WORLD TRADE  
ORGANIZATION   
WT/DS414/5 
23 July 2012 
 (12-4026) 
 Original:   English 
  
 
CHINA – COUNTERVAILING AND ANTI-DUMPING DUTIES ON GRAIN ORIENTED 
FLAT-ROLLED ELECTRICAL STEEL FROM THE UNITED STATES 
 
Notification of an Appeal by China 
under Article 16.4 and Article 17 of the Understanding on Rules 
and Procedures Governing the Settlement of Disputes (DSU),  
and under Rule 20(1) of the Working Procedures for Appellate Review  
 
  The following notification, dated 20 July 2012,  from the Delegation of the People's Republic 
of China, is being circulated to Members. 
 
_______________ 
 
 1. Pursuant to Article 16.4 and Article 17 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate 
Review, the People's Republic of China hereby notifies the Dispute Settlement Body of its decision to appeal to the Appellate Body certain issues of law and legal interpretation c overed in the Panel Report 
in China – Countervailing and Anti-Dumping Duties on Grain Oriented Flat-Rolled Electrical Steel 
from the United States  (WT/DS414) ("Panel Report").  Pursuant to Rule 20(1) of the Working 
Procedures for Appellate Review , China is simultaneously filing this Notice of Appeal with the 
Appellate Body Secretariat. 
2. The measures at issue in this dispute impos ed countervailing duties and anti-dumping duties 
on grain oriented flat-rolled electrical steel ("GOES") from the United States.  An application for the initiation of an anti-dumping and countervailing dut y investigation was filed by Chinese petitioners, 
alleging the existence of countervailable subsidies and dumping margins that caused or threatened to 
cause injury to the domestic Chin ese industry.  The Ministry of Commerce for the People's Republic 
of China ("MOFCOM") issued an affirmative fina l determination in each of these investigations.  
MOFCOM calculated ad valorem  subsidy rates of 11.7% and 12% for the respondent companies, and 
dumping margins of 7.8% and 19.9%.  Furthermore,  MOFCOM determined that the domestic industry 
was suffering from material injury , and that the injury was caused by the dumped imports of GOES 
from Russia and the dumped and subsidized imports  of GOES from the United States.  MOFCOM 
made these determinations in  its final determination, Final Determination [2010] No. 21 (10 April 
2010) . 
3. The issues that China raises in this appeal rela te to the Panel's findi ngs and conclusions in 
respect of the consistency of the challenged me asures with the Anti-Dumping Agreement and the 
Agreement on Subsidies and Countervailing Measures  ("SCM Agreement"). 
4. For the reasons stated below, and as will be deve loped in its submissions and oral statements 
to the Appellate Body, China appeals the following e rrors of law and legal in terpretation contained in 
the Panel Report and requests the Appellate Body to  reverse or modify th e related findings and WT/DS414/5 
Page 2  
 
  conclusions of the Panel.  In doing so, China mak es five specific claims, delineated below and to be 
detailed in its submissions to the Appellate Body.
1 
5. First, China seeks review by the Appellate Body of the Panel's interpreta tion of Article 3.2 of 
the Anti-Dumping Agreement and Article 15.2 of the SCM Agreement as it relates to MOFCOM's 
discussion of the existence of adverse price effects.  In particular, the Panel erred in interpreting the 
phrase "the effect of" from Article 3.2 of the Anti-Dumping Agreement and Article 15.2 of the 
SCM Agreement as meaning that an authority must demonstrate that adverse price effects were caused by dumped or subsidized imports.
2  In doing so, the Panel did not consider the text, context, 
and object and purpose of those provisions and those agreements.3 
6. Second, China seeks review by the Appellate Body  of the Panel's application of Article 3.2 of 
the Anti-Dumping Agreement and Article 15.2 of the SCM Agreement as it relates to MOFCOM's 
final determinations with respect to price effects.4  The Panel's application of the legal standard erred 
in several fundamental aspects.5  The Panel's errors of law and legal application include:  
(a) The Panel erred in interpreting MOFCOM's fi nal determinations in a manner that caused 
the Panel to apply the obligations of Article  3.2 and Article 15.2 to facts not found by 
MOFCOM.  Rather than apply the legal standa rd to MOFCOM's final determinations as 
written, the Panel examined findings never made by the authority and instead ignored or dismissed key factors that MOFCOM had discussed in its determinations.
6    
 
(b) The Panel erred in requiring specific methodologies to satisfy the obligations of 
Article 3.2 and Article 15.2.7  Instead of deferring to the discretion of the authority when 
considering price effects, the Panel impos ed several methodological requirements for 
evaluating price effects that do not exist in the text of the agreements and were not raised 
by the parties to the underlying investigation.   
 7. Third, China seeks review by the Appellate Body under Article 11 of the DSU of how the 
Panel proceeded in this dispute.  The Panel acted  inconsistently with Article 11 of the DSU in 
conducting its analysis of price depression and pr ice suppression by failing to conduct an objective 
assessment of the matter.  Specifically, the Panel misinterpreted a fundamental MOFCOM finding of fact, the result of which caused the Panel to fi nd MOFCOM's price depression and price suppression 
findings inconsistent with Article 3.2 and 15.2.
8  In doing so, the Panel also erred in failing to 
consider the totality of the evidence.  The Panel a pproached individual pieces of evidence in isolation 
instead of addressing the ways in which MOFCOM's evidence interrelated.9  Ultimately, the Panel 
erred in failing to focus on the MOFCOM decision as written.  The Panel went beyond the rationale 
contained in the determination itself and relied upon the interpretation advocated by the United States 
and the Panel's own new price effects analysis.10 
                                                      
1Pursuant to Rule 20(2)(d)(iii) of the Working Procedures for Appellate Review  this Notice of Appeal 
includes citations to the paragraphs of the Panel Report containing the alleged errors.  These citations, however, 
do not prejudice to the ability of China to refer to other paragraphs of the Panel Report in its appeal. 
2Panel Report, para. 7.520. 
3Ibid. paras. 7.519-7.522, 8.1(f). 
4Ibid. paras. 7.536, 8.1(f). 
5Ibid. paras. 7.523-7.536. 
6Ibid. 
7Ibid. paras. 7.528-7.530. 
8Ibid. para. 7.542. 
9Panel Report, paras. 7.523-7.543. 
10Ibid. WT/DS414/5 
Page 3 
 
 
  8. Fourth, China seeks review by the Appellate Body of the Panel's finding that China acted 
inconsistently with its obligati ons under Article 6.9 of the Anti-Du mping Agreement and Article 12.8 
of the SCM Agreement regarding the disclosure of essential facts relating to MOFCOM's price effects 
analysis.11  The Panel's finding rested entirely on its e rroneous understanding of the legal obligations 
of Article 3.2 of the Anti-Dumping Agreem ent and Article 15.2 of the SCM Agreement.12  The Panel 
adopted a misguided understanding of "essential facts"13 because the Panel misunderstood the 
underlying obligations at issue. 
9. Fifth, China seeks review by the Appellate Body of the Panel's finding that China acted 
inconsistently with its obliga tions under Article 12.2.2 of the Anti-Dumping Agreement and 
Article 22.5 of the SCM Agreement regarding the pu blic notice and explanation of MOFCOM's price 
effects analysis.14  As with China's fourth claim, this Panel finding rested entirely on the Panel's 
erroneous understanding of the lega l obligations of Article 3.2 of the Anti-Dumping Agreement and 
Article 15.2 of the SCM Agreement.15  In light of a proper inte rpretation of Article 3.2 and 
Article 15.2, MOFCOM adequately provided public notice of its findings regarding the existence of 
price depression and price suppression. 
10. China respectfully requests that the Appellate  Body reverse the findi ngs and conclusions of 
the Panel that are based on the errors of law and legal interpretation identified above.  
  
__________  
                                                      
11Ibid. paras. 7.575, 8.1(f).   
12Ibid. paras. 7.573-7.574.   
13Ibid. para. 7.575. 
14Ibid. paras. 7.592, 8.1(f).   
15Ibid. paras. 7.591-7.592.