WT/DS405/R 
 Page F-1 
 
 
  
ANNEX F 
  
ORAL STATEMENTS, OR EXEC UTIVE SUMMARIES THEREOF, 
OF THE PARTIES AT TH E SECOND SUBSTANTIVE 
MEETING WITH THE PANEL 
 
 
 
Contents Page 
Annex F-1 Executive Summary of the Opening Statement of China  F-2 
Annex F-2 Executive Summary of the Opening Statement of the 
European Union  F-12 
Annex F-3 Executive Summary of the Closing Statement of China  F-18 
Annex F-4 Closing Statement of the European Union  F-30 
 
 WT/DS405/R 
Page F-2  
 
  
ANNEX F-1 
 
 
EXECUTIVE SUMMARY OF THE OPENING  
STATEMENT OF CHINA  
 
 
1. China will focus its attention this morning on addressing certain of the arguments made by the 
EU in its Second Written Submission ("SWS").  Chin a will also draw to the attention of the Panel 
certain instances in which the EU has ignored ke y arguments outright, as well as certain instances 
where it has misconstrued China's arguments in su ch a way that its rebuttals are essentially non-
responsive.  The issues that China will mainly ad dress this morning are the Article 9(5) as such 
claims; the overly broad PCN-system used by the EU; the analogue country selection process; the 
failure to examine the MET forms; Article 3 and Article 11.3 issues including sampling; causation in 
the injury analysis and certain procedural issues.  
CHINA'S SUBSTANTIVE ARGUMENTS WITH REGARD TO THE "AS SUCH" CLAIMS 
ARE VALID  
2. First, with regard to China's as such claims  against Article 9(5) of the Basic AD Regulation, 
China considers that the Panel report in EC - Fasteners (China)  broadly supports its claims.  As China 
has demonstrated in its SWS
1, the Panel in that dispute roundly rejected the EU's arguments with 
respect to essentially every point on which it made an  affirmative finding.  It has done so on the basis 
of what are for the most part the same exact argume nts put forth by the EU in this dispute and found 
the Article to be WTO-inconsistent fo r a variety of independent reasons.  
 
ANALOGUE COUNTRY SELECTION FALLS WITHIN THE SCOPE OF ARTICLE 2.1 
AND 2.4  
3. China will begin with the instances of pro cedural bias seen throughout the analogue selection 
process.  Throughout this dispute China has shown 1)  that the EU had a strong motive predisposing it 
toward the selection of Brazil in light of the rela tively high normal value such a selection was likely to 
yield - a fact corroborated by the actual results of  the investigation along with the domestic producers' 
actions in ensuring the selection of Brazil; 2) highly disparate and inadequately explained treatment of 
potential analogue country producers in terms of th e questionnaire response times, and 3) a very 
strong link between questionnaire response time and the likelihood that a given country would end up 
being selected as the analogue country.       4. With respect to the question of whether any aspect of the analogue country selection process can fall within the scope of the fair comparison ob ligation, the EU continues to rest its argument 
almost solely on its theory that the obligati on, independent and overarching as it may be, only 
activates once the establishment of normal value ha s occurred.  As to that, three AB reports
2 explicitly 
state that the independent and overarchi ng fair comparison obligation informs " all of Article 2".  In 
China's view the relevant AB pronouncements in clude the proposition that if any aspect of the 
establishment of normal value precludes a fair comparison, then the fair comparison obligation is necessarily violated.    
                                                      
1 See China SWS, part 2 generally. 
2 AB Report, EC - Bed Linen, para. 59, AB report, US - Zeroing , para. 146, AB report, US - Softwood 
Lumber V , para. 133.  WT/DS405/R 
 Page F-3 
 
 
 5. As to the issue of the scope of Article 2.1 as it applies to the analogue country selection 
process, China recalls that the EU has argued in the context of the fair comparison issue that the initial 
establishment of normal value should be dealt with by Article 2.1 rather than Article 2.4.  In support 
of that Argument, the EU has cited AB in US-Hot Rolled Steel  finding a violation of Article 2.1 - and 
only Article 2.1 - in regard to an aspect of the initial establishment of normal value
3. 
 6. While China does not endorse th e EU's "two-stage logic" theo ry, China is pleased to see that 
the EU recognizes that Article 2.1, and more specifically the obligation to identify a " comparable 
price ," is central to the issue before the Panel.  China recalls that it has indeed cited Article 2.1 in the 
context of the analogue country selection, and that the EU has not put forth an argument as to why the 
analogue country selection process does not fall within its scope.   
THE EU'S ANALOGUE COUNTRY SELECTION PROCESS VIOLATED ARTICLE 2.4 
AND 2.1 
 7. As to the question of what actually constitu tes an appropriate method by which an analogue 
country selection process can secure a "comparable pr ice" capable of a "fair comparison," the EU 
misconstrues China's argument, and by doing so fa ils to address the central point.  China has made 
clear that it considers - in light of th e object and purpose of the ADA - that the underlying purpose  of 
the analogue country selection process, and indeed all processes by which proxy normal values not 
based on domestic prices in the domestic market of the country under investigation are derived, is to 
at least attempt  to approximate the value which would have  prevailed in the absence of the need to 
find the proxy.  In the case of NME methodologies , if the methodology is to have any hope of 
approximating the extent to which dumping is actually occurring , then that methodology must be 
reasonably aimed at  finding a proxy for the "undistorted" value.  If not that, then what is the final 
dumping margin but essentially a random number?  
 8. The EU seems to have taken China's argument as to the purpose  of the process - to 
approximate the value but for the distortion - as an argument dictating the mechanics  of the process.  
It is apparently on this basis that the EU summar ily dismisses the argument by concluding that it does 
not regard the goal of "replicating conditions in  a non-market economy country as though it were not 
a non-market economic country as one that can meani ngfully be pursued in the course of calculating 
dumping margins," and adding that it has not "ever been applied in this context".
4 
 9. China notes the EU's observation that China's " but for the distortion" argument is not one that 
has "ever been applied" in the analogue country selec tion context.  China notes that while it need not 
express an opinion as to the WTO-consistency of other Members' methodologies in the present case, it 
would appear as though it is in fact almost always applied by most Members that consider resort to 
the process necessary.   
THE EU PRECLUDED FAIR COMPARISON A ND VIOLATED ARTICLE 2.4 BY USING A 
BROAD PCN SYSTEM  
 10. First, it is recalled that hiking shoes and wo men's luxury shoes which were to be classified 
under the same PCN are different among others, in terms of production processes, time and 
technology and raw materials.  All of these factors affect the production costs.  It was impossible to quantify and substantiate the multiple adjustment s for each transaction-based comparison between 
these two divergent footwear types falling within  the same PCN; let alone calculating these 
adjustments for the numerous other footwear cate gories classified under the same PCN and then for 
all PCN categories "A" and "E".  
                                                      
3 EU SWS, para. 61. 
4 EU SWS, para. 80. WT/DS405/R 
Page F-4  
 
 
11. Most importantly, the Chinese exporters were  not even aware of the footwear models 
produced by the Brazilian producers.  Consequently, they could not possibly request adjustments for 
the different footwear types classified within the same PCN by them and the Brazilian producers. 
Additionally, per the EU practice, adjustments are not accepted unless duly verified.  
 
12. The EU asserts that had Chinese exporters requested adjustments such adjustments could 
have been taken into account.  China notes that in the original investigation the leather quality adjustment, besides being incorrectly calculated, applied across the board to all PCNs.  Such an 
adjustment did not address differences between di vergent footwear classified in the same PCN.  
 THE EU VIOLATED (AMONG OTHERS) P ARA. 15(a) PROTOCOL, PARA. 151 WORKING 
PARTY REPORT AND ARTICLES 17.6(i) AND 6.10.2 ADA BY FAILING TO EXAMINE THE MET APPLICATIONS OF THE NON-SAMPLED PRODUCERS  
13. As to the EU's failure to examine the MET a pplications in the original investigation, China 
recalls that for practical purposes, the likely effect of examining the MET applications would have been that a significant number of producers woul d have escaped a dumping margin based on the 
analogue country normal value  even though their own normal values would not have been used .  That 
is, even though the EU resorted to sampling, in orde r to comply with Paragraph 15(a) of the Protocol, 
the EU would have had to calculate the dumping ma rgins for the non-sampled companies on the basis 
of those sampled companies which did receive MET.   
 
14. For this reason the EU's reliance on sampling as a means to justify ignoring outright over 140 
MET questionnaires is misplaced. Sampling is not applicable to the MET determination. 
Article 6.10.2 provides that under certain circumstan ces authorities may be relieved of their obligation 
to determine individual margins of dumping , but it does not relieve them of the obligation to 
determine in which of the two relevant groups  the companies are to be assigned, where those two 
groups are (1) companies whose margins are based on analogue country normal values, and (2) companies whose margins are based on Chinese mark et economy normal values.  In other words, 
MET is a pre-determination into which of the two groups companies are put.  
 
15. There are significant differences between the tw o principal questions that relate to the MET 
issue.  The first is whether, w ithin the meaning of Article 6.10.2, determining the market economy 
status of a company is tantamount to assigning it "an individual margin," as the EU argues.  The EU notes that this question arises only as a result of a "unilateral concession vis-à-vis  China"
5 in that the 
EU makes MET determinations individually as opposed  to at the industry level.  However, where 
those individual determinations are only made with respect to about 8 per cent of the potential 
producers operating under market econom y conditions – and in this case much less - then it is not 
much of a concession.  
 
16. The other principal question is whether or not an authority may in good faith and in 
accordance with the sta ndards of Article 17.6(i) and the Wo rking Party Report solicit questionnaire 
responses from non-sampled MET claimants and then  never even bother to look at them, using 
sampling as a pretext.  The EU barely argues that  such action would accord with an obligation to 
provide interested parties a meaningful opportunity fo r the defence of their inte rests, but instead rests 
its case on the notion that none of the articles cited by China provide for that obligation.   
 
17. In that regard the portion of the Working Party Report relevant to this issue does not 
necessarily provide for an "additional right" beyond Ar ticle 6.2 (particularly the chapeau), but rather  
the same right , though located in another place.  China has provided its views on the binding nature of 
                                                      
5 EU SWS, para. 216.  WT/DS405/R 
 Page F-5 
 
 
the commitments contained in Paragr aph 151 of the Working Party Report.6 However, it would point 
out here the contradictory nature of the fact that the EU argues that it did not actually commit to 
provide interested parties a defence of their inte rests in Paragraph 151 of the Working Party Report 
and that China should have invoked Article 6.2 in that regard, while at the same time arguing 
elsewhere that there are limitations to the invoca tion as a free-standing obligation of the "broadly 
stated" defence of interests provision of the Chapeau of Article 6.2.  
 THE EU VIOLATED ARTICLE 2.2.2(iii) BY FAILING TO APPLY THE CAP FOR PROFITS 
 
18. Concerning the EU's failure to apply the cap fo r profits in the original investigation, it is 
common sense that footwear is much closer to te xtile products than to chemical and engineering 
products in terms of production inputs, production methods, end-uses, market structure, sales 
channels, and just about any othe r objective or subjective measure.
7  
 
THE EU'S VIOLATION OF ARTICLE 3 LED TO THE VIOLATION OF ARTICLE 11.3 TO THE EXTENT THE INJURY ANALYSIS WAS RELIED UPON IN THE LIKELIHOOD-OF-
INJURY ANALYSIS 
 
19. In response to the Panel questions, the EU claimed that it is an "open question" whether 
Article 3 applies to injury determ inations in sunset reviews.  Mu ch has been said by China on this 
issue.  Notably, that the panel in US - OCTG Sunset Review (from Argentina) found that if an 
investigating authority makes an injury de termination in an expiry review and " uses" the injury 
determination " as part " of its expiry review determination, the injury determination should conform 
to the requirements of Article 3.8  
 
20. In its SWS the EU asserts that China has not provided any evidence that the EU relied upon 
the injury analysis for its likelihood-of-injury determ ination.  This claim is untenable in light of the 
detailed arguments in China's FWS, opening and clos ing statements at the first meeting of the Panel 
and the SWS.  Additionally, the EU has also misint erpreted China's explanation of the legal relation 
between the applicability of Articles 3 and 11.3.9 China considers that to th e extent an investigating 
authority relies upon an injury analysis for its lik elihood-of-injury determination, the former must 
conform to the provisions of Article 3.  
 
21. Additionally, the EU provid es an explanation based on only one scenario concerning dumping 
and injury post imposition of the measures to allege that Article 3 does not apply in an expiry review 
even if a likelihood-of-injury determination relies upon the finding of past injury.10 China notes that 
there may be a situation where post imposition of the measures the exporters increase their export 
prices and yet there is injury to the domestic in dustry.  China does not agree that the injury 
determination is purely a judgmental process.  The EU's determination shows that significant reliance 
was placed on the volume and price effects of  the imports on the domestic industry and the 
undercutting margins calculated, which are mathematical issues.11  
 
                                                      
6 China's response to Questions 30 and 86; China's SWS, paras. 1252-1259. 
7 In any event, the EU does not deny that footwear  and chemical and engineering cannot be considered 
"the same general category" of products. EU FWS, para. 589. 
8 See also Panel Report, US - OCTG from Mexico , footnote 121. The Panel in that case referred to the 
AB ruling  in US – Corrosion-Resistant Steel Sunset Review, supra note 37, paras. 126-130 and held that " if, an 
investigating authority were to make an injury determination in a sunset review, such a determination would be 
subject to the requirements of Article 3 ." See furthermore Panel Report, US - Corrosion Resistant Steel , 
paras. 7.99-7.101. 
9 Para. 91, EU's SWS. 
10 See paras. 160-162, EU's SWS. 
11 Recitals 288, 291, 292, 323, Review Regulation. WT/DS405/R 
Page F-6  
 
22. The EU also states that the " fundamental issue is whether th e EU's determination of the 
likelihood-of-injury satisfies the obligations of Article 11.3 " and China " should be asked to prove " this 
in a claim against an expiry review.
12 In response, China notes that the AB in US-OCTG Sunset 
Review  clearly held that Article 11.3 does not expressly prescribe any specific methodology for 
investigating authorities to use in maki ng a likelihood-of-injury determination.13 Thus, the 
"obligations" referred to by the EU can at best be  understood to stem from the requirement to reach a 
"reasoned and adequate conclusion" based on "sufficient factual basis".14  To this end, if an 
investigating authority conducts a complete injury  analysis and uses it to determine the likelihood of 
continuation of injury,15 an assessment of the consistency of the injury analysis with Article 3 would 
be the logical recourse.  Only then can it be de termined as to whether or not the investigating 
authority's likelihood-of-injury determina tion was consistent with Article 11.3. 16  
 
THE EU VIOLATED ARTICLE 3.1 BY NOT APPLYING AN OBJECTIVE SAMPLING PROCEDURE AND BY NOT SOLICITING  POSITIVE EVIDENCE FROM THE 
COMPLAINANT PRODUCERS 
 23. First, the EU alleges in its SWS that China has modified claim II.2 " beyond recognition and 
understanding ."
17 Before elaborating on the factual incorrectness of the EU's allegations, China 
considers that the EU mixes up the concepts of 'cla ims' and 'arguments'.  China recalls that parties 
have the right to progressively clarify their clai ms in the FWS, SWS, meetings with the Panel18 and 
also in response to the Panel's questions.  
 
24. That said, the EU's interpretation that this claim was only " about a difference in the treatment 
between two broad categories " of interested parties, is incorrect .  In its FWS, China focused on the 
aspects of "objective examination" and "positive evidence" with reference to the sample selection of 
the domestic industry.19  
 THE EU'S DOMESTIC INDUSTRY SAMPLE SELECTED DID NOT COMPLY WITH ARTICLE 6.10  
25. With regard to the applicability of Article 6. 10 to sampling for injury analysis, the EU takes 
issue with China's interpretation of the panel findings in EC - Salmon .  China has clearly explained its 
reasoning in the SWS.
20 China nevertheless reiterates that the EC - Salmon panel did not prohibit the 
application of Article 6.10 in the context of samp ling for injury analysis.  Contrary to the EU's 
projection, China has provided detailed proof that indeed volume of production was the key factor taken into account by the EU for sample selection.
21  Besides the fact that the EU suddenly introduces 
                                                      
12 Para. 103, EU's SWS. 
13 AB Report, US - OCTG-Sunset Reviews , para. 281. 
14 Ibid., at para. 284. 
15 Panel Report, US - OCTG Sunset Review s, paras. 7.272-7.274. 
16 In its SWS, the EU repeats its allegation of a le gal error by China in the context of the review 
investigation claims. The EU's arguments on this point have been extensively rebutted by China in its SWS 
(paras. 504-521, of China's SWS). China has demonstrated that the legal basis of its claims are Articles 11.3 and 
3 and has justified the applicability of Article 3 in the context of the likelihood-of-injury determination in the 
EU's review investigation. 
17 Claim II.2, heading "A", EU's SWS. 
18 AB report, Korea - Dairy , para. 139. See also AB Report, India - Patents , para. 88. AB Report, EC – 
Bananas III , para. 145. 
19 See paras. 448-449.China summarized  these very points in para. 287 of its response to question 40 
from the Panel. 
20 See paras. 615-632 of China's SWS. See also China's response to question 53 from the Panel. 
21 See paras. 624-627 of China's SWS.  WT/DS405/R 
 Page F-7 
 
 
"price segment"22 as a sampling criterion, any other criteria taken into account after the selection of 
the eight EU producers are irrelevant23 and amount to ex-post justifications.  
 
26. The EU states that it did not include comp anies in the sample based on their production 
volume but fails to substantiate how precisely the ei ght companies were selected such that they could 
be considered representative of the domestic industry.  
 
THE EU VIOLATED ARTICLE 3.1 BECAUSE THE SAMPLE WAS NOT REPRESENTATIVE OF THE EU INDUSTR Y AND THE SAMPLE SELECTION WAS NOT 
BASED ON AN OBJECTIVE EXAMINATION OF POSITIVE EVIDENCE 
 27. China disagrees with the EU's contention that the Panel is not required to inquire into the 
representativeness of the sample.  China's claim II.3 cl early refers to Article 3.1 as the legal basis and 
the lack of representativeness of th e sample was argued in the FWS.
24 This aspect was also referred to 
by China in its opening statement at the first meeting of the Panel, was explained in response to 
question 53 from the Panel and extensively argued in the SWS.  
 
28. The EU's repeated statement that besid es a few large companies, 18,000 EU producers 
employ less than 10 persons and have extremel y small production volumes is  not substantiated by 
facts.  Indeed large and medium size compani es do exist in the EU as can be observed from the 
comments submitted by interested parties25 and the websites of the Spanish and Italian footwear 
associations.26 China recalls that sampling in the injury cont ext is an exception to the general rule of a 
collective injury examination for the domestic i ndustry as a whole and the results of the injury 
analysis of the sample are transposed to the w hole domestic industry.  Therefore sampling in the 
injury context is subject to the strict requirements of Article 3.1 and, based on the facts of a case, of 
Article 6.10 ADA.  China does not consider that th e EU's excuse of administrative impracticability to 
increase the number of companies in the sample is  a permissible justification for violating the ADA.  
 
29. Additionally, in response to th e EU's arguments regarding China's mere assertion  of data for 
sampling not being "sought",27 China recalls that it has established that the relevant "positive 
evidence" for sampling was not sought from the co mplainant producers.  Moreover, it was not 
available to the EU for the pool of the complainan ts, based on the complaint, standing forms and CEC 
submissions as claimed in the Review Regulation and the EU's FWS.  Thus, the EU industry's sample 
selection was not based on an objective examination of  positive evidence.  This is the crux of China's 
claim II.3(i) to the exclusion of any other interpretations put forward by the EU.  
 
30. China notes that the EU argued on numerous  occasions that it had the relevant positive 
evidence " which would have been solicited by a sampling form (had that form been sent),"  for 
selecting the eight producers from the complainant pr oducers at the time of sample selection.  In its 
SWS the EU asserts that since the domestic industry comprised of 18,000 SMEs it could not possibly have the information for each producer.  The Panel s hould not be misled into believing that the "pool 
of producers" from which the eight companies were selected comprised 18,000 producers; it 
comprised only the complainants.
28 The EU cannot be permitted to er ode the Article 3.1 requirements 
                                                      
22 See para. 142, EU's SWS.  
23 See paras. 647, 655 of China's SWS.  
24 See paras. 500, 506-509, 511-513 of China's FWS. 
25 See European Footwear Alliance submission date d 12 November 2008, Annex 4. Exhibit CHN-34. 
26 http://www.fice.es/en/index. php?option=com_content&task=view&id=18&Itemid=17;  
http://www.ancicalzature.com/anci/s oci.nsf/elencoassociati?openform . 
27 Para. 132, EU's SWS. 
28 On a date before 10 October 2008 and these eight companies were sent anti-dumping questionnaires 
on 10 October 2008. WT/DS405/R 
Page F-8  
 
also relevant for sampling of the producers,
29 by claiming that what matters is that the information 
relied upon by the investigating authority allows it to select a sample that "reliably" reflects the situation of the domestic industry.
30 Moreover, sample selection is supposed to be an "objective" 
procedure and not an alleged objective "declared in mind" by an investigating authority as considered 
by the EU.  
 
31. China recalls that contrary to the EU's clai ms, it did not define anywhere that "the domestic 
industry" was "the Union production." China has disp roved the EU's attempted interpretations of the 
Review Regulation recitals mentioned in response to question 50 from the Panel.  
 
32. Finally, China is accused of not providing any factual support to show that the information 
mentioned in the complaint is exaggerated.  In r esponse, it is noted that among others, the Chinese 
and Vietnamese imports to the EU, the dumping an d undercutting margins, the EU consumption and 
production of the like product for the years 2005-2007 provided in the complaint are significantly higher than those mentioned in the Review Re gulation.  In the Note for the File dated 
26 November 2008, the EU accepted the existence of nu merous estimates in the complaint.  In China's 
view, the data provided in the complaint emanated from the parties seeking the extension of the measures and cannot be considered "positive evidence" unless verified at the source, i.e . the company 
providing them.  Mathematical figures are verifiab le but this does not establish that the companies 
providing them did not add estimates or exaggera te them.  The CEC letter dated 29 October 2008 
which as per the EU provided the volume and sales information for the first half of 2008, clearly 
included estimations.  
 
THE EU VIOLATED ARTICLES 3.1 AND 3.4 IN ITS INJURY ANALYSIS  
33. First, the EU states that China has not s ubstantiated that the Pr odcom data included the 
production of EU producers related to or importing from Chinese/Vietnamese producers and that 
Article 4.1 does not impose an obligation to exclude  related producers.  China notes that the British 
and German footwear associations clearly stated that their members included companies that imported 
footwear from China/Vietnam.  Interested par ties also provided comments noting that Italian 
producers like Tod's and Sixmar have significant imports from China.
31 In fact the EU itself claims to 
have investigated with respect to the complainan t producers whether or not they were related to 
Chinese/Vietnamese producers and/or had imports from these countries beyond 25 per cent.  Having 
followed this approach, the EU cannot claim now that exclusion was optional and that this is an issue 
related to standing only.  The latter point is not s upported by Articles 4.1 and 3.4, the panel ruling in 
EC - Bed-Linen32 and recital 339 of the Review Regulation.  
 
34. Next, China does not consider that merely by cross-checking trends established through 
different sources for different data sets pertaining to  different time periods a nd product levels can an 
investigating authority discharge the obligation of  conducting an injury assessment consistent with 
Articles 3.1 and 3.4.  Just because the EU permitte d the national associations to provide estimates, 
such estimates do not constitute "positive evidence".33 China does not accept that "estimates" can be 
used for each and every assessment in the context of injury by an investigating authority as was done 
by the EU.  
 
                                                      
29 Panel Report, EC - Salmon , para. 7.130. AB Report, US - Hot-Rolled Steel ,  paras. 192-193. 
30 Para. 136, EU's SWS. 
31 See paras. 733-740 of China's FWS for detailed comments. 
32 Panel Reports, EC - Bed-Linen , para. 6.181. 
33 Para. 155 of EU's SWS.  WT/DS405/R 
 Page F-9 
 
 
BY USING NON-VERIFIED DATA THE EU DID NOT CONDUCT AN OBJECTIVE 
EXAMINATION OF INJURY BASED ON POSITIVE EVIDENCE  
35. In the context of China's claim concerning th e violations of Articles 3.1 and 17.6(i) in the 
original investigation, and the use of non-verified  data provided by the complainants at the complaint 
stage,
34 China would ask the Panel not to accept the EU 's arguments as to the WTO consistency of 
cross-checking information with data provided by  national federations according to a black box 
methodology.  
 
36. Essentially, the overall picture that emerges is  one where an investigating authority that 
applies sampling both on the dumping and on the in jury side, accepts at face value data from 800+ 
non-sampled unverified companies when it comes from  the complainant industry, but rejects outright 
all information submitted by ar ound 140 non-sampled exporting producers requesting MET on the 
very ground that it cannot be checked.  
 
THE EU DID NOT PERFORM THE NON- ATTRIBUTION ANALYSIS CORRECTLY 
BECAUSE ITS ANALYSIS COULD NOT HAVE DETERMINED THE EXTENT TO WHICH THE DUMPED IMPORTS WERE THE CAUSE OF THE INJURY 
 
37. China has shown that as a general matter the EU's arguments demonstrate that the conclusion 
on causation can be properly made without regard to  the non-attribution analysis, and how this helps 
explain its approach in general.  In that rega rd, the EU's SWS contains another telling paragraph:  
 
"By applying the criterion successively to two 'o ther factors', each of which caused 50 
per cent of the damage, China claims that the European Union would be compelled to disregard their relevance. In the first place , the European Union does not 
understand how in such circumstances the authority could have arrived an initial 
finding of causation by the dumped imports."35 
38. The EU has barely attempted to hide the fact  that it views the non-attribution requirement as a 
pointless formality because, in its apparent view, it is not possible to 'unring the bell'.  The question 
that the EU is asking here is "how could a non-a ttribution analysis break th e causal link if the causal 
link is already found by the time we do the non-attribution analysis?"   
 
39. China notes that the EU's exposition of its attitude toward the practical utility of the non-
attribution requirement now takes on particular importance because it is now - as a last-ditch "alternative argument" - essentially asking the Panel to believe that it really did perform a proper 
collective analysis on the basis of more precise ideas as to what the actual extent  of injury caused by 
each individual factor really was.  The EU cites its  boilerplate assertion that it performed a collective 
analysis in support of its plea, and reasons that if it did not "have an appreciation of the relative 
contribution of dumped imports…on th e one hand, and the various known 'other factors' on the other, 
it would not be able to reach the conclusion to wh ich it refers in terms of breaking the causal link."
 36  
 
40. While China considers that logic sound enou gh, it would ask the Panel here, as it has 
elsewhere, to decline the EU's request that it be take n at its word that the contents of its black box are 
indeed WTO-consistent.  First, China considers that the AB in US-Hot Rolled Steel , in requiring "a 
satisfactory explanation  of the nature and extent of the injurious effects of the other factors,"37 
intended this "explanation" to come at the investig ation stage.  In addition, the AB has endorsed the 
                                                      
34 EU SWS, para. 224. 
35 EU SWS, para. 227. 
36 EU SWS, para. 253. 
37 AB report, US - Hot Rolled Steel, para. 226 WT/DS405/R 
Page F-10  
 
rule that the party which asserts a fact, whether the complainant or respondent, is responsible for 
providing proof thereof.
38  
 
41. Second, the EU's claim is hard to believe in li ght of the context of its other arguments.  It has 
argued that, as a matter of logic, a non-attribution analysis cannot possibly break the causal link that is 
"initially found" even before the non-attribution an alysis.  At the same time it asks the Panel to 
believe, in spite of its not having provided any evidence to this effect, that (1) it did in fact expend the 
necessary resources required to perform rigorous analy ses and make more precise determinations as to 
the actual extent  of each of the injurious effect of the va rious factors it considered, and (2) that it 
performed a collective analysis on the basis of thos e more precise results.  Why didn't the EU divulge 
these results and the methodologies used to derive them in the regulations , and why would it only 
disclose their very existence at this late stage of  the proceedings, even though these issues were the 
subject of much debate at the first meeting with the Panel?   
 
42. Finally, with respect to the EU's rebuttal on the currency appreciation issue, China notes once 
again that in considering the appreciation of the Euro to be solely an issue of "import price levels," the 
EU conveniently avoids the fact that the steep appreciation of the Euro throughout the period of investigation was likely to have, in itself , an injurious effect.
39   
 
43. One effect of the appreciation of the Euro vis-à-vis the dollar was, to be sure, to make 
Chinese imports relatively more attractive in that import prices were lower when measured in Euros, 
and whether or not that issue—when framed in terms of "import prices"—can be considered an "other 
factor" is one side of the argument.   
 
44. But the other side of the issue is that, in a competitive world market with many players, the 
appreciation of the currency of the home country vi s-à-vis that in which footwear is traded on the 
world market may very well have caused major  injury to the European industry even if Chinese 
imports did not exist, or even if Chin a's home currency were also the euro.40   
 
THE EU VIOLATED ARTICLE 6.2 BY FAIL ING TO CONFIRM THAT FIVE SAMPLED 
PRODUCERS DID NOT COMPLETE THE COMMUNITY INTEREST QUESTIONNAIRE  
45. First, China does not contend, as the EU puts it,  that an EU importers' association was left in 
ignorance of the fact that some EU producers did not  complete the Community interest questionnaire. 
China's claim is based on the eviden ce on the record.  In its FWS the EU strongly argued on this issue.  
 
46. Next, China notes that the EU while referring to the Note for the File of 23 January 2009 claims that the absence of five responses in the non-confidential file should have been interpreted by 
the interested parties to imply that the missing re plies had not been received.  China notes that the 
Community interest questionnaire responses were made available progressively.
41  In recital 401 of 
the Review Regulation, the EU referring to the Co mmunity interest questionnaire stated that "all" 
cooperating producers sampled in the original investig ation kept a significant part of their production 
in the EU.  This was a clear indication that the re plies of all the ten sampled producers were available 
to the EU but only six responses were made available in the open file.  Thus the non-availability of 
the questionnaires in the non-confidential file was not an indicator that the sampled producers did not 
respond.  
 
                                                      
38 AB Report, US - Wool Shirts and Blouses , p. 14.   
39 See for example paras 591, 610 of China's responses to question 94. 
40 I.e., there are other competitors that pri ce in dollars which would depress EU prices. 
41 China notes that the questionnaire responses of companies "H" and "I" were added sometime 
between end of February and beginning of March 2009.  WT/DS405/R 
 Page F-11 
 
 
47. In response to the EU's proce dural allegation in this context42, China notes that Article 6.2 is a 
part of the Panel's terms of reference in claim II.7.   Based on the disclosure of new facts on this issue, 
per the panel ruling in India-Patents , China has the right to make additional arguments.43 
 
THE EU VIOLATED ARTICLE 6.5 BY GRANTING CONFIDENTIALITY IN THE 
ABSENCE OF GOOD CAUSE  
 
48. The EU disputes China's assertion that the sampled EU producers were represented by 
lawyers.  China has provided additional evidence in its SWS44 and also refers to the various CEC 
submissions made on behalf of the sampled companies.  In fact the EU itself stated in the Note for the 
File dated 9 December 2008 that CEC was compet ent to provide complementary information on 
behalf of the complainants including the sampled companies.45 
 
THE EU VIOLATED ARTICLES 6.2 AND 6.4 BY NOT PROVIDING INTERESTED PARTIES TIMELY OPPORTUNITIES TO SEE THE RELEVANT INFORMATION 
 49. China disagrees with the EU's assertion th at analogue country selection issues were not 
covered within the scope of "information" for the purpose of Article 6.4 as the request of the 
interested parties pertained to the "intention" of the investigating authorities.  The e-mail of EFA was 
drafted in a prospective manner based on the termin ology used in the notice of initiation of the EU. 
This does not dilute the substance of the claim regarding the denial of timely opportunities to see the 
"information" pertaining to the analogue country selection, i.e. if any analogue country producers 
responded to the questionnaires, etc.  These issues clearly fall within the scope of "information". 
Additionally, China notes that the presen t case has to be distinguished from Korea - Paper 
(Article 21.5)  referred to by the EU.  The EU's projection of the alleged "revocability" of the selection 
of Brazil is at odds with the facts.  
 
50. Last, in response to the EU's accusation of  China's expansion of claim II.7 by invoking an 
independent violation of Article 6.2,
46 it is clarified that China has developed its arguments based on 
the same Articles as stated in the Panel request  and based on the facts as described in its FWS.  
 
                                                      
42 See para. 179, EU's SWS. 
43 Panel Report, India - Patents , paras. 7.11-7.15. 
44 See para. 868(iii) of China's SWS. 
45 Exhibit CHN-26. Additionally, besides sending the anti-dumping questionnaire to the eight sampled 
companies, an undated letter was also sent by the EU to CEC mentioning that the eight sampled companies were 
required to complete the questionnaires by 19 November 2008. 
46 Paras. 200-203, EU's FWS. WT/DS405/R 
Page F-12  
 
  
ANNEX F-2 
 
 
EXECUTIVE SUMMARY OF THE OPENING  
STATEMENT OF THE EUROPEAN UNION  
 
 
 
1. China chose to file an unusually long Se cond Written Submission (SWS), saving some of the 
discussion, arguments and evidence till the last mome nt.  This necessitates a lengthy oral statement 
from the EU in which the EU addresses the tens, if not hundreds, of factual allegations by China. 
Although the EU addresses them at length1, the relevance of many of those allegations for China's 
claims is dubious.  We hope that the Panel will see through this.  2. China's "as such" claim against Article 9(5) of the Basic AD Regulation.  With respect to 
Panel's terms of reference, the EU again observes th at China is not responding to our arguments based 
on Article 6.2 of the DSU.  Nor has China fully addressed our arguments raised in our Request for 
Preliminary Rulings.  3. Moving on to substantive issues, the EU observes that in its Second Written Submission 
China mischaracterises the EU's arguments by saying  that our defence rests, essentially, on China's 
Protocol of Accession.  The EU is merely inte rpreting the provisions of the ADA and applying them 
to the specific circumstan ces of imports from China, as a non-market economy country.  Contrary to 
what China asserts, Section 15(d) of China's Protoc ol of Accession explicitly permits the EU to treat 
China as a non-market economy country until 2016.  And certain natural consequences in the context 
of anti-dumping proceedings arise from that status without that amounting to a discrimination under Article I:1 of the GATT 1994. 
 
4. We have demonstrated that China's claim under Article 6.10 does not fall under the Panel's 
terms of reference and relies on an incorrect interp retation of that provision.  The use of "shall" 
followed by the terms "as a rule" indicates that the obligation therei n is only a general principle and 
not a strict obligation that is to be complied with in  any and all circumstances.  We have also shown in 
our SWS that China is incapable of dealing with the existence of other hypothetical examples where 
investigating authorities have to calculate dumping margins and impose anti-dumping duties on a 
country-wide basis.  Those examples provide st rong contextual support to the conclusion that 
sampling is not the only exception to the individual dumping margin determination, as China posits. Moreover, the application of the Article 9(5) criteria does not make the application of the 
"relationship" test under other rules irrelevant.  Bo th are complementary, although they serve similar 
purposes, i.e. identify the relevant supplier, either a group of compan ies or separate legal entities, on 
the one hand, or the State and companies which do no t act independently from the State in their export 
activities (as a "group") or companies operating independently from the State, on the other hand.  In sum, both tests serve to identify a close relati onship between separate legal entities in order to 
conclude that they can be considered as one single exporter or producer for the purpose of 
Article 6.10.  Furthermore, in the specific contex t of anti-dumping investigations relating to Chinese 
imports, the EU has shown  that, in non-market economy countries, the State can be considered as a producer and that the presumption is State control of international trade.  Thus, the degree of 
interference of the State in the export activities of  private entities has to be examined on a case-by-
                                                      
1 For the purposes of this executive summary, the EU  focuses on some but necessarily not all the points 
raised in its oral statement.  WT/DS405/R 
 Page F-13 
 
 
case, company-by-company basis.  China has not cont ested this presumption by reference to relevant 
evidence, but only by assertions rega rding its economic status.  Needless to say, such assertions are 
not enough to meet its own burden of proof in these proceedings.  Once again, the fact that China has 
not provided evidence to rebut the presumption that the State in non-market economy countries is a supplier and controls international trade, i.e. the me re basis of why Article 9(5) exits, is quite telling. 
 
5. Moving on to China's claim under Article 9.2, this provision permits the imposition of anti-dumping duties on a country-wide basis also in the particular case of imports from non-market economy countries, where the State is considered as one  supplier.  In any even t, the third sentence of 
Article 9.2 of the ADA also permits the imposition of duties on a country-wide basis when there are 
several suppliers and it is "impracticable" to specify  individual anti-dumping duties per supplier.  The 
notion of "impracticable" implies "something which is not feasible in practice", "something which 
cannot be done for practical reasons ", or something that is not "able to be effected, accomplished or 
done".  In other words, suppliers cannot be spec ified by name and duties cannot be imposed on an 
individual basis because of "practical" reasons (i .e. it would render those duties ineffective, not 
feasible or not suited for being used for a particul ar purpose, i.e. offsetting or preventing dumping). 
Indeed, if a supplier is not acting independently of the State, in view of the role of the State in non-market economy countries and in particular its control on international trade, there is a risk that non-
IT suppliers will channel all its exports through the company with the lowest duty-rate, thereby 
undermining the main objective of the anti-dumping measure, i.e. to offset or prevent dumping.  
6. With respect to China's claim under Article I:1 of the GATT 1994, the EU has elaborated in 
theory but also by providing uncon tested evidence specifically relating to China that the status of the 
economy of the exporter is relevant in the context of anti-dumping proceedings.  China also follows a 
narrow approach to when a conflict between two c overed agreements may take place.  This includes 
situations like the present case, where an agreemen t prohibits what another permits.  Indeed, if 
Article 9.2 of the ADA already requires the imposition and collection of anti-dumping duties "on a 
non-discriminatory basis" and Article 9(5) is cons istent with such a provision, by definition, 
Article 9(5) could not violate the non-discriminat ion provision contained in Article I:1 of the 
GATT 1994.   7. Finally, Article 9(5) does not provide for any discretion as to how the EU authorities 
administer this provision and, thus, China's claim is outside the scope of Article X:3(a).  In reality 
through this claim China takes issue with the ma nner in which the EU authorities calculate dumping 
margins in the case of imports from China.  This  issue is blatantly outside the Panel's terms of 
reference since China made no reference to Artic le 6.8 of the ADA in its Panel Request.  In 
conclusion, the EU respectfully requests the Panel to reject China's claims against Article 9(5) of the 
Basic AD Regulation. 
 8. Claims against Review and Definitive Regulations – Burden of Proof.  Where there is a 
clash of evidence the maxim 'he w ho asserts a fact must prove it' will come into play.  Although the 
rule is the same for both parties, the consequen ces of failing it are not.  If the complainant fails to 
prove the facts that form the basis of its claim th at claim will fail.  If a responding Member fails to 
prove a fact that it has put forward in order to refu te the complainant's factual assertions the panel will 
still have to determine whether those assertions ha ve been proved.  In other words, that the 
respondent's assertions are not established to be true does not necessarily imply the truth of those of the complainant.  
 
9. Claim II.1, Claim II.13.  A.  Analogue country selection.  The basic source of law on the 
selection of the analogue country is China's Protocol of Accession.  The Commission considered all relevant factors in making the selection; there is  no obligation to consider the level of economic 
development.  Article 2.1 of the ADA does not provide a sufficient basis for regulating the selection, 
nor do Articles 2.4 and 17.6(i), or paragraph 151 of the Working Party Report.  The distortions of a 
non-market economy prevent identification of what would exist but for the distortions.  Even if WT/DS405/R 
Page F-14  
 
Indonesia had been used as an analogue country th e margins of dumping would have been large, and 
the evidence produced in the review showed that pr ices were not likely to rise and extinguish that 
margin.  The possibility of using proxies under Ar ticle 14 of the SCM Agreement has no significance 
for the ADA, where the context is much wider.  The EU looks at various factors in making its 
selection, but in the footwear review competitiveness and representativeness were the most significant.  As regards representativeness, sales in  Brazil satisfied the 5 per cent rule, whereas those 
in Indonesia fell far below it.  China has failed to prove that the 'holiday season' resulted in bias in 
favour of Brazil as the analogue country.  The contacts with producers did not reflect such a bias. 
Extensive time was allowed to producers in a ll countries, and none was refused for lateness. 
Allegations of collusion between Italian and Brazilia n producers to distort the investigation were not 
substantiated.  Indian and Indonesian producers woul d have had most to gain from continuation of the 
measure.  China provides no evidence for its suggest ions regarding collusion, which remain no more 
than hypotheses.  China tries, in effectually, to justify its previo us invocation of the Czechoslovak 
proposal as regards the interpretation of the second Ad  Note to Article VI:1 of GATT 1994.  The great 
number of producers in Brazil was a significant indicat or of competitiveness.  The increased value of 
the Brazilian real served to off-set  the increase in tariff.  The problem of 'like product' and children's 
shoes was overcome by making allowances during comp arison.  China has failed to establish that the 
EU made a determination of lik elihood of dumping that was based on a defective finding of past 
dumping.  
10. B.  PCN .  The alternative classification proposals made  during the review were considered by 
the Commission, but were not shown to be a significant improvement.  China has not shown that problems caused by the range of products within particular PCNs could not be dealt with by 
appropriate adjustments during comparison.  It has not established that the EU's PCN system actually 
prevented fair comparison being made by means of such adjustments. 
 
11. Errors in China's claims on injury in the review regulation.  The approach taken by the 
panel in the US – Corrosion Resistant Steel Sunset Review  confirms the EU view.  Panels have a duty 
to consider whether claims based on Article 11.3 of the ADA are in circumstances like those of the 
present case properly before them.  In this case they are not.  China's argument that the Commission 
failed to give proper consid eration to the issue of likelihood is ill -founded.  In particular, it ignores the 
thorough examination of expected export prices and volumes in the light of such factors as spare capacity.  China fails to distinguish between the Commission finding of injury, and its findings on the 
various injury factors.  These were used independe ntly in the course of making the determination of 
the likelihood of injury should the measure be allowed to lapse.  
 
12. Claim II.3 .  Contrary to what China argues, the Notes for the file of 29/10/2008, 09/12/2008 
and 09/03/2009 confirm the EU view, stated also in  the Review Regulation (Recital 21).  China also 
overlooks that the company at issue still maintained  its production capacities in the EU, even after it 
discontinued its production there.  Hence, this co mpany could have at any moment re-started its 
production in the EU.  
 
13. Claim II.4 The Note for the File of 2 October 2008 (Exhibit EU-19) discusses the 
information used by the EU IA to verify the standing  of the complainants.  That note explains that the 
production of the complaining indus try was about 150 million pairs and the total production in the EU 
had been assessed at 390 million pairs.  This confirms  the EU was consistent in defining the domestic 
industry throughout the investigation.  
 14. Claim II.5 .  China's claim that 'structural inefficien cy' was a cause of injury was an 'other 
factor' that the Commission did not consider, but th is is in effect a claim that Chinese producers can 
undercut those in the EU, which, given that ther e is dumping, supports the conclusion that the 
'dumped imports' are the cause of injury.  In any event the fact that Chin a's producers operate in non-
market economy means that differences in effici ency cannot be adequately measured.  The 
Commission had found that the EU industry had undergone and was undergoing major changes to  WT/DS405/R 
 Page F-15 
 
 
improve efficiency and meet the demands of the market.  The use of outsourcing was one of these changes, but in so far as it resulted from compe tition from dumped imports it was a symptom rather 
than a cause of injury.  Regarding non-dumped impor ts from third countries as a cause of injury, this 
was not denied by the Commission, but the volume and level of undercutting of dumped imports was 
such that their causal link with th e injury was not broken.  As re gards reduction in demand this was 
matched with a reduction in production, but this al so did not break the causal link.  That link was 
established by examining data for market share, prof its, investments and wages.  Since movements in 
exchange rates affected prices any associated in jury was a consequence of undercutting by the 
dumped imports.  
15. Claim II.6 .  As complainant, it is China's responsib ility to provide evidence for its assertions 
that the Commission did not make available non-c onfidential versions of questionnaire responses 
under Article 6.1.2 of the ADA.  The rules on confidentiality have the consequence that the 
Commission was obliged to clarify parties' intentions  in that respect, given that there were serious 
grounds for believing that they had not properly unde rstood the procedures.  In the circumstances, the 
time taken for clarification respected the standard of promptness.  Furthermore, those circumstances 
also support the conclusion that revised versions  of the responses, concealing the companies' 
identities, were received in response to requests from the Commission, and that the differences in the 
dates on which responses were made available to in terested parties were due to differences in the 
dates on which those responses were received.  The pa rties' requesting confidentiality made clear that 
it concerned any information that would reveal their identities.  The circumstances of the 
consideration of these matters were complicated.  A proper consideration of the facts shows that the 
Commission's account of what occurred regarding Company B was correct.  China has no evidence 
for its assertion that the response was not made available until 'around 12 December'.   16. Claim II .7.  China's attempt to use Article 6.2 to expand the rights conferred by 
Articles 6.1.2, 6.4 and 6.9 of the ADA conflicts with  the interpretative principles of 'effectiveness' and 
of 
lex specialis derogat legi generali.  China's interpretation of Article 6.2 would amount to 
establishing a right of 'advance consultation' on all steps taken by an investigating authority in the 
course of an investigation or review, but the ADA confers no such right.  The prospect of legal proceedings encourages the Commission to take account of criticisms made during investigations 
and if appropriate to change provisional decisions.  The particular categories of information 
identified by China were dealt with correctly by the Commission.  It confuses 'information' with 
methodology.  A party's response is what it defines as its response, which may be a revised 
document.  China has failed to provide evidence regarding the reason for the delays in placing responses of potential analogue companies in the non-confidential file.  
 
17. Claim II. 8.  The Commission applied the same policy regarding good cause for according 
confidentiality to all interested parties.  Certain categories of information were recognised as by 
nature confidential, and the Commission did not require companies to make statements of the obvious.  The fact that complainants requested confidentiality for their identities is not in doubt. 
China fails to indicate the source of the obligation to reveal the names of EU producers.  Its 
claims regarding the provision of information are contradictory.  The Commission had good 
evidence for accepting the complainants' fears of retaliation should they be identified; 
participation of some in other proceedings did not concern comparable situations.  Once the claim of confidentiality was accepted it had to be app lied to any information that could be used to 
identify the companies concerned.  The particular documents listed by China in this context do 
not reveal any failures by the Commission regarding the rules on confidentiality. 
 
18. Claim II .9.  China's claim appears to be based on the mistaken belief that an investigating 
authority is obliged to weigh the importance of  a valid claim to confidentiality against the 
problems that such confidentiality would create for other parties. WT/DS405/R 
Page F-16  
 
 
19. Claim II.10 .  The EU confirms that the Co mmission's verification visits to EU producers 
allowed sufficient time for corrected data to be obtained.  China is far from establishing the truth of its allegations of bias in the treatment of in terested parties.  It introduces a claim under 
Article 6.8 of the ADA which is not within the terms of reference.  The procedure under that 
Article is a means to an end, not an end in itself. 
 
20. Claim II.11 .  China's only reference to Article 11.3 of the ADA is in this claim.  It has treated 
this claim as a purely consequential matter, and ca nnot change that approach at this stage of the 
proceedings.  
 
21. Claim II .12.  Article 12.2.2 of the ADA does not extend to requiring publication of 
explanations of the application of doctrines of domestic law.  
 
22. Claim III .2.  The methodology specified in Article 2.2.2(ii) of the ADA could not be used 
in this investigation because the companies concerned were not operating on a market-economy 
basis.  For the same reason the data of such companies could not be used in applying the cap in 
Article 2.2.2(iii).  The companies proposed by China were makers of polyester fibres, and as such 
could not be regarded as in the same general category as footwear producers. 
 
23. Claim III .3.  China's evidence of supposed bias by the Commission is completely 
unpersuasive.  An investigating authority is not obliged overtly to address every argument raised 
by parties. 
 
24. Claim III.4 .  The product scope of the investigation was a matter for definition by the EU and 
was not governed by the notion of 'like product'.  
 
25. Claim III.5.  As apparent from its first sentence, recital 215 of Definitive Regulation 
discusses the analysis of micro-economic elements a nd the statement about companies having to close 
down is the result of that analysis and is made in th at context, rather than as a result of any statements 
in recitals 172 or 200 of the Provisional Regulation.  The fact that the info rmation from complainants 
was further cross-checked with info rmation from the relevant associations does not mean that the data 
used by the EU was thereby made less reliable.  26. Claims III.6, III.16 .  The ADA leaves Members free to set anti-dumping duties below the 
level of the dumping margin, but they may not discriminate in breach of Article 9.2.  In applying the 
'lesser duty' principle a Member is not obliged to use concepts drawn from Article 3. 
 27. Claim III .8.  The Commission provided adequate evidence for its finding on employment and 
production capacity.  It properly evaluated the factor s affecting domestic prices.  The calculation of 
the lesser duty was quite distinct from the determin ation of injury.  The Commission's evaluation of 
profit levels was proper, as was the lifting of the quota on imports from China.  
 
28. Claims III .10, III.11, III.12 .  The 36 supporters of the complaint also endorsed the 
confidentiality request that it contained.  Giving the names of companies not supporting the complaint would have risked enabling the identification of  complainants and supporters.  Doubts about the 
sufficiency of evidence supporting the complaint should be pursued under Article 5 of the ADA. 
Commercial data may still be of use to competitors  even if the names of the supplying firms are 
unknown.   29. Claim III .13.  The MET questionnaires are not part of the 'original questionnaire sent to 
interested parties at the outset of an investigati on'.  They are not part of a comprehensive set of 
questionnaires.  They seek information that is a necessary preliminary to the dumping calculation.  WT/DS405/R 
 Page F-17 
 
 
China's Accession Protocol makes explicit provisi on regarding which parts of the Working Party 
Report are binding.   30. Claim III .14.  The facts of the present dispute are similar to those in EC – Norway (Salmon).  
The changed method of calculating the lesser duty involved no new facts.  The Commission was 
going beyond its obligations under Article 6.9 of th e ADA in providing further disclosure and giving 
an opportunity for comment.  In any event, that op portunity would itself have satisfied Article 6.9. 
 31. Claim III .15.  The Commission confirmed that the removal of STAF from the products 
covered by the investigation did not affect the re presentativeness of the sample.  The government of 
China agreed to the sample that was selected, and did not question th e content of the sample when it 
was informed of the removal of STAF.  It is therefore estopped from going back on that agreement.   32. Claim III .19.  The notion of publishing an 'evidentiary path' is relevant only to those 
situations where the authority had to reconcile dive rgent information and data.  Article 12.2.2 does not 
forbid Members referring to matters in other publ icly available documents.  It does not require 
publication of matters that are neither required to  be considered nor were  actually considered. 
   WT/DS405/R 
Page F-18  
 
 
 
ANNEX F-3 
 
 
EXECUTIVE SUMMARY OF THE CLOSING  
STATEMENT OF CHINA  
 
 
 
I. INTRODUCTION 
 
1. China has taken note of the exceptionally lo ng opening Oral Statement ("OS") of the EU, 
which is for all intents and purposes its Third Written Submission.  While this Closing Statement will 
not be nearly as long as the EU's Opening Statement, it too will be unusually long in light of the 
quantity of misconstrued arguments and outright fals ehoods which China simply cannot allow to pass 
without comment.   2. With regard to the EU's arguments on the burde n of proof found at paras. 48 et seq. in its OS, 
the EU cites the AB Report US - Gambling as to the definition of a prima facie  case
1 while referring 
to "the well-established rule that 'he who asserts a fact must prove it2'".  With regard to the US - 
Gambling  case, China notes the distinction between "evide nce" in the context of as such claims where 
measures are generally WTO-consistent or not as a matter of law - such as those which were the 
subject of the US - Gambling  case - and "evidence" in the context of claims that an investigating 
authority did or did not act in a WTO-consistent manner where only that investigating authority holds the evidence necessary to defi nitively prove the truth or falsity of the allegation one way or the other.  
Where that is the case, and the complaining party makes substantiated allega tions with regard to 
which only the defendant holds the evidence which w ill ultimately prove or disprove the allegation, 
the burden must shift to the defending party to refu te a substantiated claim against it, while at the 
same time the Panel may seek information which may help it make a determination:
3  a right China 
has asked the Panel to exercise with  respect to the sample of EU producers from the beginning of this 
proceeding.  What is for certain is that the defe nding party cannot in good fa ith withhold all evidence 
which would tend to corroborate a complainant's cl aims while at the same time freely offering that 
which at least appears to absolve it of any wrongdoing.    3. As to the EU's repeated accusations that China has brought "new claims" in its Second 
Written Submission and because of that much of China's SWS are out of the Panel's terms of 
reference; China recalls once again the distinction between claims and arguments as those terms have 
been defined for the purposes of Article 6.2 of th e DSU - a distinction which has been noted countless 
times throughout these proceedings.
4   
                                                      
1 The evidence and arguments underlying a prima facie  case, therefore, must be sufficient to identify 
the challenged measure and its basi c import, identify the relevant WTO provision and obligation contained 
therein, and explain the basis for th e claimed inconsistency of the measure with that provision. AB report , US - 
Gambling, para 148. 
2 Para. 65 EU's oral statement at the second meeting with the Panel. 
3 DSU Article 13(2). 
4 By "claim" we mean a claim that the respondent party has violated, or nullified or impaired the 
benefits arising from, an identified provision of a particular agreement. Such a claim of violation must, as we have already noted, be distinguished from the arguments adduced by a complaining party to demonstrate that the 
responding party's measure does indeed infringe upon the identified treaty provision. Arguments supporting a 
claim are set out and progressively clarified in the first written submissions, the rebuttal submissions and  WT/DS405/R 
 Page F-19 
 
 
 4. The EU has not provided any support for its a pparent contention that parties' may not make 
additional arguments and provide evidence relating to their claims after the time of the First Written 
Submissions, and China considers the fact that the EU has addressed many of China's additional 
arguments in its 130 page OS as evidence that it too recognizes the clear distinction.  To the extent 
that the EU considers China to have "saved some of the discussi on, arguments and evidence till the 
last moment," thus implying that China has taken strategic decisions in bad faith, China notes that 
while its SWS was indeed lengthy, the vast majority of whatever could be considered "new" has come 
as a direct reaction to the EU's FWS and the events of the first meeting of the Panel, some of which 
include the sudden disclosure of key facts withheld by the EU up until the time of that meeting.   
 
II. CLAIMS II.1 AND II.13 
 
ANALOGUE COUNTRY SELECTION 
 
5. With regard to the question as to whethe r "China [can] overcome the argument that 
[Article 2.1] is purely definitional that cannot be used as a basis of a claim
5," the EU argues that the 
only reason why the AB in US - Hot Rolled Steel   ruled on a claim based on an impermissible 
interpretation of "ordinary course of trade" is because "the complainant had no way of challenging 
this particular conduct of the US other than by i nvoking Article 2.1 since the phrase is not elaborated 
elsewhere in the ADA".    
 
6. Actually, the phrase is located in three different  parts of Article 2, and this very fact was 
specifically noted6 as central to China's point that while Article 2.1 does not create independent  
obligations, it may nevertheless form the basis of a claim so long as it can be shown that the obligation is also located (or "created") elsewhere in the ADA as well.  In the case of "comparable 
price," China has noted five
7 other instances in which that phrase occurs, including in the 
Paragraph 15 of the Protocol itself, and thus is not purporting that the part of Article 2.1 cited creates 
an independent obligation.    7. Thus, the EU's argument that China must have cited Paragraph 15 of the Protocol in order to 
benefit from the "comparable price" language contai ned therein must fail just as an argument that 
Article 2.2 must  be cited in order to find a violation of the "ordinary course of trade" obligation 
contained in Article 2.1.  The EU has not m eaningfully distinguished this case from the US - Hot 
Rolled Steel  case.  China notes that this "no independent obl igation" point is the extent of the EU's 
argument as to whether the Article 2.1 claim is valid as it specifically acknowle dges that the analogue 
country selection process is fundamentally about securing a "comparable price".   
 
8. On the broad issue of the disciplines impo sed by the Articles cited, China notes that its 
argument that the process must include some factor acknowledging the economic realities of the 
target of the investigation is completely distinct  from its arguments attacking the EU's use of the 
criteria that it did apply.  The EU has addressed both as if it would be the case that if the Panel finds 
that the selection criteria were applied in a reasona ble manner, then it need not rule on whether those 
criteria were permissible to begin with.  The opposite is true.  China's arguments that the 
"competitiveness,"  "representativeness" and "like pr oduct" issues were handled incorrectly in this 
particular case are only necessary in the event that they, without anything more , are permissible in any 
case.  In that regard it is noteworthy that even if th e Panel is to believe that China would have been no 
better off with Indonesia as it's analogue count ry, as the EU now suddenly argues, it is the selection 
                                                                                                                                                                     
the first and second panel meetings with the parties.  AB Report, Korea - Dairy , para. 139.  (Emphasis 
added). 
5 Para. 65 EU's oral statement at the second meeting with the Panel. 
6 Para 300, China's SWS. 
7 Para 308, China's SWS. WT/DS405/R 
Page F-20  
 
process  which is of primary importance rather than any "harmless error" argument now put forth by 
the EU.  Up to this point, the parties have gone back and forth arguing over whether analogue country 
domestic sales volume and the number of producers are sufficient as the only considered criteria.  That issue logically precedes that of wh ether the EU analysed them correctly.  
 
9. With regard to the "but for the distortion"  argument, as a threshold issue, China notes in 
respect of the EU's OS that the fact that the Pa nel in DS 379 ruled only on the basis of Article 14 of 
the SCM Agreement as opposed to Article 15 of the Pr otocol is of absolutely no consequence.  At 
least as long as the Panel considers convincing the argument that there is no difference in the 
underlying purpose of proxy-value determinati on in NME anti-dumping and subsidies cases.   
 
10. The EU says that the Panel in that case - in no ting that at a bare minimum an authority must 
seek to find the value that " would  prevail in the absence of the distortion" - "did not purport to address 
how Section 15(b) [of the Protocol] would have been applied had it been invoked
8".  The EU also 
continues to argue that finding or attempting to find undistorted values is impossible in non-market 
economies.   
 11. On the second point, China recalls that DS 379 was a case in which China was the target of 
the anti-subsidy investigation, so it seems pretty clear  that the Panel thought that it was possible to try 
to find undistorted values in "NME" scenarios.  As to the first point, China understands the EU to 
argue, without giving any reason as to why, that the underlying purpose of proxy establishment in the 
case of China  would or could be different  depending on whether the investigating authority relies on 
Article 14 of the SCM Agreement or Paragraph 15 of the Protocol as its legal basis for finding a 
benchmark.  China fails to see how this could be possible.   12. Finally, as to the issue of the over-relian ce on domestic sales volume as that criteria was 
applied in the present case , China would first note that the "5 per cent rule" borrowed from the 
footnote of Article 2.2 is not actually a rule, but rather a guideline from which derogation is 
acceptable in instances where "the evidence demonstrat es that domestic sales at such lower ratio are 
nonetheless of sufficient magnitude to provide for a proper comparison
9".   
 13. China has never said that there was no statistical advantage between the Brazilian sales 
volume and the Indonesian sales volume.  Rather, China's argument was that by considering the 
200,000 Indonesian pairs capable of providing a statistically significant sample (i.e. of significant magnitude to permit a proper comparison), it was un reasonable for the EU to have considered the 
marginal advantage gained from the difference in two already statistically significant domestic sales 
volumes as more valuable than both the co mparable level of economic development and broader 
range of footwear types sold fo und in the case of Indonesia.  
 14. With regard to the procedural bias issues in  connection with the analogue country selection, 
China notes that it has not in fact "abandoned" it s Article 17.6(i) claim, as the EU argues in 
Paragraph 64, and China has explicitly said as much .  Rather, China has noted the alternate bases on 
which the Panel should find that the EU has violat ed China's due process rights and demonstrated how 
those additional bases fall within the Panel's term of reference and how China had made its case in 
regard to those bases in its First Written Submission.  
                                                      
8 Para. 85 EU's oral statement at the second meeting with the Panel. 
9 ADA Article 2.2[fn].  WT/DS405/R 
 Page F-21 
 
 
PROCEDURAL BIAS 
 
15. The EU claims in its OS that sending the analogue country questionnaires in the holiday 
season did not affect cooperation of Indian and I ndonesian producers as holidays are there all around 
the year and refers to the festival Eid-al-Adha.  It is noted that for this festival, in Indonesia10 and 
India there is one public holiday.  Therefore, this would not have interrupted or dissuaded Indonesian 
producers from cooperating and this one day holiday cannot be compared to the long holiday break starting before Christmas and ending after th e new year, generally covering two weeks.  
 16. Besides the fact that the EU changed its ju stification in the FWS compared to the Review 
Regulation concerning the reason for the sending of questionnaires to Indian and Indonesian 
producers only on 23 and 22 December 2008 respectively, it has provided no proof why this was so.   17. In paras. 107-108 of its OS the EU claims  that responses were received from analogue 
country producers even after the dates mentioned in the Note for the File dated 6 February 2009 and 
makes several arguments about the dates of the r eceipt of the non-confidential questionnaire response 
of Indonesian producers.  These arguments besides be ing irrelevant to the issue show the complete 
lack of transparency in the proceeding.  Add itionally, the EU's own Note for the File dated 
6 February 2009 gave the dates of receipt of th e confidential versions of the analogue country 
questionnaire responses.  China's claims II.1 and II. 13 relate to the confidential versions of the 
responses.  The fact that the responses had certain de ficiencies is an issue ap art from the substance of 
China's claims. 
 18. China has already explained that the Brazilian producers got maximum flexibility to reply to 
the questionnaire and the encouragement to coopera te.  This approach is undoubtedly biased.  For the 
record it is noted that non-confidential versions of  the extension letters sent to Indian and Indonesian 
producers are not available in the open files.  The EU is well aware of the Indian footwear association 
(Indian Shoe Federation) and the Indonesian footw ear association (Aprisindo) but no contacts were 
established with these associations.  Only the Braz ilian footwear association was contacted by the EU 
to solicit cooperation.   19. With regard to the issue of collusion, the point  is that the EU did not investigate this issue 
despite its apparent close links with the Brazilian foot wear association.  The EU also notes that Indian 
as well as Indonesian producers had interest in the extension of the measures.  China notes that the 
factor differentiating the situation of the Brazilia n producers was that only Brazil initiated an anti-
dumping investigation against Chinese footwear si multaneous to the EU's investigation and that 
producers in the two countries were clearly assisting each other. 
 
COMPETITIVENESS 
 
20. China has neither claimed nor premised its ar guments on the grounds that domestic prices in 
Brazil would increase by 35 per cent on account of the tariff increase.  China notes that the EU has accepted that the tariff increase would affect the domest ic prices but considers that the large number 
of producers in the Brazilian market would offset this increase.
11 While this theory of the EU does not 
appear to be economically sound, it is clear that the EU at a minimum did not have any evidence to this effect.  Third, there is no evidence in th e non-confidential file that  the Brazilian footwear 
association provided the price data for domestic  footwear sales for the period concerned.  
 
                                                      
10 http://www.indonesial ogue.com/about-indonesia/public-ho lidays-for-2008-indonesia.html. 
11 Para. 118 EU's oral statement at the second meeting with the Panel. WT/DS405/R 
Page F-22  
 
PCN METHODOLOGY 
 
21. China notes that the EU incorrectly claims  that the PCN methodology proposed by the 
interested parties would not have  overcome the problems on account of  the broad PCN system.  China 
recalls that because cooperating importers in the or iginal investigation reported data based on the 
more specific PCN system with more specific PCN categories the Commission determined that STAF 
should be excluded from the product scope.  Additiona lly, it is common sense that, if, for example, 
there had been specific categories for formal/dre ss footwear and informal/leisure footwear, the 
problem of classification of different footwear in th e different PCNs would not be there as far as these 
categories of footwear is concerned.  The main issue was with PCNs classified under categories "A" 
and "E" and these PCNs comprised 70 per cent of the PCNs exported by Chinese producers.
12  
 22. The Commission repeats that adjustments c ould have been made but China has explained
13 
that in the absence of the knowledge of the foot wear classified by the Brazilian producers in the 
various PCNs, Chinese exporters could not possibly de monstrate any adjustments.  The issue does not 
pertain to adjustments between PCNs but to footwear within the same PCN. 
 
23. Last, as regards the reclassification of footw ear, the EU claims in para. 142 of its OS that 
China has not indicated where the EU requested Chinese exporters or EU producers to classify sports, 
sports-like and trekking footwear (hiking, climbi ng and outdoor footwear) in category 'E'.  In 
response, it is noted that the EU requested such classification specifically in AD questionnaires sent to 
the exporters and EU producers.  China refers to  para. 406 of its FWS which provides extracts from 
the AD questionnaire for Chinese exporters and the EU producers.  24. China notes that the EU has accepted that  the PCN list of the Commission was wrong. 
Interestingly, it took the EU this WTO case to figure out where the problem lay as regards PCN 
ABE31.  Nevertheless, it shows that the EU could not apply its own PCN system and that even in the 
verification the EU did not gather the correct data.
14 
 FORMULATION OF CHINA'S CLAIMS CONCERNING ARTICLE 11.3 
 
25. Regarding claims II.1 and II.3, China notes that  the EU repeats its allegation of a legal error 
in the formulation of China's claims.  However, Chin a's claim and its arguments are clear – that to the 
extent the EU for its likelihood-of-dumping dete rmination relied on the dumping margin calculated 
inconsistently with Articles 2.1, 2.4 ADA and Article VI:1 GATT 1994, it violated Article 11.3. 
 26. With reference to the additional analysis clai med to be carried out by the EU, it specifically 
refers to the alleged substantia l analysis of the volume and prices of the imports made in the 
likelihood-of-dumping context.  To the extremely lim ited extent these findings were referred to by the 
EU in the likelihood-of-injury analysis, China h as presented its comments in the SWS showing that 
the volume and prices of the imports were evaluated in the context of the in jury analysis and the 
comparative price analysis of the Chinese exports was never undertaken.  Additionally, the EU states 
that if a point is covered under the arguments of interested parties it is still part of the likelihood 
analysis.  The EU seems to be pointing to its likely causation analysis through this statement.  In that 
context China notes that the EU's responses to the interested parties pertained to selected causal 
factors raised; were not entirely fact-based; and la rgely relied upon the injury analysis conducted.
15  
 
                                                      
12 See Exhibit CHN-112. 
13 See paras. 19-22 of China's oral statemen t at the second meeting with the Panel. 
14 The PCN list of the Commission was made after the verification of the EU producers as mentioned 
by the EU. See Exhibit CHN-74. 
15 See e.g. recitals 308, 310,  311, 312, Review Regulation.  WT/DS405/R 
 Page F-23 
 
 
CLAIM II.3 
 
27. Surprisingly in its OS the EU now claims th at there were five sampling criteria; the fifth 
being sales value.  This is contrary to recital 21 of the Review Regulation which explicitly refers to 
sales volume.  Such confusion in the EU's argument s thoroughly discredits its analysis and reinforces 
China's point that the sample selection of the EU was not based on "objective examination" of 
"positive evidence".  The EU also claims at this late  stage of the proceeding that there is no difference 
between product segment, price segment and sector se gment and this can be obtained by dividing the 
total sales value by the total sales volume.  Firs t, China notes that the unit sales price is not 
determinant of the price segment/sector segment in  which a company operates.  Second, as noted by 
China in its FWS and SWS, the non-confidential vers ion of the complaint does not show that sales 
data was provided by the complainants.  Third, the EU stated in response to question 45 from the 
Panel that only sales volume data was provided in the complaint and in the standing forms.16 Fourth, 
the EU mentioned in response to question 45 from th e Panel that the complaint provided the data for 
the price segment, i.e. the average price/unit price,  and not the sales value.  Therefore, there is 
extreme confusion in the EU's arguments as to the ex-post criteria created.  
 28. Indeed, China has stated that the situation of  producers in one Member State is different from 
those in another Member State but the EU's samp le did not take into account the situation of 
producers in 80 per cent of the EU Member States where footwear production is undertaken as per the Prodcom data.  Therefore, the EU's assertions concerning the geographical representativity of the 
sample are incorrect.  
 29. China recalls that the EU argued strongly in its FWS and SWS that there is no evidence that 
the data in the complaint is based on estimates and that it had all the relevant information for sampling 
from the complaint among others.  In complete contra diction, in paras. 339, 342 and 344  of its OS the 
EU has pointed out clearly that the complainants  had made false claims of providing information 
which was actually not provided in the complaint.  This shows that the complaint was not a reliable 
source for any form of information.  CLAIM II.4 
 
30. China notes that it has extensively demonstrated  in its SWS that the EU nowhere defined or 
clarified that the domestic industry comprised co mplainants and non-complainants and the EU's 
references to the various recitals of the Review Regulation do not support its assertion.  The Note for 
the File dated 2 October 2009 referred to by the EU  does not support its assertion.  The EU claims that 
the Note for the File dated 9 December 2008 was a minor mistake and " the standing Note, the other 
notes " prove its point.  The so-called standing note of  the EU as mentioned above again refers to 
Community production and not EU industry production.   China requests the Panel to ask the EU to 
provide the "other notes" which it considers clarified the situation.   CLAIM II.5 
 
31. In the context of the causation analysis, all of  the EU's arguments erroneously first blame the 
imports from China as being the cause of the othe r known factors affecting the EU producers.  
Second, the EU overlooks the fact that the injuri ous effect of the other known factors has to be 
assessed for the EU producers.  No co mparison is required to be made to  the labour costs or efficiency 
in China for that purpose.  
 
32. Regarding the structural inefficiency of th e EU producers, China's contention is not that 
Chinese exporting producers are more efficient than EU producers or can produce footwear at cheaper 
                                                      
16 China notes that until now the EU has provided no proof to establish that indeed sales data was 
provided in the complaint. WT/DS405/R 
Page F-24  
 
costs.  The claim is that EU producers are structura lly inefficient, period.  This is a major cause of 
injury to them as recognized by the EU as well in  the Review.  Additionally, the EU's argument that 
thousands of 10-employee EU producers could supposed ly together achieve the production levels and 
efficiency so as to be an attractive source of suppl y for multinational brands is an interesting ivory 
tower concept but of course does not work in practi ce.  In fact in reality no multinational brand is 
sourcing from these clusters.   
 33. Besides the fact that the EU did not assess the injurious effect of the high labour costs in the 
EU, it claims that China provided in its FWS labour co sts for all industries.  It however fails to note 
that the labour costs provided were given by a sampled EU footwear producer from the original 
investigation in its Community interest questionna ire response and that ample evidence on the issue 
was presented by EFA members during the hear ing conducted in the course of the review 
investigation.   34. China notes the EU's statement that it ha d facts and evidence to support its arguments 
concerning the structural inefficiency issue and that  it disclosed it to the parties in the Note for the 
File dated 16 October 2009.  Th is document was submitted by China as Exhibit CHN-126.  But it 
does not contain an analysis as claimed by the EU.  35. On the issue of the injurious effects of the imports from third countries, China notes that in 
para. 203 of the OS the EU claims completely  the opposite of what it claimed in its SWS.
17  
Additionally, while deviating from the issue that th e price of the Indian and Indonesian imports did 
not take into account the product mix, the EU c onfuses it with the point of volumes and market 
shares.   36. The EU also claims that the fact that pr oducers could not reach the 6 per cent profitability 
target establishes the causal link with the allege dly dumped imports and shows that there was no 
injury on account of the decline in EU demand.  This does not amount to examining the nature and 
extent of the injurious effect of the contrac tion in the EU demand and changes in patterns of 
consumption within the meaning of Article 3.5.  In  fact such an argument cannot even be considered 
to be providing a satisfactory qualita tive explanation in support of the conclusion that this factor does 
not break the causal link between the dumped imports and the injury to the domestic industry.  
 
37. Furthermore, the EU claims that the injury attributed to the dumped imports was that of 
preventing the domestic industry from restoring itself to a viable level of operations notably in terms 
of share, profits, investment and wages.  China not es that the Review Regulation states that in the 
RIIP:
18  sales prices increased by 30 per cent; profits increased by 131 per cent; investments increased 
by 133 per cent; return on investments increased by  117 per cent; and wages increased by 12 per cent. 
 CLAIM II.6 
 
38. The EU presents an incorrect interpretation of the Guatemala - Cement II  case in para. 230 of 
its OS.  The Panel neither assumed nor implied as the EU claims that " the authorities would have 
been entitled to delay making the document in question available if their suspicions had had a 
sufficiently serious basis ."  
 39. China notes that contrary to what the EU st ates in para. 233 of its OS, in this case there was 
no Commission practice of checking the non-confidentia l documents of other interested parties than 
the EU producers.  For instance, China will pr ovide an example in the context of claim II.8 
concerning the non-confidential AD questionnaire r esponse of Adidas which provided information 
that was considered by the EU as confidential by na ture as regards the EU producers.  But the EU did 
                                                      
17 See para. 162 EU's SWS. 
18 See recitals 250-256, Review Regulation.  WT/DS405/R 
 Page F-25 
 
 
not check this nor contact the importer concer ned with "confidentiality concerns" and the non-
confidential questionnaire response of this importer was made available promptly to all interested 
parties.   40. The EU also creates an interpretation based on Article 6.4 as to how an authority should act if 
there is a conflict between the promptness requireme nt of Article 6.1.2 and confidentiality issues. 
China submits that this interpretation has no legal basis in the ADA and is not supported by any Panel 
or AB findings.   41. The EU while referring to a few sentences fro m the CEC's request for confidentiality of the 
names claims that the Commi ssion interpreted that " confidentiality was sought for any information 
that would lead to the disclosure of the names of the relevant companies ." China considers that when 
the CEC letter itself refers to the names and Memb er States only, how can an  objective investigating 
authority grant confidentiality to anything it consider s to be even closely related to the identity of a 
company.  There is no legal basis in the ADA for th is interpretation.  Per the EU, besides the names 
themselves, the identity of the producers could ha ve been discovered if among others, any of the 
following were disclosed - Member States' nam es; PCNs produced; production; and sales volume.
19 
Therefore, the EU projects that practically ever ything related to the eight sampled producers was 
confidential as it could lead to the discovery of thei r identity irrespective of the fact that there are 
18,000 producers in the EU and most of them woul d likely be producing multiple kinds of footwear. 
 
42. China requests the Panel not to take into account the EU's excuse of administrative burden 
upon its officials on account of maintaining a file , sending deficiency letters and handling the 
questionnaire responses concerning which there were c onfidentiality issues.  Above all the latter issue 
was self-created and does not permit a violation of the ADA.   
43. In para. 257 of its OS the EU notes that dat es are recorded only when a document is received 
and not when it is made available to interested partie s.  This in itself shows that the EU has significant 
leverage to add a document as and when it likes.  This  also proves that it was easy for the EU to claim 
that Company B's response was added right the day af ter EFA's legal representative checked the file.  
 CLAIM II.7  
44. The EU admits in para. 272 of its OS that sampling and application of facts available, among 
others, are matters of interest for interested parties.  Agreeably these issues are related to the interested parties' rights of defence.  However each of the decisions taken by an investigating 
authority at the specific stage of the investigation are not of a provisional character as stated by the 
EU and are not merely confirmed by the adoption of the measure.  In fact China recalls that this new 
explanation is in contrast to the statement of the EU in para. 393 of its FWS.  45. Therefore, China's interpretation of timeliness is  correct and interested parties will have full 
opportunity for the defence of their interests only if  they have timely opportunities to see the relevant 
information pertaining to the issues as requested to th e investigating authority.  China's claims are not 
such that every step of the inves tigating authority would be subject to the Article 6.4 requirement as 
the EU projects.  However, the aim is indeed to have  access, at least in part, to the information in the 
EU's black box.  46. The EU has made abundant arguments but fa iled to explain how the sampled producers' 
production increased from 10.7 million pairs as stated in the Note for the File dated 
18 November 2008, to 11.3 million pairs, despite the fact that pr oduction of the sample became 18-
                                                      
19 See paras. 286-289, EU's oral statement at the second meeting with the Panel. WT/DS405/R 
Page F-26  
 
20 per cent lower due to the discovery of outsourcing by one sampled producer.
20 Contrary to what 
the EU claims, this was not explained in the disclosure issued on 12 October 2009.  47. The EU claims that the non-c onfidential responses of two Brazilian producers were not made 
available because their data was not used.  This ho wever does not justify a violation of Article 6.4.  
 
CLAIM II.8 
 
48. The EU claims in para. 310 that certain categories of information such as sales data are by 
nature confidential and if a company provides such  data it does not have to establish good cause.  
First, this proposition is inconsis tent with three Panel reports – Guatemala-Cement II
21, Korea-
Paper22, and Mexico-Tubes and Pipes .23 Second, China notes that it is not for the investigating 
authority to decide whether or not the informati on provided is confidential by nature.  Third, by 
giving an example regarding the EU importer Adid as' questionnaire response, the EU cannot justify 
the breach of Article 6.5.  It was incumbent upon the EU to ask Adidas to demonstrate good cause for 
confidential treatment.  China considers it important  to present a copy of that response as Exhibit 
CHN-132.  That questionnaire response gives extensive information on all points and on the very same issues which the EU apparently considers conf idential by nature in the case of the EU producers, 
including sales turnover of the company.  The EU is sharp in criticizing Adidas for not requesting 
confidentiality for minimal data but fails to note that sampled Companies G & H did not make any 
request for confidentiality as regards their questionnaire responses.  
 
49. As regards the request for confidential treatme nt, China considers it important to note that on 
the one hand the EU claims that the sampled produc ers authorized CEC to request confidentiality on 
their behalf.  On the other hand it has claimed in the FWS, SWS and its OS that CEC did not represent 
the sampled companies as far as the questionna ire responses were concerned and CEC had no 
knowledge of the data of these companies.  These two assertions are contradictory and the EU must 
decide its argument.  50. Despite the detailed explanations of China a nd evidence provided, the EU continues to claim 
that China gave no evidence to show that the risks of retaliation claimed in the original investigation 
are untrue.  China reiterates that in the original investigation after the imposition of the provisional 
measures, seventeen Italian footwear producers that  were granted confidential treatment filed an 
application for annulment of the Provisiona l Regulation thereby disclosing their names during the 
course of the investigation .  The argument developed by the EU in  its OS that risk of retaliation is 
less likely once duties are imposed therefore rests on a factually incorrect basis.  Furthermore, it is 
illogical that at the time of initiation of the original investigation, the risk of retaliation existed and a 
few months later after the imposition of provisi onal measures, it suddenly disappeared only to 
miraculously re-appear at the time of the review investigation.  Third, the fact that these same 
producers later intervened in other court cases d espite their names and identities having been known 
for a long time by then, proves that retaliation never occurred.     51. In para. 352 the EU claims that if r easons why non-confidential summaries cannot be 
provided are obvious, the EU does not require parties to  provide reasons.  This approach is totally in 
violation of Article 6.5.1 as confirmed by the Panel in US - OCTG Sunset Reviews (Article 21.5) .
24 
 
                                                      
20 For detailed arguments see China's SWS paras. 965-966. 
21 Panel Report, Guatemala - Cement II , para. 8.219. 
22 Ibid., at para. 7.335. 
23 Panel Report, Mexico - Pipes and Tubes , para. 7.378. 
24 See Panel Report, US - OCTG Sunset Reviews (Article 21.5) , paras.7.135-7.136.  WT/DS405/R 
 Page F-27 
 
 
CLAIMS III.1; CLAIM III.20 
 
52. The plain reading of Article 6.10.2 ADA, which provides only for the possibility not to 
determine an individual margin of dumping  for not sampled producers, does not allow the EU's 
departure from its obligations under Paragra ph 15(a) of China's Protocol of Accession.  
 
53. As to the issue of the EU's administrative capacity to analyse four additional non-sampled producers, China considers that the EU's interp retation that individual examinations beyond the 
companies selected in the sample are never necessar y, renders Article 6.10.2, which clearly uses the 
term "nevertheless" a nullity.  
 
54. Finally, the EU's insistence on receiving fro m China data on the EU's own administrative 
capacity goes beyond what China is  required to establish, i.e. a prima facie  case, as China has 
established in its FWS.
25 
 
CLAIM III.2 
 
55. The EU claims that Article 2.2.2(ii) cannot be applied per se  when " the other exports or 
producers subject to investigation " have not been granted MET, while in the same footwear 
investigation the EU did use data from the companies that have not been granted MET.26 Furthermore 
3 of the 12 sampled companies were found to comply  with MET criteria which permit the use of their 
profits and SG&A.  
 56. China's interpretation as to how to determine reasonability under Article 2.2.2(iii) is totally in 
line with previous Panel reports.
27 The EU has criticized China's s uggestion as to the use of profits 
from an investigation on finished polyester filament  fabrics from China and on polyester staple fibres, 
but did not even attempt to show a similarity between "chemical" and "engineering", which could 
mean anything from castings to trichloroisocyanuric acid28, and footwear. 
 CLAIM III.3 
 
57. The EU has - by using its own incomplete records as an excuse
29 - attempted to demonstrate 
that China has adduced no evidence of discriminat ory treatment in favour of Brazilian producers in 
the analogue country selection process.  Ironically , the supporting evidence against which the EU 
directs its criticisms, is no other than it's own non-co nfidential files.  The EU also requires China to 
prove future predictions, a claim that cannot be taken seriously.30 
                                                      
25 China's FWS, para. 1048. 
26 Definitive Regulation, Recital 127. 
27 Panel Report, EC – Bed Linen , para. 6.60, footnote 32. Cited in para. 901 of China's FWS. Panel 
Report, Thailand - H-Beams , para. 7.125. Cited in para. 900 of China's FWS. See also China's response to 
Question 84. 
28 Or hand pallet trucks, tartaric acid, barium carbonat e or magnesia bricks.  These are all products that 
were covered by measures published between 10/07/2005  and 10/07/2006 (i.e. within 12 months before the 
disclosure) in which certain Chinese companies obtained MET. 
29 EU's oral statement at the second  meeting with the Panel, para. 392: "The EU does not now possess 
records sufficient to explain the circ umstances in 2005 that led to this co nduct." See also EU FWS para. 609, 
referring to an entry from Calcados Myrabel: "At this  stage the European Union cannot confirm whether the 
earlier submission was the confidential version." 
30 EU's oral statement at the second meeting with the Panel, para. 394: "…China has no evidence to 
prove that a supposedly lengthy period that was allowed to one company would not have been allowed to 
another company should that have been required."  
In any event, the available eviden ce suggests that no extensions of the deadlines to respond to 
questionnaire from Thai, Indian or Indonesian producers would have been granted. China FWS, para. 930, bullet 
point (ii) and Exhibit CHN-84. WT/DS405/R 
Page F-28  
 
 CLAIM III.4 
 
58. The EU does not contest that the crite ria for the establishment of the "product 
concerned"/"product under consider ation" and like product are simila r and has undertaken no attempt 
to rebut the arguments in paras. 1340-1348 of Chin a's SWS showing that the EU effectively applied 
the like product test in this case, when it decide d to exclude STAF from the scope of the "product 
concerned"/"product under consideration".  CLAIM III.5  
59. The EU's conclusion that " in the case of SMEs, [losses] cannot be sustained for more than a 
few months without their being forced to close down "
31 was explicitly based on information provided 
by the national federations, i.e.  information provided by companies outside the domestic industry.  
The EU's argument that the same conclusion, wh en put in another paragraph of the Regulation 
imposing measures, would be the result of the analys is made in its own context, should be rejected.32 
 60. As the use of data from producers outside of the domestic industry, i.e. companies that are 
neither part of the sample, nor of the complainants, cannot be used ,
 33 cross-checking the information 
– in the black box part of the investigation - agai nst information provided by national associations, is 
equally prohibited.  
 
CLAIM III.10; CLAIM III.11; CLAIM III.12 
 
61. Contrary to the complainants which authorized CEC to act on their behalf34, the 36 supporters 
of the complaint merely declared their support fo r the complaint but did not provide powers of 
attorney empowering CEC to act on thei r behalf, as the complainants did.  
 62. China made no statement that the complain t contained no summary of the names of the 
complaining companies but referred to the missing summary of the domestic prices in Brazil and export prices from China and Viet Nam.   
CLAIM III.13; CLAIM III.14 
 
63. An MET questionnaire is not comparable to  a sampling form.  The EU acknowledges that 
MET and dumping questionnaires were sent simultaneous ly to interested parties and therefore the 
outcome of the MET determination does not dete rmine which party will receive the "dumping" 
questionnaire. 
 64. The Additional Disclosure did involve consid eration of new facts as import value amounts for 
the calendar year 2005 had not been disclosed pr eviously.  The reference to the Definitive 
Disclosure
35 refers to volumes , not values, and in any event concerns only the volumes of 2005 from 
China , not Viet Nam. 
 
65. Finally, China takes note of Para 380 of the EU's OS, in which it claims that the Panel would not be justified in making any recommendations to  the DSB if the 2009 regulation lapses at some 
point between now and the when it would make its final recommendations.  China considers that even 
if measures were to expire it is essential that th e Panel makes findings regarding China's claims and 
                                                      
31 Provisional Regulation, Recital 199. 
32 EU's oral statement at the second meeting with the Panel, para. 400. 
33 Panel Report, EC - Bed Linen , paras. 6.182, 6.183. 
34 Exhibit CHN-108. 
35 Exhibit CHN-81, Recital 291.  WT/DS405/R 
 Page F-29 
 
 
rules on the suggestions as mentioned by China in pa ra. 1225 of its FWS because even if the measures 
are terminated for now, a new set of inconsistent me asures could recur and in fact the EU industry has 
already threatened in press releases to do so.  Th e issues raised by China in this case are to a large 
extent systemic.  China notes that there have been previous cases in which the Panel made a finding in 
favour of the complainant exactly for these reasons.36 
 
 
                                                      
36 They are the GATT panel reports US-Prohibitio n of Imports of Tuna and Tuna Products from 
Canada, EEC-Import Restrictions on Imports of Apples from Chile and EEC-Import Restrictions on Imports of 
Desert Apples from Chile. The Panel in US - Wool Shirts and Blouses  cited those three reports, among others, in 
considering it appropriate that it issue its report in a case where the measures as issue were to be terminated, but 
where there was no agreement between the parties to te rminate the proceedings a nd where the issue of the 
withdrawal of the measure did not ar ise until long after the establishment of the panel.  See Panel report, US - 
Wool Shirts and Blouses  (para 6.2).  WT/DS405/R 
Page F-30  
 
  
ANNEX F-4 
 
 
CLOSING STATEMENT OF THE EUROPEAN UNION 
 
 
1. We divide our closing statement into two pa rts.  First, we focus on housekeeping issues, 
second, we would like to make a few observations regarding the proceedings and the way China has 
been arguing its case.  A. "HOUSEKEEPING" ISSUES 
 
2. We noticed that a couple errors occurred in our oral statement yesterday.  In para. 355, we 
referred to the data from year 1995, we meant to refer to year 2005.  In para. 260, references made to 
September should be read as references to Novemb er and references to October as references to 
December. 
 
3. Next, we note that China confirmed at this  meeting that estimates can, as such, constitute 
positive evidence within the meaning of Article 3.1 of  the ADA.  However, China is of the view that 
in the circumstances of this case the estimates made by national associations cannot constitute 
positive evidence.  We are returning to this to make sure that this position of China is firmly on the 
record. 
 4. Further, we return to the one comment we ow e you on China's second oral statement.  China, 
in para. 66 of this statement says that the Comm ission failed to take full account of the changed 
exchange rate as an ‘other factor ' in injury causation.  However, the aspect to which it refers – the 
increased price of EU products in dollar terms – was considered by the Commission because the 
consequences of that increase would have been fe lt in the areas of exports of EU products, and of 
imports from third countries.  Both of these topi cs were examined in the Commission's causation 
analysis.   B. HORIZONTAL POINTS ARISING OUT OF THE PROCEEDINGS 
 
5. Now, as this the last opportunity for us to speak before you, we would like to draw your attention to a few horizontal points which we see emanate from the proceedings. 
 6. First, yesterday, in our oral statement, we took you through many of the petty factual allegations which China made in its SWS.  As you remember, we talked, inter alia , about such things 
as a page missing in a previous version of the ope n file due to a photocopying error or what holiday 
seasons were celebrated at a certain moment in th e investigation around the world.  There were many 
more of these tiny factual matters, all of which Chin a turned into an issue or allegation before this 
Panel.  We addressed them, but we return to what we stated at the beginning of this meeting: even if 
these allegations were true, we sincerely wonder what relevance, if any, would they have for China's 
claims.  The Panel should review Chin a's claims also in this light.  
 7. Second, we note that China has made and is making new factual assertions at the last stages 
of this proceeding.  For instance, with respect to in jury, China now raises the issue with the fact that 
the EU industry comprised about 18.000 companies.  The EU pointed to this fact from the very beginning, because it was legally relevant for the c onsideration of the claims.  Now, when China 
realizes this is an important fact, China suddenly, in its oral statement, raises an issue with this  WT/DS405/R 
 Page F-31 
 
 
number, saying it represents only an EU "assertion".  Of course it is no assertion and the number is based on evidence on file.  But more fundamentally, if China had problems with this number, it should have raised them at the latest the first time the EU mentioned it, and not know (when China 
eventually realized that this number is relevant for the legal consideration of its claims).  If we 
continue like this, we will end up w ith yet another 600-page submissi on, full of new allegations which 
the EU will have to rebut at the last moment.  Ch ina's strategy raises some issue of abuse of the 
procedure in which indeed it should be the respondent  who has the last word or at least a chance to 
comment on the factual allegations made.  We have  sincere concerns that this backloading of 
discussion may happen again at the stage of co mments to the disadvantage of the respondent. 
 
8. Finally, we have an important observation about China's arguments for which we have a 
shorthand "destruction without solution".  China very  often criticizes the methods used by the EU IA 
as inconsistent with WTO rules.  But China does not  offer solutions.  China does not offer alternative 
ways of how the EU IA could have acted or th e methodologies it could have followed (e.g. in the 
injury analyses) in compliance with  WTO rules in the factual circumstances of the case.  One thing is 
clear – it is always possible to obtain additional in formation, especially if one would have the whole 
time of the world.  But this is not the task of an IA.  The task of an IA is not to write a thesis about the 
state of domestic industry, for instance.  An IA has to gather information which complies with the 
requirements of the ADA (e.g. Article 3 ADA in case of injury claims about domestic industry), within the strict deadlines imposed.  The IA looks fo r reasonable methods to deliver on this task while 
making the conduct of the investigation possible.  Metaphysical certainty and level of details which 
China seeks is something else which does not take acc ount of the realities of an investigation.  We 
would urge the panel to have this viewpoint  in mind when reviewing China's claims.  
 9. Finally, let me say again that we are con cerned about a possible disadvantage for the EU.  If 
China will indeed continue to provide its submissions  as it did up to this point, we may be faced with 
very substantial China's comments to which we ca nnot respond.  We would thus urge the Panel to 
bear this in mind when reviewing, in particular, any new assertions made by China in their comments 
and, if necessary, provide the EU with a chance to respond. 
 10. This concludes our statement.  We would lik e to thank the Panel again for the good discussion 
we had and for the patience you showed in listeni ng to our statement yesterday (and your physical 
stamina; it became very clear that panel proceedi ngs are not only about an intellectual challenge but 
also may present a physical one).  We also thank you for the work ahead of you when reviewing our 
responses to the questions and comments and drafting the report.  Thank you. 
  
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