WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/DSB/M/301 
23 September 2011 
 (11-4492) 
Dispute Settlement Body 
28 July 2011  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard 
on 28 July 2011 
 
Chairperson:  Mrs. Elin Østebø Johansen (Norway) 
 
 
1. European Communities1 – Definitive anti-dumping measures on certain iron or steel 
fasteners from China 
(a) Report of the Appellate Body (WT/DS397/AB /R) and Report of the Panel (WT/DS397/R) 
1. The Chairperson drew attention to the comm unication from the Appellate Body contained in 
document WT/DS397/10 transmitting the Appellate Body Report on:  "European Communities – 
Definitive Anti-Dumping Measures on Certain Iron or  Steel Fasteners from China", which had been 
circulated on 15 July 2011 in document WT/DS397 /AB/R, in accordance with Article 17.5 of the 
DSU.  She reminded delegations that the Appellate  Body Report and the Panel Report pertaining to 
this dispute had been circulated as unrestricted doc uments.  She noted that, as Members were aware, 
Article 17.14 of the DSU required that an Appella te Body report shall be adopted by the DSB and 
unconditionally accepted by the parties to the dispute unless the DSB decided by consensus not to adopt the Appellate Body report within 30 days follow ing its circulation to Members.  This adoption 
procedure was without prejudice to the right of Memb ers to express their views on an Appellate Body 
report.  
2. The representative of China said that her country  thanked the Panel and the Appellate Body, 
as well as the respective Secretariats for their consid erable time and efforts devoted to the resolution 
of this dispute.  They had, once again, demons trated the fundamental importance of the dispute 
settlement mechanism for the proper functioning of  the multilateral trading system.  China also 
thanked the EU and third parties for their construc tive participation in the proceedings.  As a WTO 
Member, the EU was one of the most frequent u sers of anti-dumping measures.  Since 1979, the EU 
had initiated over 160 anti-dumping in vestigations against products fro m China.  This unwarranted 
use of anti-dumping measures had not only distorted wo rld trade, but had also seriously undermined 
the legitimate interests of exporting countries, especi ally developing countries such as China.  In 
responding to certain of these measures, on 31 July 2009, China had launched it s first dispute against 
the EU in the WTO and complained that the an ti-dumping duties on certain iron or steel fasteners 
from China were discriminatory and violated WT O rules.  Moreover, China had also challenged 
certain systematic wrong doings that the EU ha d carried out repeatedly in its anti-dumping 
investigations for years.  After two years of WT O litigation, China was pleased that the Panel had 
                                                      
1 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty 
establishing the European Community (done at Lisbon, 13 December 2007) entered into force.  On 29 November 2009, the WTO received a verbal note (WT/L/779) from the Council of the European Union and 
the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 
1 December 2009, the European Union replaces and succeeds the European Community. WT/DSB/M/301 
Page 2  
 
found in favour on many of its claims, and that the Appellate Body had upheld not only most of the 
Panel's findings challenged by the EU, but had additi onally reversed two of the Panel's findings that 
had originally rejected China's claims.  In par ticular, China welcomed the unequivocal confirmation 
by the Appellate Body of the Panel's conclusion th at the individual treatment regime laid down in 
Article 9(5) of the EU's Basic Anti-Dumping Regula tion was, both "as such" and "as applied" in the 
fasteners investigation, inconsistent with WTO la w.  This provision required suppliers from certain 
WTO Members, such as China, to meet additional conditions before they could qualify for individual 
treatment and be granted an indi vidual duty and dumping margin.  Th e Panel's and Appellate Body's 
findings had clearly confirmed that this provision violated, "as such", Articles 6.10 and 9.2 of the 
Anti-Dumping Agreement and that the EU had ac ted inconsistently with its obligations under 
Article XVI:4 of the GATT 1994 and Article 18.4 of the Anti-Dumping Agreement.  
3. The Appellate Body had also concluded that S ection 15 of China's Accession Protocol did not 
contain an open-ended exception and did not provide a legal basis for the EU's presumption in Article 9(5) of the EU's Basic Anti-Dumping Regulation.  Rather, Section 15 only permitted a 
temporary and limited derogation in respect of th e use of domestic prices and costs, i.e. the 
determination of the normal value under the special condition contained in para graph 15(a)(ii) before 
2016.  The Appellate Body's and the Panel's findi ng that no support could be found in the WTO rules 
for a special regime for alleged non-market econo my countries under which their exporters were 
made subject to a country-wide duty, unless they met the individual treatment criteria of Article 9(5) 
of the EU's Basic Anti-Dumping Regulation, was no t only important for China,  but also represented a 
significant victory from the perspective of the mul tilateral trading system at large.  China also 
welcomed the Appellate Body's finding that the EU  had failed to ensure that the domestic industry 
definition would not introduce a material risk of distortion to the injury analysis by relying on a minimum 25 per cent benchmark irrelevant to the i ssue of what constituted a "major proportion" and 
by excluding certain-known producers that provided relevant information.  As was stated by the Appellate Body, in doing so, the domestic industry de fined in the fasteners investigation had covered 
a low proportion of domestic production, which had significantly restricted the data coverage for 
conducting an accurate and undistorted injury determ ination.  The Appellate Body had, therefore, 
reversed the Panel's finding that the EU had not act ed inconsistently with its WTO obligations in the 
way it had defined the domestic industry in the fasteners anti-dumping investigation. 
4. China also welcomed the Appellate Body's findi ng that, due to the EU's failure to provide a 
timely opportunity to see information concerning th e basis of the price comparisons, the Chinese 
exporters had been unable to exercise their right s under Article 2.4 of the Anti-Dumping Agreement 
and thus could not ensure that the EU had conducte d a fair comparison of the export price and normal 
value.  China was aware that a number of its claims had not been upheld by the Panel and the Appellate Body.  It noted, however, that the Reports  contained a number of important criticisms of the 
EU's measures even where Ch ina's claims had not been upheld.  As an example, China wished to refer 
to the Appellate Body's statement that the granti ng of a 15-day deadline for responding to the Market 
Economy Treatment claim form was too short a nd did not provide parties with an "ample 
opportunity" to submit all evidence in support of their requests, and could, therefore, be considered as 
a violation of Article 6.1 of the Anti-Dumping Agreement.   
5. Following the adoption of the Reports at the pre sent meeting, this dispute would move on to 
the implementation stage.  China invited the EU to  take the necessary positive steps to ensure prompt 
and full compliance with the findings and recommendati ons in the Reports.  In that respect, China 
noted that the EU's obligations were twofold.  First, the EU would have to amend its basic anti-
dumping legislation with a view to removing the "as such" violations.  Second, the EU would have to 
address the numerous WTO inconsistencies found in relation to the anti-dumping measures currently 
in force on fasteners from China.  In view of th e far- reaching consequences that these inconsistencies 
may have for both the dumping margin and injury determination, China was of the view that the 
measures should be withdrawn.  China confirmed its  willingness to cooperate with the EU to resolve 
this dispute and to achieve a WTO-consistent solu tion within a reasonable period of time.  In that  WT/DSB/M/301 
 Page 3 
 
 
regard, China looked forward to the EU's prompt im plementation of the findings in this dispute and 
would monitor this issue vigilantly.  In conclusi on, she said that China was requesting that the DSB 
adopt the Appellate Body Report a nd the Panel Report, as modified by the Appellate Body Report, 
pertaining to this dispute and called upon the EU  to implement the findings and recommendations 
promptly. 
6. The representative of the European Union said that the EU thanked the members of the 
Appellate Body, the Panel and the Secretariat fo r their work on this dispute.  The EU also 
acknowledged their time and efforts dedicated to this di spute.  The EU regretted that Article 9.5 of the 
EU Basic Anti-Dumping Regulation had been found to be WTO-inconsistent "as such" and "as 
applied" in the fasteners investigation.  The EU conceived Article 9.5 as an  important provision which 
prevented the State from channelling all the dumped exports via the State company with the lowest 
duty rate.  The EU noted, however, th at the Appellate Body had reached its findings on the basis of a 
reasoning which was different from that developed by the Panel.  In that regard, the EU was 
particularly satisfied with two cons iderations put forward by the Appe llate Body.  First, the Appellate 
Body had recognized that there may be circumstances where exporters and producers from non-
market economies could be grouped in a single entity when calculating a dumping margin and 
imposing a duty.  For instance, several distinct exporters may be treated  as one single exporter 
because of structural and commercial integration or due to control or material influence by the State.  Second, the Appellate Body had stated that the economic structure of a Member may be used as evidence before an investigating authority to dete rmine whether the State and a number of exporters 
or producers subject to an investigation constituted a single entity.  With regard to the EU regulation 
imposing anti-dumping duties on impor ts of iron or steel fastener s from China, the EU was pleased 
with the fact the Panel and the Appellate Body had rejected a great number of claims of WTO-inconsistency and that the circum scribed violations of WTO law did not affect the general soundness 
of the measure.   
7. Pursuant to Article 21.3 of the DSU, the EU had an obligation to inform the DSB of its 
intentions in respect of implementation of the DSB's recommendations and rulings within 30 days 
after the date of adoption of the Reports.  Since no DSB meeting was scheduled during that period of 
time, a special DSB meeting should normally be c onvened for that purpose.  However, to avoid the 
need to organize a DSB meeting only for that purpose during the holiday period, the EU would inform the DSB by means of a written communication with in the prescribed 30 days, and then it would 
reconfirm the information on implementation at  the next regular DSB meeting scheduled for 
2 September 2011.   
8. The representative of the United States said that  his country had followed this dispute as a 
third party, in particular the issues raised with  respect to the interpretation and application of 
Articles 6.10 and 9.2 of the Anti-Dumping Agreement and Articles 3.1 and 4.1 of the Anti-Dumping Agreement, among others.  The United States tha nked the Panel, the A ppellate Body and the 
Secretariat for their work on this dispute.  Th e United States was concerned about the Panel and 
Appellate Body's consideration of Articles 6.10 and 9.2 of the Anti-Dumping Agreement because the 
Panel and Appellate Body may not have appreciated fully the difficulties that investigating authorities 
encountered when determining anti-dumping ma rgins for non-market economy exporters.  
Importantly, the Appellate Body did recognize that "Article[] 6.10 ... of the Anti-Dumping Agreement 
do[es] not preclude an investigating authority fr om determining a single dumping margin ... for a 
number of exporters if it establishes that they c onstitute a single exporter for purposes of Articles 6.10 
...".
2  This conclusion was grounded in the text of Article 6.10 which required that individual dumping 
margins be determined for each exporter or produ cer.  Therefore, before assigning an individual 
dumping margin to a firm, the investigating authority must decide whether that firm was an "exporter" 
or "producer" within the meaning of Article 6.10.   
                                                      
2 Appellate Body Report, para. 376. WT/DSB/M/301 
Page 4  
 
9. The United States said that it would also highli ght the Appellate Body's statement that "the 
test in Korea – Certain Paper may not capture all si tuations where the State effectively controls or 
materially influences and coordinates several exporte rs such that they can be considered a single 
entity" for purposes of Articles 6.10 of the Anti-Dumping Agreement and can be assigned a single dumping margin.
3  This statement correctly recognized that the Anti-Dumping Agreement neither 
defined "exporter" nor "producer", nor set out the specific criteria for the investigating authority to 
examine before concluding that a particular firm or group of firms constituted an "exporter" or 
"producer".  With regard to the Appellate Body's  findings regarding Article 4.1 of the Anti-Dumping 
Agreement, the United States noted that the A ppellate Body had underscored the importance of 
properly defining the domestic industry for purpo ses of the injury analysis.  The United States 
concurred with the Appellate B ody's statement that, "to ensure  the accuracy of an injury 
determination, an investigating authority must not act so as to give rise to a material risk of distortion in defining the domestic industry, for example, by excluding a whole category of producers of the like product".
4  
10. The United States said that it would also like to  draw Members' attention to the Appellate 
Body's articulation of the standard of review for a claim of error under Article 11 of the DSU.5  The 
Appellate Body usefully reminded Members that "[ a]n attempt to make every error of a panel a 
violation of Article 11 of the DSU is an approach th at is inconsistent with the scope" of Article 11 of 
the DSU.  Further, the Appellate Body highlights that "[i]t is also unacceptable for a participant 
effectively to recast its argumen ts before the panel under the guise of an Article 11 claim".  The 
United States agreed with these statements and belie ved that they were a useful reminder to Members 
regarding the proper scope of Article 11, as well as reflecting the limited scope of appellate review 
under Article 17.6 of the DSU.   
11. Finally, turning to a procedural matter, th e United States noted that the Report of the 
Appellate Body had been circulated outside the 90-da y period stipulated in Article 17.5 of the DSU.  
Unfortunately, this proceeding raised the same concer ns regarding lack of transparency on this issue 
as the United States had noted during the DSB's cons ideration of the last Appellate Body Report.6  In 
this dispute, the Appellate Body's Article 17.5 no tification to the DSB that it could not provide its 
report within 60 days had been submitted on 24 May but was not circulated until 5 July.7  Contrary to 
past practice, this notification made no mention of  whether the parties had been consulted on this 
issue or whether each party had agreed.  Neither did the Appellate Body Report refer to these issues.  
In fact, as a third party, the United States was aware that the parties to the dispute had provided a 
letter informing the Appellate Body that each party would deem a report issued in this proceeding to 
have been circulated pursuant to Article 17.5.  That letter was dated 30 June, pr ior to the circulation of 
the Article 17.5 notice and the Appellate Body Report.   The approach followed by the Appellate Body 
in this dispute again resulted in less transparen cy for Members on the circumstances leading to 
consideration by the DSB of a report circulated outsi de the 90-day period stipulated in Article 17.5.  
While the United States noted that the parties to th e dispute, China and the EU, had been consulted 
and had agreed to deem this Report to be an Appe llate Body report for purposes of Article 17.5 of the 
DSU, the United States did not see how less transparency for other Members and for the DSB as a whole was desirable.  Once again, the United Stat es considered that, in future disputes, Members 
should be provided with the level of transpar ency on these issues as had been provided by the 
Appellate Body in the past. 
                                                      
3 Appellate Body Report, para. 380. 
4 Appellate Body Report, para. 414. 
5 Appellate Body Report, para. 442. 
6 "Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines",  WT/DS371/AB/R 
(adopted on 15 July 2011). 
7 WT/DS397/9 (5 July 2011).  WT/DSB/M/301 
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12. The representative of Costa Rica said that his country had not participated as a third party in 
this dispute.  However, Costa Rica wished to  be associated with the statement made by the 
United States regarding the circulation of the Appellate Body Report outside the 90-day period 
stipulated in the DSU.  Article 17.5 of the DS U clearly stated that in no case shall the appeal 
proceedings exceed this 90-day time-limit.  When , in exceptional and very specific circumstances, 
after consultations with the parties to the dispute, and in view of the complexity of the case, it would 
not be possible to comply with this 90-day time- limit, then in accordance with the DSU, the DSB 
must be informed of the reasons for the delay in  order to ensure due transparency for all WTO 
Members.  However, the approach taken by the Appe llate Body in this dispute – not to mention the 
agreement between the parties – resulted in less transparency for other WTO Members than in the 
past. 
13. The representative of Australia said that her c ountry shared the concerns expressed by the 
United States and Costa Rica concerning the procedural  aspects of the Report, including circulation of 
the Appellate Body Report outside the normal a ppellate time-frames and the apparent lack of 
transparency on this issue in the Report.  Austra lia recognized that, in exceptional circumstances, it 
might not be possible to meet the deadlines contained in Article 17.5 of the DSU and that apparently 
such exceptional circumstances had ar isen in this case.  As Australia  had stated upon the adoption of 
the Appellate Body Report on:  "Thailand - Cigarettes" (WT/DS371/AB/R) in which it had 
participated as a third party, Australia recognized th at, where a balance had to be struck between the 
quality of reports and adhering to appellate time-fra mes, quality should not suffer.  However, in the 
exceptional circumstances where it would not be possi ble to adhere to Article  17.5 time-frames, it was 
particularly important that there be full transpar ency on the extension of the time-frames.  Such 
transparency was important for the Membership as a whole, including those Members that had been 
neither parties nor third parties to the dispute. 
14. The representative of Japan said that her country  also shared the concerns expressed by the 
United States about the lack of transparency.  It appeared that the Appellate Body had departed from 
the practice it had established.  Less transparen cy was undesirable, to say the least because 
Article 17.5 of the DSU was drafted in categorical terms. 
15. The representative of Norway said that her country  had participated in this dispute as a third 
party and wished to thank the Panel, the Appellate  Body and the Secretariat for their work on this 
dispute.  Norway had no comments with regard to  the findings of the Appellate Body.  However, 
Norway noted that the Report had been circulated outside the 90-day period stipulated in Article 17.5 
of the DSU.  As pointed out by previous speakers, this proceeding raised concerns about the lack of 
transparency with regard to this issue.  Norway agreed with the United States, Costa Rica, Australia 
and Japan that in future disputes, Members should be provided transparency in line with what the 
Appellate Body had provided in previous disputes. 
16. The Chairperson noted the concerns raised by Members and said that she had communicated 
to the Chairperson of the Appellate Body similar concerns raised upon the adoption of the Appellate 
Body Report in the dispute on:  "Thailand - Cigarettes" (WT/DS371/AB/R) at the DSB meeting on 15 July 2011.  She said that she had expressed her hope that this type of situa tion would be avoided in 
the future. 
17. The DSB took note of the statements, and adopt ed the Appellate Body Report contained in 
WT/DS397/AB/R and the Panel Report contained in WT/DS397/R, as modified by the Appellate 
Body Report. 
__________