WORLD TRADE  
ORGANIZATION  WT/DS405/2 
9 April 2010 
 
 (10-1877) 
 Original:   English 
  
 
EUROPEAN UNION – ANTI-DUMPING MEASURES ON  
CERTAIN FOOTWEAR FROM CHINA 
 
 
Request for the Establishment of a Panel by China
 
 
  The following communication, dated 8 April 2010, from the delegation of China to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.  
_______________ 
 
  On 4 February 2010, The People's Republic of  China ("China") requested consultations with 
the European Union ("EU") pursuant to Article 4 of the DSU, Article XXIII:1 of the General 
Agreement on Tariffs and Trade 1994 ("GATT 1994" ) and Article 17.3 of the Agreement on 
Implementation of Article VI of GATT 1994 (" Anti-Dumping Agreement ") with respect to 
Article 9(5) of Council Regulation (EC) No. 384/96 on protection against dumped imports from 
countries not members of the European Community as amended, codified and replaced by Council 
Regulation (EC) No. 1225/2009 (the " Basic AD Regulation "), Council Regulation (EC) 
No. 1472/2006 of 5 October 2006 imposing definitiv e anti-dumping duties and collecting definitively 
the provisional anti-dumping duties imposed on imports  of certain footwear with uppers of leather 
from inter alia  China, and Council Implementing Regulation (EU) No. 1294/2009 of 
22 December 2009, imposing definitive anti-dumping duties on imports of certain footwear with 
uppers of leather originating in inter alia  China, as extended to imports of certain footwear with 
uppers of leather consigned from the Macao SAR, wh ether declared as originating in the Macao SAR 
or not, following an expiry review pursuant to Artic le 11(2) of Council Regulation (EC) No 384/96. 
 
 The request for consultations was circulated in document WT/DS405/1 - G/L/916 - G/ADP/D82/1 dated 8 February 2010.   Consultations were held on 31 March 2010 with a view to reaching a mutually satisfactory 
solution. These consultations however failed to resolve the dispute. 
  Therefore, China respectfully requests, pursuant to Articles 4 and 6 of the DSU, Article XXIII:2 of the GATT 1994 and Articles 17.4 and 17.5 of the Anti-Dumping Agreement , that 
the Dispute Settlement Body ("DSB") establish a Panel with standard terms of reference as set out in 
Article 7.1 of the DSU to examine China's claims. 
  
I. Article 9(5) of Council Regulation (EC) No. 384/96 on protection against dumped 
imports from countries not members of the European Community
1 as amended,2 codified and 
replaced by Council Regulation (EC) No. 1225/20093 (the " Basic AD Regulation" ) 
                                                      
1 Council Regulation (EC) No. 384/96 of 22 D ecember 1995 on protection against dumped imports 
from countries not members of the European Community, OJ L 56, 6.3.1996, p.1. WT/DS405/2 
Page 2  
 
   
Article 9(5) of the Basic AD Regulation effectively provides that, in case of imports from non-market 
economy countries (including China), the anti-dumping duty shall be specified for the supplying country concerned and not for each supplier and th at an individual duty will effectively only be 
specified for the exporters which can demonstrate, on the basis of properly substantiated claims, that 
they fulfil all the criteria listed in that provision.  
 China submits that Article 9(5) of the Basic AD Regulation is inconsistent as such with, at least, the EU's obligations under the following provisions of the Anti-Dumping Agreement, the GATT 1994 
and the Marrakesh Agreement Establishing the World Trade Organisation: 
 
I.1 Articles 6.10 of the Anti-Dumping Agreement  because in order to benefit from an individual 
dumping margin, an exporter from China must fulfil specific conditions that are not provided for in 
that article or elsewhere in the Anti-Dumping Agreement . 
 
I.2 Article 9.2 of the Anti-Dumping Agreement  because in order to benefit from an individual 
anti-dumping duty, an exporter from China must fulfil specific conditions that are not provided for in that article or elsewhere in the Anti-Dumping Agreement . 
 I.3 Article 9.3 of the Anti-Dumping Agreement  because on account of the additional conditions in 
order to be entitled for an individual dumping marg in, for those producers/exporters who do not fulfil 
the conditions for the individual treatment regime, th e anti-dumping duty is determined on the basis of 
a dumping margin likely to exceed the dumping marg in established in accordance with Article 2 of 
the Anti-Dumping Agreement . 
 I.4 Article 9.4 of the Anti-Dumping Agreement  given that the anti-dumping duty that is applied to 
imports from producers/exporters who are not included in the sample is calculated on the basis of the 
dumping margins of the sampled producers/exporte rs, including dumping margins of those who do 
not qualify for individual treatment in accordance with Article 9(5) of the Basic AD Regulation . 
 I.5 Article I of the GATT 1994 since, by laying down additional conditions for Chinese exporters/producers to benefit from an individua l dumping margin and an individual anti-dumping 
duty, the EU fails to accord to China advant ages granted to other contracting parties. 
 I.6 Article XVI:4 of the Marrakesh Agreement establishing the World Trade Organisation and 
Article 18.4 of the Anti-Dumping Agreement  since the EU has not taken all necessary steps, of a 
general or particular character, to ensure the c onformity of its laws, regul ations and administrative 
procedures with the provisions of the GATT 1994 and the Anti-Dumping Agreement . 
 I.7 Article X:3(a) of the GATT by not administering the provisions of Article 9(5) of the Basic 
AD Regulation  in a uniform, impartial and reasonable manner.   
 
*** 
                                                                                                                                                                    
 
2 Council Regulation (EC) No. 2331/96 of 2 Decem ber 1996, OJ L 317, 6.12.1996, p.1, Council 
Regulation (EC) No. 905/98 of 27 April 1998, OJ L 128, 30.4.1998, p. 18, Council Regulation (EC) No. 
2238/2000 of 9 October 2000, OJ L 257, 11.10.2000, p.2, Council Regulation (EC) No. 1972/2002 of 5 
November 2002, OJ L 305, 7.11.2002, p.1, Council Regulation (EC) No. 461/2004 of 8 March 2004, OJ L 77, 13.3.2004, p. 12 and Council Regulation (EC) No. 2117/20 05 of 21 December 2005, OJ L 340, 23.12.2005, p. 
17. 
3 Council Regulation (EC) No. 1225/2009 of 30 November 2009 on protection against dumped imports 
from countries not members of the European Community (codified version), OJ L 343, 22.12.2009, p.51 and 
corrigendum to Council Regulation (EC) No. 1225/2009, OJ 7, 12.1.2010, p.22.  WT/DS405/2 
 Page 3 
 
 
   
II Council Implementing Regulation (EU) No. 1294/2009 of 22 December 2009, imposing 
definitive anti-dumping duties on imports of certain footwear with uppers of leather originating in inter alia  China, as extended to imports of certain footwear with uppers of leather consigned 
from the Macao SAR, whether declared as originating in the Macao SAR or not, following an 
expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96
4  
 
 The EU initiated an expiry review of the an ti-dumping measure applicable to the imports of 
certain footwear with uppers of leather from inter alia  China on 3 October 2008. Council 
Implementing Regulation (EU) No. 1294/2009 of 22 December 2009 extended the measure for a 
period of fifteen months. 
 China considers that Council Implementing Regul ation (EU) No. 1294/2009 of 22 December 2009 is 
inconsistent, at least, with the EU's oblig ations under the follo wing provisions of the Anti-Dumping 
Agreement  and the GATT 1994: 
 
II.1 Articles 2.1 and 2.4 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994 
because the EU precluded a fair comparison between the export price and the normal value:  
• on account of the analogue country selection procedure and the selection of Brazil as 
the analogue country; and 
 
• by using the PCN methodology applied in the original investigation and suddenly 
reclassifying the footwear categories in the middle of the investigation.  
 
II.2 Articles 3.1 and 17.6(i) of the Anti-Dumping Agreement because the EU failed to objectively 
examine, based on positive evidence, both the volume of the dumped imports and the effect of the 
dumped imports on prices in the domestic market fo r like products, and the consequent impact of 
these imports on domestic producers of such products, as the EU used different sampling procedures 
for Chinese exporters, EU importers, and non-co mplaining EU producers on the one hand, and 
complainant EU producers on the other hand.   II.3 Articles 3.1 and 17.6(i) of the Anti-Dumpi ng Agreement and Article VI:1 of the GATT 1994 
because the EU failed to objectively examine, b ased on positive evidence, both the volume of the 
dumped imports and the effect of the dumped imports on prices in the domestic market for like 
products, and the consequent impact of these impor ts on domestic producers of such products; and 
Article 6.10 of the Anti-Dumping Agreement, because:  
• the EU selected the EU producers' sample in  the absence of requisite data which is 
normally solicited in a sampling form, is essential for the selection of the sample, and 
was requested from non-complainant EU producers who made themselves known; 
• the EU producers' sample selected was neither statistically valid nor represented the 
largest percentage of volume that could reas onably be investigated and the EU failed to 
cover the largest percentage of volume that could be investigated;   
• the EU producers' sample included a producer  that outsourced its entire production of 
the product concerned to a third country in the review investigation period; and 
                                                     
 
4OJ L 352, 30.12.2009, p. 1. WT/DS405/2 
Page 4  
 
  • the EU used an incorrect product classification methodology and suddenly reclassified 
the footwear categories in the middle of the investigation. 
II.4 Articles 3.1, 3.4 and 17.6(i) of the Anti-D umping Agreement because the EU failed to make 
an objective examination, on the basis of positive evidence, of the factors having a bearing on the 
state of the domestic industry because several key inju ry indicators were analysed on the basis of the 
data of the whole EU production as termed by the EU , that included data pertaining to EU producers 
not part of the EU industry.  II.5 Articles 3.1, 3.5 and 17.6(i) of the Anti-D umping Agreement because the EU failed to make 
an objective examination, on the basis of positive evidence, that dumped imports are, through the 
effects of dumping, causing injury; and because the EU  failed to ensure that injury caused to the EU 
industry by other factors was not attributed to dumped imports. 
 II.6 Article 6.1.2 of the Anti-Dumping Agreement because the EU failed to provide other interested parties prompt access to the informa tion in the non-confidential questionnaire responses 
filed by sampled EU producers. 
 
II.7 Articles 6.2 and 6.4 of the Anti-Dumping Ag reement because the EU failed to provide timely 
opportunities for all interested parties to see all non- confidential information re levant to the defence 
of their interests concerning but not limited to sa mpling of EU producers, selection of the analogue 
country and other procedural issues.  
II.8 Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement because the EU failed to ensure 
among others, the disclosure of the names of the complainants; and the provision of summaries of 
confidential information relating to the EU industry,  and sampled EU producers in the expiry review 
request and questionnaire responses respectively; and data used for selecting the sample of EU 
producers, or, where provided, failed to ensure the provision by the EU industry and/or the sampled 
EU producers, of sufficiently detailed summaries  to enable a reasonable understanding of the 
substance of that information.  II.9 Articles 6.2 and 6.5.2 of the Anti-Dumping Agreement because the EU failed to determine that the request for the confidentiality of the names of the complainants is not warranted; and failed to 
reject the confidential information provided by  the sampled EU producers, the non-confidential 
summaries of which were not provided. 
 II.10 Articles 3.1 and 6.8 of the Anti-Dumping Agreement because the EU did not apply facts 
available when faced with incorrect and deficient information, including but not limited to the product 
classification information, provided by sampled EU  producers in the injury questionnaire responses. 
 
II.11 Article 11.3 of the Anti-Dumping Agreement be cause the EU's determination that expiry of 
the measure is likely to lead to a continuation of  dumping and injury is based on determination of 
continued dumping and injury in violation of Articles 2. 1, 2.4, 3.1, 3.4, 3.5, 6.8, 6.10 and 17.6(i) of 
the Anti-Dumping Agreement.  
 
II.12 Article 12.2.2 of the Anti-Dumping Agreemen t because the EU failed to provide sufficiently 
detailed explanations in the Council Implementing Regulation (E U) No. 1294/2009 of 22 December 
2009, regarding matters of fact and law and reasons which led to the ex tension of the measures; and of 
reasons which led to the acceptance or rejection of the arguments of the interested parties. 
 
II.13 Article 17.6(i) of the Anti-Dumping Ag reement because the analogue country selection 
process by the EU did not amount to a proper establishment of the facts and an unbiased and objective evaluation of those facts.  WT/DS405/2 
 Page 5 
 
 
   
II.14 In consequence, Articles 1 and 18.1 of  the Anti-Dumping Agreement because an anti-
dumping measure shall be applied only under the ci rcumstances provided for in Article VI of the 
GATT 1994 and in accordance with the provisi ons of the Anti-Dumping Agreement. 
       
*** 
  
III. Council Regulation (EC) No. 1472/2006 of 5 October 2006 imposing definitive anti-
dumping duties and collecting definitively the provisional anti-dumping duties imposed on imports of certain footwear with uppers of leather from inter alia  China
5  
 China submits that Council Regulati on (EC) No. 1472/2006 of 5 October 2006  leading to the 
imposition of an anti-dumping duty of 16.5% on the impor ts of certain footwear with uppers of leather 
from China with the exception of one Chinese producer-exporter, is inconsistent, at least, with the 
obligations of the EU under the following provisions of the Anti-Dumping Agreement , the 
GATT 1994 and Part I, paragraph 15 of  China's Protocol of Accession: 
 III.1 Part I, paragraph 15 (a) (ii) of China's Pr otocol of Accession, Paragraph 151(e), (f) of the 
Report of the Working Party on the Accession of China, Articles 2.4 and 6.10.2 of the Anti-Dumping 
Agreement because the EU did not examine the non-sampled cooperating Chinese exporting 
producers' Market Economy Treatment and Individual Treatment applications.  
 
III.2 Article 2.2.2 of the Anti-Dumping Agreement because the amounts for administrative, selling 
and general costs and profits established by th e EU for the company granted Market Economy 
Treatment were not calculated on the basis of a re asonable method as the EU used the administrative, 
selling and general costs and profits of Chin ese exporters in other anti-dumping cases involving 
products other than the product concerned.  
 III.3 Article 2.4 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994  because the 
EU precluded a fair comparison between th e export price and the normal value:  
 
• on account of the analogue country selection procedure and the selection of Brazil as 
the analogue country;  
• by using the PCN methodology established; and 
• by making adjustments for differences in production costs when normal value was 
based on prices or constructed values in the an alogue country, on the basis of the data 
of Chinese exporters that were not granted market economy treatment. 
III.4 Article 2.6 of the Anti-Dumping Agreement read together with Articles 3.1 and 4.1 of the 
Anti-Dumping Agreement because the EU wrongly established the like product/product concerned by 
not excluding STAF below €7.5/pair even though conceptually and technically there is no difference 
between STAF below and above €7.5/pair. 
 III.5 Articles 3.1 and 17.6(i) of the Anti-Dumpi ng Agreement and Article VI:1 of the GATT 1994 
because the EU failed to objectively examine, b ased on positive evidence, both the volume of the 
dumped imports and the effect of the dumped imports on prices in the domestic market for like 
                                                     
 
5OJ L 275, 6.10.2006, p.1. This measure confir ms, and incorporates r easoning from Commission 
Regulation (EC) No. 553/2006 of 23 March 2006 imposing provisional anti-dumping duty on imports of certain footwear with uppers of leather from inter alia  China. OJ L 98, 6.4.2006, p.3. 
 WT/DS405/2 
Page 6  
 
  products, and the consequent impact of these impor ts on domestic producers of such products; and 
Article 6.10 of the Anti-Dumping Agreement, because:  
• the EU used different sampling procedures for Chinese exporters on the one hand, and 
EU producers on the other hand; and 
• the EU made the injury assessment partially on the basis of the verified data of the 
sampled EU producers and partially on the basi s of the unverified data pertaining to the 
EU industry provided by the complainant producers at the complaint stage, as cross-checked, where possible, with  the overall information provided by the relevant 
associations throughout the EU. 
III.6 Articles 3.1, 3.2, 9.1 and 17.6(i) of the Anti-Dumping Agreement as the EU failed to 
objectively examine, based on positive evidence, th e effect of the dumped imports on prices in the 
domestic market for like products, and the conseque nt impact of these imports on domestic producers 
of such products  because: 
 
• the EU's underselling calculation was based on a very low quantity of exports of the 
sampled Chinese exporting producers; and 
• the EU wrongly calculated the underselli ng margin by applying a volume-based 
reduction ratio to the originally calculated price-based margin and by allocating the 
non-injurious import value in relation to import values for a period outside the 
investigation period; 
• the EU inappropriately established the profit margin for the EU industry. 
III.7 Article 3.3 of the Anti-Dumping Agreement because the cumulative assessment of imports 
from China and Vietnam by the EU was inappropri ate in light of the conditions of competition 
between the imported products and the conditions of competition be tween the imported products and 
the like domestic product. 
 III.8 Articles, 3.1, 3.2 and 3.4 of the Anti-Dumping Agreement  because the EU failed to examine 
the impact of the dumped imports on the domestic indus try concerned by evaluating all of the relevant 
economic factors and indices having a bearing on the state of the EU industry, notably production 
capacity and capacity utilization.  
 
III.9 Articles 3.1 and 3.5 of the Anti-Dumping Agreement as the EU failed to objectively examine, 
based on positive evidence, the effect of the dumped imports on prices in the domestic market for like 
products, and the consequent impact of these imports on domestic producers of such products  because 
the EU failed to ensure that inju ry caused to the EU industry by other factors, including but not 
limited to the export performance of EU producers, the lifting of the quota on Chinese footwear, 
changes in pattern of consumption, the decline in EU demand and the effects of exchange rate 
fluctuations, was not attributed to dumped imports from China.  III.10 Articles 6.2, 6.4 and 6.5 of the Anti-Dumping Agreement because the EU failed to provide 
timely opportunities for all interested parties to see all non-confidential information relevant to the 
defence of their interests including, but not limited to, the identity and sampling of the EU producers, information on the adjustments for di fferences affecting price comparability. 
 III.11 Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement because the EU failed to ensure the 
disclosure of the names of the complainants; the provision of non-confidential summaries of  WT/DS405/2 
 Page 7 
 
 
  confidential information relating to the EU industr y and sampled EU producers in the complaint and 
questionnaire responses respectively; information used  for sampling, among others or where provided, 
failed to ensure the provision by the EU industry and/or the sampled EU producers, of sufficiently 
detailed summaries to enable a reasonable understa nding of the substance of that information. 
 
III.12 Articles 6.2 and 6.5.2 of the Anti-Dumping Agreement because the EU failed to determine that 
the request for confidentiality of the names of the co mplainants is not warranted; and the EU failed to 
reject the confidential information provided by  the sampled EU producers, the non-confidential 
summary of which was not provided.  
III.13 Article 6.1.1 of the Anti-Dumping Agreement and Part I, paragraph 15 of China's Accession 
Protocol because Chinese exporting producers were granted only 15 days by the EU to submit their 
written reply to the Market Economy Treatment  and Individual Treatment questionnaires. 
 III.14 Article 6.9 of the Anti-Dumping Agreement because the additional defi nitive disclosure issued 
on 28 July 2006 regarding a change in the form of the measures was not made by the EU in sufficient 
time for the interested parties to defend their interests.  III.15 Article 6.10 of the Anti-Dumping Agreement because the sample of  the Chinese exporting 
producers selected by the EU was not based on the largest percentage of export volumes of the 
product concerned from China as: 
 
• the sample was established befo re the exclusion of STAF from the product scope of the 
investigation; and 
• the domestic sales volumes of the sampled co mpanies were also taken into account for 
sample selection. 
III.16  Articles 3.1 and 9.2 of the Anti-Dumping Agreement because the anti-dumping duty on 
Chinese exports was not imposed and collected by the EU on a non-discriminatory basis as the duty 
rate established for China was higher than that for Vietnam, although both the dumping and injury 
margins found for Vietnamese exporters we re higher than those for Chinese exporters. 
 III.17 Articles 6.10, 6.10.2, 9.2 and 9.3 of the Anti-Dumping Agreement because although sampling 
was resorted to in the curren t case by the EU for Chinese exporting producers, a country-wide duty 
was imposed on the sampled Chinese exporting producers. 
 III.18 Articles 6.10, 6.10.2, and 9.2 of the Anti-Dumping Agreement because the EU applied 
additional conditions by way of the Individual Treat ment criteria to deny individual dumping margins 
to cooperating Chinese exporting producers.  
III.19 Article 12.2.2 of the Anti-Dumping Agreement because the EU failed to provide sufficiently 
detailed explanations in Council Regula tion (EC) No. 1472/2006 of 5 October 2006  regarding matters 
of fact and law which led to the acceptance or rejecti on of the arguments of the interested parties, and 
on matters of fact and law and reasons whic h led to the imposition of final measures. 
 
III.20 Article 17.6(i) of the Anti-Dumping Agreement because the analogue country selection 
process by the EU and the calculation of a dumpi ng margin for the non-samp led cooperating Chinese 
exporting producers without the examination of their Market Economy Treatment and Individual 
Treatment applications, did not amount to a pr oper establishment of facts and an unbiased and 
objective evaluation of those facts.  WT/DS405/2 
Page 8  
 
  III.21 In consequence, Articles 1 and 18.1 of the Anti-Dumping Agreement because an anti-dumping 
measure shall be applied only under the circumst ances provided for in Article VI of the GATT 1994 
and in accordance with the provisions of the Anti-Dumping Agreement . 
  
 The EU's measure therefore nullifies and impairs benefits accruing to China under the Anti-
Dumping Agreement , the GATT 1994, the Marrakesh Agreem ent Establishing the World Trade 
Organisation and China's Protocol of Accession.   China asks that this request be  placed on the agenda of the DSB meeting scheduled to take 
place on 20 April 2010. 
 
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