a particular policy or practice under U.S. law can and frequently does 
change, it does not itself direct Commerce to take any future action, and therefore it cannot necessarily result in a WTO breach. China’s allegations of repetition do not transform the 
discussion in Kitchen Shelving  into a measure that can be challenged. Not having established that 
the Kitchen Shelving  discussion is a measure, China has also failed to show that that discussion 
can result in an “as such” breach of the SCM Agreement. 
 
VI. COMMERCE’S USE OF OUT-OF-COUNTRY BENCHMARKS TO MEASURE THE BENEFIT 
WHEN INPUTS WERE PROVIDED FOR LESS THAN ADEQUATE REMUNERATION WAS NOT INCONSISTENT WITH  THE SCM AGREEMENT 
 
24. China has failed to make a prima facie case for its out-of-country benchmark claims because 
its claims are based on generalizations instead of the specific facts of the determinations at issue 
and improper legal interpretations of the SCM Agreement.   
 25. There can be no question that an investigating authority may rely on out-of-country 
benchmarks in certain circumstances. Additionally, it should come as no surprise to China that an 
investigating authority might rely on out-of-country benchmarks as the reliability of Chinese in-country prices was of sufficient concern to Members that China’s Accession Protocol recognizes that such prices within China might not always be appropriate benchmarks.   
 
26. China conflates what are, necessarily, two separate analyses: (1) a financial contribution analysis under Article 1.1 of the SCM Agreement; and (2) a benefit analysis under Article 14(d). As 
evidenced by US – Anti-Dumping and Countervailing Duties (China) , the Appellate Body did not 
perceive Commerce’s treatment of SOEs as public bodies as an impediment to upholding Commerce’s reliance on out-of-country benchmarks in those investigations.  
 
27. Commerce’s public body determinations in the investigations challenged here were not WTO-inconsistent. In any event, the Appellate Body report in US – Anti-Dumping and Countervailing 
Duties (China) demonstrates that a WTO-inconsistent public body determination does not mean 
that a determination that government involvement in an input market distorts prices in that 
market, such that the use of out-of-country prices as a benchmark is appropriate, is also WTO-inconsistent.  
 
28. Notwithstanding its claims before this Panel, China itself considered production by majority government-owned firms to be of  key relevance in Commerce’s examination of China’s presence in 
the market. As such, China essentially challenges Commerce’s reliance on China’s own reporting. 
China would have the Panel overturn Commerce’s determinations to use out-of-country benchmarks where Commerce relied on China’s own reporting.    WT/DS437/R/Add.1 
 
- B-13 - 
 
  29. As a matter of law, depending on the information obtained in a given countervailing duty 
investigation, a government’s role as provider in a marketplace can be sufficient on its own to explain price distortion and, as a result, support a decision to rely on out-of-country benchmark 
prices for the benefit analysis.   
 
30. China also mischaracterizes Commerce’s methodology by stating that Commerce applies a per se test that relies exclusively on government market-share rather than the case-by-case 
analysis that it actually performs. China’s generalization that Commerce relies exclusively on 
government-market share in each case to determine that distortion exists is incorrect, as Commerce relies on other facts as well. So even if, arguendo , Commerce could not rely on the 
share of government-produced good in the market alone to find distortion in the in-country 
market, China’s arguments fail. 
 VII. COMMERCE’S DETERMINATIONS THAT INPUT SUBSIDIES WERE SPECIFIC WERE 
FULLY CONSISTENT WITH ARTI CLE 2 OF THE SCM AGREEMENT 
 31. China’s claims that Commerce’s specificity determinations are inconsistent with the 
SCM Agreement are without merit. China appears to challenges 17 different specificity 
determinations in 15 investigations. Each determination was based on the specific facts and circumstances of the relevant proceeding, and China must address those facts and circumstances. China has failed to do so, instead relying on broad, inaccurate characterizations of the measures at 
issue. The Panel should reject its claims for that reason. In addition, China proposes unsupportable 
legal interpretations of the SCM Agreement discussed below.    
32. First, there is nothing in the text of Article 2.1(c) that requires an investigating authority to 
identify a “subsidy program,” that is formally set out in a plan or outline. Article 2.1(c) provides 
that one of the “factors” that “may be considered” as part of the de facto specificity analysis is 
“use of a subsidy programme by a limited number of certain enterprises.” As China points out, in 
the challenged investigations Commerce generally identified the “program” at issue in its analysis. China argues that Commerce’s identification of such programs was not in accordance with Article 2.1(c) because there was no “‘legislation’ or other type of official” government measures 
that provide for these subsidies,” “dedicated funding,” or an otherwise formal designation of “a 
series of subsidies as a program.” China is incorrect in its interpretation of Article 2, because neither the text of Article 2 nor any other provis ion of the SCM Agreement requires a subsidy or 
“subsidy program” to be implemented pursuant to a formally instituted “plan or outline”. 
Accordingly, China’s argument has no textual support in Article 2.1(c).   
33. China’s interpretation must be understood  within the context of Article 2 and the 
SCM Agreement. China’s interpretation would ne gate the distinction between Article 2.1(c), 
relating to subsidies that are de facto  specific, and Article 2.1(a), relating to subsidies that are de 
jure specific. China’s interpretation of Article 2.1(c) would incorrectly focus a de facto  specificity 
inquiry on the existence of a formal plan or outl ine, and not on whether or not there are a limited 
number of users, the inquiry which is the subject of Article 2.1(c). This interpretation is not only unsupported by the text of the Agreement, bu t would also allow Members to circumvent the 
disciplines of the Agreement by avoiding the creati on of an identifiable plan or outline, thereby 
frustrating the ability of investigating authorities to countervail otherwise actionable subsidies.   
34. Second, China’s assertion that an investigating authority must examine a subsidy under 
Articles 2.1(a) and 2.1(b) before examining Article 2.1(c) in every case has no basis in the text of 
the SCM Agreement. The ordinary meaning of Ar ticle 2.1 makes clear that the paragraphs in 
Article 2.1 should be applied “concurrent[ly] and that, although Article 2.1 “suggests” that the 
specificity analysis will “ordinarily” proceed sequentially, this is not a mandatory prescription. 
Because China’s arguments are inconsistent with the ordinary meaning and context of the provisions of the SCM Agreement, the Panel must fi nd there is no order of analysis requirement in 
Article 2.1. 
 35. Third, China is incorrect to assert that the SCM Agreement requires investigating authorities 
to conduct a separate analysis identifying the granting authority as part of its Article 2.1 
evaluation. China points to no language within Article 2.1(c) or the SCM Agreement as a whole which would support such an argument. Accordingly, China’s argument that Commerce was required in every specificity determination to analyze and identify the “granting authority” is 
without merit.  WT/DS437/R/Add.1 
 
- B-14 - 
 
  36. Fourth, China argues that Commerce was requir ed to address expressly the diversification of 
China’s economy and the length of time inputs had been provided for less than adequate remuneration in each challenged determination. A specificity determination involves a fact-based analysis, made on a case-by-case basis. Thus, th e relevance of either (1) the length of time a 
subsidy has been in place or (2) the economic diversification in the Member country would also be 
determined on a case-by-case basis. In particular, those factors would be relevant only if the period of time examined could directly impact the specificity determination, or if the subject 
economy lacks diversification. The factors were not relevant to the investigations at issue, and 
China’s submission does not allege that the factors would have impacted the analysis in the investigations at issue. Thus, China’s argument is without merit, and Commerce’s determinations that the provision of inputs was specific in the challenged investigations were fully consistent 
with U.S. obligations under Article 2.1. 
 VIII. CHINA HAS FAILED TO MAKE A PRIMA FACIE  CASE WITH RESPECT TO THE 
REGIONAL SPECIFICITY DETERMINATIONS IN THE CHALLENGED INVESTIGATIONS 
 37. China appears to challenge determinations made by Commerce in seven CVD investigations 
that the provision of land-use rights in China was specific within the meaning of Article 2 of the 
SCM Agreement. Although China claims that in “each investigation” Commerce’s determination of specificity with respect to land-use rights is inconsistent with Article 2.2 of the Agreement, China has failed to make a prima facie  case of any of these alleged breaches. For that reason, the Panel 
must reject China’s claims with respect to regional specificity. 
 IX. COMMERCE’S INITIATIONS OF INVEST IGATIONS INTO WHETHER RESPONDENT 
COMPANIES RECEIVED GOODS FOR LESS THAN ADEQUATE REMUNERATION WERE 
CONSISTENT WITH ARTICLE 11 OF THE SCM AGREEMENT 
 
38. China’s claims that Commerce’s initiations of CVD investigations are inconsistent with the 
SCM Agreement must fail because China has failed to establish a prima facie case with respect to 
these claims. Furthermore, in all cases, Commerce’s decisions to initiate the investigations with respect to the provision of goods for less than ad equate remuneration were consistent with the 
standard set out in Article 11 of the SCM Agreement.   
 39. Article 11 of the SCM Agreement requires only  that there be “sufficient evidence” of the 
existence of a subsidy in an application to justify initiation of an investigation. As the panel stated 
in China – GOES , all that is required is “adequate evidence, tending to prove or indicating the 
existence of” a subsidy, not “definitive proof” of the subsidy’s existence and nature. Further, an 
investigating authority must be cognizant of what is, and what is not, reasonably available to an 
applicant. As the panel in China – GOES stated: “[i]n the Panel's view, the fact that an applicant 
must provide such information as is ‘reasonably available’ to it confirms that the quantity and quality of the evidence required at the stage of initiating an investigation is not of the same 
standard as that required for a preliminary or final determination.” China has failed to demonstrate 
that Commerce’s determinations were in consistent with this standard.   
 
40. With respect to specificity, Commerce’s initiations were justified because evidence pertaining 
to the subsidies themselves indicated that the prov isions of the inputs in question for less than 
adequate remuneration were specific. Further, the applications provided additional evidence 
regarding specificity, including past final determinations regarding the same or similar inputs. 
Under the standard above, this evidence was sufficient to initiate investigations into the alleged subsidies   
41. With respect to the sufficiency of evidence re garding the existence of public bodies, in many 
situations, much of the evidence of government control may not be available before the initiation of an investigation, particularly with respect to entities alleged to be state-owned. Accordingly, the 
only reasonably available information to an a pplicant may be general evidence of government 
control over an industry or sector.    
42. Even under China’s interpretation of the te rm “public body” in Article 1.1(a)(1) of the 
SCM Agreement, Article 11 would only require adequate evidence tending to prove or indicating that an entity possesses, exercises, or is vested with governmental authority, not definitive proof 
of such. The relevant question would therefore be wh at type of evidence is adequate, for initiation 
purposes, to tend to prove or indicating that an entity possesses, exercises or is vested with WT/DS437/R/Add.1 
 
- B-15 - 
 
  governmental authority. China argues that evid ence of government ownership or control is 
insufficient for initiation purposes. China is mistaken.  43. If evidence of government ownership or control is relevant to the question of whether an 
entity is a public body in a final determination, such evidence can be adequate to “tend to prove or 
indicate” or “support a statement or belief” that an entity is a public body at the initiation stage, as required by Article 11 of the SCM Agreement. 
 
44. Further, when assessing the sufficiency of evidence, an investigating authority must be 
cognizant of what is, and what is not, reasonably av ailable to an applicant. If the precise identities 
of the entities that may be public bodies are not reasonably available, then their characteristics 
and features also are not reasonably available to an applicant. This means that certain evidence 
relevant to the question of whether an entity “possesses, exercises or is vested with governmental authority” generally may not reasonably be availabl e to an applicant, and instead, this evidence 
must be gathered by the investigating authority through the investigatory process. Even if the 
identities of some of the entities that may be pu blic bodies are available, much of the evidence 
regarding the nature of those entities is not in  the public realm and thus not available to an 
applicant. At the same time, an investigation cannot be initiated on the basis of no evidence, or on 
the basis of simple assertion, unsubstantiated by relevant evidence. The question for the investigating authority is therefore: what evidence is reasonably available to an applicant, and does it tend to indicate that the government or public bodies are providing financial contributions? 
In general, evidence of government ownership or control is in certain circumstances the only 
evidence that is reasonably available. In fact, th e issue of public bodies is an example of why the 
SCM Agreement includes the term “reasonably available.”   
 
X. COMMERCE’S INITIATION OF INVE STIGATIONS INTO CERTAIN EXPORT 
RESTRAINT POLICIES IMPOSED BY CHIN A AND DETERMINATIONS THAT THESE 
EXPORT RESTRAINTS CONSTITUTED COUNTERVAILABLE SUBSIDIES ARE 
CONSISTENT WITH THE SCM AGREEMENT 
 45. China challenges Commerce’s decision in Seamless Pipe and Magnesia Carbon Bricks to 
initiate investigations into export restraints imposed by China, in addition to Commerce’s 
determination to countervail those export restraints after China refused to provide information necessary to the analysis. China’s objections to these initiation decisions – objections which are 
crucial to China’s case given that it failed to cooperate once the investigations were underway – 
are unfounded because they rely on China’s flawed belief that investigating authorities are prohibited from examining China’s various export restraint schemes based on one WTO panel 
report.   
 46. China failed to make a prima facie case. Additionally, Commerce’s initiation of investigations 
into export restraints in the challenged investigations was not inconsistent with Articles 11.2 
and 11.3 of the SCM Agreement, in spite of the US – Export Restraints  panel’s erroneous obiter 
dicta analysis of whether hypothetical export restraints could constitute a financial contribution.  
 
47. Notwithstanding the erroneous panel repo rt, examining whether an export restraint 
constitutes a financial contribution through entrustment or direction is fully consistent with Article 1.1(a)(1). Additionally, the United States decisions to countervail China’s export restraints 
on coke and magnesia are not WTO-inconsistent where they were based upon the use of facts 
available pursuant to Article 12.7 of the SCM Agr eement. The use of facts available was required 
after China declined to provide necessary information based on its erroneous position that, as a legal matter, an export restraint cannot constitute a financial contribution encompassed by 
Article 1.1(a) of the SCM Agreement.   
 XI. COMMERCE’S USES OF FACTS AVAILABLE WERE CONSISTENT WITH ARTICLE 12.7 
OF THE SCM AGREEMENT 
 48. China provides only a cursory description of two Article 12.7 claims, merely listing the 
remaining instances in an exhibit. For this reason, China failed to make a prima facie  case with 
respect to these claims. In addition, China’s Article 12.7 claims are based on incorrect interpretations of the SCM Agreement and mischaracterizations of Commerce’s determinations.  WT/DS437/R/Add.1 
 
- B-16 - 
 
  49. Commerce’s use of an adverse inference in selecting from among the available facts is fully 
consistent with the SCM Agreement, confirmed by the ordinary meaning of the provision, as well 
as the context provided by the SCM Agreement as a whole and the parallel provision in the 
AD Agreement. Further, China’s interpretation of  Article 12.7 would lead to a breakdown of the 
remedies provided in the SCM Agreement, as interested parties and Members would have no 
incentive to participate in an investigation. Finally, China’s reliance on the panel’s decision in China – GOES  to argue that Article 12.7 prohibits the reliance on adverse facts available is 
misplaced. The panel found that China’s investigating authority had ignored substantiated facts on 
the record and that its determination “was actually at odds with information on the record.” In contrast, Commerce’s determinations were ba sed on a factual foundation and were not 
contradicted by substantiated facts.  
 
50. Finally, China has failed to demonstrate that any of the 48 challenged determinations are not supported by the record evidence in each investigation. Commerce’s facts available 
determinations are based on the factual information available on the record of each investigation.  
Thus, China’s argument that the challenged advers e facts available determinations were devoid of 
a factual basis is simply incorrect.   
 
XII. CONCLUSION  51. For the foregoing reasons, the United States respectfully requests that the Panel reject 
China’s claims. 
  
_______________ 
  
 WT/DS437/R/Add.1 
 
- C-1 - 
 
  ANNEX C 
THIRD PARTIES WRITTEN SUBMISSIONS OR  
EXECUTIVE SUMMARIES THEREOF 
Contents Page 
Annex C-1 Third Party Written Submission of Australia C-2 
Annex C-2 Executive Summary of the Third Party Written Submission of Brazil C-5 
Annex C-3 Executive Summary of the Third Party Written Submissi on of Canada C-6 
Annex C-4 Executive Summary of the Third Party Written Submission of the 
European Union C-9 
Annex C-5 Third Party Written Submission of Norway C-14 
Annex C-6 Executive Summary of the Third Party Written Submission of the 
Kingdom of Saudi Arabia C-20 
 
 WT/DS437/R/Add.1 
 
- C-2 - 
 
  ANNEX C-1 
THIRD PARTY WRITTEN SUBMISSION OF AUSTRALIA  
I. INTRODUCTION 
 
1. Australia considers that these proceedings initiated by China under the Understanding on 
Rules and Procedures Governing the Settlement of Disputes (DSU) raise significant issues of legal interpretation of the Agreement on Subsidies and Countervailing Measures (SCM Agreement).   
 
2. In this submission, Australia addresses a numbe r of issues relating to the interpretation of 
the provisions of the SCM Agreement, with a particular focus on:   
(a) the meaning of the term “public body” in Article 1.1(a)(1) of the SCM; 
 
(b) the use of out-of-country benchmarks to calculate the benefit to the recipient under 
Article 14(d) of the SCM Agreement; and 
 
(c) whether export restraints can constitute a countervailable subsidy under the 
SCM Agreement. 
 3. Australia reserves the right to raise other issues in the third party hearing with the Panel.  
II. THE SUBSIDIES AND COUNTERVAILING MEASURES AGREEMENT 
 A. T
HE MEANING OF THE TERM “PUBLIC BODY ” 
 
4. A material issue in this matter is the interpretation of the term “public body” in Article 1.1(a)(1) of the SCM. In United States – Definitive Anti-Dumping and Countervailing Duties 
on Certain Products from China , the Appellate Body reversed the Panel’s finding that the term 
“public body” in Article 1.1(a)(1) of the SCM Agreement means “any entity controlled by a 
government”. The Appellate Body considered that this interpretation of “public body” lacked a proper legal basis.
1 
 
5. Australia notes that China’s submission states that after a comprehensive interpretative analysis, the Appellate Body determined that “being vested  with, and exercising , authority to 
perform governmental functions” is the “c ore feature” that defines a public body.
2 However, while 
the Appellate Body did make a statement similar to  this, that statement was made as part of its 
analysis, following which it stated its conclusion that “a public body within the meaning of 
Article 1.1(a)(1) of the SCM Agreement must be an entity that possesses , exercises  or is 
vested with governmental authority”.3   
 6. As such, Australia’s view is that the Appellate Body’s conclusion is broader than is indicated 
in China’s submission. Australia considers that the Appellate Body’s conclusion suggests that a 
public body must meet one of th ree descriptions – an entity that possesses  governmental 
authority, an entity that exercises  governmental authority, or an entity that is vested  with 
governmental authority. These descriptions a ppear to be alternatives to one another. 
 7. However, as part of its analysis in forming this conclusion, the Appellate Body made a 
number of statements that require further analysis.   
 8. For example, a statement was made by the Appellate Body that “being  vested with, and 
exercising , authority to perform governmental functions is a core feature of a public body in the 
sense of Article 1.1(a)(1)”.
4 It is not clear whether possessing  government authority is included 
in this description of “a core feature of a public body”. This statement also appears to suggest that 
                                               
1 Appellate Body Report, US – AD/CVDs, para. 322. 
2 China’s first written submission, para. 15. (emphasis added) 
3 Appellate Body Report, US – AD/CVDs, para. 317. (emphasis added) 
4 Appellate Body Report, US – AD/CVDs, para. 310. (emphasis added) WT/DS437/R/Add.1 
 
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  in order to meet this description, an entity must both be vested with , and exercise , authority to 
perform governmental functions, whereas the Appellate Body’s conclusion, as noted above, expressed these features as alternatives to each other.  
9. In the same paragraph, the Appellate Body also made a statement that “being vested  with 
government authority is the key feature of a public body”.
5 It is not clear whether possessing  
government authority, or exercising  government authority are also included in this description of 
“the key feature of a public body”.   
 10. Australia’s view is that the discussion of core and key features does not fully explain what the other features of a public body might be, and whether an entity might be considered a public 
body if it has other features of a public body even if not the core or key feature. 
 11. Another statement made by the Appellate Body in its analysis in forming its conclusion, was 
that in order for an entity to be able to give resp onsibility to a private body (entrustment), it must 
itself be vested  with such responsibility.
6 This appears to suggest that in order to give 
responsibility to a private body (entrustment), it may not be sufficient if an entity possesses  
and/or exercises  such responsibility. Rather, it must be vested  with it.  
 12. Australia considers that it may be useful for the Panel in this dispute to carefully examine again the term “public body”. Australia would not support a view that an entity must be vested  
with governmental authority in order to be regard ed as a “public body”. This is because Australia 
considers that public bodies have government authority (without having to be vested  with it). 
Australia is concerned to ensure that a focus on the idea of entities being vested  with government 
authority is not used to artificially transpose the test for “entrustment or direction” onto the 
definition of “public body”.   
B. T
HE USE OF OUT -OF-COUNTRY BENCHMARKS TO CALCULATE THE BENEFIT TO THE RECIPIENT UNDER 
THE SCM  AGREEMENT  
 13. Australia notes the view of the United States  that the use of out-of-country benchmarks is 
not inconsistent with Article 14(d) of the SCM Agreement.
7   
 14. Australia agrees with this statement.  In United States – Final Countervailing Duty 
Determination with respect to Certain Softwood Lumber from Canada , the Appellate Body 
acknowledged that Article 14(d) allows investigating authorities to use a benchmark other than private prices in that market.
8   
 
15. However, Australia notes that the Appellate Body also made the statement that “we emphasise once again that the possibility under Article 14(d) for investigating authorities to consider a benchmark other than private prices in the country of provision is very limited.”
9 
 
16. Australia agrees with both the United States and China that when the Appellate Body reaffirmed these interpretative findings in United States – Definitive Anti-Dumping and 
Countervailing Duties on Certain Products from China, it emphasised the case-by-case nature of 
the distortion inquiry.
10  
 
C. W HETHER EXPORT RESTRAINTS CAN CONSTITUTE A FINANCIAL CONTRIBUTION UNDER 
ARTICLE  1.1( A)(1)  OF THE SCM  AGREEMENT  
 17. In its submission, the United States has argued that “export restraints can constitute a 
financial contribution under Article 1.1(a)(1)(iv). Through measures implementing export 
restraints, a government can entrust or direct private enterprise to provide a good to a domestic marketplace if they are going to sell it at all, in accordance with Article 1.1(a)(1)(iii).”
11  
 
                                               
5 Appellate Body Report, US – AD/CVDs, para. 310. (emphasis added) 
6 Appellate Body Report, US – AD/CVDs, para. 294. 
7 United States’ First Written Submission, para. 146. 
8 Appellate Body Report, United States – Softwood Lumber IV, para. 101. 
9 Appellate Body Report, United States – Softwood Lumber IV, para. 102. 
10 Appellate Body Report, United States – AD/CVDs, para. 446. 
11 United States’ first written submission, para. 302. WT/DS437/R/Add.1 
 
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  18. The United States’ submission further argues th at “as a result of these explicit policies, the 
private entities are “caused to move in a specified direction”; if they are to continue the sales of their products, they must sell the good to the do mestic market. Additionally, through these explicit 
measures, private entities are “invested with a trust” that they will sell the good to the domestic 
market. At a minimum, these policies represent a prima facie case of entrustment or direction of a 
private entity”.
12   
 
19. In relation to Article 1.1(a)(1)(iv), Australia notes the arguments made by the United States 
that entrustment or direction is not necessarily explicit.13 
 20. However, even if the arguments of the United States are accepted, Australia notes that 
Article 1.1(a)(1)(iv) requires that a private body  is entrusted or directed by a government “to 
carry out one or more of the type of functions illustrated in (i) to (iii)” . While the United States has 
referred briefly to the function illustrated in Article 1.1(a)(1)(iii), this element is not analysed and 
the focus has been on the “entrustment  or direction” element. Australia does not rule out the 
possibility that an export restraint may constitute a financial contribution, but notes that in order for an export restraint to constitute a financial contribution under Article 1.1(a)(1)(iv), both 
elements of Article 1.1(a)(1)(iv) must be satisfied. 
 III. CONCLUSION  
21. Central to this dispute are important issues of legal interpretation concerning aspects of the 
SCM Agreement, principally the meaning of the term “public body” as used in Article 1.1(a). Australia is of the view that an en tity should not be required to be vested  with governmental 
authority in order to be regarded as a public bo dy, but notes that the broad conclusion reached by 
the Appellate Body in United States – Definitive Anti-Dumping and Countervailing Duties on 
Certain Products from China can accommodate Australia’s view. Australia has also commented on 
a number of other issues of interpretation, including whether export restraints can be regarded as 
a financial contribution under Article 1.1(a)(1).  
                                               
12 United States’ first written submission, para. 299. 
13 United States’ first written submission, para. 300. WT/DS437/R/Add.1 
 
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  ANNEX C-2 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
WRITTEN SUBMISSION OF BRAZIL  
1. In its written submission, Brazil focused its comments on the concept of public body under 
Article 1.1(a)1 of the Agreement on Subsidies and Countervailing Measures (SCM) Agreement and 
the predominance analysis under Article 14(d) of the mentioned Agreement.  
I. THE CONCEPT OF “PUBLIC BODY” IN ARTICLE 1.1(A)(1) OF THE SCM AGREEMENT 
SHOULD BE BASED ON THE AUTHORIT Y OF THE ENTITY ON EXERCISING 
GOVERNMENTAL FUNCTIONS 
 
2. Brazil highlighted that, as it has been alre ady firmly established by the Appellate Body, in 
the core of the concept of “public body”, in the text of Article 1.1 of the SCM Agreement, is the 
“performing functions of a “governmental” character,  that is, to “regulate”, “restrain”, “supervise” 
or “control” the conduct of private citizens”,
1 in other words, the “exercise of lawful authority”. In 
this sense, governmental ownership of an entity per se does not necessarily prove it has the authority inherent of a public body.  
 
3. In Brazil’s view nothing in the SCM Agreement authorizes investigation authorities to establish a presumption (be it rebuttable or not) th at, if an entity is owned by the government, it 
can be considered, without further scrutiny, as a public body. On the contrary, the Appellate Body 
has made quite clear that the conduct of corporate bodies “is presumptively not attributable to the 
State”,
2 and investigating authorities should conduct “a proper evaluation of the core features of 
the entity concerned, and its relationship with government in the narrow sense”3 in order to define 
whether the entity under investigation is a public body for the purposes of the application of 
Article 1.1 of the SCM Agreement.  
II. THE PREDOMINANCE ANALYSIS UNDER ARTICLE 14(D) OF THE SCM AGREEMENT 
SHOULD BE CARRIED OUT ON A CASE-BY-CASE BASIS 
 4. In Brazil’s view, the mere fact that there is  a significant provision of goods or services or 
purchase of goods by a government does not, in and of itself, establish a presumption of market 
distortion for the calculation of the amount of su bsidy conferred in Part V of the SCM Agreement. 
According to the established “predominance test”, an investigating authority may exclude in-
country benchmarks only when the “government's role in providing the financial contribution is so 
predominant that it effectively determines the price at which private suppliers sell the same or similar goods”.
4 In this sense, the concept of “predominance” “does not refer exclusively to market 
shares, but may also refer to market power.”5 
 5. The Appellate Body made it clear that the mere fact that a government is a significant supplier does not allow for the investigative authority to presuppose price distortion and deviate 
from domestic prices.
6 B r a z i l  i s  o f  t h e  v i e w  t h a t  G o v e r n m e n t s  m a y  p l a y  d i f f e r e n t  r o l e s  i n  t h e  
market, including as an economic agent, when it is subject to “the prevailing market conditions” 
and, according to Article 14(d) of the SCM Agr eement, would not confer a benefit within the 
provisions pertaining countervailing duties. Thus, however significant the market share of the 
government acting as an economic agent, it would not be using its power to influence price, and in-country benchmarks should not, for this reason alone, be discarded. 
 
                                               
1 Canada – Dairy (Appellate Body Report, paragraph 97).  
2 US – Countervailing Duty Investigation on DRAMS (Appellate Body Report, footnote. 179). 
3 US – Anti-dumping and Countervailing Duties (China)  (Appellate Body Report, paragraph 317). 
Emphasis added. 
4 US – Softwood Lumber IV (Appellate Body Report, paragraph 100). 
5 US – Anti-dumping and Countervailing Duties (China).  (Appellate Body Report, paragraph 444). 
6 US – Anti-dumping and Countervailing Duties (China).  (Appellate Body Report, paragraphs 442-443). WT/DS437/R/Add.1 
 
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  ANNEX C-3 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
WRITTEN SUBMISSION OF CANADA 
I. INTRODUCTION 
 
1. Canada is participating in this panel proceeding because it has a substantial systemic interest in the interpretation of WTO subsidy rules. 
 
II. PUBLIC BODY  2. In the panel and Appellate Body proceedings in US – Anti-Dumping and Countervailing 
Duties (China) , Canada, a third party in that dispute, argued that the appropriate interpretation of 
the term "public body" is that it is an entity co ntrolled by the government. Such an interpretation 
is consistent with the context of Article 1. 1(a)(1) and the object and purpose of the SCM 
Agreement. 
 3. Canada's interpretation gives sense to the reference to "public body" in Article 1.1(a)(1) 
because it maintains the effet utile  of the term and distinguishes it from a "private body" entrusted 
or directed by a government in Article 1.1(a)(1)( iv). This interpretation also ensures that the 
disciplines of the SCM Agreement are given a sufficiently broad scope in terms of the entities to which they apply and as such prevents the creation  of loopholes allowing for the circumvention of 
the disciplines of the Agreement. 
 4. The panel endorsed this interpretation in US – Anti-Dumping and Countervailing Duties 
(China) . Regrettably, the Appellate Body reversed the panel's findings. Nevertheless, Canada 
acknowledges the importance of security and pred ictability in the dispute settlement system, as 
contemplated in Article 3.2 of the DSU. 
 
III. USE OF OUT-OF-COUNTRY BENCHMARKS   5. In Canada's view, an investigating authority may use out-of-country benchmarks where the 
investigating authority establishes that private prices are distorted because of the predominant 
presence of government-controlled entities in the domestic market and provided that such 
benchmarks reflect prevailing conditions in the country of provision. 
 
6. In US – Softwood Lumber IV  the Appellate Body indicated that an investigating authority 
may reject the use of in-country private transaction prices for a good where private prices are 
distorted because of the government's predominant role in the market as a provider of the same 
or similar goods.   7. Price distortion may arise not only where the government itself is a supplier of the good, but 
also where the suppliers of the good are owne d and controlled by the government. Where a 
government owns and controls SOEs, it is able to interfere with the companies' pricing decisions by virtue of its control. Through the SOEs, the government can affect prices in the market for the 
good as if it acted itself. Where SOEs are predominant suppliers in a market, they can affect prices 
by private suppliers and thus have the same ability to create market distortion as the government acting directly. 
 
8. Government-owned and controlled entities, such as SOEs, do not need to be public bodies under Article 1.1(a)(1) of the SCM Agreement to be in a position to distort private prices in the market and for these prices to constitute improper benchmarks as a result. 
 
9. This is confirmed by the Appellate Body decision in US – Antidumping and Countervailing 
Duties (China) , where the Appellate Body held that certain SOEs could not be considered "public 
bodies" under Article 1.1(a)(1) merely because they were government-owned and controlled. 
However, the Appellate Body treated the fact that government-owned and controlled SOEs supplied 96.1 percent of the hot-rolled steel prod uced in the Chinese market as equivalent to WT/DS437/R/Add.1 
 
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  a 96.1 percent market share of the government. The Appellate Body confirmed, on this basis, the 
panel's finding of "predominant supplier".  IV. SPECIFICITY 
 
10. With respect to specificity, Canada considers that first, Article 2.1 of the SCM Agreement does not mandate a specific order of analysis of subparagraphs (a) to (c). The first paragraph of 
Article 1 sets out several principles  that assist in determining whether a subsidy is specific because 
of its limitation to "certain enterprises". Determining the weight that should be given to each principle will depend on the facts of the case and requires a certain amount of flexibility. That 
includes the question whether a principle may or may not be relevant to the specificity analysis at 
all. In US – Antidumping and Countervailing Duties (China)  the Appellate Body held that there may 
be instances where evidence unequivocally directs the specificity analysis to one specific subparagraph of Article 2.1.  
 
11. Second, Canada considers that the identification of a formal subsidy program is not required in all cases. A subsidy may be provided pursuant to a formal program or not. When there is a 
formal program under which a subsidy appears to be broadly available, it may be necessary to 
consider all the recipients under the program in order to determine, notably by applying factors listed in Article 2.1(c), whether a given subsidy is, in fact, specific. In such circumstances, the identification of a formal subsidy program may be necessary. 
 
12. When there are no indications that there is a formal program, the key issue is whether the 
subsidies are limited to certain enterprises. The conduct of this analysis does not require the 
identification of a formal subsidy program. 
 V. THE USE OF FACTS AVAILABLE AND ADVERSE FACTS AVAILABLE UNDER 
ARTICLE 12.7 OF THE SCM AGREEMENT 
 13. Canada considers that Article 12.7 of the SC M Agreement allows an investigating authority 
to make determinations based on "facts available" to it. In some situations, facts available will 
include facts that are less favourable to a party than the facts that the party would have submitted 
itself, if it had responded in a timely and complete manner.  
14. Reading Article 12.7 in the context of Annex II to the Antidumping Agreement, as suggested 
by the Appellate Body in Mexico – Anti-Dumping Measures on Rice , confirms that the use of facts 
that are detrimental to the respondent is permissible.  
 
15. An investigating authority should also be permitted to draw adverse conclusions, or inferences, under certain circumstances. Where a party withholds information, a reasonable and 
objective investigating authority may find that a party should not benefit from a lack of 
cooperation and use facts on the record in a way that is not favourable to a party. 
 16. This interpretation of Article 12.7 and Annex II is supported by the findings of the panel in 
EC – Countervailing Measures on DRAM Chips , which found that an investigating authority may be 
justified in drawing adverse inferences from the failure to cooperate of a party.   
VI. INITIATION STANDARDS 
 17. Canada considers that an investigating authority should be permitted, when reviewing the sufficiency of evidence under Articles 11.2 and 11.3, to take into account that access to relevant 
information may be limited in a country. 
 18. The text of Article 11.2 itself reveals what a reasonable and objective investigating authority 
should conclude when reviewing whether evidence is sufficient. On the one hand, "[s]imple 
assertions unsubstantiated by relevant evidence" are insufficient, on the other hand, the application shall contain "information as is reasonably available" to the applicant.  
 
19. Governments are in possession of much of the information regarding subsidies. The information about a subsidy that is reasonably available to an applicant will depend on transparency and access to information within the domestic system of the subsidizing Member. 
What is reasonably available will vary widely amongst Members. It will depend, inter alia , on WT/DS437/R/Add.1 
 
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  general record keeping and publication requiremen ts for a government, on the existence of access 
to information laws and on company reporting and publication requirements.   20. Canada submits that a subsidizing Member should not be able to evade its obligations under 
the SCM Agreement because it is in a position to make information relating to subsidies 
inaccessible, or "unavailable", thus effectively impeding applicants' ability to adduce evidence for an application to initiate a countervailing duty investigation. 
 
VII. EXPORT RESTRAINTS DO NOT CONFER SUBSIDIES 
 21. A financial contribution by a government, a public body or a private body entrusted or 
directed by a government is a necessary element of a subsidy under Article 1.1(a)(1) of the 
SCM Agreement. Subparagraphs (i) to (iv) of Arti cle 1.1(a)(1) set out an exhaustive list of the 
types of government conduct that can constitute a financial contribution. Export restraints are not 
a listed type of government conduct.  
 22. The panel in US – Export Restraints  examined the question whether export restraints can 
constitute government "entrustment" or "direction" to a private body, in the sense of 
Article 1.1(a)(1)(iv), to provide goods. The panel found that restrictions on exporting a product and an instruction to sell that product domestically are not "functionally equivalent". Export restraints do not constitute a financial contribution because the existence of a financial 
contribution cannot be determined merely based on the effects, or the result, of a government 
action.  
23. Although the Appellate Body in US – Countervailing Duty Investigation on DRAMS  broadened 
the interpretation of "entrustment" and "direction", it is clear that export restraints are not covered 
by Article 1.1(a)(1)(iv) and that the findings of the panel in US – Export Restraints  in this regard 
remain relevant. 
 24. Export restraints are a form of governmental regulation of exports that may have different effects, since, where the government restricts the exportation of certain goods, it is up to 
manufacturers and other market operators to decide how to react.  
 25. The reports by the Appellate Body and the panel in US – Softwood Lumber IV  and the 
Appellate Body Report in US – Countervailing Duty Investigation on DRAMS  confirm, in relevant 
parts, the interpretation by the panel in US – Export Restraints  of Article 1.1(a)(1)(iv) that not 
every market intervention by a government constitutes "entrustment" or "direction".  
 
26. Canada considers that the imposition of ex port restraints is one of many instances of 
government regulation of a market where there is no immediate link between the regulatory measure and the actions that private entities may or may not take based thereon. Such measures 
are outside the coverage of government "entrustment" or "direction" to a private body and do not 
constitute a financial contribution within the me aning of Article 1.1(a)(1) of the SCM Agreement. 
 WT/DS437/R/Add.1 
 
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  ANNEX C-4 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
WRITTEN SUBMISSION OF THE EUROPEAN UNION 
I. PUBLIC BODY 
 
1. China uses the term "definitively" to describe the interpretation of Article 1.1(a)(1) provided 
by the AB in DS379 . It is not clear what China might mean. The AB Report must be unconditionally 
accepted by the parties and is part of the acquis  of the WTO dispute settlement system, implying 
that, absent cogent reasons, the same legal question will be resolved in the same way in a subsequent case. However, simply because a legal provision has been interpreted in one AB Report certainly does not preclude the possibility that it may be the subject of further, 
complementary, clarification in subsequent AB Reports. 
 2. China uses the term "facially" when claiming that the measures are inconsistent with 
Article 1.1(a)(1). It is not clear what China might mean. In order to determine if the measure is 
consistent, it is simply necessary to examine the terms of the relevant measure, including the facts and evidence on the record of the investigation, as well as the procedural conduct of that 
investigation. 
 3. The AB Report in DS379  is a closely reasoned assessment, and care needs to be exercised in 
considering any one particular statement out of context. The AB endeavoured to strike a balance 
between the US position, with its emphasis on ownership and control  in general terms and China's 
position, with its emphasis on governmental authority  and function , which approach the AB 
considered to coincide with and correspond to the attribution  rules in the ARSIWA. 
 
4. The Parties agree with the AB that the core issue is attribution . They disagree about the 
circumstances in which a conclusion about attribution can be reached in general terms, with 
respect to a set of one or more measures, based on a characterisation of the author of such 
measures as a "public body". The EU remains of the view that when the US casts the abstract test (leaving aside what the particular circumstances might be) in terms of the possibility  of control 
through whatever means , if understood literally, that is too broad. Through their powers of 
regulation and taxation governments can control all of the resources subject to their jurisdiction. 
The US is on stronger ground when it focusses on a more specific link  between the conduct  in 
question and the government . 
 
5. China focuses its argumentation on the interpretative part of the AB Report in DS379 , rather 
that the part in which the law was applied to the facts, in which the AB also attached importance 
to whether or not USDOC asked for information, other than ownership information . The Panel 
should determine whether or not the fact patterns of these 14 measures, on the issue of public 
body, are indeed the same for all relevant purposes to the fact patterns of the measures in DS379 .  
 
6. Depending on the fact patterns in the cases in question, including whether USDOC asked for 
information, other than ownership information, and whether such information was provided, or available to USDOC, the Panel will need to de termine how USDOC assessed such information as a 
whole, and whether or not such assessment was consistent with Article 1.1(a)(1). If other 
information was requested but not provided , then the Panel will need to determine what inferences  
USDOC may or may not have drawn and/or what other available facts it might have relied on , 
leading ultimately to the relevant determination of "public body", and whether or not such 
assessment was consistent with Article 1.1(a)(1). Specifically, if USDOC relied not only on evidence of government ownership and control in general terms, but also on something more as a basis for establishing that the entity is a public  body, then the Panel will need to consider how 
these various factors have been weighed, and whether or not the assessment as a whole is 
consistent with the ASCM . For the purposes of this dispute, the EU takes no position on the 
conclusions and findings that the Panel should eventually reach. 
 WT/DS437/R/Add.1 
 
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  7. China explains that, in framing a claim against the alleged rebuttable presumption "as such", 
it is seeking to respond to alleged recidivism on  the part of the US. According to China, this 
approach is directed towards cessation by the US of such behaviour in the future. Instead of having to proceed against each individual "as app lied" measure, China would wish to see all such 
future instances caught by any eventual compliance or arbitration proceedings. In assessing 
China's claims and arguments concerning the rebuttable presumption "as such", the EU considers that the Panel should pay close attention to the question of whether or not China has 
demonstrated the existence and precise content of the measure at issue . The Panel may also seek 
to strike a reasonable balance between the objective of prompt settlement , which might militate in 
favour of the existence of the alle ged measure, and the principle of due process . In making its 
assessment, the Panel may also wish to take into account the nature of the alleged measure in this 
case as a rebuttable presumption. Thus, the measure is not a rule of substance, but rather a rule 
about evidence, and specifically about where the burd en of proof is to lie. Given its character as a 
rule of evidence, it may be difficult to dissociate the alleged measure in this case (that is, the 
alleged rebuttable presumption) in abstract terms from a particular procedural context. This need 
to take into account the specific procedural context may need to inform a consideration of whether 
or not the complaining Member has identified the existence and precise content of the measure at 
issue. 
 8. The ARSIWA refer expressly to cessation and non-repetition . It provides that the State 
responsible for an internationally wrongful act is under an obligation to cease the act and to offer 
appropriate assurances and guarantees of non-repe tition, if circumstances so require. The ARSIWA 
also suggest that a "systematic" breach of an obligation may be "serious"; that other States should co-operate to bring serious breaches to an end; and that they should not recognise as lawful a 
situation created by a serious breach, nor render aid or assistance in maintaining that situation. 
The EU does not expect either Party, in this or other cases, to fall prey to the temptations of 
recidivism, or for that matter self-help, neither of which serves the interests of other 
WTO Members, or the WTO system. 
 9. The EU considers that the information that a complainant might be expected to adduce in support of a request for initiation of an investigation must be a function of the availability of such 
information in the public domain. Information and evidence concerning the types of additional 
factors, over and above ownership and control, that the AB has indicated may be relevant to the assessment, may (or may not) be of a similar type . This could mean that evidence of ownership 
and control, together with some other relevant and reasonable inference or available fact, could be 
sufficient for the purposes of initiation, if no other information is available to the complainant.   
10. China does not explain the relationship betw een its claims on the substantive question of 
public body, and its procedural claims concerni ng initiation. Notably, China does not explain 
whether success with the first set of claims would allow the Panel to exercise judicial economy  with 
respect to the second set of claims. In other wo rds, China does not explain what the value added 
of its claims with respect to initiation might be. China does not argue that a defective initiation 
would require termination of the measure in compliance proceedings, and does not seek any suggestion from the Panel. 
 
II. BENEFIT  
11. This claim is consequential on the preceding claim. If China is correct that the benefit 
determinations rest upon the public body determinations, and if the public body determinations are WTO inconsistent, then China's claim would be well-founded. If, on the other hand, China has 
failed to demonstrate that the public body determinations are WTO inconsistent, or if China has 
failed to demonstrate that the benefit determinations rest upon the public body determinations, 
then the Panel should reject China's claims. The role of government market share or predominance 
is not therefore per se at issue in this dispute . 
 
III. SPECIFICITY OF INPUT SUBSIDIES  
12. Article 2 has recently been clarified by the AB. In DS379 , the AB observed that the chapeau 
of Article 2.1 offers interpretative guidance on th e scope and meaning of the rest of the provision, 
and frames the central enquiry as a determination of whether a subsidy is specific to certain enterprises within the jurisdiction of the granti ng authority, applying the principles in sub-
paragraphs (a)-(c), no one of which may be determinative. Eligibility is a common and critical WT/DS437/R/Add.1 
 
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  feature of sub-paragraphs (a) (which relates to specificity) and (b) (which relates to non-
specificity), and appropriate consideration must be accorded to both principles. In cases of the appearance of non-specificity, a measure may still be specific in fact pursuant to sub-paragraph (c). The principles are to be applied concurrently, although it may not be necessary to 
consider all sub-paragraphs in all cases, and ca ution should be exercised when applying one sub-
paragraph if the potential for the application of the others is warranted on the facts of a particular case. The term "explicitly" in sub-paragraph (a) refers to something express, unambiguous or 
clear and not something implied or suggested. The ph rase "an enterprise or industry or group of 
enterprises or industries" in the chapeau involves  a certain amount of indeterminacy at the edges 
and needs to be applied on a case-by-case basis.  It is not necessary for the purposes of sub-
paragraph (a) that the limitation on access be demonstrated with respect to both the financial 
contribution and the benefit. 
 13. In EC – Large Civil Aircraft  there was an EC Framework Programme for R&TD, with sector-
specific programmes, including for aeronautics. The Panel found the subsidies granted to Airbus de 
jure specific under Article 2.1(a) based on the fact that specific funding was reserved for specific 
sectors, including aeronautics. The EU appealed on  the grounds that, viewed at the level of the EC 
Framework Programme, there was no specificity. The AB rejected the appeal, considering that an 
explicit  limitation to enterprises in one sector would not be rendered non-specific  by virtue of the 
fact that other groups of undertakings in other sectors had access to other pools of funding. 
 
14. In US – Large Civil Aircraft , the AB considered the issue of whether the allocation of patent 
rights under the contracts and agreements betw een NASA/DOD and Boeing were specific. The AB 
considered that, whilst the question of eligibility is critical, a "granting authority" could consist of 
multiple granting authorities, and the terms "granting authority" and "the legislation pursuant to 
which the granting authority operates" are not mutu ally exclusive. The Panel did not therefore err 
by considering the overall US legal framework for the allocation of patent rights under government 
R&D contracts, and had made an explicit finding that  the allocation of such patent rights is uniform 
in all sectors. However, the Panel did err by failing to consider the EU arguments under Article 2.1(c), although the AB was unable to complete the analysis. In this context, the AB confirmed that the principles in Article 2.1 must  be applied concurrently, and that the provision 
suggests a sequence in which the application of sub-paragraphs (a) and (b) normally  precedes 
sub-paragraph (c). The AB also considered a US appeal against the Panel's finding under Article 2.1(a) that the reduced rates of Washington B&O tax for commercial aircraft were specific, 
because they should have been assessed as part of a broader scheme. The AB rejected the appeal, 
agreeing with the Panel that, if multiple subsidies are to be considered as part of the same subsidy scheme, one would expect to find links or commonalities  between those subsidies, and such 
evidence was not on the record. Finally, the AB considered, and rejected, a US appeal against the 
Panel's finding under Article 2.1(c) that subsidies provided by Industrial Revenue Bonds (IRBs) of the City of Wichita were de facto  specific because a disproportionately large percentage were 
granted to Boeing. 
 
15. The EU suggests that the Panel consider the i ssues before it in light of the clarifications 
provided by these three cases. For example, Chin a complains that the granting authority has not 
been identified, and yet, as outlined above, the AB has clarified that the core issue is one of 
eligibility. So the question for the Panel may be whether or not the evidence demonstrates a limitation of eligibility with respect to the me asure described by the investigating authority. 
Similarly, China complains about the sequence of an alysis, and yet, as outlined above, the AB has 
merely stated that an analysis under sub-paragraph (c) normally  follows one under sub-
paragraphs (a) and (b). So the question for the Panel may be: in what circumstances is it permissible to resort directly to sub-paragraph (c),  and could this include the situation in which it 
is evident that no de jure  specificity is present? Finally, China claims that the impugned measures 
are available outside the alleged programme, and yet,  as outlined above, the AB has indicated that 
one might expect there to be links and commonalities  between allegedly related measures, and 
that the Member asserting such matters may need to adduce evidence to that effect. In particular, 
the EU notes that, since each of the investigations in question normally concerned a single input product, it would be up to China to provide evidence that different public bodies in different 
industries provide diverse inputs as part of a single subsidy “programme”. It appears from the 
information provided so far that this was not done. In the absence of such a demonstration, and since Article 2.1 does not appear to require the identification of a “subsidy programme” in the 
first place, it would seem that the US is entitled to base its finding of de facto  specificity under 
Article 2.1(c) on the limitations inherent in the use of the input product in question. WT/DS437/R/Add.1 
 
- C-12 - 
 
  IV. ADVERSE FACTS AVAILABLE 
 16. The appropriate use of facts available under Article 12.7 is a vital tool with which to counteract non-cooperation and the withholding of information by interested parties in 
CVD investigations. One of the key decisions to be made when having recourse to this provision is 
which inferences may be drawn from non-cooperation and which facts may be available to support a determination. 
 
17. Inference involves determining a fact (fact C), of which there is no direct evidence, from other facts (facts A and B), of which there is direct evidence. Inference is a routine and necessary part of all economic law determinations, indeed, of daily life. How attenuated an inference may be 
is a function of all the surrounding facts and circ umstances, including the procedural context. The 
procedural context includes the situation in which questions have been properly put, and interested parties afforded an opportunity to re spond and comment. When an inference is drawn 
about fact C it is by definition no t possible to be sure how it compares to the situation in which fact 
C would have been directly evidenced, precisely because fact C is not directly evidenced. Insofar as the inference differs from realit y it may well be "adverse" to one or other interested party. WTO 
law permits appropriate authorities to put approp riate questions and draw inferences if full 
responses are not forthcoming. The system could not function without such a rule.  
 18. In drawing inferences, the authority is no t permitted to identify two different equally 
possible inferences, and then select the inference that is more adverse to the interests of a 
particular interested party, solely because it is more adverse  (for example, in order to "punish" 
non-cooperation). Rather, the authority must draw the inference that best fits the facts. However, 
there are no facts that are per se  excluded from the set of facts to be taken into consideration for 
this purpose : so they include  such things as the precise question that has been put; the procedural 
circumstances; the availability of the evid ence being sought; and all the circumstances 
surrounding the absence of the requested informatio n from the record. Thus, the behaviour of an 
interested party can colour the inferences that it may or may not be reasonable to draw. The more uncooperative a party is, the more attenuated and extensive the inferences that it may be reasonable to draw. Whether or not a particular inference is reasonable is something that can only 
be considered on a case-by-case basis. 
 19. The concept of facts available is related. It refers to the situation in which direct evidence of 
the investigated fact (fact C) is not provided, but there is another fact on the record that may be 
used. The concept of facts available may also involve inference of a fact not provided (fact C) from other facts on the record (facts A and B). The same principles apply. 
 
20. Whether a Member acts inconsistently with Article 12.7 might depend less upon the particular label that has been used, and more upon a specific examination of all the surrounding facts and procedural context. China complains in general terms  about the use of the term 
"adverse" in the measures at issue, and yet it remains unclear whether or not this term refers to a 
possible outcome of the process (the inference or fact may be adverse, we simply do not know) or whether it refers to a particular methodology (the intentional selection of a particular inference or 
fact solely because it is adverse to a particular interested party). The EU would rather expect to 
see China's claims set out with specific reference to each instance, and all the surrounding facts and procedural context. To the extent that China ha s failed to proceed in that manner, it may have 
failed to make a prima facie  case.  
 V. REGIONAL SPECIFICITY WITH RESPECT TO LAND USE RIGHTS 
 
21. The EU recalls that this issue was addresse d by the panel (paras. 9.127 – 9.144) and, to a 
limited extent, by the AB (paras. 402 – 424), in DS379 . A similar issue was examined by the panel 
in EC – Large Civil Aircraft  (paras. 6.231 and 7.1220 – 7.1237). The Panel may follow a similar 
approach in this case. WT/DS437/R/Add.1 
 
- C-13 - 
 
  VI. INITIATION WITH RESPEC T TO EXPORT RESTRAINTS 
 22. The panel in US-Export Restraints  considered that the determination of whether there is a 
"financial contribution" under Article 1.1(a)(1) should focus on the nature  of the government 
action, rather than on the effects  or the results  of the government action, and concluded that an 
export restraint, as described in that dispute, ca nnot satisfy the entrusts or directs standard. Other 
panels and the AB have agreed with the panel report in US – Export Restraints  that what matters 
in determining whether there is "financial contribution" under Article 1.1(a)(1)(iv) is the nature  of 
the specific government action at issue, as nece ssarily implying that the producers of the product 
subject to export restraints are "directed" to sell locally (i.e., by effectively eliminating the free choice of private operators in that market). To wh ich extent producers subject to export restraints 
have other options than selling domestically and reduce their prices has to be examined in the 
specific circumstances of each case. In this respect, evidence of the government's intention to support the downstream industry, or the existe nce of other government measures ensuring a 
particular result on the market (e.g. an export restraint together with a government measure 
preventing operators subject to those restraints from stocking their products), may be relevant to determine the existence of a "financial contribution ". Whether there was sufficient evidence in this 
case, as contained in the petitions or otherwise available to the US, that the export restraints at 
issue were accompanied by other specific sets of me asures aiming at increasing domestic supply of 
the products subject to export restraints, and whether the US was legitimately entitled to rely on such evidence in view of China's lack of cooperation in the investigations, are factual matters on 
which the EU does not take a position. Should the Panel conclude that there was sufficient 
evidence before the USDOC for initiating the investigations under Article 11, the EU considers that China's apparent lack of co-operation with the investigation would appear to justify the use of best 
facts available in reaching a definitive determination. 
 WT/DS437/R/Add.1 
 
- C-14 - 
 
  ANNEX C-5 
THIRD PARTY WRITTEN SUBMISSION OF NORWAY  
TABLE OF CONTENTS  
 
 
I.  INTRODUCTION ........................................................................................................... 16 
II.  DETERMINATION OF “PUBLIC BODY” IN ARTICLE 1.1(A)(1) OF THE SCM AGREEMENT .......... 16 
A.  Introd uction  .............................................................................................................. . 16 
B.  Interpretation of the term “pub lic body” ......................................................................... 16 
a)  Introd uction ...................................................................................................... 16 
b)  A «Public body» must be an Entity that Possesses, Exercises or is Vested 
with Government al Authority .................................................................................... 17 
c)  Which Functions may be consider ed as Government al Functi ons? .............................. 18 
d)  Assessing whether an Entity Possesses, Exercises or is Vested with 
Governmental Authority ........................................................................................... 19 
III.  CONCLUSION ............................................................................................................ 19 
 
 WT/DS437/R/Add.1 
 
- C-15 - 
 
  TABLE OF CASES CITED IN THIS SUBMISSION 
  
Short Title Full Case Title and Citation 
US –Anti-Dumping and 
Countervailing Duties  Appellate Body report, United States – Definitive Anti-Dumping and 
Countervailing Duties on Cert ain  Products from China , WT/DS379/AB/R 
US –Anti-Dumping and 
Countervailing Duties Panel report, United States – Definitive An ti-Dumping and Countervailing 
Duties on Certain Products from China , WT/DS379/R 
US – DRAMS CVD Appellate Body Report, United States – Countervailing Duty Investigation on 
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea, WT/DS296/AB/R 
US – Export Restraints Panel Report, United States – Measures Treating Export Restraints as 
Subsidies,  WT/DS194/R and Corr.1 
US — Stainless Steel 
(Mexico) Appellate Body report , United States — Final Anti-dumping Measures on 
Stainless Stee l from Mexico, WT/DS344/AB/R  
 WT/DS437/R/Add.1 
 
- C-16 - 
 
  I. INTRODUCTION 
 1. Norway welcomes this opportunity to be hear d and to present its views as a third party in 
this case concerning a disagreement between Chin a and the United States as to the conformity 
with the covered agreements of 17 countervailing duty investigations of Chinese products initiated 
by the United States between 2007 and 2011.   
2. Norway will not address all of the issues  upon which there is disagreement between the 
parties to the dispute. Rather, Norway will confine itself to discuss the criteria for defining a “public body” under the Agreement on Subsidies and Countervailing Measures (“SCM Agreement ”). 
 
II. DETERMINATION OF “PUBLIC BODY ” IN ARTICLE 1.1(A)(1) OF THE 
SCM AGREEMENT 
 
A. Introduction 
 3. For a measure to constitute a subsidy according to article 1 of the SCM Agreement it must 
entail a financial contribution or income or price support by a government or a public body and it 
must confer a benefit.  4. China claims that the United States has incorrectly found that state owned enterprises 
(SOEs) were “public bodies” within the meaning of Article 1.1(a)1 of the SCM Agreement,  by 
focussing only on majority ownership by the government.
1 China further claims that the 
“Rebuttable Presumption” is, as such, inconsistent with the proper legal standard for determining 
whether an entity is a “public body”, as established by the Appellate Body in US – Anti-Dumping 
and Countervailing Duties .2 
 
5. The United States claims that the term “public  body” means an entity that is controlled by 
the government such that the government can use that entity’s resources as its own.3 The 
United States rejects China’s “as such” claim amongst others on the basis that the Kitchen 
Shelving  discussion does not necessarily result in a breach of the SCM Agreement.4 
 
B. Interpretation of the term “public body”  
a) Introduction 
 6. In the dispute US – Anti-Dumping and Countervailing Duties , the Appellate Body conducted 
a thorough interpretation of the concept of “publi c body”, within the meaning of Article 1.1(a)1 of 
the SCM Agreement . The ruling of the Appellate Body in this case has provided a number of 
important and useful clarifications regarding the concept of “public body”, within the meaning of Article 1.1(a)1 of the SCM Agreement . These clarifications are relevant also in the case at hand.  
 
7. The United States asserts that the parties are in agreement “that the findings of the Appellate Body on “public body” are important and n eed to be taken into account in this dispute”. 
However, the United States also submits that “China should be understood as having agreed that 
in this particular dispute the Panel may and must make its own legal interpretation of the term “public body” and that “the Panel may proceed on this basis.”
5 
 
8. In light of this and before going into the sp ecifics of the interpretation of the term “public 
body” in Article 1.1(a)1 of the SCM Agreement  in US – Anti-Dumping and Countervailing Duties , 
Norway would like to remind the Panel that the Appellate Body has held that:  
 
“the legal interpretation embodied in adopted panel and Appellate Body reports become part and parcel of the acquis of the WTO dispute settlement system. Ensuring 
“security and predictability” in the dispute settlement system, as contemplated in 
                                               
1 China, First Written Submission (“China FWS”), see esp. paras. 12-58. 
2 China FWS, paras. 32-44. 
3 United States, First Written Submission (“US FWS”), see, eg., para. 29. 
4 US FWS,  paras 127-137. 
5 US FWS, para. 121.  WT/DS437/R/Add.1 
 
- C-17 - 
 
  article 3.2 of the DSU, implies that, absent cogent reasons, an adjudicatory body will 
resolve the same legal question in the same way as in a subsequent case”.6 
9. It is Norway’s view that it follows from th e very construction of the WTO dispute settlement 
system that adopted panel and Appellate Body reports create legitimate expectations that 
Members must be able to rely on. Thus, it is not, as insinuated by the United States, up to the 
parties in any one dispute to agree otherwise, and request the panel in that particulate dispute to 
“proceed on that basis”.  
 
b) A «Public body» must be an Entity that Possesses, Exercises or is Vested with 
Governmental Authority 
 
10. Regarding the interpretation of Article 1.1(a)(1) of the SCM Agreement, the United States 
submits that the Panel should conclude that the term “public body” in this provision means “an entity controlled by the government such that the government can use the entity’s resources as its 
own. It is Norway’s opinion that the Panel shou ld reject the suggested interpretation by the 
United States for the reasons set out below.  
11. The Appellate Body has already found that interpreting the term "public body" in 
Article 1.1(a)(1) of the SCM Agreement to mean "any entity controlled by a government" is wrong. 
In the following, Norway will set out some of th e reasons why the Appellate Body’s interpretation 
is correct and the United States’ reasoning is flawed. 
 
12. In US – Anti-Dumping and Countervailing Duties , the Appellate Body concluded that:  
 
“We see the concept of “public body” as shar ing certain attributes with the concept of 
“government”. A public body within th e meaning of Article 1.1.(a)(1) of the 
SCM Agreement must be an entity that possesses, exercises or is vested with 
governmental authority.”
7 
13. The Appellate Body’s interpretati on of the term “public body” in US –Anti-Dumping and 
Countervailing Duties  entails that each case must be looked at separately, giving careful 
consideration to all relevant characteristics, with particular attention to whether an entity exercises 
authority on behalf of a government. The drafters of the WTO Agreements recognized and 
accepted that many types of public ownership coexist with private ownership, and focussed on 
whether there was proof of government intention to influence trade. 
 
14. Norway agrees with the Appellate Body’s assessment that the phrase “a government or any public body” entails two concepts with distinct meanings; “government” in the narrow sense and 
“government or any public body”, as “government” in the collective sense.
8 These two concepts 
are closely linked and share a number of essential characteristics. The view that the use of the 
collective term “government” does not have a meaning besides facilitating the drafting of the Agreement, as advocated in the Panel report in US –Anti-Dumping and Countervailing Duties
9, 
would in our view not be in line with the principle of effective treaty interpretation.10 
 15. Norway believes that it is important to re ad the reference to “government or any public 
body” also in light of Article 1.1(a)(1)(iv) and its reference to situations where the government 
“entrusts or directs a private body to carry out one or more of the type of functions ... which would 
normally be vested in the government ...” (emphasis added). Article 1.1(a)(1)(iv) provides in our 
view important context to the interpretation  of “public body” in Article 1.1(a)(1). 
 16. The purpose of Article 1.1(a)(1)(iv) is to avoid circumvention of the obligations in Article 1.1(a)(1), by providing the financial contribution through non-governmental bodies.
11 By 
focussing on situations where a private body has been “entrusted or directed” to perform functions 
that would normally be vested in the government , the provision gives a clear indication of the 
                                               
6 US — Stainless Steel (Mexico) , para. 160. 
7 Appellate Body report, US –Anti-Dumping and Countervailing Duties , para. 317. 
8 Appellate Body report, US –Anti-Dumping and Countervailing Duties , paras. 286-288. 
9 Panel report, US –Anti-Dumping and Countervailing Duties , especially paras. 8.65 and 8.66. 
10 Similarily, Appellate Body report, US –Anti-Dumping and Countervailing Duties , para. 289. 
11 Panel Report, US – Export Restraints, para. 8.49; Appellate Body Report, US – Drams CVD,  
para. 113. WT/DS437/R/Add.1 
 
- C-18 - 
 
  dividing line between the “public bodies” (included in the concept of “government” in the collective 
sense under Article 1.1(a)(1)) and the “private bodies”. This dividing line is not based on an ownership criterion, but on a functional delimita tion based on whether the entity in question 
performs governmental functions or not. If the enti ty in question possesses, exercises or is vested 
with the authority to perform governmental functions,  then it is covered by Article 1.1(a)1 directly 
when it acts in that capacity when it provides subsidies.  
17. The United States seems to interpret this provision in an antithetic way, implying that the 
interpretation above must entail that it is a prerequisite for all “organs of Member governments” that they have the authority to perform the concrete functions listed in Article 1.1(a)(1)(iv).
12 This, 
however, is an interpretation that cannot be supp orted. The purpose of Article 1.1(a)(1)(iv) is, as 
stated above, to avoid circumvention of the oblig ations in Article 1.1(a)(1), by providing the 
financial contribution through non-governmental bodies. The purpose is not to define what “organs of Member governments” are. However it provides  important context to drawing the line between 
“public bodies” and “private bodies” for the purpose of Article 1.1(a)(1). 
 18. Norway finds further support for its interpreta tion in paragraph 5(c) of the GATS Annex on 
Financial Services, where the term “Public Entity” is defined in the following manner: 
 
“(c) “Public entity” means: 
(i) a government, a central bank or a monetary authority, of a 
Member, or an entity owned or controll ed by a Member, that is principally 
engaged in carrying out governmental functions or activities for 
governmental purposes, not including an entity principally engaged in 
supplying financial services on commercial terms; or 
(ii) a private entity, performing functions normally performed by a 
central bank or monetary authority, when exercising those functions.” 
(emphasis added) 
19. The definition in the GATS Annex on Financial Services applies the essential criterion that 
the entity in question must be “ engaged in carrying out governmental functions or activities for 
governmental purposes ”. Ownership or control by a government is not sufficient in itself. Norway 
recognizes that the interpretation of this term is not directly applicable in a subsidy context as it is 
from another agreement, and the wording is not necessarily identical in all respects, but it sheds light on the intent of the Members when consider ing conduct that should be attributable to the 
governments. 
 20. The US claims that the term “public body” ca nnot be interpreted to mean an entity that 
performs functions of a governmental character. Were this to be the case, the US asserts, the 
term “public body” would be equivalent with “a  government” or a part of “a government” and 
there would be no reason to include the term “public body” in Article 1.1(a)(1).
13 Norway begs to 
differ with this interpretation. In our view, this reasoning illustrates the difference between the use 
of “government” in the narrow and the collective sens e. A public body is not a “government” in the 
narrow sense just because it is vested with the power to exercise certain governmental functions. It is, however, to be considered a part of government in the collective sense, and thus also subject 
to the restrictions in Article 1.1(a)(1) of the SCM Agreement.  
 
c) Which Functions may be considered as Governmental Functions? 
 
21. In assessing whether an entity is a “public bo dy”, the focus must be on whether the entity in 
question possesses, exercises or is vested with  the authority to perform governmental functions 
when providing the financial contribution in question. This requires a factual analysis of the 
functions the particular entity performs, where government ownership is not dispositive in itself. 
 22. The context of Article 1.1(a)(1)(iv) is of relevance with regard to clarifying which functions 
may be considered as governmental functions. Reference is made to the phrase “which would 
                                               
12 US FWS , paras. 84-85. 
13 US FWS, paras. 50 and 57. WT/DS437/R/Add.1 
 
- C-19 - 
 
  normally be vested in the government” in subparagraph (iv). Regarding this, the Appellate Body 
has stated that:  
“As we see it, the reference to “normally” in this phrase incorporates the notion of 
what would ordinarily be considered part of governmental practice in the legal order of 
the relevant Member. This suggests that whether the functions or conduct are of a kind that are ordinarily classified as governmental in the legal order of the relevant 
Member may be a relevant consideration for determining whether or not a specific 
entity is a public body. The next part of that  provision, which refers to a practice that, 
“In no real sense differs from practices normally followed by governments”, further suggests that the classification and functions of entities within WTO Members 
generally may also bear on the question of what features are normally exhibited by 
public bodies.”
14 
23. Thus, both what would ordinarily be considered part of governmental practice in the legal 
order of the relevant Member and the classification and functions of entities within WTO Members 
generally are of relevance when the scope of governmental functions is addressed. 
 
d) Assessing whether an Entity Possesses, Exercises or is Vested with Governmental 
Authority 
 24. In the analysis of whether an entity possesses, exercises or is vested with governmental 
authority, it is vital to consider whether  an entity is vested with authority to exercise governmental 
functions, rather than how that is achieved.
15 In this regard we would like to direct the attention 
once more to the Appellate Body ruling in US – Anti-Dumping and Countervailing Duties, where 
the Appellate Body pointed out that: 
 
“Yet, just as no two governments are exactly alike, the precise contours and 
characteristics of a public body are bound to differ from entity to entity, State to 
State, and case to case. Panels or investigating authorities confronted with the question of whether conduct falling within the scope of Article 1.1.(a)(1) is that of a public body will be in a position to answer that question only by conducting a proper 
evaluation of the core features of the entity concerned, and its relationship with 
government in the narrow sense.” 16 (emphasis added) 
25. The United States asserts that Article 1.1(a)(1) of the SCM Agreement  must be interpreted 
to mean that the term “public body” means an enti ty that is controlled by the government such 
that the government can use that entity’s resour ces as its own. Norway fails to see that the 
arguments put forward by the US should lead to this conclusion. In our view, this interpretation 
lacks support in the SCM Agreement.  Rather, the focus must be on whether the entity in question 
possesses, exercises or is vested with the authority to perform governmental functions when providing the financial contribution in question. This requires a factual analysis of the functions the particular entity performs, where government ownership is not dispositive in itself. Where the 
entity does not perform governmental functions, it is not a “public body” within the meaning of 
Article 1.1(a)(1).  
III. CONCLUSION 
 26. Norway respectfully requests the Panel to ta ke account of the considerations set out above 
in interpreting the relevant provisions of the covered agreements. 
 
                                               
14 Appellate Body report, US – Anti-Dumping and Countervailing Duties , para. 297. 
15 Appellate Body report, US – Anti-Dumping and Countervailing Duties , para. 318. 
16 Appellate Body report, US – Anti-Dumping and Countervailing Duties , para. 317. WT/DS437/R/Add.1 
 
- C-20 - 
 
  ANNEX C-6 
EXECUTIVE SUMMARY OF THE THIR D PARTY WRITTEN SUBMISSION  
THE KINGDOM OF SAUDI ARABIA 
I. INTRODUCTION 
 
1. Saudi Arabia's participation in this dispute addresses fundamental issues relating to the interpretation of the Agreement on Subsidies and Countervailing Measures (the SCM Agreement). 
These issues are of systemic importance to all WTO Members. Saudi Arabia takes no position on 
the merits of the claims as they pertain to the particular facts of this dispute.  II. A "PUBLIC BODY" MUST POSSESS, EXERCISE OR BE VESTED WITH GOVERNMENTAL 
AUTHORITY 
 2. The SCM Agreement requires a finding that a pu blic body possesses, exercises or is vested 
with "governmental authority". The "governmental authority" standard derives from the structure 
of Article 1.1(a)(1)(iv) of the Agreement: a public body must have the power to entrust or direct a 
private body to act. Based on this structure and the defining elements of “government”, the 
Appellate Body has ruled that a public body must possess the ability to compel, command, control 
or govern a private body. Government ownership or control of an entity is not sufficient to establish that the entity exercises governmental authority, and no other factor is dispositive. 
 
3. Exercising governmental authority is distinct from being controlled by the government. A 
government-controlled entity might be a public body, but only if it exercises governmental 
authority. If it does not, then the entity is properly understood to be a "private body",
 and any 
finding of financial contribution  must be based on the entrustment or direction standard of 
Article 1.1(a)(1)(iv) . To disregard this distinction would, as the Appellate Body stated, undermine 
"the delicate balance embodied in the SCM Agreement because it could serve as a license for 
investigating authorities to dispense with an analysis of entrustment and direction and instead 
find entities with any connection to government to be public bodies ". 
 
4. The SCM Agreement imposes affirmative obli gations on investigating authorities when 
determining whether an entity is a public body. The Agreement requ ires the authorities – in every 
case – to analyze thoroughly the legal status an d actions of the entity in question, examine all 
evidence on the record without unduly emphas izing any one factor (for example, state 
ownership), and point to positive evidence establishing  – not merely implying – that an entity 
possesses, exercises or is vested with government a l  a u t h o r i t y .  I f  p o s i t i v e  e v i d e n c e  o f  s u c h  
authority does not exist, then  t h e  e n t i t y  m a y  n o t  b e  f o u n d  t o  b e  a  p u b l i c  b o d y ,  a n d  an 
investigating authority would fail to meet its obligations where it found governmental authority 
based solely on evidence of government ownership or control. 
 5. No single fact (or combination thereof) can automatically fulfill the positive evidence 
standard that must support a finding of governmental  authority. This is especially so with respect 
to government ownership or control, which relates only indirectly to the possession or exercise of 
governmental authority. Governmental authority and government ownership or control are two 
distinct concepts, and the latter is not a proxy fo r the former. Thus, a public body standard that 
systematically relies on evidence of government ownership or control would result in an impermissible interpretation of Article 1.1(a)(1) of the SCM Agreement. The Kingdom respectfully 
requests that the Panel ensure that any 
evidentiary weight given by an investigating authority to 
government ownership or control does not undermine the governmental authority standard established by the Appellate Body
.  
 
III. DOMESTIC PRICE BENCHM ARKS MAY NOT BE REJECTED  MERELY BECAUSE STATE-
OWNED ENTERPRISES ARE A SIGNIFICANT DOMESTIC SUPPLIER 
 
6. The SCM Agreement prohibits an authority from rejecting private in-country price 
benchmarks to determine whether the government provision of a good confers a benefit merely because state-owned enterprises are a significant domestic supplier of that good. In particular, WT/DS437/R/Add.1 
 
- C-21 - 
 
  multiple Appellate Body rulings establish that (i) alternative benchmarks may be used only where 
it has been established that domestic prices of the good at issue are distorted; (ii) the government's predominant role as a supplier of that good in the home market is not a per se  
proxy for price distortion; and (iii) government predominance may not be found simply because 
state-owned industries sell the good and have a significant share of the home market. 
 7. Domestic private prices are foremost among the "prevailing market conditions" enumerated 
in Article 14(d) and are the first reference point to determine whether the government's provision 
of a good confers a benefit. The Appellate Body has emphasized that "the possibility under Article 14(d) for investigating authorities to consider a benchmark other than private prices in the country of provision is very limited " – to where there is evidence of "market distortion". When such 
"very limited" circumstances arise, it is the Kingdom's view that a cost-based benchmark is 
preferable because, unlike international market or third-country prices, it reflects the exporting Member's "prevailing market conditions" and is less likely to nullify that Member's natural 
comparative advantages. 
 8. Price distortion might  exist where the government is a "predominant" supplier of the good at 
issue in the domestic market. However, the Appellate Body has confirmed that actual price 
distortion must be proven in every case, and th at evidence of government predominance cannot 
serve as a per se  proxy for such distortion.   
 
9. The SCM Agreement sets forth precise legal definitions for "government predominance". The 
text of Article 14(d) and related jurisprudence establish that the same standard for defining 
"government" or "public body" under Article 1.1(a)(1) must apply when determining whether the 
"government" is the predominant supplier of a good. Under this standard the domestic sales of a 
"government" may serve as evidence of price dist ortion only where they are “predominant”, which 
is properly defined as the ability of the government to exercise "influence on prices". Significant 
market share alone is insufficient to establish government predominance, much less price 
distortion.  10. Thus, an investigating authority may not find "government predominance" and thereby 
resort to alternative benchmarks based solely on the fact that a state-owned entity (or several 
state-owned entities) has a large domestic market share. The authority must determine (i) that the entity is a public body, (ii) who is the predominant supplier in the market, and (iii) that prices 
are actually distorted due to that predominance. 
 IV. DETERMINATIONS OF DE FACTO  SPECIFICITY MUST TAKE INTO ACCOUNT A 
MEMBER'S ECONOMIC DIVERSIFICATION 
 11. Article 2.1(c) of the SCM Agreement requir es investigating authorities to undertake an 
examination of the extent of diversification of economic activities in the exporting country when 
determining de facto  specificity. Accordingly, any de facto specificity determination will depend on 
the unique economic conditions of the Member at issue. Facts that might indicate de facto  
specificity in a more diversified economy might not justify a finding of specificity where a Member's 
economy is relatively less diversified. Applying a rigid de facto specificity standard to less 
diversified countries would penalize such economies, which predominate in developing countries, for simply being less diversified. That is not what was intended by Article 2.1, and it is exactly 
what the economic diversification requirement of Article 2.1(c) was designed to prevent. 
 V. REGIONAL SPECIFICITY UNDER ARTICLE 2.2 MUST BE SUBJECT TO A LIMITING 
PRINCIPLE 
 
12. The Kingdom is of the view that Article 2.2 is subject to the same limiting principle 
governing all of Article 2, which precludes a legal standard whereby any geographic limitation on 
access to a subsidy would establish regional specificity. 
 13. Given the limited jurisprudence on Article 2.2, it would be useful for the Panel to provide 
guidance on what may constitute a "designated geographical region" and thus regional specificity. 
Consistent with analogous precedent under Article 2.1, regional specificity must be subject to some “limiting principle”, meaning a point at which a certain area to which a granting authority provides a subsidy is so large or widespread as to render the subsidy non-specific 
under Article 2.2. WT/DS437/R/Add.1 
 
- C-22 - 
 
  14. Several WTO panels and the Appellate Body have acknowledged that the specificity 
requirement of Article 2 is limited, and, as such , "the relevant question is not whether access to 
the subsidy is limited in any way at all, but rather  where it is sufficiently limited for the purpose of 
Article 2". Although these cases addressed Article 2.1, basic logic would necessitate similar limits 
on Article 2.2. Without such a limiting principle, regional specificity determinations could apply to 
almost any subsidy that mentions a Member's geography, including those that are clearly 
"sufficiently broadly available throughout the economy as to be non-specific". 
 
15. The Kingdom is of the view, in line with prio r jurisprudence, that regional specificity under 
Article 2.2 should be determined on a case-by-case basis, and that a geographically limited subsidy should nonetheless be found to be non-specific where it has been demonstrated, with 
positive evidence, that the subsidy has been provid ed to a "sufficiently broad" geographic region. 
Because the precise point at which a subsidy becomes non-specific would "modulate according to the particular circumstances of a given case", any such standard should require an investigating 
authority to consider the unique geography, governmental structure and economy of the Member 
at issue.    
VI. EXPORT RESTRAINTS MAY NOT CONSTI TUTE A SUBSIDY BECAUSE THERE IS NO 
"FINANCIAL CONTRIBUTION" 
 16. An export restraint does not constitute a subsidy because there is no financial contribution 
by the government, as defined under Article 1.1(a)(1) of the SCM Agreement. Where a 
government restricts exportation of a certain good, it does not thereby entrust or direct a private producer of those goods to provide them to domestic purchasers.  
 
17. "Entrustment or direction" requires an affirmative demonstration of the link between the government and the specific conduct – in particular, evidence relating to the intent and 
involvement of the government in the transactions  at issue. The Appellate Body has ruled that 
entrustment or direction "does not cover 'the situation in which the government intervenes in the market in some way, which may or may not have a particular result simply based on the given 
factual circumstances and the exercise of free choice by the actors in that market'". 
 
18. In US – Export Restraints , the panel found that an export restraint does not constitute the 
government-entrusted or government-directed provision of goods. This is consistent with the 
views enunciated by the Appellate Body. First, an export restraint does not constitute the 
government's involvement in the specific conduct at issue (i.e. a private body's domestic sales of the good). Second, an export restraint "may or ma y not have a particular result" because its effect 
would depend on the factual circumstances and choices made by market actors. As such, an 
export restraint fails to meet the Appellate Body's standards for "entrustment or direction".  VII. CONCLUSION 
 
19. Saudi Arabia respectfully urges the Panel to consider the Kingdom's positions on these 
important systemic issues.  
 
 
_______________ 
 
   WT/DS437/R/Add.1 
 
- D-1 - 
 
  ANNEX D 
ORAL STATEMENTS OR EXECUT IVE SUMMARIES THEREOF OF 
THE PARTIES AT THE FIRS T SUBSTANTIVE MEETING 
Contents Page 
Annex D-1 Executive Summary of the Opening Statement of China at the First Meeting of 
the Panel D-2 
Annex D-2 Opening Statement of the United States at the First Meeting of the Panel  D-7 
Annex D-3 Closing Statement of the United States at the First Meeting of the Panel D-14 
 
 WT/DS437/R/Add.1 
 
- D-2 - 
 
  ANNEX D-1 
EXECUTIVE SUMMARY OF THE OPEN ING STATEMENT OF CHINA AT  
THE FIRST MEETING OF THE PANEL 
Introduction 
 
1. In the interest of moving promptly to the Panel's questions, I will limit my opening remarks 
to certain aspects of five key issues in this dispute: (1) public body; (2) benchmark "distortion"; 
(3) input specificity; (4) "adverse" facts available; and (5) export restraints. Before turning to the 
specific issues that I intend to discuss, however, I would like to address one of the principal themes of the U.S. first written submission, namely, that China has failed to establish a prima 
facie case with respect to its claims. This contention is based on a backwards understanding of 
what it takes to establish or rebut a legal claim.   
 2. In its first written submission, China demonstrated that Commerce's application of incorrect 
legal standards is evident on the face of Commerce's own determinations. That is all that China 
needed to establish in order to substantiate its claims. If the U.S. interpretations of the 
SCM Agreement are incorrect, then the only "fact"  that matters is the fact that Commerce applied 
those incorrect legal interpretations in the investigations at issue – a fact that China has 
demonstrated by reference to Commerce's own determinations.  3. Commerce has initiated countervailing duty investigations, conducted those investigations, 
and reached final determinations in those investigations based on the application of incorrect 
understandings of its obligations under the SCM Agreem ent. It is on the basis of the rationales set 
forth in those determinations that the Panel must evaluate China's claims. As China has 
demonstrated, those determinations were self-evidently based on an improper interpretation and 
application of the relevant provisions of the SCM Agreement.  
Financial Contribution 
 4. I would like to begin by discussing the relevanc e to this dispute of the Appellate Body's legal 
interpretation of the term "public body" in US – Anti-Dumping and Countervailing Duties (China) 
("DS379"). 
 5. The Appellate Body has stated that "following the Appellate Body's conclusions in earlier 
disputes is not only appropriate, but is what would be expected from panels, especially where the 
issues are the same". This expectation supports "a key objective of the dispute settlement system", namely, "to provide security and predicta bility to the multilateral trading system." In 
contrast, not acknowledging the hierarchical structure contemplated in the DSU would 
"undermine[] the development of a coherent and predictable body of jurisprudence clarifying Members' rights and obligations under the covered agreements". For these reasons, the Appellate Body has stated that "absent cogent reas ons, an adjudicatory body will resolve the same 
legal question in the same way in a subsequent case." 
 6. In accordance with the Appellate Body's holdings concerning the relevance of its prior legal 
interpretations, China expects the Panel to foll ow the Appellate Body's ruling in DS379 that a 
public body is an entity that is vested with  and exercises authority to perform governmental 
functions. In China's view, it should be a non-controversial proposition that merely advancing 
arguments that the Appellate Body has already considered and rejected cannot justify departing 
from a legal interpretation embodied in a prior adopted Appellate Body report. This is particularly true in a dispute, such as this one, that involves the same litigants, the same types of measures, and the same claims that were at issue in the prior dispute. 
 
7. If the Panel agrees with China that the Appe llate Body's interpretation of the term "public 
body" in DS379 must be applied here, China's "as applied" claims are open and shut. The excerpts 
from Commerce's Issues and Decision Memoranda identified in CHI-1 establish on their face that, 
in each investigation, Commerce applied the same  majority ownership, control-based standard WT/DS437/R/Add.1 
 
- D-3 - 
 
  that the Appellate Body rejected in DS379. It follows that all of Commerce's public body findings 
referenced in CHI-1 are inconsiste nt with Article 1.1(a)(1).   
 8. These "as applied" public body determinations  were made pursuant to an explicit "policy" 
that Commerce announced in Kitchen Shelving  to address the "recurring issue" of how to analyse 
whether particular entities are public bodies. China demonstrated in its first written submission that this "policy" is "as such" inconsistent with Article 1.1(a)(1) of the SCM Agreement because it 
is based on the notion that government control of an entity, by itself, is sufficient to establish that 
an entity is a "public body".   9. The United States makes a half-hearted attempt to argue that the policy articulated in 
Kitchen Shelving  is not a "measure", but rather mere "administrative practice" that cannot be 
challenged in WTO dispute settlement. In advancing this argument, the United States simply ignores the Appellate Body jurisprudence holding that "any act or omission attributable to a 
WTO Member" can be challenged before a WTO panel, and that the legal status of such acts or 
omissions within a Member's domestic legal system is not relevant to the question whether they may be challenged in WTO dispute settlement.   
 
10. The United States is on equally weak ground  in arguing that because the policy established 
in Kitchen Shelving  "does not commit Commerce to any future course of action" it does not 
"necessarily" result in a breach of Article 1. 1(a)(1). Appellate Body jurisprudence clearly 
establishes that non-mandatory measures  may be challenged "as such", which per force  means 
that on the merits, measures of this type may be found, and indeed have been found, to be "as 
such" inconsistent with the relevant provisions of the covered agreements. In none of those cases 
did the Appellate Body suggest that Commerce's ability to abandon the challenged measures at 
some point in the future was relevant, let alone determinative, to the analysis of whether those measures were inconsistent with the covered agreements. 
 
11. I will now turn to China's initiation claims under Article 11 of the SCM Agreement. The United States concedes that under the Appellate Bo dy's interpretation of the term "public body", 
Article 11 would require "adequate evidence tend ing to prove or indicating that an entity 
possesses, exercises, or is vested with govern mental authority". The United States does not 
assert, nor could it, that Commerce actually applied this standard when evaluating the adequacy of the evidence of a financial contribution in each of the four cases at issue. 
 
12. China submits that this should be the begi nning and end of the Panel's inquiry. When an 
investigating authority initiates a subsidy investigation on the basis of an incorrect legal standard, 
it necessarily has acted inconsistently with Arti cle 11.3 of the SCM Agreement. A Member may not 
then seek to salvage the flawed initiation decision in a panel proceeding through ex post  
rationalizations to the effect that had the investigating authority applied the correct legal standard, 
it still could have found the evidence adequate to initiate the investigation. Yet that is precisely 
what the United States is seeking to do here. In essence, the United States is asking this Panel to 
evaluate the consistency of Commerce's initiation  decisions with the SCM Agreement based not on 
what Commerce actually  did, but on what it might  have done. China respectfully submits that this 
is not a proper role for a Panel to undertake.  
 Benefit 
 
13. China's benefit claims in this dispute raise an important question of legal interpretation: namely, whether the standard for defining what constitutes "government" for purposes of the financial contribution inquiry under Article 1.1(a)(1) must also apply when determining whether 
"government" is a predominant supplier for purposes  of the distortion inquiry under Article 14(d). 
In China's view, the text of the SCM Agreement as  well as prior Appellate Body decisions require 
an affirmative answer to this question. 
 
14. The Appellate Body held in DS379 that government ownership and control alone are an insufficient basis on which to conclude that the provision of goods by a state-owned entity is the 
conduct of "government", i.e., a financial contribution. In China's view, it must follow as a matter 
of law that government ownership and control alone are an insufficient basis on which to conclude that the provision of goods by a state-owned enti ty is the conduct of a "government" supplier for 
purposes of the distortion inquiry.   
 WT/DS437/R/Add.1 
 
- D-4 - 
 
  15. The only justification that the United States offers for its view that "government" means one 
thing for purposes of the financial contribution in quiry and something else for the distortion inquiry 
is the assertion that the Appellate Body implicitly endorsed this counterintuitive outcome in DS379. This argument is without merit. In DS379, the Appellate Body neither addressed nor decided the 
question of legal interpretation presented by Chin a's distortion claims in the present dispute for 
the simple reason that they we re not properly before it.   
 
16. Stripped of its misguided reliance on the Appellate Body's decision in DS379, the 
United States is left with nothing to counter the proposition that the same legal standard for defining what constitutes "government" for purposes of the financial contribution inquiry must also apply when determining whether "government" is  a predominant supplier for purposes of the 
distortion inquiry. Notably, until this case, even Commerce apparently agreed with China's 
interpretation. In every case cited in CHI-1, Co mmerce's finding that the "government" played a 
predominant role in the market was based exclusively or primarily on equating SOEs with 
"government" suppliers, solely  on the grounds that SOEs are owned and/or controlled by the 
government. All of Commerce's distortion findings th erefore lack a lawful basis. It follows that all 
of Commerce's benefit determinations in the 14 cases under challenge must be found inconsistent 
with Articles 1(b) and 14(d) of the SCM Agreement.  
 Specificity  
17. I will now turn to Commerce's specificity determinations under Article 2 of the 
SCM Agreement with regard to the alleged provisio n of subsidized inputs to downstream producers 
of finished products.   
 
18. My first substantive point concerns the relati onship between Article 2.1(c) and the prior two 
subparagraphs of Article 2.1. Article 2.1(c) states that " if, notwithstanding any appearance of non-
specificity resulting from the application of the principles laid down in subparagraphs (a) and (b), 
there are reasons to believe that the subsidy may in fact be specific, other factors may be 
considered ." This is unquestionably a conditional statement – an investigating authority "may" 
consider the "other factors" under Article 2.1(c) "if" there is an "appearance of non-specificity 
resulting from" a prior examination of the principles set forth under subparagraphs (a) and (b). If 
the prior condition is not satisfied, the authority to "consider" the "other factors" under Article 2.1(c) does not arise.   
 
19. This straightforward language led the Appellate Body to conclude in DS379 that Article 2.1(c) "applies only when there is an 'app earance' of non-specificity" resulting from the 
application of subparagraphs (a) and (b). The United States agreed with this interpretation in EC – 
Aircraft , observing that Article 2.1(c) "presumes that  a specificity analysis already has occurred 
under subparagraphs (a) and (b)".    
20. In the absence of an "appearance of non-specificity resulting from the application of" 
subparagraphs (a) and (b), Commerce lacked an essential predicate for its analysis of specificity under Article 2.1(c). In addition to this error, Commerce's failure to identify a relevant "subsidy 
programme" relating to the provision of inputs for less than adequate remuneration constitutes a 
separate and independent reason for the Panel to find that Commerce's specificity determinations were inconsistent with Article 2. 
 
21. The first factor under Article 2.1(c) refers to the "use of a subsidy programme  by a limited 
number of certain enterprises". As the United States explained in EC – Aircraft , a "subsidy 
programme" is a "plan or outline of subsidies or a planned series of subsidies". The United States 
was emphatic in its understanding that a subsidy programme "is not just any series of subsidies … 
but a planned series of subsidies". The panel correctly found in EC – Aircraft  that "the starting 
point" for any analysis of specificity under the first factor of Article 2.1(c) "should be the 
identification of the relevant subsidy programme", i.e., the identification of the "planned series of 
subsidies" that may, in practice, have been used by only a "limited number of certain enterprises".   
22. Notwithstanding it position in the Aircraft cases, the United States now contends that the 
first factor under Article 2.1(c) does not require the identification of any "subsidy programme". The 
United States appears to interpret the term "subsidy programme" as synonymous with the term "subsidy", thereby ignoring the express language of  Article 2.1(c), its own prior positions, and the 
unappealed findings of the panels in the two Aircraft  cases. This simply is not credible.   WT/DS437/R/Add.1 
 
- D-5 - 
 
  23. For these reasons, as well as the reasons set forth in China's first written submission, 
Commerce's determinations of specificity in regards to the alleged input subsidies were plainly inconsistent with Article 2. Moreover, because Commerce initiated its investigations into these alleged input subsidies on the basis of the same er roneous understanding of Article 2.1(c) that it 
applied in the final determinations, Commerce's initiations of these investigations were 
inconsistent with Article 11.3 of the SCM Agreement.  
"Adverse Facts Available" 
 24. I will now turn to Commerce's use of so-called "adverse facts available" under Article 12.7 of the SCM Agreement.  In its first written submissi on, the United States does not disagree with the 
proposition that Article 12.7 requires the investigating authority to apply facts that are available . 
Instead, it asserts that "[b]ecause Commerce's a pplication of 'adverse' facts available is, by its 
terms, based on facts available, its use is consistent with Article 12.7". The assertion that 
Commerce's AFA-based conclusions were actually based on record evidence is exactly that – an 
assertion. It has no basis in Commerce's actual determinations, and is nothing more than an ex 
post attempt by the United States to justify these unlawful findings. 
 
25. In the 48 instances that China has identified in CHI-2, Commerce follows a consistent pattern. Commerce explains that the respondent has "failed to act to the best of its ability", and consequently, that an "adverse inference is warranted" in making the relevant finding, and/or that 
it is "assuming adversely" the relevant finding. Notwithstanding Commerce's repeated assertions 
that it is applying facts available, the "facts" are conspicuously absent from its analysis.  
26. In Print Graphics , Commerce explained its use of "adverse facts available" as follows:  "When 
the government fails to provide requested information concerning the alleged subsidy program, the Department, as AFA, typically finds that a financial contribution exists under the alleged 
program and that the program is specific." No amount of semantic gymnastics can turn 
Commerce's use of "assumptions" and "inferences" into the use of "facts available" within the 
meaning of Article 12.7. For this reason, the 48 AFA-based determinations that China has identified in CHI-2 are inconsistent with Article 12.7 of the SCM Agreement. 
 
Export Restraints  
27. The final issue I would like to address this morning relates to Commerce's decision in 
Magnesia Bricks  and Seamless Pipe  to initiate investigations into allegations that export restraints 
imposed by China on magnesia and coke confer a countervailable subsidy. China's claims are 
based on the proposition that an export restraint cannot, as a matter of law, constitute 
government entrusted or directed provision of good s within the meaning of Article 1.1(a)(1)(iv) of 
the SCM Agreement.    
28. In Magnesia Bricks  and Seamless Pipe , the petitioners alleged that China imposed export 
restraints on magnesia and coke through a combination of quotas, taxes, and licensing requirements. These fall squarely within the de finition of export restraints that the panel 
addressed in US – Export Restraints . In each case, the sole basis for petitioners' claims that the 
export restraints constituted a financial contribution was their assertion that through the export restraints, and through those measures alone , China was providing a financial contribution by 
entrusting or directing domestic suppliers to pr ovide these inputs to downstream producers of 
subject merchandise. And in each case, Commerce initiated its investigations based solely on petitioners' evidence and assertions concerning the existence of the export restraints and their 
purported effect  on the prices at which downstream consumers purchased raw material inputs. 
 
29. The Panel here is thus confronted with the id entical question of legal interpretation that the 
panel faced in US – Export Restraints .  In that regard, China's claims do not raise, and the Panel 
need not decide, the issue of whether export restraints "accompanied by other specific sets of 
measures aiming at increasing domestic supply of the products subject to export restraints" might constitute a financial contribution.  In Seamless Pipe  and Magnesia Bricks , it is undisputed that no 
measures other than the export restraints themselves were alleged to constitute a financial 
contribution.  WT/DS437/R/Add.1 
 
- D-6 - 
 
  30. Accordingly, the only question for this panel to resolve is whether it agrees with the 
interpretative reasoning that led the panel in US – Export Restraints  to conclude that the types of 
export restraints addressed by that panel, which include those at issue in these two investigations, do not constitute a financial contribution as a matter of law. If the Panel agrees with that legal 
interpretation, Commerce's decisions to initiate investigations in Magnesia Bricks  and Seamless 
Pipes must be found inconsistent with Article 11.3.  
 WT/DS437/R/Add.1 
 
- D-7 - 
 
  ANNEX D-2 
OPENING STATEMENT OF TH E UNITED STATES AT  
THE FIRST MEETING OF THE PANEL 
1. On behalf of the U.S. delegation, I would li ke to thank you for agreeing to serve on this 
Panel. This dispute raises the question whether WTO rules are adequate to counter subsidization 
taking place in one of the world’s most important economies, causing profound distortions not only 
in that economy but throughout the world trading system generally. While it is every WTO 
Member’s right to decide the degree of intervention in its own economy, it is equally the case that 
every WTO Member has agreed that subsidies that cause injury are subject to WTO rules. These WTO rules create effective disciplines and permit Members to counter injurious subsidization. The claims brought by China, however, seek to convert the WTO rules into a means to shield China’s 
subsidization from scrutiny. China’s reading of the WTO rules would make it more difficult, if not 
impossible, to ensure that firms in other Members do not have to compete against the financial resources of the Chinese government. The choice China has made about the structure of its 
economy does not excuse China from the rules that apply to all WTO Members.  
 2. This dispute is also one of the largest in th e history of the WTO. China has advanced claims 
with respect to 97 individual alleged breaches of the SCM Agreement, concerning 17 different 
CVD investigations, and involving 31 initiations of investigations, preliminary or final determinations. Yet, at each step in this case – first the consultations request, then the panel request, and, most importantly, in its first written submission – China has taken shortcuts in its 
claims, discussion of the facts, and arguments. China relies on sweeping factual generalizations 
instead of presenting the facts and legal arguments for each challenged investigation necessary to sustain China’s burden of proof. China must make its own case, and it has failed to do so. 
 
3. China attempts a shortcut when it asserts that its claims “largely entail the application of the findings in DS379, as well as other well-settled  jurisprudence.” In fact , this dispute involves 
several novel interpretations of the SCM Agreement that were not addressed in  US – Anti-Dumping 
and Countervailing Duties (China)  (DS379), or any other dispute. It is important to recall that in 
DS379 neither the panel nor the Appellate Body found any general regulations or other measures of the United States WTO-inconsistent “as such”, but rather, evaluated certain determinations by 
the U.S. Department of Commerce (“Commerce”) on an as applied basis in four 
CVD investigations. China inappropriately relied on the findings of US – Anti-Dumping and 
Countervailing Duties (China) , declining to include in its first written submission virtually any 
discussion of the facts at issue in the determinatio ns it challenges here. Accordingly, for each of 
China’s claims, China has failed to establish a prima facie  case.   
 
4. China must demonstrate, with specific evidence from the investigations challenged, how 
Commerce’s determinations in each investigation were inconsistent with the requirements of the SCM Agreement. China must link its legal argume nts to the facts and evidence of each of the 
investigations it challenges. However, despite advancing dozens of individual claims that 
Commerce’s findings were inconsistent with the SCM Agreement, China barely discusses 
Commerce’s determinations at all, simply providing a few cursory descriptions as examples. In doing so, China has attempted another shortcut. China seems to ask the Panel to fill in the blanks 
and answer the questions China has not addressed. Of course, it is not proper for China to ask this 
of a panel, and China should be mindful of the Appellate Body’s caution that asking a panel to make findings “in the absence of evidence and supporting arguments,” is to ask a panel to act 
inconsistently with its obligations under Article 11 of the DSU.”
1 China must make its own case, 
and it has failed to do so.   5. In the remainder of our opening statement – without repeating in full the arguments we 
have made in the U.S. first written submission – we  would like to touch on each of the issues in 
this dispute to highlight China’s failure to make its case, both as a matter of evidence and as a matter of law. 
 
                                               
1 US – Gambling (AB) , para. 281. WT/DS437/R/Add.1 
 
- D-8 - 
 
  I. CHINA’S PUBLIC BODY CLAIMS ARE FOUNDED ON AN ERRONEOUS 
INTERPRETATION OF THE SCM AGREEMENT 
 6. First, with respect to the interpretation of the term public body, China’s claims are without 
merit. China has offered the Panel an erroneous interpretation of the term “public body” in 
Article 1.1(a)(1) of the SCM Agreement, and has failed to demonstrate that Commerce’s public body determinations are inconsistent with the requirements of the SCM Agreement, when its terms 
are properly interpreted. 
 7. With respect to the definition of the term “public body,” the Panel must undertake its own interpretations of that term by applying the customary rules of interpretation of public 
international law, taking due account of previous interpretations of that term. As explained in the 
U.S. first written submission, the proper conclusion that flows from such an analysis is that a public body is an entity controlled by the go vernment such that the government can use the 
entity’s resources as its own. We note that the interpretation we have set forth in the 
U.S first written submission accords with the ordinary meaning of the terms of the SCM Agreement, read in their context, in ligh t of the object and purpose of the agreement. 
 
8. Three WTO dispute settlement panels – in Korea – Commercial Vessels, EC and certain 
member States – Large Civil Aircraft , and US – Anti-Dumping and Countervailing Duties (China)
2 – 
have agreed that a “public body” is an entity co ntrolled by the government. The Appellate Body, in 
one report, arrived at a different conclusion. However, as explained in the U.S. first written 
submission, the Appellate Body’s interpretation  leaves open questions that, when resolved, 
support the conclusion that a public body is an en tity controlled by the government such that the 
government can use the entity’s resources as its own.   
 9. Contrary to China’s suggestion in its first written submission, it simply is not necessary for 
an entity to be vested with, possess, or exercise “governmental authority” to “‘regulate’, ‘control’ 
or ‘supervise’ individuals, or otherwise ‘restrain’  their conduct, through the exercise of lawful 
authority” for that entity to provide a financial contribution that confers a benefit; that is, for that entity to provide a subsidy.   
 
10. Indeed, of the activities described as financial contributions in Article 1.1(a)(1), only the indirect reference to taxation in Article 1.1(a)(1)(ii) appears to even have a remote connection to 
what the Appellate Body described in Canada – Dairy  as the “essence” of government. When the 
term “government” in Article 1.1(a)(1)(ii) is read in the collective sense, as it must be, that provision actually refers to “government [or any public body] revenue ... foregone or not 
collected,” and so is not limited to taxation at all. Hence, as the Appellate Body suggested in US – 
Anti-Dumping and Countervailing Duties (China) , the types of conduct listed in all of the 
subparagraphs of Article 1.1(a)(1) could be carried out by governmental as well as nongovernmental entities, and “governmental au thority” – in the sense of controlling or 
supervising individuals, or otherwise restraining their conduct – is not necessary to undertake any 
of them.  
11. China is asking the Panel to go beyond the Appellate Body’s findings in United States – Anti-
Dumping and Countervailing Duties (China) . China seeks a finding from the Panel that all public 
bodies must have the power to regulate, control, supervise, and restrain individuals. Such power 
simply is unrelated to and unnecessary for the purpose of providing a subsidy, and there is no 
textual support in the SCM Agreement for the conclu sion that all public bodies must possess such 
power.  
12. What is necessary, in order for a subsidy to be attributable to a Member, is that the 
Member’s government can control the entity providing the financial contribution such that the government can use the entity’s resources as its own. When the government has that kind of 
control over an entity, there is no logical distinction between a financial contribution that flows 
directly from the government and a financial contribution that flows from the entity – the public body – over which the government has control.   
 
                                               
2 See Korea – Commercial Vessels , para. 7.50. See also id. , paras. 7.172, 7.353, and 7.356; EC and 
certain member States – La rge Civil Aircraft (Panel) , para. 7.1359; US – Anti-Dumping and Countervailing 
Duties (China) (Panel) , para. 8.94. WT/DS437/R/Add.1 
 
- D-9 - 
 
  13. The SCM Agreement is intended to discipline the use of subsidies by governments so as to 
permit economic actors to compete in the international marketplace without the effects of subsidies distorting the outcome of that competition. An understanding of “public body” as reaching financial contributions flowing from an entity that is controlled by the government such 
that the government can use that entity’s resources as its own supports that goal. To find 
otherwise would permit a government to provide the same financial contribution with the same economic effects and escape the definition of a “financial contribution” merely by changing the 
legal form of the grantor from a government agen cy to, for example, a wholly government-owned 
corporation. A correct interpretation of the “public body” avoids such an outcome.  II. CHINA’S CLAIM REGARDING THE KITCHEN SHELVING  DISCUSSION HAS NO MERIT 
 
14. Next we move on to the issue of China’s “as such” challenge to Commerce’s discussion of the public body issue in the final determination in the Kitchen Shelving  investigation. China claims 
that Commerce established a policy of a “rebuttable presumption” that majority government-
owned entities are public bodies. This argument fails for two reasons: First, the Kitchen Shelving 
discussion is simply a discussion of the past practice and is not a “measure.” Second, even if that 
discussion somehow could be construed a measure, it would not result in a breach of a 
WTO obligation.   15. Even aside from the proper interpre tation of the term “public body,” the Kitchen Shelving  
discussion is not a “measure.” WTO panels have consistently found that administrative practice 
does not have independent operational status such that it gives rise to a breach of WTO obligations. A repeated practice does not create a breach of WTO obligations, as the practice 
can be departed from. In light of these findings, a discussion of past practice likewise cannot 
amount to a “measure” for the purposes of dispute settlement proceedings.    
16. Further, in order for China’s “as such” claim to be successful, China must show that the 
Kitchen Shelving discussion – if somehow construed as a “measure” – will necessarily result in a 
determination that is inconsistent with the U.S.’ WTO obligations. Such an assertion, however, is not supportable. In Kitchen Shelving , Commerce merely discussed its historic approach to public 
body issues and explained how it viewed the issues  at the time. The discussion is simply that – a 
discussion of the factors and relevant information that Commerce takes into account when determining whether a firm is an authority. It does not commit Commerce to any future course of 
action. Moreover, it is well-established that as a matter of U.S. domestic law that Commerce must 
evaluate each case on its own merits, and is not bound by past practice. Accordingly, a discussion of past practice does not dictate the outcome in any future proceeding.   
 
III. COMMERCE’S USE OF OUT-OF-COUNTRY BENCHMARKS TO MEASURE THE BENEFIT 
WHEN INPUTS WERE PROVIDED FOR LESS THAN ADEQUATE REMUNERATION WAS NOT INCONSISTENT WITH  THE SCM AGREEMENT 
 
17. Next we will address China’s claims regarding out-of-country benchmarks. First, China has failed to make a prima facie case for its out-of-country benchmark claims because it has failed to 
conduct the case-by-case analysis necessary to show why a reasonable and objective investigating 
authority could not reach the conclusion that in-country private prices were unreliable benchmarks.   
 
18. There can be no question that an investigating authority may rely on out-of-country benchmarks in certain circumstances. As a matter of law, depending on the information obtained 
in a given countervailing duty investigation, a government’s role as provider in a marketplace can 
be sufficient on its own to explain price distortion and, as a result, support a decision to rely on 
out-of-country benchmark prices for the benefi t analysis. China’s generalization that Commerce 
relies exclusively on the share of government-produced goods in the market in each investigation 
to determine that distortion exists is incorrect, as Commerce relies on other factors as well. So 
even if, arguendo , Commerce could not rely on government market share alone  to find distortion 
in the in-country market, China’s arguments fail. 
 WT/DS437/R/Add.1 
 
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  IV. COMMERCE’S DETERMINATIONS THAT IN PUT SUBSIDIES WERE SPECIFIC WERE 
FULLY CONSISTENT WITH ARTI CLE 2 OF THE SCM AGREEMENT 
 19. Next, China’s claims that Commerce’s specificity determinations are inconsistent with the 
SCM Agreement are without merit. China appears to challenge 17 different specificity 
determinations in 15 investigations. As an initial matter, China has failed to make a prima facie  
case with respect to its claims under Article 2. Each determination was based on the specific facts 
and circumstances of the relevant proceedin g, and China must address those facts and 
circumstances. China has failed to do so, instead relying on broad, inaccurate characterizations of 
the measures at issue. The claims should be rejected for that reason alone.    
20. With respect to its legal arguments, China advances novel interpretations of Article 2 which 
would impose formalistic requirements on investigating authorities that lack any basis in the agreement. Article 2 is, essentially, about determining whether a subsidy is specific. China’s 
interpretations would substantially impede an investigating authority’s ability to find the de facto  
provision of goods for less than adequate remuneration, a type of subsidy explicitly contemplated by Articles 1.1(a)(1)(iii) and Article 14(d), to be specific. China’s approach frustrates the operation 
of the SCM Agreement.  
 21. First, there is nothing in the text of Article 2.1(c) that requires an investigating authority to 
identify a “subsidy program,” that is formally set out in a plan or outline. Article 2.1(c) provides 
that one of the “factors” that “may be considered” as part of the de facto specificity analysis is 
“use of a subsidy programme by a limited number of certain enterprises.” As China points out, in the challenged investigations Commerce generally identified the “program” at issue in its analysis. 
China argues that Commerce’s identification of such programs was not in accordance with 
Article 2.1(c) because there was no “‘legislation’ or other type of official” government measures that provide for these subsidies. China is incorrect in its interpretation of Article 2, because neither 
the text of Article 2 nor any other provision of the SCM Agreement requires a subsidy or “subsidy 
program” to be implemented pursuant to a formally instituted “plan or outline.” Accordingly, China’s argument has no textual support in Article 2.1(c).    
22. China’s interpretation, inserting the requirement that a formal “subsidy program” must be 
identified, runs counter to the text of Articl e 2 and the SCM Agreement. In particular, this 
interpretation would negate the distinction between Article 2.1(c), relating to subsidies that are de 
facto specific, and Article 2.1(a), relating to subsidies that are de jure specific because of a 
limitation on access is explicitly laid out in legislation or elsewhere. China’s interpretation of Article 2.1(c) would incorrectly focus a de facto  specificity inquiry on the existence of a formal plan 
or outline, and not on whether or not there are limited numbers of users, the inquiry which is the 
subject of Article 2.1(c). This interpretation is no t only unsupported by the text of the Agreement, 
but would also allow Members to circumvent the disciplines of the Agreement by avoiding the 
creation of an identifiable plan or outline, thereby frustrating the ability of investigating authorities 
to countervail otherwise actionable subsidies.   
 23. Second, China’s assertion that an investigating authority must examine a subsidy under 
Articles 2.1(a) and 2.1(b) before examining Article 2.1(c) in every case has no basis in the text of 
the SCM Agreement. The ordinary meaning of Arti cle 2.1 makes clear, and the Appellate Body has 
confirmed, that paragraphs in Article 2.1 should  be applied “concurrent[ly]” and that, although 
Article 2.1 “suggests” that the specificity analysis will “ordinarily” proceed sequentially, this is not 
a mandatory prescription.
3 As a result, China’s arguments are inconsistent with the ordinary 
meaning and context of the prov isions of the SCM Agreement. 
 
24. Third, China is incorrect to assert that the SCM Agreement requires investigating authorities 
to conduct a separate analysis identifying the granting authority as part of its de facto  specificity 
analysis. China points to no language within Article 2.1(c) or the SCM Agreement as a whole which 
would support such an argument. As the Appellate Body has explained, “the analysis 
under 2.1 focuses on ascertaining whether … the subsidy in question is limited to a particular class of eligible recipients.
4 Accordingly, China’s argument that Commerce was required in every 
specificity determination to analyze and identify the “granting authority” is without merit.  
                                               
3 US – Large Civil Aircraft (2nd Complaint) (AB) , para. 873.  
4 US – Large Civil Aircraft (2nd Complaint) (AB) , para. 756. WT/DS437/R/Add.1 
 
- D-11 - 
 
  25. Fourth, China argues that Commerce was requir ed to address expressly the diversification of 
China’s economy and the length of time inputs had been provided for less than adequate remuneration in each challenged determination. A specificity determination involves a fact-based analysis, made on a case-by-case basis. Thus, th e relevance of either (1) the length of time a 
subsidy has been in place or (2) the economic diversification in the Member would also be 
determined on a case-by-case basis. In particular, those factors would be relevant only if the period of time examined could directly impact the specificity determination, or if the subject 
economy lacks diversification. These factors were not relevant to the investigations at issue, and 
China’s submission does not allege that the factors would have impacted the analysis in the investigations at issue. Thus, China’s argument is without merit, and Commerce’s determinations that the provision of inputs was specific in the challenged investigations were fully consistent 
with U.S. obligations under Article 2.1. 
 V. CHINA HAS FAILED TO MAKE A PRIMA FACIE  CASE WITH RESPECT TO THE 
REGIONAL SPECIFICTY DETERMINATIONS IN THE CHALLENGED  INVESTIGATIONS 
 26. China appears to challenge determinations made by Commerce in seven investigations that 
the provision of land-use rights in China was specific within the meaning of Article 2 of the 
SCM Agreement. Although China claims that in “each investigation” Commerce’s determination of specificity with respect to land-use rights is inconsistent with Article 2.2 of the Agreement, China has failed to make a prima facie  case of any of these alleged breaches. For that reason, China’s 
claims with respect to regional specificity fail. 
 VI. COMMERCE’S INITIATIONS OF INVEST IGATIONS INTO WHETHER RESPONDENT 
COMPANIES RECEIVED GOODS FOR LESS THAN ADEQUATE REMUNERATION WERE 
CONSISTENT WITH ARTICLE 11 OF THE SCM AGREEMENT 
 
27. China’s claims that Commerce’s initiations of CVD investigations are inconsistent with the 
SCM Agreement must fail because China has failed to establish a prima facie case with respect to 
these claims because it has failed to discuss the evidence presented in each application. Furthermore, in all cases, Commerce’s decision to initiate the investigations with respect to the 
provision of goods for less than adequate remunera tion were consistent with the standard set out 
in Article 11 of the SCM Agreement.   
28. Article 11 of the SCM Agreement requires only  that there be “sufficient evidence” of the 
existence of a subsidy in an application to justify initiation of an investigation. As the panel stated in China – GOES , all that is required is “adequate evidence, tending to prove or indicating the 
existence of” a subsidy, not “definitive proof” of the subsidy’s existence and nature. Further, an 
investigating authority must be cognizant of what is, and what is not, reasonably available to an applicant. As the panel in China – GOES stated: “[i]n the Panel's view, the fact that an applicant 
must provide such information as is ‘reasonably available’ to it confirms that the quantity and 
quality of the evidence required at the stage of initiating an investigation is not of the same 
standard as that required for a preliminary or final determination.” China has failed to demonstrate that Commerce’s determinations were in consistent with this standard.   
 
29. With respect to specificity, Commerce’s initiations were justified because evidence pertaining to the subsidies themselves indicated that the prov isions of the inputs in question for less than 
adequate remuneration were specific. Further, the applications provided additional evidence 
regarding specificity which was reasonably available to the applicants, including citations to past final determinations regarding the same or similar inputs. Under the standard for initiations under Article 11, this evidence was sufficient to initiate investigations into the alleged subsidies. 
 
30. With respect to the sufficiency of evidence re garding the existence of public bodies, in many 
situations, much of the evidence of government control may not be available before the initiation 
of an investigation, particularly with respect to entities alleged to be state-owned. Accordingly, the 
only reasonably available information to an a pplicant may be general evidence of government 
control over an industry or sector.  
 
31. Even under China’s proposed interpretation of the term “public body” in Article 1.1(a)(1) of the SCM Agreement, Article 11 would only requ ire adequate evidence tending to prove or 
indicating that an entity possesses, exercises, or is vested with governmental authority, not 
definitive proof of such. The relevant question would therefore be what type of evidence is WT/DS437/R/Add.1 
 
- D-12 - 
 
  adequate, for initiation purposes, to tend to prove or indicating that an entity possesses, exercises 
or is vested with governmental authority. China argues that evidence of government ownership or control is insufficient for initiation purposes. China is mistaken.   
32. If, as DS379 allows, evidence of government ow nership or control is relevant to the question 
of whether an entity is a public body in a final determination, such evidence can be adequate to “tend to prove or indicate” or “support a statement or  belief” that an entity is a public body at the 
initiation stage, as required by Article 11 of the SCM Agreement. 
 33. Further, when assessing the sufficiency of evidence, an investigating authority must be 
cognizant of what is, and what is not, reasonably av ailable to an applicant. If the precise identities 
of the entities that may be public bodies are not reasonably available, then their characteristics 
and features also are not reasonably available to an applicant. This means that certain evidence 
relevant to the question of whether an entity “possesses, exercises or is vested with governmental 
authority” generally may not reasonably be availabl e to an applicant, and instead, this evidence 
must be gathered by the investigating authority through the investigatory process. Even if the identities of some of the entities that may be pu blic bodies are available, much of the evidence 
regarding the nature of those entities is not in  the public realm and thus not available to an 
applicant. At the same time, an investigation cannot be initiated on the basis of no evidence, or on the basis of simple assertion, unsubstantiated by relevant evidence. The question for the investigating authority is therefore: what evidence is reasonably available to an applicant, and 
does it tend to indicate that the government or public bodies are providing financial contributions? 
In general, evidence of government ownership or control is in certain circumstances the only evidence that is reasonably available. In fact, th e issue of public bodies is an example of why the 
SCM Agreement includes the term “reasonably available.”   
 VII. COMMERCE’S INITIATION OF INVE STIGATIONS INTO CERTAIN EXPORT 
RESTRAINT POLICIES IMPOSED BY CHIN A AND DETERMINATIONS THAT THESE 
EXPORT RESTRAINTS CONSTITUTED COUNTERVAILABLE SUBSIDIES ARE 
CONSISTENT WITH THE SCM AGREEMENT 
 
34. China challenges Commerce’s decision in Seamless Pipe and Magnesia Carbon Bricks to 
initiate investigations into export restraints imposed by China, in addition to Commerce’s determination to countervail those export restraints after China refused to provide information 
necessary to the analysis. China’s objections to those initiation decisions – objections which are 
crucial to China’s case given that it failed to cooperate once the investigations were underway – are unfounded because they rely on China’s flawed belief that investigating authorities are 
prohibited from examining China’s various export restraint schemes based on the US – Export 
Restraints  panel report. Commerce’s initiation of investigations into export restraints in the 
challenged investigations was not inconsistent with Articles 11.2 and 11.3 of the SCM Agreement, in spite of the Export Restraints  panel’s analysis of whether hypothetical export restraints could 
constitute a financial contribution.   
 35. Examining whether an export restraint constitutes a financial contribution through the 
entrustment or direction of private entities is fu lly consistent with Article 1.1(a)(1). The U.S. 
decisions to countervail China’s export restraints on coke and magnesia are not WTO-inconsistent where they were based upon the use of facts available pursuant to Article 12.7 of the 
SCM Agreement. The use of facts available was requ ired after China declined to provide necessary 
information based on its erroneous position that, as a legal matter, an export restraint can never constitute a financial contribution encompassed by Article 1.1(a) of the SCM Agreement.   
VIII. COMMERCE’S USES OF FACTS AVAILABL E WERE CONSISTENT WITH ARTICLE 12.7 
OF THE SCM AGREEMENT 
 
36. As an initial matter, the United States would point out that China, in its pursuit of its facts 
available claims, failed in its panel request to summarize the legal basis of the complaint sufficient to present the problem clearly, as required by Ar ticle 6.2 of the Dispute Settlement Understanding. 
Its vaguely drafted panel request describing hundreds of facts available claims, which it apparently 
never intended to pursue. After incorrectly stating that it was pursuing all of those claims, China has advanced claims only with respect to 48 instances of the use of facts available. China’s defective approach to its Article 12.7 claims made it impossible for the Panel to understand what WT/DS437/R/Add.1 
 
- D-13 - 
 
  matters fell into its terms of reference, and for th e United States to begin to prepare its defense. 
The United States is disappointed by China’s approach to the proceedings.   37. On the substance, China’s first submission pr ovides only a cursory description of its claims 
with respect to two investigations, merely listing the remaining instances in an exhibit. This 
approach is insufficient to establish a prima facie  case with respect to these claims. In addition, 
China’s Article 12.7 claims are based on incorrect interpretations of the SCM Agreement and 
mischaracterizations of Commerce’s determinations.  
 38. Commerce’s use of an adverse inference in selecting from among the available facts is fully consistent with the SCM Agreement, confirmed by the ordinary meaning of the provision, as well 
as the context provided by the SCM Agreement as a whole and the parallel provision in the 
AD Agreement. Further, China’s interpretation of  Article 12.7 would lead to a breakdown of the 
remedies provided in the SCM Agreement, as interested parties and Members would have no 
incentive to participate in an investigation if their refusal would mean that an investigating 
authority would have insufficient information to make a finding of a specific subsidy. Finally, China’s reliance on the panel’s findings in China – GOES  to argue that Article 12.7 prohibits the 
reliance on adverse facts available is misplaced. The panel found that China’s investigating 
authority had ignored substantiated facts on the record and that its determination “was actually at odds with information on the record.” In contrast, Commerce’s determinations are based on a factual foundation and were not contradicted by substantiated facts.  
 
39. Finally, China has failed to demonstrate that any of the 48 challenged determinations are inadequately supported by the record evidence in  each investigation. Commerce’s facts available 
determinations are based on the factual information available on the record of each investigation. 
Thus, China’s argument that the challenged advers e facts available determinations were devoid of 
a factual basis is simply incorrect.   
 
IX. CONCLUSION  40. As we have demonstrated in our first written submission and again this morning, China has 
f a i l e d  t o  m a k e  i t s  c a s e  i n  t h i s  d i s p u t e ,  b o t h  a s  a  m a t t e r  o f  e v i d e n c e  a n d  a s  a  m a t t e r  o f  l a w .  
Accordingly, the United States respectfully requests the Panel to reject China’s claims.   
41. Mr. Chairperson, members of the Panel, this concludes our opening statement. We would be 
pleased to respond to your questions.  WT/DS437/R/Add.1 
 
- D-14 - 
 
  ANNEX D-3 
CLOSING STATEMENT OF TH E UNITED STATES AT  
THE FIRST MEETING OF THE PANEL 
1. The United States has only a few brief closing comments. We have observed before that this 
dispute is incredibly large, involving around 100 in dividual alleged breaches of various provisions 
of the SCM Agreement.  Despite the enormity of the dispute that China has chosen to bring before 
you, China included in its first written submission only sweeping generalizations and references to 
the facts of other disputes.   
 2. During the past two days, China has done little to remedy the deficiencies of its first written submission, instead insisting repeatedly that it has done enough. Today, though, we perhaps saw 
a crack in China’s resolve, as it began to dribble out, in a piecemeal fashion, some new exhibits 
containing particularized references to Commerce’s determinations. This is the kind of information that would have been most useful for the Panel if it had been included in China’s first written 
submission, so that the United States was provided a full opportunity to respond to it in the U.S. 
first written submission. It is disturbing that China appears to intend to wait until its rebuttal submission to include still more information and argumentation of this nature.   
 
3. Ultimately, this dispute is like all WTO disputes. It is about the meaning of the SCM Agreement and whether the measures at issue here are inconsistent with the obligations in that agreement. China’s continued refusal to en gage with the facts deprives the Panel of the 
argumentation necessary for the Panel to do its work in assessing whether the challenged 
measures are inconsistent with the SCM Agreement. Moreover, the legal interpretations China advances – including its assertion that the Panel is bound simply to follow prior Appellate Body 
reports without undertaking its own interpreta tive analysis under the customary rules of 
interpretation – lack support in the SCM Agreement and the DSU.    
4. The Panel should make its own interpretative analysis under the customary rules, and it 
must assess for itself whether China has presented sufficient argument related to the facts to support its claims. We, of course, believe that China has failed in that task.  
5. The United States recognizes that the Panel is only at the beginning of its work, and we 
hope that our first written submission and our presentation over these past two days have been helpful for the Panel. We look forward to rece iving the Panel’s written questions and we will 
endeavor to provide responses that bring clarity and understanding to the many complex issues in 
this dispute. Ultimately, we seek to aid the Panel in arriving at the correct conclusions, based on 
proper interpretations of the covered agreements. We are confident that, if we are successful in 
that effort, the Panel will find in our favor and dismiss China’s claims. 
 6. Once again, the United States thanks the Panel members, and the Secretariat staff, for their time and attention to this matter. 
 
 
_______________ 
 
  WT/DS437/R/Add.1 
 
- E-1 - 
 
  ANNEX E 
THIRD PARTIES ORAL STATEMENTS AT  
THE FIRST MEETING OF THE PANEL 
Contents Page 
Annex E-1 Third Party Oral Statement of Aust ralia at the First Meeting of the Panel E-2 
Annex E-2 Third Party Oral Statement of Brazil at the First Meeting of the Panel  E-4 
Annex E-3 Third Party Oral Statement of Cana da at the First Meeting of the Panel E-6 
Annex E-4 Third Party Oral Statement of India at the First Meeting of the Panel E-9 
Annex E-5 Third Party Oral Statement of Japan at the First Meeting of the Panel E-13 
Annex E-6 Third Party Oral Statement of Korea at the First Meeting of the Panel E-15 
Annex E-7 Third Party Oral Statement of Norw ay at the First Meeting of the Panel E-17 
Annex E-8 Third Party Oral Statement of the Kingdom of Saudi Arabia at the First Meeting 
of the Panel E-19 
Annex E-9 Third Party Oral Statement of Turk ey at the First Meeting of the Panel E-22 
 
 WT/DS437/R/Add.1 
 
- E-2 - 
 
  ANNEX E-1 
THIRD PARTY ORAL STATEMENT OF AUSTRALIA AT  
THE FIRST MEETING OF THE PANEL 
1. Thank you for the opportunity to present Australia’s views in this dispute. 
 
2. Australia has provided a written submission identifying some key issues of systemic and legal interest. I will not repeat the arguments set out in Australia's submission. Rather, I would 
like to highlight one of the key questions before th e Panel in this dispute: 'what is a public body?' 
 3. Australia considers there may be benefit in this Panel helping to further clarify the meaning of the term 'public body' following the 2011 Appellate Body finding in United States – Definitive 
Anti-Dumping and Countervailing Duties on Certain Products from China . In that dispute, the 
Appellate Body said that a public body ‘m ust be an entity that possesses, exercises or is vested 
with governmental authority. Yet, just as no two governments are exactly alike, the precise 
contours and characteristics of a public body are bound to differ from entity to entity, State to 
State, and case to case’ (emphasis added).
1 On that basis, we consider each of the indicia to be 
alternative considerations. The test for ‘public body’ is not a three stage cumulative test. 
 
4. The Appellate Body has made clear that govern ment ownership or control of an entity is not 
a proxy for governmental author ity. In Australia's opinion government ownership , in and of 
itself, is not evidence of meaningful control of an entity by a government and cannot , without 
more , serve as a basis for establishing that the entity possesses, exercises, or is vested with 
authority to perform a governmental function.  
5. However, Australia considers that governmental control over an entity is dispositive as to 
whether it is a public body. Government ownership of an entity can be distinguished from governmental control of such entity. 
 
6. Australia is concerned that in order to meet th e Appellate Body’s test, if the test were to be 
cumulative, the evidentiary burden for investigating authorities in determining whether an entity possesses, exercises and is vested with authority to perform a government function would extend 
beyond the ordinary interpretation of Article 1.1(a)(1) of the Agreement on Subsidies and 
Countervailing Measures  (SCM Agreement). Australia considers this interpretation is flawed 
because, amongst other things, it conflates the inquiry relevant to Article 1.1(a)(1) in relation to 
public bodies with the test of whether a private  body  is entrusted or directed by a government 
under Article 1.1(a)(1)(iv).   
7. Australia considers that one element of an a ppropriate test for whether an entity ‘possesses 
or exercises governmental authority’ could be to look to governmental control over the entity. In our view, this is a multi-faceted issue where considerations such as how the entity is managed, the degree of Ministerial approval and whether a government issues instructions to the entity may all 
be relevant considerations, whether by de jure  or de facto  means. In Australia's view, the relevant 
inquiry under Article 1.1(a)(1) of the SCM Agreement is: ' to what extent does the government 
control the entity'? 
 
8. In Australia's view, an approach which looks at the extent of governmental control of an 
entity is consistent with the object and purpose of Article 1.1 which is to ensure that a subsidy 
provided by any public body within the meaning of Article 1.1 is captured by the SCM Agreement.  
 9. Further, Australia considers that it is not imperative for an entity to be vested with governmental authority, but also notes that the Appellate Body has  recognized this as one 
potential consideration.   
  
                                               
1 Appellate Body Report, US – Definitive Anti-Dumping and Count ervailing Duties on Certain Products 
from China , para. 317. WT/DS437/R/Add.1 
 
- E-3 - 
 
  Conclusion 
 10. Finally, we would like to note that although Australia’s written submission and this oral submission do not address every issue raised by th e parties in this dispute, this should not be 
regarded as an indication that Australia considers that the issues it has not addressed are not 
i m p o r t a n t .  N o r  d o e s  i t  i n d i c a t e  a g r e e m e n t ,  o r  o t h e r w i s e ,  w i t h  a n y  p a r t i c u l a r  a r g u m e n t  o f  t h e  participants or other third parties in this dispute. 
 
11. Australia thanks the Chairman and Members of  the Panel for this opportunity to present its 
views in this dispute. WT/DS437/R/Add.1 
 
- E-4 - 
 
  ANNEX E-2 
THIRD PARTY ORAL STATEMENT OF BRAZIL AT  
THE FIRST MEETING OF THE PANEL 
1. Brazil welcomes the opportunity to present this Oral Statement as a Third Party in the 
current proceedings. While not delving into the specific facts regarding the dispute and not 
assessing the specific circumstances of the Ch inese enterprises under dispute, in its Oral 
Statement Brazil wishes to further the argume nts presented in its Third Party Submission 
regarding the concept of “public body” in Articl e 1.1(a)(1) of the SCM Agreement and the concept 
of “market power” under Article 14(d) of the same agreement.  I. The concept of “public body” in article 1.1(a)(1) of the SCM agreement is based on 
the authority of the entity on exercising governmental functions 
 2. Given the long-standing jurisprudence regardin g the concept of “public body”, Brazil does 
not consider necessary to further develop the me aning of “government” and “public body”. We 
would like to recall that, as well established by the Appellate Body in Canada – Dairy , “the exercise 
of lawful authority” is a fundamental element fo r the definition of the “essence of ‘government’”
1 
and, thus, of a “public body”. Furthermore, in orde r to find if a public body is vested with such 
authority, it is necessary to verify whether the en tity performs functions and exercises attributions 
that are typical of government, “that is to ‘regulat e’, ‘restrain’, ‘supervise’ or ‘control’ the conduct 
of private citizens”.2 
 
3. This analysis, as we have highlighted in ou r written submission, can only be achieved in a 
case-by-case evaluation of the core features of the entity under scrutiny, going beyond the mere 
identification of the existence of its formal links to the Government.3 The mere link of ownership  is 
not sufficient to prove said functions and attributions of a public body.  
4. In this sense, nothing in the SCM Agreement seems to authorize investigating authorities to 
establish any presumption (rebuttable or not) that, if an entity is owned by the government, it can be considered, without further scrutiny, a public body, within the meaning of Article 1.1 of the 
mentioned Agreement. In fact, according to the Appellate Body in US – Countervailing Duty 
Investigation on DRAMS , it is quite the opposite: the conduct of corporate bodies “is presumptively 
not attributable to the State.”
4 
 
II. The “predominance test” under article 14( d) of the SCM Agreement should refer to 
the “market power” of the government in the market 
 
5. Based upon the rules established for the investigating authorities on the SCM Agreement, 
the same case-by-case analysis should apply in order to analyze an in-country benchmark in the benefit analysis of Article 14(d) of the SCM Agreem ent, taking into account both the Government’s 
market share and its “market power”, with due regard to the prevailing market conditions. 
 
6. In its written submission Brazil proposed that  this approach should be done qualitatively as 
well as quantitatively as expressed by the Appellate Body in US — Anti-Dumping and 
Countervailing Duties (China)  in discussing the “predominance of the government in the market”, 
understanding that the concept “does not refer exclusively to market shares, but may also refer to market power.”
5 
 
7. A possible definition for “market power”, put forth in the Dictionary of Trade Policy Terms, 
establishes that market power is “based on the vi ew that firms may have the ability to increase 
their prices without suffering a decrease in their sales. Antitrust laws are aimed at ensuring the 
                                               
1 Canada – Dairy  (Appellate Body Report, paragraph 97). 
2 Canada – Dairy  (Appellate Body Report, paragraph 97). 
3 US – Anti-dumping and Countervailing Duties (China)  (Appellate Body Report, paragraph 317). 
4 US – Countervailing Duty Investigation on DRAMS  (Appellate Body Report, footnote. 179). 
5 US – Anti-dumping and Countervailing Duties (China)  (Appellate Body Report, paragraph 444). WT/DS437/R/Add.1 
 
- E-5 - 
 
  existence of price competition in the market.”6 Thus, as to what regards Article 14(d) of the 
SCM agreement, it could be possible to conceive that an agent has “market power” when it is 
detached from price constraints of market logic and that such leverage is a strong indicator of government intervention subsidizing the dominant position of that agent in the market. 
 
8. In other words, even if an agent has a larg e market share, but is still submitted to the 
prevailing market conditions, its position in the market may most likely reflect its own market 
efficiency and will not be harmful to competition. If, however, an agent is dominant in the market 
because it is largely unrestrained by its prices, its power then will most likely derive not from its efficiency but from an external source that provides for it. There would thus be a strong indication that a government might be conferring a benefit to it. In this case there would probably be some 
significant distortion and harmful impacts in the market. 
 9. This conclusion seems also to be in line with the decision of the Appellate Body in US — 
Anti-Dumping and Countervailing Duties (China) , which defined that “an investigating authority 
may reject in-country private prices if it reaches the conclusion that these are too distorted due to the predominant participation of the government as a supplier in the market, thus rendering the 
comparison required under Article 14(d) of the SCM Agreement  circular. It is, therefore, price 
distortion that would allow an investigating authority to reject in-country private prices, not the fact that the government is the predominant supplier per se.”
7 
 
10. In Brazil’s view, without going into the specific situation of the Chinese enterprises under 
scrutiny, when there is no analysis of the “market power” in a specific market, it is very difficult to determine a priori  if the prevailing market conditions are distorted merely because of the 
participation of the government as a provider of  goods and services, under Article 14(d) of the 
SCM Agreement.  
11. Mr. Chairman, distinguished members of the Panel, this concludes Brazil’s oral statement. 
We thank you for your attention and welcome any questions that you may have.   
 
                                               
6 GOOD, Walter. Dictionary of Trade Policy Terms . Cambridge: Cambridge University Press, 2003. 
p. 224. 
7 US – Anti-dumping and Countervailing Duties (China)  (Appellate Body Report, paragraph 446). WT/DS437/R/Add.1 
 
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  ANNEX E-3 
THIRD PARTY ORAL STATEMENT OF CANADA AT  
THE FIRST MEETING OF THE PANEL 
TABLE OF CASES REFERRED TO IN THIS SUBMISSION 
 
SHORT FORM FULL CASE TITLE AND CITATION 
US – Anti-Dumping and 
Countervailing Duties (China) Panel Report, United States – Definitive An ti-Dumping and Countervailing 
Duties on Certain Products from China , WT/DS379/R, adopted 
25 March 2011, as modified by Appellate Body Report WT/DS 379/AB/R 
US – Large Civil Aircraft 
(2nd complaint) Appellate Body Report, United States – Measures Affecting Trade in Large 
Civil Aircraft (Second Complaint) , WT/DS353/AB/R, adopted 23 March 2012 
US – Softwood Lumber IV Panel Report, United States – Final Countervailing Duty Determination with 
Respect to Certain Softwood Lumber from Canada , WT/DS257/R and Corr.1, 
adopted 17 February 2004, as modified by Appellate Body Report WT/DS257/AB/R, DSR 2004:II, 641  
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R, 
Corr.1, and Add.1 to Add.3, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R, DSR 2005:II, 299 
 WT/DS437/R/Add.1 
 
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  I. INTRODUCTION 
 1. Canada thanks the Panel for the opportunity to  present its views in this important dispute. 
 
2. In this oral statement we will briefly elaborate on two issues raised in Canada's Written 
Submission to the Panel, namely the use of out-of-country benchmarks to calculate an amount of benefit and specificity. 
 
3. In our written submission, we addressed the issues of public body, use of adverse facts, 
initiation standards and export restraints as subsidies. We will not address them here.  
II. THE USE OF OUT-OF-COUNTRY BENCHMARKS  
 4. Where a government provides a subsidy through the provision of goods, an investigating 
authority may use out-of-country benchmarks instead of in-country prices to calculate the benefit 
to the recipient under Article 14(d) only in very limited circumstances.
1 
 
5. Out-of-country prices can only be used if it is established that market prices are distorted 
and the distortion is due to the presence of the government  in the domestic market as a provider 
of the same or similar goods. In US – Antidumping and Countervailing Duties (China) , the 
Appellate Body stated that price distortion must be established on a case-by case-basis and that 
even where evidence indicates that the government  is a predominant supplier of goods, evidence 
other than government market share must be considered.2 
 
6. In its written submission, Canada also argued that out of-country prices can be used where 
in-country market prices are distorted and the distortion is due to the predominant role of 
government-controlled entities  in the market.3   
 
7. In every case, the benchmarks used must reflect prevailing market conditions in the country of provision.  
8. Canada considers that there cannot be a finding of market distortion simply because a 
government is an important player in a market as  a provider of goods. In the absence of other 
supporting evidence, the sole fact that a government has a significant or predominant presence in 
the market does not in itself prove that a gove rnment is the price setter. There are economic 
models that effectively establish ground-rules for government participation in markets, even what some might consider predominant participation, without distorting market values. 
 
III. SPECIFICITY  9. Canada will now turn to the issue of specificity to comment on two points, the relevance of 
the criteria in the last sentence of Article 2.1(c) on de facto  specificity and whether Article 2.1 
requires that the authority granting a subsidy must always be identified.  
10. Regarding the application of the criteria in  the last sentence of Article 2.1(c), Canada 
considers that the state of diversification of the economy may be significant for the determination of de facto  specificity in some cases. In other cases, however, the economy of an exporter may be 
known to be highly diversified. Where it is well-established that an economy is highly diversified, 
this fact is likely "taken into account" by an investigating authority in its analysis of de facto  
specificity.
4 There should not be an obligation on the investigating authority to mechanically 
address this issue in its written determination. 
 
11. Finally, Canada submits that the focus of the analysis under Article 2.1 is on determining whether a subsidy is limited to specific recipients, rather than on identifying the particular entity 
that constitutes the "granting authority". Canada po ints to the statement of the Appellate Body in 
US – Large Civil Aircraft  that "[…] the analysis under Article 2.1 focuses on ascertaining whether 
access to the subsidy in question is limited to a particular class of eligible recipients ".
5   
                                               
1 Appellate Body Report, US – Softwood Lumber IV , para. 102. 
2 See Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 446. 
3 Canada's first written submission, para. 18 
4 Panel Report, US – Softwood Lumber IV , para. 7.124. 
5 Appellate Body Report, US – Large Civil Aircraft , para. 756. WT/DS437/R/Add.1 
 
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  12. The identification of the granting author ity may not be required in some cases when 
conducting a specificity analysis. In this case, China did not explain the relevance of identifying a particular granting authority. In such circumstances, there may not be a strict necessity for the investigating authority to identify which particular entity granted the subsidy. 
 
13. Mr. Chairman, distinguished members of the Pa nel, this concludes Canada's oral statement. 
We thank you for your attention and would be pleased to answer any questions that you might 
have. 
  WT/DS437/R/Add.1 
 
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  ANNEX E-4 
THIRD PARTY ORAL STATEMENT OF INDIA AT  
THE FIRST MEETING OF THE PANEL 
I. Introduction 
 
1. India welcomes this opportunity to presen t its views in the present dispute. India has 
systemic interest in the issues raised by China in  the present dispute and intervenes to provide its 
view for the proper interpretation and application of the SCM Agreement. India considers that the 
manner in which the United States has conducted the countervailing duty investigations and the manner, in which the United States responds to certain issues raised by China, undermine the basic foundation of the SCM Agreement.  
 
2. In this third party oral statement, India will  focus on two key issues arising in the present 
dispute, namely, (i) the interpretation of the term 'public body'; and (ii) the use of 'adverse facts 
available' standard by the United States.  
 II. The interpretation of the term 'public body' 
 
3. India considers that pursuant to Article 1.1(a)(1) of the SCM Agreement, a subsidy can exist only if a 'financial contribution' is provided either by the 'government', or 'any public body' or a "private body entrusted or directed" by such government or public body.  
 
4. Contrary to the assertions made by the United States in its written submission, India is of the view that the Appellate Body's interp retation of the term 'public body' in US – Anti-Dumping 
and Countervailing Duties (China) (DS379) is indeed dispositive.  
 5. In the present case, the United States attempts to re-interpret the term 'public body' by 
selectively relying on the decision of Panel and A ppellate Body in DS379. In fact, the United States 
has gone on record to state that the Appellate Body's approach was flawed. However, while doing 
so, the United States completely ignores that the Appellate Body was unequivocal in deciding the core issue that a mere majority shareholding by a Government in an entity is insufficient to confer 
the status of 'public body' to that entity. In th e present dispute the United States has failed to 
produce any evidence to establish that it considered factors other than government ownership in reaching its determinations.  
 
6. It is noteworthy that the reliance placed by United States on dictionary meaning, contextual 
interpretation, the Working Party Report to accession protocol of China and the relevance of ILC 
Draft Articles, were all argued before and consid ered by the Appellate Body in DS379. Therefore, 
any attempt to revisit or review the decision of Appellate Body is against the established 
jurisprudence in this regard. The Appellate Body in US – Continued Zeroing , while relying on 
previous Appellate Body Reports, has held that Appellate Body reports adopted by the DSB are 
binding and must be unconditionally accepted by th e parties to the particular dispute; such reports 
create legitimate expectations among WTO Members and, therefore, should be taken into account where they are relevant to any dispute; and that  such reports become part and parcel of the 
acquis  of the WTO dispute settlement system. The Appe llate Body further observed that "ensuring 
'security and predictability' in the dispute settlement system, implies that, absent cogent reasons, an adjudicatory body will resolve the same legal question in the same way in a subsequent case".
1 
India is of the view that the issue raised in the present dispute about the interpretation of the term 
'public body' is identical to the issue before the Appellate Body in DS379 and the United States has 
not provided any ‘cogent’ reasons different than those argued in DS379. Therefore, the Panel must 
interpret this issue in a consistent manner.   
                                               
1 Appellate Body Report, US – Continued Zeroing , para. 362 relying on Appellate Body Report, US – 
Softwood Lumber V , paras. 109-112; Appellate Body Report, US –Shrimp (Article 21.5 – Malaysia) , para. 97; 
Appellate Body Report, Japan – Alcoholic Beverages II , pp. 12-15, DSR 1996:I, 97, at 106-108; Appellate Body 
Report, US – Oil Country Tubular Goods Sunset Reviews , para. 188; and Appellate Body Report, US – Stainless 
Steel (Mexico) , paras. 160-161. WT/DS437/R/Add.1 
 
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  7. The Appellate Body, referring to the definition  of 'government' in the ordinary dictionary 
sense2, found that the essence of 'government' is that it enjoys the effective power to " regulate, 
control, or supervise individuals, or otherwise rest rain their conduct, through the exercise of lawful 
authority ".3 The Appellate Body also reiterated that this finding was derived, in part, from the 
functions  performed by a government and, in part, from the government having the powers and 
authority  to perform those functions.4  
 
8. Based on the above definition of the term 'government', the Appellate Body in DS379 held 
that "performance of governmental functions, or the fact of being vested with, and exercising, the 
authority to perform such functions are the core commonalities between government and public body".
5  
 
9. In this context, it is relevant that not only must the alleged public body be performing a governmental function , but that body must also have the power and authority  to perform those 
functions.
6 It is submitted that 'governmental function' is not about what a government itself may 
engage in; rather it involves regulating, controlling, or supervising individuals, or otherwise restraining their conduct, through the exercise of lawful authority. As is evident from the Canada – 
Dairy  case, the mere fact that one of the perceived interests of the State was being promoted did 
not per se transpose any economic activity into a 'governmental function'.  10. India is of the view that being vested with the authority to perform a governmental function  
presupposes a special nature of intervention diffe rent from the ordinary relations between private 
entities; it presupposes a vertical relationship, rather than a horizontal one, and one which may involve power  flowing from a superior source to unilaterally impose rights / duties / obligations on 
itself or on third parties.  
 11. Further, in light of observations of the Panel in Canada-Dairy
7, India submits that over and 
above the presence of a governmental framework, there has to be an express delegation of power  
to regulate, control, or supervise individuals, or otherwise restrain conduct  and that this power 
must flow from the 'governmental' source, as is understood in the traditional narrow sense, such that it differs from the ordinary relations between private entities. 
 
12. Similarly, after noting that under Article 1. 1(a)(1)(iv) of the SCM Agreement, a 'public body' 
as well as a 'government' in the narrow sense could 'direct or entrust' a 'private body', the 
Appellate Body in DS379 took the view that a 'public body' would have the authority, including the 
power of compulsion, over a private body (in order to  be able to 'direct' such private body) as well 
as be able to grant responsibility to a private body (in order to be able to 'entrust' a private 
body).
8 These were, according to the Appellate Body, another set of characteristics that were 
common to both 'government' in the narrow sense and a 'public body'.9 The kind of authority or 
responsibility that the alleged 'public body' must be able to exercise or be vested with, must be the type "which would normally be vested in the government".
10 
 
13. Therefore, for an entity to be  a public body, that entity must be able to entrust or direct a 
private body, namely, have the power to give 'r esponsibility' to a private body or exercise 
'authority' over a private body. Viewed from this perspective, mere shareholding by the 
government in an entity will not make it a public body.    
14. The evidence that an entity is, in fact, exercising governmental functions may serve as 
evidence that it possesses or has been vested with governmental authority, particularly where such evidence points to a sustained and systematic practice.
11 Similarly, on the question of 
governmental control, the Appellate Body held that the majority shareholder of an entity does not  
                                               
2 Appellate Body Report, US – Anti-Dumping and Co untervailing Duties (China) ,para. 290 (referring to 
the Shorter Oxford English Dictionary). 
3 Appellate Body Report, US – Anti-Dumping and Coun tervailing Duties (China) , para. 290. 
4 Ibid. 
5 Ibid. 
6 Appellate Body Report, Canada – Dairy ,para. 101. 
7 Panel Report, Canada – Dairy , fn. 433. 
8 Appellate Body Report, US – Anti-Dumping and Coun tervailing Duties (China) , para.294. 
9 Ibid. 
10 Ibid.paras.295-297. 
11 Appellate Body Report, US – Anti-Dumping and Coun tervailing Duties (China) , para.318. WT/DS437/R/Add.1 
 
- E-11 - 
 
  demonstrate that the government exercises meaningful control over the conduct of that entity, 
much less that the government has bestowed it with governmental authority .12 
 15. In other words, majority shareholding in and of itself is insufficient to prove that the entity is 
exercising governmental authority. It is impo rtant to emphasize that the Appellate Body was 
dealing with the question as to how shareholding by the government may act as evidence  in order 
to prove  vesting of governmental authority . It is submitted that the language and tenor of the 
decision of the Appellate Body suggests that the "governmental control" was only intended as an 
indicia or evidence in determining the key question: whether the entity has been vested with "governmental authority". Therefor e, the determination by the United States of a ‘public body’ 
solely  on the basis of ownership is inconsiste nt with Article 1 of the SCM Agreement. 
 
III. The use of 'adverse facts available'  
16. A bare textual reading of Articles 12.1 and 12.7 of the SCM Agreement shows that an 
investigating authority is permitted to resort to "facts available" only when an interested Member or interested party: (i) refuses access to necessary information within a reasonable period; 
(ii) otherwise fails to provide such information within a reasonable period; or (iii) significantly 
impedes the investigation. The purpose behind Article 12.7 of the SCM Agreement is only to 
ensure that the failure of an interested party to provide necessary information does not hinder an agency's investigation.
13 The United States admits that it “may use an inference that is adverse to 
the interests of that party in selecting from among the facts otherwise available ” if an interested 
party has failed to cooperate and argues at length  to support such an interpretation. However, 
India is of the view that while interpreting Article 12.7, it is equally important to place emphasis on 
what Article 12.7 does not , express verbis , provide for- "adverse facts available" or to "draw 
adverse inferences" from "facts available".  
17. The Appellate Body in Mexico-Beef and Rice  identified the similarity between Article 12 of 
the SCM Agreement and Article 6 of the Anti-D umping Agreement, inasmuch as both the 
provisions are intended to " set out [the] evidentiary rules that apply throughout the course of 
the … investigation, and provide[s] also for due process rights that are enjoyed by 'interested 
parties ' throughout … an investigation ".
14 While Article 6.8 permits an investigating authority to 
rely on the "facts available", placing emphasis on the fact that Annex II of the Anti-Dumping 
Agreement, which forms a mandatory part of Articl e 6.8 of the Anti-Dumping Agreement, is titled 
"Best Information Available in Terms of Paragraph 8 of Article 6 ", the WTO Panel in the Mexico – 
Beef and Rice  observed that the discretion to employ "facts available" is not unlimited.15 The 
Appellate Body in Mexico-Beef and Rice  expressly affirmed this ruling of the Panel.16  
 
18. The United States also relying on Article 6. 8 and Annex II of the AD Agreement, argues that 
an investigating authority may rely on facts which may lead to results less favourable. However, the United States, in fact, disregards facts (from se condary sources) that may in fact lead to better 
results and chooses only those secondary facts that lead to the least favourable result. In other 
words, the pick and choose approach mandatorily applied by the United States forecloses the possibility of considering facts from secondary sources which may lead to better results. 
 
19. As seen earlier, the purpose behind Article 12.7 is to ensure that the non-cooperation by an interested party does not impede the investigation;  the purpose is not to punish an allegedly non-
cooperating member by granting a right to draw  adverse conclusions. Established jurisprudence 
makes it evident that Article 12.7 places an oblig ation on the United States to employ the "best 
information available", after engaging in an " evaluative, comparative assessment " of the evidence 
available. As a logical corollary, it is submitted that Article 12.7 cannot be interpreted as granting 
the right to draw adverse consequences / inferences in all cases of non-cooperation. This is also 
                                               
12 Ibid. 
13 Appellate Body Report, Mexico – Anti-dumping Measures on Rice , para.293 ("Thus, the provision 
permits the use of facts on record solely  for the purpose of replacing information that may be missing, in order 
to arrive at an accurate subsidi zation or injury determination."). 
14 Appellate Body Report, Mexico-Anti-dumping Measures on Rice , para.292 (citing Appellate Body 
Report, EC – Tube or Pipe Fittings , para. 138). 
15 Panel Report, Mexico – Anti-Dumping Measures on Rice , para. 7.166. 
16 Appellate Body Report, Mexico – Anti-dumping Measures on Rice , para.289. WT/DS437/R/Add.1 
 
- E-12 - 
 
  recognized by findings of various panels.17 As recently as in 2012, the panel has held that non-
cooperation " does not justify the drawing of adverse inferences " under Article 12.718.  
 20. In summary, it is submitted that Article 12.7 places a restraint  on the investigating Member 
to only apply those facts that are most fitting or most appropriate . At the same time, it places a 
positive obligation  on the investigating Member to arrive at this most fitting or most appropriate 
information , after engaging in an " evaluative, comparative assessment " of all the available 
evidence. Thirdly, the investigating Member is prohibited from using the "facts available" standard 
in a punitive manner so as to draw adverse consequences / inferences against a non-cooperating party.   
21. India strongly considers that drawing adverse inferences by choosing from among the 
various "facts available" , even where the adverse inference so drawn is not the most fitting or 
most appropriate , is not consistent with the provisions of Article 12.7 of the SCM Agreement. 
 
IV. Conclusion  
22. India strongly feels that the interpretati on of the term 'public body' given by the 
United States and the application of 'adverse fact s available' standard by the United States are 
inconsistent with the relevant provisions the SCM Agreement. Mr. Chairman and Members of the Panel, thank you for the opportunity to present India's views on this dispute. India would be 
pleased to provide responses to any questions that the Panel may have.  
 Thank you. 
 
                                               
17 Panel Report, EC- Countervailing Measures on DRAMs , paras.7.80, 7.100 and 7.143. 
18 Panel Report, China -GOES , para. 7.302. WT/DS437/R/Add.1 
 
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  ANNEX E-5 
THIRD PARTY ORAL STATEMENT OF JAPAN AT  
THE FIRST MEETING OF THE PANEL 
1. Japan wishes to express its appreciation to th is opportunity to be heard by the Panel in this 
third party session of the Panel’s First Substantive Meeting. In this statement, Japan will focus on 
the issue of “public body” in Article 1.1(a) of the Agreement on Subsidies and Countervailing 
Measures  (“SCM Agreement”).  
 
2. At the outset, Japan wishes to make it clear that it takes no position as to the Appellate Body’s findings on the issue of “public body” in US – AD/CVD (China)  (DS379) which have been 
discussed extensively by the parties to this disput e in their first written submissions. However, 
Japan does have concerns about the certain interpre tive approach the Appellate Body took in that 
report.
1 For example, in its analysis, the Appellate Body relied on the ILC Articles on Responsibility 
of States for Internationally Wrongful Acts . In our view, the ILC Articles are irrelevant and the 
Appellate Body’s reliance was wholly unnecessary. 
 3. That being said, Japan wishes to  offer the following observation.  
 
4. Japan finds it significant that the SCM Agreement juxtaposes a “government” and a “public body”, on the one hand, with a “private body” us ed in Article 1.1(a)(1)(iv), on the other. Japan 
understands that one of the distinctive attribute of a “private body” is that it usually acts on its 
own interests. In the case of a business enterprise, its objective is to seek profits, and as such the 
entity operates on market considerations.   
5. A business enterprise normally seeks profits, not from each single transaction, but from its 
overall business activities for a certain length of time period in accordance with the relevant ordinary market practices or principles. Accordingly, a business entity is normally unable to 
continue selling products bearing losses beyond a reasonable period of time; if it does, it will go 
bankrupt, and thus, exit out of the market. Thus should the entity be able to continue making losses for a sustained period of time, this ability mu st have been artificially created, for example, 
because a government has provided it with a financial basis for the ability. This may be suggestive 
that the entity is seeking something other than profits (presumably to advance public policy goals 
set by the government) and is not acting on market considerations.   
6. The panel in  US – AD/ CVD (China) , citing the finding of the panel on Korea – Commercial 
Vessels , stated that "it is the government’s control of an entity that gives that entity the potential 
to intervene in markets so as to advance public policy goals without seek ing profit, by providing 
financial contributions on better-than-market terms".
2 However, a mere majority shareholding in a 
stock corporation by a government would not be enough to give this potential to that corporation; it may require deeper involvement of a governme nt to enable the corporation to have this 
potential “to advance public policy goals” by continuing business activities while bearing losses, not 
in a single transaction or some transactions, but for a long period of time. 
 7. In Japan’s view, the examination of the afor esaid ability of an entity or an underlying 
financial basis backed by a government to advance certain public policy goals may often be a 
useful, albeit  not decisive, tool to examine the governmental or “public” nature of that entity under 
the SCM Agreement. This could be the case where a state owned enterprise continues selling 
products below costs, thus bearing losses, for a sustained period of time. Japan notes that this 
does not render the “benefit” requirement meaningless since this examination is conducted on whether a government-guaranteed financial basis is present, or the inquiry of whether the entity continues existing while bearing losses, in an unreasonably sustained manner, rather than the 
inquiry of each transaction in light of the relevant market benchmark. In order to find an existence 
and amount of “benefit” in one or more particular “financial contributions”, made by a “public 
                                               
1 See Minutes of Meeting of the Dispute Settlement Body, held on 25 March 2011 (WT/DSB/M/294). 
2 Panel Report, US – AD/CVD (China) . para. 8.80. WT/DS437/R/Add.1 
 
- E-14 - 
 
  body” under the SCM Agreement, an independent ex amination of a “benefit”, for example, using a 
relevant market benchmark, is needed for particular “financial contributions” in question.   8. Since such a financial basis can be provided in various forms, the examination of whether an 
entity has such ability is a case-by-case analysis based on various factors. Such factors could 
include, but not limited to, a type of business th e entity is engaged in, the design, structure, 
content and application of the relevant laws and regulations that govern the entity, the 
government’s commitment or responsibility to inject additional capital to rescue that entity in 
bankruptcy, the proportion of government’s owne rship, the observance of corporate governance 
principles, and the applicability of  t h e  b a n k r u p t c y  l a w .  F u r t h e r ,  t h e  f a c t  t h a t  a n  e n t i t y  m a y  b e  
allowed to operate in a monopolistic or oligopolistic market with excess capacities without any 
discipline under the competition law may be a positive indicia for the financial basis. Japan notes 
that a majority shareholding in an entity by a government is not sufficiently suggestive of such a financial basis for that entity. 
 
9. In short, Japan observes that the government-sponsored financial basis that can be found on the aforesaid examination, not a mere governmental majority shareholding, may suggest, 
depending on the relevant facts and circumstances, that the entity in question is not seeking its 
own interest or profits, as it would be able to continue its operation to advance public policy goals while sustaining accumulated losses unreasonably.  
10. This concludes Japan’s statement.  
 WT/DS437/R/Add.1 
 
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  ANNEX E-6 
THIRD PARTY ORAL STATEMENT OF KOREA AT  
THE FIRST MEETING OF THE PANEL 
1. The Republic of Korea (“Korea”) appreciates this opportunity to present its views to the 
Panel as a third party in this dispute. In this dispute, China challenges more than a dozen 
countervailing duty (“CVD”) investigations conducted by the United States Department of Commerce (“USDOC”) during the period of 2007 to 2012. As with other recent disputes concerning 
the SCM Agreement, the present dispute also ra ises a series of important systemic issues 
regarding the interpretation and application of key provisions of the Agreement.   2. In the interest of brevity, Korea would like to focus on the following three issues and share 
its views with the Panel. They are (i) the “public body” determination, (ii) the benefit calculation, 
and (iii) the regional specificity analysis of the USDOC in the challenged CVD investigations.    
3. First of all, let us turn to the issue of “public body.” This very issue was extensively 
discussed in the previous dispute of United States – Definitive Anti-Dumping and Countervailing 
Duties on Certain Products from China  (DS379) (“ U.S. - AD/CVD ”), in which the Appellate Body 
found that the USDOC’s public body determination based on the so-called “majority government-
ownership” methodology was inconsistent with Article 1.1(a)(1) of the SCM Agreement.
1 The 
Appellate Body in U.S. - AD/CVD  rejected the notion that the government ownership, by itself, 
translates into the confirmation of “public body.” 
 
4. More specifically, what was at issue in that dispute was whether State-Owned Enterprises (“SOE”s) of China were “public bodies” within the meaning of Article 1.1(a)(1) of the 
SCM Agreement by the mere fact of government ownership in those entities. The Appellate Body 
found that the USDOC’s application of a rebuttable presumption standard, under which entities with government ownership are presumed to be pub lic bodies, is inconsistent with Article 1.1(a)(1) 
of the SCM Agreement.   
 5. In the CVD investigations challenged in the present dispute, the evidence on the record seems to prove that the USDOC has applied basically the same methodology in finding “public 
bodies.” To the extent that the USDOC continues to apply its government ownership-determinative 
methodology in its public body analysis, Korea views that the USDOC fails to apply the legal standard as established by the Appellate Body in contravention of Article 1.1(a)(1) of the 
SCM Agreement.   
 6. In light of this, we request the Panel to confirm and apply the legal standard established by 
the Appellate Body in U.S.-AD/CVD  to the facts of this case. Although we do not have access to all 
the information on the record, we have not yet found any persuasive reason to disturb the clearly articulated jurisprudence of the Appellate Body in this regard.   
7. We now move on to the second issue: finding benefit and confirming a market benchmark. A 
correct analysis of benefit under the SCM Agreement hinges upon the selection of a correct and proper market benchmark. A benchmark should reflect the prevailing market condition of an 
alleged subsidizing Member, so it should be sought in the domestic market of the Member as much 
as feasible, unless the market is disqualified by proven distortion. This is clear under Article 14 (d) of the SCM Agreement and the jurisprudence interpreting this provision. 
 
8. In terms of disqualifying the domestic market, the Appellate Body has warned against a finding of distortion simply because of the gove rnment’s alleged predominant role in the market. 
The Appellate Body stated that “an investigating authority cannot, based simply on a finding that 
                                               
1 See Appellate Body Report, U.S. – AD/CVD , para. 346 (“[mere government ownership] cannot, 
without more, serve as a basis for establishing that the entity is vested with authority to perform a 
governmental function”); para. 320 (“control of an entity by a government, by itself, is not sufficient to establish that an entity  is a public body”). WT/DS437/R/Add.1 
 
- E-16 - 
 
  the government is the predominant supplier of the relevant goods, refuse to consider evidence 
relating to factors other than government market share.”2 
 9. In this dispute, Korea looks forward to the Panel’s examination of the USDOC’s benefit 
analysis and benchmark selection based on the Appe llate Body jurisprudence, in particular whether 
and how the evidence on the record proves that th e domestic market of China was distorted as to 
be disqualified by the investigating authority. At the same time, we would like to ask the Panel to 
be mindful of the fact that the USDOC’s benefit analysis was almost entirely hinged upon its 
government ownership-determinative public body find ing. In other words, if the public body finding 
in the USDOC’s countervailing duty determinations  is overturned, as discussed above, it seems 
that its benefit finding cannot stand either. We would like to bring the Panel’s attention to this 
close relationship between the two findings. 
 10. Finally, let us briefly touch upon the regional specificity issue. Any subsidy should be specific 
to certain enterprises or industries, within the me aning of Article 2 of the SCM Agreement, to be 
condemned under the SCM Agreement. In this respect, Korea asks the Panel to carefully review, in accordance with Article 2.2 of the SCM Agreement,  the regional specificity finding of the USDOC 
with respect to the alleged provision of land use rights.   
 11. Regarding the regional specificity, the A ppellate Body explained that “[t]he necessary 
limitation on access to the subsidy can be effected through an explicit limitation on access to the 
financial contribution, on access to the benefit, or on access to both.”
3 It is critical therefore that 
an investigating authority demonstrates that either the financial contribution or the benefit was “limited to certain enterprises located within a designated geographical region.” In other words, 
the terms “limitation” and “designation” are the key concepts in finding a regional specificity.  Mere 
reference to a geographical element in the general scheme of a widely available national policy may not satisfy the “limitation” and “designation” requirements.  
 
12. To conclude, in our view, this dispute, as with U.S. - AD/CVD,  starts and ends with the issue 
of public body. The Panel should carefully review whether the USDOC’s public body finding is indeed consistent with the jurisprudence of the Appellate Body, which has also incorporated the 
established jurisprudence of public international law, as articulated in the 2001 U.N. Draft Articles 
on State Responsibility. The gist of the jurispru dence established by both the Appellate Body and 
other international tribunals is that the government ownership by itself cannot be a sufficient basis 
for turning an entity into a public body or a gove rnmental entity. Based on the parties’ arguments, 
Korea is of the view that the evidence on the re cord indicates that the USDOC’s finding of public 
body focused on the government ownership. If so, we view that the USDOC’s public body finding is 
not consistent with the established jurisprudence. It follows that the benefit finding also cannot be 
sustained. We ask the Panel to carefully examine the factual record and apply the proper legal standard.  
13. Again, Korea appreciates this opportunity to present its view and would be happy to take 
questions you might have. Thank you.  
 
                                               
2 Appellate Body Report, U.S. – AD/CVD , para. 446. 
3 Appellate Body Report, U.S. – AD/CVD , para. 378.   WT/DS437/R/Add.1 
 
- E-17 - 
 
  ANNEX E-7 
THIRD PARTY ORAL STATEMENT OF NORWAY AT  
THE FIRST MEETING OF THE PANEL 
I. INTRODUCTION 
 
1. Norway welcomes this opportunity to present its views on the issues raised in these panel 
proceedings.  
 
2. In its written statement, Norway addressed so me interpretative issues raised by the US and 
China. Norway focused on the criteria for defini ng a “public body” under Article 1.1(a)(1) of the 
Agreement on Subsidies and Countervailing Measures (the “SCM Agreement”). Norway maintained 
that a public body must be an entity that possess es, exercises or is vested with the authority to 
perform governmental functions, when providing the financial contribution in question. This requires a factual analysis of the functions the particular entity performs, where government 
ownership is not dispositive in itself. 
 3. Today, Norway would like to address two additi onal elements in the interpretation of “public 
body” and the relevance of the International Law Commission’s (ILC) Articles on Responsibility of 
States for Internationally Wrongful Acts.  
 4. First, we note that a question has been raised  regarding the interpretation of the criteria laid 
down by the Appellate Body in US – Anti-Dumping and Countervailing Duties.  In this case, the 
Appellate Body  stated that a public body must be “an enti ty that possesses, exercises or is vested 
with governmental authority”. In our view, the different ways in which an entity may come to have 
governmental authority are multiple. The criteria laid down by the Appellate Body; to possess, 
exercise or be vested with, do not necessarily represent a preemptive listing of the ways in which an entity may come to have governmental authority.  
 
5. Indeed, in US – Anti-Dumping and Countervailing Duties , the Appellate Body itself 
underscored this, as it stated that:  
“There are many different ways in which government in the narrow sense could 
provide entities with authority. Accordin gly, different types of evidence may be 
relevant to showing that such authority has been bestowed upon a particular entity.”
1 
6. Here, the Appellate Body itself uses yet other words to describe the action of giving 
governmental authority to an entity; inter alia “provide … with” and “bestowed upon”. This 
illustrates that the labeling is only a tool to help determine when an entity has governmental 
authority. This assessment requires a factual analysis of the functions the particular entity 
performs. Where the entity does not perform govern mental functions, it is not a “public body”. 
 7. Furthermore, concern has been expressed that the focus on the idea of entities being vested 
with governmental authority, may transpose the test for “entrustment or direction” onto the 
definition of “public body”. In our view this would not be the case. Rather than moving this test into the public body definition, we see a distinctio n between the definition of a public body on the 
one hand and the action this body performs when it  is entrusting or directing a private body on the 
other. This follows from the very wording of Article 1.1(a)(1)(iv) of the SCM Agreement. The 
reference to governmental authority being “vested” or in other ways given to an entity, should 
thus not be seen as interfering with the entity’s subsequent entrustment or direction of a private 
body.  8. Finally, we would like to briefly address the reference to the ILC Articles on Responsibility of 
States for Internationally Wrongful Acts.  In US – Anti-Dumping and Countervailing Duties, the 
Appellate Body found that Article 5 of the ILC Arti cles supported the analysis of “public body” in 
                                               
1 US – Anti-Dumping and Countervailing Duties , para. 318.   WT/DS437/R/Add.1 
 
- E-18 - 
 
  the SCM Agreement.2 Norway shares this assessment, and we are of the view that this should also 
be taken into account when interpreting Article 1.1(a)(1) of the SCM Agreement.   9. Mr. Chairman, distinguished Members of the Panel, this concludes Norway’s statement 
today.  
 Thank you for your attention. 
 
                                               
2 US – Anti-Dumping and Countervailing Duties , para. 311. WT/DS437/R/Add.1 
 
- E-19 - 
 
  ANNEX E-8 
THIRD PARTY ORAL STATEMENT OF THE KINGDOM OF SAUDI ARABIA AT  
THE FIRST MEETING OF THE PANEL 
I. INTRODUCTION 
 
1. Thank you, Mr. Chairman. The Kingdom of Saudi Arabia would like to take this opportunity to affirm all of the positions set out in its Third Party submission. Today, Saudi Arabia will 
summarize its views on three of the systemic issues  relating to the interpretation of the Agreement 
on Subsidies and Countervailing Measures.  II. A "PUBLIC BODY" MUST POSSESS, EXERCISE OR BE VESTED WITH GOVERNMENTAL 
AUTHORITY 
 2. The first issue concerns the Panel's "public body" determination. The Appellate Body in 
DS379 set out the authoritative standard that a Pane l must use to determine whether an entity is 
a public body. The Appellate Body stated in th at decision that the SCM Agreement requires a 
finding that a public body possesses, exercises or is vested with "governmental authority". The 
"governmental authority" standard derives from th e text of the Agreement: a public body must 
have the power to entrust or direct a private body to act. Based on this structure and the defining elements of "government", the Appellate Body has ruled that a public body must possess the 
ability to compel, command, control or govern a private body. It follows, then, that government 
ownership or control of an entity is not suff icient to establish that the entity exercises 
governmental authority, and no other factor is dispositive. 
 
3. As it is clear, exercising governmental authority is distinct from being controlled by the 
government. A government-controlled entity might be a public body, but only if it exercises governmental authority. If it does not, then th e entity is properly understood to be a "private 
body",
 and any finding of financial contribution  must be based on the entrustment or direction 
standard . To disregard this distinction would, as the Appellate Body stated, undermine " the 
delicate balance embodied in the SCM Agreement because it could serve as a license for 
investigating authorities to dispense with an analysis of entrustment and direction and instead 
find entities with any connection to government to be public bodies ". 
 
4. The SCM Agreement imposes affirmative obli gations on investigating authorities when 
determining whether an entity is a public body. The Agreement requ ires the authorities – in every 
case – to analyze thoroughly the legal status an d actions of the entity in question, examine all 
evidence on the record without unduly emphasizing any one factor, and point to positive evidence 
establishing  – not merely implying – that an entity possesses, exercises or is vested with 
governmental authority. A n investigating authority would fail to meet its obligations if it were to 
find governmental authority based solely on evidence of government ownership or control. 
 
5. In our view, no single fact can automatically fulfill the positive evidence standard that must 
support a finding of governmental authority. This is especially so with respect to government 
ownership or control, which relate s only indirectly to the possession or exercise of governmental 
authority. Governmental authority and government ownership or control are two distinct 
concepts, and the latter is not a proxy for the former. Thus, a public body standard that systematically relies on evidence of government ownership or control would result in an 
impermissible interpretation of the SCM Agreemen t. The Kingdom respectfully requests that the 
Panel ensure that any 
evidentiary weight given by an investigating authority to government 
ownership or control does not undermine the governmental authority standard established by the Appellate Body
. 
 
III. DOMESTIC PRICE BENCHM ARKS MAY NOT BE REJECTED  MERELY BECAUSE STATE-
OWNED ENTERPRISES ARE A SIGNIFICANT DOMESTIC SUPPLIER 
 
6. The second issue is benchmarks. The SCM Agreement prohibits an authority from rejecting private in-country price benchmarks to determine whether the government's provision of a good WT/DS437/R/Add.1 
 
- E-20 - 
 
  confers a benefit merely because state-owned enterprises are a significant domestic supplier of 
that good. Three well-established legal principles require the Panel to come to this conclusion.  7. First, alternative benchmarks may be used only where it has been established that domestic 
prices of the good at issue are distorted. The Appellate Body has emphasized that the 
circumstances in which investigating authorities may consider a benchmark other than domestic private prices are " very limited " – to where there is evidence of "market distortion". Such 
distortion might  exist where the government is a "predomi nant" supplier of the good at issue in 
the domestic market. However, the Appellate Body has confirmed that actual price distortion must 
be proven in every case.  
8. Second, the government's predominant role as a supplier of that good in the home market is 
not a per se  proxy for price distortion. Thus, an authority may not use evidence of government 
predominance to deem price distortion to exist. 
 
9. Third, government predominance may not be found simply because state-owned industries sell the good and have a significant share of the home market. The SCM Agreement and related 
jurisprudence establish precise legal definitions for "government predominance". Most importantly, 
the same standard for defining "government" or "public body" under Article 1 of the SCM 
Agreement must apply when determining whether th e "government" is the predominant supplier of 
a good. Any other approach would not only run afoul of the Agreement's text and clear statements 
by the Appellate Body, but also undermine the sole reason for permitting alternative benchmarks 
in the first place.  
10. Moreover, the domestic sales of a "governmen t" may serve as evidence of price distortion 
only where they are "predominant", which is properly defined as the ability of the government to exercise "influence on prices". Significant market share alone is insufficient to establish 
government predominance, much less price distortion. 
 11. In Saudi Arabia’s view, these principles establish that an investigating authority may only reject private, in-country benchmarks due to "government predominance" where it has 
determined, first, that the government or a public  body is the predominant supplier in the market 
and, second, that prices are actually distorte d due to that predominance. Only then may the 
investigating authority resort to alternative benchmarks. 
 
IV. REGIONAL SPECIFICITY UNDER ARTICLE 2.2 MUST BE SUBJECT TO A LIMITING 
PRINCIPLE 
 
12. Finally, Saudi Arabia would like to address the regional specificity issue. Given the limited jurisprudence on Article 2.2 of the SCM Agreement,  the Kingdom is of the view that it would be 
useful for the Panel to provide guidance on what may constitute a "designated geographical 
region" and thus regional specificity. In this regard precedent under the specificity provisions of 
Article 2.1 of the SCM Agreement provide a he lpful analogy. These precedents support the 
conclusion that regional specificity must be subject to some "limiting principle", meaning a point at 
which a certain area to which a granting authority provides a subsidy is so large or widespread as 
to render the subsidy non-specific under Article 2.2.  
13. Several WTO panels and the Appellate Body have acknowledged that the specificity 
requirement of Article 2 of the SCM Agreement is lim ited, and, as such, "the relevant question is 
not whether access to the subsidy is limited in any way at all, but rather where it is sufficiently limited for the purpose of Article 2" . Although these cases addressed Article 2.1 of the 
SCM Agreement, basic logic would necessitate simila r limits on Article 2.2. Without such a limiting 
principle, regional specificity determinations could apply to almost any subsidy that mentions a 
Member's geography, including those that are clearly "sufficiently broadly available throughout the 
economy as to be non-specific". This cannot be what was intended by the regional specificity 
requirement and could result in an overbroad inte rpretation of Article 2.2 of the SCM Agreement 
which is biased against exporting nations and discourages basic economic development and 
diversification initiatives. 
 14. The Kingdom is of the view, in line with relevant Article 2 jurisprudence, that regional specificity should be determined on a case-by-case basis, and that a geographically limited subsidy 
should nonetheless be found to be non-specific where it has been demonstrated, with positive WT/DS437/R/Add.1 
 
- E-21 - 
 
  evidence, that the subsidy has been provided to a "sufficiently broad" geographic region. Because 
the precise point at which a subsidy becomes non-specific would "modulate according to the particular circumstances of a given case", any such standard should require an investigating authority to consider the unique geography, governmental structure and economy of the Member 
at issue. 
 V. CONCLUSION 
 
15. Mr. Chairman, the Kingdom urges the Panel, wh en considering the systemic issues raised in 
this dispute, to preserve the SCM Agreement's ca refully negotiated balance of interests between 
WTO Members. That "delicate balance" requires the consistent application of the multilateral 
disciplines of the SCM Agreement, which all WTO Members have accepted.   
 16. This concludes the Kingdom's statement. Thank you for your attention. 
 WT/DS437/R/Add.1 
 
- E-22 - 
 
  ANNEX E-9 
THIRD PARTY ORAL STATEMENT OF TURKEY AT  
THE FIRST MEETING OF THE PANEL 
I. INTRODUCTION 
 
1. Mr. Chairman, distinguished Members of the Pane l, on behalf of the Government of Turkey, I 
thank you for giving us the opportunity to express our views in this dispute. 
 
2. Our participation as a third party is based on our systemic interest in the correct interpretation of several provisions of the Agreement on Subsidies and Countervailing Measures (SCM Agreement), discussed in this case. The panel’s findings in this dispute will have 
consequences for the future interpretation and application of the subsidy disciplines. Turkey will 
not address all of the issues upon which there is a disagreement between the parties to the 
dispute. Rather, Turkey would like to confine itself  by presenting its view on the interpretation of 
“public body”  in Article 1.1(a)(1), use of “out-of-country benchmarks”  in Article 14 and “standard 
for the initiation of countervailing duty investigations”  in Article 11 of the SCM Agreement.  
 
II. DETERMINATION OF PUBLIC BODY  
 3. Considering the legal essence of the submissi ons of the Republic of China and the United 
States of America, the discussion concerning the context of the “public body” predominantly 
concentrates on the issue on how the link between the government and entity, alleged to be a 
public body, will be established. Thus, the focus is on the rules of “attribution”.   
4. In its third party submission in “ US-Anti-Dumping and Countervailing Duties (China)”  Turkey 
underscored government ownership as the most important decisive indicator showing control on the entity in question. Turkey would like to reiterate its position also in this legal dispute and 
express that an entity controlled by a governme nt should constitute a “public body” within the 
meaning of Article 1.1(a)(1) of the SCM Agreement.  5. Turkey believes that the Panel in “Korea-Measures Affecting Trade in Commercial Vessels 
(EC)” provided a proper criterion for determination of “public body”. In relevant part of its Report 
the Panel stated that,  
“an entity will constitute a “public body” if  it is controlled by the “government” (or 
other public bodies”. If an entity is controlled by the “government” (or other public bodies), then any action by that entity is attributable to the “government”, and should 
therefore fall within the scope of Ar ticle 1.1(1)(1) of the SCM Agreement .”
1 
6. In the light of the latest ru ling of the Appellate Body in US-Anti-Dumping and Countervailing 
Duties (China) , Turkey highlights that factors other than “shareholder ownership” can be 
considered as useful indicators in the analysis. Such instruments, however, do not prejudice the 
significance of “government ownership” in the conclusion whether the entity in question is a public 
body.    
7. In addition to this the Appellate Body’s interpretation of the term “public body” in US - Anti-
Dumping and Countervailing Duties (China)  entails that each case must be looked at separately, 
giving careful consideration to all relevant characteristics, with particular attention to whether an 
entity exercises authority on behalf of a government.  
 8. In line with the legal interpretation of Article 1.1(a)(1) of the SCM Agreement under the rules of Article 31 of the Vienna Convention on the Law of Treaties, Turkey is of the view that the 
context of “government” is different from “public body”. This distinction has been clearly identified 
in the wording of the Article 1.1 of the SCM Agreem ent. Accordingly, a benefit conferring financial 
contribution has to be channeled to the recipient either by government  or by any public body .  
                                               
1 Korea – Commercial Vessels , Panel Report, Para. 7.50. WT/DS437/R/Add.1 
 
- E-23 - 
 
  9. In light of these arguments it is clear that “public body” differs from “private body”. While 
the analysis whether an entity is a public body depends primarily on the shareholder power of the 
government and secondarily, if needed, on other facts such as the percentage of government-appointed members in the board or whether the government induces the working plans of the 
entity, “private body”  has different peculiarities. Depending on argumentum e contrario  
interpretation it would be right to express that “private body”  is an entity that is neither a 
government organization nor a public body. Thus, it is not controlled by the government and is 
owned, organized and managed by private individuals or other companies. Such an interpretation 
finds support in the wording of Article 1.1(a)(1)(i v) of the SCM Agreement which stipulates that 
the link of “entrustment” or “direction” is imperative to conclude that a private body can be held liable under  the SCM Agreement. As argued befo re, the link of “control” between the government 
and public body has different parameters in that respect.   
 III. USE OF OUT-OF-COUNTRY BENCHMARKS 
 
10. In terms of legal discussion on the use of “ out-of-country benchmarks ” in subsidy 
calculations pursuant to Article 14 of the SC M Agreement, where the investigating authority 
establishes that prices are distorted because of the predominant role of the government 
(government might be a supplier of the investigated  product, or the suppliers of the investigated 
product might be owned and controlled by the gove rnment) or interference of government-entities 
or public bodies to the domestic market price of the investigated product, the investigating 
authority has a discretion to disregard the domestic  market prices. Turkey believes that, when the 
investigating authority comes to the conclusion that the price of the investigated product in the domestic market is distorted and unreliable, it can resort to out-of-country benchmarks in order to 
determine whether government has provided go ods for less than adequate remuneration and 
make correct subsidy amount determination.   
11. In line with the ruling of the Appellate Body in US – Softwood Lumber IV
2, the calculation of 
the benefit must relate or refer to, or be connect ed with, the prevailing market conditions in the 
country of provision and must reflect price, quality, availability, marketability, transportation and other conditions of purchase or sale.  
 
12. Turkey expresses that the overwhelming role of  the state in the domestic market is a strong 
proxy that domestic prices fail to reflect the levels that are normally observed in market conditions 
free from government intervention.  
 IV. INITIATION STANDARDS 
 
13. As regard to the standards to be applied for the initiation of countervailing duty investigations Turkey considers that the context of the word “sufficient”, as used in Article 11. 2 of 
the SCM Agreement, sets the legal margin of the initiation standards.  
 
14. Article 11.2 sets out the evidentiary standards for the application to initiate a countervailing investigation and Article 11.3 obliges the investigating authority to review the sufficiency of the 
evidence as a condition to initiate an investigation.  
 15. Turkey underlines that the “ sufficiency ” of information used in the application is a case-
based issue which must pass the minimum threshold identified in the second sentence of 
Article 11.2 of the SCM Agreement. In this respect, under no circumstances shall the information depend on simple assertions that are unsubstantiated by relevant evidence.  
 
16. The last sentence of Article 11.2, on the other hand, introduces the concept of “ reasonable 
availability ” of the information. The reasonable availability of the information depends widely on, 
inter alia , general record keeping and publication requirements for a government, access 
information on company recording and publication requirements access information on laws and 
regulations. It should be also noted that no tification requirements under Article 25 of the 
SCM Agreement is another important source of information about subsidy schemes of members. 
However, non-fulfilment of Article 25 notification requirement of certain members adversely affects 
rest of the membership to be informed about subsidy schemes of those members.  
                                               
2 US – Softwood Lumber IV , para. 102. WT/DS437/R/Add.1 
 
- E-24 - 
 
  17. Thus, under the conditions changing case by case and country to country, it may not be 
reasonably possible to gather the information requ ired in the following paragraphs of Article 11.2 
then it will be embarked upon the investigating authority to decide whether the application meets requirements.  
 
18. Considering the contextual interpretation  of Article 11.2 of the SCM Agreement the 
investigating authority has the discretion to decide whether the application meets the minimum 
requirements of sufficiency and whether the absence of information is an outcome of reasonable 
unavailability of the said information. Turkey reiterates that this is a case and fact based determination.    
19. Mr. Chairman, distinguished Members of the Pa nel, with these comments, Turkey expects to 
contribute to the legal debate of the parties in this case, and would like to express again its appreciation for this opportunity to share its view on this relevant debate, regarding the 
interpretation of the SCM Agreement. We thank you for your kind attention and remain at your 
disposal for any question you may have.  
 
_______________ 
  
 WT/DS437/R/Add.1 
 
- F-1 - 
 
  ANNEX F 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN  
SUBMISSIONS OF THE PARTIES 
 
Contents Page 
Annex F-1 Executive Summary of the Second Written Submission of China F-2 
Annex F-2 Executive Summary of the Second Written Submission of the United States F-11 
 
 WT/DS437/R/Add.1 
 
- F-2 - 
 
  ANNEX F-1 
EXECUTIVE SUMMARY OF  
THE SECOND WRITTEN SUBMISSION OF CHINA 
I. Introduction 
 
1. This submission presents China's rebuttal to the arguments advanced by the United States in its first written submission and at the first substantive meeting of the Panel, as well as China's 
comments on the United States' responses to the questions posed by the Panel following the first 
substantive meeting.    II. The United States Has Failed to Rebut China's Showing that the Preliminary 
Determinations in Wind Towers  and Steel Sinks  Are Within the Panel's Terms of 
Reference 
 
2. The Appellate Body has said that as long as the complaining Member "does not expand the 
scope of the dispute" or change the "essence of the challenged measures", a panel's terms of reference can include measures that were not incl uded in the consultations request. The inclusion 
of the preliminary determinations in Wind Towers and Steel Sinks in China's panel request neither 
"expands the scope of the dispute" nor "changes the essence of the challenged measures", because the initiations of these two countervailing duty investigations were identified in China's request for consultations and were subject to consultations between China and the United States. 
The initiation and preliminary determinations represent a "continuum of events" in the 
United States' investigation concerning the existence, degree, and effects of alleged subsidization on imports of Wind Towers  and Steel Sinks  from China. Therefore, ther e is a "sufficient degree of 
identity between the measures that were the subject of consultations and the specific measures 
identified in the request for establishment of the panel to warrant a conclusion that the challenged measures were subject to consultations as required by Article 4 of the DSU."   
 
3. China's challenge of the preliminary determinations in Wind Towers and Steel Sinks  
represents nothing more than additional instances of the same claims that China has already raised in respect of other measures at issue in this dispute, and that were the subject of 
consultations. For these reasons, the United States has failed to demonstrate that China's 
challenges of the preliminary determinations in Wind Towers  and Steel Sinks  are not within the 
Panel's terms of reference.  
 
III. China Has Established a Prima Facie  Case with Respect to All of Its Claims 
 
4. The Appellate Body observed in US – Gambling  that "the evidence and arguments 
underlying a prima facie  case ... must be sufficient to identify the challenged measure and its basic 
import, identify the relevant WTO provision and ob ligation contained therein, and explain the basis 
for the claimed inconsistency of the measure with that provision". The Appellate Body has applied 
this standard to evaluate the sufficiency of cl aims relating to trade remedy determinations. 
Accordingly, this is the standard against which the United States' assertions that China has failed to make out a prima facie  case must be evaluated.   
 
5. China has met each of the elements that the Appellate Body has deemed necessary to establish a prima facie  case with respect to all of its claims. China has: (1) identified the 
challenged measure at issue and precisely those portions of the measure pertinent to the 
particular claim; (2) identified the relevant provisions of the SCM Agreement with which it alleges the particular aspects of each challenged measure are inconsistent, and presented China's understanding of the legal obligation each such provision imposes; and (3) explained the basis for 
its claim that the particular aspects of each of the challenged measures at issue are inconsistent 
with the relevant provisions of the SCM Agreement, properly interpreted.    
6. Contrary to the United States' unfounded assertions, China is not "attempt[ing] to avoid a 
factual examination of its claims", nor does "it expect the Panel to do China's work for it". Rather, China has limited its factual presentation to the specific aspects of the USDOC determinations cited WT/DS437/R/Add.1 
 
- F-3 - 
 
  in CHI-1 and CHI-2, and excerpted in CHI-121 – CHI-125, because these are the only facts that 
China needs to adduce to establish that the USDOC has applied an incorrect legal standard in each determination under challenge with respect to financial contribution, benefit, specificity, initiation, and the use of facts available.   
 
7. The United States' repeated insinuation that the underlying "facts" of particular 
investigations are somehow relevant to China's claims presupposes that its interpretation of the 
relevant provision of the SCM Agreement is correct. But this begs the very interpretative questions 
that China's claims in this case raise. If th e U.S. interpretations of the SCM Agreement are 
incorrect, as China alleges is the case with respect to each set of claims it presents, then the only "fact" that matters is that the USDOC applied those incorrect legal interpretations in the 
investigations at issue – a fact that China has amply demonstrated by reference to the USDOC's 
own determinations.    
IV. The United States Has Failed to Rebut China's Showing that the USDOC's Public 
Body Determinations in the 14 Investigat ions Under Challenge Are Inconsistent 
with Article 1.1(a)(1) of the SCM Agreement 
 
8. As China has demonstrated, the USDOC's public body determinations in the 14 investigations under challenge were, in each instance, expressly based upon the USDOC's view 
that any entity controlled by the Government of China is a public body, with majority government 
ownership in itself being sufficient to satisfy the USDOC's control-based test. This is evident on the 
face of the pages of the USDOC Issues and Decision Memoranda and preliminary determinations that China identified in CHI-1 and whose excerpts are collected in CHI-123. The control-based 
legal standard that the USDOC applied in the 14 investigations under challenge is the same legal 
standard that the Appellate Body addressed in the four investigations at issue in DS379, and found to be inconsistent with Article 1.1(a)(1).  
 
9. The United States does not take issue with an y of these propositions. It follows that the only 
question that the Panel needs to address in order to decide China's "as applied" public body claims is whether to apply the interpretation of the term  "public body" that the Appellate Body established 
in DS379. If the Panel agrees with China that the Appellate Body's legal interpretation must be 
applied here, then all of the USDOC's public body findings referenced in CHI-1 and CHI-123 must be found inconsistent with Article 1.1(a)(1).  
 
10. Here again, the United States does not disagree. Its only defence of the USDOC's public body determinations is its assertion that the control-based standard the USDOC applies is the 
"correct" standard, and that China "erroneousl y interprets the phrase 'public body' in 
Article 1.1(a)(1)" when it relies upon the interpretation established by the Appellate Body in DS379. The United States asks the Panel to disregard the Appellate Body's legal interpretation and instead embrace as the "proper" interpretation of  the term "public body" the same USDOC control-
based test that the Appellate Body expressly rejected. Because the United States categorically 
rejects the jurisprudence on the proper role of prior Appellate Body legal interpretations, it sees no reason to present "cogent reasons" in support of this extraordinary request, and therefore offers 
none. 
 11. Indeed, the United States' discussion of the Appellate Body's decision in Canada – Dairy  in 
its first written submission and in response to Panel question 24 unwittingly demonstrates that the 
legal interpretations the Appellate Body adopted in DS379 were the only ones possible in light of well-established principles of treaty interpretation.   
12. In its first written submission, the United States sought to find support for its position that 
the ordinary meaning of the term "public body" did not convey the meaning of "vested with or 
exercising governmental authority" by noting that  "there were a number of other terms that were 
available to the drafters [of the SCM Agreement] ha d they wished to convey that meaning".  These 
terms included "governmental body", "public agen cy", "governmental agency", and "governmental 
authority", all of which, in the United States' view, "would have, through their ordinary meaning, 
more clearly conveyed the sense of ex ercising governmental authority".   
 13. The problem for the United States is that  one of the terms whose ordinary meaning it 
concedes would have "more clearly conveyed the sense of exercising governmental authority" in 
fact was used  in Article 1.1(a)(1) of the SCM Agreement. The identical term for "public body" in WT/DS437/R/Add.1 
 
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  the Spanish text of Article 1.1 of the SCM Agreemen t – "organismo público" – is used in the plural 
form in the Spanish text of Article 9.1 of the Ag reement on Agriculture to mean "agencies" of a 
"government".   
14. To give effect to the integrated nature of the different agreements under the 
WTO Agreement, identical terms in the different agreements ordinarily must be given the same meaning. It follows that a treaty interpreter faced with the task of interpreting the term 
"organismo público" in Article 1.1(a)(1) of the SCM Agreement would naturally look to the 
meaning previously given to that identical term in Canada – Dairy . Indeed, to comply with the 
obligation to interpret Article 1.1 of the SCM Ag reement "harmoniously" with Article 9.1 of the 
Agreement on Agriculture, as interpreted by the Appellate Body in Canada – Dairy , and in a way 
that "gives effect, simultaneously" to the terms in each provision in each authentic language, the 
English terms "public body" and "government agency " must be treated as functional equivalents, 
since that is how the Spanish texts of the SCM Agreement and Agreement on Agriculture treat the 
corresponding Spanish terms. In other words, a "p ublic body" – like a "government agency", like 
an "organismo público" – must be "an entity which exercises powers vested in it by a 'government' 
for the purpose of performing functions of a 'governmental' character, that is, to 'regulate', 
'restrain', 'supervise' or 'control' the conduct of private citizens.''  
 V. The United States Has Failed to Rebut China's Showing that the Policy Articulated 
by the USDOC in Kitchen Shelving Is "As Such" Inconsistent with Article 1.1(a)(1) 
of the SCM Agreement 
 15. China has demonstrated that the policy articulated by the USDOC in Kitchen Shelving 
establishes a rule or norm pursuant to which the USDOC conclusively determines that all entities 
controlled by the government are "public bodies" within the meaning of Article 1.1(a)(1) of the 
SCM Agreement, with majority government ownership presumptively establishing such control. By 
its express terms, the policy announced in Kitchen Shelving was not meant to apply only in the 
particular context of that investigation, but rather, was intended to have general and prospective application, a fact confirmed by its systematic application by the USDOC in all subsequent countervailing duty investigations. China also has demonstrated that the Kitchen Shelving  policy 
leads the United States to act inconsistently with  Article 1.1(a)(1) of the SCM Agreement, because 
it reflects the same control-based standard that the Appellate Body rejected in DS379.    
16. The United States' argument that the Kitchen Shelving policy is not a "measure" subject to 
WTO dispute settlement is directly contradicted by established jurisprudence to the effect that any act or omission attributable to a WTO Member, including "practice", may be challenged before 
WTO panels. The United States argues that the Kitchen Shelving policy does not have "general and 
prospective application" because it merely describes the USDOC's "past practice" with respect to the "public body" analysis, but this argument is di rectly contradicted by the text of the measure 
itself. The express terms of Kitchen Shelving establish a rule or norm that is intended to apply to 
all subsequent countervailing duty investigations in which the question of whether state-owned 
enterprises are "public bodies" arises. The policy sets forth an irrebuttable presumption that a government's control over an entity makes it a "public body" in all cases.  
 
17. The U.S. argument that the Kitchen Shelving policy does not "necessarily" result in a breach 
of Article 1.1(a)(1) of the SCM Agreement because the USDOC has the discretion to abandon this 
policy in the future is equally unpersuasive. As China noted in its oral statement, the Appellate 
Body's finding that non-mandatory measures may be challenged "as such" per force means that, 
on the merits, measures of this type may be found, and indeed have been found, to be "as such" inconsistent with the relevant provisions of the covered agreements. Even assuming that the 
mandatory/discretionary distinction were relevant to the Panel's assessment of China's "as such" 
claim on the merits, the relevant question is not whether the USDOC retains the theoretical discretion to abandon the Kitchen Shelving policy in the future.  Rather, it is whether the Kitchen 
Shelving policy itself provides the USDOC with discretion to act consistently with Article 1.1(a)(1) 
of the SCM Agreement. It does not, because it results in the USDOC applying the same control-based standard that is insufficient, as a matter of law, to establish a "public body" within the 
meaning of Article 1.1(a)(1). 
 18. The Kitchen Shelving policy establishes an irrebuttable presumption that all government-
controlled entities are "public bodies" under Articl e 1.1(a)(1). If the Panel were to follow the 
Appellate Body's interpretation of Article 1.1(a)(1) in DS379, it follows that the Kitchen Shelving WT/DS437/R/Add.1 
 
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  policy necessarily results in the United States acting inconsistently with Article 1.1(a)(1) of the 
SCM Agreement in each instance in which it is applied.  VI. The United States Has Failed to Rebut China's Showing that All of the USDOC's 
Adequate Remuneration Determinations in  the Investigations Under Challenge Are 
Inconsistent with Articles 14(d) and 1.1(b) of the SCM Agreement Because They Were Predicated on Unlawful "Distortion" Findings 
 
19. In each of the 14 input subsidy investigations under challenge, the USDOC's "distortion" finding was predicated on its conclusion that the "government" played a "predominant role" in the 
market because SOEs provide at least a "substantial portion" of the market for the input. The 
USDOC's "government predominance" findings were thus based exclusively, or primarily on 
treating SOEs as "government suppliers", solely on the grounds that SOEs are owned and/or controlled by the Government of China. These fact s are evident on the face of the pages of the 
USDOC Issues and Decision Memoranda and preliminary determinations that China identified in 
CHI-1 and whose excerpts are collected in CHI-124.    
20. China's claims under Articles 14(d) and 1.1(b) are premised on its view that the same legal 
standard for determining whether an entity is a "government" supplier for purposes of the financial contribution inquiry under Article 1.1(a)(1) must also apply when determining whether an entity is a "government" supplier for purposes of the distortion inquiry under Article 14(d). China has 
offered the Panel compelling reasons why this must be the case.   
 21. First, Article 1.1(a)(1) of the SCM Agreement sets forth a single definition of the term 
"government" that by its express terms applies throughout the SCM Agreement, including with 
respect to the interpretation and application of Article 14(d). Second, the only circumstance in 
which the Appellate Body has interpreted Article 14(d) as authorizing the rejection of private in-
country prices is where "the government's role in providing the financial contribution is so 
predominant that it effectively determines the price at which private suppliers sell the same or similar goods, so that the comparison contempl ated by Article 14 would become circular". The 
Appellate Body identified the potential cause of "distortion" as the government's role in providing 
"the financial contribution". In this way, the Appellate Body affirmed that the same juxtaposition 
between governmental and private actors set forth in Article 1.1 applies in the distortion inquiry 
under Article 14(d) as well.  
 
22. The United States asks the Panel to accept its position that "government ownership and control – in and of itself – is an appropriate test for determining whether SOE presence in a given 
market indicates government involvement in that market", on nothing more than its opinion  that it 
would make sense to have such a rule. Putting aside that a Member's opinions should not guide the Panel's interpretative exercise, the United States' position makes no sense at all. To the contrary, it would produce the nonsensical result that in the same investigation, an entity properly 
found to be a "private body" under Article 1.1(a)(1) when providing goods nonetheless could be 
deemed a "government" supplier wh en engaged in the same conduct for purposes of the distortion 
analysis under Article 14(d).   
 
23. China wishes to close this discussion with a br ief rebuttal of the United States' assertion that 
"Commerce relies on other facts" beyond SOE presence in a market to support its distortion 
findings. This argument fails for three independent reasons. First, in the seven investigations 
where the USDOC cited "other facts" in support of its distortion findings, those facts did not 
provide an independent basis for the USDOC's findings. Second, the most common factor the USDOC cites in support of its findings of "government predominance" in a market is the "low level 
of imports" or "insignificant" share of imports as  a share of domestic consumption. In the USDOC's 
view, imports are a proxy for private sales, which is correct as far as it goes. By itself , however, a 
low level of imports says nothing about the extent or nature of the government's role as a supplier 
in the market. Third, the only other factor the USDOC occasionally cites in support of its distortion 
findings is the existence of export restraints with respect to certain inputs. Here again, the existence of export restraints cannot, whether alone or in tandem with a "low levels of imports", 
support a finding that the government is a predominant supplier in the market.   
 24. It is undisputed that the USDOC's distortion findings served as the sole basis for its rejection of Chinese prices and resort to out-of-country prices as a benchmark in each of the 
14 investigations under challenge. Because those distortion findings lack a proper legal basis, it WT/DS437/R/Add.1 
 
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  follows that all of the USDOC's benefit determinations in those cases must be found inconsistent 
with Articles 14(d) and 1.1(b) of the SCM Agreement.  VII. The United States Has Failed to Rebu t China's Showing that the USDOC's Input 
Specificity Determinations Are Inconsiste nt with a Proper Interpretation and 
Application of Article 2.1( c) of the SCM Agreement 
 
25. China has identified four specific respects in which the USDOC's findings of specificity in the 
determinations at issue were inconsistent with a proper interpretation and application of the first factor under Article 2.1(c). In particular, China ha s shown that the USDOC: (1) failed to identify 
the relevant "granting authority" (or "authorities") responsible for the provision of the alleged 
input subsidies; (2) failed to apply the first factor under Article 2.1(c) in light of a prior 
"appearance of non-specificity", as required by the first sentence of Article 2.1(c); (3) failed to identify and substantiate the relevant "subsidy programme" under the first factor; and (4) failed to 
take into account the two mandatory considerations set forth in the last sentence of Article 2.1(c). 
 26. To the extent that the United States has en gaged with China's arguments at all, the United 
States has not genuinely disputed the fact that the USDOC failed to undertake the four elements of 
the specificity analysis that are the basis of China's claim under Article 2.1(c). Instead, the United States has advanced legal interpretations that are contrary to the interpretative principles of the Vienna Convention, contrary to the manner in which prior panels and the Appellate Body 
have interpreted and applied these provisions, and contrary to interpretations of the same 
provisions that the United States has advanced in other disputes.    
27. The first sentence of Article 2.1(c) expressly conditions any evaluation of the "other factors" 
under Article 2.1(c) on a prior "appearance of non-specificity" resulting from the application of subparagraphs (a) and (b). Question 43 from the Panel asked the United States to respond to 
China's description of the conditional nature of Article 2.1(c). The United States responded by 
trying to interpret the clause "notwithstanding an y appearance of non-specificity resulting from the 
application of the principles laid down in subparagraphs (a) and (b)" as having no practical significance whatsoever. According to the United States, the purpose of this clause is merely to 
indicate that "a finding of non-specificity under (a) or (b) … does not prevent  consideration of [the] 
additional factors" under Article 2.1(c).    
28. This explanation makes no sense on its face, as the first sentence of Article 2.1(c) would not 
have "prevented" anything even in the absence of the "notwithstanding" clause. Moreover, this 
conclusion does not follow at all from the ordinary meaning of the term "notwithstanding" that the 
United States has provided. As the United States itself observed in EC – Aircraft , 
"[s]ubparagraph (c) of Article 2.1 presumes that a specificity analysis already has occurred  under 
subparagraphs (a) and (b)." This conclusion follows directly from the ordinary meaning of the term 
"notwithstanding", as the U.S. definition plainly demonstrates.  
 
29. The fact that Article 2.1(c) "applies only when  there is an 'appearance' of non-specificity" is 
also supported by the context of Article 2.1 as a whole. The Appellate Body has observed that "a 
granting authority will normally administer subsidies pursuant to legislation". Thus, it makes sense 
that a panel or investigating authority would ordinarily begin its evaluation of specificity by examining the legislation (or other written instrument), if any, pursuant to which the granting 
authority conferred the subsidy at issue. However, Articles 2.1(a) and 2.1(b) are not limited to an 
evaluation of written instruments. Both subparagraphs also refer to the granting authority itself, i.e. to any "express acts" or "pronouncements" of the granting authority that may shed light on 
whether the granting authority has imposed a limitation of access to the subsidy. The 
Appellate Body has stressed that any assessment of specificity under Article 2.1 "should normally 
look at both" of these factors, i.e. the legisl ation pursuant to which the granting authority 
operates, as well as the acts or pronouncements of the granting authority itself. 
 
30. In most cases, the application of subparagraphs (a) and (b) to the instruments and/or conduct of the granting authority will resolve the issue of specificity one way or the other. 
Article 2.1(c) is in the nature of an exception that panels and investigating authorities may take 
into account when the prior application of subparagraphs (a) and (b) has resulted in an "appearance of non-specificity". It is undisputed that the USDOC did not identify an "appearance of non-specificity resulting from the application of the principles laid down in subparagraphs (a) 
and (b)".   WT/DS437/R/Add.1 
 
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  31. Nor, as is evident from the United States' response to Panel question 34, did the USDOC 
identify a relevant "subsidy programme" in the 14 determinations at issue. The United States cannot point to a single passage in any of the USDOC's Issues and Decision Memoranda or preliminary determinations in which the USDOC substantiated the existence of an actual "subsidy 
programme" by reference to record evidence. In the absence of an identifiable "subsidy 
programme", the USDOC had no basis to determine whether the users of that programme constituted no more than "a limited number of certain enterprises". This should be the end of the 
line for the "subsidy programme" issue.   
 32. In relation to China's claim that the USDOC failed to identify the relevant "granting authority" (or "authorities") that were responsi ble for providing the alleged input subsidies, the 
United States asserts that there is no need to "conduct a separate analysis and [identify] the 
granting authority" for purposes of Article 2 "if the granting authority has already been identified through the analysis of the financial contribution at issue under Article 1.1." As China has 
explained, the U.S. response appears to treat each  SOE provider of inputs as a distinct "public 
body" and therefore, under the U.S. rationale, a di stinct "granting authority" for the purposes of 
the specificity analysis under Article 2. This is an ex post rationale that does not appear anywhere 
on the face of the USDOC's determinations. Furthermore, the proposition that each SOE is a 
"granting authority" appears to contradict the USDOC's position that SOEs are "public bodies" 
merely by virtue of being "controlled" by the government (a position which implies that some entity other than the SOE is the relevant "granting authority"), and it appears to contradict the 
USDOC's assertion that the alleged subsidies were provided pursuant to input-specific "subsidy 
programmes" (which implies a degree of coordination among SOEs that the USDOC has never been able to substantiate).   
 
33. Finally, the last sentence of Article 2.1(c) stat es that, with respect to any application of that 
subparagraph, "account shall be taken of the extent of diversification of economic activities within 
the jurisdiction of the granting authority, as well as of the length of time during which the subsidy 
programme has been in operation." Contrary to the U.S. assertion, an investigating authority's obligation to take these considerations into account is not dependent upon whether an interested party "raised the relevance of the two factors" or whether there were "facts before an investigating 
authority that would indicate [whether] either factor may be relevant". As China further explained 
in response to question 36, the failure of the USDOC to take these two factors into account is inextricably bound up with its failure to apply other aspects of Article 2.1. Once the investigating 
authority no longer feels constrained by the actu al text and requirements of Article 2.1, the 
analytical framework that Article 2.1 imposes begins to fall apart.    
VIII. The United States Has Failed to Rebut China's Showing that the USDOC's Regional 
Specificity Determinations in the Seve n Investigations Under Challenge Are 
Inconsistent with Article 2.2 of the SCM Agreement  
 
34. China has identified for the Panel and the United States the seven regional specificity 
determinations that it is challenging in this dispute by identifying the pages in the USDOC's Issues and Decision Memoranda and preliminary determinations where the USDOC provides its regional 
specificity analysis, and by providing relevant excerpts from those pages at the first substantive 
meeting of the parties. China has explained that  the text of Article 2.2 of the SCM Agreement 
requires the investigating authority to identify "[a] subsidy which is limited to  certain enterprises 
located within a designated geographical region within the jurisdiction of the granting authority". 
China has explained that the USDOC acted inconsistently with this provision in the seven determinations at issue by finding the provision of land use rights to be regionally specific without identifying the requisite limitation on access.  
 
35. Given that the United States has failed to contest China's characterizations of the USDOC's 
findings or China's understanding of the requirements of Article 2.2, all that remains for the Panel 
to decide is whether it, like the panel in DS379, believes that a proper finding of regional 
specificity under Article 2.2 requires the investigating authority to identify a limitation on access to the financial contribution or the benefit. If the Panel agrees with China that such a limitation is 
required, then the USDOC's determinations in the seven determinations under challenge are 
inconsistent with Article 2.2 of the SCM Agreement.  WT/DS437/R/Add.1 
 
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  IX. The United States Has Failed to Rebut Ch ina's Showing that the USDOC's Initiation 
Decisions Under Challenge Are Inconsistent  with Article 11.3 Because They Were 
Based on the Application of Incorrect Legal Standards 
 
36. In response to question 54 from the Panel, the United States definitively states that it does 
not agree with China's claim that when an investigating authority initiates a subsidy investigation on the basis of an incorrect legal standard, it necessarily acts inconsistently with Article 11.3 of the 
SCM Agreement. The United States argues that "China reads into Article 11.3 words that are not 
there – China reads into Article 11.3 a requirement that the investigating authorities, in conducting the review called for under Article 11.3, articulate and be bound by some 'legal standard'." China's argument does nothing of the sort. To the contra ry, China's argument gives meaning and effect to 
all of the relevant provisions of Article 11, which together make clear that an investigating 
authority cannot possibly judge the sufficiency of the evidence within the meaning of Article 11.3 
other than in relation to "some 'legal standard'".  
 
37. The United States explained in its first written submission that the term "sufficient" is defined as "[a]dequate to satisfy an argument, situation, etc., satisfactory."  As is evident from the 
U.S. definition, the term "sufficient" is a relative term. With respect to Article 11 of the 
SCM Agreement, whether evidence "is sufficient to justify the initiation of an investigation" under Article 11.3 only has meaning in relation to Articl e 11.2, which requires "sufficient evidence of the 
existence of a subsidy". 
 
38. In considering what would constitute "sufficient evidence of the existence of a subsidy", the 
panel in China – GOES explained that "[a]lthough definitive proof of the existence and nature of a 
subsidy, injury and a causal link is not necessary for the purposes of Article 11.3, adequate 
evidence, tending to prove or indicating the existe nce of these elements, is required." This means 
that there must be "adequate evidence tending to prove or indicating the existence of" a financial 
contribution, of a benefit, and of specificity. 
 39. China cannot conceive of how an investigating authority would determine whether there is "adequate evidence tending to prove or indicating  the existence of" a financial contribution, of a 
benefit, or of specificity without a precise underst anding of what these subsidy elements require. 
Moreover, the United States has recognized as much. In its first written submission, the United States explained that under the U.S. control-based legal standard  "Article 11 requires adequate 
evidence that tends to prove or indicating that the entity is controlled by the government", but 
that under China's interpretation of the term "public body" , Article 11 requires "adequate evidence 
tending to prove or indicating that an entity posse sses, exercises, or is vested with governmental 
authority …". The United States understood, at least prior to its responses to Panel questions, that 
it is the legal standard that determines what would constitute "adequate evidence" under Article 11.   
40. If the legal standard determines what would constitute "adequate" and "sufficient" evidence 
under Article 11 – and it does – it necessarily follows that when the investigating authority applies the wrong legal standard, the legitimacy of the investigating authority's conclusion that there was 
"adequate" and "sufficient" evidence to justify initiation is irreparably undermined. 
 X. The United States Has Failed to Rebut Ch ina's Showing that the USDOC's Initiation 
Decisions in Magnesia Bricks  and Seamless Pipe  Are Inconsistent with Article 11.3 
Because They Were Predicated on the Incorrect Legal Standard that Export Restraints May Constitute a Financial Contribution Within the Meaning of 
Article 1.1(a)(1)(iv) of the SCM Agreement 
 
41. In China's view, the facts are undisputed rega rding the circumstances that led the UDSOC to 
initiate investigations in Magnesia Bricks  and Seamless Pipe  into the petitioners' allegations that 
certain export restraints constitute a countervailable subsidy.   
 42. First, the measures that the petitioners cited in support of their export restraint allegations 
in Magnesia Bricks  and Seamless Pipes  fall squarely within the broad definition of an "export 
restraint" set forth in US – Export Restraints . Second, the sole basis for petitioners' claims that the 
export restraints constituted a financial contribution was their assertion that through the imposition of the export restraints, China was entrusting or directing domestic suppliers of the 
inputs (magnesia and coke) to provide such inpu ts to domestic consumers. Third, the USDOC's WT/DS437/R/Add.1 
 
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  justification for initiating investigations with respect to export restraints can be found in the 
initiation checklists for the Magnesia Bricks  and Seamless Pipe  investigations. Finally, in each case, 
the USDOC initiated the investigations based on its legal interpretation that export restraints may constitute a financial contribution in the form of government-entrusted or -directed provision of 
goods.   
 43. The only potential source of disagreemen t between the parties is reflected in the 
United States' response to Panel question 71, where the United States said that "the applications 
in Seamless Pipe  and Magnesia Bricks  contained contextual evidence relating to the particular 
export restraints at issue over and above the exis tence of the export restraints themselves". The 
United States did not bother telling the Panel what this purported "contextual evidence" was, or 
where it might be found in the record. More importantly, the United States was careful not to 
assert that the petitions in the two cases cited " measures " other than the export restraints 
themselves as being relevant to their financial contribution allegations – the subject of China's 
assertion in paragraph 84 of its oral statement. Nor did the United States assert that the USDOC 
actually took any other " measures " or even some unidentified "contextual" evidence into account 
when deciding to initiate the investigations in each case. The United States did not make these 
assertions presumably because it knows that the petitions and the USDOC initiation checklists 
would establish that they are untrue.   44. If, consistent with the reasoning of the panel report in US – Export Restraints , the Panel 
agrees with China that the export restraints alleged in Magnesia Bricks  and Seamless Pipes  cannot, 
as a matter of law, constitute a financial contribution within the meaning of Article 1.1(a)(1)(iv), then in China's view it necessarily follows that the USDOC's initiations were inconsistent with 
Article 11.3 for all of the reasons set forth in Section 0 above.   
 XI. The United States Has Failed to Rebut China's Showing that the USDOC's "Adverse 
Facts Available" Determinations Under Ch allenge Are Inconsistent with Article 
12.7 of the SCM Agreement Because They Were Not Based on "Facts" That Were 
"Available" 
 
45. China and the United States agree that any determination under Article 12.7 of the 
SCM Agreement must be based on "facts" that are "available" on the record of the investigation, but disagree as to how an investigating authority must comply with this requirement. Based on its 
response to Panel question 78, the United States  apparently considers that a "facts available" 
determination is consistent with Article 12.7 so long as the investigating authority once referred to a fact that might conceivably have provided support for the investigating authority's later 
determination to resort to "facts available". The Unit ed States believes this to be true even though 
the investigating authority's stated rationale for using "facts available" nowhere refers to this fact, or indeed to any facts at all. Moreover, by accusing China of "fail[ing] to demonstrate that any of the 48 challenged determinations are not supported by the record evidence in each investigation", 
the United States appears to take the position that it is somehow China's  obligation to search for 
"facts" that the USDOC might have relied upon to support its "facts available" determination, had 
it bothered to do so, and to rule out the possibi lity that any such undisclosed "facts" actually 
existed. 
 46. This attempt by the United States to evade the prima facie  case that China has established 
is wholly unfounded. It was the USDOC's obligation as the investigating authority to provide a 
reasoned and adequate explanation of how the evid ence on the record supported its application of 
"facts available" under Article 12.7. It is preposterous to suggest that it is now China's obligation, or the obligation of this Panel, to determine in hindsight if the USDOC might have been able to 
provide a reasoned and adequate explanation of how its determination was consistent with 
Article 12.7, if it had actually sought to do so.    
47. The absurdity and impracticality of the position  that the United States has taken is precisely 
why investigating authorities  – not panels or complaining Members – are required to provide a 
"reasoned and adequate explanation as to: (i) how the evidence on the record supported its 
factual findings; and (ii) how those factual findings supported the overall subsidy determination". 
This reasoned and adequate explanation "should be discernible from the published determination itself". In the case of a determination based on "facts available" under Article 12.7 of the 
SCM Agreement, a "reasoned and adequate explan ation" would require, at a minimum, some 
explanation of how the investigating authority's determination was based on "facts" that were WT/DS437/R/Add.1 
 
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  "available". This explanation would have to be apparent from the investigating authority's 
published determination – not from conjecture or post hoc  rationalizations supplied by the 
responding Member.    
48. The U.S. position – that any fact referred to anywhere on the record can later be invoked to 
support a "facts available" determination – plainl y does not comport with these requirements. The 
mere existence of a particular fact on the record of an investigation does not constitute a 
"reasoned and adequate explanation" as to why the investigating authority considered this fact to 
be relevant to the gap that it needed to fill. It provides no indication whatsoever that the 
investigating authority engaged in "an evaluative, comparative assessment" of all the available evidence, "tak[ing] into account all the substantiated facts provided by an interested party", to 
conclude that this particular fact represented the "best information available". The Panel's 
assessment of China's claims must be based on the rationales set forth in the USDOC's published determinations, and those rationales are plainly inconsistent with Article 12.7. 
 WT/DS437/R/Add.1 
 
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  ANNEX F-2 
EXECUTIVE SUMMARY OF THE  
SECOND WRITTEN SUBMISSION OF THE UNITED STATES  
I. INTRODUCTION 
 
1. This dispute, like all WTO disputes, presen ts questions about the interpretation of the 
covered agreements and requires an objective assessment of the specific facts in the dispute. Yet, 
in China’s first written submission and its responses to questions from the Panel, China has cut 
corners in its legal analysis, failed to analyze the specific facts of each investigation, and failed to make a prima facie  case with respect to most of its claims. The Panel should not accept China’s 
invitations to take short cuts, and the Panel cannot make China’s case for it. China’s arguments 
simply do not provide a basis on which the Panel could sustain China’s allegations that the United 
States has acted inconsistently with its WTO obligations.  
II. TERMS OF REFERENCE 
 2. China argues that adding the preliminary determinations in Wind Towers and Steel Sinks  
together with new legal claims in its panel request does not “expand the scope of the dispute”
 
because it made similar claims with respect to different investigations in its consultations request. 
However, China’s arguments are not consistent with the plain language of Articles 4 and 6.2 of 
the DSU.  To the contrary, the fact that China considers the initiation of an investigation to be 
subject to different obligations from preliminary determinations only highlights that they are 
distinct.  
3. The fact that China brought claims against multiple measures does not relieve China of its 
obligations under Article 6.2 of the DSU to identify “the specific measures at issue” and  “provide a 
brief summary of the legal basis of the complaint sufficient to present the problem clearly.” 
Instead, the fact that China is challenging multiple measures only increases the need for clarity of 
its claims. China’s arguments do not address the threshold fact that these preliminary determinations did not exist at the time China requ ested consultations, and so they could not have 
been the subject of consultations. Where the re sponding Member engages in consultations, the 
complaining Member may request the establishment of a panel on the disputed matter only “[i]f 
the consultations fail to settle the dispute.” This  request for panel establishment under Article 7.1 
of the DSU, in turn, establishes the terms of re ference for the panel proceeding. The process helps 
resolve disputes earlier in the context of consultations, and thereby potentially reduces the 
number of panel proceedings.  
III. CHINA HAS FAILED  TO ESTABLISH A PRIMA FACIE  CASE WITH RESPECT TO 
ALLEGED VIOLATIONS OF THE SCM AGREEMENT 
 4. China’s first submission relied on broad and in accurate generalizations regarding the facts of 
Commerce’s preliminary and final determinations. Because China did not discuss how the 
provisions of the SCM Agreement apply to any of the determinations made by Commerce, it failed to make a prima facie case. China belatedly submitted exhibits CHI-121 through CHI-125, which 
provide excerpts from various documents. However, these exhibits fail to cure the deficiencies in 
China’s submissions. In particular, the “cut and paste” excerpts in CHI-121 through CHI-125 fail to 
“explain the basis for the claimed inconsistency of the measure with” the provision at issue, which 
China acknowledges is a necessary component of a prima facie case.   
 5. China does not discuss or cite to the facts of the investigations at all, much less demonstrate that those facts are all “similar.” As a result, China has failed to demonstrate that Commerce 
“adopted an ‘assembly line’ approach,” or any other approach, to its subsidy determinations. 
Further, China cannot avoid its burden to present a prima facie case for each of its numerous 
claims by simply asserting that “the central issues in this dispute are issues of legal interpretation” 
and that its claims concern the “applications of legal standards.” It is impossible to know whether 
any particular “legal standard” (as proposed by China) was applied in a given determination and WT/DS437/R/Add.1 
 
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  whether a particular application of any such legal standard was inconsistent with the 
SCM Agreement, because China has not discussed the facts of the investigations.    IV. THE PANEL SHOULD FIND THAT A “PUBLIC BODY” IS AN ENTITY CONTROLLED BY 
THE GOVERNMENT SUCH THAT THE GO VERNMENT CAN USE THAT ENTITY’S 
RESOURCES AS ITS OWN 
 
6. The U.S. first written submission explains in detail the reasons why the Panel should 
conclude that the term “public body” in Article 1.1(a)(1) of the SCM Agreement means an entity 
controlled by the government such that the governme nt can use that entity’s resources as its own. 
Rather than seriously engage with the interp retation of “public body” proposed by the 
United States, China simply insists repeatedly  that the interpretative question has been 
“definitive[ly]” settled as a result of the DSB adoption of the Appellate Body report in US – Anti-
Dumping and Countervailing Duties (China) . China is incorrect. 
 
7. The Panel should undertake its own interpretative analysis in accordance with the customary rules of interpretation of public international law. The DSU not only empowers the Panel to take on 
that task, it charges the Panel with that responsibi lity through DSU Articles 11 and 3.2. It does not 
limit the Panel to simply “apply[ing] the legal standard” adopted by the Appellate Body, as China urges. China’s proposed analytical approach – a simple binary choice between two competing interpretations – is impermissible under the DSU.  The DSU tasks each panel with making its own 
“objective assessment of the matter before it, incl uding an objective assessment of the facts of the 
case and the applicability of and conformity with the relevant covered agreements.” The Panel should address the arguments that the Parties have put before it here and should come to its own 
conclusions about the proper interpretation of the term “public body” using customary rules of 
interpretation, pursuant to the DSU.  
8. The Panel should take into account all prior panel and Appellate Body reports that have 
addressed the meaning of the term “public body ,” and which are relevant to the Panel’s own 
consideration of the proper interpretation of that  term. The DSU, consistent with the practice of 
GATT and WTO panels and the Appellate Body, gives the Panel broad authority to draw upon the 
reasoning of prior dispute settlement reports, both adopted and unadopted, as the Panel works to 
resolve the legal questions that have been presented to it. The “hierarchical structure 
contemplated in the DSU” exists only in relation to a particular dispute. Outside the context of a 
dispute in which there has been an appeal, Appellate Body reports do not have an elevated status 
above adopted or even unadopted panel reports. The Appellate Body is not infallible, and its legal interpretations are not binding outside the context of a particular dispute. Accordingly, the Panel 
should take into account all panel and Appellate Body reports that discuss the same issue and that 
the Panel considers could assist the development of its own reasoning.  9. China draws the Panel’s attention to the panel report in Canada – Renewable Energy . The 
United States agrees that the Panel should take that panel report into account, but we submit that 
the panel’s application of the public body standa rd there is much closer to the U.S. proposed 
interpretation than it is to China’s. That panel focused on the government’s “meaningful control” 
and did not find that Hydro One “itself possess[ed] the authority to ‘regulate, control, supervise or 
restrain’ the conduct of others.” We consider “meaningful control” to mean control over the entity such that the government can use the entity’s resources as its own. 
 
10. The Appellate Body applied the same public body standard in US – Anti-Dumping and 
Countervailing Duties (China)  when it upheld Commerce’s determinations that state-owned 
commercial banks (SOCBs) in China were public bo dies. The Appellate Body repeatedly referred to 
the government’s “meaningful control” over an en tity. There was no evidence that the banks could 
or did regulate, control, supervise, or restrain the conduct of others. The implication is that the SOCBs would fail to meet the new test China has proposed in this dispute. China’s approach is, in 
reality, a deviation from the standard articulated in US – Anti-Dumping and Countervailing Duties 
(China) , as applied by the Appellate Body. 
 
11. Finally, we share Canada’s concern about the potential for circumvention of the 
SCM Agreement if the term “public body” were  interpreted too narrowly. China’s proposed 
interpretation would permit a government to provide the same financial contribution with the same economic effects and escape the SCM Agreement definition of a “financial contribution” merely by 
changing the legal form of the grantor. This could have wide-ranging effects in the international WT/DS437/R/Add.1 
 
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  marketplace if Members began engaging in subsidizing activity that, under China’s proposed 
interpretation, would technically be outside the scope of the SCM Agreement. Such an outcome would be a major step backwards from the subsidies disciplines that were a key accomplishment of the Uruguay Round, but would not result from a proper interpretation of the term “public body.” 
We believe that our proposed interpretation of the term “public body” is consistent with and 
supports the object and purpose of the SCM Agreemen t, and it is the interpretation that results 
from the proper application of the customary rules of interpretation of public international law. 
 
12. The United States continues to urge the Panel to engage in a fulsome interpretative analysis in accordance with the customary rules of interpretation of public international law. We remain confident that doing so will lead the Panel to conc lude that a “public body” is an entity controlled 
by the government such that the government can use that entity’s resources as its own. 
 V. THE DISCUSSION IN KITCHEN SHELVING  IS NOT A MEASURE THAT CAN BE 
CHALLENGED “AS SUCH” 
 13. As demonstrated in the U.S. first written submission and U.S. responses to the Panel’s 
questions, Commerce’s discussion of the public body issue in the Kitchen Shelving  final 
determination is not a “measure” that can be challenged “as such.” In Kitchen Shelving , 
Commerce described its past determinations regard ing the public body issue. As explained in 
the U.S. first written submission, the discussion in Kitchen Shelving  does not bind Commerce to 
any particular analysis of whether an entity is a public body. At most, it explains Commerce’s past 
actions. However, an explanation is not a “mea sure,” and even a practice or policy is not 
necessarily a “measure.”   
 
14. China argues that “any act or omission attributable to a WTO Member” can be a measure. However, even with this problematic and broad definition of a measure, the explanation in Kitchen 
Shelving  that China challenges is not an “act or omission.” The explanation, on its own, does not 
do or accomplish anything. It has no “independent operational status such that it could independently give rise to a WTO violation.” It is descriptive, rather than proscriptive.   
15. Indeed, the fact that the discussion in Kitchen Shelving  does not have “general and 
prospective application” is fatal to China’s claim. There is no indication in that discussion that Commerce intended the Kitchen Shelving  reasoning to apply to all cases, regardless of the unique 
facts and record in each case. There is no indication that Commerce intended “to conclusively treat 
all entities controlled by the Govern ment of China as ‘public bodies’ in all cases ...”. The language 
used in Kitchen Shelving  indicates that rather than opining on the conclusive status of all entities 
controlled by the government in all cases and for all time, Commerce would in the future examine 
evidence and arguments that “majority ownership does not result in control of the firm” and would consider “all relevant information.”  
VI. OUT-OF-COUNTRY BENCHMARKS 
 16. As the United States demonstrated previo usly, China’s argument conflates two distinct 
analyses: a financial contribution analysis under Article 1.1(a)(1) on the one hand, and a benefit 
analysis under Article 14(d) on the other hand. Article 14(d) is solely focused on the adequacy of the remuneration. Instead, the question before the Panel is whether it is inconsistent with the text 
of the SCM Agreement for Commerce to focus on those aspects of the Government of China’s 
ownership and control that are necessary to affect  the adequacy of the remuneration – i.e., the 
prices. As the United States has explained, Commerce asked the appropriate questions, and 
reached the correct conclusions, regarding the adequacy of remuneration.   
 
17. Where the government maintains a controlling ownership interest in SOEs, it, like any owner 
of a company, has the ability to influence that enti ty’s prices. Therefore, to  the extent SOEs, which 
have shared ownership by the Government of Ch ina, are producers in the relevant market in 
China, this presence is evidence of the government’s ability to influence prices in that market. It is neither necessary nor logical as a policy matter or as a matter of interpretation of the 
SCM Agreement for the Panel to find that the only way for a government to exert market power or 
influence prices in a particular market is through entities engaging in governmental functions—i.e., 
the public body analysis from US – Anti-Dumping and Countervailing Duties (China) . And it would 
be inappropriate to limit the benefit analysis in this way. Where prior Appellate Body findings 
permit the use of out-of-country benchmarks because of the government’s ability to affect prices, WT/DS437/R/Add.1 
 
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  and SOE presence in a market is evidence of a government’s ability to affect prices in that market, 
Commerce’s benefit analysis is consistent with prior Appellate Body findings.    18. China is also incorrect when it states that “USDOC’s equation of SOEs with the government 
is explicitly or implicitly based on its belief that entities majority-owned and controlled by the 
government are ‘ public bodies ’.” The government’s ownership and control of SOEs is relevant for 
Commerce’s assessment of government presence in a given input market. In turn, such SOE 
presence is an indicator of government presence in that market for purposes of evaluating the 
government’s ability to influence prices in the relevant input market.    19. The US – Anti-Dumping and Countervailing Duties (China) report demonstrates that the 
Appellate Body did not perceive altering the public bodies standard in Article 1.1(a) of the 
SCM Agreement as an impediment to upholding Commerce’s reliance on out-of-country benchmarks in the investigations challenged in US – Anti-Dumping and Countervailing 
Duties (China) .   
 20. While a public body analysis is relevant, it is not – as demonstrated by the findings in US – 
Anti-Dumping and Countervailing Duties (China) an “essential factual predicate” for the market 
distortion analysis under Article 14(d). The findings of US – Anti-Dumping and Countervailing 
Duties (China) show that the examination of public bodies and market distortion remain two 
distinct analyses such that even if the Panel were to find Commerce’s public body determinations 
in this dispute to be WTO inconsistent, it still could find Commerce’s benchmark determinations 
not to be WTO inconsistent. Whether or not Chin a made the same argument before the Appellate 
Body in US – Anti-Dumping and Countervailing Duties (China) that it makes before this Panel, the 
Appellate Body was fully aware in US – Anti-Dumping and Countervailing Duties (China)  that (1) 
Commerce applied an ownership or control standard in its analysis that certain SOEs constituted public bodies; and (2) Commerce had treated SOE presence in the market as indicative of 
government presence in the market. 
 21. The United States recalls that the Panel went out of its way to give China a second opportunity to present a prima facie  case; requesting that “China present the facts on the record 
for each investigation challenged in relation to the use of out-of-country benchmarks” and “detail 
how the USDOC treated such facts for its benefit analysis.” But China failed to use that opportunity to support its claims. Instead China responds to th e first aspect of the Panel’s request by providing 
a table, CHI-124. China then asserts that “it is evident on the face of the cited pages that the 
USDOC’s justification for its recourse to an out-of-country benchmark is its conclusion that SOEs provide at least a ‘substantial portion’ of the market for the input, which renders the market 
distorted due to the ‘government’s’ predominant role as a supplier in the market.”   
 22. Additionally, in an apparent concession that China’s claims in its first written submission were incorrect, China has since modified its argument. Whereas in its first written submission, 
China argued that Commerce found government predominance in a given market based 
“exclusively ” on its equation of SOEs with government  suppliers, China now argues that Commerce 
based such findings “exclusively or primarily ” on its equation of SOEs with the government. This 
new argument demonstrates that there is no generally applicable measure by which Commerce 
finds distortion in a particular market, as indicated by China’s highly generalized legal theory arguments.   
 
VII. COMMERCE’S DETERMINATIONS THAT THE PROVISION OF CERTAIN INPUTS FOR 
LESS THAN ADEQUATE REMUNERATION WA S SPECIFIC WERE CONSISTENT WITH 
ARTICLE 2 OF THE SCM AGREEMENT 
 
23. Each of Commerce’s determinations that the provision of an input for less than adequate remuneration was specific is fully consistent with  Article 2 of the SCM Agreement. After identifying 
a subsidy in accordance with Article 1.1(a)(1)(iii), Commerce determined, based on evidence on 
the record, that a “limited number of ce rtain enterprises” used the subsidy. 
 
24. China has not disputed the fact that the record of each investigation supported a finding that 
the number of users of each of the inputs in ques tion was limited. Rather, China appears to argue 
that Commerce should have considered these subsidies in light of an overarching formally implemented subsidy program, even though it points  to no facts or arguments on the record that 
would have supported the existence of such a program. Further, China has not provided support WT/DS437/R/Add.1 
 
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  for the argument that Commerce should have disreg arded evidence relating to the existence of the 
subsidy programs it found to exist in each challenged investigation. Accordingly, China has failed to make a prima facie  challenge to Commerce’s specificity determinations. 
 
25. In each specificity determination, Commerce properly determined, based on the records of 
the investigations, that only a limited number of enterprises used the input being provided for less than adequate remuneration, which was the subsidy program being evaluated under Article 2.1(c).   
 
26. There is nothing in the ordinary meaning of the word “program” that requires that a 
program be written or “expressly pronounced” as China contends. China’s position also does not comport with the context of the term in Article 2. 1(c). In particular, Article 2.1(c) is concerned 
with whether a subsidy is in fact  specific not whether it is “explicitly” specific, which is the subject 
of an Article 2.1(a) inquiry. A requirement that all subsidies be implemented through formal means 
would frustrate the operation of the SCM Agreemen t and enable Members to avoid its application 
by providing the subsidy to recipien ts without formal implementation. 
 27. Based on its incorrect interpretation of Article 2.1(c), China argues that information related 
to the “end use” of a particular input cannot be a basis for determining that the number of “users” 
is limited. China appears to argue that where a good is provided for less than adequate remuneration, an investigating authority is barred from examining which enterprises “use” the subsidy, that is, which enterprises are being provided the good in the first place. China’s 
interpretation is illogical and finds no support in the text of the SCM Agreement.   
 28. China’s characterizations of Commerce’s determinations are divorced from the facts of the 
investigations. Commerce did not “merely assert” or “makeup” the existence of the “subsidy 
programs” for purposes of its Article 2.1(c) analysis. Far from being “made up,” Commerce’s determinations that a limited number of recipients used the subsidy programs at issue are 
grounded in the facts of each record. In each investigation, the subsidy programs were first 
identified in the applications, which contained evidence. Then, Commerce investigated the programs, by 1) asking questions relating to those programs of China and other interested parties; 2) identifying the specific programs in each preliminary determination; 3) providing parties the 
opportunity to comment on the preliminary determinations with respect to those programs; and 
4) ultimately issuing a final determination on those programs. The Aluminum Extrusions  example 
demonstrates that Commerce did not “merely assert” the existence of a subsidy program in each 
of the challenged investigations. Instead, Commerce investigated the alleged programs and 
reviewed the administrative record as a whole,  determining in the final determination that a 
subsidy program was used by a limited number of certain enterprises, and was therefore de facto  
specific.   
 29. China’s argument that Commerce was required to analyze subparagraphs (a) and (b) of Article 2.1 before turning to (c) is contradicted by the text and context of that provision in the 
SCM Agreement. Further, the Appellate Body’s consid eration of Article 2.1(c) confirms that there is 
no mandatory order of analysis. For these reasons, there is no merit to China’s claim that the SCM Agreement requires investigating authorities to always conduct a de jure  specificity analysis 
before conducting a de facto  analysis, even where there is no basis for a de jure finding. 
 30. China’s order of analysis argument rests primarily on the subordinate clause in the 
first sentence of Article 2.1(c). China’s proposed interpretation, however, is not supported by the 
ordinary meaning of the text, nor the stru cture of the sentence. The purpose of the 
“notwithstanding” clause is to convey that a finding of non-specificity under (a) or (b) does not prevent  further consideration of a subsidy from under (c), not that such a finding is a mandatory. 
Further, China’s interpretation is in conflict wi th the context of subparagraph (c) provided by the 
chapeau of Article 2.1. The Appellate Body has re peatedly discussed the structure of Article 2.1 
and concluded that Article 2.1 does not mandat e that investigating authorities address each 
subparagraph of Article 2.1. The Appellate Body’s statements regarding the “concurrent 
application” of the “principles” of Article 2.1 corre ctly anticipate that on a case-by-case basis, an 
investigating authority must consider the facts on the record and determine if those facts warrant 
a de jure  analysis pursuant to Article 2.1(a), or if, as was the case in the challenged investigations, 
it is appropriate to proceed directly to a de facto  specificity analysis under Article 2.1(c).  
 31. In addition, contrary to China’s novel inte rpretation of Article 2.1, Commerce was not 
required to identify a “granting authority” as part of its specificity analysis. China’s assertion, in its WT/DS437/R/Add.1 
 
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  responses to questions from the Panel, that it is “impossible” to conduct an analysis of specificity 
under Article 2.1 and that identification of a granting authority is “require[d]” directly contradicts the numerous specificity analyses undertaken by the panels and Appellate Body in US – Large Civil 
Aircraft (2nd complaint) , EC and certain member States – Large Civil Aircraft , and US – Anti-
Dumping and Countervailing Duties (China) , none of which involved the identification of a “granting 
authority.” China’s interpretation is far removed from  the text of Article 2.1, as well as the context 
provided by the rest of the SCM Agreement.   
 
32. The focus of a de facto analysis under the first factor of Article 2.1(c) is on the universe of 
users of the subsidy, not on the “granting authority” – and the relevant jurisdiction of the granting 
authority for purposes of the specificity analysis is the jurisdiction where those users are located. 
For each specificity determination at issue, Commerce determined that the input was provided for 
less than adequate remuneration to a limited number of users within China . China’s arguments 
seem designed to preclude investigating authorities from examining subsidies of the type 
maintained by China, despite the fact that such subsidies are specifically covered by the 
SCM Agreement. For these reasons, this Panel should reject China’s argument.    
33. Contrary to China’s assertions that it reiterates in its response to questions from the Panel, 
an investigating authority is not required to analyze economic diversity or the length of time a subsidy program has been in operation where – as was true with respect to the determinations at issue – there is no reason to believe either of these factors would alter the specificity analysis.  
 
34. The language in the last sentence of the principles set out in Article 2.1(c) requires only that an investigating authority “take into account” the two factors. “Account shall be taken” does not 
mean that an investigating authority must explicitly analyze the two factors in each and every 
investigation. With respect to the determinations at issue, Commerce had no reason to believe that the two factors would be relevant, and China has not pointed to any reason either before 
Commerce during the investigations or before this Panel in this dispute. China is incorrect to argue 
that Article 2 of the SCM Agreement required Commerce in the challenged investigations to analyze economic diversity or the length a time  a subsidy program has been in operation.   
 
VIII. CHINA HAS FAILED TO MAKE A PRIMA FACIE  CASE WITH RESPECT TO THE SEVEN 
CHALLENGED REGIONAL SPEC IFICITY DETERMINATIONS 
 
35. At this late stage in the dispute, China has only just clarified that its Article 2.2 claim is 
limited solely to the seven specific regional spec ificity determinations in CHI-121. However, China 
still fails to make a prima facie  case with respect to any of the alleged breaches. China continues 
to rely on the legal reasoning and factual findings in US – Anti-Dumping and Countervailing Duties 
(China)  even though that panel’s conclusion was made on an “as applied” basis and was “driven by 
the specific facts that were on the record of that  investigation.” China must demonstrate, on an as 
applied basis, that each challenged determinations was inconsistent with WTO obligations. 
 
36. China’s blanket assertion that the provision of land-use rights within an industrial park or economic development zone is “immaterial” to a determination that the provision of land use 
rights is regionally specific is in error. Such a finding is material to the analysis of whether the land 
at issue constitutes a “geographical region,” and the weight of such a finding depends on the case-specific facts that are available on the record. China’s assertions in its response to questions from 
the Panel regarding Commerce’s regional specificity finding in Coated Paper  (referred to by China 
as Print Graphics ) have no merit. Commerce’s analysis in Coated Paper  differed from that applied 
in Laminated Woven Sacks , as well as the other determinations at issue in this investigation. In 
Coated Paper , due to noncooperation by responding parties, Commerce had insufficient facts 
regarding the provision of land use rights to conduct such an analysis. China’s contention that the 
use of facts available in Coated Paper is inconsistent with Article 12.7 is also in error.   
 
IX. COMMERCE’S INITIATIONS WERE CO NSISTENT WITH ARTICLE 11 OF THE 
SCM AGREEMENT 
 
37. Commerce’s initiation determinations with respect to the specificity of the provision of goods 
for less than adequate remuneration were consiste nt with the standard set out in Articles 11.2 
and 11.3 of the SCM Agreement because the applicat ions at issue contained “sufficient” evidence 
to justify initiation, in light of the information reasonably available to the applicant. 
 WT/DS437/R/Add.1 
 
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  38. China’s arguments with respect to these initiation claims must fail for several reasons. First, 
China does not dispute that certain of the applications contain substantial evidence relating to the use of the inputs provided for less than adequate remuneration. The relevant question under the first factor of Article 2.1(c) is whether there are a limited number of users  of the subsidy program, 
and so the question of which enterprises “use” the input is relevant to the inquiry. An examination 
of the provision of a good by the government will  necessarily involve the question of whether only 
a limited number of enterprises are capable of using the good. Second, China argues that an 
application must identify, and contain evidence of a “facially non-specific subsidy program,” the 
“granting authority” and the two factors set out in the last sentence of Article 2.1(c). Not only is China incorrect in asserting these elements are required for an Article 2.1(c) finding, but also there is no basis to conclude that these elements would be necessary to meet the Article 11 standard. 
 
39. Finally, China cites no evidence supporting the general assertion that none of Commerce’s final determinations cited in applications were properly determined (including those outside the 
scope of this dispute), nor does it place the cited final determinations on the record, or discuss 
why applications citing to those determinat ions fail to meet the Article 11 standard. 
 
40. As for the “Public Bodies” claims, there wa s sufficient evidence, within the meaning of 
Article 11.3 of the SCM Agreement, to initiate investigations into whether “public bodies” provided goods for less than adequate remuneration. Article 11 does not require that applicants allege, or 
that investigating authorities recite, a particular legal standard prior to initiation. There is a 
distinction between a finding that an entity is a pu blic body for purposes of a preliminary or final 
determination, and a finding that there is sufficient evidence within the meaning of Article 11 of the SCM Agreement to support initiation of an investigation into whether entities are public bodies. 
 
41. Indeed, the SCM Agreement indicates that interested parties present “arguments” to the investigating authority (Article 12.2) and that the authority’s determinations shall set out “findings 
and conclusions reached on all issues of fact and law considered material by the investigating 
authority” (Article 22.3). Those issues of law may involve the legal standards to be applied, and arguments related to those issues may be considered during the investigation itself.   
42. China’s argument is particularly misplaced, given that evidence of government ownership or 
control is relevant to a public body analysis, even under the legal standard it advances. That is, evidence of government ownership or control can tend to prove or indicate that an entity is a 
public body under (1) a standard that an entity is a public body if it is simply controlled by the 
government, (2) a standard that an entity is a pu blic body if it is controlled by the government 
such that the government can use the entity’s resources as its own, or (3) a standard that an 
entity is a public body if it possesses, exercises, or is vested with governmental authority.   
 43. Further, contrary to China’s argument, the United States is not advancing an ex post  
rationalization to support Commerce’s initiations. In the Appellate Body’s view, a Member is 
“precluded during the panel proceedings from offering a new rationale or explanation ex post  to 
justify the investigating authority’s determination.” The rule does not make sense in the context of an initiation, considering that Article 22.2 of th e SCM Agreement (in contrast to Article 22.3 for 
determinations) does not require any public explanation of reasons which have led to the initiation 
of the investigation.  
X. COMMERCE’S INITIATION OF INVE STIGATIONS INTO CERTAIN EXPORT 
RESTRAINT POLICIES IMPOSED BY CHIN A AND DETERMINATIONS THAT THESE 
EXPORT RESTRAINTS CONSTITUTED COUNTERVAILABLE SUBSIDIES ARE 
CONSISTENT WITH THE SCM AGREEMENT 
 
44. China argues “an export restraint cannot, as a matter of law, constitute government 
entrusted or directed provision of goods.” China does not argue, in the alternative, that the 
evidence in the applications was insufficient for initiation purposes should the Panel find that an 
export restraint scheme could constitute a financial contribution determination in some situations.  
45. At the same time China, in its responses to the Panel’s questions, criticizes the factual basis 
for the initiation of the investigations at issue with regard to export restraints. China has no legitimate basis for this criticism, and has ignored important and relevant evidence on the record in the investigations, as the applications for Seamless Pipe and Magnesia Carbon Bricks contained 
sufficient evidence of the existence of the expo rt restraint schemes themselves, and sufficient WT/DS437/R/Add.1 
 
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  evidence that through these policies the government was entrusting or directing private entities to 
provide the covered goods to downstream producers in China.    46. Article 1.1(a)(1)(i)-(iv) of the SCM Agreement describes various forms of government 
conduct that may be considered a financial contribution. The list is not exhaustive; instead it 
includes “general terms with illustrative examples that provide an indication of the common features that characterize the conduct referred to  more generally.” Rather than preventing any 
particular action  from possibly being a financial contribution, an investigating authority must seek 
to determine whether such government behavior  is a financial contribution under 
Article 1.1(a)(1)(i)-(iv). Particularly with respect to entrustment or direction under (iv), this analysis will necessarily “hinge on the particular facts of the case.” Certainly, there is no basis in 
the text of the SCM Agreement for declaring all measures defined loosely as export restraints to be 
exempt from coverage under the SCM Agreement.    
47. Even the report in US – Export Restraints , upon which China so heavily relies, recognized 
that “an export restraint could result in a private body or bodies ‘provid[ing] goods’.”
  It follows 
that when it is alleged that a government is providing a financial contribution through a private 
body, an authority may investigate whether a “private body is being used as a proxy by the 
government to carry out one of the types of function s listed in paragraphs (i) through (iii).” In this 
instance, that type of function is the provision of goods. It is up to the investigating authority to “identify the instances where seemingly private conduct may be attributable to a government for 
purposes of determining whether there has been a financial contribution within the meaning of the 
SCM Agreement.” Commerce’s investigation into China’s export restraint schemes was consistent with these principles.   
 
48. The US – Export Restraints  panel recognized that it was possible for a private entity to 
provide a good as a result of an export restraint scheme, this Panel’s analysis of the relevance of 
the US – Export Restraints  panel findings to this dispute should focus, in part, on the US – Export 
Restraints  panel’s  interpretation of entrustment or direction. In this regard, the United States 
agrees with China that the Appellate Body has found the US – Export Restraints  panel’s 
interpretation of entrustment or direction is too narrow. And it is that very interpretation of 
entrustment or direction that led the panel to conclude that “an export restraint in the sense that 
the term is used in this dispute cannot satisfy the ‘entrusts or directs’ standard of subparagraph (iv).” This Panel’s analysis should also consider and decide whether there are differences between 
the evidence in US – Export Restraints  and this dispute such that the findings of the US – Export 
Restraints  are not persuasive for purposes of this dispute. The United States considers that the 
US – Export Restraints  findings are not persuasive for purposes of this dispute in light of the 
difference between the evidence and legal posture presented to this Panel and the hypotheticals 
before the panel in US – Export Restraints . 
 49. It is quite possible that if the US – Export Restraints panel had the Appellate Body’s broader 
interpretation in mind, the panel would have concluded that the hypothetical it was examining 
could satisfy the entrusts or directs standard. In any event, given that the findings in US – Export 
Restraints  were based on an overly narrow interpretation of entrustment or direction, the findings 
of the panel are not persuasive for purposes of determining whether the export restraints in this 
dispute satisfy the entrustment or direction standa rd in Article 1.1(a)(1)(iv). Instead, the Panel 
should base its analysis on the broader interpreta tion of entrustment or direction recognized by 
the Appellate Body.   
 XI. COMMERCE’S “FACTS AVAILABLE” DETERMINATIONS ARE BASED ON A FACTUAL 
FOUNDATION 
 
50. China’s only facts available argument – that Commerce’s facts available determinations were allegedly not based on facts – necessarily involves an analysis of the facts and circumstances of 
each determination.  The only way for China to establish a prima facie case would be to 
demonstrate that Commerce acted inconsistently with the SCM Agreement in each of the 48 separate uses of facts available it has challenged. China has failed to do so, and so has failed to 
meet its burden. China bases its 48 facts available claims on sweeping and inaccurate 
generalizations. Exhibit, CHI-125, fails to advance China’s arguments. The exhibit consists of excerpted text, taken out of context, and does not explain how or why China views the excerpts of text as support for the proposition that Commerce did not base its determinations on available 
facts on the record in the investigations.   WT/DS437/R/Add.1 
 
- F-19 - 
 
  51. Due to the lack of cooperation by responding  parties, there was often very little factual 
information on the record, other than that in the application, for Commerce to make a determination. Commerce used this limited factual basis to, consistent with Article 12.7, make inferences to reach its determination. Because necessary information was unavailable, an 
“inference” was needed to connect the fact relied upon to the conclusion in the determination. 
China agrees that “the use of ‘facts available’ by  an investigating authority could be ‘adverse’ to 
the interests of the non-cooperating party.” In light of China’s (or another interested party’s) non-
cooperation, Commerce looked to what information was available on the record to make its 
determination. China tries to refocus the issue now by alleging that Commerce failed to provide a “reasoned and adequate explanation” of its facts available determinations. However, whether Commerce has provided sufficient reasons is a question under Article 22 of the SCM Agreement, 
not Article 12.7. 
 XII. CONCLUSION 
 
52. For the reasons set forth above, along with thos e set forth in the U.S. written filings and oral 
statements, the United States requests that the Panel reject all of China’s claims. 
 
 
_______________ 
 
 
 WT/DS437/R/Add.1 
 
- G-1 - 
 
  ANNEX G 
ORAL STATEMENTS OR EXECUT IVE SUMMARIES THEREOF OF 
THE PARTIES AT THE SECO ND SUBSTANTIVE MEETING 
Contents Page 
Annex G-1 Executive summary of the Opening Statement of the United States at the 
second meeting of the Panel G-2 
Annex G-2 Executive summary of the Opening Statement of China at the second meeting 
of the Panel G-12 
Annex G-3 Closing Statement of the United States at the second meeting of the Panel G-19 
 
 WT/DS437/R/Add.1 
 
- G-2 - 
 
  ANNEX G-1 
EXECUTIVE SUMMARY OF THE OPENING STATEMENT 
OF THE UNITED STATES AT THE SECOND MEETING OF THE PANEL 
Mr. Chairperson, members of the Panel: 
 
1. China has cut corners in its legal analysis, failed to analyze the specific facts of each investigation, and failed to make a prima facie  case with respect to its almost 100 individual 
claims. The Panel should not accept China’s invitation to take short cuts and the Panel cannot 
make China’s case for it. China has also failed to provide a proper interpretive analysis of the relevant provisions of the SCM Agreement. China departs from the accepted rules of treaty interpretation, and in its effort to find any support for its views, attempts to rely on the facts at 
issue in prior disputes and answers advanced by th e United States with respect to other issues in 
other disputes. China invents obligations found nowh ere in the text of the covered agreement with 
the aim of protecting its subsidies from any analysis under the SCM Agreement, as well as to 
prevent application of any resulting remedies. Chin a’s arguments simply do not provide a basis on 
which the Panel could sustain China’s allegations that the United States has acted inconsistently with its WTO obligations. 
 
I. THE TERM “PUBLIC BODY” SHOULD BE  UNDERSTOOD TO MEAN AN ENTITY 
CONTROLLED BY THE GOVERNMENT SUCH THAT THE GOVERNMENT CAN USE THE ENTITY’S RESOURCES AS ITS OWN 
 
2. In its second written submission, China asserts that “the only question that the Panel needs to address in order to decide China’s ‘as applied’ public body claims is whether to apply the 
interpretation of the term ‘public body’ that the Appellate Body established” in US – Anti-Dumping 
and Countervailing Duties (China)  (“DS379”). China offers the Panel a false choice and an 
analytical approach that simply has no basis in the DSU or in the customary rules of interpretation 
of public international law. China would reduce the role of the Panel to a mere rubber stamp.   
 3. We disagree with that approach and believe  that the role of the Panel under the DSU is 
much more important. As we have explained, consistent with Articles 11 and 3.2 of the DSU, the 
Panel should undertake its own interpretative anal ysis in accordance with the customary rules of 
interpretation, because the DSU tasks each panel with making its own “objective assessment of 
the matter before it, including an objective assessment of the facts of the case and the 
applicability of and conformity with the relevant  covered agreements”. The Panel should address 
the arguments that the parties have put before it here, taking into account all relevant panel and 
Appellate Body reports that have addressed the meaning of the term “public body,” and should 
come to its own conclusions about the proper interpretation of that term. 
 4. China argues that the United States has no t provided the Panel any “cogent reasons ... for 
departing from the Appellate Body’s interpretation of the term ‘public body’ in DS379”. Again, this 
is a false choice. The Panel is not limited to choosing between applying and not applying the 
Appellate Body’s interpretation. The Panel has th e option – indeed, under the DSU, it has the 
obligation – to make and apply its own interpretation. Aside from the text of the DSU, one “cogent 
reason” for doing so is that the Appellate Body’s interpretation of the term “public body” is 
incorrect.  Another reason is the significant di sagreement between the parties as to how exactly 
the Appellate Body applied that interpretation in  DS379. China proposes an interpretation that 
would be inconsistent with the Appellate Body’s application of its interpretation in that dispute  
when it reviewed Commerce’s “public body” determinations with respect to state-owned commercial banks in China. The United States suggests a correct interpretation of the term “public body,” and one that would not be inconsistent with the Appellate Body’s findings in DS379.   
 
5. In our view, a proper application of the cu stomary rules of interpretation leads to the 
conclusion that there will be sufficient links to establish that an entity is a “public body” within the 
meaning of Article 1.1(a)(1) of the SCM Agreemen t when a government controls the entity such 
that it can use the entity’s resources as its own.   WT/DS437/R/Add.1 
 
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  6. China raises one additional – though hardly new – argument in its second written 
submission. China argues that the Appellate Body’s interpretation of the term “governments or their agencies” in Article 9.1 of the Agreemen t on Agriculture should govern the Panel’s 
interpretation of the term “a government or any public body within the territory of a Member” in 
Article 1.1(a)(1) of the SCM Agreement because the same term, “organismo público,” is used in 
the Spanish versions of Article 9.1 of the Agreement on Agriculture, Article 1.1(a)(1) of the SCM Agreement, and the Appellate Body report in Canada – Dairy . China urges that the term 
“organismo público” must be interpreted “harmoniou sly”, which is to say that the Panel must apply 
the interpretation adopted by the Appellate Body in Canada – Dairy . 
 7. This is not a new argument. China raised it before both the panel and the Appellate Body in 
DS379. However, neither the Panel nor the Appellate Body relied on Article 9.1 of the Agreement 
on Agriculture as context for the interpretation of Article 1.1(a)(1) of the SCM Agreement. While 
China insisted there, as it does here, that the covered agreements must be interpreted 
“harmoniously,” the Appellate Body explained that “specific terms may not have identical 
meanings in every covered agreement”. That is the correct result here.    
8. The terms of Article 9.1 of the Agreement on Agriculture, in any language, are different from 
the terms of Article 1.1(a)(1) of the SCM Agreement. Furthermore, in Canada – Dairy , the 
Appellate Body was interpreting the specific term “their agencies” or “leurs organismes” or “organismos públicos” in the context of Article 9. 1 and in light of the object and purpose of the 
Agreement on Agriculture. There is no reason that the Appellate Body’s interpretation in Canada – 
Dairy  should dictate the outcome of the interpretation of a different phrase, situated in a different 
context, in a different Agreement that has its own object and purpose. 
 
9. While the United States agrees that the ordinary meaning  of the term “government” is the 
same when it is used in Article 9.1 of the Agr eement on Agriculture and Article 1.1(a)(1) of the 
SCM Agreement – indeed, we would agree that the ordinary meanings of the words “organismo” 
and “público” are the same – that does not answer  the interpretative question. The terms must be 
interpreted in their context and in light of the ob ject and purpose of the agreement in which they 
appear. China appears to confuse the ordinary meaning of a term with its interpretation  according 
to the customary rules of interpretation. China also ignores the concern we raised later in our 
response to the same question from the Panel that  the Appellate Body’s interpretation of the term 
“government” in Canada – Dairy  appears incomplete or too narrow, because the Appellate Body 
neglected numerous types of government functions beyond the regulation, control, supervision or 
restraint of individuals.    
II. THE DISCUSSION IN KITCHEN SHELVING IS NOT A MEASURE AND CHINA’S “AS 
SUCH” CHALLENGE FAILS 
 10. China’s efforts to cast the descriptive sections of the Kitchen Shelving final determination as 
a measure that breaches WTO obligations “as such” have fallen short of the requirements in the 
DSU and findings articulated in past WTO reports. China argues that a measure, minimally, may be an “act or omission” and that various types of government action can be considered a measure. 
However, China conveniently ignores that these types of action still must have “independent 
operational status in the sense of doing something or requiring some particular action”. The Kitchen Shelving discussion does not do something or require some particular action. Instead, it is 
an explanation of Commerce’s historic approach and current actions.   
 11. China has not connected the explanatory language in the Kitchen Shelving memorandum with any action by the United States. Instead, it has found a general description of Commerce’s 
consideration of an issue or policy, and then found other citations to that description that are 
similar – but not the causation between the Kitchen Shelving memorandum and any other action by the United States that would indicate that it is an “act” or “doing something”. Therefore, China 
has failed to show that the discussion is, in fact, a measure, in the sense of a legally relevant act 
or omission by a Member.   
12. Even more starkly, China’s efforts to turn the language of the discussion into a rule of 
general and prospective application to support its “as such” challenge fail upon a cursory examination of the text of the document. China claims that the Kitchen Shelving memorandum creates an “irrebuttable presumption” that “all government-controlled entities are public bodies”. 
This characterization flatly ignores the context and the plain language of the document. Whether WT/DS437/R/Add.1 
 
- G-4 - 
 
  or not “all” government-controlled entities are public bodies under the SCM Agreement simply is 
outside the purview of the brief explanation. Commerce made no such statement in Kitchen Shelving.  
13. The Kitchen Shelving discussion is simply Commerce’s explanation of how it approached a 
public body analysis in response to interest ed party arguments during the Kitchen Shelving 
investigation. In other words, it is Commerce’s satisfaction of its obligation under Article 22.5 of 
the SCM Agreement. The fact that Commerce may have repeated the approach in Kitchen Shelving 
in subsequent determinations does not transfor m the approach into a measure. As the panel 
stated in US – Steel Plate , “[t]hat a particular response to a particular set of circumstances has 
been repeated, and may be predicted to be repeated in the future, does not, in our view transform 
it into a measure”. 
 14. As the United States has noted previously, in fact, in the Kitchen Shelving discussion 
Commerce stated that it would examine evidence and arguments that “majority ownership does 
not result in control of the firm” and would consider “all relevant information”. Thus, even aside from the fact that the discussion is not a measure (an act or omission with independent 
operational status), the discussion does not require Commerce to do anything or not to consider 
any necessary information. The discussion does not therefore necessarily result in any outcome on the issue of “public body”, and for that reason cannot breach any WTO obligation “as such”.  
III. THE PRELIMINARY DETERMINATIONS IN  WIND TOWERS AND STEEL SINKS ARE 
OUTSIDE THE PANEL’S TERMS OF REFERENCE 
 
15. In its second written submission, China does nothing to further its argument that adding the 
preliminary determinations in Wind Towers and Steel Sinks  together with new legal claims in its 
panel request does not “expand the scope of the dispute”
 because it made similar claims with 
respect to different investigations in its consulta tions request. China’s arguments were and are not 
consistent with the plain language of Articles 4 and 6.2 of the DSU. To the contrary, China’s 
responses only highlight the fact that the legal claims are not a natural evolution from the claims associated with the measures consulted upon – the initiation of the investigations – but are 
distinct, and it is only due to the fact that China challenged separate, different measures using the 
same claims that there is any alleged similarity in the scope of the dispute.  
16. The fact that China brought claims against multiple measures does not relieve China of its 
obligations under Article 6.2 of the DSU to identify “the specific measures at issue” and  “provide a 
brief summary of the legal basis of the complaint sufficient to present the problem clearly” in its 
panel request. Instead, the fact that China is challenging multiple measures only increases the 
need for clarity of its claims. China’s arguments do not address the threshold fact that these preliminary determinations did not exist at the time China requested consultations, and so that they could not have been the subject of cons ultations. There are important reasons for why 
measures should be the subject of consultati ons. Where the responding Member engages in 
consultations, the complaining Member may request the establishment of a panel on the disputed matter only “[i]f the consultations fail to settle the dispute”. This request for panel establishment, 
in turn, establishes the terms of reference under Article 7.1 of the DSU for the panel proceeding. 
The process helps resolve disputes earlier in the context of consultations, and thereby potentially 
reduces the number of panel proceedings. 
 
17. In sum, China has failed to cure the initial procedural failings contained in the consultations and panel requests regarding these preliminary determinations.   
IV. COMMERCE’S USE OF OUT-OF-COUNTRY BENCHMARKS TO MEASURE THE BENEFIT 
WHEN INPUTS WERE PROVIDED FOR LESS THAN ADEQUATE REMUNERATION WAS NOT INCONSISTENT WITH  THE SCM AGREEMENT 
 
18. China continues to argue that the same legal standard for determining whether an entity is a public body for purposes of the financial contribu tion analysis under Article 1.1(a)(1) must also 
apply when determining whether an entity is reflective of government involvement in a particular 
input market for purposes of the distortion anal ysis under Article 14(d). Further, China continues 
to argue that the interpretation of public body  set out in the Appellate Body report in DS379  
applies in both analyses. WT/DS437/R/Add.1 
 
- G-5 - 
 
  19. The parties agree that, in order for China to succeed in its argument, the Panel must (1) 
adopt China’s interpretation of public body, and (2 ) find that it necessarily extends to the benefit 
analysis. The United States has addressed the errors in China’s approach to the first element in Section I of this statement. Here, we focus on the second element.  
 
20. As the United States previously explaine d, China’s argument conflates two separate 
analyses: a financial contribution analysis under Article 1.1(a)(1) on the one hand, and a benefit 
analysis under Article 14(d) on the other hand. Ch ina focuses on the use of the term “government” 
in Article 1.1(a)(1), but the use of this term in Article 14(d) expressly refers to the financial contribution analysis. Instead, the question before the Panel is whether it is inconsistent with Articles 14(d) and 1.1(b) of the SCM Agreement for Commerce to focus on the Government of 
China’s ownership and control of producers in the relevant input market to examine whether 
inputs were provided for adequate remuneration.   
21. China errs in arguing that the interpretati on of “public body” under Article 1 necessarily 
applies to the analysis of benefit under Article 14(d). In fact, the Appellate Body’s report in DS379  
demonstrates that the Appellate Body did not make the extension for which China advocates. 
Instead, the Appellate Body report reflects that  the examination of public bodies and market 
distortion are two distinct analyses. China’s arguments are neither rooted in the Appellate Body’s findings in that case, or the text of the SCM Agreement. So, to be clear, China is asking the Panel to make a new pronouncement on the use of out-of-country benchmarks. 
 
22. It is important to recall the Appellate Body’s finding in US — Softwood Lumber IV  rejecting a 
challenge to the use out-of-country benchmarks under Article 14(d) of the SCM Agreement. In 
making this finding, the Appellate Body was focuse d on the ability of the government to influence 
prices in the marketplace, not any other function of governmental authority at issue in this dispute, such as the power to “regulate, control,  supervise or restrain” the conduct of others. The 
Appellate Body’s analysis in DS379 also did not focus on other governmental factors. 
 23. The United States has demonstrated that Commerce applied an appropriate test for examining market distortion in the benefit context. While China erroneously contends that the 
United States’ position “makes no sense,” the United States has demonstrated that when focusing 
on the adequacy of remuneration to determine the benefit conferred by the provision of a good, it 
is logical that Commerce would consider the ability of the government to influence prices for that 
good in the market through its ownership or control of other entities, among other ways.   
 24. A simple example illustrates why China’s reasoning fails. Let us assume (1) that the 
“governmental authority test” articulated in DS379 fo r public bodies is controlling, and (2) that for 
a given product in a Member, five wholly government-owned entities produce input goods, one with a market share of two per cent, and the four others hold the remaining market share of 98%. Further, assume that Commerce determined that th e entity with two per cent of the market was a 
public body under China’s test, but the others, while wholly-government owned, did not meet the 
“governmental authority test”. The potential for government to influence prices in this market is evident. However, under China’s argument, under this scenario, in spite of the government’s 
100 per cent ownership or control of production in the relevant input market, it would not be 
possible for Commerce to use an out-of-country benchmark.   
25. With respect to the China’s argument that Commerce relied exclusively on SOE market 
share in each of the challenged investigations to determine distortion, we have demonstrated that this is not correct. Commerce used a variety of other factors to consider whether the relevant 
markets could be distorted. 
 
V. COMMERCE’S SPECIFICITY DETERMINATIO NS ARE CONSISTENT  WITH ARTICLE 2 
OF THE SCM AGREEMENT 
 
26. China’s claims with respect to specificity are based on obligations that are nowhere to be found in the text of Article 2 of the SCM Agreemen t. China argues that Commerce must identify a 
“facially non-specific subsidy program”, that Article 2.1 contains a mandatory “order of analysis”, 
and that an investigating authority must explicitly identify a “granting authority”, even though the text of the SCM Agreement contains no such requirements and prior panels and the Appellate Body have found no such obligations in their numerous considerations of Article 2.1.   WT/DS437/R/Add.1 
 
- G-6 - 
 
  27. China appears to advance an alternative argument in its second written submission – that 
Commerce failed to provide a “reasoned and adequate  explanation” of its specificity analysis. To 
the extent that China is alleging that Commerce has insufficiently explained the basis for its specificity determinations, such a claim is dealt with under the procedural obligations under 
Article 22 which was not addressed in China’s Panel Request, and is not before the Panel. 
However, Commerce’s explanations of its specificity determinations were more than sufficient.  
A. The First Sentence of Article 2.1(c) Does Not Prescribe an Order of Analysis 
 28. As the United States has previously explaine d, the clause “notwithstanding any appearance 
of non-specificity resulting from the application of the principles laid down in subparagraphs (a) 
and (b)” does not require  a determination under subparagraphs (a) and (b) of non-specificity. 
Rather, it explains that such an appearance does  not prevent the application of subparagraph (c), 
and a resulting finding of de facto specificity. China argues that this understanding of the clause 
renders it inutile. However, that is not the case. The clause serves to explain that a subsidy that 
appears to be non-specific as a result of an examination of relevant legislation may nevertheless be specific in application, and an investigating authority should examine the factors under 
Article 2.1(c) as appropriate, that is, where there are reasons to believe that the subsidy may in 
fact be specific. This is an important concept that would be lost if the clause were excluded. For that reason, the clause is utile – it does not need to impose a prerequisite to an Article 2.1(c) analysis in order to have meaning. 
 
29. Despite China’s repeated attempts to transform this explanatory clause into a mandatory precondition, it is clear from the French and Spanish texts that it is not. Although China is 
generally correct regarding the translation of the terms in the French and Spanish versions, it 
misconstrues their meaning. The use of “ aun cuando ”, which may be translated to “even when” 
and “ nonobstant ”, which may be translated to “notwithstanding”, confirms that an appearance of 
non-specificity resulting from the application of subparagraphs (a) and (b) does not prevent the 
application of subparagraph (c).   
 30. These terms serve the same purpose as in the English. They clarify that Article 2.1(c) 
provides an alternative means of determining specificity even when  there is an appearance of non-
specificity. China’s interpretation would require them to be exclusive – China would attribute the meaning of “only when” to “notwithstanding” or “e ven when”. Further, the use of the word “any” 
to modify “appearance” supports the conclusion that an “appearance of non-specificity” is not a 
mandatory prerequisite, and may or may not be identified prior to undertaking an analysis under subparagraph (c). If an appearance of non-specific ity were identified in each instance, the article 
“the” would be used instead.   
 31. As the United States has explained, multiple  statements by the Appellate Body regarding the 
application of the principles laid out in Article 2.1 support a finding that there is no mandatory 
order of analysis to Article 2.1. In particular , the Appellate Body stated in paragraph 371 of US – 
Anti-Dumping and Countervailing Duties (China)  that it “recognize[d] that there may be instances 
in which the evidence under consideration unequivocally indicates specificity or non-specificity by 
reason of law, or by reason of fact, under one of the subparagraphs, and that in such 
circumstances further consideration under the other subparagraphs of Article 2.1 may be unnecessary”. The Appellate Body also “caution[ed]  against examining specificity on the basis of 
the application of a particular subparagraph of Article 2.1, when the potential for application of 
other subparagraphs is warranted in the light of the nature and content of measures challenged in a particular case ”. These statements show that these subparagraphs are not necessarily to be 
applied sequentially and to every specificity determination.   
 
32. China mistakenly relies on a statement the Appellate Body makes in the same paragraph which merely illustrates the point that it is not necessary to analyze each subparagraph of 
Article 2.1 as part of a specificity analysis. China’s argument cannot be reconciled with the 
Appellate Body’s analysis that where the evidence unequivocally indicates specificity in fact, then there is no need to look at subparagraphs (a) and (b).   
 
33. China argues that an Article 2.1(a) analysis can be undertaken even where there are no known written instruments regarding the administration of the subsidy, because Article 2.1(a) addresses “express acts” or “pronouncements” of the granting authority. However, it is not clear in 
what circumstances a granting authority would “explicitly limit[] access to a subsidy”, through for WT/DS437/R/Add.1 
 
- G-7 - 
 
  example, acts, without a written record of the lim itation. Further, a pronouncement may only be 
examined by an investigating authority to the extent that there is some record of it. In any event, China has not alleged that any such unrecorded, explicit limitation existed in the investigations, or pointed to a source of such limitation Comme rce should have analyzed. Where there is no 
evidence of an explicit limitation on access to a subsidy, there is no basis for analyzing the subsidy 
under subparagraphs (a) and (b). The implications of China’s argument is that, if a Member is able to avoid “explicit” limitations on access to a subsidy, an investigating authority is unable to 
examine the specificity of the subsidy under either subparagraph (a) or (c). 
 34. Even if China were correct that an investigating authority must identify an “appearance of non-specificity” prior to undertaking an analysis under Article 2.1(c), Commerce would have 
satisfied that condition in the investigations at issue. In the 14 investigations, there was no 
legislation or any other source of an “explicit” limit to access to the subsidy. The Appellate Body has explained that an explicit limitation under Ar ticle 2.1(a) “is express, unambiguous, or clear 
from the content of the relevant instruments, and not merely ‘implied’ or ‘suggested’.” There were 
no known relevant instruments (such as legislation, regulations, guidance, etc.), or pronouncements that would provide such express or unambiguous limitations. For that reason, the 
evidence before DOC unequivocally indicated that the subsidies were not de jure specific under 
subparagraph (a), and any consideration under that subparagraph was unnecessary.    35. Accordingly, under the first sentence of Arti cle 2.1(c), the lack of any legislation or other 
source of an explicit limitation on the subsidy amounts to an “appearance of non-specificity”.   
 B. Commerce Identified the Relevant “Sub sidy Program” in Each Investigation 
 
36. With respect to Commerce’s identification of the relevant “subsidy program” in the investigations at issue, the United States has explained in detail with respect to one example, the 
Aluminum Extrusions investigation, that Commerce clearly identified the subsidy program at issue 
in each case, a determination that was supported by facts on the record. China has not disputed the fact that, in each investigation, the applications contained information tending to show that a certain good was provided for less than adequate remuneration. On that basis, Commerce initiated 
the investigations and analyzed the programs at issue – the provision of each good for less than 
adequate remuneration in China. Not only were the programs at issue identified in the applications 
and questions to each interested party, but they were also identified in the preliminary and final 
determinations. As a result, China’s assertion that Commerce did not identify the relevant subsidy 
programs is contradicted by the findings on each record.    
C. Commerce Was Not Required to Identify the “Granting Authority” or Explicitly 
Analyze the Two Factors in the La st Sentence of Article 2.1(c) 
 37. With respect to China’s arguments concerning the “granting authority,” for the reasons 
stated in our prior submissions, Commerce was no t required to identify a “granting authority”. 
China’s speculation as to what is and is not the “granting authority” reveals that this inquiry is tangential to the question that Article 2.1 is concerned with – whether the subsidy at issue is 
specific to certain enterprises. For the reasons the United States has explained, the identification 
of the granting authority is not required in a specificity analysis, and in the investigations at issue, the relevant jurisdiction was identified as all of China. As the relevant jurisdiction was not limited 
t o  s o m e  p a r t  o f  t h e  M e m b e r ,  a n y  de facto  analysis would not be influenced by geographic 
limitations. Finally, for the reasons already ex plained by the United States, Commerce was not 
required to explicitly analyze the two factors in the last sentence of Article 2.1(c).  
VI. THE “LEGAL STANDARD” EMPLOYED BY COMMERCE IS NOT DETERMINATIVE OF 
WHETHER INITIATION DECISIONS WITH RESPECT TO SPECIF ICTY AND PUBLIC 
BODY WERE CONSISTENT WITH ARTICLE 11.3 OF THE SCM AGREEMENT 
 
38. China has failed to demonstrate that Commerce’s initiation decisions with respect to specificity and public body are inconsistent with Article 11.3 of the SCM Agreement. China 
attempts to recast the inquiry in Article 11 from the question of the sufficiency of evidence to a 
question of the “legal standard” employed. China’s arguments have no basis in the text of Article 11.3 or the facts of the investigations at issue. A determination to initiate a countervailing duty investigation is fundamentally an evaluati on of the sufficiency of the evidence in an 
application and supporting documents.  WT/DS437/R/Add.1 
 
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  39. China argues that an investigating authority is required to judge the sufficiency of evidence 
in relation to a correct “legal standard”, and that because Commerce employed an incorrect “legal standard”, according to China, its initiation determinations are “necessarily” inconsistent with Article 11.3. The logic of China’s argument is flawed for several reasons.  
 
40. First, as a threshold matter, Commerce’s ulti mate determinations with respect to public 
body and specificity were consistent with Articles 1.1(a)(1) and 2, respectively, for the reasons the 
United States has explained extensively in its submissions. Second, China’s use of the term “legal 
standard” is emblematic of its attempt to transform this dispute from one concerning a large number of “as applied” claims to one concerning a few “as such” claims. China has not demonstrated the existence of any “legal standards” applied across investigations. In any event, 
the question for the Panel remains whether the individual determinations made by Commerce were 
consistent with the relevant provisions of the SCM Agreement.  
41. Third, even if the Panel were to conclude that Commerce’s final determinations are 
inconsistent with the SCM Agreement, that conclusi on would not be determinative of the initiation 
decisions, made at the very outset of the requested investigation. The relevant question at the 
initiation stage is not whether the information in each application fully satisfies the requirements in 
the relevant substantive provisions of the SCM Agreement, but rather whether it is “sufficient to 
justify the initiation of an investigation”. By asserting that an investigating authority must apply a particular legal standard, China appears to seek to convert the initiation decision into another 
preliminary determination – in other words, to require a determination whether the petitioner has 
supplied sufficient evidence that, if unrebutted, would suffice to reach an affirmative determination in relation to the legal issue in question. But that is not the question to be answered. The 
investigating authority is seeking to ascertain if there is sufficient evidence of subsidization and 
injury to undertake the investigation. The evaluation of an alleged subsidy may evolve during an investigation and will depend upon the nature of the subsidy.   
 
42. Fourth, the evidence in the applications was sufficient to justify initiation even if the Panel adopts the interpretations of Articles 1.1(a)1 and 2 by China.    
43. With respect to public body regardless of th e final standard of evidence necessary to prove 
that a certain entity is a public body, evidence of government ownership or control is relevant and sufficient evidence to initiate an investigation into whether an entity is a public body. This is true 
even under China’s proposed interpretation of the term “public body” as an entity vested with or 
exercising governmental authority. Further, it is frequently the only evidence reasonably available to an applicant and an investigating authority. To require more evidence than is reasonably 
available would be contrary to the plain language of the text. 
 44. Further, with respect to public body, we no te that China has not shown, or even attempted 
to show, that the evidence in the four cases challenged was insufficient to justify initiations of 
investigations into whether there were public bodies. We detailed at length in our first written 
submission the evidence that tended to prove, or indicated, either that (1) entities were controlled 
by the government such that the government could use their resources as its own; or (2) entities 
possessed, exercised or were vested with governme ntal authority. China’s only argument is its 
untenable position that Commerce’s initiations “necessarily” breached the SCM Agreement.  
45. With respect to specificity, China argues that  the applications failed to present evidence of 
any “subsidy programme, much less evidence of a facially non-specific subsidy programme that, in practice was used by a limited number of certain enterprises”. However, the United States has explained, and China does not refute, that each  application did contain evidence regarding a 
program – the provision of a certain input for less than adequate remuneration, and that only a 
limited number of certain enterprises used those inputs. That information is sufficient for purposes of initiation. Even if China were correct that a su bsidy under the first factor of Article 2.1(c) must 
be administered pursuant to a “facially neutral subsidy program”, it has not explained why such a 
program is necessary to meet the standard under Article 11.3, particularly where no written law or other instrument describing such a program is available to the applicants.  
 
46. Finally, China’s reliance on the panel’s reasoning in Argentina – Poultry Anti-Dumping Duties  
is misplaced. In that dispute, Argentina’s investigating authority based its initiation determination under Article 5.3 of the AD Agreement upon a weig hted average export price that “was not based 
on the totality of appropriate export transactions” and “totally exclude[d]” certain export prices”.  WT/DS437/R/Add.1 
 
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  The panel determined that it was inappropriate for Argentina’s investigating authority to disregard 
certain transactions when determining whether to initiate. Argentina was found to have unjustifiably ignored  information on the record. That is not the case here; Commerce did not 
employ a methodology that disregarded relevant information. The information in the applications 
at issue was relevant to and indicated that the en tities at issue were public bodies, and that the 
subsidies were specific.    
VII. COMMERCE’S INITIATION OF INVESTIG ATIONS OF CERTAIN EXPORT RESTRAINT 
POLICIES BY CHINA ARE NOT INCONSISTENT WITH THE SCM AGREEMENT 
 47. In its second written submission, China inaccurately frames the question before the Panel as 
whether an export restraint can constitute government entrusted or directed provision of goods.
  
The real question before the Panel is whether it was permissible for Commerce to initiate investigations examining whether China’s export restraint schemes constitute a countervailable 
subsidy under the SCM Agreement. China failed to provide any evidence or argumentation to 
prove that such an initiation was improper, but instead asks the Panel to rely wholly on the analysis in US – Export Restraints  to conclude that any investigation under any circumstance 
would be impermissible. For the reasons the United States presented in its submissions and at the 
first panel meeting, China’s argument must be rejected.    48. The United States has demonstrated that its initiations of investigations regarding China’s 
export restraint schemes were supported by sufficien t evidence of the existence of a subsidy. Also, 
the United States has shown that the structure and language of Article 1.1(a)(1)(i)-(iv), as supported by the more expansive view reports have taken with regards to the terms entrustment 
and direction since US – Export Restraints , demonstrates that it is permissible for an investigating 
authority to consider whether export restraints can constitute a countervailable subsidy. It is unnecessary to spend more of the Panel’s time repeating our arguments, though we welcome 
further discussion during this meeting.   
 49. China presents the puzzling argument that “t he United States did not bother telling the 
Panel what this purported ‘contextual evidence’ was, or where it might be found in the record”. 
This is incorrect. The U.S. first written submissi on presented the evidence supporting the petitions 
in Seamless Pipe  and Magnesia Carbon Bricks . The U.S. second written submission also lays out 
evidence that the applications in Seamless Pipe  and Magnesia Carbon Bricks  contained sufficient 
evidence to sustain an investigation into whether the Chinese government was entrusting or 
directing private entities to provide goods to downstream producers in China.
   
 
50. However, this argument was and remains irrelevant, since China does not argue in the 
alternative that, as an evidentiary matter, the evidence in the applications was insufficient for initiation purposes.    
VIII. COMMERCE’S USES OF FACTS AVAILABL E ARE CONSISTENT WI TH ARTICLE 12.7 OF 
THE SCM AGREEMENT 
 
51. China’s “facts available” claim is based on mischaracterizations of Commerce’s 
determinations and contradicts the records of the investigations. In particular, China has selectively excerpted text from the relevant issues and decision memoranda and ignored the 
complete facts on the record that support Commerce’s facts available determinations in the 
challenged investigations.    52. China’s Exhibit CHI-125, the only place in Chin a’s submissions where it presents the facts of 
the investigations at issue, consists only of selected excerpts of the facts available discussion, 
taken out of context, from the issues and decision memoranda or Federal Register  notices. In 
Exhibit USA-94, the United States has provided the full discussion of the “facts available” 
determinations, as well as corresponding inform ation relied upon as “facts available”.   
 53. In its second written submission, China argues that the examples the United States has 
discussed in prior submissions from Magnesia Carbon Bricks , OCTG , Line Pipe , and Coated  Paper  
are not based on “facts available” because Commerce did not refer to “facts available”. The full passages of the facts available discussions at Exhibit USA-94 contradict this assertion:  WT/DS437/R/Add.1 
 
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   At page 43 of Exhibit USA-94 the Magnesia Carbon Bricks issues and decision memorandum 
explains that “[i]n [Commerce’s] initiation analysis for the export restraints at issue, the Department found that the Petitioner had properly alleged the three elements necessary for the imposition of CVD duties ... and that these elements were supported 
by information reasonably available to the Petitioner with regard to export restraints at 
issue ...”. On this basis, Commerce asked questions of China and, in the face of noncooperation, Commerce “drew an adverse inference when choosing among the 
incomplete information on the record” consisting, as explained by Commerce, of 
information from the application, “and determined that the export restraints are specific and provide a financial contribution”.  
 
 At pages 32-33 of Exhibit USA-94, the OCTG  issues and decision memorandum  explains that 
China failed to provide requested information and then discussed Commerce’s practice of “selecting information” and its reliance on “secondary information”, defined as 
“information derived from the petition that gave rise to the investigation or review, the 
final determination concerning the subject merchandise, or any previous review ...”. 
These statements, in the context of the investigation, make clear that the information 
relied upon was from the application.  
 
 At pages 6-11 of Exhibit USA-94, the passages from the Line Pipe  issues and decision 
memorandum explains the facts available determination with respect to input specificity. 
In particular, at pages 7-8, Commerce explains that China failed to provide necessary 
information and that Commerce uses “as adverse facts available (AFA) information derived from the petition, the final determination, a previous administrative review, or 
other information placed on the record”. These statements, made in the context of the 
investigation, make clear that the only relevant information on the record was information available in the application.  
 
 At pages 54-57 of Exhibit USA-94, the passages from the Print Graphics  issues and decision 
memorandum explain the facts available determ ination with respect to input specificity. 
Again, Commerce explains that China had not cooperated in the investigation by failing to 
provide necessary information. As a result, Commerce resorted to facts available and 
concluded that “record information supplied by  Petitioners, supported their allegations 
with respect to the specificity of papermak ing chemicals by citing various webpages. 
Regarding caustic soda, Petitioners’ information shows that its main uses are for pulp and 
paper, alumina, soap and detergents, petroleum products and chemical production. The information goes on to say that one of the largest consumers of caustic soda is the pulp 
and paper industry where it is used in pu lping and bleaching processes”. Inexplicably, 
China continues to cite, at paragraph 190 of its second written submission, and previously in its first oral statement, language from Print Graphics related to a facts available 
determination which is not at issue in this dispute.  
 
54. It is clear from these examples that, in most  of the instances at issue in this dispute, the 
information relied on for the facts available determination may be found in the application. The 
information in the application is the basis for the initiation of the investigation and the questions 
asked by Commerce of interested parties regarding the investigated subsidies. The noncooperation of the parties means that information in the application was often the only information available to 
Commerce. As a result, in the context of an investigation where parties are refusing to cooperate, 
the parties are able to understand from the memoranda and preliminary determinations the content of “the factual basis that led to the imposi tion of the final measures” even if the specific 
facts were not recited in Commerce’s determinations. It is disingenuous for China to argue 
otherwise and accuse the United States of employing an ex post  rationalization.   
 55. In a handful of instances, the source of  facts available was something other than the 
application, but Commerce’s issues and decision memoranda, as well as the context of the facts 
available determinations, make clear what the source of the facts available was in those instances. In these types of instances as well, Commerce’s determinations were sufficient for interested 
parties, and the Panel, to understand how and why Commerce made its facts available 
determinations.  56. As these examples illustrate, Exhibit USA- 94 demonstrates that Commerce’s facts available 
determinations were based on “facts” and provides  references to those facts, which are available WT/DS437/R/Add.1 
 
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  as additional exhibits. Commerce’s use of an “adverse” inference in selecting from among the facts 
otherwise available is, by its terms based on facts available applied in a manner consistent with Article 12.7 of the SCM Agreement, as understoo d in the context provided by Annex II of the 
AD Agreement. The “adverse” inference applied by Commerce merely enables Commerce to make 
determinations based only on the limited facts that are available in the face of noncooperation, 
which may lead to a result that is less favorable to the non-cooperating party.    
57. While an Article 22 claim is not within the terms of reference of the Panel, Exhibit USA-94 
demonstrates that Commerce’s explanations are more than sufficient to meet the procedural obligations under Article 22. Commerce’s determinations indicate how and why Commerce made its facts available determinations. An investigating authority is not required “to cite or discuss 
every  piece of supporting record evidence for each fact in the final determination”. Indeed, the 
Appellate Body has found that it is inappropriate for a panel to disregard information on the record of the investigation, but not cited in a final determination. To the extent that China alleges that 
Commerce has insufficiently explained the basis for its uses of facts available, and even though 
Commerce’s explanation was more than sufficient, the sufficiency of such explanations are dealt with under Article 22 of the SCM Agreement, not Article12.7.  
 
58. China has failed to demonstrate that any instances of resort to facts available by Commerce were not based on facts, much less that there is a “pattern” of applications of facts available deficient of factual foundation. China’s refusal to point to any verifiable record evidence which 
should have been relied on is telling because there was no information on the record except  
information that tends to show the existence of some aspect of a subsidy.    
59. For these reasons, China’s claim with respect to facts available must fail.  
 IX. CONCLUSION 
 
60. As we have demonstrated in our previous submissions and statements, and again this morning, China has failed to make its case in this dispute, both as a matter of evidence and as a matter of law. Accordingly, the United States re spectfully requests the Panel to reject China’s 
claims.   
 WT/DS437/R/Add.1 
 
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  ANNEX G-2 
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF  
CHINA AT THE SECOND MEETING OF THE PANEL  
Introduction 
 
1. The principal issues in this dispute involve questions regarding the proper legal interpretation of several of the most fundamenta l provisions of the SCM Agreement. Through their 
submissions to date, the parties have provided the Panel with their respective – and sharply 
divergent – views on the proper understanding of  those provisions. The resolution of China's 
claims will require the Panel to choose between these competing interpretations.    
2. China has demonstrated that the interpretations it has advanced are fully consistent with 
well-established principles of treaty interpretation and the legal interpretations established in prior adopted panel and Appellate Body reports. It has also demonstrated that the interpretations the 
United States has presented to the Panel cannot be reconciled with either the plain language of the 
relevant SCM Agreement provisions at issue, or the legal interpretations regarding those provisions embodied in prior adopted panel and Appellate Body reports.  
 
Public Body – As Applied Claims  3. Through the excerpts from Commerce's Issues and Decision Memoranda identified in CHI-1 
and CHI-123, China has demonstrated that in each investigation at issue, Commerce applied the 
same majority ownership, control-based standard for determining whether an entity is a public body that the Appellate Body rejected in DS379. The United States does not dispute this. Nor does 
the United States dispute that the purportedly "m ore refined interpretation" of the term public 
body that it has invented for this proceeding was not  applied by Commerce in any of the 
14 investigations at issue.  
 
4. Accordingly, the only question  that the Panel needs to address in order to decide China's "as 
applied" public body claims is whether to apply the interpretation of the term "public body" that 
the Appellate Body established in DS379.  Contrary to the U.S. argument in its second submission, 
China is not asking the Panel to modify or devi ate from the legal standard established by the 
Appellate Body.
  China is asking the Panel to apply that standard precisely as it was articulated by 
the Appellate Body in DS379, pursuant to which a "public body" is an entity that is "vested with, 
and exercising, authority to perform governmental functions".  If the Panel agrees with China that 
the Appellate Body's interpretation in DS379 must be applied here, and that the United States has 
not presented any legitimate justification for departing from that interpretation, then all of 
Commerce's public body findings re ferenced in CHI-1 and CHI-123 mu st be found inconsistent with 
Article 1.1(a)(1).  Public Body – "As Such" Claim 
 
5. With respect to China's "as such" public body  challenge, the central issue in dispute remains 
largely unchanged from the last time the parties were before the Panel, namely, whether the 
policy articulated in Kitchen Shelving reflects a measure of general and prospective application 
that is the proper subject of an "as such" challenge. In its second submission, the United States argues that it does not because Kitchen Shelving is "descriptive rather than proscriptive" and 
constitutes mere "explanation of [Commerce's]  reasoning in the context of a trade remedy 
investigation".  6. China notes that the United States' position – that Kitchen Shelving merely reflects 
Commerce's reasoning in the context of that investigation – is directly contradicted by the text of 
the measure itself. Having outlined its "policy" of "normally" treating majority government-owned entities as "public bodies", Commerce articulates the following reasoning to conclude that the 
producers of wire rod in Kitchen Shelving were "public bodies":  "In this investigation, the GOC 
holds a majority ownership position in certain of the wire rod producers that supply [the WT/DS437/R/Add.1 
 
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  respondent]. Consistent with the policy explained above, we are treating these producers as 
'authorities'".  
 7. This is the entire "explanation of the reas oning" articulated by Commerce in the context of 
the facts in Kitchen Shelving . All of the discussion that precedes it has no relationship to the 
particular facts in that investigation. It simply is not credible to suggest that Commerce was doing anything other than applying the rule or norm of general application that it had just articulated as 
the "policy" to address the "recurring issue" of how to analyse whether particular entities were 
public bodies. True to form, subsequent cases contain similarly curt reasoning, and refer back to the policy articulated in Kitchen Shelving  as the only ratio decidendi  for the relevant "public body" 
findings. 
 
8. The United States fares no better in suggestin g that some legal signific ance should flow from 
the fact that the policy in Kitchen Shelving  was articulated in the body of a final determination, 
rather than in a stand-alone document like Commerce's "Sunset Policy Bulletin". The Appellate 
Body has made clear that the determination of whether a measure may be challenged "as such" must be based on the "content and substance of the alleged measure, and not merely on its form". 
Following this line of reasoning, the Appellate Body has found measures expressed in a variety of 
forms, including unwritten measures and administrative methods as reflected in Commerce's final 
determinations to be "as such" inconsistent with the relevant provisions of the covered 
agreements. The United States' overly formalistic approach in this dispute has no merit.  
 
9. If the Panel agrees with China that the policy articulated in Kitchen Shelving  is susceptible to 
an "as such" challenge, it remains unrebutted that this policy necessarily leads Commerce to act 
inconsistently with Article 1.1(a)(1) in each instance.   
 Benefit 
 
10. China's benefit related claims are premised upon the simple proposition that the legal standard for defining the "government" that provides "the financial contribution" under Article 1.1(a)(1) of the SCM Agreement and the "government" whose predominant role as a 
supplier in the market may be found to distort private prices under Article 14(d) must be the 
same.    
11. The United States has been unable to provide any coherent explanation as to how its 
contrary position can be reconciled with the la nguage of Articles 1.1(a)(1) and 14(d) of the 
SCM Agreement and the Appellate Body's interpretati on of those provisions. All the United States 
can offer in its second submission is that "prior Appellate Body findings permit the use of out-of-
country benchmarks because of the government's ability to affect prices", and "SOE presence in a market is evidence of a government's ability to affect prices in that market". The first of these statements is a gross mischaracterization of the Appellate Body's "distortion" jurisprudence, and 
the second is a conclusory assertion that begs the very question at issue.   
 12. Contrary to the United States' assertion, it is not some generic governmental "ability to 
affect prices" that may justify a distortion finding, but the very specific instance where the 
"government is the predominant provider of ce rtain goods" and it "has been established"
 by the 
investigating authority that "the government's role in providing the  financial contribution  is so 
predominant that it effectively determines the price at which private suppliers sell the same or 
similar goods".    13. Under Article 1.1(a)(1), the "government" providing the financial contribution is "a 
government" or "any public body". An entity that is neither a government nor any public body is, 
by definition, a "private body", whose provision of goods is presumptively deemed non-governmental. Since it is undisputed that SOEs are not part of the government in the narrow 
sense, it necessarily follows that "SOE presence in the market" could support a distortion finding 
only if the SOEs at issue were properly found to be public bodies within the meaning of Article 1.1(a)(1). In the absence of such a finding, they cannot be deemed to be "government 
providers" or "government suppliers", nor can the prices at which they sell those goods be deemed 
"government" prices capable of causing "distortion" for purposes of Article 14(d).  14. Aside from lacking any interpretative basis and flying in the face of the very Appellate Body 
jurisprudence on which it purports to rely, the U. S. interpretation produces absurd results. As WT/DS437/R/Add.1 
 
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  China has shown, under the U.S. interpretation, th e same entity could simultaneously be deemed 
a "private" supplier of goods under Article 1.1(a )(1), and a "government" supplier of goods for 
purposes of the distortion analysis under Articl e 14(d). While the United States asserts (without 
any elaboration) that this counterintuitive result "make[s] sense as a policy matter", China is 
confident that the Panel will conclude that it does nothing of the sort.   
 Specificity 
 
15. China has demonstrated that Commerce's specificity determinations in respect of the alleged input subsidies are inconsistent with Article 2.1(c) of the SCM Agreement in multiple respects. The United States' second submission confirms that it  has no credible response to China's arguments. 
 
16. China has shown that the specificity determinations at issue were inconsistent with Article 2.1(c) because Commerce did not examine the first of the "other factors" under this 
subparagraph in light of a prior appearance of non-specificity. In its second submission, China 
demonstrated that the U.S. response to this claim is based on an interpretation of Article 2.1(c) 
that is contradicted by the ordinary meaning of it s terms, finds no support in its context, and is 
contrary to the manner in which the Appellate Body has interpreted this provision. 
 17. The only remaining issue in dispute with regard  to the identification of the relevant "subsidy 
programme" under the first factor of Article 2.1(c) is whether Commerce did, in fact, identify the 
relevant "subsidy programme" in each of the input specificity determinations at issue. 
 18. In its second submission, the United States co ntinues to assert, as it did in its answers to 
Panel questions, that Commerce's identification of the relevant "subsidy programme" was 
"grounded in the facts on the record". The United States now provides an "example" from the Aluminum Extrusions  investigation which purports to substantiate this assertion. In addition to its 
entirely ex post nature, the problem with this example is that it does not prove the assertion for 
which the United States offers it.    19. The "facts" identified by the United States reveal only that Commerce grouped a series of 
alleged subsidies together and called them a "program". There is absolutely nothing in these facts 
to show that this was a planned  series of subsidies, which, as the definition of the term makes 
clear, and as the United States has agreed, is the sine qua non  of a "subsidy programme".
  
 
20. The supposed "facts" of the Aluminum Extrusions  investigation demonstrate that the United 
States is trying to back away from the agreed  understanding of the term "subsidy programme", 
without openly acknowledging its retreat. The United States now tries to frame the issue as 
whether Commerce was required to identify the ex istence of what it calls a "formal" subsidy 
programme, or whether it was sufficient for Commerce to "informally establish[]" the existence of a subsidy programme by reference to a "series of activities or events". But whether a subsidy 
programme is "formal" or "informal", what makes it a "programme" is that it is a planned  series of 
subsidies. A "series of activities or events" is not a "programme" – a fact that the United States 
conveniently overlooks by omitting the word "planned" from the definition of the term 
"programme" on which both parties rely.
  
 21. At bottom, the United States is trying to read the term "programme" out of the first factor of 
Article 2.1(c). If an investigating authority can call any series of alleged subsidies a "subsidy 
programme", without the slightest evidence that it was a planned series of subsidies, then the term "subsidy programme" would no longer have any meaning. The United States seems to recognize that the principle of effet utile  requires it to give meaning to this term, but then it 
interprets and applies this term as if it had no meaning at all and were synonymous with the term 
"subsidy".    
22. The United States is forced to engage in these contortions because it is obvious that 
Commerce failed to substantiate the existence of input-specific "subsidy programmes" based on positive evidence in the record.  The existence of these "subsidy programmes" was, as China has 
shown, based on nothing more than Commerce's assertions. 
 23. On the issue of whether Commerce was required to identify the relevant "granting authority" in respect of the alleged input subsidies, China co nfesses that it can no longer keep track of the 
U.S. position. The United States seems to acknow ledge that the identification of the granting WT/DS437/R/Add.1 
 
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  authority is a prerequisite to evaluating whether a particular subsidy is specific to certain 
enterprises "within the jurisdiction of the granting authority". This is, after all, the entire point of the specificity inquiry under Article 2, and it is hard to see how the relevant jurisdiction can be identified without knowing who the granting authority is. At the same time, the United States 
continues to insist that Commerce "was not required to identify a 'granting authority' as part of its 
specificity analysis."
  China cannot reconcile these two positions. 
 
24. China is equally confused by the positions that the United States has taken, at least 
implicitly, on who the relevant granting authority was in the case of the alleged input subsidies. At first, it seemed that the United States was taking the position that each SOE acted as its own "granting authority" in respect of the input subsidies that it allegedly provided to downstream 
producers. In its second submission, however, the United States appears to be taking the position 
that the Government of China  was the "granting authority" in respect of all alleged input subsidies.   
 
25. So was each SOE a "granting authority", or was the Government of China the granting 
authority?  Since the United States appears to have settled on the latter position, at least for the moment, it is worth examining the implications of this latest position. In the 14 input specificity 
determinations at issue in this dispute, Commerce found 11 different types of inputs to be specific 
countervailable subsidies under the first factor of Article 2.1(c). Logically, Commerce must consider that the Government of China maintains 11 distinct, input-specific "subsidy programmes" with respect to the subsidized provision of these inputs. Each one of these nationwide, input-
specific "programmes" must coordinate the subsid y granting activities of the tens, hundreds, and 
maybe even thousands of SOEs in China that manuf acture and sell each type of input. But where 
is the evidence that these "programmes" exist? On what factual basis does Commerce infer that 
these are distinct subsidy programmes, as opposed to a single subsidy programme concerning the 
provision of all types of inputs?    
26. As China has sought to demonstrate throughout this dispute, Commerce's failure to identify 
the relevant granting authority, in addition to being inconsistent with Article 2 by its own terms, speaks to the basic incoherence of the entire "input subsidy" fiction that it has created. In the vast majority of cases, the identification of the re levant granting authority is obvious and scarcely 
warrants comment. In the determinations at issu e here, by contrast, neither Commerce nor the 
United States could clearly identify the re levant granting authority, even on an ex post  basis, for 
the simple reason that these subsidies do not actually exist.   
 
27. For these reasons, and for the other reasons th at China has set forth in its submissions, the 
Panel should find that Commerce's specificity determinations in respect of the alleged input 
subsidies were inconsistent with Article 2.1(c) of the SCM Agreement.   
 Initiation  
28. China's initiation related claims are predicated on what it considers must be an axiomatic 
proposition of law: namely, that if an investigating authority initiates a subsidy investigation on the basis of an incorrect legal standard, it necessarily acts inconsistently with Article 11.3 of the 
SCM Agreement. For its part, the United States asserts that "there is no basis for this argument",
 
but the reasons it provides are not persuasive. In  the United States' view, "Article 11 speaks to 
providing and evaluating evidence" and "does not require that … investigating authorities recite, a 
particular legal standard prior to initiation".   
 29. China agrees that Article 11 speaks to "evaluating evidence", but contrary to the suggestion of the United States, the evaluation of that evid ence does not occur in a vacuum. Rather, it must 
be conducted within the legal framework that Article 11 sets forth, which makes clear that for 
there to be "sufficient evidence" to justify initia tion under Article 11.3, there must be "adequate 
evidence, tending to prove or indicating the existence of" a subsidy as set forth in Article 11.2. 
This means that there must be "adequate evidence tending to prove or indicating the existence of" 
a financial contribution, of a benefit, and of specificity.    
30. Each of these three elements of a subsid y has an established legal meaning under the 
SCM Agreement. It necessarily follows that the ad equacy and sufficiency of the evidence tending 
to prove their existence must be evaluated against that established meaning. An investigating authority cannot possibly evaluate whether there is  "adequate" or "sufficient" evidence of a WT/DS437/R/Add.1 
 
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  financial contribution, of a benefit and of specificity without applying its understanding of the 
proper legal standard for each of these terms.    31. At the outset of this case, the United States had no difficulty endorsing this basic 
understanding of the proper operation of Article 11. In its first submission, the United States 
explained that under the U.S. control-based legal standard  for public body, "Article 11 requires 
adequate evidence that tends to prove or indicating that the entity is controlled by the 
government"
 , but that under China's interpretation of the term "public body" , Article 11 requires 
"adequate evidence tending to prove or indicating th at an entity possesses, exercises, or is vested 
with governmental authority …". By  expressly linking the sufficiency determination to the particular 
legal standard applied, the United States clearly understood that it is, in fact, the legal standard 
that determines what constitutes "adequate" and "sufficient" evidence" under Article 11. 
 32. The United States has now abandoned that understanding. It has done so because it 
belatedly came to realize that if the legal standard determines what constitutes "adequate" and 
"sufficient" evidence under Article 11, then it must follow that if an investigating authority applies the wrong  legal standard, the legitimacy of its conclusion that the evidence was sufficient to justify 
initiation is irreparably tainted.   
 33. This is precisely what the panel in Argentina – Poultry  concluded. In that case, the panel 
found that by using an unlawful zeroing methodol ogy, Argentina had violated Article 5.3 of the 
Antidumping Agreement "by initiating its investigation without a proper basis to conclude that 
there was sufficient evidence of dumping to justify initiation".
 
 
34. Applying this same reasoning here, if the Panel agrees with China that the legal standards 
Commerce applied at initiation with respect to financial contribution and specificity are inconsistent with Article 1.1(a)(1) and Article 2 of the SCM Agreement, then Commerce was "without a proper 
basis to conclude that there was sufficient eviden ce" of these elements of a subsidy to justify 
initiation in the investigations under challenge.    35. The United States' has no credible response to China's interpretative analysis or to the 
reasoning of the panel in Argentina – Poultry . This has led the United States to tie itself into knots 
trying to explain why China's initiation claims nonetheless must fail. Most notable in this regard is the U.S. assertion that Commerce "did not adopt an y particular interpretation of the term 'public 
body' in initiating the investigations at issue".
 
 
36. This is a remarkable assertion for the United States to be making, not only because it is 
implausible on its face and contradicted by the re cord, but because it suggests that investigating 
authorities are free to make initiation decisions untethered from any legal standards whatsoever. In the world the United States envisions, investigating authorities apparently may evaluate the adequacy and sufficiency of the evidence regard ing the existence of the elements of a subsidy 
using any baseline they choose, regardless of whet her it has a proper basis in the SCM Agreement 
or even any basis at all. If the United States' interpretation of Article 11 were correct, it effectively would make initiation decisions unreviewable.   
 
37. This cannot be, and of course, is not the law, as the panel reports in Argentina – Poultry  and 
China – GOES  among other cases make clear. Just as importantly, the record establishes that 
Commerce does not, in fact, inhabit the imaginary world the United States has concocted for this 
proceeding where investigating authorities evaluate the sufficiency of the evidence for initiation in a legal vacuum. Commerce's initiation checklists, along with the evidence and arguments from the petitions that they cite, demonstrate that Commerce does have established views on the legal 
standards necessary to establish the existence of a subsidy, and that it applied those legal 
standards in the investigations at issue with respect to financial contribution and specificity.
 
 
38. The problem for the United States is that the legal standards that Commerce applied are 
inconsistent with Article 1.1(a)(1) and Article 2 of the SCM Agreement as those provisions have been interpreted by the Appellate Body.  For this reason, Commerce's initiation determinations in 
the investigations at issue are necessarily inconsistent with Article 11.3 of the SCM Agreement.   
 WT/DS437/R/Add.1 
 
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  Export Restraints 
 39. China's export restraints claim raises two separate questions of legal interpretation. The first is whether the export restraints alleged in Magnesia Bricks  and Seamless Pipe  cannot, as a matter 
of law, constitute a financial contribution within the meaning of Article 1.1(a)(1). The 
second question is the one I just addressed, namely, whether an investigating authority acts inconsistently with Article 11.3 when it initiates a countervailing duty investigation on the basis of 
an incorrect legal standard.   
 40. On the first of these interpretative questions, the United States' second submission covers no new ground. Accordingly, China will not repeat this morning all of the reasons why it believes 
this Panel should resolve the first question in the same manner as the panel in US – Export 
Restraints . And, for all of the reasons I just explained, China believes an affirmative answer to the 
second question is required as well, particularly in light of the panel's decision in China – GOES , 
which is directly on point. 
 41. The only issue China intends to address this morning is the United States' futile attempt in 
its second submission to distinguish factually the situation Commerce confronted in the two cases 
at issue here and the situation the panel addressed in US – Export Restraints . At the outset, China 
notes that the United States does not dispute that the export restraint measures  at issue in both 
Magnesia Bricks  and Seamless Pipe  – export quotas, export taxes, and export licensing 
requirements – fall squarely within the definition of export restraints considered in US – Export 
Restraints . It is also beyond dispute that no measures other than the export restraints themselves 
were alleged to constitute a financial contribution in either investigation. 
 
42. The United States nonetheless argues that in contrast to the situation in US – Export 
Restraints , here "there was evidence before Commerce relating to the context in which the export 
restraint schemes were imposed as well as other direct and circumstantial evidence to inform the 
analysis of the export restraint schemes". This "context", according to the United States, consisted of "evidence" to the effect that the "export restra ints were part of a broader governmental policy" 
to promote the export of higher value goods thro ugh increasing the domestic supply of the inputs 
involved. In fact, the only "evidence" the United States cites in support of this characterization, 
which can be found at USA-73 and USA-93, amounts to nothing more than conclusory assertions unsupported by any documentary evidence whatsoever.
 
 43. More importantly, the United States never explains how this alleged "contextual evidence" affects the analysis of whether the export restraints at issue here entrust or direct private parties 
to provide goods. In fact, even if such evidence  existed, it would not alter the nature of the 
relevant government action involv ed.  Whether the objective of an export restraint is to conserve 
exhaustible natural resources, reduce air pollution, promote downstream industries, or some combination thereof, in no case does the export restraint "give responsibility"
 to a private body, 
"give authoritative instructions" to a private body, or "order" a private body to "carry out" the 
provision of goods to domestic consumers. Inst ead, an export constraint imposes specific 
limitations or conditions on the export of particular goods, nothing more and nothing less.   
 
44. In sum, the United States' attempt to distinguish the case before the Panel from the one addressed in US – Export Restraints is wholly unpersuasive. For the reasons that China has 
already explained, the panel's reasoning in that case was persuasive when adopted, and remains 
so in light of subsequent panel and Appellate Body jurisprudence.    "Adverse Facts Available" 
 
45. I will now turn to China's claims under Article 12.7 of the SCM Agreement, in relation to Commerce's use of so-called "adverse facts available". As a result of the parties' responses to 
Panel questions and written submissions, the po ints of disagreement between the parties in 
respect of China's claims under Article 12.7 are now sharply defined. The United States agrees with China that when making a determination on th e basis of "facts available" under Article 12.7, 
an investigating authority "must apply  facts that are 'available'". Where the parties disagree is 
what this means in practice.  46. The U.S. theory, as explained in its second submission, is that the Panel should conclude 
that Commerce properly applied facts available under Article 12.7 in the 48 instances under WT/DS437/R/Add.1 
 
- G-18 - 
 
  challenge because the United States has now, for purposes of this dispute,  "provide[d] examples 
of the record evidence supporting the determinations" at issue. Notably, the United States does 
not assert that Commerce actually relied on the information it provides in USA-94 when making its 
"adverse facts available" determinations. In fact, the United States maintains that "Commerce was 
not required to explicitly cite such information in its determinations".    
 47. In contrast to the U.S. view, China believes that for an investigating authority properly to 
apply facts available, Article 12.7 requires it to "explicitly cite" and discuss the facts that provide 
the basis for its legal conclusions. It is undisputed that there is no reference to or discussion of the facts that the United States cites in USA-94 in any of Commerce's actual determinations. There is, accordingly, no evidence in those determinatio ns that Commerce's "adverse facts available" 
findings were based on anything other than gro undless assumptions. The U.S. attempt to provide 
an ex post factual basis for Commerce's determinations, by providing "examples of the record 
evidence supporting the determinations", does nothing but make clear that Commerce failed to 
provide the necessary "reasoned and adequate" explanation for its conclusions in the 48 instances 
under challenge.  
48. The United States suggests that the "sufficien cy of an investigating authority's explanations" 
is a procedural obligation, not relevant to whether an investigating authority has complied with the substantive requirements in Article 12.7 of the SCM Agreement. While China understands why the 
United States would want to draw this distinction, it is not persuasive.   
 
49. The Appellate Body explained in US – Softwood Lumber VI that in  reviewing the sufficiency 
of an investigating authority's determinations, and specifically in reviewing "the factual 
components of the findings made by investigating authorities", a Panel should examine whether an 
investigating authority's conclusions are "reasoned and adequate". Whether the investigating authority's conclusions are "reasoned and adequate" is informed, in part, by "whether the 
explanations given disclose how the investigating authority treated the facts and evidence in the 
record". The Appellate Body cautioned that a pane l must not be "passive by 'simply accept[ing]  
the conclusions of the competent authorities'".   
50. The "reasoned and adequate" explanation provided by the investigating authority is what 
allows a panel to assess the validity of the investigating authority's conclusions under the substantive provisions of the covered agreements, including Article 12.7 of the SCM Agreement. In 
the absence of such a "reasoned and adequate explanation", a panel has no basis to evaluate "how 
the investigating authority treated the facts and evidence in the record" and is put in a position of having to "simply accept" the investigating authority's conclusions.   
 
51. The United States believes that it can retroactively cure Commerce's failure to provide the necessary explanation for its findings by provid ing the Panel with facts from the record that 
arguably might have supported Comm erce's findings had it actually relied on them at the time. But 
there is a reason that the Appellate Body has said that an investigating authority's "reasoned and 
adequate" explanation "should be discernible from the published determination itself". 
Exhibit USA-94 tells us nothing about how Commerce treated the facts and evidence cited therein 
when making its determinations. The only evidence of how Commerce  treated the facts and 
evidence in the record in the 48 instances under challenge is Commerce's own analysis in its preliminary determinations and Issues and Decision Memoranda. By reference to Commerce's 
actual determinations, China has demonstrated that these determinations were based on 
"assumptions" and "adverse inferences" that had no documented basis in the record evidence.  52. The United States argues in its second submission that an investigating authority is only 
required to discuss "those facts that allow an understanding of the factual basis that led to the 
imposition of the final measures". China has thoroughly reviewed USA-94, which purports to provide "the complete discussion from the relevant issues and decision memorandum or 
preliminary determination for each determination [at issue]", and China still has not found an 
analysis by Commerce that allows for "an understanding of the factual basis that led to the imposition of the final measures".  
 WT/DS437/R/Add.1 
 
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  ANNEX G-3 
CLOSING STATEMENT OF TH E UNITED STATES AT  
THE SECOND MEETING OF THE PANEL  
Mr. Chairperson, members of the Panel: 
 
1. You have heard extensive arguments from bo th sides in our written submissions and oral 
presentations. At this point, the disagreements of the parties have been clearly established. 
Perhaps, then, we might acknowledge here a point on which the parties agree. As China said in the 
second paragraph of its opening statement at this meeting, “[t]he principal issues in this dispute involve questions regarding the proper legal interpretation of several of the most fundamental provisions of the SCM Agreement”. That is correct. 
 
2. However, China goes on to note the “sharply divergent” views of the parties on the proper understanding of those provisions, and suggests that “[t]he resolution of China’s claims will 
require the Panel to choose between these competing interpretations”. On that, we cannot agree. 
China proposes an analytical approach that is simply without support in the DSU. Rather than 
choosing between the interpretations proposed by th e parties, or choosing whether or not to apply 
an interpretation elaborated by the Appellate Bo dy, the Panel’s role, and the way the Panel will 
help the parties resolve this dispute, is by undertaking its own interpretative analysis of the terms of the SCM Agreement in accordance with the customary rules of interpretation of public 
international law. 
 
3. We are confident that when the Panel interp rets the terms of the SCM Agreement in good 
faith in accordance with the ordinary meaning to be given to the terms of the Agreement in their 
context and in the light of its object and purp ose, the Panel will agree with the proposed 
interpretations that the United States has ad vanced, and will find that China’s proposed 
interpretations are divorced from the text of the SCM Agreement and entirely inconsistent with the 
interpretative analysis required by the customary rules of interpretation.  
 4. In short, as we have demonstrated, for all of its nearly 100 individual claims, China simply has failed to make its case, on the law and on the facts.  Accordingly, we respectfully request that 
the Panel reject China’s claims. 
 5. In closing, the United States once again would like to thank the Panel members, as well as 
the Secretariat staff, for your time and the careful attention you are giving to this matter. 
  
_______________ 
   WT/DS437/R/Add.1 
 
- H-1 - 
 
  ANNEX H 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex H-1 Working Procedures of the Panel H-2 
 
 WT/DS437/R/Add.1 
 
- H-2 - 
 
  ANNEX H-1 
 
UNITED STATES – COUNTERVAILING DUTY MEASURES ON 
CERTAIN PRODUCTS FROM CHINA 
(DS437) 
WORKING PROCEDURES FOR THE PANEL 
1. In its proceedings, the Panel shall follow the relevant provisions of the Understanding on 
Rules and Procedures Governing the Settlement of  Disputes (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 Panel shall meet in closed session. The parties, and Members having notified their 
interest in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU 
(hereafter "third parties"), shall be present at the meetings only when invited by the Panel to 
appear before it.  
 
4. Each party and third party has the right to determine the composition of its own delegation when meeting with the Panel. Each party and third party shall have the responsibility for all 
members of its own delegation and shall ensure th a t  e a c h  m e m b e r  o f  s u c h  d e l e g a t i o n  a c t s  i n  
accordance with the DSU and these Working Procedures, particularly with regard to the confidentiality of the proceedings.    
Submissions 
 5. Before the first substantive meeting of the Panel with the parties, each party shall submit a 
written submission in which it presents the facts of the case and its arguments, in accordance with 
the timetable adopted by the Panel. Each party sh all also submit to the Panel, prior to second 
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by 
the Panel. 
 6. A party shall submit any request for a prelimin ary ruling at the earliest possible opportunity 
and in any event no later than in its first written submission to the Panel. If China requests such a 
ruling, the United States shall submit its response to the request in its first written submission. If 
the United States requests such a ruling, China 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.
1 Exceptions to this procedure shall be granted upon a showing of good cause. 
 7. Each party shall submit all factual evidence to the Panel no later than during the 
first substantive meeting, except with respect to evidence necessary for purposes of rebuttal, 
answers to questions or comments on answers 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 period of time for comment, as appropriate, on 
any new factual evidence submitted after the first substantive meeting.  
                                               
1 The United States submitted its request for preliminary rulings on 14 December 2012, prior to its 
first written submission. Accordingly, the date determined by the Pane l for China to submit its response to this 
request has been indicated in the Timetable ad opted by the Panel in these proceedings.   WT/DS437/R/Add.1 
 
- H-3 - 
 
   
8. 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 China could be numbered CHN-1, 
CHN-2, etc. If the last exhibit in connection with the first submission was numbered CHN-5, the 
first exhibit of the next submission thus would be numbered CHN-6. The United States' exhibits could be numbered USA-1, USA-2, etc. 
 
Questions  9. The Panel may at any time pose questions to the parties and third parties, orally in the 
course of a meeting or in writing.  
 Substantive meetings 
 
10. 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 5.30 p.m. the previous working day.   
 
11. The first substantive meeting of the Panel wi th the parties shall be conducted as follows: 
 
(a) The Panel shall invite China to make an opening statement to present its case first. 
Subsequently, the Panel shall invite the United States to present its point of view. 
Before each party takes the floor, it shall provide the Panel and other participants at the meeting with a provisional written vers ion of its statement. In the event that 
interpretation is needed, each party shall provide additional copies to the interpreters. 
Each party shall make available to the Panel and the other party the final version of its statement, preferably at the end of the meeting, and in any event no later than 
5.30 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 questions or make comments, through the Panel. 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 questions within a deadline to be determined by 
the Panel. 
 
(c) The Panel may subsequently pose questions to the parties. The Panel shall send in 
writing, within a timeframe to be determin ed 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 China presenting its statement first.  
 
12. The second substantive meeting of the Panel wi th the parties shall be conducted as follows: 
 
(a) The Panel shall ask the United States if it wishes to avail itself of the right to present 
its case first. If so, the Panel shall invite the United States to present its opening 
statement, followed by China. If the respon dent chooses not to avail itself of that 
right, the Panel shall invite China to presen t its opening statement first. Before each 
party takes the floor, it shall provide the Panel and other participants at the meeting 
with a provisional written version of its statement. In the event that interpretation is 
needed, each party shall provide additional copies to the interpreters. Each party shall make available to the Panel and the other party the final version of its statement, 
preferably at the end of the meeting, and in  any event no later than 5.30 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 questions or make comments, through the Panel. 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 WT/DS437/R/Add.1 
 
- H-4 - 
 
  respond in writing to the other party's questions within a deadline to be determined by 
the Panel. 
 
(c) The Panel may subsequently pose questions to the parties. The Panel shall send in 
writing, within a timeframe to be determin ed 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  
13. 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.   
 
14. Each third party shall also be invited to present its views orally during a session of this first substantive meeting, set aside for that purpos e. Each third party shall provide to the Panel the 
list of members of its delegation in advance of  this session and no later than 5.30 p.m. the 
previous working day.   
 15. 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, preferab ly at the end of the session, and in any 
event no later than 5.30 p.m. of the fi rst 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. 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. 
 
Descriptive part 
 16. The parties and third parties shall provide the Panel with executive summaries of the facts and arguments as presented to the Panel in each of their written submissions, other than answers 
to written questions, and in their oral presentati ons, within one week following the delivery to the 
Panel of the written version of the submission or oral statement concerned. Each executive summary of the parties shall be limited to no more than ten (10) pages. The executive summaries 
shall not serve in any way as a substitute for the submissions of the parties in the Panel's 
examination of the case. Third parties are re quested to provide the Panel with executive 
summaries of their written submissions and oral statements of no more than five (5) pages each, 
within one week following the delivery to the Panel of the written version of the relevant 
submission. Paragraph 21 shall apply to  the service of executive summaries. 
 17. The descriptive part of the Panel's report w ill include the procedural and factual background 
to the present dispute. Description of the main  arguments of the parties and third parties will WT/DS437/R/Add.1 
 
- H-5 - 
 
  consist of the executive summaries referred to in paragraph 16, and these will be annexed as 
addenda to the report.  Interim review 
 
18. 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.    19. 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.   
 
20. The interim report shall be kept strictly confidential and shall not be disclosed.  
Service of documents 
 21. 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 8 paper copies of all documents it submits to the 
Panel. However, when exhibits are provided on CD-ROMS/DVDs, 5 CD-ROMS/DVDs and 5 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, and cc'd to 
XXXXXX and XXXXXX. If a CD-ROM or DVD is pr ovided, it shall be  filed with the 
DS Registry.   
 
(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. Service may take place in electronic format (CD-ROM, DVD, or e-mail 
attachment), if the party receiving service consents to such format. 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 documents with the DS Registry and serve 
copies on the other party (and third parties where appropriate) by 5.30 p.m. 
(Geneva time) on the due dates established by the Panel. 
 
(f) The Panel shall provide the parties with an electronic version of the descriptive part, 
the interim report and the final report, as well as of other documents as appropriate. 
When the Panel transmits to the parties or third parties both paper and electronic versions of a document, the paper version sh all constitute the official version for the 
purposes of the record of the dispute. 
  
 
__________