WT/DS440/R/Add.1  
 
23 May 2014  
(14-3074)  Page: 1/115  
  Original: English  
 
 
 
  
CHINA - ANTI-DUMPING AND COUNTERVAILING DUTIES  
ON CERTAIN AUTOMOBILES FROM THE UNITED STATES 
REPORT OF THE PANEL 
Addendum 
This addendum  contains Annexes A to D to the Report of the Panel to be found in document 
WT/DS440/R. 
 
 
_______________ 
 
 WT/DS440/R/Add.1 
 
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LIST OF ANNEXES 
 
ANNEX A 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex A-1 Working Procedures of the Panel A-2 
Annex A-2 Additional Working Procedures on BCI A-6 
ANNEX B 
ARGUMENTS OF THE UNITED STATES 
Contents Page 
Annex B-1 Executive summary of the first written submission of the United States B-2 
Annex B-2 Executive summary of the opening statement of the United States at the first 
Panel meeting B-9 
Annex B-3 Closing statement of the United States at the first Panel meeting B-18 
Annex B-4 Executive summary of the second written submission of the United States B-19 
Annex B-5 Executive summary of the opening statement of the United States at the 
second Panel meeting B-29 
Annex B-6 Closing statement of the United States at the second Panel meeting B-38 
ANNEX C 
ARGUMENTS OF CHINA 
Contents Page 
Annex C-1 Executive summary of the first written submission of China C-2 
Annex C-2 Executive summary of the opening statement of China at the first Panel 
meeting C-10 
Annex C-3 Closing statement of Chin a at the first Panel meeting C-18 
Annex C-4 Executive summary of the second written submission of China C-20 
Annex C-5 Executive summary of the opening statement of China at the second Panel 
meeting C-28 
Annex C-6 Closing statement of China at the second Panel meeting C-36 
ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Executive summary of the third party written submission of the 
European Union D-2 
Annex D-2 Executive summary of the third party written submission of Japan D-6 
Annex D-3 Executive summary of the third party oral statement of Japan D-11 
Annex D-4 Executive summary of the third party oral statement of Korea D-13 
Annex D-5 Executive summary of the third party written submission of Saudi Arabia D-15 
Annex D-6 Executive summary of the third part y oral statement of Saudi Arabia D-18 
Annex D-7 Executive summary of the third party written submission of Turkey D-21 
Annex D-8 Executive summary of the third party oral statement of Turkey D-27 
 
  WT/DS440/R/Add.1 
 
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 ANNEX A 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex A-1 Working Procedures of the Panel A-2 
Annex A-2 Additional Working Procedures on BCI A-6 
 
 WT/DS440/R/Add.1 
 
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ANNEX A-1 
WORKING PROCEDURES OF 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. 
5. The parties shall treat business confidential information in accordance with the procedures 
set forth in the Additional Working Procedures of the Panel Concerning Business Confidential Information, found in Annex 1 to these Working Procedures. 
Submissions 
 6. Before the first substantive meeting of the Panel with the parties, each party shall submit a written submission in which it presents the facts of the case and its arguments, in accordance with 
the timetable adopted by the Panel. Each party 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.  
7. 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 the United States requests such a ruling, China shall submit its response to the request in its first written 
submission. If China requests such a ruling, the United States shall submit its response to the 
request prior to the first substantive meeting of the Panel, at a time to be determined by the Panel 
in light of the request. Exceptions to this pr ocedure shall be granted upon a showing of good 
cause. 
8. Each party shall submit all factual evidence to the Panel no later than during the first 
substantive meeting, except with respect to evid ence necessary for purposes of rebuttal, answers 
to questions or comments on answers provided 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.  
9. Where the original language of exhibits is not a WTO working language, the submitting party 
or third party shall submit a translation into the WTO working language of the submission at the same time. The Panel may grant reasonable extensions of time for the translation of such exhibits WT/DS440/R/Add.1 
 
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 upon a showing of good cause. Any objection as to  the accuracy of a translation should be raised 
in writing as promptly as possible, and in any case not later than by the date of the written 
submission of the objecting Party due following the submission of the translation. In 
exceptional circumstances, the Panel may gran t an extension to this deadline upon good 
cause shown. Any objection shall be accompanied by a detailed explanation of the grounds of 
objection and an alternative translation. 
10. To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submissions, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute. For example, exhibits su bmitted by the United States could be numbered 
USA-1, USA-2, etc. If the last exhibit in connect ion with the first submission was numbered USA-5, 
the first exhibit of the next submission thus wo uld be numbered USA-6. China's exhibits could be 
numbered CHN-1, CHN-2, etc. 
Questions 
 
11. The Panel may at any time pose questions to the parties and third parties, orally in the 
course of a meeting or in writing.   
Substantive meetings  
 
12. Each party shall provide to the Panel the list of members of its delegation in advance of each 
meeting with the Panel and no later than 5.30 p.m. the previous working day.  
13. The first substantive meeting of the Panel wi th the parties shall be conducted as follows: 
a. The Panel shall invite the United States to make an opening statement to present its 
case first. Subsequently, the Panel shall invite China to present its point of view. Before each party takes the floor, it shall provide the Panel and other participants at the 
meeting with a provisional written version of its statement. In the event that 
interpretation is needed, each party shall provide additional copies 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 question s to the parties. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the parties to which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to such questions within a deadline to be determined by the Panel. 
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with the United States presenting its statement first.  
14. The second substantive meeting of the Panel wi th the parties shall be conducted as follows: 
a. The Panel shall ask China if it wishes to avail itself of the right to present its case first. If 
so, the Panel shall invite China to present its opening statement, followed by the United States. If China chooses not to avail itself of that right, the Panel shall invite the 
United States to present its opening statement first. Before each party takes the floor, it 
shall provide the Panel and other participants at the meeting with a provisional written version of its statement. In the event that interpretation is needed, each party shall 
provide additional copies 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. WT/DS440/R/Add.1 
 
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 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 question s to the parties. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the parties to which 
it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to such questions within a deadline to be determined by the Panel. 
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with the party that presented its opening statement 
first, presenting its closing statement first.  
Third parties 
 
15. The Panel shall invite each third party to transmit to the Panel a written submission prior to 
the first substantive meeting of the Panel with the parties, in accordance with the timetable adopted by the Panel.  
16. Each third party shall also be invited to presen t its views orally during a session of this first 
substantive meeting, set aside for that purpose. Ea ch 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.  
17. The third-party session shall be conducted as follows: 
a. All third parties may be present during the entirety of this session.  b. The Panel shall first hear the arguments of the third parties in alphabetical order. Third 
parties present at the third-party session and intending to present their views orally at 
that session, shall provide the Panel, the parties and other third-parties with provisional written versions of their statements before they take the floor. Third parties shall make 
available to the Panel, the parties and other third parties the final versions of their 
statements, preferably at the end of the session, and in any event no later than 
5.30 p.m. of the first working day following the session.  
c. After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third parties questions for clarification on any 
matter raised in the third parties' submissions or statements. Each party shall send in writing, within a timeframe to be determined by the Panel, any questions to a third party 
to which it wishes to receive a response in writing.  
d. The Panel may subsequently pose questions to the third parties. 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 
 
18. 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 and in their oral 
presentations, within one week following the deliv ery to the Panel of the written version of the 
submission or oral statement concerned. Each exec utive summary of the parties shall be limited to 
no more than ten (10) pages. The executive summ aries 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 
requested to provide the Panel with executive su mmaries 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 subm ission. Paragraph 23 shall apply to the service of 
executive summaries.   WT/DS440/R/Add.1 
 
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 19. 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 
consist of the executive summaries referred to in paragraph 18, and these will be annexed as addenda to the report. 
Interim review 
 20. 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.  
21. 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.  
22. The interim report shall be kept strictly confidential and shall not be disclosed. 
Service of documents 
 
23. 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 
xxxxxxxxxx@wto.org and xxxxxxxxxx@wto.org. 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, 
i n  w r i t i n g ,  t h a t  c o p i e s  h a v e  b e e n  s e r v e d  a s  r e q u i r e d  a t  t h e  t i m e  i t  p r o v i d e s  e a c h  
document to the Panel. 
e. Each party and third party shall file its do cuments with the DS Registry and serve copies 
on the other party (and third parties where appropriate) by 5.30 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 part ies both paper and electronic versions of a 
document, the paper version shall constitute the official version for the purposes of the record of the dispute. WT/DS440/R/Add.1 
 
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ANNEX A-2 
ADDITIONAL WORKING PROCEDURES ON BUSINESS  
CONFIDENTIAL INFORMATION 
1. These procedures apply to any business confidential information (BCI) that a party wishes to 
submit to the Panel. For the purposes of these pr ocedures, BCI is defined as any information that 
has been designated as such by the Party submitti ng the information, that is not available in the 
public domain, and the release of which would seriously prejudice an essential interest of the 
person or entity that supplied the information to the Party. In this regard, BCI shall include information that was previously submitted to China's Ministry of Commerce ("MOFCOM") as BCI in the anti-dumping and countervailing duty investigations at issue in this dispute. However, these 
procedures do not apply to information that is available in the public domain. In addition, these 
procedures do not apply to any BCI if the person who provided the information in the course of the 
aforementioned investigations agrees in writing to make the information publicly available.  
2. The first time that a party submits to the Panel BCI as defined above from an entity that 
submitted that information in one of the investigations at issue, the party shall also provide, with a copy to the other party, an authorizing letter from the entity. That letter shall authorize both the 
United States and China to submit in this disp ute, in accordance with these procedures, the 
confidential information submitted by that en tity in the course of those investigations. 
3. If an entity refuses to grant the authorizatio n referred to in paragraph 2, a party may bring 
the situation to the attention of the Panel. The Panel shall consider what steps to take, which may 
include requesting information pursuant to Article 13 of the DSU. 
4. No person may have access to BCI except a member of the Secretariat or the Panel, an 
employee of a party or third party, and an outsid e advisor for the purposes of this dispute to a 
party or third party. However, an outside advisor is not permitted access to BCI if that advisor is 
an officer or employee of an enterprise engage d in the production, export, or import of the 
products that were the subject of the investigations at issue in this dispute. 
5. A party or third party having access to BCI shall treat it as confidential, i.e. shall not disclose 
that information other than to those persons authorized to receive it pursuant to these procedures. Each party and third party shall have responsibility in this regard for its employees as well as any outside advisors used for the purposes of this dispute. BCI obtained under these procedures may 
be used only for the purpose of providing information and argumentation in this dispute and for no 
other purpose. 
6. The party submitting BCI shall mark the cover and/or first page of the document containing 
BCI, and each page of the document, to indicate the presence of such information. The specific 
information in question shall be placed between  double brackets, as follows: [[xx,xxx.xx]]. The 
first page or cover of the document shall state "Contains business confidential information on 
pages xxxxxx", and each page of the document shall contain the notice "Contains Business 
Confidential Information" at the top of the page. In case of exhibits, the party submitting BCI in 
the form of an Exhibit shall mark it as (BCI) ne xt to the exhibit number (e.g. Exhibit EU-1 (BCI)). 
Should the party submit specific BCI within a document which is considered to be public, the 
specific information in question shall be placed between double brackets, as follows: 
[[xx,xxx.xx]]." 
7. Where a party submits a document containing BCI to the Panel, the other party or any third 
party referring to that BCI in its documents, including written submissions and oral statements, 
shall clearly identify all such information in those documents. All such documents shall be marked as described in paragraph 4. In the case of an oral statement containing BCI, the party or third 
party making such a statement shall inform the Pa nel before making it that the statement will 
contain BCI, and the Panel will ensure that only persons authorized to have access to BCI pursuant to these procedures are in the room to hear that statement.  WT/DS440/R/Add.1 
 
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 8. The Panel will not disclose BCI, in its report or in any other way, to persons not authorized 
under these procedures to have access to BCI. The Panel may, however, make statements of conclusion drawn from such information. Before the Panel circulates its final report to the Members, the Panel will give each party an opportun ity to review the report to ensure that it does 
not contain any information that the party has designated as BCI.  
9. Submissions containing BCI will be included in  the record forwarded to the Appellate Body in 
the event of an appeal of the Panel's Report. 
 
  WT/DS440/R/Add.1 
 
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 ANNEX B 
ARGUMENTS OF THE UNITED STATES 
Contents Page 
Annex B-1 Executive summary of the first written submission of the United States B-2 
Annex B-2 Executive summary of the opening statement of the United States at the first 
Panel meeting B-9 
Annex B-3 Closing statement of the United States at the first Panel meeting B-18 
Annex B-4 Executive summary of the second written submission of the United States B-19 
Annex B-5 Executive summary of the opening statement of the United States at the 
second Panel meeting B-29 
Annex B-6 Closing statement of the United States at the second Panel meeting B-38 
 WT/DS440/R/Add.1 
 
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ANNEX B-1 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN 
SUBMISSION OF THE UNITED STATES 
I. INTRODUCTION 
1. In this dispute, the United States challeng es antidumping and countervailing duty measures 
imposed by China on certain automobiles from the United States. This is the third dispute 
settlement proceeding the United States has commenced against China concerning antidumping 
and countervailing duty measures targeting U.S. exports, owing to China's repeated failure to abide by the commitments it made when it joined the WTO. 
II. STANDARD OF REVIEW 
2. The applicable standard of review in this dispute is that stated in Article 11 of the DSU and 
Article 17.6 of the AD Agreement. Per these provisions, the Panel must examine whether 
MOFCOM's conclusions are "reasoned and adequate" in "light of the evidence." The standard of 
review recognizes that investigating authorities in anti-dumping and countervailing duty 
investigations may have to consider conflicting arguments and evidence and that they will need to exercise discretion. However, it does not entitle an investigating authority to automatic deference 
regarding the exercise of that discretion. To the contrary, the investigating authority is responsible 
for ensuring that its explanations reflect that conflicting evidence was considered. 
III. PROCEDURAL FLAWS IN MOFCOM'S IN VESTIGATIONS OF CERTAIN AUTOMOBILES 
FROM THE UNITED STATES 
A. China Breached Article 6.5.1 of the AD Agreement and Article 12.4.1 of the 
SCM Agreement by Failing to Requir e the Provision of Adequate Non-
Confidential Summaries 
3. In this case, China acted inconsistently with its obligations under Article 6.5.1 of the AD 
Agreement and Article 12.4.1 of the SCM Agreement.   
1. Article 6.5.1 of the AD Agreem ent and Article 12.4.1 of the SCM 
Agreement Require the Preparation of Non-Confidential Summaries 
Absent Exceptional Circumstances 
4. An investigating authority that accepts confidential information from an interested party 
must also require that party to provide a non-confidential summary of such information.  
2. The Non-Confidential Summaries Are Inadequate 
5. In the investigations at issue, the petiti oner did not present to MOFCOM any particular 
circumstances, let alone exceptional ones, that explained why the information in question was not 
susceptible to non-confidential summary. Yet MOFCOM failed to require the petitioner to prepare 
non-confidential summaries of information it submitted.  
a. Sales to Output Ratio, Re turn on Investment, Salary, 
Apparent Consumption 
6. For several categories of information, the petitioner simply redacted the information 
contained in the application, preventing the resp ondents from reviewing the data and leaving them 
in the dark about the substance of the information provided.  WT/DS440/R/Add.1 
 
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 b. Other Economic Indicators 
7. For a number of other data categories, the application indicates year-on-year percentage 
changes for the POI, but it does not provide a non-confidential summary of the actual values 
associated with the percentage changes. Due to the petitioner's extensive reliance on what it 
characterized as confidential information, the fa ct that MOFCOM did not require non-confidential 
summaries of the information that was capable of summary was a significant failure, which seriously compromised the ability of the United States and U.S. companies to respond to the 
petitioners' allegations.  
B. China Breached Article 6.9 of the AD Agreement by Failing to Disclose the 
Calculations and Data Used to Determine the Existence of Dumping and Calculate Dumping Margins 
8. China breached Article 6.9 of the AD Agreemen t by failing to disclose to interested parties 
the "essential facts" forming the basis of MOFCOM's decision to apply antidumping duties.  
1. Article 6.9 of the AD Agreement Requires the Investigating 
Authority to Disclose to Interest ed Parties the Calculations and 
Data Used to Determine the Existe nce of Dumping and to Calculate 
Dumping Margins 
9. The calculations relied on by an investigating authority to determine the normal value and 
export price – a s  w e l l  a s  t h e  d a t a  u n d e r l y i n g  t h o s e  c a l c u l a t i o n s  – constitute "essential facts" 
forming the basis of the investigating authority's imposition of final measures within the meaning of Article 6.9. These data are "facts" because they  are things "known for certain to have occurred." 
The investigating authority aggregates, disaggregates or otherwise mathematically manipulates 
this adjusted data to calculate the normal value and export price. These calculations similarly are 
"facts" because they also represent things kn own to have occurred, as distinct from the 
investigating authority's reasoning or legal interpretation of those data.  
2. MOFCOM Failed to Disclose the Calculations and Data it Used to 
Determine the Existence of Dumping and Arrive at the Dumping 
Margins 
10. The calculations and related information MOFCOM should have made available include, but 
are not limited to: (1) all calculations performed with respect to the derivation of normal value; (2) all calculations performed with respect to the derivation of export price; and (3) all calculations 
performed with respect to the determination of cost s of production. For normal value, export price, 
and costs of production, MOFCOM should have provided the details of any data adjustments or manipulations performed by MOFCOM on the data provided by each respondent, made available 
adjustments and revisions made by MOFCOM to the sales data provided by each respondent, and 
specifically identified any data provided by each  respondent that was eliminated or rejected by 
MOFCOM. These facts were "essential" to MOFCOM's dumping determination because they formed 
the basis of its decision to apply definitive measures and the determination of the dumping 
margins.  
11. MOFCOM's failure to make available the ca lculation data prevented the respondents from 
knowing basic information about how the dumping margins to which they would be subject had 
been determined. Without the actual calculations performed by the investigating authority, it is not 
possible to check the calculations against the methodological explanations given, to ensure the completeness and accuracy of the investigating authority's calculations.  
IV. MOFCOM'S FLAWED ALL OT HERS DUMPING DETERMINATION 
A. MOFCOM's Determination of the All Others Rate Is Inconsistent with 
Articles 6.8, 6.9, 12.2, and 12.2.2 of the AD Agreement 
12. In the final determination, MOFCOM applied the all others dumping margin of 21.5 per cent 
to unexamined U.S. producers/exporters. It did so despite the fact that the dumping margin for the respondents ranged from 2 per cent to 8.9 per cent. MOFCOM's explanation for its all others WT/DS440/R/Add.1 
 
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 dumping margin was that, pursuant to Article 21 of its Anti-Dumping Regulation, it relied on "the 
best information available and facts that were  adopted in the PD, and appl[ied] the dumping 
margin claimed in the petition" for all other U.S. companies. 
1. MOFCOM's Use of Facts Available Is Inconsistent with Article 6.8 
and Annex II of the AD Agreement 
13. China acted inconsistently with Article 6.8 of the AD Agreement and paragraph 1 of Annex II 
because MOFCOM applied (apparently adverse) facts available, despite the fact that it did not 
notify the relevant producers of the information re quired of them, and the producers did not refuse 
to provide necessary information or otherwise impede the dumping investigation. Indeed, MOFCOM had no evidence that any interested party "refused access to" or otherwise "did not provide" information that was "necessary" to the antidumping investigation, or otherwise 
"significantly impeded" the antidumping investigation. As was the case in China – GOES , other 
exporters of subject merchandise were non-existent: no other U.S. exporters of automobiles existed at the time of the antidumping investigation of certain automobiles from the United States.  
2. China Acted Inconsistently with Article 6.9 of the AD Agreement by 
Failing to Disclose the Essential Facts under Consideration Regarding its Calculation of the "All Others" Dumping Rate 
14.  MOFCOM failed to inform the United States and other interested parties "of the essential 
facts under consideration" which formed the basis for this calculation in time for the United States and other interested parties to defend their interests.   
a. MOFCOM's Determinations and Disclosures 
15. In the preliminary determination, MOFCOM established an all others dumping rate of 
21.5 per cent. MOFCOM explained its determination in a single sentence: "For other U.S. companies, in accordance with Article 21 of th e AD regulations, the Investigating Authority 
decided, using available facts and the best info rmation available, to apply the dumping margin 
claimed in the petition to these companies." Article 21 of China's Anti-Dumping Regulation pertains to the use of facts available. In the final determination, MOFCOM established a final all others 
dumping rate of 21.5 per cent. It did so despit e the fact that the dumping rates for the other 
respondents ranged from 2 per cent to 8.9 per cent.  
b. MOFCOM Failed to Disclose  the Essential Facts under 
Consideration Forming the Basis for the All Others Dumping 
Rate, and the United States Was Deprived of Its Ability to 
Defend Its Interests as a Result 
16. MOFCOM did not identify the essential facts th at formed the basis for its imposition of a 21.5 
per cent all others dumping rate. As described above, its disclosure consisted of a single sentence. 
Noticeably absent from its determination are the following types of facts that would be necessary to MOFCOM's decision to apply facts available: facts relating to whether or not the U.S. companies 
refused access to necessary information or significantly impeded the antidumping investigation; 
facts that led MOFCOM to conclude that a 21.5 per cent all others dumping rate was an appropriate rate applicable to all other companies; and facts underpinning the calculation of the 21.5 per cent rate, and the details of the calculation itself.  
17. These facts are essential because they form the basis for MOFCOM's decision to apply a facts 
available all others dumping rate. Because MOFCOM did not disclose these essential facts, the United States and other interested parties were not able to understand, much less evaluate and, if 
necessary, rebut, MOFCOM's assessment or calculation of the all others dumping margin. Likewise, 
because MOFCOM did not adequately disclose the factual information used to calculate the 21.5 per cent all others rate, the United States and interested U.S. companies were not able to 
argue that this rate was inappropriate. Given the significant disparity between the "all others" rate 
and the rates calculated for the known exporters – the "all others" rate was more than twice as high as the margin for any of the investigated companies – a more detailed disclosure of the "essential facts" under consideration leading to the "all others" rate was required to allow the 
United States to defend its interests an d those of potential future exporters.  WT/DS440/R/Add.1 
 
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 3. MOFCOM Failed to Explain Its Determination 
18. MOFCOM breached Article 12 of the AD Agreem ent because it failed to provide in sufficient 
detail the findings and conclusions that lead to application of facts available pursuant to Article 21 of its regulations.  
V. MOFCOM'S FLAWED ALL OTHERS SUBSIDY RATE DETERMINATION 
A. MOFCOM's Determination of the All Others Rate Is Inconsistent with 
Articles 12.7, 12.8, 22.3, and 22.5 of the SCM Agreement 
19. In the final determination, MOFCOM applied the all others subsidy rate of 12.9 per cent to 
unexamined U.S. producers/exporters. MOFCOM's explanation for its all others subsidy rate was that it relied upon Article 21 of its CVD Regulation, and that it relied on facts available to make its determination for all other U.S. companies. 
1. MOFCOM's Use of Fact s Available Is Inconsistent with Article 12.7 
20. China acted inconsistently with Article 12.7 of the SCM Agreement because MOFCOM applied 
facts available to producers that MOFCOM did not notify of the information required of them, and 
that did not refuse to provide necessary information or otherwise impede the countervailing duty 
investigation. Indeed, MOFCOM had no evidence th at any interested party "refused access to" or 
otherwise "did not provide" information that was "necessary" to the investigation, or otherwise 
"significantly impeded" the investigation. As was the case in the investigation that was the subject 
of China – GOES , exporters of subject merchandise other than the named respondents did not 
exist at the time of the countervailing duty investigation. Therefore, China's application of facts available was improper, as it is logically impossible for a non-existent exporter to fail to cooperate.  
2. China Acted Inconsistently with Article 12.8 of the SCM Agreement 
by Failing to Disclose the Esse ntial Facts under Consideration 
Regarding its Calculation of the "All Others" Subsidy Rate 
21. Because MOFCOM failed to inform the United States and other interested parties "of the 
essential facts under consideration" which formed the basis for this calculation in time for the United States and other interested parties to defend their interests, MOFCOM's calculation of the 
all others subsidy rate also was inconsistent with Article 12.8 of the SCM Agreement. 
a. MOFCOM's Determinations and Disclosures 
22. In the preliminary determination, MOFCOM established an all others subsidy rate of 12.9 per 
cent. MOFCOM explained its determination in one single sentence: "For all other U.S. companies, 
in accordance with Article 21 of the CVD regula tions, the Investigating Authority decided, by 
adopting facts available, to apply the ad valorem  subsidy rate of General Motors LLC to these 
companies." Article 21 of China's CVD Regulation pe rtains to the use of facts available. However, 
MOFCOM provided no further explanation of its calculation of the all others subsidy rate. In the 
final determination, MOFCOM applied the all ot hers subsidy rate of 12.9 per cent. MOFCOM's 
cursory explanation repeated that of its preliminary determination and final disclosure. 
b. MOFCOM Failed to Disclose  the Essential Facts Under 
Consideration Forming the Basis for the All Others Subsidy Rate, and the United States Was Deprived of Its Ability to Defend Its Interests as a Result 
23. As in the AD proceeding, MOFCOM did not identify the essential facts that formed the basis 
for its imposition of a 12.9 per cent all others subsidy rate. As described above, its disclosure consisted of a single sentence. Noticeably absent from this disclosure are the facts that serve as 
the basis for MOFCOM's decision regarding the applic ation of facts available, and in particular the 
facts that led MOFCOM to conclude that resorting to the use of the facts available was appropriate. 
These facts are essential because they form the basis for any investigating authority's 
determination to apply a facts available subsidy rate. Without disclosure of the facts underlying 
MOFCOM's decision to apply facts available, the Un ited States and interested U.S. companies were WT/DS440/R/Add.1 
 
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 unaware of the factual basis for MOFCOM's dete rmination and therefore could not adequately 
defend their interests.  
3. MOFCOM Failed to Explain Its Determination 
24. Article 22 of the SCM Agreement required th at MOFCOM provide in sufficient detail the 
findings and conclusions that led to application of facts available pursuant to Article 21 of its 
regulations. The single, perfunctory sentence MOFC OM included in its determination and disclosure 
document does not satisfy this requirement. 
VI. MOFCOM'S FLAWED INJURY DETERMINATION 
25. MOFCOM's injury determination is inconsistent with Articles 3.1, 3.2, 3.5, and 4.1 of the AD 
Agreement and Articles 15.1, 15.2, 15.5, and 16.4 of the SCM Agreement.  
A. MOFCOM's Narrow Definition of the Domestic Industry Is Inconsistent 
with Articles 3.1 and 4.1 of the AD  Agreement and Articles 15.1 and 16.1 
of the SCM Agreement 
26. MOFCOM narrowly defined the domestic industry for the purpose of its injury investigation, 
such that the domestic industry that MOFCOM examined included only a fraction of domestic 
producers, limited to members of CAAM, the petitioner in the AD and CVD investigations. MOFCOM's determination to limit the definition of the "domestic industry" only to the petitioners 
"reduced the data coverage that could have served as a basis for its injury analysis and introduced 
a material risk of distorting the injury determ ination." Furthermore, MOFCOM excluded "a whole 
category of producers of the like product," (i.e. domestic producers that did not express support 
for the petition) and likely also joint ventures between international and Chinese-owned companies 
("JVs"). This gave rise to "a material risk of distortion." 
27. In addition to the skewing of the data inherent in MOFCOM's limitation of the domestic 
industry definition to those enterprises that we re members of the group supporting the petition, 
the evidence suggests that the collective output of  those enterprises represented a relatively small 
percentage of total domestic production in China. Under the circumstances of these investigations, where there has been no indication by MOFCOM that  the domestic industry is fragmented or is so 
large that sampling would be necessary, MOFCOM's exclusion from the definition of the domestic 
industry of enterprises accounting for more than 60 per cent of domestic production resulted in a 
definition of the domestic industry that did not include a "major proportion" within the meaning of 
Article 4.1 of the AD Agreement and Article 16.1 of the SCM Agreement. The Appellate Body has 
explained that a "major proportion" means a "rel atively high proportion of the total domestic 
production." 
28. MOFCOM's definition of the domestic industry is inconsistent with the definition set out in 
Article 4.1 of the AD Agreement and Article 16. 1 of the SCM Agreement, because it does not 
include enterprises that represent "a major prop ortion of the total domestic production" of 
automobiles. As a result, MOFCOM's injury determination, which was based on its flawed definition 
of the domestic industry, is inconsistent with Ar ticle 3.1 of the AD Agreement and Article 15.1 of 
the SCM Agreement because it was neither objective nor based on "positive evidence." 
B. MOFCOM's Price Effects Analysis Is Inconsistent with Articles 3.1 and 3.2 
of the AD Agreement and Articles 15.1 and 15.2 of the SCM Agreement 
29. Analyzing the effect of subject imports on th e price of the domestic like product, MOFCOM 
found only price depression at the end of the pe riod of investigation, i.e. interim 2009; MOFCOM 
did not find price suppression or price undercutting . MOFCOM's finding of price depression during 
interim 2009 is plainly contradicted by the evidence on the administrative record, and its 
consideration of price effects is neither objective nor based on "positive evidence." 
30. In support of its price depression finding, MO FCOM asserted that "the average sales price of 
domestic like products varied the same as the import price of Subject products." However, 
MOFCOM's assertion that parallel pricing existed between the domestic like products and subject imports is plainly contradicted by the evidence on the administrative record. Additionally, merely WT/DS440/R/Add.1 
 
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 identifying parallel pricing would do nothing to explain how the effect of subject imports was to 
significantly depress prices for the domestic li ke products. MOFCOM did not provide sufficient 
reasoning and, in fact, said nothing in the final determination to explain how parallel pricing caused the depression of domestic prices. 
31. MOFCOM failed to address evidence that subj ect imports oversold the domestic like products 
during the period in which MOFCOM identified price depression. Absent further explanation, the fact that subject imports were overselling the domestic like products calls into question MOFCOM's 
conclusion that the price depression obse rved was the effect of subject imports. 
32. MOFCOM failed to make needed adjustments to the average unit values ("AUVs") used in its 
price effects analysis. The only "pricing" information MOFCOM referenced anywhere in its injury determination consists of AUVs for the imports under investigation and for the domestic like 
product. Indeed, MOFCOM used a single, annual AUV for each year of the period of investigation 
and a single AUV for interim 2009. While in certain circumstances, AUV data may serve as a reliable proxy for pricing information, for that to be the case, each group of products being 
compared should be relatively similar. Otherwise, differences in AUVs may reflect changes or 
variations in product mix, not differences in pricing. Here, the record evidence unequivocally indicates that "certain automobiles" is not a homogenous product and that the subject automobiles 
imported from the United States primarily fell into a different grade from those primarily sold by 
the Chinese domestic producers. MOFCOM's failure to make necessary adjustments to ensure price comparability, or, at the very least, explain why such adjustments were not necessary in this case, undercuts its conclusion that the price depression observed was the effect of subject imports. 
33. MOFCOM failed to consider or address eviden ce that the market share of the domestic like 
products increased along with that of subject imports during the period in which MOFCOM found price depression. This undercuts its conclusion th at the price decline of domestic like products 
observed was the effect of subject imports. 
34. Finally, MOFCOM's price effects analysis, nece ssarily, is founded upon and constrained by its 
narrow definition of the domestic industry, which is itself inconsistent with Articles 3.1 and 4.1 of 
the AD Agreement and Articles 15.1 and 16.1 of  the SCM Agreement. The flaws in MOFCOM's 
domestic industry definition also compromised MOFCOM's price effects analysis. 
35. For these reasons, MOFCOM's price effects analysis was not based on positive evidence, nor 
did it involve an objective examination of the evid ence, as required by Articles 3.1 and 3.2 of the 
AD Agreement and Articles 15.1 and 15.2 of the SCM Agreement.  
C. China's Causation Analysis Is Inconsistent with Articles 3.1 and 3.5 of the 
AD Agreement and Articles 15.1 and 15.5 of the SCM Agreement 
36. MOFCOM's causation analysis includes and relies upon a number of findings that are 
contradicted by the evidence on the administrative record before MOFCOM, and MOFCOM's determination is neither objective nor based on "positive evidence." Additionally, MOFCOM failed to 
base its determination on an examination of all relevant evidence before it and to examine any 
known factors other than dumped and subsidized imports that were injuring the domestic industry.   
37. As an initial matter, MOFCOM's causation analysis is founded upon its faulty, narrow 
domestic industry definition, and relies heavily on MOFCOM's flawed price effects analysis. The 
flaws in MOFCOM's domestic industry definition and its price effects analysis taint the causation 
analysis. It follows that, if the bases upon which MOFCOM's causation analysis is founded are flawed, then the causation analysis is also flawed. 
38.  MOFCOM failed to address evidence that  subject imports took market share from non-
subject imports and not from the domestic like products. Evidence that subject imports did not take market share from the domestic like products undercuts MOFCOM's conclusion that subject 
imports were a cause of material injury to the domestic industry. 
39. MOFCOM failed to account for the sharp decline in the Chinese industry's productivity 
throughout the period of investigation. The "productivity of the domestic industry" is expressly identified in Article 3.5 of the AD Agreement an d Article 15.5 of the SCM Agreement as a factor WT/DS440/R/Add.1 
 
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 that "may be relevant" to the causation analysis. MOFCOM's failure to address this factor in its 
analysis is plainly inconsistent with these provisions. 
40. MOFCOM failed to recognize the lack of  competition between subject imports and the 
domestic like product. The record evidence of limited competition between subject imports and the 
domestic like products is a further indication that subject imports were not a cause of the 
economic difficulties experienced by the domestic industry. 
41. MOFCOM failed to take into account the shar p drop in demand in interim 2009. Article 3.5 of 
the AD Agreement and Article 15.5 of the SCM Ag reement expressly identify "contraction in 
d e m a n d  o r  c h a n g e s  i n  t h e  p a t t e r n s  o f  c o n s u m p t i o n "  a s  a  f a c t o r  t h a t  " m a y  b e  r e l e v a n t "  t o  t h e  causation analysis. While MOFCOM discussed demand, its findings with respect to the impact of demand on its causation determination are not consistent with the evidence on the administrative 
record. The only part of the period of investigation in which MOFCOM found injury to have occurred 
coincided with the only instance of demand contraction  during the period of investigation. Given 
that a contraction in demand would typically be expected to have an adverse effect on pricing in 
the market, MOFCOM's summary dismissal of this factor as having no injurious impact on the 
industry was deeply flawed.  
42. MOFCOM failed to address other factors that may have caused injury to the domestic 
industry. First, MOFCOM ignored a decision by China to increase the sales tax on larger engine 
vehicles, and reduce the sales tax on smaller engine vehicles, and failed to consider the effect this may have had on the domestic industry. Second, MOFCOM failed to address the effect of increases in average wages and employment over the POI, coupled with decreases in productivity, on the 
domestic industry's pre-tax profits. These other known factors, which MOFCOM itself presented 
elsewhere in the final determination, were likely the cause of the decline in the domestic industry's pre-tax profits. 
43. For all of these reasons, MOFCOM's causatio n analysis was not based on positive evidence 
and did not reflect an objective examination, as required by Article 3.1 of the AD Agreement and 
Article 15.1 of the SCM Agreement. Further, MOFCOM failed to meet the requirements of 
Article 3.5 of the AD Agreement and Article 15.5 of the SCM Agreement to properly demonstrate 
causation by examining all relevant evidence before it; by failing to examine certain known factors other than the dumped or subsidized imports which at the same time were injuring the domestic industry; and by failing to ensure that the injuries caused by these other factors were not 
attributed to the dumped or subsidized imports. 
VII. CONSEQUENTIAL CLAIMS 44. In view of the claims set forth above, the United States considers that China has also acted 
inconsistently with Article VI of the GATT 1994, Article 1 of the AD Agreement, and Article 10 of 
the SCM Agreement, which only permit antidumping or countervailing duty measures to be applied under the circumstances provided for in Article VI of the GATT 1994 and conducted in accordance 
with the AD Agreement and the SCM Agreement. 
VIII. CONCLUSION 45. For the reasons set forth in the U.S. first written submission, the United States respectfully 
requests that the Panel find that China's measures, as set out therein, are inconsistent with 
China's obligations under the GATT 1994, SCM Agreement, and AD Agreement. The United States 
further requests, pursuant to Article 19.1 of the DSU, that the Panel recommend that China bring its measures into conformity with the GA TT 1994, SCM Agreement, and AD Agreement. WT/DS440/R/Add.1 
 
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ANNEX B-2 
EXECUTIVE SUMMARY OF THE OP ENING STATEMENT OF THE  
UNITED STATES AT TH E FIRST PANEL MEETING 
Mr. Chairperson, members of the Panel: 
 1. This is the third dispute settlement proceeding the United States has commenced against 
China concerning antidumping and countervailing du ty measures targeting U.S. exports. Each of 
the disputes we have brought addresses similar problems under the same substantive provisions of the covered agreements, and we are concerned by China's repeated failure to abide by fundamental commitments that it made in the trade remedies area when it joined the WTO.  
 
2. China, through its investigating authority, MOFCOM, has acted inconsistently with its obligations under the AD Agreement, the SCM Ag reement, and Article VI of the GATT 1994. In 
particular, MOFCOM failed to adhere to a range of key WTO obligations relating to transparency 
and procedural fairness, and it once again went forward with final affirmative determinations in the face of wholly inadequate evidence of material injury that should have led to the termination of the 
investigations, not the imposition of duties. 
 3. China's responses to the U.S. claims are unpersuasive. China seeks to counter arguments the United States does not make; to divert attention from the claims the United States is actually 
pursuing; to minimize MOFCOM's numerous procedural failures; and to assert without any factual 
basis that MOFCOM engaged in a searching and critic al evaluation of the facts and evidence before 
it. However, as the United States has shown, the conclusions that MOFCOM reached simply do not 
meet the standard, as described by a recent panel, of being "such reasonable conclusions as could 
be reached by an unbiased and objective investigating authority in light of the facts and arguments before it and the explanations given." Contrary to China's charge, it is not the case that 
the United States is seeking to "impose its mode of implementing the AD and SCM Agreements on 
other WTO Members." Rather, it is just that, when subjected to scrutiny, MOFCOM's investigations and determinations fail to meet the requirements of the AD and SCM Agreements and Article VI of 
the GATT 1994.  
 
I. CHINA FAILED TO RE QUIRE ADEQUATE NON-CONFIDENTIAL SUMMARIES OF 
CONFIDENTIAL INFORMATION 
 
4. Under Article 12.4.1 of the SCM Agreement and Article 6.5.1 of the AD Agreement, when an interested party claims that certain information must be treated as confidential, an investigating 
authority must require the party to provide sufficiently detailed non-confidential summaries of the 
confidential information. In exceptional circumstances, if an interested party believes the confidential information is not susceptible of summary, an explanation of why must be provided to the investigating authority. We demonstrated in our first written submission that China failed to 
meet these requirements.  
 5. China argues that the respondents never objected to the sufficiency of the non-confidential 
summaries. However, there is nothing in the text of  Articles 12.4.1 or 6.5.1 that relieves China of 
its obligations under those provisions in the absence of an "objection" from respondents. China made this same exact argument in China – GOES , and the panel there rejected it.   
 
6. China also argues that the petitioner did in  fact prepare adequate summaries, even though 
they were not labeled as such. However, for the categories of confidential information identified, China points to general statements in the petiti on addressing topics related to the confidential 
information, but these general statements are insufficient. The recent panel report in China – 
GOES  makes clear that interested parties do not have "to infer, derive and piece together a 
possible summary of confidential information."  
 
7. Two examples cited by China illustrate why China's approach is misguided. Table 19 from 
the petition, which we have reproduced as Exhibit USA-14, and Table 27 from the petition, which 
we have reproduced as Exhibit USA-15. In both of these tables, China points to a trend line that is WT/DS440/R/Add.1 
 
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 not labeled to indicate scale, and it relies on discussion where the key information is simply 
redacted.  8. China's approach to summaries would require interested parties to "infer, derive and piece 
together a possible summary of confidential in formation," contrary to the requirements of 
Articles 12.4.1 and 6.5.1. Because of these reda ctions and other shortcomings in summarization, 
in this case the respondents could not discern the substance of the information provided. 
 
9. Additionally, we note that neither the pe tition nor the documents prepared by MOFCOM 
during the course of the proceeding ever asserted that summarization was not possible or otherwise justified the absence of meaningful non-confidential summaries.  
 
10. Accordingly, China breached Article 6.5.1 of  the AD Agreement and Article 12.4.1 of the SCM 
Agreement. 
 
II. MOFCOM'S USE OF FACTS AVAILABLE TO DETERMINE THE "ALL OTHERS" CVD 
RATE IS INCONSISTENT WITH ITS OB LIGATIONS UNDER ARTICLE 12.7 OF THE 
SCM AGREEMENT 
 11. We turn now to MOFCOM's determination of the "all others" CVD rate. In the autos proceeding, the following U.S. exporters/producers of automobiles registered for the investigation: 
General Motors, Chrysler, Mercedes-Benz and its affiliated company Daimler, BMW, Honda, 
Mitsubishi, and Ford. Notwithstanding the fact that neither the petitioner nor MOFCOM identified any other U.S. producers or exporters of automobiles, China not only established an "all others" 
subsidy rate for unknown or unidentified producers, but applied facts available to arrive at this rate 
based on the purported lack of cooperation by  these unknown or unidentified companies.   
 
12. China claims that any unknown or unidentified companies were properly notified by virtue of 
the fact that MOFCOM placed a copy of the public  version of the petition in a reading room in 
Beijing, published the notice of initiation, and notified the U.S. government.   
13. This is not an adequate basis to resort to facts available. Under Article 12.1 of the SCM 
Agreement, all interested parties "shall be given notice of the information which the authorities require and ample opportunity to present in writing all evidence which they consider relevant." In 
that regard, an interested party cannot "refuse[] access to, or otherwise … not provide, necessary  
information" if it has not been given notice of "the information which the authorities require ." As 
the Appellate Body has made clear, an export er must be given the opportunity to provide 
information required by an investigating authority before the investigating authority resorts to 
facts available that can be adverse to the exporter's  interests. By definition, an exporter that is 
unknown to the investigating authority is not notified of the information required, and thus is denied an opportunity to provide it.  
 
14. The panel in China – GOES  reviewed facts that are similar to the facts in this dispute. The 
China – GOES panel found that China acted inconsistently with Article 12.7 of the SCM Agreement, 
noting that "in the absence of being notified of the ‘necessary information' in the context of a 
particular investigation, it is difficult to conclude that unknown exporters refused access to or failed to provide necessary information or otherwise impeded the investigation." The panel also 
observed that "a conclusion that non-existent exporters refused to provide information or impeded 
the investigation seems illogical."  15. As in  China – GOES , in the absence of being notified of the "necessary information" in the 
autos proceeding, it is illogical to conclude that unknown exporters refused access to or failed to 
provide necessary information or otherwise impeded the investigation. And similar to China – 
GOES , no other exporters existed at the time of the autos investigation; it is logically impossible to 
argue in this dispute that a non-existent exporter failed to cooperate. 
 16. China's mere placement of a petition in a re ading room and publication of a notice do not 
constitute a meaningful opportunity for a company to provide information. Accordingly, an 
unidentified or unknown exporter cannot be said to have failed to cooperate by not having located the petition or the notice of initiation in this case. Thus, by applying facts available to non-existent, unknown, or unidentified firms, China brea ched Article 12.7 of the SCM Agreement. 
 WT/DS440/R/Add.1 
 
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 III. CHINA'S DETERMINATION OF THE "ALL OTHERS" RATE IN THE FINAL 
ANTIDUMPING DUTY DETERMINATION IS INCONSISTENT WITH ARTICLE 6.8 AND 
PARAGRAPH 1 OF ANNEX II OF THE AD AGREEMENT 
 
17. For the "all others" dumping rate, as with the "all others" subsidy rate, notwithstanding the 
fact that neither the petitioner nor MOFCOM iden tified any other U.S. producers or exporters of 
autos, China applied a facts available dumping rate  to unknown or unidentified exporters of autos. 
Notably, this "all others" dumping rate was more than twice as high as the highest rate calculated 
for an investigated company.  18. China again claims that it was permitted to apply facts available because it placed the 
petition in a reading room in Beijing and published the notice of initiation on its website. For the 
reasons described earlier, this is not a sufficient basis to deem unknown or unidentified producers or exporters uncooperative. 
 
19. China further claims that, while the AD Agr eement limits the antidumping rate that can be 
applied to known producers or exporters that ar e not individually examined, there are no such 
limits placed on unknown producers/exporters. Th erefore, according to China, MOFCOM was within 
its rights to base the "all others" dumping rate on facts available. This argument, however, overlooks the clear direction in Article 6.1 and paragraph 1 of Annex II to notify all interested parties of the information that is required of th em and to provide them with ample opportunity to 
provide all relevant information. 
 20. Understood in light of the obligation to notify interested parties of the information required 
of them, Article 6.8 and Annex II are intended to address situations where an interested party 
does not provide such information to or cooperate with the investigating authority. A failure to provide necessary information or a failure to cooperate cannot be found to have existed where no 
other producer or exporter was made aware of the information which the authorities require of it 
for purposes of that investigation. And where th ere was no other producer or exporter, they of 
course could not be aware of the investigation, much less the information required.  
21. In China – GOES , the panel found that China acted inconsistently with Article 6.8 of the AD 
Agreement, and paragraph 1 of Annex II, for reasons similar to those provided in its findings under Article 12.7 of the SCM Agreement.  The facts of the China – GOES  dispute are similar to the 
facts of this dispute. The panel in this dispute should similarly find that China acted inconsistently 
with Article 6.8 and paragraph 1 of Annex II of the AD Agreement.  
IV. CHINA BREACHED ARTICLE 12.8 BY FAIL ING TO DISCLOSE THE ESSENTIAL FACTS 
REGARDING THE CALCULATION OF THE "ALL OTHERS" SUBSIDY RATE 
 22. During the  autos investigation, MOFCOM calculated the all others subsidy rate by applying 
"facts available." It did so without disclosing the essential facts forming the basis for its decision, 
contrary to Article 12.8 of the SCM Agreement. Th ese essential facts included the facts that led 
MOFCOM to conclude that "facts available" was warranted. In China – GOES , the panel found that 
China acted inconsistently with the disclosure obligations under Article 12.8 of the SCM Agreement 
by not disclosing facts leading to the conclusion that applying "facts available" to calculate the "all others rate" was warranted. Accordingly, the panel in this dispute should find that China acted 
inconsistently with Article 12.8 of the SCM Agreement by not disclosing the essential facts forming 
the basis for its decision regarding final measures for "all other" U.S. companies.   V. CHINA FAILED TO DISCLOSE THE ESSENTIAL FACTS REGARDING THE 
CALCULATION OF THE "ALL OTHERS" DUMPING RATE, CONTRARY TO ARTICLE 6.9 
OF THE AD AGREEMENT 
 
23. China also acted inconsistently with Article 6.9 of the AD Agreement by failing to disclose 
the essential facts forming the basis of the "all others" dumping rate. MOFCOM's "all others" dumping rate was twice as high as the highest calculated rate. China justified its choice of this 
final rate as reliance on the "facts available." 
 24. However, prior to the final determination, China did not disclose the essential facts forming the basis for its decision. In response, China argues that it applied the AD rate alleged in the 
petition, and there were no adjustments or calculations that could have been disclosed. This WT/DS440/R/Add.1 
 
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 argument is inadequate. It ignores that an "essential fact" when an investigating authority seeks 
to resort to facts available would be the facts identified in Article 6.8 – that is, the facts that demonstrate an interested party has "refuse[d] access to, or otherwise d[id] not provide, necessary information … or significantly impede[d] the investigation." Further, MOFCOM also did 
not disclose any of the facts it employed to corro borate the margin information provided in the 
petition, or to decide that it was an appropriate margin for the "all others" rate.   
25. In China – GOES , the panel found that China acted inconsistently with the disclosure 
obligations under Article 6.9 of the AD Agreement by  not disclosing facts leading to the conclusion 
that applying "facts available" to calculate the "all others rate" was warranted.  
26. By failing to disclose these essential facts in the autos proceeding, China acted inconsistently 
with Article 6.9 of the AD Agreement.  
VI. CHINA FAILED TO DISCLOSE THE DATA AND CALCULATIONS UNDERLYING ITS 
DETERMINATION OF THE DUMPING MARGIN , CONTRARY TO ARTICLE 6.9 OF THE 
AD AGREEMENT 
 
27. China also breached Article 6.9 of the AD Agreement because MOFCOM failed to disclose the data and calculations it performed to determine the existence and margin of dumping, including the calculation of the normal value and the export price for the respondents. 
 
28. As just discussed, Article 6.9 of the AD Ag reement requires the investigating authority to 
disclose the essential facts "under consideration which form the basis for the decision whether to 
apply definitive measures." Definitive measures are only applied if the normal value exceeds the 
export price, and the margin of dumping is based on  the extent to which it does so. Therefore, the 
data and calculations used to determine the normal value and export price constitute "essential" 
facts. Without those facts, no affirmative dumping determination could be made, and no definitive 
duties could be imposed.  29. China asserts that the U.S. reading of Article 6.9 creates a disclosure requirement without 
limit. To the contrary, the first sentence of Articl e 6.9 has at least three limitations – it applies to 
facts, as opposed to other matters ; it concerns only the essential  facts, as opposed to any and all 
facts; and it is limited to those essential facts that form the basis of the decision to apply definitive 
measures . The United States claim under Article 6.9 is firmly based on this text, and respects 
these limitations. Additionally, the first sentence of Article 6.9 must be read in context of the 
second sentence, which provides that that the aim of the requirement is "to permit parties to 
defend their interests." As the panel in EC – Salmon  explained, the purpose of Article 6.9 is to 
"provide the interested parties with the necessary information to enable them to comment on the completeness and correctness of the facts being considered by the investigating authority" and "provide additional information or correct perceived errors."  
 
30. China responds by arguing that it did disclos e the essential facts. In doing so, China cites a 
passage of the final determination that merely states that China disclosed the essential facts. This 
is not enough. China does not cite any evidence showing that it disclosed the actual essential facts 
– the data and calculations – underlying the dumping margin determination. Thus, by failing to disclose the data and calculations it performed to determine the existence and margin of dumping, 
including the calculation of the normal value and the export price for the respondents, China has 
breached Article 6.9 of the AD Agreement.   VII. MOFCOM'S INJURY DETERMINATION IS INCONSISTENT WITH CHINA'S WTO 
OBLIGATIONS  
 
A. MOFCOM's Narrow Definition of the Domestic Industry Is Inconsistent 
with Articles 3.1 and 4.1 of the AD  Agreement and Articles 15.1 and 16.1 
of the SCM Agreement 
 
31. The petition in these cases was filed by th e China Association of Automobile Manufacturers 
or "CAAM." We do not know who CAAM's members are – they were never identified. After initiating its investigations, MOFCOM published "Notifications for Registration to Participate" in the injury investigations. CAAM was the only domestic producer or association of domestic producers to 
respond to MOFCOM's notices. CAAM was then the only such domestic entity to which MOFCOM WT/DS440/R/Add.1 
 
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 issued the injury questionnaire, and CAAM was the only domestic entity that provided a response 
to the injury questionnaire. MOFCOM based its injury determination on data submitted only by CAAM. However, the producers for which CAAM prov ided data accounted for only about one-third 
of total domestic production for most of the period  of investigation. It simply cannot be the case 
that MOFCOM had "ample data" with which to make an accurate injury determination when the 
domestic industry – as MOFCOM defined it – was limited only to enterprises that supported the 
petition and excluded more than 60 percent of total domestic production.  
 
32. Article 4.1 of the AD Agreement and Articl e 16.1 of the SCM Agreement establish that the 
term "domestic industry shall be interpreted as re ferring to the domestic producers as a whole of 
the like products or to those of them whose collective output of the products constitutes a major 
proportion of the total domestic production of those products." Article 3.1 of the AD Agreement 
and Article 15.1 of the SCM Agreement require that a determination of injury be based on "positive 
evidence" and involve an "objective examination" of, inter alia , the impact of imports on the 
domestic producers of such products.  
 33. In EC – Fasteners , the Appellate Body explained that "to ensure the accuracy of an injury 
determination, an investigating authority must not act so as to give rise to a material risk of 
distortion in defining the domestic industry, for example, by excluding a whole category of producers of the like product." The Appellate Body  also explained that there is a relationship 
between the proportion of domestic production incl uded in the domestic industry definition and the 
likelihood that the injury determination will be di storted. In other words, in cases such as this, 
where the industry "coverage" is low, there is a heightened risk that the injury determination will be distorted. 
 
34. In these investigations, the definition of th e domestic industry was distorted because it was 
limited to entities that were willing to register to participate in the injury investigations, that is, 
domestic producers that supported the petition. This is similar to the situation in EC – Fasteners , 
where the domestic industry was defined on the basis of a willingness to be included in a sample. China attempts to distinguish the facts of the EC – Fasteners  dispute, but, in fact, the situations 
are quite similar. In each case, the investigative pr ocedure introduced a material risk of distortion, 
which was inconsistent with the obligation to conduct an objective examination.  
 35. China claims that it conducted "an open, inclus ive, and transparent" investigation. In reality, 
MOFCOM's investigation bore none of these attributes, and the standard to which MOFCOM's 
investigation must be held is not whether it was "open, inclusive, and transparent;" the relevant question is whether it met the specific requirem ents of the AD and SCM Agreements. It did not. 
 
36. China tries to refute an argument that the United States did not make; namely that MOFCOM categorically excluded data from joint ventures between international and Chinese-owned companies. What the United States argued i s  t h a t  M O F C O M ' s  d e f i n i t i o n  o f  t h e  d o m e s t i c  
industry was distorted because it included only those producers that supported the petition, 
namely CAAM's member companies ( i.e., the petitioners) or some subset thereof.  
 
37. China disputes that MOFCOM defined the domestic industry as the petitioner CAAM's 
member companies. The final determination provides two strong indications that the domestic industry was indeed defined to encompass CAAM member companies or some subset thereof. 
First, the final determination makes clear that the only questionnaire response that MOFCOM 
received from domestic producers was from CAAM. There is no indication in the final determination that CAAM was reporting data for any company other than its member companies in that questionnaire response. Second, in discussing th e definition of the domestic industry, MOFCOM 
stated that "there is evidence showing that the total production of like products from domestic 
industry represented by China Association of Automobile Manufacturers accounts for the main part of that of domestic like products," and that the "domestic enterprises mentioned above can 
represent the Chinese domestic industry."
 The unavoidable implication of this statement is that the 
domestic industry was defined as the CAAM member companies or some subset thereof. 
 
38. China argues that no "freestanding distortion test" can be read into Article 4.1 of the AD 
Agreement and Article 16.1 of the SCM Agreement. The obligation to avoid distortion stems from 
Article 3.1 of the AD Agreement and Article 15. 1 of the SCM Agreement, which are overarching 
obligations that inform the rest of the injury determination. MOFCOM's definition of the domestic 
industry was distorted because it included only producers that supported the petition. WT/DS440/R/Add.1 
 
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39. China's first written submission makes clear that only about one third of domestic production w a s  i n c l u d e d  i n  M O F C O M ' s  d e f i n i t i o n  o f  t h e  d o m e s t i c  i n d u s t r y  f o r  m o s t  o f  t h e  p e r i o d  o f  investigation. While the AD and SCM Agreements do not provide a definition of "a major 
proportion," that does not mean that there are no limitations on how an investigating authority 
may define the domestic industry. As the Appellate Body explained in EC – Fasteners , a proper 
interpretation of the term "a major proportion" "requires that the domestic industry defined on this 
basis encompass producers whose collective output represents a relatively high proportion that 
substantially reflects the total domestic production."   40. The Appellate Body further explained that in certain circumstances  it might be appropriate 
for investigating authorities to have some flexibility in interpreting "major proportion." However, in 
this investigation, MOFCOM neither described the domestic industry as fragmented nor identified any practical constraints on its ability to obtain information. Further, nothing in the final 
determination suggests that MOFCOM's investigation of automobiles involved any such special 
market situations that would warrant a lower threshold for defining "major proportion."    
41. China seeks to excuse MOFCOM's failure to collect data covering a larger proportion of 
domestic production by noting that MOFCOM does not have the authority to compel interested parties to provide data for its investigations. However, there is no evidence that MOFCOM even made any effort  to obtain information from additional producers on a voluntary basis. In fact, 
MOFCOM created a disincentive by requiring that  producers apply to participate in the injury 
investigation as a prerequisite to submitting information.  
42. MOFCOM stated in its final determination that it issued its injury questionnaire to "known" 
domestic producers. This is certainly not true. CAAM was not the only domestic producer or association of domestic producers that could have been "known" to MOFCOM. Indeed, MOFCOM by 
law would have approved all of the Sino-foreign joint ventures in the auto sector. It therefore 
would appear that MOFCOM simply closed its eyes  to the existence of about two-thirds of the 
industry producing the domestic like product in China.    
43. For these reasons, MOFCOM's definition of the domestic industry does not constitute "a 
major proportion of domestic production," within  the meaning of Article 4.1 of the AD Agreement 
and Article 16.1 of the SCM Agreement. MOFCOM fail ed to ensure that the "domestic industry" was 
capable of providing "ample data" that would "ensure an accurate injury analysis." MOFCOM's 
injury determination, which was based on its definition of the domestic industry, was neither objective nor based on "positive evidence," as re quired by Article 3.1 of the AD Agreement and 
Article 15.1 of the SCM Agreement. 
 
B. MOFCOM's Price Effects Analysis Is Inconsistent with Articles 3.1 and 3.2 
of the AD Agreement and Articles 15.1 and 15.2 of the SCM Agreement 
 
44. Contrary to China's assertion, the United States does not merely challenge "certain narrow elements of MOFCOM's analysis" and ignore the bi g picture. The problem is that MOFCOM ignored 
the big picture, and the overall fa ctual situation presented in the final determination simply does 
not support MOFCOM's conclusion with respect to price effects.    
45. MOFCOM found that subject imports depressed prices for the domestic like product at the 
end of the period of investigation, in interim 2009, the first nine months of that year. That is the only adverse price effect that MOFCOM identified. MOFCOM made this finding despite the fact that subject imports were selling at much higher pric es than the domestic like product. The average 
unit price of subject imports in interim 2009 was about RMB 411,000, while the average unit price 
of the domestic like product was about RMB 316,000 . Moreover, the decline in the price of subject 
imports in interim 2009, as compared with interim 2008, was only 3.17 percent, compared to a 
decline for the domestic product of 10.13 percent.  
 46. This scenario presents a difficult question for China: how is it that a 3 percent decline in the 
price of the subject imports could have caused a 10 percent decline in the price of the domestic 
like product, when the imports were overselling  the domestic product by such a wide margin? 
MOFCOM's explanation is cursory in the extreme and implausible on its face.   WT/DS440/R/Add.1 
 
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 47. As an initial matter, we are puzzled by China's argument that MOFCOM was not required to 
make a finding of price undercutting. The United St ates did not argue in its first written submission 
that MOFCOM was required to make such a find ing. The United States merely observed that 
MOFCOM did not make a finding of price undercutting , in order to identify with precision the type 
of price effects finding that MOFCOM did make.    
 48. MOFCOM gave two reasons for its conclusion  that subject imports had depressed domestic 
prices in interim 2009: (1) "parallel pricing," and (2) the rising market share of subject imports, 
especially at the end of the period of investig ation. Neither of these is sufficient to explain 
MOFCOM's price depression finding.  
49. With respect to parallel pricing, MOFCOM's conclusion that the prices of the domestic like 
product and subject imports were moving in tandem  is belied by the relevant data, which showed 
that these prices diverged significantly in 2007. The data on the record before MOFCOM plainly 
show that there was no price parallelism.  
 50. China takes issue with the U.S. argument that, because of a sharp divergence in prices in 
the 2006-2007 period, the record did not show parallel pricing. However, China's argument 
actually shows that MOFCOM's parallel pricing finding was at such a level of generality as to be virtually meaningless. According to China's preferred translation, the final determination states that "change trends of the price of product under investigation and the price of the domestic like 
product were consistent basically ," and that they increased from 2006 to 2008 " in general ." 
Observations at this level of generality are simply not enough for an investigating authority to, in the Appellate Body's words, "understand whether subject imports have explanatory force for the 
occurrence of significant depression . . . of domestic prices." 
 51. Furthermore, even if there had been parallel pricing, merely identifying the existence of such 
a price trend does nothing to explain how the effect  of subject imports was to significantly depress 
prices for the domestic like products. MOFCOM said nothing in the final determination to explain how parallel pricing caused the depression of domestic prices.  
52. MOFCOM's second reason for finding price depression in interim 2009 is equally 
unconvincing. MOFCOM found that the rising market share of subject imports, especially at the end of the period of investigation, resulted in price depression for the domestic like product. However, 
MOFCOM failed to explain this conclusion, which was, in fact, contradicted by other evidence. 
MOFCOM's final determination shows that the market share of the domestic like product also 
increased  from interim 2008 to interim 2009, nearly as "sharply" as that of subject imports. In 
other words, subject imports were not taking market  share from the domestic like product. Rather, 
both subject imports and the domestic like produc t took market share from Chinese producers not 
included in MOFCOM's definition of the domestic industry and from non-subject imports during this 
period. Under these circumstances, it is hard to see how the increase in market share of subject 
imports could have depressed the price of the dome stic like product, and MOFCOM's determination 
gives no indication of how it considered these facts.  
53. China argues that MOFCOM's finding of price depression in interim 2009 was explained by 
the increase in the volume or market share of subject imports, both throughout the period of investigation and in interim 2009. This is unpersu asive. The increases in the volume of subject 
imports in the 2006-2008 period were commensurate with rising consumption of the subject 
merchandise in the Chinese market. These increases resulted in only a very slight rise in the market share of subject imports, from 9.97 percen t in 2006 to 10.74 percent in 2008. It is true 
that the domestic industry as defined by MOFCOM  lost market share in the 2006-2008 period, but 
this was almost entirely because of gains made by Chinese producers not included in MOFCOM's 
definition of the domestic industry and thir d-country imports, not the subject imports.  
 
54. The integrity of MOFCOM's finding that subjec t imports were responsible for price depression 
is also undercut by MOFCOM's use of average unit va lues or "AUVs." In light of the varying grades 
of the automobiles MOFCOM was comparing, MOFCOM should have made necessary adjustments 
to ensure price comparability, or, at the very least, it should have explained why such adjustments 
were not necessary. China argues that the relevant WTO agreement provisions do not require any specific methodology when examining price trends. But, as the Appellate Body recognized in China 
– GOES , although Articles 3.2 and 15.2 do not specify a particular methodology for evaluating 
price effects, a failure to ensure price comparability would not be consistent with the requirements WT/DS440/R/Add.1 
 
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 under Articles 3.1 and 15.1 that a determination of injury be based on "positive evidence" and 
involve an "objective examination" of the effect of subject imports on the prices of domestic like products.  
55. China also maintains that MOFCOM established that there was a sufficient competitive 
overlap between subject imports and the domestic pr oduct to warrant the use of AUVs in the price 
effects analysis. The United States submits that MOFCOM's analysis (much of which occurred in 
the context of MOFCOM's discussion of the scope of the investigation and the definition of the 
domestic like product, and not in the context of a discussion of price effects) was at such a level of generality that it failed to establish the degree of competitive overlap that would make an analysis of price effects meaningful.  
 
56. In sum, MOFCOM's finding of price depressi on during interim 2009 is not supported by the 
evidence on the record, and its consideration of price effects is not based on "positive evidence" 
and did not "involve an objective examination." Consequently, MOFCOM acted inconsistently with 
Articles 3.1 and 3.2 of the AD Agreement, and Articles 15.1 and 15.2 of the SCM Agreement, in conducting its price effects analysis. 
 
C. China's Causation Analysis Is Inconsistent with Articles 3.1 and 3.5 of the 
AD Agreement and Articles 15.1 and 15.5 of the SCM Agreement  
 
57. Not only is MOFCOM's causation analysis compromised by its flawed definition of the 
domestic industry and price effects analysis, but it also suffers from a number of other defects.  
58. China suggests that the United States "selectively cit[ed] isolated data and ignor[ed] the 
complete picture," but it is MOFCOM that selectiv ely cited the few elements of data that may have 
lent some support to its conclusion while ignoring the bulk of information on the record tending to 
s u g g e s t  t h a t  n o  r e l a t i o n s h i p  o f  c a u s e  a n d  e f f e ct existed between the subject imports and any 
difficulties experienced by the Chinese domestic industry.   59. China also argues that "[s]ubject imports need only be a ‘cause,' not the sole or significant 
cause, and may be one of many causes and still satisfy Articles 3.5 and 15.5." While China's 
position is unobjectionable in this regard, it is also beside the point. Taking the evidence on the record before MOFCOM as a whole, i.e., looking at the complete picture, there simply is no support 
for MOFCOM's conclusion that subject imports were in any way a cause of material injury to the 
Chinese domestic industry. When MOFCOM's causation analysis is subjected to scrutiny, it becomes clear that the evidence on which MOFCOM relied does not support the conclusion that 
MOFCOM reached, and the evidence that MOFCOM ignored provides further confirmation of 
MOFCOM's error.  60. MOFCOM relied on the increase in the vo lume and market share of subject imports to 
support its causation analysis, but again it failed to take into account that the market share of the 
Chinese domestic industry also increased, nearly as sharply as that of the subject imports, in 
interim 2009. China responds that MOFCOM fully ex amined the role of third country imports and 
found that they did not affect the causal link in this case. China misses the point. The question is 
not whether third-country imports injured the domestic industry in interim 2009, but whether the increase in the market share of subject impo rts in interim 2009 was at the expense of the 
domestic industry or of third country imports. China also argues that the United States should not 
have focused on interim 2009, but the developm ent of subject imports prior to interim 2009 
provided no basis for attributing injury to the do mestic industry in interim 2009 to subject imports 
in prior years. 
 
61. MOFCOM also failed to account for the significant decline in the domestic industry's productivity throughout the period of investigation. China argues that productivity was not a 
meaningful or significant factor to be examined when considering the causal link between subject 
imports and material injury because labor costs are a relatively insignificant part of the cost of manufacturing a vehicle in China. However, most of the decline in the domestic industry's pre-tax 
profits from interim 2008 to interim 2009 (a decline of RMB 493 million) can be attributed to the 
near-doubling of labor costs over this period (an increase of RMB 406 million).   62. MOFCOM also failed in its causation analysis to recognize the lack of competition between 
subject imports and the domestic like product. China attempts to rebut the U.S. arguments WT/DS440/R/Add.1 
 
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 concerning the lack of competition between subj ect imports and the domestic like product by 
pointing to the fact that subject imports undersold the domestic like product in one year of the period of investigation, in 2007. In fact, China's argument only serves to underscore the competitive disconnect between subject imports an d the domestic product. This is because the 
undersellin g in 2007 had absolutely no effect on domest ic prices, which rose in both 2007 (by 11 
percent) and 2008 (by 17 percent).   
63. Another defect in MOFCOM's causation analysis is that MOFCOM failed to take into account 
the sharp drop in demand in the Chinese market in interim 2009. China points to portions of the final determination in which MOFCOM dismissed declining demand as a cause of injury because the domestic industry "still kept increasing production  and sales." It appears from the evidence on the 
administrative record that the domestic industry found itself in the unfortunate position of ramping 
up production just as demand fell sharply, and that it had to decrease its prices in interim 2009 in order to move its excess production. These actions are not properly attributable to subject 
imports, but rather to ill-considered decisions made by the domestic industry. It appears that 
MOFCOM did indeed attribute the injury from declin ing demand to the subject imports, contrary to 
the prohibition on doing so in Article 3.5 of  the AD Agreement and Article 15.5 of the SCM 
Agreement. 
 64. MOFCOM also failed adequately to address other factors that likely accounted for the challenges experienced by the Chinese domestic industry in interim 2009, such as the increase in 
the sales tax in China on larger engine vehicles, and the sharp increases in wages and 
employment, coupled with the decline in produc tivity, in the Chinese domestic industry in 
interim 2009. 
 
65. In short, MOFCOM did not fulfil its obligations under the Agreements to establish a causal link between the imports under investigation and the injury sustained by the domestic industry, 
and its causation determination was not based on  positive evidence and did not involve an 
objective examination. Consequently, China acted inconsistently with Articles 3.1 and 3.5 of the AD Agreement and Articles 15.1 and 15.5 of the SCM Agreement.  WT/DS440/R/Add.1 
 
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 ANNEX B-3 
CLOSING STATEMENT OF THE UNITED STATES  
AT THE FIRST PANEL MEETING 
Mr. Chairman, Members of the Panel. 
1. The United States would like to begin by thanking the Panel and the Secretariat staff for 
your efforts in the preparation for and conduct of this hearing. We hope that the discussion held here yesterday and today has been of use to the Panel as you grapple with the issues in this 
dispute. 
 2. As we noted in our opening statement, this is the third dispute that the United States has brought concerning China's application of trade remedy measures, and each of these disputes 
addresses similar problems under the same substantive provisions of the covered 
agreements. Indeed, a review of the panel report in China – GOES  shows that China is making 
some of the same exact arguments here that it made in that dispute. For example, at 
paragraph 7.378 of that report, the panel writes: "China's position is that exporters or producers 
that did not register for the investigation were 'non cooperating' and therefore the application of facts available . . . was warranted." The China – GOES  panel rejected that argument and many of 
China's other arguments. We believe the Panel here  should find that panel's reasoning persuasive, 
and should likewise reject China's arguments in this dispute.  3. At times, listening to China's interventions du ring this meeting, it appeared that China was 
arguing that because MOFCOM followed its own procedures and exercised its seemingly boundless 
discretion, everything MOFCOM did in the autos investigations was consistent with China's WTO obligations. However, the fact that MOFCOM took certain steps and followed its own procedures is 
irrelevant to the issue of the WTO-consistency of its actions.  
 4. As we have shown, and as the third parties all seem to agree, the AD and SCM Agreements 
impose detailed procedural obligations and require a rigorous examination by investigating 
authorities so that the due process rights of inte rested parties are assured and so that when trade 
remedy measures are imposed, they are founded on positive evidence and an objective examination. The test is whether MOFCOM met th e specific standards in the agreements, and in 
the autos investigations, MOFCOM's efforts fell far short. 
 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 further clarity and understanding to the issues in this 
dispute. 
 6. The United States would like to conclude by again thanking the Panel and Secretariat for your time and attention to this matter.   
 WT/DS440/R/Add.1 
 
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ANNEX B-4 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN 
SUBMISSION OF THE UNITED STATES 
I. INTRODUCTION 
1. The U.S. first written submission demonstrat ed that China's investigating authority, the 
Ministry of Commerce for the People's Republic of China ("MOFCOM"), acted inconsistently with China's obligations under the  Agreement on Implementation of Article VI of the General 
Agreement on Tariffs and Trade 1994  ("AD Agreement") and the Agreement on Subsidies and 
Countervailing Measures  ("SCM Agreement") when it investigated and imposed antidumping and 
countervailing duty measures on certain automobiles from the United States.  
2. China responds with distraction, avoidance, and unsubstantiated assertion. China appears to 
argue that because MOFCOM followed its own pr ocedures and exercised its seemingly boundless 
discretion, everything MOFCOM did in the investigations of certain automobiles was consistent with 
China's WTO obligations. However, the fact that MOFCOM took certain steps and followed its own 
procedures is irrelevant to the issue of the WTO-co nsistency of its actions. MOFCOM failed to meet 
many of the specific procedural and substantive requirements of the AD and SCM Agreements, and 
MOFCOM's conclusions fail to meet the standard, as described by a recent panel, of being "such 
reasonable conclusions as could be reached by an unbiased and objective investigating authority in light of the facts and arguments before it and the explanations given."  
II. PROCEDURAL FLAWS IN MOFCOM'S IN VESTIGATIONS OF CERTAIN AUTOMOBILES 
FROM THE UNITED STATES 
A. China Breached Article 12.4.1 of th e SCM Agreement and Article 6.5.1 of 
the AD Agreement Through MOFCOM's Fa ilure to Require Non-Confidential 
Summaries 
3. As the United States has explained, Chin a failed to require adequate non-confidential 
summaries, breaching Article 12.4.1 of the SCM Agr eement and Article 6.5.1 of the AD Agreement. 
China responds by asserting that, inter alia,  the respondents never objected to the purported non-
confidential summaries, thus relieving China of its obligation to require adequate non-confidential 
summaries; and that general statements in the petition addressing topics related to the 
confidential information are, in fact, adequate. In doing so, China disregards the obligations contained in Article 12.4.1 of the SCM Agreem ent and Article 6.5.1 of the AD Agreement. 
 
4. Relying on an improper interpretation of  the SCM Agreement and AD Agreement, China 
argues that the purported non-confidential summaries are in fact contained in the petition. But a 
party submitting confidential information is required to provide a non-confidential summary of that 
information. If that party fails to submit the information, it is not sufficient to have a Member subsequently point to previously unspecified info rmation elsewhere on the record that is not a 
summary of the specific confidential information at issue and claim that it serves as that non-
confidential summary. Moreover, the purported non-confidential summaries in the petition are not, 
in fact, summaries. Instead, the petition only pr ovides simple redactions, general statements that 
do not shed light on the redacted information's contents, unlabeled trend lines that provide no 
context that would allow respondents to provide meaningful comments, and year-over-year 
percentage changes that could have been adequately summarized without implicating 
confidentiality concerns. MOFCOM failed to require summaries of this information in a manner 
permitting a reasonable understanding of the substance of the data and information treated as 
confidential. Therefore, China breached Article 12.4.1 of the SCM Agreemen t and Article 6.5.1 of 
the AD Agreement.  WT/DS440/R/Add.1 
 
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 B. China Breached Article 6.9 of the AD Agreement through MOFCOM's 
Failure to Disclose the Calculations and Data Used to Determine the 
Existence of Dumping and to Calculate Dumping Margins 
5. As the United States has demonstrated, MOFCOM acted inconsistently with Article 6.9 of the 
AD Agreement by failing to disclose to interested parties the "essential facts" forming the basis of 
M O F C O M ' s  d e c i s i o n  t o  a p p l y  a n t i - d u m p i n g  d u t i e s .  T h i s  i n c l u d e d  a  f a i l u r e  b y  M O F C O M  t o  m a k e  
available the data and calculations used to de termine the existence and margins of dumping. 
China denies that MOFCOM failed to provide the actual data and calculations that formed the basis 
of its dumping determinations.  
 6. The United States has shown that the calculations relied on by an investigating authority to determine the normal value and export price, as well as the data underlying those calculations 
(such as various production costs and sales data), constitute "essential facts" forming the basis of 
the investigating authority's imposition of final measures within the meaning of Article 6.9. The calculations and data are "essential facts" because they are the "indispensable and necessary" 
facts considered by the investigating authority in determining whether definitive measures are 
warranted, i.e.: whether dumping has occurred and, if so, the magnitude of such dumping. In 
other words, without the calculations and data, no  affirmative determination could be made and no 
definitive duties could be imposed. And, without disclosure of the actual calculations and data 
used, the interested parties cannot check the investigating authority's math for errors or whether the authority did what it purported to do.  
7. None of the documents on the record support China's contention that it disclosed the margin 
calculations and underlying data. In response, China asserts that MOFCOM complied with Article 6.9 because it disclosed the essential facts. China cites the final determination, which only 
states that China disclosed the essential facts. China also asserts that it sent disclosure documents 
to the U.S. companies; however, China failed to submit these documents as exhibits in this dispute. China's statements are insufficient to establish as a fact that it did disclose the essential 
facts to interested parties. Rather, China, asserting as a fact that it did disclose essential facts 
regarding margin data and calculations to the U.S. companies, must offer evidence proving the fact that it has asserted. China does not, because it cannot, present any evidence showing that it disclosed the actual essential facts – the data and calculations – underlying the dumping margin 
determination.  
 
C. MOFCOM's Determinations of the "All Others" Rates are Inconsistent with 
Articles 12.7 of the SCM Agreement, and Article 6.8 and Annex II of the 
AD Agreement 
8. The United States has demonstrated that MOFCOM applied facts available to calculate, based 
on adverse facts available, an "all others" dumping margin and subsidy rate for unknown 
producers or exporters, which were not notified of the investigations, of the information that would 
be required of them in those investigations, or of the fact that failure to participate and provide certain information in those investigations would result in a determination based on facts available. By applying facts available with an adverse inference to these unknown producers or exporters, 
including those that did not export subject product during the investigation period, MOFCOM acted 
inconsistent with China's obligations under Ar ticle 6.8 and Annex II of the AD Agreement and 
Article 12.7 of the SCM Agreement. 
 
9. In response, China argues that MOFCOM attempted to notify all producers or exporters by (1) posting a public notice on MOFCOM's website, (2) placing a copy of the initiation notices in a 
reading room in Beijing, (3) sending questionnaires to registered companies, and (4) requesting 
the U.S. Embassy to notify any other producers or exporters.   10. The fact that MOFCOM made certain notification attempts, however, is irrelevant to the 
WTO-consistency of China's applying adverse facts available to companies subject to "all others" 
rates in this dispute. As a matter of logic, the unknown (and even non-existent) "other" U.S. producers or exporters were not notified of the information required, and thus cannot be said to 
have (1) refused access to the necessary information, or (2) otherwise failed to provide access to 
the necessary information within a reasonable period as required under Articles 12.7 of the SCM Agreement and 6.8 of the AD Agreement. 
 WT/DS440/R/Add.1 
 
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 11. Nor can an exporter that does not exist be said to have (3) significantly impeded an 
investigation. In response to the U.S. claim that no other exporters existed at the time of the investigation, China asserts that it "does not kn ow if the other U.S. exporters and producers to 
which the all others rates apply are non-existent." This statement is not credible, and is belied by 
China's first written submission, in which China exhibits knowledge of the U.S. industry in 
describing it as "a mature industry with a relatively settled and small number of U.S. exporters and producers." China, thus, fails to rebut the U.S. argument that no other exporters existed at 
the time of the investigation. China has no basis to apply adverse facts available to nonexistent 
entities for significantly impeding an investigation.   12. Nor is it possible for unknown producers or exporters, or those that did not ship subject 
product during the investigation period, to significantly impede an investigation that they did not 
know about or could not participate in. These parties cannot be said to have refused or failed to provide necessary information to the investigating authority. As the Appellate Body has noted, an 
exporter must be given the opportunity to provide information required by an investigating 
authority before the latter resorts to facts available. An exporter that is unknown to the investigating authority is not notified of the information required, and thus is denied an 
opportunity to provide the required information. 
 13. China's own arguments demonstrate that its use of adverse facts available to calculate the "all others" AD rate is particularly unjustifiable. For example, MOFCOM applied the "all others" AD 
rate to Ford "since Ford did not have any export s during the POI, there was no export price." So, 
despite never indicating how Ford refused access to or failed to provide necessary information, or significantly impeded the investigation, MOFCOM applied the "all others" AD rate to Ford. Indeed, 
MOFCOM denied Ford's request for establishing an individual dumping margin in recognition of its 
cooperation in the investigation, since Ford did not have any exports during the investigation period. Thus, MOFCOM applied the adverse all others rate to Ford, even though MOFCOM 
acknowledged that it could not have participated in the antidumping investigation. 
 14. The U.S. first written submi ssion noted that the panel in China – GOES , in regard to factual 
circumstances nearly identical to this dispute, found that China's attempts to notify the "all other" 
exporters of the necessary information required of them did not satisfy the precondition for 
resorting to facts available found in paragraph 1 of  Annex II of the AD Agreement and, as a result, 
China acted inconsistently with Article 6.8 of the AD Agreement. The panel reached a similar 
conclusion with regard to Article 12.7 of the SCM Agreement. In dismissing China's arguments, the 
panel also rejected the same "policy" arguments that China is now offering in this dispute as insufficient for satisfying the preconditions for resorting to facts available.  
 
15. Given the soundness of the China –  GOES panel's reasoning, and the similar underlying facts 
and legal arguments in China – GOES  and this dispute, the United States considers the panel's 
reasoning in China – GOES  should be considered highly persuasive here.  
 
16. In addition to not being relevant for the a pplication of adverse facts available, MOFCOM's 
notification attempts are insufficient to justify its use of facts available to calculate the "all others" 
rates for four reasons. First, posting a public notice on MOFCOM's website is unlikely to provide 
sufficient notice to an exporter or producer unless that exporter or producer was actively reviewing MOFCOM's website. Also, China's description of posting its notice on a website as "wide 
dissemination" is inaccurate. China is using the phrase "wide dissemination" to characterize its 
mere placement of the notice on MOFCOM's websit e, as opposed to some other action, such as 
emailing the notice to potential exporters or producers.   
17. Second, placing the initiation notices in a reading room is arguably even less likely to ensure 
an exporter or producer is notified of the investigations than placing it on MOFCOM's website. Both actions presuppose that the exporter or producer will be aware that there is a reason to check 
either the website or reading room with some frequency. With the reading room, it is unreasonable 
to expect an exporter or producer to be provided notice of an investigation by virtue of placing the 
document in a room, possibly thousands of miles away, with no additional targeted communication 
indicating that such an action by the investigating authority has taken place.  
 18. Third, China suggests that requesting the Embassy to contact any other exporters or producers also served to notify "all other" exporters or producers. But the obligation to notify WT/DS440/R/Add.1 
 
- B-22 - 
 
  
 exporters or producers is on the investigating authority – not the Member where those exporters 
or producers might be located.   19. The United States considers that Article 6.8 of the AD Agreement and Article 12.7 of the 
SCM Agreement provide for similar conditions on  the use of facts available and, therefore, 
Annex II may provide relevant context for the pu rpose of interpreting Article 12.7 of the SCM 
Agreement. The Appellate Body has previously reje cted arguments similar to those China presents 
here, finding that no obligation exists for an Embassy to make its exporters or producers aware of 
the investigation.   20. Fourth, China argues that "MOFCOM's above-described notification efforts must have been 
effective, because additional U.S. producers and exporters beyond those identified in the petition 
registered for participation in the investigation and received questionnaires." China's assertion is beside the point. China's "all other" rates applies to companies that did not register or were 
otherwise unknown to MOFCOM, such as export ers and producers that began shipping after 
MOFCOM initiated or even concluded the investig ation. These exporters or producers could not 
have failed to provide information or impeded MOFCOM's investigations. Nonetheless, under 
MOFCOM's calculations, they would still be subject to an all others rate based on adverse facts 
available. Such a calculation is inconsistent with the requirements of Article 6.8 of the AD Agreement and Article 12.7 of the SCM Agreement.  
D. MOFCOM Acted Inconsistently with Article 6.9 of the AD Agreement and 
Article 12.8 of the SCM Agreement by Failing to Inform Interested Parties 
of the Essential Facts Under Considerat ion in Calculating the "All Others" 
Dumping Margin and Subsidy Rate 
21. The United States demonstrated that China breached Article 6.9 of the AD Agreement and 
Article 12.8 of the SCM Agreement because MOFCOM fa iled to inform the interested parties of the 
"essential facts under consideration" that formed the basis for its calculation of the "all others" 
dumping margin and subsidy rate. Regarding the "all others" dumping and subsidy rates, MOFCOM 
failed to disclose the "essential facts under consideration" that formed the basis for its use of facts available in calculating the "all others" rates. MOFCOM also failed to disclose the "essential facts under consideration" that formed the basis for applying a 21.5 percent "all others" dumping rate, 
and a 12.9 percent all others" subsidy rate.  
 22. In response, China claims that "all pertinent facts contributing to MOFCOM's decision to 
apply facts available are laid out" by MOFCOM. Chin a then rehashes the same arguments it uses to 
justify its use of facts available, and argues that these points comprise the essential facts under consideration in calculating the "all others" dumping margin and subsidy rate. 
 
23. China's arguments miss the point. The purported facts offered by China are not facts – only conclusions unsupported by the record. Also, China does not provide any facts relating to how unknown U.S. companies, in fact, refused access to or failed to provide necessary information, or 
significantly impeded the investigation. Reviewing a similar set of facts, the panel in China – GOES  
found that China acted inconsistently with the covered agreements.   
24. China's assertions that it disclosed, or that it was under no obligation to disclose, the 
essential facts relating to the calculation of the "all others" dumping margin are not persuasive. In the case of the "all others" antidumping rate, China simply states that it applied the margin alleged 
in the petition. That is not enough. Once an authority has determined that use of facts available is 
necessary in an investigation, further specific conditions are imposed on an authority's use of secondary sources (such as information supplied in an application or petition for initiation of an investigation).  
 
25. Where a petition rate is used as facts available, an investigating authority, where 
practicable, should use special circumspection, chec king the petition rate with other facts in order 
to ensure that it is appropriate to apply as  facts available to the respondents in a given 
investigation. China did not disclose anywhere on the record the special circumspection applied by MOFCOM in its consideration of the petition rate in this dispute. China did not indicate any effort 
that it undertook to check against independent so urces the accuracy of the information supplied by 
the petitioner in the reaching the petition rate.  In its first written submission, China contends that because it based the "all others" dumping rate on the dumping margin alleged in the petition, the WT/DS440/R/Add.1 
 
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 calculation of the "all others" rate is somehow immune from disclosure and scrutiny. Exactly the 
opposite is true.  A factual description of the steps MOFCOM took to check the accuracy of the 
petition rate is essential to MOFCOM's use of the petition rate.   
26. Also, the antidumping rate, as described in the petition, is incomplete and does not provide 
a full understanding of how that rate was determ ined. The record does not reflect any efforts by 
MOFCOM to identify the missing information and verify the validity or reasonableness of the 
petition rate.  
 27. As in the AD proceeding, MOFCOM did not identify the essential facts that formed the basis for its imposition of a 12.9 percent all others subsidy rate. MOFCOM's disclosure of the all others 
subsidy rate consisted of a single sentence: "For  all other U.S. companies, in accordance with 
Article 21 of the CVD regulations, the Investigating Authority decided, by adopting facts available, 
to apply the ad valorem subsidy rate of General Motors, LLC to these companies." Noticeably 
absent from MOFCOM's disclosure are the facts that serve as the basis for MOFCOM's decision 
regarding the application of the facts available, and in particular, that resorting to the use of General Motors' rate, the highest of the individual company rates, was appropriate.  
 
E. MOFCOM Acted Inconsistently with Articles 12.2 and 12.2.2 of the AD 
Agreement, and Articles 22.3 and 22. 5 of the SCM Agreement, by Failing 
to Explain its Determinations 
28. The United States also demonstrated that Ch ina breached Articles 12.2 and 12.2.2 by failing 
to explain the "all others" dumping margin in the AD determinations, as well as Articles 22.3 and 
22.5 of the SCM Agreement by failing to explain the "all others" subsidy rate in the CVD determinations. China has failed to rebut the United States arguments because it cannot cite to 
any explanation contained in the record that would be sufficient to satisfy the obligations contained 
in those articles.  
29. Regarding the "all others" dumping margin, China cites to a passage of the final 
determination, which mirrors the statements contained in MOFCOM's Final AD Disclosure. In other words, MOFCOM did not provide any additional explanation in its final determination. Nowhere does China explain how a non-exporting producer refused to provide necessary information in the 
investigation. The United States has already explained why this statement fails to provide in 
sufficient detail the findings and conclusions th at led to the application of facts available. 
 
30. For the "all others" subsidy rate, China cites the following statement: "Regarding other 
companies, in accordance with Article 21 of Countervailing Regulation , the investigating authority 
decided to adopt facts available and applied the ad valorem  subsidy rate of General Motors to 
them." This single, conclusory sentence echoes the abbreviated statement contained in MOFCOM's 
final disclosure. As above, MOFCOM did not pr ovide any additional explanation in its final 
determination, and nowhere does China explain ho w a non-exporting producer refused to provide 
necessary information in the investigation. The United States has explained why this statement 
fails to provide in sufficient detail the findings and conclusions that led to the application of facts 
available, thus falling short of the requirements  of Articles 22.3 and 22.5 of the SCM Agreement. 
 
31. In China – GOES , the panel faulted China for failing to explain its use of facts available to 
calculate the "all others" rates. In particular, the panel stated that a failure to explain how unknown or non-existent exporters failed to cooperate is inconsistent with the covered 
agreements. These findings apply equally to the U. S. claims under Article 12 of the AD Agreement 
and Article 22 of the SCM Agreement. And, because of the similarity of the facts with the instant 
dispute, these findings are persuasive. Because MOFCOM failed to explain its use of adverse facts available in calculating the "all others" rates, Ch ina breached Articles 12.2 and 12.2.2 of the AD 
Agreement, and Articles 22.3 and 22.5 of the SCM Agreement. 
 WT/DS440/R/Add.1 
 
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 III. MOFCOM'S FLAWED INJURY DETERMINATION 
A. MOFCOM's Narrow Definition of the Domestic Industry Is Inconsistent 
with Articles 3.1 and 4.1 of the AD  Agreement and Articles 15.1 and 16.1 
of the SCM Agreement 
32. MOFCOM's domestic industry definition in the antidumping and countervailing duty 
investigations of certain automobiles from the United States suffered from two principal flaws. 
First, it resulted in a definition of the domestic industry that was distorted because it included only 
producers that supported the petition. Second, it resulted in a definition of the domestic industry that did not include a major proportion of the total production of certain automobiles. 
 
33. China responds to the U.S. claim that MOFCOM's definition of the domestic industry was distorted by arguing that the domestic industry  as MOFCOM defined it included some joint 
ventures between international and Chinese- owned companies ("JVs") and MOFCOM did not 
"exclude," by which China means MOFCOM did not receive and reject any data from any domestic 
producer. China's responses are beside the point. The basis of the U.S. claim is not that MOFCOM 
excluded all JVs from its definition of the domestic industry or that it rejected data from any 
particular domestic producer that sought to provide it. The problem is that MOFCOM utilized a 
process that was likely to, and in fact did result in, a material risk of distortion in defining the 
domestic industry. 
 
34. MOFCOM's decision to define the domestic industry as including only producers who voluntarily registered for participation in the injury investigations was similar to the approach in EC 
– Fasteners (China) , with which the Appellate Body found fault. MOFCOM created the very same 
kind of self-selection process, which introduced  a material risk of distortion. There is no 
substantive difference between the willingness of producers to be included in a sample in EC – 
Fasteners (China)  and the willingness of producers to resp ond to MOFCOM's notice and register to 
participate in the injury investigation here. 
 35. China's attempt to distinguish the facts of EC – Fasteners (China) fails. There was exactly 
the same kind of self-selection process among domestic producers here. CAAM, the petitioner, was 
the only domestic entity that responded to MOFCOM's  notice, it was the only entity that registered 
to participate in the injury investigation, and it was the only entity that provided domestic industry data to MOFCOM. Beyond this, and more importantly still, China has belatedly explained in 
response to a question from the Panel that CA AM, in fact, self-selected from among its own 
members, providing to MOFCOM domestic industry data from only eight of its member companies.   
 
36. It is highly unlikely that data from just  eight companies, handpicked from among the 
domestic producers that comprise the membership of the petitioner, CAAM, could provide MOFCOM with "ample data" sufficient for an "accurate injury analysis" of the domestic industry. Given that 
MOFCOM had data from only eight companies that  were handpicked by the petitioner, CAAM, and 
which represented only about 40 percent or less of domestic production for most of the period of investigation, MOFCOM was obligated to seek additional data on the condition of the domestic industry, or, at the very least, explain why it considered that more data was not necessary in light 
of the particular situation of the auto industry in China. MOFCOM failed to do so. 
 37. China suggests that "[a]nother critical  distinction" between this dispute and EC – Fasteners 
(China) is that, in EC – Fasteners (China) , "the Appellate Body confronted the investigating 
authority's application of a 25% minimum benchmark, derived from the AD Agreement's standing provisions, for determining the existence of a ‘major proportion.'" China is conflating two distinct 
lines of reasoning. The distinction that China attempts to draw between the situation in EC – 
Fasteners (China)  and the situation in the underlying  investigations is not relevant. 
 38. In addition to the skewing of the data inherent in MOFCOM's limitation of the domestic 
industry definition to eight of CAAM's memb er companies that supported the petition, the 
collective output of those eight companies repres ented a relatively small percentage of total 
domestic production of the like product. As China explained in its first written submission, "the 
percentages of total domestic production represented by MOFCOM's definition of the domestic 
industry for the period of investigation" were "54% in 2006, 34% in 2007, 34% in 2008, and 42% in Interim 2009." 
 WT/DS440/R/Add.1 
 
- B-25 - 
 
 39. Assuming these numbers to be correct, and in  light of statements by the Appellate Body, 
relevant questions for the Panel to consider here include: Did MOFCOM have before it "wide-ranging information concerning the relevant economic factors"? Was MOFCOM's definition of the domestic industry "capable of providing ample data  that ensure an accurate injury analysis"? Did 
the domestic producers MOFCOM examined represen t "a relatively high proportion of the total 
domestic production"? The answer to all of these questions is no.  
40. MOFCOM's exclusion from the definition of the domestic industry – or its failure to include in 
the definition of the domestic industry – enterprises accounting for more than 60 percent of domestic production for most of the period of investigation resulted in a definition of the domestic industry that did not include a "major proportion  of the total production" within the meaning of 
Article 4.1 of the AD Agreement and Article 16.1 of the SCM Agreement. Accordingly, MOFCOM's 
injury determination, which was based on its definition of the domestic industry, was neither objective nor based on "positive evidence," as re quired by Article 3.1 of the AD Agreement and 
Article 15.1 of the SCM Agreement. 
 
B. MOFCOM's Price Effects Analysis Is Inconsistent with Articles 3.1 and 3.2 
of the AD Agreement and Articles 15.1 and 15.2 of the SCM Agreement 
41. In considering the effect of subject import s on the price of the domestic like product, 
MOFCOM concluded that, due to parallel pricing an d the rising market share of subject imports, 
especially at the end of the period of investig ation, subject imports depressed prices for the 
domestic like product in interim 2009. However, there was no parallel pricing, and any increase in 
market share of the subject products was not at the expense of the domestic like product, which 
also increased its market share at the same time. So, there simply is no support for MOFCOM's price depression finding. 
 
42. China explains that MOFCOM found parallel pricing because the price movements of subject imports and the domestic like product were "consistent basically" and both increased from 2006 to 
2008 "in general." China describes the price increase from 2006 to 2008 as "remarkably similar," 
noting that the "prices for subject imports incr eased approximately 88,000 RMB while prices for 
domestic like product increased approximately 84,000 RMB over that same time period." Finally, China suggests that the price declines from interim 2008 to interim 2009 were "comparable." The 
evidence on the administrative record does not support China's arguments. There was no price 
parallelism.  
43.  Ultimately, because MOFCOM requested data  only for full-year 2006, 2007, and 2008, and 
the full interim periods for 2008 and 2009, there are only three data points on the record that one 
can look at to assess whether price parallelism exis ted. Specifically, there is the change from 2006 
to 2007, the change from 2007 to 2008, and th e change from interim 2008 to interim 2009. Even 
with just these three data points, though, the inescapable conclusion is that no price parallelism existed between subject imports and the domestic  like product, both because prices did not 
consistently move in the same direction, and because when they did move together, the 
magnitude of the changes was significantly differen t. In light of the data, MOFCOM's conclusion 
that price parallelism existed was not, in the words of a recent panel, such a "reasonable conclusion[] as could be reached by an unbiased and objective investigating authority in light of 
the facts and arguments before it and the explanations given." 
 44. Furthermore, the situation here is identica l to that described by the Appellate Body in China 
– GOES . MOFCOM and China have done nothing to eluc idate "what explanatory force parallel price 
trends had for the depression . . . of domestic pr ices." Accordingly, because no price parallelism 
existed and, even if it had, MOFCOM did nothing to explain the relevance of parallel pricing in this case, MOFCOM's reliance on parallel pricing was unfounded and provided no support whatsoever 
for its price depression finding. 
 45. MOFCOM's reliance on the increasing market  share of subject imports during interim 2009 
likewise provided no support for its price depression finding. China argues that MOFCOM's finding 
of price depression in interim 2009 was explained by the increase in the volume or market share of subject imports, both throughout the period of investigation and in interim 2009. China's argument 
is unpersuasive.  
 WT/DS440/R/Add.1 
 
- B-26 - 
 
  
 46. The increases in the volume of subject imports in the 2006-2008 period were commensurate 
with rising consumption of the subject merchand ise in the Chinese market. While the domestic 
industry as defined by MOFCOM lost market share in the 2006-2008 period, this was almost entirely because of gains made by Chinese produc ers not included in MOFCOM's definition of the 
domestic industry and third-country imports, not gains by subject imports. The domestic industry 
may have been lowering its prices in interim 2009 to recapture lost market share, as China suggests, but it was, for the most part, not market share that the domestic industry had lost to 
subject imports. Even if no party had raised this issue during the investigation, this would not 
excuse MOFCOM's failure to consider the volume and market share data and ensure that its determination was based on positive evidence and involved an objective examination.  
47. An additional problem with MOFCOM's price effects analysis was its use of full-year or full-
period average unit values ("AUVs"). China defends MOFCOM's use of AUVs in its price effects analysis by arguing that the relevant WTO agreement provisions do not require any specific 
methodology when examining price trends. China also argues that because MOFCOM was 
examining price trends over time and was not comparing absolute prices, adjustments to price to ensure price comparability were not necessary.    
 
48. As the Appellate Body recognized in China – GOES , however, while Articles 3.2 and 15.2 do 
not specify a particular methodology for evaluati ng price effects, a failure to ensure price 
comparability would not be consistent with the requirements under Articles 3.1 and 15.1 that a 
determination of injury be based on "positive evidence" and involve an "objective examination" of 
the effect of subject imports on the prices of do mestic like products. Contrary to China's view, the 
Appellate Body's emphasis on the importance of price comparability was not limited to an 
examination of price undercutting. 
 49. China argues that MOFCOM established that  there was a sufficient competitive overlap 
between subject imports and the domestic like pr oduct to warrant the use of AUVs in the price 
effects analysis. The United States submits that MOFCOM's analysis (much of which occurred in the context of MOFCOM's discussion of the scope of the investigation and the definition of the 
domestic like product, and not in the context of a discussion of price effects) was at such a level of 
generality that it failed to establish the degree of competitive overlap that would make an analysis 
of price effects meaningful.   
50. MOFCOM's flawed definition of the domestic industry compromised its analysis of price 
effects because pricing data from the limited part of the domestic industry from which MOFCOM obtained information cannot provide an understandi ng of the explanatory force of subject imports 
on the price of the domestic like product. China characterizes this argument as a "consequential 
claim" and argues that it must fail because each WTO provision must be examined on its own to determine whether a Member has acted inconsistently with the requirements of that provision.   
51. China is mistaken. The United States does not merely rely on MOFCOM's flawed domestic 
industry definition to establish its claim that China has breached Articles 3.2 and 15.2. The United States has given a number of reasons in support of its claims, one of which is that the price 
effects analysis was premised on a flawed domestic industry definition. Taken together, the 
problems the United States has identified provide ample support for the conclusion that China has breached Articles 3.2 and 15.2. 
 
52. In sum, MOFCOM's finding of price depressi on during interim 2009 is contradicted by the 
evidence on the record, and its consideration of price effects is not based on "positive evidence" and it did not "involve an objective assessment." Accordingly, MOFCOM acted inconsistently with 
Articles 3.1 and 3.2 of the AD Agreement, and Articles 15.1 and 15.2 of the SCM Agreement, in 
conducting its price effects analysis.  
C. MOFCOM's Causation Analysis Is Inco nsistent with Articles 3.1 and 3.5 of 
the AD Agreement and Articles 15.1 and 15.5 of the SCM Agreement 
53. MOFCOM's causation determination in the antidumping and countervailing duty 
investigations of certain automobiles from the United States is inconsistent with Articles 3.1 and 
3.5 of the AD Agreement and Articles 15.1 and 15. 5 of the SCM Agreement. China responds to the 
U.S. claims by arguing that the focus should not be on interim 2009, though that is the only time in the period of investigation during which MOFCOM found that injury occurred, and that the WT/DS440/R/Add.1 
 
- B-27 - 
 
 United States has "selectively cit[ed] isolated data and ignor[ed] the complete picture," which is 
simply untrue. China's arguments are unpersuasive.  54. The first sentence of Article 3.5 of the AD  Agreement and Article 15.5 of the SCM Agreement 
provides that "[i]t must be demonstrated that the [dumped or subsidized] imports are, through 
the effects of [dumping or subsidization] . . . causing injury" to the domestic industry. Pursuant to Article 3.1 of the AD Agreement and Article 15.1 of the SCM Agreement, this demonstration must 
be based on positive evidence and involve an objective examination. 
 55. The causal chain identified by MOFCOM ha s subject imports, with increased volume and 
decreased price, causing the price of the domestic  like product to decrease, which then caused 
various economic injuries to the domestic industry , including decreased profits and rate of return 
on investment. In fact, as we have shown, MOFCOM has failed to establish the requisite causal connection between subject imports and injury to the domestic industry. 
 
56. All of the arguments we have made relating to MOFCOM's analysis of price effects apply with equal force to our claims relating to MOFCOM's causation determination. MOFCOM's finding that 
subject imports depressed domestic prices is without any foundation and cannot serve as a basis 
for MOFCOM's conclusion that subject imports caused injury to the domestic industry.   57. In its causation analysis, MOFCOM reasoned that, because domestic prices declined, so did 
"the increase margin of the sales revenue, pre-tax profits and the rate on return of investment of 
the domestic industry." The economic indicators showing that the domestic industry was suffering injury are all related to the industry's profits declining. Although declining profits can be correlated 
to declining prices, it seems much more likely that the injury experienced by the domestic industry 
was caused by the continuous decline in in the domestic industry's productivity and the near 
doubling of wages from interim 2008 to interim 2009, but MOFCOM simply ignored the role that 
the sharp drop in the domestic industry's productivity played in its financial performance.  
 58. The second sentence of Article 3.5 of the AD Agreement and Article 15.5 of the SCM Agreement provides that "[t]he demonstration of a causal relationship between the dumped 
imports and the injury to the domestic industry sh all be based on an examination of all relevant 
evidence before the authorities." MOFCOM failed to examine all relevant evidence before it. Specifically, MOFCOM did not address evidence th at subject imports took market share from non-
subject imports and not from the domestic like product, and that the sharp decline in the 
industry's productivity and a near-doubling of wages from interim 2008 to interim 2009 hurt the domestic industry's profitability. While MOFCOM may have reported this evidence or noted the 
arguments of the parties in its final determination, MOFCOM failed to grapple with this evidence 
with any seriousness, and cannot be said to have based its causation determination on an "examination" of it within the meaning of Articles 3.5 and 15.5.   
59. The third sentence of Article 3.5 of th e AD Agreement and Article 15.5 of the SCM 
Agreement provides that "[t]he authorities sha ll also examine any known factors other than the 
[subject] imports which at the same time are injuring the domestic industry, and the injuries 
caused by these other factors must not be attributed to the [subject] imports." We have 
demonstrated that other known factors likely were the cause of the economic difficulties experience by the domestic industry. Specifically, declining productivity coupled with increasing 
wages and a decision by China to increase the sales tax on larger engine vehicles while reducing 
the sales tax on smaller engine vehicles were known factors. Each of these factors was reported in MOFCOM's final determination and they likely were causes of the injury to the domestic industry. Yet, MOFCOM failed to examine them in connection with its causation analysis and failed to meet 
its obligation not to attribute injuries caused by those other factors to subject imports. 
 
IV. CONSEQUENTIAL CLAIMS 
60. The U.S. first written submission explains that, in view of the claims we have set forth, the 
United States considers that China has also acted inconsistently with Article 1 of the AD Agreement 
and Article 10 of the SCM Agreement, which only  permit antidumping or countervailing duty 
measures to be applied in accordance with the AD Agreement and the SCM Agreement. China 
argues that the United States has failed to make out a prima facie  case for these consequential 
claims. China is incorrect.  WT/DS440/R/Add.1 
 
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 61. Since it is impermissible to impose an antidumping measure except "in accordance with" the 
AD Agreement, if the Panel finds that China has breached any provision of the AD Agreement cited 
in the U.S. claims, then the Panel should also find that, as a consequence of imposing an antidumping measure not "in accordance with" the AD Agreement, China has also breached 
Article 1 of the AD Agreement. The same is true  if the Panel finds that China has breached any 
provision of the SCM Agreement cited in the U.S.  claims. The Appellate Body has explained that 
the complaining Member is "not required to advance further arguments to establish a 
consequential violation of Articles 10 and 32.1" of the SCM Agreement.  
 
V. CONCLUSION 
62. For the reasons set forth in the U.S. second written submission, along with those set forth in 
the other U.S. written filings and oral statements, the United States respectfully requests that the 
Panel find that China's measures are inconsistent with China's obligations under the AD Agreement 
and the SCM Agreement. The United States further requests, pursuant to Article 19.1 of the DSU, 
that the Panel recommend that China bring its measures into conformity with the AD Agreement 
and the SCM Agreement. 
 WT/DS440/R/Add.1 
 
- B-29 - 
 
  
ANNEX B-5 
EXECUTIVE SUMMARY OF THE OP ENING STATEMENT OF THE  
UNITED STATES AT THE SECOND PANEL MEETING 
Mr. Chairperson, members of the Panel: 
1. The United States appreciates this opportunity to appear again before the Panel to provide 
further views on the reasons why China's anti-d umping ("AD") and countervailing duty ("CVD") 
measures on U.S. exports of certain automobiles are inconsistent with WTO rules. Our previous 
submissions and statements have addressed most of the arguments that China has made in 
response to our claims, and we continue to rely on the arguments we have presented before. In this statement, we will concentrate on those points that China made for the first time – or chose to 
re-emphasize – in its second written submission. 
I. CHINA CANNOT DEFEND MOFCOM'S FLAWED PROCEDURES  
2. We will first turn to the U.S. claims with respect to MOFCOM's failure to follow procedural 
obligations under the AD and SCM Agreements. We have demonstrated that MOFCOM's actions are 
inconsistent with Articles 6.5.1, 6.8, 6.9, 12.2, 12.2.2, and paragraph 1 of Annex II of the AD 
Agreement; and Articles 12.4.1, 12.7, 12.8, 22.3, and 22.5 of the SCM Agreement.  
3. In its second written submission, China appears to repeat many of the same arguments it 
made in prior submissions. Its oral statement today also appears to repeat many of the same 
arguments it made in prior submissions. We will use our time today to respond to some of the 
points China emphasizes in its second written submission.  
A. China Cannot Defend MOFCOM's Fa ilure to Require Non-Confidential 
Summaries 
4. First, I will discuss China's failure to requ ire adequate non-confidential summaries of 
confidential information. This failure impaired the ability of the United States and other interested 
parties to defend their interests throughout the course of the investigation. 
5. The United States demonstrated in our submissions that China failed to meet the 
requirements of Article 12.4.1 of the SCM Agreement and Article 6.5.1 of the AD Agreement. As 
we have explained, MOFCOM did not require adequa te non-confidential summaries of confidential 
information contained in the petition. And, there is no explanation on the record from the domestic 
interested parties as to why the information was not susceptible to summarization. 
6. In its second written submission and today,  China disregards the obligations contained in 
the covered agreements. China also fails to just ify the inadequate non-confidential summaries 
contained in the petition. 
7. The United States has detailed various instances where China's interpretation of the covered 
agreements is flawed. For instance, China continues to insist that a party needs to dispute the non-confidential summaries provided before China would review the non-confidential summaries for adequacy.  
8. As we have explained, however, China has no  legal basis for this position. To the contrary, 
whether an interested party objects to summaries du ring the underlying proceeding is irrelevant to 
the question of whether the investigating authority has required summaries that are adequate. As the Panel found in Mexico – Anti-Dumping Measures on Rice , "The investigating authority is not 
allowed to rely on the initiative of the interested parties for the fulfilment of obligations which are 
really its own." The China – GOES  panel reached the same conclusion.  The United States further 
refers the Panel to the reasoning used in these reports.  
9. China also asserts that whether it has complied with the obligations contained in the covered 
agreements must be assessed in light of factors as set out in other Articles. As we have explained, 
this line of reasoning is incorrect. The text of the agreements does not support China's argument. WT/DS440/R/Add.1 
 
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 The obligation to provide adequate non-confidential summaries is an independent obligation not 
limited by other provisions of the covered agr eements. Another recent panel – also reviewing a 
Chinese petition and China's obligation to require non-confidential summaries – came to the same 
conclusion.  
10. The United States has also detailed the flaws in the purported non-confidential summaries 
offered by China. Not only is China wrong on the law; it is also wrong on the facts. The 
U n i t e d  S t a t e s  w i l l  n o t  a t  t h i s  t i m e  r e v i e w  e a c h  i n d i v i d u a l  c a t e g o r y  o f  c o n f i d e n t i a l  i n f o r m a t i o n  contained in the petition to demonstrate the shortcomings in China's approach. Rather, at this 
time the United States will respond to a general assertion that China has made. China contends 
that the unlabeled trend lines contained in the petition are accompanied with percent changes, and that taken together, this information suffices for a non-confidential summary. For instance, this 
argument is reflected in paragraphs 10-12 of its oral statement delivered today. 
11. China's argument has no merit. As the United States has explained, the unlabeled trend 
lines are inadequate because without a sense of scale, it is impossible to obtain a reasonable 
understanding of the substance of the confidential information. The United States has also noted that the percentage changes are flawed because they  do not reveal the significance in the absolute 
changes. The same recent panel reviewing China's obligation to require non-confidential 
summaries agreed on both points.  
12. Thus, China is asking the Panel to take inadequate trend lines, add them to defective 
percent changes – and then somehow the two in combination make China's actions consistent with the covered agreements. China's argument simply doesn't add up. The "very exercise of 
calculating an approximate figure... through a se ries of operations" suggests that the purported 
summaries are inadequate.  
13. China's approach to summaries would require interested parties to "infer, derive and piece 
together a possible summary of confidential info rmation," contrary to the requirements of the 
covered agreements. For these reasons, China br eached Article 6.5.1 of the AD Agreement and 
Article 12.4.1 of the SCM Agreement. 
B. China Cannot Defend MOFCOM's Failu re to Disclose the Calculations and 
Data Used to Determine the Existence of Dumping and to Calculate the Dumping Margins 
14. The United States will now turn to MOFCOM's failure to disclose the essential facts 
underlying its dumping margin calculation. In its previous submissions, the United States showed 
that China breached Article 6.9 of the AD Ag reement because MOFCOM failed to disclose the 
"essential facts" forming the basis of its decision to apply anti-dumping duties, including the data 
and calculations it performed to determine the existence and margins of dumping. 
15. China offers no new arguments. Rather, China continues to assert that the United States has 
not established a prima facie  case solely because the United States has not submitted as exhibits 
the company-specific disclosure documents. It also asserts that it sent disclosure documents to the 
U.S. companies, and that these documents contain the essential facts. Despite acknowledging that 
the documents are in its possession, China failed to submit these documents as exhibits in this dispute. As noted, China highlights that these documents contain BCI, but it fails to indicate why the Panel's agreed-upon BCI procedures are insufficient to allow China to submit these documents for panel review.  
16. China argues that "the United States has deprived the Panel of any ability to assess the 
adequacy of the disclosure letters under Article 6.9." Yet, it is China that is depriving the Panel of any ability to assess the adequacy of its disclosure letters because of its steadfast refusal to submit the documents as exhibits. 
17. Now should the Panel wish to test the veracity of China's assertion relating to the content of 
its disclosure letters, it may exercise its authority under Article 13 of the DSU to request that China present the company disclosure letters that China has – up to this point – refused to submit. China acknowledges that the documents are in its possession; and the Panel's BCI procedures 
ensure that no party would be prejudiced if China submitted the documents. Furthermore, the 
reason why China possesses these documents, and th at the United States does not, follows from 
the normal course of an anti-dumping proceed ing. MOFCOM itself prepared and issued the WT/DS440/R/Add.1 
 
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 disclosures, and provided them directly to the pr ivate sector respondents. And, MOFCOM has never 
provided copies to the United States.  
18. China refuses to submit the documents for panel review because MOFCOM failed to make 
available the dumping calculation, and data underly ing those calculations, depriving the interested 
parties of their ability to defend their interest s. At least one private sector respondent noted 
China's failure to provide the data and calculations underlying the dumping margin in its 
comments on MOFCOM's final disclosure. This is contained in Exhibit USA-20, which is attached to this statement. Specifically this respondent indicated that "MOFCOM did not provide sufficient 
information in the final disclosure…MOFCOM failed to explain in detail how the data came from in 
the final determination without calculation steps, detailed description, formula and program language, nor provided relevant calculation steps in the final disclosure."  China's failure to 
disclose the essential facts is inconsistent with Article 6.9 of the AD Agreement. 
C. China Breached its WTO Obligations in Using Facts Available to Determine 
All Others Rates 
19. The United States has also demonstrated that China breached Article 6.8 and Annex II of 
the AD Agreement and Article 12.7 of the SCM Agreem ent by applying "facts available" to calculate 
an adverse dumping margin and subsidy rate for unknown producers or exporters that received no 
notice. In particular, these parties did not: (1) refuse access to necessary information within a 
reasonable period; (2) otherwise fail to provide such information within a reasonable period; or (3) significantly impede the investigation. As explai ned, the unknown (and even non-existent) "other" 
U.S. producers or exporters could not have been made aware of the information required as a 
matter of logic, and thus, cannot be said to have failed to cooperate under the covered 
agreements. 
20. In its second written submission and today, China continues to assert that the actions taken 
by MOFCOM constitute sufficient notice to just ify MOFCOM's resort to facts available. The 
United States has explained why these actions did not provide a reasonable basis for resorting to 
adverse facts available. It is telling that China does not argue that unknown producers or exporters were made aware of the information requ ired, and thus met the notification requirement 
for resorting to facts available. And nowhere does China demonstrate with evidence that unknown 
producers or exporters refused access to or otherwise failed to provide necessary information within a reasonable period or significantly impeded the investigation. For instance, at paragraph 23 of its oral statement today, China states that "it would be futile for an investigating authority to 
continue to seek information from a party that has decided not to cooperate." But this is an 
unsubstantiated conclusion. China provides no evidence that unknown parties refused access to 
information, or significantly impeded the investigation, or otherwise decided not to cooperate.  
21. Instead of applying the text of the relevant provisions, China makes a "policy" argument to 
justify its use of facts available for unknown exporters, stating that it was merely exercising its 
discretion, and that "it does not matter if the unknown exporters and producers do not exist or 
have chosen not to make themselves known."  
22. China cannot brush off its responsibility to comply with the covered agreements. The 
United States agrees that investigating authorities may exercise discretion in calculating all others 
rates for unknown exporters, but as stated by the China – GOES panel, "this discretion should not 
extend to acting inconsistently with the express terms of" the covered agreements.  
23. In our submissions, the United States has argued that China inappropriately applied facts 
available with an adverse inference to unknown  producers or exporters. Specifically, China 
concluded that any company that did not register to participate in the investigation failed to 
cooperate. Based upon that unsubstantiated conclusion, China applied an adverse dumping margin 
and subsidy rate to these "other" U.S. companies. This approach is flawed.  
24. Moreover, China's attempt to distinguish China – GOES from this dispute is unavailing 
because, contrary to China's suggestions, this dispute is not fundamentally different from China – 
GOES.  China asserts that "in China – GOES , a key question before the panel was how MOFCOM 
derived the AD all others rate of 64.8 percent app lied in that case." Here, China states, "there is 
no mystery about MOFCOM's derivation of this rate." China forgets to mention that a key question 
before the panel in China – GOES  was whether MOFCOM applied facts available to calculate the all WT/DS440/R/Add.1 
 
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 others rates for unknown exporters in a manner consistent with the covered agreements. The 
identical question is before this Panel.  
25. As explained, the China – GOES  panel rejected the same arguments that China is now 
offering in this dispute as insufficient for satisfying the preconditions for resorting to facts available. The panel in China –GOES  analyzed whether there is an obligation on unknown 
exporters to come forward after a general public notice of initiation. It also analyzed whether 
evidence existed of unknown exporters refusing a ccess to or failing to provide information, or 
impeding the investigation. A recent panel reviewing China's use of facts available to calculate the 
all others rate for unknown exporters took a different approach, as China has noted, but it 
nonetheless concluded that China acted inconsistently with the covered agreements. Given the soundness of the China –  GOES panel's reasoning, and the similar underlying facts and legal 
arguments in China – GOES  and this dispute, the United States considers the panel's reasoning in 
China – GOES  should be considered highly persuasive here. 
26. The United States also demonstrated that China breached Article 6.9 of the AD Agreement 
and Article 12.8 of the SCM Agreement because MOFC OM failed to inform the interested parties of 
the essential facts under consideration that formed the basis of its calculation of the "all others" dumping margin and subsidy rate.  
27. China argues that it disclosed the essential facts by largely repeating the arguments it 
makes in conjunction with its facts available argument, and then asserts that it disclosed "the totality of the facts on which MOFCOM based its al l others rates decisions, and there are no other 
pertinent facts that MOFCOM could have disclosed."  
28. As explained, China has failed to disclose any facts relating to how unknown or non-
exporting U.S. companies, in fact, refused access to or failed to provide necessary information, or 
significantly impeded the investigation. Instead, China states that "MOFCOM found that all exporters and producers – including any not known to MOFCOM – were notified of its information 
requirements." China also states that "for any other exporters and producers that did not respond 
to MOFCOM's registration notices, MOFCOM found that they did not intend to cooperate." Yet, 
these are unsupported conclusions – they are not facts.  
29. China also argues that "concerning MOFCOM's selection of the all others rates, all findings as 
well as conclusions, as well as supporting relevant information, are readily apparent from the 
record." As noted, in the case of the "all others " anti-dumping rate, China asserts that it applied 
the margin alleged in the petition. That is not enough. China did not indicate any facts regarding 
the steps it undertook to check against indepe ndent sources the accuracy of the information 
supplied by the petitioner in the reaching the peti tion rate. China simply accepted and then applied 
petitioner's alleged rate. And, as in the AD proceeding, MOFCOM did not identify the essential facts 
that formed the basis for its imposition of a 12.9 percent all others subsidy rate.  
30. China also fails to rebut the U.S. demonstration that China breached its WTO obligations by 
failing to explain the all others dumping margin an d subsidy rates. Rather, as above, China repeats 
its flawed attempt to distinguish this dispute from the China – GOES  dispute. And the 
"straightforward rationale" that China asserts does nothing to explain how unknown exporters could have possibly (1) refused access to necessa ry information within a reasonable period, (2) 
otherwise failed to provide such information within a reasonable period, or (3) significantly 
impeded the investigation. 
II. CHINA CANNOT DEFEND MOFCOM'S  FLAWED INJURY DETERMINATION 
31. The United States has demonstrated that MOFCOM's injury determination is inconsistent 
with Articles 3.1, 3.2, 3.5, and 4.1 of the AD Agreement and Articles 15.1, 15.2, 15.5, and 16.1 of 
the SCM Agreement. China has failed to offer the Panel anything that would explain or excuse the 
shortcomings of MOFCOM's injury determination.  
A. MOFCOM's Narrow Definition of the Domestic Industry Is Inconsistent 
with Articles 3.1 and 4.1 of the AD  Agreement and Articles 15.1 and 16.1 
of the SCM Agreement 
32. MOFCOM's domestic industry definition suffered from two principal flaws. First, it resulted in 
a definition of the domestic industry that was distorted because it included only producers that WT/DS440/R/Add.1 
 
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 supported the petition. Second, it resulted in a de finition of the domestic industry that did not 
include a major proportion of the total production of certain automobiles. This has been our 
argument from the outset, and that is reflected in the U.S. first written submission.  
33. China is mistaken when it asserts that the United States has "shifted its focus" away from 
joint ventures ("JVs"). In fact, throughout this dispute, only China has "focused" on JVs, in an 
effort to misrepresent the U.S. argument. The United States drew the Panel's attention to a U.S. 
respondent's argument that MOFCOM had "apparently" excluded JVs, and we pointed to other data o n  t h e  r e c o r d  t h a t  " c a s t  d o u b t  o n  M O F C O M ' s  a s s e r t i o n  t h a t  i t  i n c l u d e d  J V  p r o d u c e r s  i n  t h e  
industry." We raised that concern because the pr oportion of the domestic industry included in 
MOFCOM's definition was so low. At that point, due to China's lack of transparency, we did not know which companies were included in MOFCOM's domestic industry definition. We still do not know which companies were included, because China has concealed that information. But China 
now has told the Panel that the domestic industry , as MOFCOM defined it, included four JVs and 
four domestically owned enterprises. That may resolve the question of whether or not MOFCOM's definition of the domestic industry did or did no t include JVs, but it does not get MOFCOM off the 
hook for defining the domestic industry inconsistently with the definition in Articles 4.1 and 16.1 
and for failing to base its injury determination on positive evidence and an objective examination, 
as required by Articles 3.1 and 15.1. 
34. It remains the case that MOFCOM utilized a proc ess that was likely to, and in fact did, result 
in a material risk of distortion in defining the domestic industry. In EC – Fasteners (China) , the 
Appellate Body said that "to ensure the accuracy of an injury determination, an investigating authority must not act so as to give rise to a material risk of distortion in defining the domestic industry . . . ." China argues that "MOFCOM took no affirmative action to invite a material risk of 
distortion . . . ." However, a corollary to the Appellate Body's observation is that an investigating 
authority must not fail to act  if doing so would give rise to a material risk of distortion. In this 
case, "MOFCOM took no affirmative action ," and that itself is the problem. 
35. MOFCOM's decision to define the domestic industry as including only producers who 
voluntarily registered for participation in the injury investigations created the very same kind of 
self-selection process about which the Appellate Body expressed concern in  EC – Fasteners 
(China) . That introduced a material risk of distortion, and, despite China's protestations to the 
contrary, there was indeed a self-selection proces s. CAAM, the petitioner, was the only domestic 
entity that responded to MOFCOM's notice, CAAM wa s the only entity that registered to participate 
in the injury investigation, CAAM was the only entity that provided domestic industry data to MOFCOM, and, most importantly, CAAM, in fact, self-selected from among its own members, 
providing to MOFCOM domestic industry data from only eight of its member companies.  On its 
website, CAAM identifies dozens  of companies as being among its members. Yet, CAAM provided 
data from only eight of those members. "MOFCOM took no affirmative action" in response to CAAM's self-selection  of data from just those eight companies. 
36. The Appellate Body's specific concern in EC – Fasteners was that, "by defining the domestic 
industry on the basis of willingness to be included  in the sample, the [investigating authority's] 
approach imposed a self-selection process among the domestic producers that introduced a m a t e r i a l  r i s k  o f  d i s t o r t i o n . "  T h e r e  i s  n o  s u bstantive distinction between what happened in 
Fasteners and what happened in this case.  
37. The Appellate Body has also said that "'a major proportion of the total domestic production 
should be determined so as to ensure that the dome stic industry defined on this basis is capable of 
providing ample data that ensure an accurate injury analysis." Data from just eight companies, 
handpicked by CAAM from among its members,  did not provide MOFCOM with "ample data" 
sufficient for an "accurate injury analysis." It is very likely that the data selected by CAAM was from domestic producers posting the weakest performance, which would distort the injury 
analysis. MOFCOM did not even ask CAAM why it  provided data only for these particular 
companies.  
38. The Appellate Body has explained that investigating authorities "must actively seek out 
pertinent information" and may not "remain[] passive  in the face of possible shortcomings in the 
evidence submitted. . . ." The domestic industry definition is central to the price, impact, and 
causation analyses required under Articles 3.2, 3.4, and 3.5 of the AD Agreement and 
Articles 15.2, 15.4, and 15.5 of the SCM Agreement, and it is potentially determinative of the WT/DS440/R/Add.1 
 
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 injury analysis. It is important that investigating authorities make active efforts to collect the 
information necessary to define the domestic industry in a comprehensive and objective manner. 
3 9 .  W h e n  M O F C O M  r e c e i v e d  d a t a  f r o m  o n l y  e i g h t  c o m p a n i e s  t h a t  w e r e  h a n d p i c k e d  b y  t h e  
petitioner, CAAM, and which represented less than 40 percent of domestic production for most of the period of investigation, MOFCOM was obligated to seek additional data on the condition of the 
domestic industry, or, at the very least, explain why it considered that more data was not 
necessary in light of the particular situation of the auto industry in China. MOFCOM failed to do so. 
40. China suggests that the United States argued for the first time at the first panel meeting 
that "the percentage of domestic production in c l u d e d  i n  M O F C O M ' s  d e f i n i t i o n  o f  t h e  d o m e s t i c  
industry is too low on its face." China is mistaken. This is not a "new argument." It has been our 
argument from the beginning. 
41. What is new is China's confirmation of "the percentages of total domestic production," which 
were "54% in 2006, 34% in 2007, 34% in 2008, and 42% in Interim 2009." Also new is China's revelation that the domestic industry examined by MOFCOM consisted of only eight of CAAM's 
member companies. The question is whether the proportion of total domestic production 
represented by these eight companies meets the defini tion of "a major proportion" in Article 4.1 of 
the AD Agreement and Article 16.1 of the SCM Agreement.  
42. China argues that "the AD and SCM Agreem ents nowhere define a specific quantitative 
threshold required to satisfy the 'major proportion' te st . . . ." That is correct, but it is beside the 
point. The proper inquiry should take into account  the percentages in light of the process MOFCOM 
employed, which resulted in MOFCOM having before it data from only eight domestic producers, themselves just a small part of the membership of  the petitioner, CAAM.  The inquiry should also 
consider the absence of any discussion by MOFCOM  in the final determination of the nature and 
composition of the auto industry in China or why MOFCOM could not seek additional information. 
43. China maintains that investigating authorities should have "some latitude to adapt their 
injury analysis to the unique facts of each case." We do not dispute this, but there were no "unique 
facts" in this case to justify MOFCOM's low level of domestic industry coverage. MOFCOM did not 
even attempt to suggest that there were.  
44. China's explanation that "MOFCOM lacks th e authority to compel additional domestic 
producers to participate in the injury investigation" rings hollow. MOFCOM did not even attempt to collect additional information. Simply posting the questionnaire on a website is precisely the type 
of "passive" response to "possible shortcomings in the evidence submitted. . ." that panels and the 
Appellate Body have in the past said is not consistent with the obligation to investigate. 
45. The Panel should ask: Did MOFCOM have before it "wide-ranging information concerning the 
relevant economic factors"? The answer is no. Was MOFCOM's definition of the domestic industry 
"capable of providing ample data that ensure an accurate injury analysis"? The answer is no. Did 
the domestic producers MOFCOM examined represen t "a relatively high proportion of the total 
domestic production"? Once again, the answer is no. 
46. Thus, the Panel should conclude that MOFCOM's exclusion from the definition of the 
domestic industry – or its failure to include in the definition of the domestic industry – enterprises 
accounting for more than 60 percent of domestic production resulted in a definition of the domestic industry that did not include a "major pr oportion of the total domestic production" within 
the meaning of Article 4.1 of the AD Agreem ent and Article 16.1 of the SCM Agreement. 
Accordingly, MOFCOM's injury determination, which was based on its definition of the domestic 
industry, was neither objective nor based on "positiv e evidence," as required by Article 3.1 of the 
AD Agreement and Article 15.1 of the SCM Agreement. 
B. MOFCOM's Price Effects Analysis Is Inconsistent with Articles 3.1 and 3.2 
of the AD Agreement and Articles 15.1 and 15.2 of the SCM Agreement 
47. We have demonstrated that there is no support for MOFCOM's price depression finding. 
There was no price parallelism. Even if there ha d been price parallelism, there is no evidence 
showing that the price of subject imports drove the price of the domestic like product. With respect 
to market share, MOFCOM's original explanation of the relevance of the market share data does WT/DS440/R/Add.1 
 
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 not hold up to scrutiny. China has now offered a post hoc  rationalization, to which the Panel should 
give no credit, and even this new explanation does not accord with the evidence. 
48. China continues to insist that the prices of  subject imports and the domestic like product 
moved in parallel. However, the evidence on the administrative record does not support MOFCOM's conclusions or China's arguments. There was no price parallelism – not "basically," not "in 
general," not at all. During every time period during the period of investigation, the price of 
subject imports and the price of the domestic like product were moving in opposite directions or at 
very different rates in the same direction.  
49. China criticizes the chart we presented in the U.S. opening statement at the first panel 
meeting as being "distorted." But China's own chart tells the same tale. We refer the Panel to 
exhibit USA-18, which we have passed out today. In  this exhibit, we have placed the U.S. chart 
above China's chart on the same page. Unmistakably, in both graphs, the trend line for the price of subject imports crosses the trend line for the price of the domestic like product twice. That 
alone demonstrates that, by definition, the lines are not parallel. Indeed, during none of the three 
time periods for which MOFCOM presented data do  the trend lines even approach being parallel. 
China's own graph confirms the non-existence of price parallelism. 
50. It is not the United States, but MOFCOM and China that seek to look at "isolated" data 
points. China is not looking at the "whole POI;" it is just looking at the beginning and the end. 
China argues that "[p]erfect correlation in prices is not needed." As we have shown, though, there was no correlation at all. Accordingly, MOFCOM's conclusion that price parallelism existed was not, in the words of a recent panel, a "reasonable conclusion[] [that] could be reached by an unbiased 
and objective investigating authority in light of the facts and arguments before it and the 
explanations given." 
51. Furthermore, and this may be an even more important point, neither MOFCOM in its final 
determination nor China in its submissions and statements to the Panel even attempts to explain 
how parallel pricing – even if there had been any – caused the depression of domestic prices. 
China has steadfastly refused even to address this issue. Neither MOFCOM in its final determination nor China here before the Panel has done anything to describe "what explanatory force parallel price trends had for the depression . . . of domestic prices."  
52. Accordingly, because no price parallelism existe d and, even if it had, MOFCOM did nothing to 
explain the relevance of parallel pricing in this case, MOFCOM's reliance on parallel pricing was 
unfounded and provided no support whatsoever for its price depression finding. 
53. The volume and market share data on the administrative record likewise provide no support 
for MOFCOM's price depression finding. MOFCOM found price depression only during interim 2009. 
MOFCOM clearly could not have found any price depression for any period prior to interim 2009, 
because the price of the domestic like product was increasing during all of the rest of the period of 
investigation. 
54. Left unanswered in MOFCOM's final determination, though, is the question: how did subject 
imports depress the price of the domestic like product? China suggests that the volume and 
market share data could explain how subject imports depressed the price of the domestic like product. To show why this is not the case, however, we have compiled the volume and market 
share data on the administrative record into charts in exhibit USA-19.  
55. One possibility, since MOFCOM refers to increa ses in the volume of subject imports, is that, 
at an "economics 101" level, the market was flooded with volume in interim 2009, and that flood 
of volume drove down prices. The evidence does not support this theory. In fact, both total domestic production and total import volume were down in interim 2009, as compared to interim 2008. There was no flood of volume, and that cannot explain the price depression. 
56. As another possibility, MOFCOM points in the final determination to the "significantly 
increased" market share of the subject imports "[ e]specially at the end of the POI," that is, in 
interim 2009. As shown in the third chart in exhibi t USA-19, though, entitled "Changes in Market 
Share," the market share of the domestic indust ry as defined by MOFCOM increased just as 
significantly as the market share of subject impo rts. Indeed, the domestic industry and subject 
imports nearly split in half a market share increase that came at the expense of market share ceded by third country imports and other domestic producers not included in the domestic WT/DS440/R/Add.1 
 
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 industry. It is implausible, then, that the increa sing market share of subject imports could explain 
the price depression of the domestic like product in interim 2009. 
57. China's new explanation offered during this dispute is not one that MOFCOM presented in its 
final determination, and the Panel should give China's post hoc  rationalization no weight. It also 
lacks any support in the evidence. 
58. In its second written submission, China highlights selected data from the 2006 to 2008 
period and posits that "[t]he domestic producers' prices went up, and as a result, they lost market 
share to surging subject imports ." China goes on to argue that, "[i]n effect, the domestic industry 
was forced to fight back against the increase in  market share of subject imports by decreasing 
prices at the expense of profits." So, U.S. imports are the villain in China's story. The problem for 
China, though, is that there is no truth to this whatsoever. As the data show, the domestic industry lost market share to other domestic producers and to third country imports. It never lost 
any significant amount of market share to subject imports.  
59. China argues that "domestic producers face d crippling loss of market share unless they 
likewise reduced prices in the face of massive import competition." The only massive import 
competition to which the domestic industry ever lost market share during the period of investigation was competition from third country imports. In interim 2009, the domestic industry 
took back market share from those third country im ports. So, to the extent that there is any truth 
to China's new explanation that domestic producers lowered their prices in response to import competition over the entire period of investigation, that would establish that third country imports 
– not subject imports – were the cause of the price depression observed.  
60. In its second written submission, China goes on at some length defending MOFCOM's use of 
average unit values ("AUVs") and MOFCOM's purp ortedly thorough examination of the issue of 
competitive overlap. We have shown previously why MOFCOM's use of AUVs was problematic, particularly in light of evidence on the record in dicating that the subject imports and the domestic 
like product were sold in different grades.  Despit e China's forceful assertions to the contrary, the 
Appellate Body's emphasis on the importance of price comparability in China – GOES was not 
limited to an examination of price undercutting. 
61. China's argument that the sales data submitted by a U.S. respondent was "unreliable" is not 
a finding MOFCOM made, and this post hoc rationalization deserves no credit. The data was 
provided to the U.S. respondent by CAAM, and MO FCOM itself relied on the sales data as support 
for its conclusion, so China cannot now ask the Panel to dismiss the data as unreliable. 
62. China's insistence that MOFCOM "thoroughl y examined the issue of competitive overlap" 
between the subject imports and the domestic like  product does not withstand scrutiny. MOFCOM's 
mention of competitive overlap in the final determination was at such a level of generality that it 
failed to establish a degree of competitive overlap that would make an analysis of price effects 
meaningful.  
C. MOFCOM's Causation Analysis Is Inco nsistent with Articles 3.1 and 3.5 of 
the AD Agreement and Articles 15.1 and 15.5 of the SCM Agreement 
63. Finally, we have demonstrated that MOFCOM's causation determination in these 
investigations is inconsistent with Articles 3.1 and 3.5 of the AD Agreement and Articles 15.1 and 
15.5 of the SCM Agreement.  
64. Fundamentally, the evidence simply does not support MOFCOM's conclusion that subject 
imports caused injury to the domestic industry. There was no basis for MOFCOM's finding that the 
price of the domestic like product was depressed by subject imports. All of the arguments we have 
made relating to MOFCOM's analysis of price effects apply with equal force to our claims relating to MOFCOM's causation determination. MOFCOM's finding that subject imports depressed domestic 
prices simply is without any foundation and thus cannot serve as a basis for MOFCOM's conclusion 
that subject imports caused injury to the domest ic industry. For that reason alone, the Panel 
should find that China has breached Articles 3. 1 and 3.5 of the AD Agreement and Articles 15.1 
and 15.5 of the SCM Agreement. 
65. Furthermore, as we have shown, there are still other problems with MOFCOM's causation 
determination. For example, MOFCOM dismissed without explanation the decline in apparent WT/DS440/R/Add.1 
 
- B-37 - 
 
 consumption in interim 2009 as possibly causing injury to the domestic industry. Yet, this was the 
only instance of demand contraction during the entire period of investigation, and it coincided with the only part of the period of investigation during which the price of the domestic like product dropped. China argues that "Chinese automobile manufacturers produced vehicles in anticipation 
of sales levels, and did not simply build up produc tion independently." It appears that the domestic 
industry was taken by surprise when demand co ntracted and it was forced to lower prices.  
66. Similarly, MOFCOM failed to consider the domestic industry's declining productivity and 
increasing labor cost. An examination of the relevant data shows a nearly one-to-one 
correspondence between the decline in the domestic industry's pre-tax profits from interim 2008 
to interim 2009 and the near-doubling of labor costs over the same period. The domestic industry's sagging productivity cannot simply  be dismissed as insignificant without any 
explanation. Indeed, it is specifically identified in Article 3.5 of the AD Agreement and Article 15.5 
of the SCM Agreement as a factor that "may be relevant" to the causation analysis.  
67. The explanations China offers now are not the explanations on which MOFCOM relied in its 
final determination. Moreover, China's arguments are not convincing. China argues that the domestic industry's profits were "very small" anyway. China cannot have it both ways. MOFCOM 
relied on its findings that pre-tax profit "fell sharply" and the "profitability of the domestic industry 
was badly affected" in interim 2009. China cannot now dismiss the declines in pre-tax profits and 
profitability as unimportant.  
68. China also contends that the increase in labor costs in interim 2009 was not significant 
because overall unit costs declined in interim 2009.  The answer to this, which MOFCOM also failed 
to examine or appreciate, is that overall costs would have declined even more, with a beneficial 
effect on the industry's profitability, were it not for the sharp increase in labor costs. 
69. Lastly, as we have explained, MOFCOM failed  to examine a sales tax change and failed to 
avoid attributing the injury caused by it to the subject imports. MOFCOM merely summarized the 
positions of the interested parties and then asserted, without explanation, that "Chinese tax policy 
is not the factor causing material injury to the domestic industry." MOFCOM was obligated to undertake an objective examination of any known factors and ensure that any injury caused by 
those factors was not attributed to subject imports. MOFCOM failed to do so. 
 WT/DS440/R/Add.1 
 
- B-38 - 
 
  
  
ANNEX B-6 
CLOSING STATEMENT OF THE UNITED STATES  
AT THE SECOND PANEL MEETING 
Mr. Chairman, Members of the Panel: 
1. The United States would again like to thank the Panel and the Secretariat staff for your 
efforts during this meeting and throughout the di spute. In light of the extensive submissions and 
statements that the parties have made already, we only have a few brief comments to make in 
closing.  2. This is the third time that the United States has brought a dispute concerning China's 
application of trade remedy measures. This dispute addresses problems that are similar to those 
addressed in the China – GOES and China – Broiler Products  disputes, and this dispute concerns 
inconsistencies with the same substantive provisions of the covered agreements. As the panels did 
in China – GOES and China – Broiler Products , and as the Appellate Body did in China – GOES , the 
Panel here should find that China has yet again breached its WTO obligations.  
3. Yet again, China has denied U.S. companies th e opportunity to fully defend their interests by 
failing to require the petitioners to provide adeq uate non-confidential summaries of confidential 
information, and by failing to disclose the calculations and data used to determine the existence of dumping and calculate dumping margins. 
 
4. Yet again, China has imposed "all others" anti-dumping and countervailing duty rates determined using adverse facts available, despite the absence of any non-cooperation by any U.S. 
companies.  
 5. Yet again, China has found material injury ba sed on information provided by a small, self-
selected subset of domestic producers, and has done so despite the absence of any causal 
connection between subject imports and the econ omic difficulties experienced by domestic 
producers.  
6. In sum, the United States has established that China breached the procedural and 
substantive obligations set forth in the AD and SCM Agreements, and China failed to make an objective examination and determinations based on positive evidence. In its submissions and 
statements to the Panel, China has failed to rebu t the U.S. case. Accordingly, for the reasons we 
have given throughout this dispute, the United States renews its request that the Panel find that China has acted inconsistently with its WTO obligations. 
 
7. The United States would like to conclude by again thanking the Panel and Secretariat for your time and attention to this matter, and we likewise thank China for its participation in this proceeding. We look forward to responding to th e Panel's written questions and providing further 
comments, which we hope will further clarify the issues in this dispute. 
  
 
 WT/DS440/R/Add.1 
 
- C-1 - 
 
 ANNEX C 
ARGUMENTS OF CHINA 
Contents Page 
Annex C-1 Executive summary of the first written submission of China C-2 
Annex C-2 Executive summary of the opening statement of China at the first Panel 
meeting C-10 
Annex C-3 Closing statement of Chin a at the first Panel meeting C-18 
Annex C-4 Executive summary of the second written submission of China C-20 
Annex C-5 Executive summary of the opening statement of China at the second Panel 
meeting C-28 
Annex C-6 Closing statement of China at the second Panel meeting C-36 
 
 WT/DS440/R/Add.1 
 
- C-2 - 
 
  
  
ANNEX C-1 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN 
SUBMISSION OF CHINA 
I. Introduction 
 1. In this dispute, the United States claims that China's antidumping and countervailing duty 
investigations of certain automobiles from the United States were tainted by a number of 
procedural and substantive flaws. According to the United States, China's choices and determinations in carrying out its investigations resulted in final determinations that violate China's obligations under the  AD Agreement and the  SCM Agreement. The AD and SCM 
Agreements, however, provide considerable latitude to investigating authorities in conducting 
antidumping and countervailing investigations, permitting different approaches and findings by WTO Members that may nevertheless all be in co mpliance with these Agreements. Further, many 
of the U.S. claims in this proceeding represent an effort by the United States to impose its mode of 
implementing the AD and SCM Agreements on other WTO Members.  
II. Factual Background 
 2. On November 6, 2009, MOFCOM initiated antidumping and countervailing duty investigations on certain automobiles from the United States with engine displacement equal to or 
greater than 2 liters (the scope was later amended to exclude automobiles with an engine 
displacement equal to or less than 2.5 liters). To  ensure the broadest possible dissemination of its 
initiation notices, MOFCOM posted them on its Internet site and placed them in its public reading 
room. Additionally, MOFCOM requested that the U.S. Government provide its notices of initiation to 
any interested parties. The notices of initiation invited all interested parties to register for participation in MOFCOM's injury investigation, and also explained that MOFCOM "shall have the 
right to refuse to accept relevant materials" of interested parties that fail to register, "and shall 
have the right to determine based on the existing materials available."   3. On April 2, 2011, after gathering and evaluating information from interested parties, 
MOFCOM issued its Preliminary Determination, in which it calculated preliminary dumping margins 
and rates of subsidization for all known U.S. exporters and producers participating in its investigations, and preliminarily found that imports of the product under investigation caused 
material injury to the domestic industry. MOFCOM ex plained that it applied, as facts available, the 
alleged petition rate for the AD all others rate, and applied, as facts available, the highest calculated subsidy rate for the CVD all others rate. 
 
4.  On April 15, 2011, MOFCOM issued its pre-final injury determination disclosure letter to all interested parties. On April 18, 2011, prior to issuance of its final determinations, MOFCOM also sent letters to the U.S. Government and all U.S. exporters and producers participating in its 
antidumping and countervailing duty investigatio ns, disclosing the basic facts on which MOFCOM 
based its dumping margin and subsidy rate calculations.   
5. MOFCOM's Final Determination, issued on May 5, 2011 follows the same basic structure as 
the Preliminary Determination, but discusses additional information gathered by MOFCOM in its investigations and provides MOFCOM's responses to comments from interested parties. As in the 
Preliminary Determination, MOFCOM calculated dumping margins and rates of subsidization for all 
known U.S. exporters and producers participating in its investigations.    III. Standard of Review 
 
6. Article 17.6(i) of the AD Agreement states th e standard of review to be applied by panels 
with respect to challenges of domestic anti-dumping measures. Article 17.6(i) requires panels to 
determine whether the authorities' establishmen t of the facts was proper and whether their 
evaluation of those facts was unbiased and objective. As long as the panel finds this to be so, the panel may not overturn the authorities' determination even if it would have reached a different 
conclusion. The same standard of review should be  employed in challenges of the SCM Agreement.  WT/DS440/R/Add.1 
 
- C-3 - 
 
 IV. Arguments 
 
A. MOFCOM's Treatment of Confidential Information was Fully Consistent 
with the Requirements of Article 6.5.1 of the AD Agreement and 
Article 12.4.1 of the SCM Agreement  
 7. The first claim of the United States is that the non-confidential summaries in MOFCOM's 
petition were inadequate. Article 6.5.1 does not require any specific type or specific level of detail 
or format for the non-confidential summaries to be provided. Rather, it must permit "a reasonable understanding of the substance of the information withheld in order to allow the other parties to the investigation an opportunity to respond and defend their interests." The non-confidential 
summaries in MOFCOM's petition were adequate to meet this standard. 
 8. In particular, the United States alleges that MOFCOM simply redacted the information 
contained in the application and that no non-confidential summary was provided. However, the 
U.S. arguments ignore significant portions of  the non-confidential summaries provided. The 
United States' arguments fail to take into account the percentage changes depicted in the charts, 
the significant text providing additional information directly below each of the tables provided in 
the petition, as well as trend lines accompanying the charts showing changes in the indices over the period of investigation. Furthermore, it is important to note that no party objected to the adequacy of any of the non-confidential summaries provided in the petition during the course of 
investigations, indicating that the parties to the investigation did not believe that the non-
confidential summaries had failed to provide "an opportunity to respond and defend their interests."    
 
B. The United States Failed to Make a Prima facie  Case with Respect to its 
Claims under Article 6.9 of the AD Agreement 
 
9. As an initial matter, the United States proposes  an interpretation of Article 6.9 that goes far 
beyond its literal bounds. Article 6.9 does not mandate the disclosure of all facts before an 
investigation authority, but only the "essential facts under consideration" underlying a decision to 
apply definitive AD measures.   
 10. The United States has failed to establish a prima facie  case under Article 6.9, because the 
United States misconstrues the disclosure requirement of Article 6.9. On its face, Article 6.9 
requires disclosure if essential facts to interested parties only before a final determination is made. It does not require disclosure during any other phase of an antidumping investigation, or in the 
actual final determination of an investigating authority to apply (or not apply) definitive duties. The 
United States, however, ignores the plain language of Article 6.9, alleging as inadequate MOFCOM's descriptions of its antidumping calculations in its preliminary and final determinations. However, because final determination logically cannot occur "before a final determination is made" 
for purposes of Article 6.9, the United States  cannot substantiate its claim by alleging any 
deficiencies in that determination. Furthermore,  MOFCOM issued a disclosure to all interested 
parties prior to its Final Determination, yet the United States omits any mention of MOFCOM's 
actual disclosure documents.   
 11. The United States confuses the requirements for a preliminary and final determination under 
Article 12.2 of the AD Agreement with those of a pre-final determination disclosure, as required 
under Article 6.9. To cite one key difference, Article 12.2 requires the provision by investigating authorities of "public notice" of preliminary and final determinations. Pre-final determination disclosure, on the other hand, typically – and often necessarily – entails the disclosure to individual 
interested parties of business confidential information. The conflation by the United States of the 
requirements for public notice of determinations with the requirements for disclosure of data underlying margin calculations constitute a fatal flaw under the standards for a prima facie  case. 
For these reasons, the United States has failed to uphold its burden of articulating an adequate 
legal claim and establish a prima facie  case.       
 
C. MOFCOM's Determination of the AD All Others Rate was Permissible under 
the AD Agreement 
 12. The United States contends that China violated  Articles 6.8, 6.9, 12.2, and 12.2.2 of the AD 
Agreement in its determination of the AD all others rate. However, MOFCOM lawfully determined to WT/DS440/R/Add.1 
 
- C-4 - 
 
  
 apply, as facts available, the margin of dumpin g alleged in the petition. While the AD Agreement 
does not prescribe a particular methodology for the calculation of an all others rate, Article 6.8 of the AD Agreement and Annex II provides guidelines for filling gaps in the administrative record with facts available drawn from the petition.   
 
13. China complied with Article 6.8 and Annex II of the AD Agreement. Contrary to the United States' assertion that MOFCOM did not provide the requisite level or type of notification of 
the investigation, China went to great lengths to ensure that all producers and exporters would be 
aware of its investigation. Specifically: (1) MOFCOM sought to ensure wide dissemination of its initiation notice by posting it on its website and placing it in MOFCOM's public reading room; (2) MOFCOM requested the U.S. government to info rm all U.S. producers and exporters of its 
investigation; (3) MOFCOM sent its questionnaire to all U.S. producers and exporters identified in 
the petition, as well as to additional four  U.S. producers and exporters that voluntarily registered 
for participation in the investigation. This level of notification represents the best effort that 
MOFCOM could reasonably be expected to undertake. Further, the United States does not explain 
what additional type of notification to potential interested parties MOFCOM could have offered in the circumstances of this case. In light of MOFCOM's broad notification of its investigation, 
MOFCOM could reasonably conclude that any unknown U.S. exporters and producers that did not 
register for participation in the investigation were aware of the initiation notice, and that any U.S. exporters and producers not responding had "refused" to participate in the investigation.   
14. China's disclosure associated with its AD all others rate also complied with Article 6.9 of the 
AD Agreement. All of the pertinent facts contributi ng to MOFCOM's decision to apply facts available 
were laid out in MOFCOM's pre-final determination disclosure to the U.S. Government. MOFCOM 
was under no obligation to disclose its reasoning  for its selection of the 21.5% all others rate. 
Nonetheless, even if MOFCOM were required to disclose the reasoning underlying its selection, MOFCOM's pre-final determination disclosure lays out the entire predicate for MOFCOM's 
application of the 21.5% rate as the AD all others rate. Finally, MOFCOM was under no obligation 
under Article 6.9 to disclose as essential facts any calculations underlying its selection of the AD all others rate. As MOFCOM explained in its pre-final determination disclosure to the United States, it applied the AD margin alleged in the petition. Me anwhile, the petition, which is outside the scope 
of the Article 6.9 disclosure obligation, clearly and fully lays out the data underlying the alleged 
margin of dumping. Because MOFCOM disclosed all pertinent facts, there were no additional facts 
that, if disclosed, might have permitted the United States to better defend its interests prior to the 
final determination.  
 15. Furthermore, China adequately explained its determinations for purposes of Article 12.2 and 
12.2.2 of the AD Agreement, as the legal and fact ual bases for MOFCOM's determination of the all 
others rate are perfectly clear and straight forward from the administrative record.  
 
D. MOFCOM's Determination of the CVD  All Others Rate was Permissible 
under the SCM Agreement 
 16. The United States contends that China viol ated Articles 12.7, 12.8, 22.3, and 22.5 of the 
SCM Agreement in its determination of the all others rate. However, MOFCOM lawfully determined 
to apply, as facts available, the highest rate calc ulated for an individually investigated producer 
and exporter. MOFCOM also fully explained its reason ing, and disclosed all pertinent facts, in doing 
so. The SCM Agreement – like the AD Agreement – is silent with respect to the determination of all 
others, or residual, rates applicable to non-investigated respondents. Given the gap in the SCM Agreement, Article 12.7 provides guidelines for filli ng gaps in the administrative record with facts 
available drawn from the petition.   
 
17. China complied with Article 12.7 of the SCM Agreement. China's arguments presented above 
with respect to China's efforts to ensure that all producers and exports were aware of the 
investigation apply equally with respect to the SCM Agreement. As explained above, this level of 
notification represents the best effort that MO FCOM could reasonably be expected to undertake. 
Further, the United States does not explain what additional type of notification to potential 
interested parties MOFCOM could have offered in the circumstances of this case. The SCM 
Agreement, like the AD Agreement, does not requir e China to continue pursuing the cooperation of 
interested parties that MOFCOM could reasonably  assume, through non-responsiveness to a widely 
disseminated initiation notice, would not participate in its investigation.   
 WT/DS440/R/Add.1 
 
- C-5 - 
 
 18. Furthermore, China's disclosure associated wi th its all others rate complied with Article 12.8 
of the SCM Agreement. China's arguments presented above with respect to selection of the AD all 
others rate apply equally to calculation of the CVD all others rate. China also adequately explained its determinations for purposes of Article 22.3 and 22.5 of the SCM Agreement, as the legal and 
factual bases for MOFCOM's determination of the all others rate are perfectly clear and 
straightforward from the administrative record.   
E. China's Definition of the Domestic  Industry was Fully Consistent with 
Articles 3.1 and 4.1 of the AD Agre ement, and 15.1 and 16.1 of the SCM 
Agreement. 
 
19. The United States alleges that MOFCOM improperly defined the domestic industry by 
excluding foreign joint ventures ("JVs"), and that the resulting group of domestic producers did not represent a "major proportion" of the total producer s of the domestic like product for purposes of 
the AD and SCM Agreements.  
 20. Article 4.1 of the AD Agreement and Article 16.1 of the SCM Agreement provide considerable 
discretion to investigating authorities in defining a domestic industry. An investigating authority 
may lawfully define the domestic industry as all producers of the domestic like product, or as those producers comprising a "major proportion" of prod uction of the domestic like product. The AD and 
SCM Agreements provide no definition of "major proportion," and panels have explained that the 
level of domestic production constituting a "major proportion" may be a level less than 50 per 
cent.    
21. Furthermore, MOFCOM did not exclude JVs from  the investigation. MOFCOM provided public 
notice inviting all domestic producers to participate in its injury investigation. MOFCOM also 
examined and included in its analysis data from all domestic producers that supplied injury data. 
MOFCOM's injury investigation neither contains nor implies an exclusion of any subset of the 
domestic industry. By its plain terms, the invitation to participate in the injury investigation was open to "any" domestic producer. It was also av ailable, through placement in MOFCOM's public 
reading room, to any domestic producer that might have wished to participate in the investigation. 
Further, the Preliminary and Final Determinations are devoid of any statement or implication that 
MOFCOM excluded from its injury investigation data from any domestic producer. MOFCOM's above-described open process for gathering data on domestic production is confirmed by its 
April 15, 2011 Letter of Disclosure of Essential Facts.     
 22. MOFCOM explained in its Final Determination, in response to comments from interested 
parties, that it did not limit its definition of the domestic industry to Chinese-owned companies, 
and that it did not exclude JVs. Data in the public record of the investigation also demonstrates that MOFCOM, in its definition of the domestic industry, included production data for a greater 
extent of domestic production than represente d by Chinese-owned producers, showing that the 
data captured by MOFCOM's definition of the domestic industry did include some amount of 
production by JVs.    
23. Because MOFCOM did not exclude from the defi nition of the domestic industry a subset of 
Chinese production, it follows that the U.S. claim that MOFCOM failed the "distortion test" contained in Article 4.1 of the AD Agreement and Article 16.1 of the SCM Agreement as elucidated 
by the Appellate Body in EC – Fasteners (China)  fails as a factual matter. Aside from the mistaken 
factual premise underlying the U.S. argument, the U.S. argument also fails as a matter of law because there is no freestanding distortion test contained in Article 4.1 of the AD Agreement and Article 16.1 of the SCM Agreement. The term "dis tortion" appears nowhere in these provisions, 
and the relevant text provides only that investigating authorities must base the definition of the 
domestic industry on a "major proportion" of domestic production. Further, the facts before the Appellate Body in EC – Fasteners (China)  are distinguishable with the present case, as, unlike the 
investigating authority in EC – Fasteners (China) , MOFCOM did not engage in a self-selection 
process that affirmatively excluded certain producers from its definition of the domestic industry.    
24. MOFCOM did, however, satisfy the "major proportion" test of Article 4.1 of the AD 
Agreement and Article 16.1 of the SCM Agreement.  As explained above, MOFCOM did not exclude 
JVs or any other sector of the domestic industry in defining the domestic industry. In defining the domestic industry, MOFCOM conducted an open da ta-gathering process and included production 
data from all domestic producers that supplied such data. The record of the investigation also WT/DS440/R/Add.1 
 
- C-6 - 
 
  
 plainly shows the percentages of total domestic pr oduction represented by MOFCOM's definition of 
the domestic industry for the period of investigation – i.e., 54% in 2006, 34% in 2007, 34% in 2008, and 42% in Interim 2009. MOFCOM reasonably concluded, based on an objective examination of the evidence supplied to it, that these percentages constituted a "major proportion" 
of domestic production for purposes of Article 4. 1 of the AD Agreement and Article 16.1 of the SCM 
Agreement.   
25. Finally, the Panel should reject the United States' claims that China's alleged violations of 
Article 4.1 of the AD Agreement and Article 16.1 of the SCM Agreement necessarily result in an 
injury determination for purposes of Article 3.1 of the AD Agreement and Article 15.1 of the SCM 
Agreement. As an initial matter, the Panel should reject the U.S. allegation of a consequential 
violation because, for the reasons set forth above, China did not breach Article 4.1 of the AD 
Agreement and Article 16.1 of the SCM Agreement.  Moreover, each article of the AD and SCM 
Agreements set forth distinct standards and obligations, and claims with respect to each article 
must be assessed independently and separately.   
 
F. MOFCOM's Price Effects Analysis was Fully Consistent with Articles 3.1 and 
3.2 of the AD Agreement, and 15.1 and 15.2 of the SCM Agreement 
 26. The United States claims that: (1) the record  before MOFCOM did not show evidence of price 
undercutting; (2) subject imports and the domestic like product did not exhibit parallel pricing 
trends during the period of investigation; (3) MOFCOM erroneously relied on average values for 
purposes of its price analysis; and (4) MOFCOM failed to account for the fact that the market share of the domestic like product increased over the period of investigation. As discussed below, each of 
the United States' claims fail.  
 27. First, the plain text of Article 3.2 of the AD Agreement and Article 15.2 of the SCM 
Agreement states only that the investigating authorities "shall consider whether there has been a 
significant price cutting…or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree." Thus, the text in the relevant articles, along with prior panel determinations, makes clear 
that a price undercutting analysis is optional and that no specific methodology is required. 
MOFCOM based its price effects analysis on price depression. As a matter of logic, price depression or suppression can occur without price undercutting being present. Prices of domestic like products 
can be pushed down and depressed by competition with subject imports, even if those subject 
imports are priced higher at any single point in time than are the prices for the domestic like product. MOFCOM's Final Determination discusses in detail the evidence on which MOFCOM relied 
and its reasoning when reaching its price effects determination.  
 28. Second, the United States' claim that MOFCOM's finding of parallel pricing was not supported by the record and was based on an analysis of comp arable prices over only an isolated period of 
time is simply incorrect. MOFCOM reviewed price trends based upon an analysis over the entire 
period of investigation, as supported by the re cord evidence. In addition, the argument of the 
United States relies in part on an incorrect translation of MOFCOM's reasoning in the Final 
Determination. The fact that MOFCOM did not rely solely on a single time period is in fact 
supported by the correct translation of the Final Determination, which states that " {e}specially  at 
the end of the POI…its price decreased at the sa me time…" (emphasis a dded). MOFCOM's use of 
the term "especially" demonstrates that MOFCOM  did not rely solely on the interim 2009 period, 
but rather was basing its parallel price analysis upon an examination of price trends over the entire period of investigation.  
29. Third, the record evidence supports MOFCOM's finding that there was sufficient competitive 
overlap between subject imports and the domestic like product that use of average unit values was not inappropriate. Articles 3.2 of the AD Agreem ent and 15.2 of the SCM Agreement do not require 
an investigating authority to use model or category-specific prices rather than average unit values 
when conducting a price effects analysis, and in fact require no specific or particular methodology. The plain text of those Articles states only that an investigating authority "shall consider…whether 
the effect of such imports is otherwise to de press prices to a significant degree…" MOFCOM 
examined the issue of competitive overlap between  subject imports and the domestic like product 
in both its Preliminary and Final Determinations. Thus, MOFCOM conducted an objective examination based on positive evidence of the competitive overlap between subject imports and 
the domestic like product.  WT/DS440/R/Add.1 
 
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30. In addition, the mere fact that there may be price differences between the various products included in the averages is not an indication of bias or lack of objectivity in the pricing analysis. MOFCOM's use of average prices is also supported by other factors: there is no evidence that the 
product mix changed substantially over time; MOFCOM  did not manipulate the data it obtained in 
any way, nor did MOFCOM exclude any of the pric ing data it examined; MOFCOM used the same 
methodology for examining both domestic and import prices, and was thus even handed and 
objective when analyzing price trends.  
 31. Fourth, the claim of the United States that MOFCOM failed to consider that the market share 
of the domestic like product increased at the sa me time as the market share of subject imports 
increased looks at just one isolated piece of data, and does not undercut MOFCOM's price 
depression finding. Over the entire period of inve stigation, the market share for imports from third 
countries was relatively stable, while the market share of subject imports increased by about 
3.5 per cent. In addition, over the entire period of  investigation, the market share of the domestic 
industry decreased while the market share of subject imports increased significantly.   
 
32. As MOFCOM's domestic industry definition wa s not flawed, the United States' argument that 
MOFCOM's price effects analysis is necessarily compromised fails as a factual matter. In addition, the United States in effect argues that any violat ion of Article 4.1 of the AD Agreement and 15.1 of 
the SCM Agreement as a matter of law results in a violation of a Member's price effects analysis 
under Articles 3.2 of the AD Agreement and 15. 2 of the SCM Agreement. As noted earlier, 
however, such "consequential" claims must fail.    
G. MOFCOM's Causation Analysis was Fully  Consistent with Articles 3.1, 3.4 
and 3.5 of the AD Agreement, and 15.1, 15.4 and 15.5 of the SCM Agreement. 
 
33. The United States focuses solely on certain isolated factors in MOFCOM's overall causation analysis in its effort to claim that MOFCOM failed to establish a causal link between subject imports and material injury to the domestic industry. The United States argues that: (1) MOFCOM failed to 
consider the fact that the domestic industry's  market share increased in interim 2009; (2) 
MOFCOM failed to take into account a decline in the domestic industry's labor productivity over the period of investigation; (3) MOFCOM "failed to recognize" the alleged lack of competition between 
subject imports and the domestic like product; and (4) MOFCOM failed to address certain "other 
factors" that "may" have caused injury, including a change in China's tax policy. The United States' arguments, by selectively citing isolated data and ignoring the complete picture, run afoul of the 
applicable standards under Article 3.5 of the AD Agreement and 15.5 of the SCM Agreement. 
Subject imports need only be a "cause," and not the sole or significant cause, to satisfy 
Articles 3.5 and 15.5.  Furthermore, when determining whether other facts might have been the cause of injury to the domestic industry, previo us panel and Appellate Body reports make clear 
that there is no required method of analysis undertaking that examination.   
 34. First, MOFCOM fully accounted for the role of  third country imports. In its arguments, the 
United States focuses entirely on a single period of time, interim 2009. However, in the Final 
Determination, MOFCOM examined statistical data for imports from all sources and specifically addressed the role of third country imports. MO FCOM found that, over the entire period of 
investigation, the market share of third country imports was relatively stable, while the market 
share of subject imports increased. Moreover, the volume of imports from third countries dropped 
more than did imports from the United States, further confirming that third country imports were not the cause of material injury. Thus, the record demonstrates that there was substantial 
competition between subject imports and domestic like products.   
 35. Second, MOFCOM did not fail to account for the drop in labor productivity. MOFCOM's 
causation analysis was based upon an overall review of the entire record. In the Final 
Determination, MOFCOM analyzed sixteen  different indicia of the financial industry's health and 
performance over the period of investigation. Th e United States focuses solely on one piece of 
information, concerning labor productivity, and ignores the other fifteen indicia of the industry's 
health and performance over the period of investigation and their relationship to the causation analysis. Furthermore, an investigating authority is not required to examine in depth every possible issue. Given the low labor costs in China, a decline in labor productivity in the Chinese 
industry is not a key indicia of the health of the industry nor is it a significant or telling indicator WT/DS440/R/Add.1 
 
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 for MOFCOM's causation analysis. Nonetheless, cont rary to the U.S. claims, MOFCOM did in fact 
examine labor costs. Specifically, in its Final Determination, MOFCOM noted in its analysis of the various factors it reviewed that "employment and average annual salaries increased…"   
 
36. Third, MOFCOM fully examined the record ev idence concerning competition between subject 
imports and the domestic like product, and fully accounted for that competition in its causation analysis. MOFCOM's Final Determination shows that the investigating authority conducted a 
comprehensive investigation on the product under investigation and the domestic like product in 
terms of "physical characteristics, performanc e, production process, product use, product 
substitution, perception of consumers and produc ers, sales channels, prices and so on." The 
investigation indicated that the two are similar and comparable, and compete with each other.  
 
37. The United States also argues that the fact that subject imports oversold the domestic like 
products for part of the period of investigation undercuts MOFCOM's conclusion that subject 
imports and domestic producers competed with each other. But the fact that subject imports 
during some periods in the period of investigation oversold the domestic like product does not indicate that there was no competition between them. The finding of price undercutting is only one 
of the three possible findings that need to be found to support an adverse price effects finding. In 
any case, the U.S. argument ignores the fact that in 2007, subject imports were priced lower  than 
was the domestic like product.   
38. MOFCOM also fully accounted for the decline in apparent consumption in interim 2009. 
MOFCOM's Final Determination notes that even though apparent consumption declined in interim 2009 from the same period in 2008, sales of the do mestic like product and the domestic industry's 
market share were able to increase over the same period. Thus, the fall in apparent consumption 
did not cause material injury.   
39. The United States claim that MOFCOM ignored other possible causes of injury rests on a 
mistaken assumption concerning the appropriate application of the non-attribution standard. Article 3.5 and Article 15.5 do not specify any particular methodology that an investigation authority must follow when analyzing the role of other known factors. Furthermore, MOFCOM is 
not required to disprove a possible cause of injury. The burden is on the United States to establish 
the prima facie  case that the effects of another factor broke the causal link. The United States has 
not met that burden. Moreover, MOFCOM examined and discussed a number of "other causes" so 
as to ensure that it was properly attributing material injury to the subject imports, including: the 
role of imports from third countries; the change in market demand; exports of the domestic like 
product; whether events of force majeure caused negative effects to the normal operation of the 
domestic industry; the role of changes in the consumption tax policy and purchase tax policy over 
the period of investigation.   40. Finally, MOFCOM's causation analysis is not compromised by its definition of the domestic 
industry and its price effects analysis. As explained above, the factual premise of the 
United States' argument is incorrect, as China's domestic industry definition and its price effects analysis were fully consistent with its obligations under the AD and SCM Agreements. In addition, 
the U.S. argument incorrectly presumes a direct, per se  link between the obligations contained in 
Article 3.1 and 3.2 of the AD Agreement and 15.1 and 15.2 of the SCM Agreement with the 
obligations of causation set out in Articles 3.4 and 3.5 of the AD Agreement and 15.4 and 15.5 of 
the SCM Agreement. There is no such per se  link. The United States bears the independent burden 
of establishing a prima facie  case that the causation analysis failed to meet the standards set out 
in Articles 3.5 and 15.5, regardless of the Panel' s findings on the definition of the domestic 
industry and MOFCOM's price effects analys is made under different Articles.    
 
H. The United States Failed to Make a Prime Facie Case with Respect to its 
Consequential Claims 
 
41. The Panel should reject the consequential clai ms of the United States for failure to make a 
prima facie  cas e . T o make  a prima facie  case of breach of a WTO agreement, the complaining 
party must provide both evidence and legal argument tying the alleged facts to each of the 
elements of a legal claim. Where there is a di sconnect between the alleged facts and the legal 
claim, or no proper legal claim can be made out, a panel must conclude that the complaining party has not satisfied its burden to make out a prima facie  case. While the United States claims that 
China has acted inconsistently with Article VI of  the GATT 1994, Article 1 of the AD Agreement, WT/DS440/R/Add.1 
 
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 and Article 10 of the SCM Agreement, it does not specify any specific evidence or legal argument 
in making these claims, and instead relies on a bl anket reference to "the claims set forth above," 
to support its claims. As such, the United States has failed to make out a prima facie  case 
regarding these consequential claims  
 
V. Conclusion  
42. For the reasons set forth in this submission, China requests that the Panel find that 
MOFCOM's determinations in the underlying investigations were fully consistent with China's WTO rights and obligations.   WT/DS440/R/Add.1 
 
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ANNEX C-2 
EXECUTIVE SUMMARY OF THE OPENING STATEMENT  
OF CHINA AT THE FIRST PANEL MEETING 
I. Introduction 
1. This dispute is the latest in a series of U.S. challenges to China's trade remedy procedures. 
As the Panel considers the specific claims before it, China asks the Panel to bear in mind one 
important overarching consideration: China's trad e remedy procedures are different from U.S. 
procedures, and this is acceptable under the AD and SCM Agreements. The Agreements provide 
considerable latitude to investigating authorities to adopt different procedures. China may legitimately adopt different trade remedy procedures from the United States, and these 
procedures may lead to different results than what the United States is used to under its own 
procedures. This does not mean that China is wrong. 
II. MOFCOM Appropriately Required Ad equate Non-Confidential Summaries  
2. The first claim of the United States is that MOFCOM failed to require adequate non-
confidential summaries of confidential information in the petition. The U.S.'s argument appears to 
rest on the mistaken premise that total disclo sure is required. But Article 6.5.1 of the AD 
Agreement and Article 12.4.1 of the SCM Agreement only require that a non-confidential summary 
be in "sufficient detail" to permit a "reasonable understanding" of the "substance" of the information.  
3. The use of the term "substance" is important,  because it signals that each individual number 
or all aspects of the confidential information need not be summarized publicly, but rather that the 
non-confidential summary must be sufficient to allow an understanding of the overall "substance" of the information.  
4. The New Shorter Oxford Dictionary defines the term "substance" as "the theme or subject of 
an artwork, and argument, etc., esp. as opposed to form or expression; the gist or essential 
meaning of an account, matter." The Dictionary further defines substance as "[t]he essential 
nature or part of a thing."  
5. Article 31(1) of the Vienna Convention requires a provision to be interpreted "in accordance 
with the ordinary meaning to be given to the terms of the treaty in their context and in light of its 
object and purpose." The "substance" of the confidential information at issue therefore should not 
be determined in isolation, but rather within its larger context. The non-confidential summaries at 
issue concern certain aspects of the petition's claims concerning injury, as defined in the AD and SCM Agreements. The "substance" of the particular information at issue, therefore, needs to be 
evaluated in the context of the substantive obligati ons set out in Articles 3.4 of the AD Agreement 
and 15.4 of the SCM Agreement.   
6. Article 3.4 requires an investigating authority to determine injury through an evaluation of 
all relevant economic factors and indices that have a bearing on the industry, including actual or 
potential decline in certain factors, and actual or potential negative effects on various other factors. The petition focuses its injury allegations on the trends in the movements of various factors rather than the underlying absolute numbers themselves. This is demonstrated in the 
petitioner's summary injury paragraph, which argues that all the injury factors show "an adverse 
trend." Therefore, the "substance" that must be ascertainable pertains to the movement – or trends – of certain factors, and the relationship between the foreign and domestic products, rather 
than the absolute numbers that form the basis of  determining such trends and relationships. As 
long as the non-confidential summaries are sufficient to allow a reasonable understanding of these trends – rather than the absolute numbers themselv es – then the obligations of Articles 6.5.1 and 
12.4.1 are satisfied. 
7. Furthermore, the provisions of the relevant Ar ticles do not require any specific type, or level 
of detail, or format, for the non-confidential summaries. In addition, as we noted above, the determination as to whether the non-confidential summaries permit a reasonable understanding of 
the "substance" of the information, must be evaluated in light of the relevant context that the 
confidential information at issue pertains to trend lines and movements over time of injury data. WT/DS440/R/Add.1 
 
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 The use of trend lines or percentage changes in these circumstances is appropriate to permit a 
reasonable understanding of the substance of the information at issue. 
8. Also, the United States complains in a single conclusory sentence of its First Written 
Submission that, for certain data, only percenta ge changes were provided. Providing percentage 
changes is a common approach for non-confidential summaries. By showing year-to-year 
percentage changes, the summary provides a "r easonable understanding" of trends over time. 
While the United States seems to imply that using percentage changes is insufficient, the 
United States in China – GOES  concedes that the use of percentage indices is sufficient. 
9. The U.S. First Written Submission overlooks th ese principles and merely asserts that certain 
isolated tables contained in the petition were  not adequately summarized. However, the U.S. 
arguments fail to take into account additional text provided below each of the tables, as well as 
additional tables contained in the non-confidential  version of the petition that provide trend lines 
for the data in the tables. The non-confidential summary of the tables, the additional text below the tables, and the additional tables providing tren d lines – taken together – more than adequately 
allow for a "reasonable understanding" of the "substance" of the information submitted. 
10. China's First Written Submission explains why each of the U.S. claims concerning the public 
summaries is not correct. For example, concerning the sales-to-production ratio information in 
Table 19 of the petition, the U.S.'s assertion th at "no non-confidential summary was provided" 
ignores the additional text directly below Table 19, which provided further information and context for the redacted information. Specifically, the additional text explains that while "foreign producers' production and sales increased and domestic apparent consumption grew, the proportion of 
products sold of domestic industry did not increase accordingly." The United States also ignores 
the related trend line showing changes in the sales-production ratio over the period of 
investigation. The trend line provided with th e table showed the ratio increasing from 2006 to 
2007 and generally decreasing from 2007 through the end of the period of investigation. As noted 
previously, Article 3.4 refers to actual and potential "decline" in sales, or in other words, the trend of sales over time. Taken together, this information in its proper context provides a "reasonable 
understanding" of the "substance" of the information at issue, particularly when examined in terms 
of its relationship with other public data such as apparent consumption and inventory shifts. 
11. Finally, it is important to note that no pa rty objected to the adequacy of any of the non-
confidential summaries at issue. If interested parties felt that the non-confidential summaries had 
prejudiced their interests, then MOFCOM could ha ve reviewed the situation and determined how to 
proceed. China is not arguing that there is an ex haustion requirement and that the failure to raise 
this issue during the course of the proceeding wa ives the U.S.'s right to raise it now, but the 
failure to do so does go to the merits of the underlying argument. 
III. The United States Has Failed To Meet it s Burden with Respect to its Claim under 
Article 6.9 of the AD Agreement 
12. Rather than reiterating the elements of a prima facie  case, China focuses its statements on 
why the United States failed to make out a prima facie  case with respect to its claim under 
Article 6.9. Article 6.9 addresses a specific phase in an antidumping investigation – requiring disclosure of essential facts "before a final determination is made." Requiring disclosure at this 
specific point is logical in light of the stated purpose of Article 6.9, which is to provide interested 
parties with an adequate opportunity to defend their interests. Logically, the appropriate time to provide such disclosure is late in the investigation, when the investigating authority has gathered 
and verified relevant facts, but before reaching its final conclusions with respect to those facts. 
That is precisely what MOFCOM did in this case, when it provided letters of disclosure to all interested parties. 
13. The U.S. First Written Submission, however, does not address any aspect of MOFCOM's pre-
final determination disclosure letters, but only addresses MOFCOM's preliminary and final determinations. Specifically, the United States provides a long list of "calculations and related information" that it believes MOFCOM should have included in its determinations. The 
United States also complains of supposed "vague  descriptions" of the establishment of normal 
value, and the export price provided in MOFCOM's determinations. 
14. However, it is Article 12.2 of the AD Agreement, and not Article 6.9, that imposes 
requirements with respect to an investigating author ity's public notices. In most cases, a pre-final 
determination disclosure will include business confidential information, requiring separate confidential disclosures to each interested party. Public determinations, in contrast, must not 
disclose any business confidential information. China thus cautions against the conflation of WT/DS440/R/Add.1 
 
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 Articles 6.9 and 12.2, which set forth distinct requ irements for separate aspects of an antidumping 
investigation. The panel in China – GOES  confirmed that Articles 6.9 and 12 serve fundamentally 
different purposes.  
15. Thus, it appears the United States has alleged facts that do not "relate" to its legal 
arguments, failing to establish its prima facie  c a s e  w i t h  r e g a r d  t o  t h i s  c l a i m .  W h i l e  t h e  U n i t e d  
States claims that China has violated Article 6.9, it points to evidence of alleged deficiencies in 
MOFCOM's public determinations, which ar e governed by a different article.  
IV. MOFCOM's Determination of the AD an d CVD All Others Rates was Permissible 
under the AD and SCM Agreements 
16. At the core of the U.S. argument regardin g MOFCOM's determination of the AD and CVD all 
others rate is the notion that MOFCOM did not do  enough to alert all possible U.S. exporters and 
producers of its information requirements for the investigations. However, contrary to the U.S. 
claim that "MOFCOM made no attempt to even identify whether any other U.S. exporters/products might exist," MOFCOM took multiple steps in this respect: (1) MOFCOM posted its initiation notices 
on its website and placed them in its public  reading room; (2) MOFCOM requested the U.S. 
government to inform all U.S. producers and exporters of its investigations; and (3) MOFCOM sent its questionnaires to all U.S. producers and exporters identified in the petition, as well as to a 
number of additional U.S. companies that voluntarily registered for participation in the 
investigations. 
17. Together, these steps constituted a reason able and comprehensive notification effort. 
Indeed, while the United States complains that MOFCOM should have done more, the 
United States does not explain what additional steps MOFCOM might have taken. Under these 
circumstances, it does not seem reasonable to conclude, as the United States implies, that MOFCOM should have gone to unspecified greater lengths to publicize the fact of its investigation 
and its information requirements.  
18. Furthermore, MOFCOM made clear from the outs et that the consequence of a decision not to 
register for participation in the investigations could be the application of facts available. Thus, 
China believes that any U.S. producers and exporters that did not register for participation must 
have known of the investigations, and decided not to participate. Accordingly, MOFCOM reasonably concluded that such U.S. producers and exporters "refused" to provide the necessary information, 
and thereby lawfully resorted to facts available. China submits that the China – GOES  panel did 
not take into account MOFCOM's reasonable conclusion that any producers and exporters not 
responding to the initiation notices had decided to refuse to participate in the investigations. Following the logic of the China – GOES  panel, MOFCOM would have been required to supply full 
questionnaires to unknown parties that had already decided not to participate in the investigations.  
19. For the same reasons, China also disagrees with Japan's comment in its Third Party 
Submission that the AD Agreement "requires that authorities give notice of specific information to 
an interested party from which the specific information is needed." This comment correctly 
interprets the AD Agreement as to known interested  parties. However, this logic does not extend 
to scenarios in which the interested party is unknown and has decided not to cooperate. 
20. The United States' reliance on Mexico – Rice  is also misguided. In that case, the Appellate 
Body found that the investigating authority improperly applied facts available before providing all 
exporters with the opportunity to provide the info rmation required to calculate AD rates. In the 
present case, MOFCOM pursued a multi-faceted notification approach that did provide the required 
opportunity. China believes it is reasonable, in the circumstances of this case, to conclude that any 
other unknown U.S. producers and exporters knew of MOFCOM's investigations, and could have registered and obtained the full questionnaires. Indeed, the Appellate Body in Mexico – Rice  
emphasized that, what is reasonable to expect of an investigating authority, as far as notification 
of foreign producers and exporters is concerned, "w ill depend on the circumstances of each case." 
21. As for MOFCOM's disclosure of its all others rate methodologies under Article 6.9 of the AD 
Agreement and Article 12.8 of the SCM Agreement, th e United States is attempting to stretch the 
obligations to mandate a breadth and depth of disclosure that is not required. MOFCOM fully 
disclosed the facts underlying its determination that unknown U.S. producers and exporters refused to participate in the investigations, including its finding that unknown producers and 
exporters were aware of MOFCOM's investigations , but decided not to participate anyway. There 
were no other facts that could have been disclosed.  WT/DS440/R/Add.1 
 
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 22. With respect to MOFCOM's choice  of rates, the United States' belief that MOFCOM should 
have disclosed the reasoning behind its 21.5% AD all others rate and 12.9% CVD all others rate must fail, because the requirement to disclose "essential facts" does not extend to the disclosure of reasoning. As for the claim that MOFCOM was required to disclose factual details underpinning 
the calculation of the all others rates, there was nothing more China could have disclosed. In the 
case of the AD all others rate, MOFCOM simply applied the rate alleged in the petition; in the case of the CVD all others rate, MOFCOM simply applied the highest calculated rate. 
23. Finally, the United States challenges the adequacy of MOFCOM's determinations for purposes 
of AD Agreement Articles 12.2 and 12.2.2, and SCM Agreement Articles 22.3 and 22.5. Simply put, the legal and factual bases for MOFCOM's all others rates are clear and straightforward from the administrative record. Also, this case is fundamentally different from China – GOES . In that 
case, the question before the panel was how MOFCOM  derived an AD all others rate that differed 
from any other alleged or calculated rate. In this case, there is no such question: It is clear that MOFCOM applied the alleged petition rate as the AD all others rate, and the highest calculated CVD 
rate as the CVD all others rate. 
V. MOFCOM Properly Defined the Domestic Industry 24. As explained in its First Written Submission, China's definition of the domestic industry was 
consistent with the requirements of Article 4.1 of the AD Agreement and Article 16.1 of the SCM 
Agreement.  
25. First, both the AD and SCM Agreements pr ovide considerable discretion to investigating 
authorities in defining a domestic industry. The Agreements present an investigating authority with 
a choice to define a domestic industry as all producers of the domestic like product, or as those 
producers accounting for a "major proportion" of domestic production of the like product. Indeed, the United States does not appear to challenge China's choice to define the domestic industry in 
this case based on the "major proportion" option of the AD and SCM Agreements. 
26. Second, the United States is wrong in claiming that MOFCOM categorically excluded joint 
ventures from its definition of the domestic industry. As China explained in its First Written 
Submission, MOFCOM provided public notices inviting all domestic producers to participate in its 
injury investigation. Also, MOFCOM's Final Determination made clear that it included information from all domestic producers that supplied injury data, and did not exclude joint ventures of foreign 
automobile companies and Chinese automobile enterprises.  
27. Third, Table 1 of China's First Written Subm ission refutes the U.S. theory that MOFCOM 
excluded joint ventures from its definition of the domestic industry. Table 1 shows that during 
2006 and Interim 2009, the total number of autos prod uced by those in the domestic industry who 
chose to participate in MOFCOM's investigation exceeded the number of autos produced during the 
same periods by the domestically owned Chinese producers. The included production volume d e m o n s t r a t e s  t h a t  M O F C O M  i n c l u d e d  s o m e  p r o d u c t i o n  o f  j o i n t  v e n t u r e s  i n  i t s  d e f i n i t i o n  o f  t h e  
domestic industry.  
28. Given the available data on the actual volume of production covered by MOFCOM's definition 
of the domestic industry, there is no need to evaluate the U.S. claim that market share data 
demonstrates MOFCOM's exclusion of joint venture production from the definition of the domestic 
like product. As explained in China's First Wr itten Submission, market share data, under these 
circumstances, are a poor proxy for actual production data. 
29. The AD and SCM Agreements do not define "m ajor proportion." Therefore, as noted by the 
Appellate Body in EC – Fasteners , an investigating authority is granted some flexibility to adjust 
"major proportion" to what is reasonable. 
30. Table 1 in China's First Written Submission sets forth the percentages of total domestic 
production captured in MOFCOM's definition of the domestic industry, for each year of the period of 
investigation. The percentages varied during this period, ranging from 54 percent in 2006 to 42 percent in Interim 2009. These percentages are comparable to those at issue in Argentina – 
Poultry , in which the panel agreed that the investigating authority had satisfied the "major 
proportion" test. In the absence of any specific quantitative threshold, and because MOFCOM 
included all data supplied by domestic producer s, MOFCOM has satisfied the "major proportion" 
test in this case. 
31. Finally, the United States relies on the Appellate Body in  EC – Fasteners  t o  r e a d  a  
freestanding distortion test into Article 4.1 of the AD Agreement and Article 16.1 of the SCM Agreement. However, the AD and SCM Agreemen ts contain no freestanding distortion test. WT/DS440/R/Add.1 
 
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 Additionally, EC – Fasteners  is not directly analogous for several reasons. For one, in that case the 
EU engaged in what the Appellate Body described as a "self-selection process," affirmatively excluding several domestic producers that had supplied production information.
 Also, the EU 
erroneously related its definition of the domestic industry to the 25 percent standing threshold, 
artificially suppressing the volume of domestic production incorporated into its definition of the 
domestic industry. MOFCOM did not do this here.   
VI. MOFCOM's Price Effects Analysis was Consistent with WTO Obligations  
32. Next, the United States claims that MOFCOM's price effects analysis was not consistent with 
Articles 3.1 and 3.2 of the AD Agreement, and Ar ticles 15.1 and 15.2 of the SCM Agreement. While 
the United States seems to assert that there is only one way to conduct a price effects analysis, and because China did not follow this method, its findings are wrong. However, the relevant 
Articles provide discretion to investigating authorities, so long as they undertake an objective 
examination based on positive evidence. Such discretion is appropriate because, by its very nature, a price effects analysis is highly fact-specific and dependent on the particular 
circumstances of each case.  
33. Moreover, unlike the circumstances in China – GOES  and China – X-Ray Equipment , 
MOFCOM did not make a price undercutting finding. This is important because in a price 
undercutting analysis, a comparison of absolute price levels is more critical to the ultimate finding 
as to whether the subject imports were priced above or below the price for the domestic like product. Thus, in a price undercutting analysis, adjustments to absolute price levels might be necessary in some circumstances. In contrast, MOFCOM made a finding of price depression in this 
case. In a price depression analysis, an investigating authority is determining whether prices for 
the subject imports push down in relative terms prices for the domestic like product, examining price trends over time rather than comparing absolute price levels. For these reasons, adjustments 
to price to ensure comparability are not needed to the extent required in an undercutting analysis.  
A. MOFCOM Was Not Required To Make  a Finding of Price Undercutting 
34. In this case, MOFCOM did not make a price undercutting finding, and the United States does 
not claim that MOFCOM did. Much of the U.S. ar gument rests on its mistaken assumption that a 
finding of price undercutting must be made to support an adverse price effects analysis. However,
 
Articles 3.2 of the AD Agreement and 15.2 of the SCM Agreement allow a Member to base an adverse price effects finding on price undercutting  "or" price depression "or" price suppression. 
The text thus makes clear that any one of these three possible findings is sufficient to support an 
adverse price effects finding. As the Final De termination clearly demonstrates, MOFCOM found 
price depression in this case.  
B. MOFCOM's Finding of Parallel Price Trends Was Supported by the Record 
35. The United States claims that MOFCOM's finding of parallel pricing was based on an analysis 
of comparable price levels only in interim 2009, rath er than over the entire period of investigation. 
MOFCOM's Final Determination, however, shows a clear relationship between prices
 for subject 
imports and domestic like products throughout the full period of investigation. As the Final Determination explains, prices for subject imports and domestic like products increased substantially from 2006 through 2008, but then fell in tandem in interim 2009 relative to prices in 
interim 2008, showing parallel movements. The existe nce of parallel pricing helped to confirm that 
the declining prices for subject imports acted to depress prices for the domestic like product. The 
Appellate Body in China – GOES  has confirmed that parallel price trends can support a price 
depression analysis.   
36. Finally, the United States relies on the fact  that from 2006 to 2007, the price of subject 
imports decreased by about eight percent, but prices for the domestic like product increased. But 
the United States fails to account for the fact that the period 2006 through 2007 was when subject 
import volumes skyrocketed, and domestic producers lost significant market share. While the United States is correct that prices did not move in parallel in this isolated one year time period, the fact that domestic producers in 2007 lost massive market share to subject imports when 
domestic producers' prices went up, demonstrates the debilitating competition they faced with 
unfairly priced subject imports. 
C. MOFCOM Reasonably Used Average Prices 
37. When conducting its adverse price effects analysis, MOFCOM used average prices. The 
United States argues that MOFCOM should have used some unidentified assortment of individual models when conducting its price analysis. However, Articles 3.2 of the AD Agreement and 15.2 of WT/DS440/R/Add.1 
 
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 the SCM Agreement do not require an investigating authority to use model or category-specific 
prices when conducting a price effects analysis. Indeed, they require no specific methodology at 
all, but rather leave that to the discretion of th e investigating authority based on the particular 
facts of each case.   
38. The U.S. reliance on the decisions in China – GOES  is misplaced. As explained above, the 
panel and Appellate Body in that case were looking at the use of average prices in the context of price undercutting , not price depression. This same reasoning distinguishes the more recent panel 
decision in X-Ray Equipment .   
39. In addition, the use of averages has some advantages because it allows MOFCOM and other 
investigating authorities to examine prices for all sales, not just some sales. Here the fact that there is no evidence that the product mix changed over time further supports the use of average 
prices when looking at relative price trends. Also , MOFCOM did not exclude any of the pricing data 
it received, nor did it manipulate the data in any way. MOFCOM used the same methodology for examining both domestic and import prices, and was thus even-handed and objective when 
analyzing price trends.  
40. The United States relies entirely on a single chart submitted by one U.S. respondent. As 
discussed further below, however, MOFCOM examin ed the issue of competitive overlap between 
subject imports and the domestic like product in detail, and concluded that there was meaningful 
competitive overlap and substitutability, further ju stifying the use of average prices here when 
making a price depression finding.  
D. MOFCOM Appropriately Considered the Fact That the Market Share for the 
Domestic Like Product In creased In Interim 2009 
41. The United States also claims that MOFCOM's price depression finding is contradicted by the 
fact that the market share of domestic like products increased from interim 2008 to interim 2009, 
at the same time that the market share of subject imports also increased. The United States 
seems to rely on the fact that third-country imports lost market share in interim 2009 from interim 2008 levels. However, over the entire period of investigation, the market share for imports from 
third countries was relatively stable, while the ma rket share of subject imports increased by about 
3.5 percent. Moreover, over the entire period of investigation, the market share of the domestic industry decreased while the market share of subj ect imports increased significantly. The domestic 
producers were only able to increase market shar e in interim 2009 to the extent that they were 
forced by subject imports to decrease prices in order to try to gain back lost market share.  
VII. MOFCOM Sufficiently Established a Ca usal Link Between Subject Imports and 
Material Injury To The Domestic Industry 
42.  To support its claim that MOFCOM's causation analysis was not consistent with Articles 3.1 
and 3.5 of the AD Agreement, and Articles 15.1 an d 15.5 of the SCM Agreement, the United States 
picks certain isolated factors, and argues that MOFCOM's failure to consider them renders its 
causation analysis invalid. Thus, the United States seems to argue that if it can show any other 
factor that might have contributed in some way to the material injury suffered by the domestic industry, MOFCOM's causation analysis must fail. However, it is clear under the applicable text that subject imports need only be a cause, not the sole cause, of material injury, in order to satisfy 
Articles 3.5 and 15.5. The Appellate Body has also stated that an investigating authority need only 
to show that subject imports contributed in some manner, even though other factors also 
contribute to the situation of the domestic industry. 
43. Here, MOFCOM thoroughly reviewed the record and reached its causation determination on 
the basis of positive evidence. The Final Determination spends 25 pages discussing the causal link between subject imports and the material injury su ffered by the domestic industry. MOFCOM found 
that the volume of subject imports increased dramatically and prices declined, resulting in 
depressed prices for the domestic like products. Also, prices for subject imports and the domestic like product exhibited similar trends, and were consistent from 2006 to 2008 in general, and both decreased in interim 2009 from interim 2008 levels. While it is true that apparent consumption in 
the domestic market declined in interim 2009, the domestic industry's production and sales did not 
suffer proportionately. MOFCOM also carefully exam ined the role of other factors that might have 
contributed to injury. MOFCOM's thorough review of the causal link more than satisfies the 
standards under the relevant AD and SCM Agreement articles. 
 WT/DS440/R/Add.1 
 
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 A. MOFCOM Appropriately Accounted For the Role of Third Country Imports 
44. The United States argues that MOFCOM "failed to take into account" the fact that in a single 
isolated time period during the period of inve stigation – interim 2009 – the market share of the 
domestic like product increased at the same ti me that the market share of subject imports 
increased. The United States implies that subject imports took market share only at the expense of 
third country imports, and that MOFCOM "failed to address" the role of third country imports. The 
record shows, however, that MOFCOM fully examined and addressed this issue. MOFCOM 
examined data for imports from all sources and noted that the volume of third country imports 
decreased sharply by 32 percent in interim 2009, and that "imports from other countries (regions) do not affect the finding of the causal link in this case." Over the entire period of investigation, the record shows that the market share for third country imports was relatively stable, decreasing by 
less than one percent. In contrast, the market share of subject imports increased by about 3.5 
percent. 
B. MOFCOM Accounted For the Drop in Labor Productivity 
45. The United States focuses on the fact that labor productivity declined to conclude that 
MOFCOM failed to account for the drop in labor productivity, despite the fact that MOFCOM examine 16 different indicia of the financial indust ry's health and performance over the period of 
investigation. An investigating authority is not required to examine in depth every possible issue. 
The U.S. argument ignores the fact that the Chin ese industry has low labor costs, and therefore 
the decline in labor productivity in the Chinese industry is not a key indicia of the health of the industry or a significant factor in a causation an alysis in these circumstances. Furthermore, the 
fact that no party raised this issue before MOFCOM during the course of investigation indicates 
that this is not a critical issue.  
C. MOFCOM Reasonably Examined the Degree of Competitive Overlap 
Between Subject Imports and the Domestic Like Product 
46. The United States argues that MOFCOM failed to recognize the alleged lack of competition 
between subject imports and the domestic like pr oduct. However, MOFCOM's Final Determination 
specifically examined the degree of competitive overlap, making it clear that the investigating 
authority conducted a comprehensive investigat ion of the product under review, considered 
various physical and market-related factors, and determined that the products were competitive.   
47. The United States alleges that MOFCOM faile d to address Table 6, which was submitted by 
Chrysler showing sales in four alleged categories of vehicles. The Final Determination, however, 
examines the contents of the chart and explains  why the chart does not contradict MOFCOM's 
determination that products of the domestic industry and the product under investigation compete 
with each other.  
48. In addition, the record shows that Chrysler's Ta ble 6 is not reliable on its face. First, the four 
categories of vehicles it uses – "entry, mid, luxury, premium" – are nowhere defined. It is not clear 
if those categories relate to the size of the vehicle, their prices, consumer perceptions, or 
something else. Second, the data in Table 6 are incomplete. For example, the total volume of 
subject imports shown in Chrysler's Table 6 for ea ch year is far less than the actual volume of 
subject imports shown in the Final Determination. Third, the record shows there are no dividing 
lines between these alleged categories. With respect to price, for example, the four categories 
identified in the Chrysler Table do not corresp ond strictly with discrete price segments.   
49. In addition, even to the extent it can be  relied upon, the Chrysler Table shows direct 
competition in 3 of the 4 product categories it id entified, which on its face represents significant 
competitive overlap. There is no requirement that there be perfect, 100 percent overlap in light of 
MOFCOM's findings that subject imports are comp etitive with and substitutable for the domestic 
like product. 
50. Moreover, the United States argues that the fact that subject imports oversold the domestic 
like product for part of the period of investigation undercuts MOFCOM's conclusion that subject imports and the domestic producers competed with each other. Again, the United States here 
seems to rely on the premise that a causation finding cannot be made in the absence of price 
undercutting. The fact that subject imports may have oversold the domestic like product for parts of the period of investigation does not mean that  there was no competition between them. If that 
were true, then a causal link could not be found in any case where price undertaking was not 
present. Rapidly falling prices for subject imports can still depress or suppress prices for domestic WT/DS440/R/Add.1 
 
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 like products, and support an adverse price effects finding, even if those subject imports do not, 
over any given period of time, undersell the domestic like products. 
51. Furthermore, the United States ignores the fact that in 2007, subject imports were priced 
lower than the domestic like product, which further supports MOFCOM's conclusion of competition 
between subject imports and the domestic like product.  
D. MOFCOM Properly Accounted for the Decline in Apparent Consumption in 
Interim 2009 
52. Again attempting to focus solely on isolated data point rather than examine the totality of 
MOFCOM's causation finding, the United States argues that MOFCOM "failed to take into account" the decline in apparent consumption in interim 2009. The U.S. claim is simply not correct, because MOFCOM in fact examined the role of the decline in consumption in interim 2009. The Final 
Determination beginning at page 138 addresses the decline in apparent consumption in interim 
2009, and notes that "the domestic industry still kept increasing production and sales, as well as market share by improving production and operation levels and product competitiveness." Because 
the domestic industry was able to increase sales and production in interim 2009, it was insulated 
somewhat from the fall in apparent consumption over that period. The U.S. argument that MOFCOM "without explanation" rejected the fall in apparent consumption as a causal factor is 
therefore contradicted by the record. 
E. MOFCOM Reasonably Addressed Other Possible Causes of Injury  
53. Finally, the United States claims that MOFC OM failed to address other factors that "may" 
have caused injury, specifically, an increase in sales taxes on larger engine vehicles, and the 
impact of effective increases in average wages and employment, coupled with decreases in 
productivity. Both U.S. arguments should be dism issed. Concerning the sales tax issue, MOFCOM's 
Final Determination specifically explains that the respondent's argument raised in the underlying 
investigation was based on incorrect facts, because the domestic industry's production and sales in 
fact increased in interim 2009 from interim 2008. Regarding the impact of average wages and productivity, we noted above that
 labor costs are not a critical causal factor when examining the 
financial health of the domestic Chinese auto industry, and could not have been a likely cause of 
the decline in the domestic industry's pretax profits. 
 WT/DS440/R/Add.1 
 
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ANNEX C-3 
CLOSING STATEMENT OF CHINA AT  
THE FIRST PANEL MEETING 
1. Mr. Chairman and Members of the Panel, Chin a would like to begin by thanking you and the 
Secretariat for the time and effort you are devoting to this proceeding. We hope that the discussion held during this hearing has assisted the Panel in enhancing its understanding of the 
claims raised by the United States, and China's response to those claims. 
 2. At this time, we would simply like to offe r four brief observations regarding how the U.S. 
case has evolved during this proceeding so far. 
 
3. First, we note with particular interest that the United States has shifted some of its arguments before the Panel. For example, in its First Written Submission, the United States 
focused on MOFCOM's supposed exclusion of joint ventures. Now, during the hearing, the 
United States appears to concede that MOFC OM did not exclude them. In addition, the 
United States previously argued that the petition failed to include any meaningful public 
summaries, but the United States now seems to ar gue that public summaries have been provided, 
but allegedly are insufficient. All of this shifting of arguments suggests that the United States may in fact be overreaching in  its claims against China. 
 
4. Second, the United States appears to rely heavily on the overly simplistic argument that the 
present case is the same as China – GOES . However, as the Panel now ca n see, that case differs in 
many fundamental respects from the present case. Concerning the adequacy of non-confidential 
summaries, for instance, the summaries at issue in this case are far more detailed than those in 
the GOES  case. The non-confidential summaries in this case include text, trend lines, percentage 
changes, and related information, all of which provide more details than in GOES . 
 
5. Also, this case presents different facts than GOES  on the issue of facts available as the basis 
for all others rates. For example, in this case ther e is no question about the origin or derivation of 
the AD and CVD all others rates; the public noti ces of MOFCOM make perfectly clear how MOFCOM 
derived these rates. Further, as we discussed yesterday, the GOES  panel did not expressly 
consider MOFCOM's logic and analysis in finding that the unknown U.S. exporters had determined 
not to participate in MOFCOM's investigations. 
 
6. Moreover, the GOES panel found that adjustments we re needed to ensure price 
comparability, but only in the context of a price undercutting analysis where prices are being 
compared. But in the present case, MOFCOM did not compare prices and did not make a price 
undercutting finding.  7. China's third observation concerns the U.S. cl aim under Article 6.9 of the AD Agreement. In 
its First Written Submission, the United States simply asserts that China violated this provision. 
Yet at the same time, the United States has not presented supporting documents to the Panel. As such, the United States has not met its initia l burden of proof. The United States, as the 
complainant, must first make out a prima facie  case by not just making the legal argument, but 
also by providing relevant evidence to support its arguments. Without doing so, the burden cannot 
shift to China. 
 
8. China's final observation from this first hear ing concerns the continuing U.S. argument that 
MOFCOM's notification of U.S. exporters and pr oducers was inadequate. The record shows that 
MOFCOM engaged in a multi-pronged notification effort that included posting the registration 
notice on its website and requesting the U.S. government to provide the notice to all U.S. 
exporters and importers. The fact that four additional companies beyond those named in the petition registered for participation shows that the notification was effective. MOFCOM's notice also 
stated clearly that non-participation in the investigations could lead to the imposition of facts 
available, and thus, China satisfied its Article 6.8 notification obligation.  WT/DS440/R/Add.1 
 
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 9. China would like to conclude by again th anking the Panel and the Secretariat for their 
attention and efforts during this hearing. We look forward to further clarifying the facts and issues for the Panel.  WT/DS440/R/Add.1 
 
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ANNEX C-4 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN 
SUBMISSION OF CHINA 
I. INTRODUCTION 
1. This dispute continues the overly broad attack  by the United States on China's trade remedy 
procedures. Yet as China explained in its First Written Submission and during the First Substantive 
Meeting of the Parties, the aspects of MOFCOM's determinations before the Panel rest on a lawful 
and reasonable implementation of China's oblig ations under the AD and SCM Agreements.   
 II. ARGUMENTS 
 
A. MOFCOM Appropriately Required Adequate Non-Confidential Summaries of 
Confidential Information 
2. Article 31(1) of the Vienna Convention requires a provision to be interpreted "in accordance 
with the ordinary meaning to be given to the terms of the treaty in their context and in light of its 
object and purpose." Therefore, when interpre ting Article 6.5.1 of the AD Agreement and 
Article 12.4.1 of the SCM Agreement, the term "substance" in setting the public disclosure 
standard must be given due meaning. As the "s ubstance" of the non-confidential summaries at 
issue concerns certain aspects of the petition's claims concerning injury, the substantive obligations concerning injury set out in Articles 3.4 of the AD Agreement and 15.4 of the SCM 
Agreement provides context. Article 3.4 requires an investigating authority to determine injury 
through an evaluation of all relevant economic factors and indexes that have a bearing on the industry, including actual or potential declines  in certain specified injury factors, and actual or 
potential negative effects  on certain other listed factors. Thus, the "substance" that must be 
ascertainable to the parties upon review of the non-confidential summaries in this case pertains to the trends  of the specified injury factors and the relationship between subject imports and the 
domestic like product over time, rather than the absolute numbers themselves.  
 3. The United States argues that the trend lines  provided in the petition do not provide an 
adequate summary because they are not to scale. The United States overlooks the fact, however, 
that for the vast bulk of the non-confidential summaries at issue, percentage changes are also 
provided, which give further detail and context for the non-confidential summaries at issue.   
4. The United States also argues that the applicant could summarize absolute figures without 
disclosing confidential information by reporting the absolute figure as an average. The United States is in effect is arguing that the provision of "average" ranged figures is the only way to 
provide a non-confidential summary that would sati sfy the requirements of Article 6.5.1. However, 
the text of the Article does not require any specific type or format for non-confidential summaries to be provided. Rather, Article 6.5.1 requires only that such summaries "be in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence." 
As discussed above, the "substance" of the confidential information at issue here relates to the 
trends in the relevant injury criteria discussed in the petition, in accordance with the context established by Article 3.4 of the AD Agreement. In  such a trends-focused analysis, the percentage 
changes provided in the petition, coupled with  trend lines over time, provide an adequate 
understanding of the substance of the information at  issue. Additionally, each of the tables that 
the United States references relate to annual aggregate data concerning injury, the confidential 
treatment of which the United States has not challenged. Therefore, the United States is in effect 
arguing that the very information treated as confidential should have been disclosed, a circular argument that the China – GOES  panel has previously found "not convincing."  
 
5. Moreover, the U.S. argument that the petitioner in the present case never asserted that 
summarization was not possible or otherwise justified the absence of meaningful non-confidential summaries is beside the point. Petitioner never asserted that public summarization was not 
possible here for the simple fact that petitioner provided adequate non-confidential summaries.  WT/DS440/R/Add.1 
 
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B. The United States Has Failed to Establish a Prima Facie  Case with Respect to its 
Claim that MOFCOM Did Not Disclose the Essential Facts Underlying its Dumping 
Margin Calculation  
6. For reasons set forth in China's First Written Submission and its Opening Statement at the 
First Substantive Meeting of the Panel, the United States has failed to discharge its burden with respect to its claim under Article 6.9. The United States has provided no new evidence that would 
shift the burden to China as the respondent. Rath er, in its response to the Panel's first set of 
questions, the United States argues that it can base its claim on just those documents "in its possession," implying that China, despite being the respondent, must supply the evidence for the United States to prove its case. The U.S. argument is without merit.  
 
7. First, to make out a prima facie  case, the complaining party must provide both adequate 
evidence and legal argument tying the alleged facts to a legal claim. As explained by the Appellate 
Body in US – Gambling , "{a} prima facie  case must be based on 'evidence and legal argument' put 
forward by the complaining party in relation to each of the elements of the claim." The burden 
shifts to the responding party only if the complaining party adduces evidence sufficient to raise a 
presumption that what is claimed is true. Thus the burden cannot shift to the responding party 
where, as here, the United States has provided no evidence that would permit the Panel to adjudicate its claim of supposed deficiencies in MOFCOM's pre-final determination letters to the six U.S. exporters and producers for which it reached company-specific dumping determinations.  
 
8. Second, the United States cannot establish a prima facie  case by pointing to documents 
other  than the pre-final determination disclosure letters to the six U.S. exporters and producers. 
As China explained, a legitimate prima facie  case must tie alleged facts to the specific legal claim 
at issue. The U.S. references to unrelated docume nts that do not purport to be MOFCOM's pre-final 
determination disclosure letters are no substitute for evidence that is only contained in the 
disclosure letters to the U.S. exporters and producers.   
 9. Third, the U.S. comment that the disclos ure letter provided by MOFCOM to the U.S. 
government did not provide the detail necessary for it to understand MOFCOM's dumping margin 
calculations misses the mark. The United States appears to imply that MOFCOM was required 
under Article 6.9 to provide to the U.S. govern ment the same type of detailed disclosure of 
dumping margin calculations and analysis as provided to the individual company respondents, 
notwithstanding the inclusion of business confidential information ("BCI") in the disclosure letters 
to the individual respondents. Because MOFCOM calculated dumping margins based on company-specific BCI, the U.S. government could not reasonably expect that it, as a different interested 
party not authorized to receive this BCI, would receive the same level of disclosure. 
 
C. MOFCOM Properly Resorted to Facts Available to Determine the AD and CVD All 
Others Rates, and Adequately Explained its Determinations  
10. In its First Written Submission and in its arguments before the Panel during the First 
Substantive Meeting, the United States relied heavily on the panel report in China – GOES , 
claiming that this Panel should reach the "same" decision as that earlier panel. In China – GOES , 
however, the panel noted that it was unclear from the record how MOFCOM had determined the all 
others rate. No such question of clarity exists in this case; MOFCOM based the AD all others rate on the alleged rate of dumping provided in the petition, as explained in its Final Determination. 
The petitioner's basis for the all others rate is clearly laid out in the public version of the petition. 
The CVD all others rate was based on the highest calculated rate, i.e., the rate of subsidization determined for General Motors, as explained in detail in MOFCOM's pre-final determination disclosure letter to the U.S. government. Further,  China submits that, in the absence of direct 
guidance in the AD and SCM Agreements, MOFCOM's  administrative process – which first requires 
interested party registration and then proceeds with more detailed information requests – reasonably ensures an orderly investigation process that complies with the AD and SCM 
Agreements. 
 11. The United States has continued to insist that MOFCOM failed to provide adequate notice to 
those exporters and producers subj ect to the AD and CVD all others rates under Article 6.8 of the 
AD Agreement and Article 12.7 of the SCM Agreement. China reiterates that it took multiple steps to attempt to ensure that all exporters and producers of the subject merchandise were aware of WT/DS440/R/Add.1 
 
- C-22 - 
 
  
 MOFCOM's AD/CVD investigations, as well as of the possibility that non-cooperation could result in 
the application of the facts available. Specifically, MOFCOM (i) posted its initiation notices on its website and placed them in its public reading room ; (ii) requested the U.S. government to inform 
all U.S. producers and exporters of its investigations; and (iii) sent its questionnaires to all U.S. 
producers and exporters identified in the petition , as well as to a number of additional U.S. 
companies that voluntarily registered for participation in the investigations. These steps constituted a reasonable and comprehensive notification effort that made clear to potential 
exporters and producers that they faced the applic ation of facts available should they choose not 
to cooperate with MOFCOM. China also rejects the reliance of the United States on the Appellate 
Body decision on Mexico – Rice , because in that case, there was no indication that the 
investigating authority warned interested parties that the investigating authority would apply facts 
available in the absence of participation in the investigation. In this case, MOFCOM provided the 
required notification to all potential exporters and producers of the consequences of non-cooperation with MOFCOM's investigations.  
 
12. Furthermore, China respectfully suggests that , for purposes of the establishment of AD and 
CVD all others rates in circumstances like those presented by this case, it does not matter if the 
unknown exporters and producers do not exist or have chosen not to make themselves known. As 
a practical matter, an investigating authority may not be able to determine the basis for the non-responsiveness of unknown exporters and producers. China therefore does not believe that the Panel should adopt a new test in which investigating authorities are asked to do what may be 
impossible – i.e., determine whether unknown exporters do not exist or have simply chosen not to 
cooperate.  
13. According to the United States, a purportedly WTO-consistent methodology for the 
calculation of AD and CVD all others rates may be  to base such rates on simple or weighted 
averages of the rates determined for individually investigated companies. While the United States 
does not refer to any provision of the AD and SCM Agreements in making this suggestion, China 
understands that the United States is referring to Article 9.4 of the AD Agreement. However, the argument implied by the United States as to the applicability of Article 9.4 fails as a matter of law and policy.    
 
14. Article 9.4 of the AD Agreement only applies when the investigating authority has limited the 
number of exporters and producers under investigat ion under the second sentence of Article 6.10. 
It does not apply to circumstances where, as here, the investigating authority investigated all 
exporters and producers of the subject merchandise that registered for participation in the AD/CVD 
investigations, under the preferred approach of Arti cle 6.10. This corresponds with the objective of 
Article 9.4, which is to prevent prejudice agai nst cooperative exporters not included by the 
investigating authority in its investigation. The method of calculating AD and CVD all others rates based on averages as suggested by the United States, on the other hand, would provide no inducement to non-cooperating exporters and producers to provide information to the 
investigating authority. In the event such a po licy were to be applied, such exporters and 
producers would know that they would obtain ra tes as favorable as the average of the rates 
applied to those exporters and producers expending time and effort to cooperate with the 
investigating authority.   
 15.  The United States further argues that MOFCOM did not explain why non-investigated 
exporters and producers should be subject to rate s based on facts available; did not explain how 
non-exporting companies could refuse to provide necessary information; and did not explain why 
the facts available applied were appropriate under AD Agreement Articles 12.2 and 12.2.2 and SCM Agreement Articles 22.3 and 22.5. As an initial matter, China emphasizes that, in addressing 
this issue, any comparison with China – GOES  is unwarranted. As noted above, a key question 
before the panel in China – GOES  was how MOFCOM had derived an all others rate that differed 
from the rates determined for individual export ers and producers. In this case, there is no 
analogous question.  
 16. MOFCOM fully laid out its rationale for applying the all others rates to non-investigated U.S. 
exporters and producers based on facts available – i.e., having been notified of the investigations 
and given the opportunity to register for participation, MOFCOM determined that any U.S. exporters and producers that remained unknown had determined not to cooperate with MOFCOM's AD/CVD investigations. MOFCOM's logic in this respect was straightforward and reasonable, and 
there is no other analysis or rationale that MOFCOM could have further provided. The same WT/DS440/R/Add.1 
 
- C-23 - 
 
 rationale applies with respect to the U.S. clai m that MOFCOM did not explain how non-exporting 
companies could refuse to provide necessary information. Each step in MOFCOM's analysis is laid out in the Final Determination.  
17. Concerning MOFCOM's selection of the all others rates, all findings and conclusions, as well 
as supporting relevant information, are readily apparent from the record. As MOFCOM first explained in the Preliminary Determination, it derived the AD all others rate directly from the rate 
alleged in the petition, and applied the all others rate from the highest calculated subsidy rate as 
the CVD all others rate. It affirmed both of these choices in the Final Determination.    18. China also emphasizes that the Articles 6. 9 and 12.7 disclosure requirements apply only to 
certain facts, and do not extend to reasoning . These Articles thus do not obligate China to disclose 
its rationale for the selection of the all others rates, but only the essential facts underlying its choice of rates. The Articles 6.9 and 12.7 discl osure requirements similarly do not encompass 
calculations , which are a form of interpretation or assessment of facts.  
 
D. MOFCOM's Definition of the Domestic Industry Is in Accordance with the AD and 
SCM Agreements 
19. As an initial matter, the U.S. approach to its claim under Articles 3.1 and 4.1 of the AD 
Agreement and Articles 15.1 and 16.1 of the SC M Agreement has evolved considerably over the 
course of this proceeding. Most notably, the United States, having originally focused on MOFCOM's 
supposed exclusion of joint ventures from its definition of the domestic industry, now accepts 
(correctly) that MOFCOM did not exclude them. Th e United States has now shifted its focus to 
alleged distortion of MOFCOM's domestic industry  definition pursuant to the Appellate Body's 
decision in EC – Fasteners (China) , and a new claim that the percentage of domestic production 
included in the domestic industry definition is, standing alone, too small to qualify as a "major proportion."  
 
20. As China has explained, CAAM's membership is broad, encompassing all active domestic producers during the period of investigation, and thus including both joint ventures and domestically owned companies. MOFCOM included in its definition of the domestic industry and in 
its injury analysis all data provided by this group of eight domestic producers. Accordingly, 
MOFCOM's definition of the domestic industry is broadly representative of Chinese production of 
the domestic like product. Further, MOFCOM did not, as the United States alleges, limit its 
definition of the domestic industry to only thos e domestic producers that supported the petition. 
Rather, MOFCOM simply included data for all domestic producers that chose to participate, regardless of their position with respect to the petition. While China acknowledges that certain 
domestic producers did not register for participation in MOFCOM's injury investigation, MOFCOM 
did nothing to preclude that possibility.    21. The United States asserts that the Appellate Body's decision in EC – Fasteners (China)  
compels a finding of distortion in this case. Howe ver, the two cases differ in key respects, and no 
finding of distortion is warranted in this dispute. First, in EC – Fasteners (China) , the investigating 
authority affirmatively excluded from its definition  of the domestic industry 25 out of 70 domestic 
producers that had supplied some initial information to the investigating authority. MOFCOM 
engaged in no such self-selection process, but rather incorporated into its injury analysis data from all those domestic producers that registered for participation in the investigation. Second, the 
Appellate Body in EC – Fasteners (China)  f o u n d  t h a t  t h e  2 5 %  d o m e s t i c  i n d u s t r y  c o v e r a g e  
benchmark applied by the investigating authority to determine a "major proportion" reduced the 
data coverage of the injury analysis and introduced a material risk of distortion. MOFCOM applied no such limiting benchmark in this case.  
 
22. The United States argued for the first time at the First Substantive Meeting of the Panel that the percentage of domestic production included in MOFCOM's definition of the domestic industry is 
too low on its face. This new U.S. argument fa ils for several reasons. First, the AD and SCM 
Agreements nowhere define a specific quantitati ve threshold required to satisfy the "major 
proportion" test of Article 4.1 of the AD Ag reement and Article 16.1 of the SCM Agreement. 
Second, MOFCOM's inclusion of data from all domestic producers that decided to participate in the 
injury investigation permits the Panel to conclude that MOFCOM's definition of the domestic industry constitutes a substantial reflection of total domestic production. Third, even though Article 4.1 of the AD Agreement and Article 16.1 of the SCM Agreement do not require an WT/DS440/R/Add.1 
 
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 investigating authority to identify specific "practical constraints" on its ability to obtain information 
from more domestic producers as the Unit ed States suggests, MOFCOM nonetheless did face the 
real constraint that it could not compel additional  domestic producers to participate in the injury 
investigation, and took action to facilitate participation by additional domestic producers in the 
injury investigation. Finally, MOFCOM's registration process does not create a disincentive for 
domestic producers to participate in its injury investigation, as the United States contends. For one, MOFCOM's registration process is designed to ensure an orderly investigation process in 
which MOFCOM may quickly establish the pool of interested parties intending to supply 
information. Further, the injury registration notice that China supplied with its First Written Submission is a straightforward and relatively short questionnaire that cannot be described as burdensome.   
 
E. MOFCOM's Price Effects Analysis Is Co nsistent with China's WTO Obligations  
23. MOFCOM's finding of price depression in the present case was fully supported by record 
evidence and consistent with MOFCOM's obligations under Articles 3.1 and 3.2 of the AD 
Agreement, and Articles 15.1 and 15.2 of the SC M Agreement. MOFCOM's Final and Preliminary 
Determinations specifically linked the price depression it found to subject imports, under the 
section entitled "Price Effect of the Product Under Investigation on Prices of Chinese Like Product." 
The Final Determination found that the movement of price trends of the subject imports and domestic like product are consistent basically, and concluded that the increase in import volume and market share of the subject imports and the de crease of import price of subject imports in 
interim 2009 depressed the price of the domestic like product. The Final Determination also found 
that the price depression of domestic like products caused by increased import volume and market share of subject imports caused decreases in several indexes, including the sales price, the 
increase margin of the sales revenue, the pre-tax pr ofit, and the return on investment of domestic 
like products. MOFCOM's Final Determination also discusses that MOFCOM found parallel trends between prices for subject imports and domestic like product, a dramatic increase in the volume of 
subject imports, and competitive overlap between  the subject imports and the domestic like 
product, which further supported its price depression finding.    24. The fact that subject imports might have oversold the domestic like product at certain times 
during the POI does not undermine MOFCOM's find ing of price depression. First, the U.S. claim 
that MOFCOM failed to address evidence that subject imports oversold the domestic like product is contradicted by the text of MOFCOM's Final Determination. The Final Determination specifically 
addresses this argument, and concludes that "{p}rice depression and price suppression do not 
require that the import price of the product under investigation be lower than the price of the domestic like product. The evidence indicates that since 2009, the decrease of the import price of 
the product under investigation depressed the price of the domestic like product." Second, price 
depression or suppression can occur without pric e undercutting being present. Competition with 
imports can depress or suppress prices for domestic like products, even if those imports are priced 
higher at any single point in time than prices for the domestic like product. Finally, the text of 
Articles 3.2 and 15.2 authorize Members to find adverse price effects upon the basis of price 
depression "or" price suppression "or" price undercutting, confirming that a Member can find price depression or suppression without price undercutting being present.   
 
25. The existence of parallel price trends over  the entire period of investigation supports 
MOFCOM's finding of price depression. While the Un ited States focuses on price trends in 2007 to 
argue that MOFCOM's finding of parallel price trends "is belied by the relevant data," MOFCOM took 
into consideration price trends observed in the 2006-2007 time period in reaching its conclusion that "the movement of price trends of the product under investigation and domestic like product are consistent basically . Both of them increased in general  from 2006 to 2008, and decreased in 
the first three quarters of 2009." The 2007 period  is also when the volumes of subject imports 
skyrocketed, and when the domestic producers lost  massive market share. The domestic industry 
was forced to fight back against the increase in  market share of subject imports by decreasing 
prices at the expense of profits. As a result, the domestic industry's financial indicators were 
depressed, and hence injury was reflected in the financial indicators rather than in the production or market share of the domestic producers.  
 
26. The massive increase in the volume of subjec t imports during the period of investigation, 
and especially in interim 2009, further supports MO FCOM's price depression finding. In the Final 
Determination, MOFCOM found that the significant in crease in market share of the subject imports, WT/DS440/R/Add.1 
 
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 especially at the end of the POI, depressed the price of the domestic like product. While the 
United States focuses solely on interim 2009 to argue that the Final Determination failed to take into account an increase in market share of the domestic like product during a single period of the POI, the market share of domestic like products  decreased from 18 percent at the start of the 
period of investigation to about 14 percent at th e end. In contrast, the market share for subject 
imports increased substantially, from about 9.9 perc ent at the start of the period of investigation 
to about 13.4 percent at the end. The Final Determination also notes the important interaction 
between the volume effects and price effects of co mpetition with subject imports, explaining that 
"{i}n interim 2009, the domestic industry was able to gain back some market share, but only at 
the price of further reductions to price as a result of competition from the massively rising volume of subject imports. And even so, the domestic pr oducers still did not come close to gaining back 
the market share that they had held in 2006 at the start of the period of investigation."   
 27. In addition, it is not correct that subject imports only took market share from non-subject 
imports during the POI. The market share for imports from third countries remained relatively 
stable during the POI while the market share of subject imports increased by about 3.5 percent. 
Moreover, the United States is incorrect that subject imports took market share from Chinese 
producers not included in MOFCOM's definition of domestic industry, as the market share for 
Chinese producers not included in MOFCOM's definition of the domestic industry remained stable from interim 2008 to interim 2009, and in fact increased slightly over the entire period of investigation.  
 
28. Similarly, the U.S. argument that the incr eases in the volume of subject imports in the 
2006-2008 period "were commensurate with rising consumption of the subject merchandise in the 
Chinese market" also fails, because over the entire period of investigation, the massive increase in 
the volume of subject imports outstripped the rise in apparent consumption of the subject 
merchandise in the Chinese market. Further undercutting the U.S. argument that the volume of 
subject imports is linked to apparent consumption levels is the fact that in interim 2009 the 
volume of subject imports increased by 20 percen t, even while apparent consumption declined 
significantly.   
29.  Furthermore, MOFCOM appropriately used average prices when examining price effects 
under Article 3.2 of the AD Agreement and 15.2 of the SCM Agreement. The U.S. argument that 
the panel and Appellate Body decisions in China – GOES  requires MOFCOM to make adjustments to 
ensure comparability fails because the China – GOES  decisions were expressly limited to instances 
when an investigating authority makes price comparisons in the context of a price undercutting analysis. In the present case, MOFCOM did not un dertake a price undercutting analysis and did not 
compare prices. Rather, MOFCOM examined relative  price movements of the domestic like product 
and subject imports over time in the course of conducting a price depression  analysis. A 
comparison of absolute price levels is more central to the ultimate finding in a price undercutting analysis, because an investigating authority must determine and compare absolute price levels 
before making an undercutting finding. In contrast , a price depression finding relies instead on an 
analysis of relative  price trends and movements over time rather than a comparison of absolute  
prices. 
 
30. The United States argues that MOFCOM's us e of average unit values was also inappropriate 
because MOFCOM should have made unspecified adjustments to ensure price comparability among 
the "varying grades of the automobiles MOFCOM was comparing." However, MOFCOM in its Final 
Determination thoroughly examined the issue of competitive overlap, including the arguments of the interested parties and the table supplied by Ch rysler allegedly showing a lack of competition 
between subject imports and the domestic like product. MOFCOM concluded that the arguments by 
the exporters were not supported by the record and that "the product of the domestic industry and 
the product under investigation compete with each other." MOFCOM also investigated the extent of competitive overlap between the domestic like product by examining, inter alia , physical 
characteristics, use and sales channels, and pric es and end users, and concluded that subject 
imports and the domestic like product compete with each other.    
31. MOFCOM also addressed respondents' concern regarding competitive overlap in its Final 
Determination by adjusting the scope of the product under investigation and defining domestic like product based on the adjusted scope. The fact th at some of the discussion of the significant 
similarity and competitive overlap between subject imports and the domestic like product took 
place in the context of MOFCOM's domestic like product determination does not undermine the WT/DS440/R/Add.1 
 
- C-26 - 
 
  
 relevance of the information, as long as the discussion supports the factual conclusion that there 
was significant competitive overlap between subject imports and the domestic like product.  32. MOFCOM's Final Determination specifically took into account Chrysler's comments 
concerning the alleged lack of competition between  subject imports and the domestic like product, 
including the table that Chrysler supplied, and fo und that Chrysler's arguments did not undermine 
its finding of competitive overlap between subject imports and the domestic like product. 
Moreover, the record evidence demonstrates that Chrysler's Table 6 is not reliable. For example, 
the four categories of vehicle it purports to us e – "entry, mid, luxury, and premium" – are nowhere 
defined, and do not correspond strictly with discret e price segments. The data in Chrysler's Table 6 
are also incomplete, as the total volume of subject imports shown in Chrysler's Table 6 for each 
year of the period of investigation is far less than the actual volume of subject imports shown in 
the Final Determination. Finally, even to the exte nt Chrysler's Table 6 can be relied upon, it still 
shows direct competition in three of the four product categories it identified, which represents 
significant competitive overlap.  
 
F. MOFCOM Sufficiently Established A Ca usal Link Between Subject Imports and 
Material Injury To The Domestic Industry  
33.  MOFCOM's Final Determination thoroughly re viewed the record evidence and established a 
sufficient causal link between subject imports an d the material injury suffered by the domestic 
industry, consistent with Articles 3.1, 3.4 and 3.5 of the AD Agreement, and 15.1, 15.4, and 15.5 
of the SCM Agreement.    
 34. The United States argues that the significant increase in volume of subject imports over the 
POI is not relevant because, in interim 2009, subject imports took market share from Chinese 
products not included in MOFCOM's domestic in dustry definition and third-country imports. 
However, MOFCOM specifically examined statistical data for imports from all sources and 
concluded in the Final Determination that imports from other countries do not affect the finding of 
the causal link. MOFCOM's determination was based upon a review of the entire period of investigation, which showed that the market share of third country imports was relatively stable. In contrast, the market share of subject import s over the POI increased. In interim 2009, the 
volume of subject imports increased 20 percent at the same time prices declined significantly. In 
arguing that the market share of subject impo rts remained "relativel y stable" in  the 2006-2008 
period, the United States fails to acknowledge th at over that same time period, the domestic 
producers lost massive  market share to the unfairly-priced flood of subject imports.   
 35. The argument advanced by the United States for the first time that MOFCOM failed to 
account for the role played by Chinese producers not included in its definition of the domestic 
industry is also without merit, as the record evidence shows that the market share held by Chinese producers not included in the definition of the dome stic industry did not change significantly or in 
any meaningful way.  
 
36. The United States also advances a speculative assertion concerning the role of the fall in apparent consumption in interim 2009, arguing that the domestic industry was forced to reduce 
prices when it found itself with excess production in interim 2009. However, the record contradicts 
the U.S. argument, which is apparently based on the premise that, in the Chinese domestic auto 
industry, production decisions are made independent of sales volumes. In fact, the Final 
Determination demonstrates that the "the sales model of Chinese like product is that the sales 
decides the production," demonstrating that production is a function of anticipated sales rather than the other way around, as the United States presumes.   
37. Moreover, MOFCOM examined in detail the ro le of the decline in consumption in interim 
2009, and found that in interim 2009, "although the apparent consumption of the domestic market decreased, the domestic industry still kept increa sing production and sales, as well as the market 
share by improving production and operation leve ls and product competitiveness." Therefore, the 
Final Determination concluded that the change of the apparent consumption did not cause adverse impact on the domestic industry. 
 
38. The United States continues to repeat its argument that a decline in the domestic labor productivity was a "likely culprit" that MOFCOM inappropriately ignored. However, labor costs are only a small portion of the total cost of produc ing a vehicle in China, and are not a meaningful WT/DS440/R/Add.1 
 
- C-27 - 
 
 indicator when examining the causal link between subject imports and the material injury suffered 
by the domestic industry. In addition, the argument of the United States that the increase in labor 
costs eroded the profit of the domestic industry  in interim 2009 by increasing overall costs is 
incorrect, because the increase in labor costs did not increase total per unit costs, which in fact 
declined  in interim 2009 from interim 2008 levels. Also, while the United States argues that labor 
productivity is a "known factor" under Article 3.5 of the AD Agreement, prior panels have indicated that "known factors" include factors that are clearly raised before the investigating authority 
during the course of an AD investigation. No party raised the argument in the course of the 
underlying investigation in this case.    3 9 .   F i n a l l y ,  c o n t r a r y  t o  t h e  U . S .  a r g u m e n t  t h a t  M O F C O M  f a i l e d  t o  a d d r e s s  a  r e s p o n d e n t ' s  
allegation that a change in tax policy contributed to the material injury suffered by the domestic 
industry, MOFCOM reviewed the argument of the respondent and the response of the petitioner, 
and specifically concluded in the Final Determination that the respondent's argument was not 
consistent with the facts. The new assertion by the United States that MOFCOM should have 
responded to an argument that the respondents below did not even make—i.e., that tax increase may have contributed to the decline in domestic prices by making the vehicle less desirable to 
consumers—improperly imposes an obligation for the investigating authority to read the mind of 
respondents and to respond to arguments that are different  than those that the respondent 
actually made.     
III. CONCLUSION 
40. For the reasons set forth in this submission, China respectfully requests that the Panel find 
that MOFCOM's determinations in the underlying investigations were fully consistent with China's 
WTO rights and obligations. 
 WT/DS440/R/Add.1 
 
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ANNEX C-5 
EXECUTIVE SUMMARY OF THE OP ENING STATEMENT OF CHINA 
AT THE SECOND PANEL MEETING 
I. Introduction 
1. The United States notes that this is the third dispute settlement proceeding it has filed 
against AD/CVD measures imposed by China, as if th at fact alone supports the validity of its claims 
before the Panel. However, the number of cases against China does not make the U.S. claims any 
more valid than the number of cases against the United States makes the claims against it any 
more persuasive. Rather, China submits that its AD/CVD procedures and findings in this case are 
lawful under the AD and SCM Agreements.  
II. MOFCOM Appropriately Required Ad equate Non-Confidential Summaries  
2. Articles 6.5.1 of the AD Agreement and 12. 4.1 of the SCM Agreement only require that a 
non-confidential summary be in "sufficient detail" to permit a "reasonable understanding" of the 
"substance" of the confidential information. The term "substance" is defined as "the essential 
nature or part of a thing." The "essential nature" can only be discerned by examining the purpose for which the confidential information is used in a particular case. Likewise, the terms "sufficient 
detail" and "reasonable understanding" cannot be determined in isolation pursuant to one 
independent, objective standard. Rather, they  must be determined by looking at the context in 
which the confidential information at issue appears and the purpose for which that information is 
presented.  
3. In this case, the petition focuses its injury allegations on the trends  in the movement of 
various factors, rather than the absolute numbers  themselves. Therefore, in the context of this 
case and the substantive obligations of Article 3, the "substance" at issue pertains to the movement, or trends, of certain factors, rather than the absolute numbers themselves. Because 
the current petition is based on a trends-focused injury analysis, the non-confidential summaries 
allow a reasonable understanding of the substance of those trends.  
4. As for the discussion of sales to output rati o in Table 19, that table provides trend lines 
indicating the proportion of products sold by th e domestic industry relative to production over 
time. This provides a reasonable understanding of the substance of the data, consistent with the 
petition's focus on a trends analysis. The trend lin e shows the ratio of sales to output increasing 
from 2006 to 2007, and decreasing generally from 2007 through the end of the period of investigation. Likewise, Table 27 provides a trend line showing movements in the return on 
investment over time, demonstrating that the return on investment dropped significantly after 
2007. In addition, the vast bulk of the non-conf idential summaries provide percentage changes, 
along with trend lines and additional text th at give further detail and context for the non-
confidential summaries at issue.  
5. As such, the "substance" of the confidential information at issue in these tables relates to 
the trends in the relevant injury criteria, in acco rdance with Article 3.4 of the AD Agreement. While 
the United States complains of an absence of a scale for the trends provided in the public 
summaries, provision of a separate scale in additi on to the percentage changes provided is not 
necessary where, as here, the focus of the underly ing injury analysis is on the trends and the 
movement of the data rather than on the absolute values themselves.  
6. The argument of the United States, that percentage changes are not sufficient because the 
petitioner could have instead provided an average of the aggregate figures themselves, is circular 
and should be rejected. Each of the tables at issue related to annual aggregate data concerning 
the domestic industry. Petitioner applied for, and MOFCOM granted, confidential treatment for that 
aggregate information. The United States has never challenged MOFCOM's decision to grant 
confidential treatment for the aggregate data. Th e United States cannot now challenge MOFCOM's 
provision of confidential treatment for that aggregate data by requiring petitioner to release it in the public version of the petition. The panel in China - GOES  rejected this identical circular 
argument that the United States makes here.  WT/DS440/R/Add.1 
 
- C-29 - 
 
 7. Finally, no party objected to the adequacy of  any of the non-confidential summaries during 
the underlying proceedings. China is not arguing, as  the United States suggests, that an adequate 
public summary need only be provided if a party objects. Rather, China notes that it is relevant to the Panel's assessment that – as an evidentiary matter supporting China's conclusion – no party objected to the adequacy of the public summaries at issue.  
III. The United States has Failed to Establis h a Prima Facie Case with Respect to its 
Claim Under Article 6.9   
8. The United States has not put forward any evid ence in support of its claim that China failed 
to satisfy its obligation under Article 6.9 of the AD Agreement to disclose the "essential facts" 
underlying MOFCOM's dumping margin determinations. Thus, the United States has left the Panel 
with no basis to make any findings about the adeq uacy of MOFCOM's disclosures under Article 6.9. 
9. The United States continues to argue that the Panel should rule in its favor because China 
failed to provide evidence showing that MOFCOM  disclosed the essential facts of its dumping 
margin analysis. The United States bases its claim on the fact that none of the documents "before 
the Panel" demonstrate that MOFCOM disclosed the essential facts. However, the documents 
provided by the United States before the Pa nel do not include the confidential pre-final 
determination disclosure letters that MOFCOM prov ided to the respondents. As such, the U.S. 
theory of this issue seems to be that it is incumbent upon China  to provide the evidence that 
counters the unsubstantiated U.S. claim. That is not how the burden of proof is allocated in WTO 
dispute settlement. 
10. It is well-established that the complainant must first provide evidence in support of its claim. 
Indeed, a prima facie  case must be based on both evidence and legal argument, not just the 
latter. Only when the complaining party "adduces evidence sufficient to raise a presumption that 
what is claimed is true…" does the burden shift to the respondent. When applying those rules here, the Panel must conclude that the United States has failed to make out a prima facie  case under 
Article 6.9, and that the burden has not shifted to China. The United States has not explained, with 
reference to specific documents or facts, why MOFCOM's disclosure of essential facts to the 
company respondents was inadequate.   
11. In addition, the United States is factually wrong in arguing that MOFCOM did not provide the 
required disclosure documents to interested parties. The Final Determination states clearly that 
MOFCOM issued a company-specific disclosure letter to each of the U.S. exporters and producers it investigated. The disclosure letters that MOFCOM provided to the U.S. exporters and producers contain business confidential information of those pa rties, and thus were not provided to the U.S. 
government. The disclosure letter that MOFCOM did provide to the U.S. government does not 
contain the business confidential information of the other parties, including the U.S. company 
respondents. Therefore, the U.S. government disclosure letter is irrelevant to the U.S. claim that the United States asserts here.  
IV. MOFCOM's AD and CVD All Others Rates are Lawful  
12. With regard to MOFCOM's determination of it s AD and CVD all others rates, the U.S. claims 
rely extensively on the report of the panel in the China - GOES  case. Since the last meeting before 
the Panel and the Parties' most recent written submissions, however, the decision of the China - 
Broiler Products  panel has become available. While the China - Broiler Products  and China – GOES  
panel both discussed at length the determination of MOFCOM's AD and CVD all others rates on 
similar facts, the China - Broiler Products  panel came to different conclusions than the China – 
GOES  panel. 
13. The China - GOES panel based its decision on the all others rates in that case mainly on two 
factual findings. First, the China – GOES panel found that MOFCOM's notice of initiation did not 
specify all the information required for the AD and CVD investigations, and concluded that 
MOFCOM should have provided detailed notice of all required information before it could justify use 
of facts available.  
14. The China - Broiler Products  panel properly reached the opposite conclusion of the China – 
GOES  panel on the same facts. The China - Broiler Products  panel reasoned that the failure of an 
exporter to register and provide the initial information requested in MOFCOM's initiation notice, 
standing alone, meant that MOFCOM could not calculate a company-specific rate, and that WT/DS440/R/Add.1 
 
- C-30 - 
 
  
 MOFCOM was justified in resorting to facts available to determine the applicable rate. The China – 
GOES  panel's reasoning implies that an investigating authority must, before it can apply facts 
available, continue to request all information required for a full investigation from parties that have already signaled their intention not to cooperate with the authority. Such an approach is not 
supported by the AD  and SCM Agreements and the jurisprudence, nor is it practically feasible or 
necessary for investigating authorities. It would be futile for an investigating authority to continue seeking information from a party that has decided not to cooperate with the first steps in the 
investigative process. Thus, China believes that this Panel should reach the same conclusion as the 
China - Broiler Products  panel on this issue. 
15. Second, the China – GOES  panel relied on the fact that no other exporters existed beyond 
those identified by MOFCOM. On this basis, the pa nel rejected MOFCOM's resort to facts available 
for purposes of the all others rates, reasoning that non-existent exporters cannot refuse to 
cooperate with an investigating authority. Also, because the China – GOES  panel found that no 
other exporters existed, it did not have to grappl e with the practical problems that arise when an 
investigating authority does not or cannot know if other exporters exist. In this respect, the facts 
of the China – GOES  case are different from those in the China - Broiler Products  or the present 
cases. In the China - Broiler Products  case, the United States never alleged that there were no 
other exporters beyond those known to MOFCOM. In this case, however the United States is again 
arguing that there were no exporters beside s those known to MOFCOM. The United States, 
however, has pointed to no evidence from the investigation record before MOFCOM to support its argument. Indeed, in this case, MOFCOM never ma de any findings as to the existence or non-
existence of other possible exporters and producers. Therefore, the second factual underpinning of 
the decision of the China – GOES  panel was not present in the China - Broiler Products  case, and is 
not present here.  
16. The China – GOES  and China - Broiler Products  panels also differed sharply in their 
understanding of the panel and Appellate Body findings in the Mexico – Rice  case. The China - 
Broiler Products  panel identified a key factual difference between the actions of the investigating 
authority in Mexico – Rice  and MOFCOM's method of notification, which it has consistently used in 
the recent cases we have been discussing. As the China - Broiler Products  panel explained, there is 
no indication that the Mexican investigating authority warned interested parties that it would resort 
to facts available in case of failure to provide requested information. Here, as in the China - Broiler 
Products  case, that message was perfectly clear in MOFCOM's notification. Similarly, the China - 
Broiler Products  panel noted that MOFCOM made its initial request for information publicly 
available, such that interested parties unknown to the investigating authority could become aware 
of the request for information. There is no indication that the investigating authority in Mexico – 
Rice took this step. For these reasons, the U.S. reliance on the China – GOES  panel's description of 
Mexico – Rice  lacks merit. 
17. The United States also complains that MOFCOM's multiple notification efforts in this case 
were inadequate to reach all possible U.S. exporters and producers. The United States appears to take the position that MOFCOM was required to in dividually notify each such company. Aside from 
being practically impossible, such an approach is not legally required. As the China - Broiler 
Products  panel confirmed, international law recognizes that the accepted way to inform unknown 
interested parties in administrative proceedings is through public notices, including notices published in official gazettes or on the Internet. This recognition is embedded in the AD Agreement 
through the Article 12 requirement concerning the publication of preliminary and final 
determinations. The China - Broiler Products  panel also agreed with China's position in this case 
that the Appellate Body in Mexico – Rice  did not set forth a general rule requiring targeted 
requests for information to all individual exporters and producers. China further emphasizes the 
China - Broiler Products
 panel's conclusion that neither Article 6.8 of the AD Agreement nor 
Annex II specifies what form a request for information should take or how an authority is to 
communicate the request to interested parties. 
18. An investigating authority determining individual AD/CVD rates for each exporter or 
producer cannot possibly know if it has identified all exporters and producers, regardless of what it 
tries to do. The China - Broiler Products  panel recognized this inherent difficulty, finding that, in 
many investigations, an authority will be unable to sa tisfy itself that, even with best efforts, it has 
identified all exporters and producers. The Unit e d  S t a t e s  m a i n t a i n s  t h a t  M O F C O M  s h o u l d  h a v e  
undertaken some unspecified greater level of notification before resorting to facts available for the WT/DS440/R/Add.1 
 
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 determination of all others rates. China encourages  the Panel to reject the U.S. argument on the 
same grounds as the China - Broiler Products  panel.  
19. The China - Broiler Products  panel also explained that the U.S. position is problematic from a 
policy perspective, for two reasons. First, if an investigation authority were required to individually reach each unknown exporter or producer, it would be difficult, if not impossible, for the authority 
to determine appropriate AD/CVD rates for such en tities. Second, the U.S. position could provide 
an incentive for unknown exporters and producers not to make themselves known, because they could avoid the application of AD/CVD measures through non-cooperation. The China - Broiler 
Products  panel concluded that the Appellate Body report in Mexico – Rice  did not require such 
results. 
20. The United States also contends that MOFCOM's notification attempts were irrelevant 
because they could not have reached "unknown " U.S. exporters and producers. This U.S. 
argument fails on both legal and factual grounds. First, Article 6.8 of the AD Agreement and 
Article 12.7 of the SCM Agreement obligate investigat ing authorities to notify interested parties of 
the information required. Thus, the notification efforts of the investigating authority are indeed relevant. Second, MOFCOM's notification efforts we re indeed relevant and effective because four 
U.S. exporters and producers not initially known to MOFCOM registered for participation in the 
investigation. This fact contradicts the U.S. claim that companies "unknown" to MOFCOM did not 
receive its notification. 
21. The United States also argues that the application of the facts available all others AD rate to 
Ford is an example of why MOFCOM's approach produces unjustifiable results. However, the Ford 
situation provides no such example because MOFC OM did not apply facts available to Ford, as 
indicated in the Final Determination. 
22. Furthermore, it should be noted that thro ughout this proceeding, the U.S. claims under 
Article 6.8 of the AD Agreement and Article 12.7 of the SCM Agreement have focused on whether 
MOFCOM satisfied the notification prerequisite to the application of facts available. The 
United States has not made any specific claim challenging MOFCOM's choice  of facts available. In 
fact, the U.S. Request for the Establishment of  a Panel is devoid of any claim based on 
paragraph 7 of Annex II, which provides guidance  on the choice of facts available. MOFCOM's 
choice of facts available is therefore outs ide the terms of reference of this Panel. 
23. Moreover, paragraph 6 of the Working Procedur es for the Panel requires parties to submit a 
written submission presenting the facts of the case and its arguments prior to the first meeting with the Panel. The United States did not do so with respect to MOFCOM's choice of facts available 
in its First Written Submission, nor did it clearly articulate such a claim in its Second Written 
Submission. While the United States has refere nced MOFCOM's choice of facts available in 
connection with certain procedural claims under other articles, those references do not substitute 
for a claim under AD Agreement Article 6.8 an d Annex II, paragraph 7, and the equivalent 
provisions in the SCM Agreement.   
24. China recognizes that the China - Broiler Products  panel rejected China's argument that it 
should decline to rule on a U.S. claim concerning MOFCOM's choice of facts available because the United States articulated its claim too late in the proceeding. However, in China - Broiler Products , 
China did not make its argument concerning the absence of a U.S. claim regarding MOFCOM's 
choice of facts available until the interim review stage. In this case, China's argument that the United States did not make a proper claim regarding MOFCOM's choice of facts available is 
squarely before the Panel now. Further, China believes that it is even less clear in this case than it 
was in China - Broiler Products  that the United States is specifically complaining about MOFCOM's 
choice of facts available. The U.S. written an d oral submissions to the Panel nowhere clearly 
articulate such a claim. In China's view, this is not a proper claim on which the Panel can rule.  
25. The United States also argues that MOFCOM did not live up to the disclosure obligations of 
Article 6.9 of the AD Agreement and Article 12.8 of the SCM Agreement. The U.S. argument is 
wrong for several reasons. First, the United Stat es exaggerates the level and extent of disclosure 
required by these articles. These articles apply only to essential facts, and do not extend to the 
reasoning of the investigating authority. Second MOFCOM disclosed all pertinent facts leading to its 
selection and imposition of AD and CVD all others rates. There are no other salient facts that 
MOFCOM could have disclosed. WT/DS440/R/Add.1 
 
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 26. Moreover, the factual bases on which the China – GOES  and China - Broiler Products  panels 
ruled are not present in this case. In China – GOES , in the case of the AD investigation, the panel 
focused on the non-existence of other exporters and certain transactional data underlying the all 
others rate. For the CVD investigation, the China – GOES  panel focused on the non-existence of 
other exporters. Similarly, the China - Broiler Products  panel, in the case of the AD all others rate, 
found relevant certain facts related to the dumping calculation model used to generate the all others rate. In the case of the CVD all others rate, the China - Broiler Products  panel based its 
findings on questions about the government programs included in the all others rate calculation. 
27. The factual bases underlying the decisions of the  China – GOES  and China - Broiler Products  
panels are not present in this case. With respect to the AD all others rate, MOFCOM applied the rate in the petition with no further adjustments or calculations. For the CVD all others rate, MOFCOM applied the rate calculated for General Motors. Unlike the China – GOES  and China - 
Broiler Products  cases, the public record of the investigations in the present case leaves no 
questions whatsoever about the origin and application of the all others rates.   
28. Finally, the United States continues to argue that MOFCOM did not provide an adequate 
explanation of its all others rate methodology for purposes of Articles 12.2 and 12.2.2 of the AD 
Agreement and Articles 22.3 and 22.5 of the SCM Agreement. While China has already addressed 
this argument in earlier submissions, the panel report in China - Broiler Products  underscores an 
additional important point. The panel in China - Broiler Products  based its findings on MOFCOM's 
calculations and analysis underlying the AD all others rate of 105.4%. Here, however, the AD rate 
of 21.5% is taken directly from the petition and the CVD rate of 12.9% is taken directly from the 
highest calculated rate. Thus, the bases for these rates are perfectly clear. The questions surrounding the derivation of the all others rates in the China – GOES  and China - Broiler Products  
cases simply do not exist in this case. 
V. MOFCOM Properly Define d the Domestic Industry  
29. The U.S. claim regarding MOFCOM's definition of the domestic industry focuses on two main 
arguments. The first is that MOFCOM's definition must be distorted because, in the U.S. view, it included only domestic producers that supported the petition. The second is that the definition did not include enough domestic production to qualify as a "major proportion" of that production.   
30. One of the options for defining the domestic industry provided by AD Agreement Article 4.1 
and SCM Agreement Article 16.1 is the domestic producers whose combined production constitutes a major proportion of the total domestic production of the domestic like product. Nowhere do these articles specify a distortion test, mandate the collection of certain types of data, or otherwise 
limit the discretion of an investigating authority in defining the domestic industry. Prior WTO cases 
also make clear that these articles provide considerable flexibility for investigating authorities to 
adjust to the unique facts of each case. 
31. The United States relies heavily on EC – Fasteners  to argue that this case gives rise to the 
same type of distorted definition of the domestic  industry previously rejected by the Appellate 
Body. The United States is wrong, however, for reasons laid out by the China - Broiler Products  
panel on materially identical facts. First, the China - Broiler Products  panel carefully evaluated 
MOFCOM's process for providing public notice of its injury investigation – the same process 
followed here – and found that the United States did not demonstrate that MOFCOM's process 
excluded any domestic producers from participating in the investigation. Second, the China - 
Broiler Products  panel found that MOFCOM did not apply a minimum threshold, as had been the 
case in EC – Fasteners . The same is true here. Third, the China - Broiler Products  panel found that, 
unlike in EC – Fasteners , MOFCOM's process of defining the domestic industry did not involve 
sampling or any other type of limiting or self-selecting act, which is again true here. Fourth, the 
China - Broiler Products  panel inquired if MOFCOM had affirmatively rejected information from 
domestic producers, as in EC – Fasteners , and concluded that it had not, as is the case before this 
Panel. Fifth, as in China - Broiler Products , the United States has not shown that MOFCOM or CAAM 
took any actions to limit or dictate the extent of domestic industry participation in MOFCOM's investigation.  
32. In addition, the United States seems to impl y that CAAM's role as the entity submitting 
domestic producer data to MOFCOM played an unspe cified role in distorting the domestic industry 
definition. However, CAAM represents the entire domestic industry. The fact that CAAM was the 
single entity providing domestic producer data to  MOFCOM did not limit, or artificially reduce, WT/DS440/R/Add.1 
 
- C-33 - 
 
 domestic industry participation. Further, the eight participating domestic producers represent both 
joint ventures and domestically-owned producers. This broad domestic industry coverage belies alleged self-selection and confirms that MOFCOM obtained a representative and objective dataset 
for its injury analysis.    
33. The United States makes much of the supposed obligation of an investigating authority to 
actively seek out information. In this regard, China stresses that its public notification process, 
which the China - Broiler Products  panel just upheld, is designed to solicit information from any 
and all domestic producers willing to participate and to ensure an orderly investigative process. 
Further, the very jurisprudence on which the United States relies is linked to shortcomings in the 
evidence before the investigating authority. In this case, the United States has pointed to no concrete evidence of shortcomings in the data before MOFCOM; it has only offered speculation in 
claiming distortion. 
34. MOFCOM included all data it received, covering eight producers, including domestically-
owned producers and joint ventures. MOFCOM took no affirmative action that could have created a 
self-selection bias. Therefore, this Panel should reach the same conclusion on the U.S. claim as the 
China - Broiler Products  panel reached on the identical claim. 
35. Regarding its "major proportion" claim, the United States argues that the Panel should 
consider the percentage of domestic production covered by MOFCOM's definition of the domestic 
industry, in light of the process that MOFCOM employed to obtain the data. China does not believe that Article 4.1 of the AD Agreement or Article 16.1 of the SCM Agreement requires any such test. 
But even if they do, MOFCOM's process would pass such a test. This is because MOFCOM 
conducted an open and transparent registration process that permitted any domestic producer to 
participate in the injury investigation. MOFCOM excluded no company that provided data, and used all data provided by participating domestic producers. While the United States describes the 
participating group of domestic producers as "small," it is broadly representative of the Chinese 
domestic industry. As such, MOFCOM's process for defining the domestic industry did not impede 
satisfaction of the "major proportion" test. 
36. The United States also contends that Chin a did not satisfy the "major proportion" test 
because the domestic producer information in MOFCOM's possession was not "wide-ranging" or 
sufficiently "ample" to ensure an accurate injury assessment, and did not cover "a relatively high proportion" of domestic production. The United Stat es does not, however, take the next step and 
explain how to apply these concepts to the facts of this case. The fact remains that MOFCOM 
opened its injury investigation to all domestic producers; it obtained data for eight domestic 
producers representing both domestic ownership and joint ventures; and it took no actions to limit participation in the investigation or to exclude any data. The result is coverage of adequate domestic production to satisfy the "major proportion" test. 
37. In its Second Written Submission the United States appears to acknowledge that MOFCOM 
did not affirmatively exclude any domestic producer s or segment of the industry from its injury 
dataset. However, it then faults MOFCOM for not counting more of the domestic industry than it 
did. By doing so, the United States is advocating for a standard that simply does not exist in the 
AD and SCM Agreements. 
VI. MOFCOM's Price Effects Analysis is Consistent with Its WTO Obligations  
38. MOFCOM's finding of price depression was fully supported by objective record evidence. 
MOFCOM's Final Determination addressed in detail the basis for its price depression finding and the 
causal relationship between the price depression it found and the subject imports. MOFCOM's Final 
Determination also explained that it had found parallel pricing and that the volume of subject 
imports increased dramatically over the period of investigation, especially in interim 2009, further 
contributing to the price depression.  
39. The United States argues that there was no parallel pricing trend because prices moved in 
different directions from 2006 to 2007. However, MOFCOM based its finding of parallel price trends 
over the entire  period of investigation. Prices for subject imports and the domestic like product 
increased from 2006 to 2008 by remarkably similar amounts. Also, prices for subject imports and the domestic like product both decreased by comparable amounts in interim 2009 from interim 
2008 levels. In addition, a properly scaled chart of  price movements over the entire period of WT/DS440/R/Add.1 
 
- C-34 - 
 
  
 investigation, as provided in China's Second Written Submission, illustrates the parallel price 
trends over the entire period of investigation. 
40.  Contrary to U.S. arguments, MOFCOM did take  into account the price trends observed in the 
2006-2007 time period. MOFCOM's Final Determinatio n states that the price trends are "consistent 
basically. Both of them increased in general fr om 2006 to 2008, and decreased in the first three 
quarters of 2009." The use of the qualifying terms "consistent basically" and "in general" 
demonstrate that MOFCOM took into account th e price trends seen over 2006-2007. Perfect 
correlation is not required in a price trends analysis. 
41. The United States alleges that MOFCOM's Final Determination failed to explain how the 
parallel price trends MOFCOM found supported its finding of price depression. MOFCOM's Final 
Determination, however, explains in sufficient detail both the basis for its finding of parallel price trends and the role of those trends in MOFCOM's price effects analysis. The fact that prices for 
subject imports and the domestic like product move d together, coupled with the finding that they 
competed with each other, support MOFCOM's finding that the drop in prices for subject imports in 
interim 2009 contributed to the parallel drop in pr ices for the domestic like product over the same 
period.   
42. The United States also argues that the sign ificant increase in the market share of subject 
imports at the end of the period of investigation that coincided with a decrease in prices should be 
discounted because it occurred at the same time as an increase in the domestic industry's market share. However, MOFCOM's analysis did not focus solely on interim 2009, but properly looked at trends over the entire period of investigation. The market share of the domestic like product 
decreased  from the start of the period of investigation, whereas the market share for subject 
imports increased  substantially. 
43. Furthermore, when conducting its price effects analysis, MOFCOM appropriately used 
average unit prices. The United States argues that MOFCOM should have used some unidentified 
assortment of individual models or categories when conducting its price analysis. However, AD 
Agreement Article 3.2 and SCM Agreement Article 15.2 do not require investigating authorities to use any specific price methodology. Here, MOFCOM found significant evidence of competitive 
overlap that justified the use of average unit values. MOFCOM's Final Determination discussed the 
evidence of competitive overlap in detail, and based its conclusion on numerous pieces of evidence, such as similarity in physical characte ristics, performance, prod uct use, perceptions of 
consumers and producers, and price.  
44. The United States relies heavily on a single  chart submitted by a U.S. respondent showing 
sales in four alleged categories of vehicles. As China previously demonstrated, that table does not 
undercut MOFCOM's finding of competitive over lap, but rather demonstrates significant 
competitive overlap in most categories. The information in that table is also unreliable for many 
reasons. For instance, the alleged categories of vehicles are nowhere defined, and the data are 
incomplete and differ from the actual volume of subject imports.   
45. Finally, the United States alleges that the China – GOES  case prohibits MOFCOM's use of 
average unit values. However, the panel's analysis in China – GOES  was based on the situation 
when an investigating authority conducts a price undercutting  analysis. In this case, however, 
MOFCOM did not conduct a price undercutting analysis, but instead found price depression. The 
U.S. reference to the Appellate Body's Report in the  China – GOES  case, discussing "the 
depression or suppression of domestic prices," must be read in light of the fact that both the panel 
and Appellate Body in China – GOES  found that MOFCOM used its price undercutting analysis to 
support its price depression and suppression analyses. The China – X-Ray Equipment  panel also 
observed that both the panel and Appellate Body decisions in China – GOES  arose "in 
circumstances where the investigating authority had conducted a price undercutting analysis 
without considering the need for adjustments to ensure price comparability." Thus, the continued reliance by the United States on the China – GOES  case for the proposition that MOFCOM could not 
use average unit values when conducting a pr ice depression analysis must be rejected. 
46. In addition, on the facts of this case, the United States has not established that any possible 
differences in product mix would have distorted the use of average prices so as to render them 
insufficient for purposes of a price depression analysis. Moreover, there is no evidence that the product mix changed over the period of investigatio n, which might lead to a possible distortion in a 
trends analysis. WT/DS440/R/Add.1 
 
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 VII. MOFCOM Sufficiently Established a Ca sual Link between Subject Imports and 
Material Injury to the Domestic Industry  
47. MOFCOM's Final Determination sets out in detail MOFCOM's thorough causation analysis. 
MOFCOM found that the volume of subject imports increased dramatically over the period of investigation, especially in interim 2009. MOFCOM also explained that prices for subject imports 
and the domestic like product exhibited similar trends over the period of investigation. And while 
apparent consumption declined in interim 2009, MOFCOM found that the domestic industry's production and sales did not suffer proportionately.  MOFCOM also thoroughly examined the role of 
other factors that might have contributed to the material injury suffered by the domestic industry.  
48. The United States alleges that declining demand in interim 2009, not subject imports, 
caused prices to decline. However, MOFCOM th oroughly examined the role of the decline in 
demand in interim 2009, and found that the change in market demand did not cause injury to the domestic industry because its production and sales continued to increase. The United States now 
claims that MOFCOM did not address the relationsh ip between demand and price. On the contrary, 
the record demonstrates that the U.S. assumption  that a decline in demand reduced the domestic 
industry's sales was factually incorrect, as sales actually increased. Thus, there is no evidence that the decline in demand caused prices to decline.  
49. The United States also argues that the domest ic industry's injury was caused by a decline in 
labor productivity. China previously demonstrated that labor costs are only a small portion of the total cost of producing a vehicle in China, and therefore played no meaningful role in explaining the domestic industry's declining financial performance. In addition, the United States assumes 
that total unit costs would have increased in interim 2009 from interim 2008 levels. However, total 
unit costs in fact declined  in interim 2009 from interim 2008 levels. The record thus contradicts the 
U.S. claim.   
50. The United States claims that MOFCOM fa iled to examine whether subject imports took 
market share from non-subject imports rather than from the domestic like product. However, 
MOFCOM's Final Determination noted that the volume of third country imports decreased sharply in interim 2009 and that imports from other countries did not affect the finding of the causal link. 
Moreover, the record shows that over the entire pe riod of investigation, the market share for third 
country imports was relatively stable. In contrast, the market share of subject imports increased significantly. Thus, the U.S. allegation that MOFCOM failed to consider all relevant evidence is 
simply not correct. 
51. The United States also alleges that MOFCOM failed to examine alleged "known factors" other 
than subject imports, and that MOFCOM was engaged in a "selective and non-objective analysis of 
the evidence" when it failed to discuss in detail the drop in labor productivity in its Final Determination. No party even raised this labor productivity issue during the underlying 
investigation, and it does not constitute a "known factor." Contrary to the U.S. claim, the fact that 
productivity is listed as a possible factor in Article 3.5 does not make it a "known factor" in this particular case. Article 3.5 only lists some examples of what might  b e a "known fac tor" in an y  
given case. MOFCOM was not required to address issues that would have no bearing on its 
causation analysis. 
52. Finally, the United States alleges that MOFC OM failed to examine the role played by an 
increase in the sales tax in China on certain vehicles. However, MOFCOM's Final Determination examined the impact of the change in tax treatmen t, and properly concluded that the respondent's 
argument was baseless, because the factual basis of the respondent's argument was incorrect – 
contrary to respondent's assertion, production and sales in fact increased  between interim 2008 
and interim 2009, despite the increased tax imposed on larger vehicles. The United States alleges 
that MOFCOM's analysis somehow "suggests a lack of objectivity," but in fact it is indicating that 
the respondent's factual assertions were on their face incorrect. This does not reflect a "lack of objectivity," but rather it reflects an administrating authority properly examining relevant evidence 
and reaching reasoned, objective conclusions on the basis of the record evidence before it.  
 WT/DS440/R/Add.1 
 
- C-36 - 
 
  
  
ANNEX C-6 
CLOSING STATEMENT OF CHINA AT 
THE SECOND PANEL MEETING 
1. Mr. Chairman and Members of the Panel, China would like to offer several brief comments in 
closing.  
2. First, China notes that the Panel has rais ed a number of questions about the disclosure 
letters that MOFCOM provided to the U.S. exporter s pertaining to the calculation of their dumping 
margins. China reiterates that the burden is on the United States, as the complainant, to adduce 
the relevant evidence. The United States still has not done so. Accordingly, to the extent the Panel 
has any questions about the contents or substance of the disclosure letters, China would invite the 
Panel to request these documents from the United States. In Broiler Products  and other recent 
cases, the United States recognized the need to discharge its burden as a complainant on identical 
claims under Article 6.9 of the AD Agreement, and it was able to do so. China therefore 
respectfully submits that the Panel should hold th e United States to the same burden of proof in 
this case. 
 
3. Turning to the AD and CVD all others rates, the United States has urged the Panel to follow the GOES  precedent, while China believes Broiler Products  is far more instructive on this issue. 
China will highlight two of the reasons why Broiler Products  offers more compelling and relevant 
guidance in this case. First, the Broiler Products  panel carefully assessed the same MOFCOM 
notification process as is before the Panel in this case, and found that MOFCOM could reasonably conclude that an exporter unwilling to respond to the registration notice will also not respond to 
the questionnaire. Second, the Broiler Products  panel grappled with the very real practical problem 
that an investigating authority faces when it attempts to identify all exporters and producers. That panel found that the identical notification method before the Panel in this case was adequate to 
discharge China's notification responsibility under the AD and SCM Agreements. 
 4. Turning briefly to MOFCOM's definition of the domestic industry, the Panel has heard much 
speculation from the United States about supposed manipulation, distortion, or exclusion of the 
injury data before MOFCOM. The U.S. arguments in  this respect are entirely unsubstantiated. The 
fact is that the record before the Panel contains no evidence showing or even implying that either 
MOFCOM or CAAM excluded or disregarded data from any of the domestic producers willing to 
participate in the investigation, or suggesting that either MOFCOM or CAAM determined which 
producers would participate. Again, MOFCOM issued a broad public notification of its investigation, and made it possible for any domestic producer to participate in its injury investigation. 
 
5. We would also like to make a few comments on the other injury issues before the Panel. MOFCOM conducted a full and thorough injury investigation. It examined thoroughly the price effects issues. It found parallel pricing based on numerous pieces of record evidence. It properly 
examined the entire period of investigation rather  than discrete fragments, as the United States 
does in its submissions. MOFCOM also linked the parallel pricing it found to the price depression that it also found. MOFCOM also conducted a full and through volume effects analysis. It found 
that subject imports flooded the market and that the petitioner lost significant market share. 
MOFCOM also found that third country imports did not lose market share over the period of investigation. MOFCOM's injury analysis also found that the domestic producers' prices declined in 
2009 from competition with subject imports. MOFC OM also found significant competitive overlap 
between subject imports and the domestic like prod uct, based on numerous pieces of evidence in 
the record.  
6. MOFCOM answered issues that the parties ra ised, and it conducted a full and thorough non-
attribution analysis. It examined the impact of the fall in demand in interim 2009, and concluded that the fall in demand did not cause the price depression MOFCOM found. MOFCOM also examined 
the impact of the change in tax policy, and also examined the im pact and role of third country 
imports.  
7. Finally, what MOFCOM did not do is answer an d address issues that no party raised in the 
investigation below and which did not impact the injury analysis. There is no obligation on an WT/DS440/R/Add.1 
 
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 investigating authority to respond to and address issues that no party raised and which do not 
impact the injury analysis.  8. China would like to conclude by thanking the Panel and the Secretariat for the time and 
effort you are devoting to this proceeding. China treasures this opportunity to expand upon and 
clarify its positions in this case. China notes that its investigating authority is relatively young, with only about ten years of experience. We have worked diligently to implement the AD and SCM 
Agreements, and believe we have made good progress in this regard. We look forward to further 
clarifying the facts and issues of this case for the Panel in response to your questions.   
 WT/DS440/R/Add.1 
 
- D-1 - 
 
  
ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Executive summary of the third party written submission of the 
European Union D-2 
Annex D-2 Executive summary of the third party written submission of Japan D-6 
Annex D-3 Executive summary of the third party oral statement of Japan D-11 
Annex D-4 Executive summary of the third party oral statement of Korea D-13 
Annex D-5 Executive summary of the third party written submission of Saudi Arabia D-15 
Annex D-6 Executive summary of the third part y oral statement of Saudi Arabia D-18 
Annex D-7 Executive summary of the third party written submission of Turkey D-21 
Annex D-8 Executive summary of the third party oral statement of Turkey D-27 
 
 WT/DS440/R/Add.1 
 
- D-2 - 
 
  
  
ANNEX D-1 
EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN  
SUBMISSION OF THE EUROPEAN UNION 
1. The EU agrees with the US that the calculations employed by an authority to determine 
dumping margins, and the data underlying the calculations, constitute "essential facts under consideration which form the basis for the decision whether to apply definitive measures" within 
the meaning of Article 6.9 ADA. Those calculations are both material to the authority's decision 
and important for the determination. It is clear that without those calculations a decision on the definitive measure could not be taken. For these reasons, the EU agrees with the US that, by failing to disclose the actual data and calculations used to establish dumping margins, China acted 
inconsistently with Article 6.9 ADA. 
2. With respect to the all others dumping determ ination, the EU anticipates that, absent cogent 
reasons for adopting a different approach, the Panel may be guided by prior DSB reports on this 
issue. This nevertheless leaves the question of what an authority is to do in order to ensure public 
notice of such investigations. As also indicated in recent cases, and below in the specific discussion of the ASCM , the EU is of the view that nothing precludes an investigating authority from 
requesting the authorities of the exporting WTO Me mber to identify any producing exporters that 
have not yet been identified. 
3. Given the apparent absence of any meaningful disclosure, the EU agrees with the US with 
respect to this matter. The EU also agrees with the US that the single sentence in the Final 
Determination  is not sufficient to meet that re quirement, and that the failure to provide more 
detailed explanations constitutes a breach of Article 12.2.2 of the ADA. 
4. With respect to the all others subsidy determ ination, the EU would point out that there are 
some differences in the wording of Article 6.1 ADA and Article 12.1 of the ASCM . These may reflect 
the fact that it is reasonable for a Member to know to which firms it has granted subsidies, and the Panel should take this into account. 
5. In the injury determination, in its price effects analysis MOFCOM finds that the average sales 
prices of subject imports and of domestic produc ts were increasing and decreasing in parallel 
during the period of investigation. Then, without expanding its reasoning any further, MOFCOM concludes that the decreasing prices of subject imports combined with a sharp increase of their 
market share in mid-2009 resulted in depressing  the price of domestic like products. The US 
claims that the finding of continuous parallelism between domestic and import prices throughout this period is belied by the data on the record and that in any event it is not in itself sufficient to 
explain how subject imports depressed the prices of like domestic products. The EU agrees with 
the US on both points. 
6. The US is correct in pointing out that the me re fact that the prices of subject imports and 
domestic products are moving in the same direction cannot itself establish the existence and the 
direction of a causal relationship. There could be several alternative explanations of price parallelism, of which price depression by subject impo rts is only one. As a matter of pure logic, it 
may not necessarily be the case that subject import prices were driving domestic product prices 
down. It could have been the other way round or, alternatively, both domestic and subject import 
prices could have been simultaneously driven in the same direction by exogenous third factors. It 
could also be that there was no causal link at all in the evolution of the two prices but a mere 
coincidence in their movement over the reference period. In any event, a simple concluding 
statement of the kind made by MOFCOM in its Final Determination is not enough to establish which one of these options actually holds true under the circumstances of the case at hand. 
7. The need for an in-depth examination of the matter is all the more obvious in cases where 
at a certain point during the reference period th e pattern of parallel pricing was broken and the 
prices of subject imports and domestic products were clearly moving in opposite directions to such an extent that for certain periods in 2007 subject imports were in fact priced lower than domestic 
products. Absent a reasonable explanation of this  type of movement, the very existence of the 
trend of price parallelism can be called into question and the credibility of any conclusion drawn on that basis is further weakened. WT/DS440/R/Add.1 
 
- D-3 - 
 
 8. Instead of providing a plausible explanation of the apparent inconsistency in the overall 
finding of price parallelism, MOFCOM's Final Determination attempts to conceal it by presenting an oversimplified end-point-to-end-point comparison of the prices of subject imports and domestic 
products in the beginning and at the end of the 20 06-2008 period, only to conclude that over this 
period both sets of prices have increased "in general". An attempt to provide the missing 
explanation can probably be found in China's First Written Submission, where it is submitted that the diverging movements of subject import and domestic product prices in 2007 coincided with a 
period when "import volumes skyrocketed […] and domestic producers lost significant market 
share".  
9. The EU submits that such explanation should have been provided earlier and spelled out in 
MOFCOM's Final Determination in order to satisfy the requirement of performing an objective 
assessment based on positive evidence at the time of the adoption of the contested measure. 
Putting this case into context, it is also worth mentioning that MOFCOM's failure to address in any detail the causal relationship between the pricing of  subject imports and that of domestic products 
is not merely incidental but revealing of a systemic flaw in the way MOFCOM approaches injury 
analyses, that stems from an erroneous reading of Article 3.2 of the ADA and Article 15.2 of the 
ASCM . 
10. In China-GOES , the AB confirmed that, pursuant to Article 3.2 of the ADA and Article 15.2 of 
the ASCM , an investing authority is required to consider, in the context of its price effects analysis, 
the explanatory force of subject imports for the occurrence of significant price depression. More 
specifically, the AB held that it is "not sufficient for an investigating authority to confine its 
consideration to what is happening to domestic prices for purposes of considering significant price 
depression or suppression," but, rather, "an investigating authority is required to examine domestic prices in conjunction with subject imports in order to understand whether subject imports 
have explanatory force for the occurrence of sign ificant depression or suppression of domestic 
prices." 
11. In reaching this conclusion the AB reject ed China's argument that "the price effects 
considered under Articles 3.2 and 15.2 are not them selves the result of a causation determination. 
Rather, they serve as the basis for the causation determination required under Articles 3.5 and 15.5." Bearing in mind that the contested measures in this case were adopted more than a year prior to the moment when China brought the above argument up on appeal in China-GOES , it 
appears safe to assume that at the time when the price effects analysis in this case was carried 
out, MOFCOM was still acting on the erroneous understanding that it was under no obligation to consider the relevant causal link. That is why there is little credibility in China's arguments. 
12. Turning to the different market segments, MOFCOM defined the products subject to its 
findings as "Saloon cars and Cross-country cars of cylinder capacity > 2500cc" and used average unit prices for these products in its price effects analysis. The US makes the point that cars 
(covered by the above definition) can be classified  into four different segments: entry level, mid-
level, premium and luxury. It further notes that during the reference period "the Chinese domestic industry sold primarily “entry” level vehicles, and a very small number of “premium” or “luxury” vehicles, while U.S. producers primarily sold “premium” and “luxury” vehicles, and a very small 
number of “mid” level vehicles; no sales of “entry” level vehicles by U.S. producers are reported."  
13. Turning to the price effects analysis, applyi ng a methodology that involves the comparison 
of average unit values for different products may be appropriate, for the purposes of a price 
effects analysis, only where the products are relatively homogeneous and sufficiently comparable. 
Otherwise, differences in average unit values may reflect changes or variations in product mix rather than genuine differences in pricing. If the comparisons applied fail to take into account the 
existence of considerable differences in product mix, they can yield results that are unreliable and 
skewed against the target exporters. In such ca ses the findings of price undercutting and price 
depression, and the ensuing determination of injury  are not based on an "objective examination" 
of "positive evidence", contrary to the obligation imposed upon the investigating authorities by 
Articles 3.1 and 3.2 of the ADA and Articles 15.1 and 15.2 of the ASCM . The relevant question to 
answer in this case is therefore if, indeed, as a result of their focus on different car segments, 
domestic products and subject imports can be said to involve a different product mix affecting 
price comparability. 
14. The EU observes that a differentiated approach to the car market might well be justified, 
given the broad variation in the levels of technology, the quality of the materials used, the after 
sales service and the goodwill of the brands of ca rs falling under the different segments. All of 
these factors provide an objective justification for the existing differences in pricing across the four WT/DS440/R/Add.1 
 
- D-4 - 
 
  
 segments. In a related vein, one might also consider the likelihood that due to their varying 
requirements some (especially corporate and public entity) consumers might strongly focus in their demand on certain segments and completely exclude others from their consideration. To reach a definitive conclusion on this point however, it is necessary to collect empirical evidence that the 
factors just mentioned are actually relevant and perform as described in the context of the 
particular geographic market concerned. 
15. On the other hand, factors that militate against a finding of differences in product mix 
affecting price comparability include (i) the difficulty to draw a clear cut-off line between the 
different car segments, and (ii) the evidence in this case that at a certain point in 2007 the average unit prices of subject imports (supposedly a high-end product mix) have temporarily fallen 
below the average unit prices of domestic products (supposedly a low-end product mix). All of this 
being said, it is worth mentioning that, regardless of whether the use of average unit values is 
deemed to be legally justified, in this case it is possible that it may operate in favour, rather than to the detriment, of US importers. As a matter of fact, in its First Written Submission the US itself 
puts considerable weight on the argument that US subject imports were actually priced higher that 
the domestic like products. It should be noted then, that the use of average unit values may tend to highlight the price gap between the high-e nd (subject imports) and low-end (domestic 
products) segments, thus providing support for the US' overselling argument. Adjusting the 
average unit values, on the other hand, would cl ose up the gap and downplay the overselling 
argument, which presumably is not what the US is trying to achieve. That is why the Panel may wish to consider to what extent contesting the use of non-adjusted average unit values is actually 
instrumental in this case for refuting  MOFCOM's finding of price depression. 
16. In any event, the impact of using such values is stronger in cases of price undercutting, 
where a direct comparison is necessarily made be tween the prices of subject imports and those of 
domestic products. In this case, however, MOFCOM is focusing on the proposition of price 
depression, in which the prices of subject imports and domestic products are juxtaposed only for 
the purposes of explaining their mutual relationsh ip and a direct mathematical comparison of their 
absolute values is not strictly necessary and certainly not decisive.  
17. Turning to the issue of causation, the US claims that MOFCOM's statement that "[t]he 
quality and the client base between the domestic lik e products and that of the subject products is 
[…] roughly the same" and its overall finding that subject imports and domestic products have a 
competitive relationship, are contradicted by the evidence. The evidence invoked for that purpose 
includes (i) a table submitted by one of the respon dents, indicating that domestic and import sales 
were largely focusing on different market segments in opposite ends of the spectrum, and (ii) the 
average unit values used by MOFCOM, indicating th at the average prices of subject imports were 
30.4% higher than those of domestic products in 2009, when the injury to the domestic industry was found to have occurred.  
18. The EU submits that it is relevant and the argument in support of which it was presented is 
plausible, so that MOFCOM was under an obligation to analyse it in order to satisfy the "objective examination" standard imposed by Article 3.1 of the ADA and Article 15.1 of the ASCM .  The EU 
considers, however, that the analysis presented in MOFCOM's Final Determination falls short of 
meeting this standard. As a matter of fact this analysis is reduced to broad and abstract 
statements, outlining MOFCOM's final conclusions without any reference to supporting empirical evidence.  
19. The EU has two observations. First, the basic identity of production processes, quality and 
customer base across all segments of the market for "Saloon cars and Cross-country cars of cylinder capacity > 2500cc" is a doubtful line of reasoning, to say the least. MOFCOM has provided 
no evidence in respect of any of these three el ements. Second, customer overlapping, or in other 
words the fact that some consumers choose to buy and simultaneously own two or more cars of different segments, does not necessarily prove th at there is competition between these segments, 
just like buying bread and caviar from a superm arket does not prove that there is competition 
between these two products. Car rentals, for exam ple, buy large numbers of cars of different 
segments and rent them out at a different price to customers with different needs and preferences. 
20. The EU further observes that price difference is not in itself sufficient to negate competition 
between two products but it may at least be indi cative of the lack of such competition. Once 
presented with an assertion and corresponding evid ence in this sense, it is MOFCOM's task to 
examine the issue further and confirm or reject th at assertion on the basis of positive evidence. 
For that purpose it would, for example, be approp riate to examine the cross-elasticity of demand WT/DS440/R/Add.1 
 
- D-5 - 
 
 for different car segments by verifying if a sma ll but significant and non-transient change in the 
pricing of one segment could attract customers fr om or drive customers towards another segment. 
There is no evidence, however, that MOFCOM has done anything of the kind. For all of the above reasons, the EU is of the opinion that MOFCOM's analysis of this matter falls short of the 
requirement to perform an objective ex amination based on positive evidence. 
21. Turning to the question of market share, th e US claims that subject imports took market 
share from non-subject imports and not from domestic products, whose market share was actually 
growing. It relies on this claim to challenge both MOFCOM's causation analysis and its price effects 
analysis. With regard to the price effects analysis it presents the simultaneous growth of market shares as a non-attribution argument, and with regard to the causation analysis it relies on it to demonstrate a contradiction between MOFCOM's finding of the domestic industry's decreased 
profitability and the evidence on record. 
22. The EU has doubts about the relevance of this claim in either context. In its price effects 
analysis  MOFCOM does not argue that either the a lleged price depression or the diminished 
profitability of the domestic industry were in any way caused by a loss of market share, or indeed 
that a loss of market share even occurred to the domestic industry. On the other hand a finding of diminished profitability (by MOFCOM) is not necessarily in contradiction with a simultaneous 
increase of the market share of domestic products (i nvoked by the US). Profitability is a function of 
the ratio between the revenue gained and the costs incurred from selling a product, and not of the 
volume of sales or of the market share achieved. So far as the causation analysis  is concerned, 
the EU agrees with China that MOFCOM's causation finding is, on its face, premised more on price 
declines than on changes in market share. For th ese reasons, the US' assertion (not contested by 
China) that subject imports took market share from non-subject imports and not from domestic products, seems of limited relevance. With respect to the decline in domestic productivity, the US 
claims that MOFCOM failed to explore the role, in causing injury to the domestic industry, of the 
33.24% drop in the industry's productivity, combined with a 68.71 % expansion of its labour force in the first three quarters of 2009. Without cont esting this factual point, China questions its 
potential significance as a causation factor, bearing in mind that MOFCOM's causation finding is 
based on sixteen other indicia, and that the low la bour costs in China represented only 9 % of the 
domestic industry's total costs in 2009. China also notes that no party has ever raised this issue 
before MOFCOM. 
23. The EU agrees with the US that domestic productivity is a relevant factor that should have 
been addressed in MOFCOM's determination and the question of its actual significance under the 
particular circumstances of the Chinese automobile  industry should have been answered in the 
course of this discussion. The fact, that issue was never raised by any party during the 
investigation, does not imply that it was not "known" to MOFCOM and that dealing with it was therefore not required pursuant to Article 3.5 of the ADA and Article 15.5 of the ASCM . The 
relevant data about domestic productivity was obviously available to MOFCOM (and it is mentioned 
elsewhere in the text of the Final Determination) and its relevance to the causation analysis is expressly foreseen in Article 3.5 of the ADA and Article 15.5 of the ASCM . Failing to address this 
issue raises doubts about the objectiveness of MO FCOM's examination of the causation of injury, 
and therefore of its compliance with Articles 3.1 and 3.5 of the ADA and Articles 15.1 and 15.5 of 
the ASCM . 
24. Finally, turning to the issue of the drop in demand, the US notes that the only part of the 
investigation period in which injury was found to  have occurred (interim 2009) coincides with the 
only instance of contraction of demand during that period. It therefore objects to MOFCOM's 
dismissal of demand contraction as a non-attribution factor without further explanation. As it 
becomes clear from China's response in its First Written Submission, the explanation was to be 
found elsewhere in the text of the Final Determination, and in essence it was that the drop in apparent consumption was not the cause of injury to the domestic industry, because despite that drop "the domestic industry still kept increasing production and sales, as well as market share by 
improving production and operation levels and product competitiveness." 
25. The EU finds this explanation unsatisfactory be cause, as a matter of fact, the injury suffered 
by the domestic industry was found to have taken the shape of decreasing prices and profitability 
and not of lost sales. The mere fact that the number of domestic product sales increased, does 
nothing to exclude the possibility that the shrink ing demand may have driven sales prices down 
and diminished profitability of the domestic industry, or in other words, that it may have caused 
the injury identified by MOFCOM, despite the do mestic industry's growing production and sales 
volumes. WT/DS440/R/Add.1 
 
- D-6 - 
 
  
  
ANNEX D-2 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
WRITTEN SUBMISSION OF JAPAN 
A. Preparation of Non-Confidential Summaries under Article 6.5.1 of the AD 
Agreement   
1. In the First Written Submission of the United States  (the "US FWS"), the United States 
argues that MOFCOM "accepted confidential information without requiring adequate non-
confidential summaries of that information" and that consequential "lack of transparency 
significantly prejudiced the ability of [interested parties and the interested Member] to defend their interests."
1 The United States alleges that the application simply redacted the information from the 
part in which the information was provided. The United States further asserts that there was only 
a "simple assertion that the information was confidential"2 and that the "application contain[ed] no 
explanation of why such information could not be summarized."3 The United States thus claims 
that the redaction of information without non-confidential summary is inconsistent with 
Article 6.5.1 of the AD Agreement . 
2. Article 6.5.1 requires the party submitti ng confidential information to provide non-
confidential summaries except where exceptio nal circumstances have been demonstrated. 
Article 6.5.1 also requires that the non-conf idential summary should provide a reasonable 
understanding of the substance of the confidential  information. This requirement clarifies that 
the non-confidential summary must be sufficiently in detail to protect and observe the due process 
right of interested parties for the defense of their interests under Article 6.2. In case that 
interested parties did not submit sufficiently detailed non-confidential summaries of confidential information, accordingly, Article 6.5.1 requires the authorities to scrutinize
 the stated reasons 
establishing the existence of exceptional circumstances. The authority may permit the interested 
party not to submit non-confidential summaries only when they decide that the reason outweighs the due process right of the interested parties for their defense. At minimum, as the panel in 
Mexico – Olive Oil stated, "general statements ['it is not possible to prepare public summaries of 
the information and documents that we classified as confidential because of the nature of such 
information and documents'] are not sufficient as they constitute an unsupported assertion rather than a statement of reasons".
4 
B. Disclosure of Essential Facts before the Final Determination Under Article 6.9 of 
the AD Agreement   
3. The United States argues that MOFCOM failed to disclose the "data it used and calculations it 
performed to determine the existence and margin of dumping, including the calculation of the 
normal value and export price for the respondents"5 and thus acted inconsistently with Article 6.9 
of the AD Agreement . 
4. The first sentence of Article 6.9 of the AD Agreement  provides that the authorities must 
disclose the "essential facts under consideration which form the basis for the decision whether to apply definitive measure." The second sentence states that "such disclosure take place … for the parties to defend their interests." Thus, these provisions of Article 6.9 set forth the level of detail 
of each essential fact that the authority must disclose. As the panel in EC – Salmon (Norway)  
stated, the disclosure must "provide the interested parties with the necessary information to enable them to comment on the completeness and correctness of the facts being considered by 
the investigating authority, provide additional information or correct perceived errors, and 
comment on or make arguments as to the proper interpretation of those facts."
6  
                                               
1 US FWS, para. 35. 
2 Id., para. 42.   
3 Id., para. 45.   
4 Panel Report, Mexico – Olive Oil, para. 7.101. 
5 US FWS, para. 47. 
6  Panel Report, EC – Salmon (Norway) , para. 7.805. WT/DS440/R/Add.1 
 
- D-7 - 
 
 5. With respect to dumping determinations, the panel in Argentina - Poultry Anti-Dumping 
Duties  found that "the normal value and export price data ultimately used in the final 
determination are essential facts which form the basis for the decision whether to apply definitive measures."
7 Indeed, the normal value and the export pr ice data are facts found by the authorities 
based on individual items of evidence such as ac tual invoice prices and various cost and expenses 
data. 
6. The panel in China – X-Ray Equipment  further clarified that the facts related to the existence 
of the dumping margin must be disclosed to interested parties for their effective defense of 
interests. It held that: 
…we consider that the transaction-specific price and adjustment data that 
are developed and used by the invest igating authority for the purpose of 
establishing a margin of dump ing constitute "essential facts"  within the 
meaning of Article 6.9. Such data are sali ent to the establishment of the margin of 
dumping. Furthermore, the margin estab lished cannot be understood without such 
data.8 
7. As this panel clarified, an authority is obliged to disclose specific transaction prices, which 
the authority found as the fact to establish normal value and export prices and to determine the 
margins of dumping in the final determination. Mere disclosure of the finally-calculated normal 
value and export prices would not be sufficient for interested parties to present their defense. For 
example, the interested party would not be able to argue whether the authority correctly identified the transaction prices without knowing the actual invoice prices that the authorities decided to use. 
Moreover, the interested party would also not be  able to present the defense for the correct 
amount of adjustments to make fair comparison under Article 2.4 of the AD Agreement without 
knowing the amount of the individu al expenses that the authorities verified to be deducted from 
the invoice price. All these facts that the authorities found in the process to reach the 
determination of dumping margin are required for the interested parties to present an effective defense. Therefore, the authorities must disclos e these facts to meet the requirements under 
Article 6.9 of the AD Agreement. 
C. Consistency of the Determination of the All Others Rates Based on Facts Available 
with Article 6.8 and Annex II of the AD Agreement   
8. The United States alleges that MOFCOM's app lication of facts available to determine the anti-
dumping duty rate for unexamined exporters/producers was inconsistent with Article 6.8 and 
Paragraph I of Annex II of the AD Agreement .
9 
9. According to the United States, MOFCOM applied an all others dumping rate of 21.5 percent 
to unexamined U.S. producers/exporters, "despite the fact that the dumping margin for the 
respondents ranged from 2 percent to 8.9 percent".10 The United States alleges that MOFCOM "had 
no evidence that any interested party 'refused access to' or otherwise 'did not provide' information 
that was 'necessary' to the antidumping investigation or otherwise 'significantly impeded' the 
investigation."11  
10.  The United States argues that because "no other U.S. exporters existed at the time of the 
investigation,"12 it was not proper to apply facts available "as it is logically impossible for a non-
existent exporter to cooperate."13 In order to apply the facts available to an interested party, 
"Articles 6. 8 and Annex II, paragraph 1 together ensure that an exporter or producer has an 
opportunity to provide information required by an investigating authority before the latter resorts 
to the use of facts available."14  
                                               
7 Panel Report, Argentina – Poultry Anti-Dumping Duties , para. 7.223 (emphasis in original). 
8 Panel Report, China – X-Ray Equipment , para. 7.417 (emphasis added, a footnote omitted).   
9 US FWS, para. 59. 
10 Id., para. 58 and fn. 81.  
11 Id., para. 64.  
12 Id. 
13 Id., para. 65.  
14 Id., para. 62. WT/DS440/R/Add.1 
 
- D-8 - 
 
  
 11. The AD Agreement sets forth the procedural rules to investigate the margin of dumping of 
individual exporter/producers. Article 6.1 of the AD Agreement provides that "[a]ll interested 
parties shall be given notice of the information which the authorities require". Paragraph 1 of Annex II further provides, "[a]s soon as possible after the initiation of the investigation, the 
investigating authorities should specify in detail the information required from any interested 
party". Accordingly, the AD Agreement requires that authorities give notice of specific information 
to an interested party from which the specific information is needed. Article 6.8 of the AD 
Agreement  then sets forth that facts available may be applied to an interested party only when the 
interested party "refuses access to, or otherwise does to provide, necessary information … or significantly impedes the investigation". Paragraph 1 of Annex II further provides that the authorities should inform the interested party that the authorities will apply facts available if the 
interested party does not supply the requested information. Therefore, facts available cannot be 
applied to an interested party with respect to specific information, which the authorities had not asked the interested party to submit such information and had not informed that its failure to 
submit would result in application of facts available.  
12. As explained by the Appellate Body,
15 the AD Agreement  makes clear that the importing 
Member may not use facts available to determine the margin of dumping of exporters/producers 
for which the Member's authorities had not given any notice of necessary information.  
13. The panel in China – GOES further clarified that the authorities' notice as required under 
paragraph 1 of Annex II must be such that "the party is aware" of the consequences of not supplying necessary information.
16 In this connection, "posting a notice in a public place or on the 
internet will not necessarily ensure this awareness in each interested party." 17 It also clarified that 
while "the notice of initiation requested interested parties to provide some general information", investigating authorities could not "replace[…] more information than this with 'facts available'".
18 
This is all the more true for exporters that did not exist during the period of investigation. As noted 
by the panel in China – GOES , "It is not clear how non-existent exporters could possibly refuse to 
provide information or impede an investigation."19 
D. The Price Effect Analysis und er Articles 3.1 and 3.2 of the AD Agreement   
14. The United States argues that MOFCOM's price effects analysis "is not based on 'positive 
evidence' and . . . did not 'involve an objective assessment."20 Specifically, the United States 
submits that the subject automobiles imported from the United States primarily fell into a different 
grade from those primarily sold by the Chinese domestic producers and, in light of these varying 
grades of the automobiles, MOFCOM should have made necessary adjustments to ensure price comparability in its price comparison, or, at the very least, explained why such adjustments were 
not necessary in this case
21.  
15. Japan understands that the United States intends to submit that there was no or, if any, 
very limited competition between the subject imports and the domestic like products in this case. 
From Japan's point of view, this argument is in line with the recent precedents, that is, the 
Appellate Body report in China – GOES and the panel report in China – X-Ray Equipment . In 
particular, in the latter case, it was made clear that the investigating authority must examine whether there is a competition between the subject imports and the domestic like products. 
16. In the first place, in China – GOES  the Appellate Body has clarified the investigating 
authority's obligations in its price effect analysis pursuant to Article 3.2 of the AD Agreement , 
explaining  that the authorities must consider "whether certain price effects are the consequences 
of subject imports."
22 The Appellate Body further explai ned the rigor of this analysis: 
                                               
15 Appellate Body Report,  Mexico –Anti-Dumping Measure on Rice , para. 259 (emphasis in original, 
footnote omitted).  See also Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC) , para. 459. 
16 Panel Report,  China – GOES , para. 7.386. 
17 Id. 
18 Id. 
19 Id., para. 7.387.   
20 US FWS, para. 126. 
21 Id., paras. 141, 144. 
22 Appellate Body Report, China – GOES , para. 136. WT/DS440/R/Add.1 
 
- D-9 - 
 
 Moreover, the syntactic relation expressed by the terms " to depress prices" 
and "[ to] prevent price increases" is of a subject (dumped or subsidized 
imports) doing something to an object (domestic prices). The language of Articles 3.2 and 15.2 thus expressly links significant price depression and 
suppression with subject imports, and contemplates an inquiry into the 
relationship between two variables, namely, subject imports and domestic prices. More specifically, an investigating authority is required to consider 
whether a first variable—that is, subject imports—has explanatory force for the 
occurrence of significant depression or suppression of a second variable—that 
is, domestic prices.
23 
17. In this analysis, the Appellate Body has furt her clarified that the objective examination of 
positive evidence under Article 3.1 requires that the authorities must ensure price comparability 
when comparing the domestic price and the import price in its price effect analysis. It has stated: 
[W]e do not see how a failure to ensure price comparability could be 
consistent with the requirement under Article 3.1 … Indeed, if subject import 
and domestic prices were not comparable, this would defeat the explanatory 
force that subject import prices might have for the depression or suppression of domestic prices. We therefore see no reason to disagree with the Panel 
when it stated that "[a]s soon as price comparisons are made, price 
comparability necessarily arises as an issue".
24 
18. Following the Appellate Body's analysis, the panel in China – X-Ray Equipment  applied this 
legal requirement to facts in that underlying investigation. In that case, having confirmed that "the fact that where a broad basket of goods under consideration and a broad basket of domestic goods 
have been found by an investigating authority to be "like", this does not mean that each of the 
goods included in the basket of domestic goods is  "like" each of the goods included within the 
scope of the product under consideration"
25, the panel found that "the dumped imports consisted 
only of 'low-energy scanners', while there was no such limit on the energy levels of the domestic 
like product."26 In such factual situation, the panel found that the authorities must consider 
differences between the two before ma king their comparison, stating:  
[T]here was evidence on the record to indicate that there were significant 
differences between the dumped imports and some of Nuctech's scanners, in terms of uses, physical characteristics and prices, for example. Further, MOFCOM's own findings indicated that "high-energy" and "low-energy" 
scanners have different uses and are perceived differently by consumers. In 
the light of this evidence, the Panel is of  the view that MOFCOM clearly failed to 
conduct an objective examination of positive evidence by proceeding with its 
price effects analysis without even considering, let alone taking into account, 
these differences in the products being compared.
27 
19. As the Appellate Body in China – GOES and the panel in China – X-Ray Equipment  have 
clarified, the fact that the domestic product is th e "like product" as defined in Article 2.6 of the AD 
Agreement is not sufficient to compare with subject imports. The authorities must further review 
whether these products are comparable.  Indeed, "[i]f two products being analyzed in an 
undercutting analysis are not comparable, for example in the sense that they do not compete 
with each other , it is difficult to conceive how the outcome of such an analysis could be relevant 
to the causation question."28 Thus, this requirement means that the investigating authorities must 
examine whether the subject imports and the domestic  like products are in competition with each 
other, by inquiring, for example, whether these products have substantially the same physical 
                                               
23 Id. (internal citations omitted). 
24 Id., para. 200 (internal citations omitted). 
25 Panel Report, China – X-Ray Equipment , para. 7.65. 
26 Id., para. 7.68. 
27 Id., para. 7.68. 
28 Id., para. 7.50 . WT/DS440/R/Add.1 
 
- D-10 - 
 
  
 characteristics and are used by customers as interchangeable, etc.29 In this connection, it is to be 
noted that a simple observation of parall el price trends would not be sufficient.30 
E. The Causation Analysis under Articles 3.1 and 3.5 of the AD Agreement   
20. The United States argues that "MOFCOM's causation analysis includes and relies upon a 
number of findings that are contradicted by the ev idence . . ., contrary to the requirements of 
Article 3.1 of the AD Agreement and Article 15.1 of the SCM Agreement."31 The United States 
alleges further that "MOFCOM failed to meet its obligations under Article 3.5 of the AD Agreement 
and Article 15.5 of the SCM Agreement to base its determination on an examination of all relevant 
evidence before it and to examine any known fa ctors other than dumped and subsidized imports 
that were injuring the domestic industry."32  
21. Article 3.5 of the AD Agreement provides that the causation must be demonstrated through 
the effects of dumping as set forth in Article 3.2. As the panel in China – X-Ray Equipment  found, 
where the authority "relied upon the price effects of subject imports in its causation analysis, the 
flaws in the price effects analysis also undermine [the authority's] conclusion on the causal link 
between the subject imports and the injury suffered by the industry."33  
22.  Article 3.5 of the AD Agreement also requires investigating authorities to "examine all 
known factors other than the [subject] imports which at the same time are injuring the domestic 
industry." Injury caused by such other factors "must not be attributed to the [subject] imports" in 
the causation analysis. As explained by the Appellate Body,34 the authorities must separate and 
distinguish the causes of injurious effects of the other factors from the injurious effects of dumped imports when analyzing causation of injury. Although the analysis might not be "easy," the 
Appellate Body has cautioned that it is necessary to properly conduct the non-attribution analysis 
to assess injury.
35  
 
                                               
29 E.g. Id., para. 7.92. 
30 See Appellate Body Report, China – GOES , para. 210. 
31 US FWS, para. 154. 
32 Id., para. 154. 
33 Panel Report, China – X-Ray Equipment , para. 7.239. 
34 Appellate Body Report, US – Hot-Rolled Steel , para. 223. 
35 Id., para. 228. WT/DS440/R/Add.1 
 
- D-11 - 
 
  
ANNEX D-3 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
ORAL STATEMENT OF JAPAN 
I. INTRODUCTION 
1. Mr. Chairman, and distinguished Members of the Panel, Japan thanks this opportunity to 
appear before you today. This dispute involves im portant systemic issues on the disciplines of the 
AD Agreement that matter to Japan. In its third party submission, Japan discussed both 
substantive and procedural issues, such as the price effect analysis and causation analysis for the injury determination, the determination of the all others rate, the preparation of non-confidential summaries, and disclosures of essential facts. All of these issues are important to clarify disciplines 
on anti-dumping regimes of the WTO Members, but Japan would like to focus today on the price 
effect analysis that the authority is required to conduct under Articles 3.1 and 3.2 of the AD 
Agreement . 
II. DISCUSSION 
2. Japan clarified in its third party submission that Article 3.2 of the AD Agreement  requires the 
authority to examine whether subject imports compete with such domestic like products in its 
price effects analysis.
1 As the Appellate Body in China – GOES  has explained, Article 3.2 requires 
the authority to consider "whether certain price effects are the consequences of subject imports".2 
Therefore, the authority must examine "the rela tionship between two variables, namely, subject 
imports and domestic prices."3 The panel in China – X-Ray Equipment  further explained, "where a 
broad basket of goods under consideration and a broad basket of domestic goods have been 
found by an investigating authority to be "like", this does not mean that each of the goods included in the basket of domestic goods is "like"  each of the goods included within the scope of 
the product under consideration."
4 "To be comparing the prices of [subject imports of] low energy 
scanners with the prices of a much broader mix of [domestic] "like" products, including products with different uses  and which were not perceived by customers to be substitutable , does 
not constitute an objective examination of posi tive evidence for the purposes of the price 
undercutting."
5  
3. These findings clarify that Article 3.2 requires the authority to ascertain that for the purpose 
of price effects analysis, a type of subject imports is in competition with a type of the domestic like 
products. When examining the state of competitio n of the products at issue, the investigating 
authority must take into account various factors, for example physical characteristics, usage and customers' perceptions to make an objective examination in price comparisons. Indeed, if the 
authority does not address such factors, the pr ice comparability between subject imports and the 
domestic like products is not ensured. The price comparison , if it ignores differences in physical characteristics, usage and customers' perceptions, would not provide any meaningful analysis on 
"whether certain price effects are the consequences of subject imports".  
4. Japan also notes that the price effects analysis under Article 3.2 "form[s] the basis for the 
overall causation analysis contemplated in Article 3.5."
6 The panel in China – X-Ray Equipment  
explained,  
the causation question is not resolved by such a general finding of coincidence. 
Rather, we consider that MOFCOM was required to conduct a more detailed analysis.7  
                                               
1 Third Party Submission of Japan, 30 April 2013, paras. 23-30. 
2 Appellate Body Report, China – GOES , para. 136. 
3 Appellate Body Report, China – GOES , para. 136. 
4 Panel Report, China – X-Ray Equipment , para. 7.65. 
5 Panel Report, China – X-Ray Equipment , para. 7.88 (emphasis added). 
6 Appellate Body Report, China – GOES , para. 128. 
7 Panel Report, China – X-Ray Equipment , para. 7.247. WT/DS440/R/Add.1 
 
- D-12 - 
 
  
 Thus the mere finding of parallel price trends between subject imports and the domestic like 
product is not sufficient to conclude that the price effects to the domestic like product are the consequence of subject imports. 
5. In its First Written Submission, China ackn owledged that MOFCOM used averages of all 
types of the subject imports and the domestic li ke product, including passenger sedans and off-
road vehicles.
8 China explained that "the product under investigation is generally the same with 
the product manufactured by the domestic industry in terms of size of automobile bodies, wheel 
base and performance indicators", and "the domestic product and the product under investigation 
overlap partially in terms of prices and consumers, and thus are competing and substituting for each other".
9 China then argues, "MOFCOM found substitutability and mutual competition between 
subject imports and the domestic like product, fu rther justifying the use of averages in this 
case."10 According to China, MOFOM's preliminary and final determinations briefly discuss their 
physical characteristics, production process, use,  sales channels, price, consumer, competitiveness 
or substitution.11 However, the determinations only contain the conclusions that the two products 
are the same in terms of these factors, withou t pointing to any concrete facts or evidence 
supporting these conclusions, for example, eviden ce that would suggest the Chinese market does 
not distinguish passenger vehicles from off-road vehicles. 
6. Although Japan does not take any particular position in the factual issues in this case, it is 
doubtful, as a matter of general observation of auto mobile sector that the off-road vehicles do not 
differ from passenger sedans in terms of physical characteristics, usage, customers' perceptions, 
etc.. As the panel in EC – X-Ray Equipment  c o r r e c t l y  f o u n d ,  a  t y p e  o f  v e h i c l e s  i n  a  b a s k e t  o f  
subject imports would not be necessarily "like" the other type of vehicles combined together in a 
basket of domestically produced vehicles. It is li kely that the average price of different types of 
vehicles would ignore the price difference and fluctuation stemming from, for example, differences 
in physical characteristics, usage, and perception in the market. The comparison of annual average 
prices of all imports and domestically produced  vehicles would compound such differences, and 
accordingly likely to provide no meaningful results for the price effects analysis under Article 3.2. 
7. Japan respectfully requests that the Panel carefully analyse whether MOFCOM based its price 
effects analysis on an objective examination of positive evidence consistently with the requirements under Articles 3.1 and 3.2 of the AD Agreement , as discussed above. 
III. CONCLUSION 
8. In conclusion, Japan respectfully requests th e Panel to examine carefully the facts presented 
by the parties in this dispute in light of the ar guments presented in Japan's submission and this 
oral statement. Japan is happy to answ er questions that the Panel may have. 
 
                                               
8 First Written Submission of the People’s Republic  of China (“China FWS”), 22 April 2013, paras. 204-
205. 
9 China FWS, para. 204, quoting the MOFCOM’s preliminary determination, pp. 29-30 (CHN-05). 
10 China FWS, para. 210. 
11 MOFCOM’s preliminary determination, pp. 29-34 (CHN-05), and final determination, p. 158 (CH0-07). WT/DS440/R/Add.1 
 
- D-13 - 
 
  
ANNEX D-4 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
ORAL STATEMENT OF KOREA 
Mr. Chairman and Members of the Panel, 
1. Korea appreciates this opportunity to present our views to the Panel as a third party 
participant to this dispute. In this dispute, th e United States challenges the anti-dumping and 
countervailing duties imposed by China on imported automobiles from the United States. Korea 
would like to share what we think of as the key issues in this case and our opinion on such issues with regard to the Agreement on Implementation of Article VI of General Agreement on Tariffs and 
Trade 1994  ("AD Agreement") and the Agreement on Subsidies and Countervailing Measure s 
("SCM Agreement"). 
2. Among various issues, Korea would like to pr esent its views on the "calculation of dumping 
margins applicable to non-investigated entities" and the "definition of Domestic Industry." 
Dumping margins for non-investigated entities 
3. Article 6.10 of the AD Agreement allows the relevant investigative authorities, the MOFCOM 
in this dispute, to limit their examination to a reasonable number of interested parties, in cases 
where the number of exporters, producers, importers or types of products involved is so large as 
to make the determination impracticable. Howeve r, the AD Agreement is silent on determining 
dumping margins for non-investigated entities, and the issue in this dispute is whether the dumping margin calculated based on facts available could be applied to non-investigated entities. 
4. Non-investigated entities can be divided into three categories. The first category consists of 
non-investigated entities that were willing to participate but discouraged due to the impracticability of conducting an anti-dumping investigation; the second category consists of non-investigated 
entities unwilling or having no interest in participating in the investigation; and the third category 
consists of non-investigated entities unaware of the ongoing investigation or nonexistent at the time of the investigation. 
5. With regard to those entities in the first category, Korea believes such entities should be 
subject to paragraph 4 of Article 9 of the AD Agr eement and facts available not applicable to such 
entities. Non-investigated entities in the second category are blameworthy for their behavior and there is no doubt that they are subject to the dumping margins calculated based on facts available 
under Article 6.8 of the AD Agreement. With regard  to entities in the third category, Korea views 
that dumping margins calculated based on facts available are applicable, if the investigating authority had used its best efforts to notify the interested parties of the initiation of the anti-
dumping investigation and give an appropriate publ ic notice under Article 12 of the AD Agreement. 
In case of an entity that did not exist at the time of the anti-dumping investigation, it may resort to Article 9.5 of the AD Agreement and request a review on an accelerated basis during which the 
imposition of anti-dumping duties will be suspended. 
Definition of Domestic Industry 
6. Both the AD Agreement, in Article 4, and the SCM Agreement, in Article 16, contains a 
definition of "domestic industry." In principle, do mestic industry means "the domestic producers as 
a whole of the like products or those of them whose collective output of the products constitutes a 
major proportion of the total domestic production  of those products." In this dispute, MOFCOM 
chose to define China’s domestic industry in terms of "domestic producers whose collective output 
of the products constitutes a major proportion of the total domestic production of those products." 
The issue here is what level of collective output of the products could be taken as a major proportion of the total domestic production of those products (major proportion test). WT/DS440/R/Add.1 
 
- D-14 - 
 
  
 7. Considering the fact that the AD Agr eement and the SCM Agreement both stipulate 
"domestic producers as a whole of the like products" and "domestic producers whose collective output of the products constitutes a major proportion of the total domestic production of those products" in parallel with each other in defining domestic industry, Korea views that a major 
proportion of domestic production of like products should encompass a relatively high portion of 
the output of the domestic production of like products so that it could be considered equivalent to the domestic producers as a whole of like products. The Appellate Body in EC-Fasteners  case also 
stated that a proper interpretation of the term "a major proportion" under Article 4.1 of the AD 
Agreement requires that the domestic industry defined on this basis encompass producers whose collective output represents "a relatively high proportion that substantially reflects the total domestic production." 
8. Keeping in mind that domestic producers representing 46 percent of total domestic 
production had been accepted as a "major propor tion" of the "domestic industry" under Article 4.1 
of the AD Agreement in Argentina - Poultry AD Duties(Panel)  case, Korea notes that the Appellate 
Body in EC-Fasteners case stated that "in the special case of a fragmented industry with numerous 
producers, the practical constraints on an authority's ability to obtain information may mean that what constitutes ‘a major proportion’ may be lower than what is ordinarily permissible in a less 
fragmented industry." Korea agrees to the decision made in EC-Fasteners in relation to the 
meaning of major proportion and thus views that, in general, in order to be acknowledged as a major proportion, the defined domestic indust ry must encompass producers whose collective 
output represents a relatively high proportion that substantially reflects the total domestic 
production, except, in fragmented industries, what  constitutes a major proportion may be lower. 
9. That having been said, the automobile industry is not a fragmented industry with numerous 
producers that may limit an authority’s ability to obtain information, and therefore the major 
proportion of the auto industry requires that it encompass producers whose collective output 
represents "a relatively high proportion that substantially reflects the total domestic production." 
10. Also, it is not a mere provision of an opportunity for a major proportion of domestic 
producers of like products to participate, but actu al reflection of a major proportion of domestic 
producers of like products in the injury investigation that suffices to be recognized as the definition of domestic industry under Article 4.1 of the AD Agreement. 
Thank you for your attention. We would be happy to take any question you might have. 
 WT/DS440/R/Add.1 
 
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ANNEX D-5 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
WRITTEN SUBMISSION OF SAUDI ARABIA 
I. INTRODUCTION 
1. The Kingdom of Saudi Arabia's participation in this dispute addresses systemic issues 
relating to the interpretation of the Agreement on Subsidies and Countervailing Measures (the SCM 
Agreement) and the Agreement on Implementation  of Article VI of the General Agreement on 
Tariffs and Trade 1994 (the Anti-Dumping Agreem ent). The Kingdom takes no position on the 
merits of the claims that are based on the particular facts of this case.  
II. AN INVESTIGATING AUTHORITY MAY RESORT TO "FACTS AVAILABLE" IN 
LIMITED CIRCUMSTANCES 
2. WTO rules impose explicit limitations on an investigating authority's application of facts 
available. First, an investigating authority may only use "facts available" in the event of non-
cooperation. Under Article 6.8 of the Anti-D umping Agreement and Article 12.7 of the SCM 
Agreement, an investigating authority may resort to "facts available" in three limited circumstances: when an interested party (i) refuses access to, or (ii) otherwise does not provide, 
necessary information within a reasonable period; or (iii) significantly impedes the investigation.  
3. Second, an investigating authority may only resort to "facts available" where it has provided 
proper notice. Annex II of the Anti-Dumping Agreement stipulates that an authority may only resort to "facts available" where it has (i) given proper notice of the information required, and (ii) 
informed interested parties of the possibility that "facts available" will be applied in the event of 
non-cooperation. Thus, an investigating authority must ensure that interested parties have been contacted and adequately informed before resorting to "facts available".  
4. Third, "facts available" may be used "solely for the purpose of replacing information that 
may be missing", as the purpose of these provisions is to ensure that the investigation is not frustrated by non-cooperation on the part of interested parties. Correspondingly, an investigating 
authority must employ "the best information available", and any determination must have a 
factual foundation and must not be based on conjecture, or speculative inferences.  
III. INVESTIGATING AUTHORIT IES MUST DISCLOSE ESSENT IAL FACTS IN A MANNER 
WHICH ALLOWS PARTIES TO DEFEND THEIR INTERESTS 
5. Article 6.9 of the Anti-Dumping Agreement and Article 12.8 of the SCM Agreement require 
an investigating authority: (i) to disclose all "essential facts" which form the basis for its determinations; and (ii) to ensure that an interested party has adequate time to review those facts 
and correct them in a manner that permits parties to defend their interests.  
6. The Kingdom is of the view that where an inve stigating authority resorts to the use of "facts 
available", the disclosure of "essential facts" must include those facts which led the investigating 
authority to that conclusion, as well as the actual facts subsequently relied upon in reaching the 
subsidy or dumping determination. In the interest of due process, the "essential facts" must be 
identified as such so that the interested parties have an opportunity to review the facts used to replace the necessary information and to comment on  the choice of "facts available" on which the 
investigating authority has relied. An investigating authority also must explain why these facts 
constitute the "best" information available. 
IV. INVESTIGATING AUTHORITIES MUST ENSURE THAT PUBLIC NOTICES MEET 
SEVERAL TRANSPARENCY REQUIREMENTS 
7. Both the Anti-Dumping and the SCM Agreements stipulate that investigating authorities 
must include in public notices "sufficient detail" on all "material issues" and, where measures are WT/DS440/R/Add.1 
 
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 imposed, "all relevant information on the matters of fact and law" and the "reasons which have led 
to the imposition of final measures".  
8. An issue is "material" under Article 12.2 of  the Anti-Dumping Agreement and Article 22.3 of 
the SCM Agreement where it has arisen in the course  of the investigation and must be resolved in 
order for the investigating authority to be able to reach its determination. The obligation on 
investigating authorities to set forth findings and conclusions in "sufficient detail" requires that explanations are provided for all material elements of the determination. Possible alternative 
explanations must also be addressed in the public notice in the same level of detail. Where there is 
an affirmative determination for the imposition of a duty, Article 12.2.2 of the Anti-Dumping 
Agreement and Article 22.5 of the SCM Agreement require the investigating authority to issue a 
public notice or report which contains (i) "all relevant information on the matters of fact and law", 
and (ii) the "reasons which have led to the imposition of final measures".  
9. Thus, a public notice should include any facts relating to the decision to resort to "facts 
available" because that is "one step in the process leading to the imposition of a final measure". It 
also should include the "facts available" actually selected and relied upon to calculate the dumping 
and subsidy rates.  
V. ALL ASPECTS OF THE DETERMINATION OF INJURY MUST BE BASED ON AN 
OBJECTIVE EXAMINATION OF POSITIVE EVIDENCE  
10. Every aspect of an injury determination is subject to the "overarching" obligation in 
Article 3.1 of the Anti-Dumping Agreement and Ar ticle 15.1 of the SCM Agreement that Members' 
investigating authorities must conduct an "objective examination" based on "positive evidence". 
The requirement to conduct an "objective examination" means that the examination must accord 
with the basic principles of good faith and fund amental fairness, and be both unbiased and even-
handed. While "positive evidence" must be assessed on a case-by-case basis, evidence which is 
"positive" is that which is "affirmative, objective, verifiable, and credible". 
11. The definition of "domestic industry" under Article 4.1 of the Anti-Dumping Agreement and 
Article 16.1 of the SCM Agreement is fundamental to an accurate injury and causation analysis 
that is based on an "objective examination" of "p ositive evidence". The Kingdom is of the view that 
the Panel should take this opportunity to confir m that legally permissible injury and causation 
determinations cannot follow from a definition of domestic industry that does not meet the same standards of "objective examination" and "positive evidence". This conclusion flows directly from 
the text of each Agreement, which repeatedly li nks the definition of "domestic industry" to the 
injury determination.  
12. The Appellate Body recognized this linkage to mean that "the purpose of defining the 
domestic industry… [is] to provide the basis for the injury determination". The Appellate Body 
explained that the requirements of an "objective examination" based on "positive evidence" inform 
the substantive obligations for defining the domestic industry, and the "domestic industry" 
definition must "ensure that the subsequent inju ry analysis is based on positive evidence and 
involves an objective examination". Given that this is the case, the definition of "domestic industry" must itself also be based on an "o bjective examination" of positive evidence. 
13. A price effects analysis under Article 3.2 of  the Anti-Dumping Agreement and Article 15.2 of 
the SCM Agreement must meet several substant ive and procedural requirements. First, the 
investigating authority must assess whether domestic prices are depressed or suppressed by 
subject imports , and the Appellate Body has confirmed that it will not be sufficient for an authority 
to confine its consideration to what is happening to domestic prices. Second, price effects 
determinations must be based on "positive evidence" and involve an "objective examination". Although an investigating authority is only required to "consider" price effects and need not make 
a definitive determination in this respect, this "does not diminish the rigour that is required of the 
inquiry" nor "the scope of what the investigating authority is required to consider". Finally, an 
investigating authority's consideration of price effects must be reflected in relevant documentation, such as an authority's final determination.  
14. An investigating authority must also "demonstrate" causation, including specific injury 
findings and a proper "non-attribution" analysis, in accordance with Article 3.5 of the Anti-WT/DS440/R/Add.1 
 
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 Dumping Agreement and Article 15.5 of the SCM Agreement. The requirement to "demonstrate" 
causation is rigorous, and requires the investigating authority to "do more than simply list other known factors, and then dismiss their role with bare qualitative assertions". The authority must 
explain the causal analysis that has been conducted and thereby establish the requisite causal link 
for each factor in the analysis. The causation anal ysis under Articles 3.5 and 15.5 is informed by 
other parts of Articles 3 and 15, and an investigating authority's analysis of price effects, volume effects, and the domestic industry must tie into its final causation analysis. 
15. In order to "demonstrate" causation, an investigating authority must conduct a "non-
attribution" analysis, which demands a cogent explanation of the injurious effects of factors other than the dumped or subsidized imports. "Known fa ctors" include those clearly raised by interested 
parties as well as those that the investigating auth orities become aware of as a result of their own 
investigations. The injurious effects of those other factors must be separated and distinguished 
from the injurious effects of the subject imports, because this approach is the only way that an 
investigating authority can make a reasoned judgment as to the degree of injury caused by other 
factors.  
16. Separating and distinguishing the injurious effects of dumped or subsidized imports from the 
injurious effects of each other known factor requires a satisfactory or meaningful explanation  of 
the nature and extent  of the other factors' injurious effects, as distinguished from those of the 
subject imports. The investigating authority is obligated to determine the nature  and extent  of the 
injurious effects of the factors under consideration, and to establish a genuine and substantial causal relationship between the dumped or subsidized imports and the injury found to exist. 
Conclusions as to attribution should be accompanied by "quantitative or thorough qualitative 
support", and the analysis "must go deeper than a simple comparative statement". 
VI. CONCLUSION 
17. The Kingdom respectfully requests the Panel to consider its positions on the interpretive 
issues set out above. 
 WT/DS440/R/Add.1 
 
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ANNEX D-6 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
ORAL STATEMENT OF SAUDI ARABIA 
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, the Kingdom will 
summarize its views on two of the systemic issues relating to the interpretation of the Anti-
Dumping Agreement and the Agreement on Subsidies and Countervailing Measures: the use of "facts available" and the analysis of injury and causation. 
II. FACTS AVAILABLE 
2. The first issue concerns the circumstances under which an investigating authority may resort 
to "facts available". Article 6.8 of the Anti -Dumping Agreement and Article 12.7 of the SCM 
Agreement establish that "facts available" may only be used by an investigating authority in 
limited circumstances: where a party refuses access to, or otherwise does not provide, necessary 
information within a reasonable period; or where the party significantly impedes the investigation.  
3. Moreover, an investigating authority may only resort to "facts available" where it has 
provided proper notice. Annex II of the Anti-Dumping Agreement stipulates that an authority may 
resort to "facts available" only where it has, firs t, given proper notice of the information required, 
and, second, informed interested parties of the possibility that "facts available" will be applied in the event of non-cooperation. Thus, an investigating authority must ensure that interested parties 
have been contacted and adequately informed before resorting to "facts available". 
4. Finally, it is important to emphasize that when an investigating authority does resort to 
"facts available", it may only do so in order to fill in any gaps in the necessary information that 
was requested from, but not provided by, interested parties. The actual facts that may be relied 
upon to fill in any gaps are also limited. Specifically, investigating authorities are expected to employ "the best information available", which means that only those facts that are the most 
fitting or most appropriate to the case at hand should be used. Furthermore, even in cases of non-
cooperation, investigating authorities must ensure that their determinations of the "facts available" have a factual foundation and are not based on conjecture or speculative inferences designed to increase the dumping or subsidy margin. 
5. The Kingdom emphasizes that the function of the "facts available" provisions is to ensure 
that the work of an investigating authority is not frustrated by non-cooperation on the part of interested parties. As such, an investigating authority should not be permitted to resort to "facts 
available" where the absence of information before it is directly attributable to the authority's own 
failure to request it, or where better record evidence is available. 
III. INJURY AND CAUSATION 
6. The second issue relates to the requirements of  a proper injury analysis. Every aspect of an 
injury determination is subject to the "overarching" obligation in Article 3.1 of the Anti-Dumping Agreement and Article 15.1 of the SCM Agreement that Members' investigating authorities must 
conduct an "objective examination" based on "pos itive evidence". The requirement to conduct an 
"objective examination" means that the examinatio n must agree with the basic principles of good 
faith and fundamental fairness, and must be both unbiased and even-handed. "Positive evidence" is that which is "affirmative, objective, verifiable, and credible". 
7. It is the Kingdom's view that the obligation to conduct an "objective examination" of 
"positive evidence" also must apply to an investigating authority's definition of the "domestic industry" under Article 4.1 of the Anti-Dumpi ng Agreement and Article 16.1 of the SCM 
Agreement. Because the industry definition will  provide the basis for the injury and causation 
analyses, the definition is fundamental to an "o bjective examination" of "positive evidence". WT/DS440/R/Add.1 
 
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 8. That these procedural and evidentiary obligations apply to the definition of "domestic 
industry" follows directly from the text of each Agreement, which repeatedly links the definition of "domestic industry" to the injury determination. The Appellate Body confirmed this linkage when it stated that "the domestic industry forms the basis on which an investigating authority makes the 
determination of whether the dumped imports cause or threaten to cause material injury to the 
domestic producers". With this in mind, the Appellate Body in EC – Fasteners (China)  specifically 
instructed that, "to ensure the accuracy of an injury determination, an investigating authority must 
not act so as to give rise to a material risk of distortion in defining the domestic industry, for 
example, by excluding a whole category of produc ers of the like product". The definition chosen 
must not "introduce a material risk of skewing the economic data and, consequently, distorting [the] analysis of the state of the industry". 
9. Given that the definition of "domestic industry" provides the basis for the injury 
determination, and that every aspect of the injury determination requires an "objective examination" based on "positive evidence", it logically follows that the definition of "domestic 
industry" under Article 4.1 of the Anti-Dumping Agreement and Article 16.1 of the SCM Agreement 
must meet the same standard. The Kingdom respectf ully requests that this Panel reaffirm that 
legally permissible injury and causation determinations can only follow from a definition of 
"domestic industry" that meets the same standa rds of "objective examination" and "positive 
evidence". 
10. The Kingdom would also like to take this oppo rtunity to highlight an investigating authority's 
price effects analysis under Article 3.2 of the An ti-Dumping Agreement and Article 15.2 of the SCM 
Agreement. Any such analysis must meet several substantive and procedural requirements. First, 
the investigating authority must assess whether domestic prices are depressed or suppressed by 
subject imports , and the Appellate Body has confirmed that it will not be sufficient for an authority 
to only conduct a general analysis of domestic prices.  
11. Second, a price effects analysis must be based on "positive evidence" and involve an 
"objective examination". Although an investigating authority is only required to "consider" price 
effects and need not make a definitive determinatio n in this respect, this "does not diminish the 
rigour that is required of the inquiry" nor "the scope of what the investigating authority is required 
to consider".  
12. Third, an investigating authority's consideration of price effects must be reflected in relevant 
documentation, such as the authority's final determination. 
13. Finally, the Kingdom wishes to elaborate on how an investigating authority must 
"demonstrate" causation, including specific injury findings and a proper "non-attribution" analysis, 
in accordance with Article 3.5 of the Anti-D umping Agreement and Article 15.5 of the SCM 
Agreement. The requirement to "demonstrate" causat ion is rigorous, and requires the investigating 
authority to "do more than simply list other known factors, and then dismiss their role with bare 
qualitative assertions". The authority must explain the causal analysis that has been conducted 
and thereby establish the requisite causal link for each factor in the analysis. The causation 
analysis under Articles 3.5 and 15.5 is informed by other parts of Articles 3 and 15, and an investigating authority's analysis of price effects, volume effects, and the domestic industry must 
tie into its final causation analysis. 
14. In order to "demonstrate" causation, an investigating authority must conduct a "non-
attribution" analysis, which demands a cogent explanation of the injurious effects of factors other 
than the dumped or subsidized imports. "Known fa ctors" include those clearly raised by interested 
parties as well as those that the investigating auth orities become aware of as a result of their own 
investigations. The injurious effects of those other factors must be separated and distinguished 
from the injurious effects of the subject imports, because this approach is the only way that an 
investigating authority can make a reasoned judgment as to the degree of injury caused by other factors.  
15. Separating and distinguishing the injurious effects of dumped or subsidized imports from the 
injurious effects of each other known factor requires a satisfactory or meaningful explanation  of 
the nature and extent  of the other factors' injurious effects, as distinguished from those of the 
subject imports. The investigating authority is obligated to determine the nature  and extent  of the WT/DS440/R/Add.1 
 
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 injurious effects of the factors under consideration, and to establish a genuine and substantial 
causal relationship between the dumped or subsidized imports and the injury found to exist. Conclusions as to attribution should be accompanied by "quantitative or thorough qualitative support", and the analysis "must go deeper than a simple comparative statement". 
IV. CONCLUSION  
16. Mr. Chairman, the Kingdom urges the Panel, wh en considering the systemic issues raised in 
this dispute, to preserve the Anti-Dumping and SCM Agreements' carefully negotiated balance of 
interests between WTO Members. This balance requires the consistent application of the 
Agreements' multilateral disciplines.  
17. This concludes the Kingdom's statement. Thank you for your attention.  WT/DS440/R/Add.1 
 
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ANNEX D-7 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
WRITTEN SUBMISSION OF TURKEY 
I.  INTRODUCTION  
 1.  The Republic of Turkey (hereinafter re ferred to as "Turkey") makes this third party 
submission due to its interest in the correct and coherent legal interpretation of the Agreement on 
Implementation of Article VI of the General Agr eement on Tariffs and Trade (hereinafter referred 
to as the "AD Agreement") and Agreement on Subs idies and Countervailing Measures (hereinafter 
referred to as the "SCM Agreement").  
 
2.  Turkey understands that the outcomes of this  panel will have significant ramifications on the 
application of both agreements. Turkey, at this st age, would like to confine its submission to two 
important issues, namely the use of "facts avai lable" based dumping margin /subsidy amount 
calculations vis-a-vis unknown exporters and disclosure standards regarding calculation of 
dumping margin/subsidy amount imposed to interested parties.  
II.  THE USE OF "FACTS AVAILABLE" METHODOLOGY IN CALCULATIONS AS REGARDS 
UNKNOWN EXPORTERS IN ANTI-DUMPING AND SUBSIDY INVESTIGATION 
A.  Summary of Arguments of Parties  
 
4.  In its first written submission, United States of America (hereinafter referred to as 
"United States") argues that, pursuant to Articles 6.1, Article 6.8 and Annex II of the AD Agreement as well as Article 12.1 and Article 12. 7 of the SCM Agreement, during a dumping or 
countervailing duty investigation the authority is not entitled to use "facts available" based 
calculations and conclusions as regards foreign producers/exporters which are unknown to the 
investigating authority.  
5.  The United States further underscores that the investigating authority cannot resort to "facts 
available"  based calculations since the "unknown producer/exporter" was not notified on the 
requested information and, as a matter of fact, these producer/exporters had not the opportunity to respond to the required information communicated to "known producer/exporters" in line with 
paragraph 1 of Annex II to AD Agreement.
1  
6.  In response, the People's Republic of Chin a (hereinafter referred to as "China") discusses 
that the AD Agreement and SCM Agreement are bo th silent on the methodology concerning the 
calculations regarding unknown producer/exporters. In this context, China argues that the absence 
of clear cut rules leave the investigating authority with a considerable discretion to adopt a 
reasonable method as regards the conclusions on foreign producers/exporters unknown to 
authority2. China equally admits that the predicate for the application of facts available under 
Article 6.8 of the AD Agreement is notification to all interested parties. China, however, asserts 
that the weight of legal responsibility upon the investigating authority, in terms of notification, 
would differ considering the structure of the industry in the country under investigation. It underlines that every case should be evaluated considering its own facts
3. Finally, it claims that 
China has fulfilled the notification requiremen ts enshrined both in AD Agreement and SCM 
Agreement and the "unknown exporters" in this ca se were US companies that deliberately opted in 
to stay unknown which was a choice to non-cooperate within the framework of Article 6.8 of AD 
Agreement and Article 12.7 of SCM Agreement.4      
                                               
1 United States' first su bmission, paras. 60,61. 
2 China's first submission, para. 100. 
3 China's first submission, para. 110. 
4 China's first submission, para. 114. WT/DS440/R/Add.1 
 
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 B.  Summary of Leading Pane l/Appellate Body Reports  
 7.   The United States identifies the Appellate Body report of Mexico-Rice (AB)  and the panel 
report of China-GOES (panel)  as the leading cases to be considered in this dispute.  
8.  In the adjudication of Mexico-Rice (AB)  the Appellate Body upheld the findings of the panel 
by concluding that an investigating authority infringes the provisions of Article 6.8 of and 
paragraph 1 of Annex II to AD Agreement in the event that it resorts to facts available, based on information in the application for initiation, to exporters that were not given notice of the 
information required by the authority.
5 The Appellate Body, however, underlines in following 
paragraphs6 that the information submitted by the petitioning domestic industry  cannot be used as 
a basis of fact available which leaves the question open whether information other than those 
present in the application of initiation can be used for the findings vis-à-vis unknown exporters.   
9.  In the report of China -GOES (panel)  the panel concludes that the legal discipline of 
Article 6.8 of the AD Agreement should be considered  together with provision of Article 6.1. In this 
line, the panel holds that a producer/exporter cannot be held liable of refusing to provide information which was not notified to this producer/exporter in first place. The panel concentrates 
on the point that such producers/exporters, whic h were unaware of the investigation and did not 
receive any communication, had not the opportunity to respond to information demanded by the authority. Consequently, they cannot be accused of any act ( refusal/not providing required 
information, impediment of investigation) under Article 6.8 of AD Agreement (or Article 12.7 of the 
SCM Agreement) which leads to use facts available.
7 Finally, even though the panel admits that 
there is a lacuna in the AD Agreement on how the "unknown exporters" issue will be addressed it underlines that such a legal gap does not vindicate any decision violating the discipline enshrined in Article 6.8 of and Annex II to AD Agreement
8.   
C.  Observations of Turkey  
 10.  Turkey considers that this legal discussion bears outcomes that have the potential to 
profoundly influence the practice of member countries enforcing anti-dumping/countervailing 
duties on prospective basis. Turkey observes that these ramifications will influence a wide 
spectrum of issue extending from the effectiven ess of duties to the position of "unknown 
exporters" in final determinations and reviews.  
 
11.  Turkey understands that before analyzin g whether the AD Agreement and SCM Agreement 
justifies the use of " fact available " to unknown producers/exporters it is important to address first 
the phases that lead to use of the "facts avai lable". In that sense, without understanding the 
margin of the obligations to identify producers/exporters incumbent upon the investigating 
authority the analysis will be incomplete.  
12.   Pursuant to Article 5.2 (ii) of the ADA and Article 11.2(ii) of the SCM the domestic producers 
that claim to act as the domestic industry have to show in their application the identity of known  
exporters or producers operating in the investigated country/countries. Under Article 5.3 of ADA and Article 11.3 of the SCM, after an examination, if the investigating authority is satisfied with the accuracy and adequacy of the information and concludes that there is sufficient evidence to 
justify the initiation of an investigation it can take the necessary steps to commence an 
investigation.   
13.  The crucial question to be asked is whether, at this stage, the investigating authority is 
obliged to identify further potential producers/exporters that were not shown in the application. 
The Appellate Body report on Mexico-Rice  (AB) discussed this issue and concluded that there is no 
provision in the AD Agreement or in the SCM Agr eement that envisages the extension of obligation 
of identifying potential producers/exporters other than those known by the investigation authority 
at the time of submission of relevant questionnaires.  
14.  The Appellate Body supports this conclusion  by stressing that there is no legal basis in 
Article 6.1 (Article 12.1 of the SCM Agreement) and Article 6.1.3 (Article 12.1.3 of SCM 
                                               
5 Appellate Body Report, Mexico-Rice, para. 259. 
6 Appellate Body Report, Mexico-Rice, paras. 261, 264. 
7 Panel Report, China-Goes (panel), paras. 7.386-7.393. 
8 Panel Report, China-Goes (panel), para. 7.390. WT/DS440/R/Add.1 
 
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 Agreement) of the AD Agreement requiring the inve stigating authority to notify not only the known 
producers/exporters but also those producers/exports which could have been identified if the authority had deepen its pre-initiation examination.
9 Accordingly, the word "known exporters" , as 
used in Article 6.1.3 of the ADA (12.1.3 of the SCM) encompasses the companies that were 
identified in the application by the domestic in dustry and those that were pinpointed by the 
investigating authority before initiation of the investigation.  
15.  The concept of "known exporter"  in Article 6.10 of Anti-Dumping Agreement, however, 
should be considered differently from the same term used in Article 6.1.3 of the ADA. Article 6.10 reads as follows:  
      The authorities shall, as a rule, determine an individual margin of dumping for 
each known  exporter or producer concerned of the product under investigation. In 
cases where the number of exporters, prod ucers, importers or types of product 
involved is so large as to make such a determination impracticable, the authorities 
may limit their examination either to a reasonable number of interested parties or 
products by using samples which are statistically valid on the basis of information available to the authorities at the time of selection, or to the largest percentage of 
volume of the exports from the country in  question which can be reasonably be 
investigated (emphasis added)          
16.  The concept of "known"  in this provision includes those producers/exporters that the 
investigating authority got aware of during investigation. This conclusion was also confirmed by the Appellate Body Report of Mexico-Rice (AB) .
10 In light of our explanations, "known 
producers/exporters"  within the meaning of Article 6.10 of the ADA will be comprised of the 
following:  
a.  The producer/exporters which received a questionnaire at the beginning of the 
investigation and cooperated in full manner without being subject to "facts available" procedure. 
b.  Under the condition that Article 6.14 of  AD Agreement and Article 12.12 of the SCM 
Agreement is maintained, the producer/exporte rs which made themselves known after the 
initiation of investigation who got informed about the process from sources other than the 
investigating authority and cooperated in full sense.  
17.  In cases where sampling is warranted under Article 9.4 of the ADA, dumping margins for 
producers/exporters outside the scope of examin ation will be calculated in line with the 
methodology stipulated in Article 9.4. In such a case the calculation will not be company-specific. 
18.  Another group of producers/exporters whic h will not be recipients of company specific 
dumping margins will be those who did not comply with the rules of Articles 6.8 and Annex II of 
the ADA (Article 12.7 of the SCM). Consequently, the dumping margin/subsidy amount calculated 
for this group will be based on "facts available".   
19.  The case law confirms that under the legal discipline of Article 6.10 of the ADA the 
investigating authority is not under any obligation to calculate an individual margin for producers/exporters which the authority was not aware of.
11 Accordingly, the position of this third 
group of producers/exporters, namely those which; 
-  were not in the list of producers or exporters shown in the domestic industry's 
application and consequently never received relevant questionnaires.   
-  could not be identified even tough best effort has been displayed by the investigating 
authority.    
-  were not notified by their own government agencies, - were genuinely uninformed concerning the ongoing process,  
constitute the central element of the discussion.   
                                               
9 Appellate Body Report, Mexico-Rice, paras. 247, 251. 
10 Appellate Body Report, Mexico-Rice, para. 255. 
11 Appellate Body Report, Mexico-Rice, para. 255. WT/DS440/R/Add.1 
 
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 20.  Turkey considers that the focus of the ju risprudence concerning the interpretation of 
Article 6.8 of and paragraph 1 of Annex II to the AD Agreement (Article 12.7 of the SCM 
Agreement) is on the principle that due process  should be observed during the investigation.  
21.  The reports of leading cases emphasize that the use of facts available should be an outcome 
of a "process"  which, by definition, necessitates the active participation of the investigating 
authority and the interested party under investigation. It is underlined that the Article 6.8 of the 
AD Agreement (Article 12.7 of SCM Agreement) envisages that the interested party may become subject to fact available methodology if it refuses access to, or otherwise does not provide 
necessary information within a reasonable period or significantly impedes the investigation through 
various means. Under all scenarios the adverse response/action of the party is considered to be needed. Under such consideration, the jurisprudenc e holds that the authority cannot be entitled to 
impose a less favorable duty, calculated with facts available methodology, on a foreign 
producer/exporter which was not notified on the responsibilities within legal framework of 
Article 6.8 of the AD Agreement (Article 12.7 of the SCM Agreement).  
22.  Turkey understands the legal reasoning of  the Appellate Body and Panel report. Yet the 
outcome of the case law is disputable under a number of points. 
23.  During the China-GOES  adjudication China rightly voiced its concern that the Appellate Body 
report of Mexico- Rice  did not consider the policy implications and that there were no guiding 
principles or rules in Articles 9.4 and 6.10 of the ADA on how to act vis-à-vis unknown producers or exports in anti-dumping investigations. This point has correctly been raised again in this panel.  Turkey argues that the silence of both AD an d SCM Agreement on how the calculations/findings 
will be based for unknown producers/exporters cr eates a lacuna in the legal structure of both 
agreements. Such a legal grey zone is not a qu estion on procedure but relates to the very 
substance of the investigation affecting the imposition of its outcome. Even though this issue was 
partially addressed in the panel report of China-GOES  (panel) the question still necessitates further 
clarification.
12   
24.  Turkey agrees with the argument that the legal margins of the obligation under Article 6.1, 
6.1.3 and 6.10 of AD Agreement to determine all known producers/exporters should be considered 
under the peculiarities of the industry in which the foreign producers/exporters are operating. In 
this respect Turkey would like reiterate that both the conceptual reading of the relevant articles 
and case law affirms that the investigating authority is not under an obligation to determine potential producer/exporters which could have been found if the examination had been extended outside the borders of the application of petitioning domestic industry.  
25.  Turkey considers that the United States` approach and jurisprudence stays silent concerning 
the producers/exporters which get informed on the investigation through sources other than the investigating authority yet preferred to stay unknown  being aware that even "facts available" 
based calculation is not possible to be applied. Although, it is understood that the case law aims to 
protect the bona fide exporter/producer, it still leaves a gap as regards those companies that 
deliberately prefer to stay out of scrutiny to avoid any measure.    
26.  Turkey opines that the case law based in terpretation of the facts available methodology 
would encourage non-cooperation for unknown producers/exporters which are not identified by the 
applicant(s) and/or by the investigating authority. Accordingly, the non-applicability of "facts 
available" for unknown producers/exporters and the absence of instrument or clear rules to determine dumping margin and subsidy amount by the investigating authority can undermine the effectiveness of the anti-dumping and countervailing measures.  
27.  In the light of these arguments the Panel may want to clarify how the lacuna in AD and SCM 
Agreements will be addressed without harming the due process requirements in investigations but 
observing the ultimate objective of trade remedies  discipline namely the protection of domestic 
industry from unfair trade practices.     
                                               
12 Panel Report, China-Goes (panel), para. 7.390. WT/DS440/R/Add.1 
 
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 III.  DISCLOSURE OF CALCULATIONS AND DATA USED TO DETE RMINE THE EXISTENCE 
OF DUMPING TO THE INTERESTED PARTIES  A. Observations of Turkey  
 
28.  In its first written submission, the United States claims that China breached Article 6.9 of the AD Agreement by failing to disclose to interest ed parties the "essential facts" forming the basis 
of MOFCOM's decision to apply anti-dumping duties.  
 29.  Article 6.9 of the AD Agreement requires the investigating authority to disclose to interested parties the "essential facts" forming the basis of the investigating authority's decision to apply 
anti-dumping duties: 
"The authorities shall, before a final determination is made, inform all interested 
parties of the essential facts under consideration which form the basis for the 
decision whether to apply definitive measures. Such disclosure should take place in 
sufficient time for the parties to defend their interests" (emphasis added). 
30.  It is clear that Article 6.9 requires the investigating authority to make a one-time disclosure 
before a final determination is made as to whether a definiti ve measure will be applied. 
31.  Disclosure of "essential facts" is a crucial procedural obligation for the investigating 
authorities and a procedural right for the interested parties in order to defend their interests and 
present counter arguments before imposition of final measures. In this regard, fulfilling of this obligation by the investigating authority and giving a meaningful opportunity to the interested 
parties to defend their interests depends mainly on the facts to be disclosed.  
32.  Turkey is of the view that the facts relate d with the existence of dumping and injury on the 
domestic industry and the causal link between dumped imports and injury on the domestic 
industry are "essential facts". Because, no me asure is possible to be imposed if one these 
elements is absent.   
33.  This consideration of Turkey seems to be supported by the Panel in Argentina – Poultry Anti-
Dumping Duties  which further considered the term of "essential facts". The Panel stated that "We 
do not believe that the ordinary meaning of th e word "fact" would support a conclusion that 
Article 6.9, when using the term "fact" refers not only to "facts" in the sense of "things which are 
known to have occurred, to exist or to be true" but also to "motives, causes or justifications"
13.  
34.  The calculations relied on by the investigating authority to determine the normal value and 
export price –as well as data underlying those calculations- and the methodology followed by the 
investigating authority cited in Article 2.4.2 in  the AD Agreement constitute "essential facts" 
forming the basis of the investigating authority's imposition of final measures within the meaning 
of Article 6.9. Thus, disclosure of calculations gives interested parties to check correctness of these 
calculations. If there is a clerical or mathematical error in these calculations which could seriously 
distort the actual dumping margin might be raised to be reviewed by the investigating authority.  
35.  In addition to this, Turkey would like to clarify that these company specific calculations, 
which in most cases include confidential information, should be disclosed only to the related 
interested party and not to all interested parties. Thus the disclosure should be limited only to the 
relevant interested party.   
IV.  CONCLUSION  
 
36.  In the light of our explanations Turkey woul d like to underscore the following conclusions:  
 
a.  The legal interpretation of the United States concerning the non-application of 
Article 6.8 and Annex II of the Anti-Dumping Agreement as well as the Article 12.7 of the 
Subsidies Agreement for unknown producers/exporter s bears negative policy implications in terms 
of the effectiveness of duties and the level of protection of the domestic industry.   
                                               
13 Panel Report, Argentina – Poultry, para.7.225. WT/DS440/R/Add.1 
 
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   b.  The lacuna in the legal structure of the AD and SCM Agreements concerning rules and 
procedures will be followed in calculations/conclusions as regards unknown producers/exporters is an issue that need to be addressed carefully. As underlined before such a legal grey zone has the potential to create many downsides for practitioners which can extended from the problems 
created by producers and exporters that delibe rately preferred to remain unknown to the 
circumvention of the measure through company-shifting. Turkey has serious concerns whether this interpretation serves the objective of the trade remedies discipline which aims to protect of the 
domestic industry from unfair trade practices. 
c.  The calculations and data used to dete rmine the existence of dumping are "essential 
facts" within the interpretation of "essential fact s" in Article 6.9 of the Anti-Dumping Agreement. 
This is clear procedural obligation of the investigating authority to disclose these facts to give an 
opportunity to interested parties to examine the correctness of the calculations and the data used. 
37.  Turkey appreciates this opportunity to presen t its views to the Panel. Turkey requests this 
Panel to review the comments stated in this subm ission, in interpreting AD and SCM Agreements. 
 WT/DS440/R/Add.1 
 
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ANNEX D-8 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
ORAL STATEMENT OF TURKEY 
I.  Introduction 
 Mr. Chairman, Members of the Panel,  
 
1. Turkey welcomes this opportunity to presen t its views in the present dispute. Turkey has 
systemic interest in the issues raised by the US in this dispute and intervenes to provide its views 
for the proper interpretation and application of th e Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade (herei nafter referred to as the "AD Agreement") and 
Agreement on Subsidies and Countervailing Duties (hereinafter referred to as the "SCM Agreement").  
2. In this statement, Turkey will focus on "the us e of "facts available" in calculations concerning 
unknown producers/exporters" and "disclosure of  data used to determine the existence of 
dumping".  
II. The Use of "Facts Available" In Calculations Concerning Unknown Producers/Exporters Mr. Chairman, 
3. Let me start with expressing Turkey's view  on "using facts available in calculations 
concerning unknown producers/exporters".  
4. There is no rule, principle or guidance in the AD or SCM Agreement regarding determination 
of anti-dumping margin or subsidy amount for the producers/exporters which are not identified by 
the complainant and the investigating authority and not cooperated during the investigation 
process.  
5. Having no rule, principle or guidance in the agreements induces investigating authorities to 
find solutions in order to impose duty for these pr oducers/exporters due to the fact that imposition 
of anti-dumping duty or countervailing duty for these unknown producers/exporters is essential for 
the effectiveness of the trade remedies.  
6.  According to the Appellate Body decision in Mexico-Rice (AB)
1 and textual reading of 
Article 5.2 (ii) of the AD Agreement and Article 11. 2(ii) of the SCM Agreement, Turkey opines that 
the investigating authority is not under the obligation to identify the potential producers/exporters 
which did not appear on the petition of the do mestic industry at the initial phase of the 
investigation. In addition to this, the notice of initiation provided to the diplomatic authorities of 
the investigated country does not generate any obligation for the investigated country to make 
their producers/exporters aware of the investigation2.  
7. Thus, taking into account that neither the investigating authority nor the government of the 
investigated country is obliged to identify all producers/exporters it would be fair to conclude that there will always be a group of producers/export ers falling outside the individual examination of 
the investigating authority in AD or CVD investigations. The number of unknown 
producers/exporters will be higher when th e investigated industry is fragmented.  
8. As a result, it is clear that there will be residual producers/exporters in nearly all AD or CVD 
investigations which are not known by the complainant and not identified by the investigating authority despite its best effort and not informed by the government of the investigated country.  
9. Having said that, the crucial question that should be addressed and responded by the panel 
that arises in this dispute is whether "facts available" can be used for determination and imposition of an AD/CVD for residual exporters/producers. In  relation to this question, Turkey believes that 
                                               
1 Appellate Body Report, Mexico Rice, paras. 247,251. 
2 Appellate Body Report, Mexico Rice, para. 263. WT/DS440/R/Add.1 
 
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 the question whether it is necessary to determine anti-dumping margin or subsidy amount for 
these unknown producers/exporters and impose duty  for these producers/exporters is out of the 
scope of the examination of the Panel. 
10. However, taking into account the importance of the response to that question, let me start 
with expressing Turkey's view whether it is necessary to determine anti-dumping margin or 
subsidy amount for these unknown producers/exporters and impose duty for these 
producers/exporters?  
11. Turkey considers that it is essential and necessary to calculate anti-dumping margin or 
subsidy amount and impose duty for unknown producers/exporters. Firstly, if no measure is 
imposed for these exporters/producers this will un dermine the credibility and effectiveness of the 
measure, makes the measure inutile and may lead to circumvention.  
12. Secondly, these exporters/producers whic h are unknown and not identified by the 
complainant in the petition and by the investigating authority at the initiation stage of the investigation despite its best efforts will be  out of the scope of the measure. So these 
producers/exporters will continue to sell their products with/without dumped prices – no clarity 
whether their products are dumped because no determination has been made - by taking 
advantage of extra costs for cooperated exporters/producers brought by AD/CVD measures.  
13. It is clear that such an approach will encourage non-cooperation for unknown 
producers/exporters. In fact, while the legal rationale of panel and Appellate Body reports
3, 
understandably, aims to protect the " bone fide " producer/exporter through " due process " 
requirement they still leave unanswered questions on how to treat those producer/exporters which 
were fully aware of the initiation of the ongoing investigation but deliberately stayed unknown to avoid a possible trade measure. 
14. Fourthly, non-imposition of a measure for "unknown" producers/exporters makes newcomer 
investigation process inutile for producers/exporters due to the fact that these producers/exporters will not be subject to the measure. As it is clear that newcomer process stipulated in Article 9.5 of 
the AD agreement and Article 19.3 of the SCM Ag reement protect producers/exporters right which 
have no export sales during the investigation period or which come out after the imposition of the measures and subject to the measure. It should be highlighted at this point that if no measure is 
imposed to the producers/exporters which have no export sales during the investigation period 
there is no need to have a newcomer mechanism in AD and SCM Agreement. In this respect, 
having a newcomer mechanism in AD and SCM Ag reements should be interpreted as a measure 
shall be imposed to exporters/producers which do not have export sales during the investigation 
period.  
15. In relation to this issue, I would like to re call at this stage that Article 3.2 of the Dispute 
Settlement Understanding envisages that the recommendations and rulings of the Dispute Settlement Body can not add to or diminish the rights and obligations provided in the covered 
agreements.  
16. In addition to this, I would like to highlight that there is also a need to impose a measure in 
cases where there is no producer/exporter except co operated companies. This practice will prevent 
circumvention of a measure through many ways like changing company names or establishment of a new company and protect rights of the producers/exporters that may come out after the measure is imposed by resorting newcomer review process.   
17. Let me move back to the question that should be addressed and responded by the panel 
whether "facts available" can be used for determination of anti-dumping margin and subsidy 
amount for imposition of a measure on residual exporters/producers. 
18. As underlined at the beginning of our statement there is no rule, principle or guidance in the 
AD or SCM Agreement displaying the methodolog y on how the dumping margin/subsidy amount 
should be calculated for producers/exporters unknown to the investigating authority. Turkey considers such an absence as a significant lacuna in the fabric of both agreements. Notwithstanding, Turkey has no clear response concerning the basics of the calculations. Even 
                                               
3 Appellate Body Report, Mexico -Rice, paras.259; Panel Report, China-GOES (Panel), paras. 7.386-
7.393. WT/DS440/R/Add.1 
 
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 though the jurisprudence holds that "facts available" based calculations are not applicable to 
unknown producers/exporters and underlines such a legal lacuna cannot be remedied through the 
expansion of discretional powers4 of the investigating authority the basis of these calculations still 
remains unanswered.  
19. As a last point, it has been argued in th ird party submissions that the case of "unknown 
producers/exporters" would appear differently in countervailing duty investigations. It is 
highlighted that, for practical reasons, the memb er state, granting the subsidy, would possess 
knowledge on the names and addresses of the recipients. 5 Thus, as a rebuttable presumption, the 
companies included to the subsidy program cannot be considered to be a part of the "unknown 
producer/exporter" group since they will be info rmed by their own government authorities. Even 
though the reasoning of such an approach appears to be sound the position of the companies that 
are not a part of a long lasting subsidy program is still ambiguous. Furthermore, it is not clear 
what will happen if the member state under investigations refuses to cooperate or partially 
cooperate. Lastly, the questions why a member would refrain from conveying the notice of 
investigation to the relating firm or why this firm would deliberately keep itself unknown6 need to 
be addressed.  
 III.  Disclosure of Data Used To Determine the Existence of Dumping   Mr. Chairman, 
20. Let me move to clarify Turkey's position rega rding "disclosure of data used to determine the 
existence of dumping". 
21. Taking this opportunity, I would like to reiterate that disclosure of "essential facts" is a 
crucial procedural obligation for the investigating authorities and a procedural right for the 
interested parties in order to defend their interests and present counter arguments before 
imposition of final measures. In this regard, fulfilling of this obligation by the investigating 
authority and giving a meaningful opportunity to the interested parties to defend their interests depends mainly on the facts to be disclosed.  
22. Having said that, the calculations relied on by the investigating authority to determine the 
normal value and export price –as well as data underlying those calculations- and the methodology followed by the investigating authority cited in  Article 2.4.2 in the AD Agreement constitute 
"essential facts" forming the basis of the investigating authority's imposition of final measures 
within the meaning of Article 6.9. Thus, disclosure of calculations gives interested parties to check 
correctness of these calculations. If there is a clerical or mathematical error in these calculations 
which could seriously distort the actual dumping margin might be raised to be revised by the 
investigating authority.  
23. In addition to this, Turkey would like to clarify that these company specific calculations, 
which in most cases include confidential information, should be disclosed only to the related 
interested party and not to all interested parties. Thus the disclosure should be limited only to the relevant interested party. 
 
 Turkey appreciates this opportunity to present it s view and would be happy to take questions you 
might have.  
  
__________  
 
                                               
4 Panel Report, China-GOES, para. 7.390. 
5 Third Party Written Submission of the European Union, p. 9. 
6 Third Party Written Submission of the European Union, p. 11.