WT/DS405/R 
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ANNEX E 
  
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN 
SUBMISSIONS OF THE PARTIES 
 
 
Contents Page 
Annex E-1 Executive Summary of the Second Written Submission of China E-2 
Annex E-2 Executive Summary of the Second Written Submission of the 
European Union E-12 
 WT/DS405/R 
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ANNEX E-1 
 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN 
SUBMISSION OF CHINA 
  
I. INTRODUCTION 
 1. The extent to which this summary treats certa in facts and legal issues should not be taken as 
any indication of the relative impor tance that China attaches to them. 
  
II. PRELIMINARY RULING REQUEST ISSUES 
 
2. First, China notes that it is its view that the drafters did intend to have Article 17.6(i) set 
limits on authorities' discretion to act in an unfair manner.  After the inclusion in the Anti-Dumping 
Agreement of Article 17.6(i), it seems as though it would have gone without saying that if Members 
did not conduct investigations in  accordance with the broad standard s set by the Article, then they 
would be liable to have the de terminations not made in conf ormity therewith overturned.  
 3. China also notes, as it did in its response to qu estion 29 by the Panel, that even if the Panel 
were to consider that Article 17.6(i) were not capab le of forming the basis of a claim, the Panel should 
still consider China to have made its prima facie case in respect of its procedural fairness claims 
through the Article 2.4 fair comparison obligation.  The facts which China has said violate the 17.6(i) 
standards are the same facts which would violate the fair comparison obligation, and for the same 
reasons (it is noteworthy that the EU responde d to these allegations on their merits).  
 
4. With respect to the EU's DSU Article 6.2 arguments in connection with China's 
Article 17.6(i) claims, China refers to Paragraphs  116 to 135 of its First Written Submission ("FWS") 
for a general overview of how WTO panels and the AB have interpre ted Article 6.2 of the DSU, as 
well as Paragraphs 149 to 155 of its FWS for its ar gument as to why China's Article 17.6(i) claims, 
specifically, satisfied the requirements of that Article.  
 5. China does not have much substance to add to those arguments in connection with the rest of 
the EU's DSU Article 6.2 arguments pertaining to the Definitive and Review regulation claims.  The 
claims , as China has explained, were properly made  in the panel request as they identified the 
measures at issue and provided a brief summary of the legal basis of the complaint, as those terms 
have been defined by consistent case law.  An elaboration of the arguments  was provided in China's 
FWS.  
 
III. CHINA'S "AS SUCH" CLAIM AGAINST ARTICLE 9(5) OF THE BASIC AD 
REGULATION 
 6. As an initial matter, China would note th at up to this point, it has not relied upon the 
conclusions of the panel in the EC - Steel Fasteners dispute as they relate directly to each of China's 
as such claims.  As of four days before the due-d ate of this submission, however, the final report of 
the panel in that dispute has been made public, and China considers that the holdings of the panel in 
that dispute should henceforth be duly take n into account by the panel in this one.  
  WT/DS405/R 
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7. Notably, with respect to China's as such claims, the panel in that dispute ruled in favour of 
China with respect to every claim on which it made  an affirmative finding.  Specifically, the panel 
held that Article 9(5) of the Basic AD Regulation violates Articles 6.10 and 9.2 of the Anti-Dumping 
Agreement , along with the MFN principle contained in Article I:1 of the GATT 1994, Article XVI:4 
of the WTO Agreement and Article 18.4 of the AD Agreement.1  In addition, it is noteworthy that the 
panel considered, in the context of a virtually id entical panel request in both cases, that each of 
China's as such claims fell within the scope of Article 9(5) such that they could be considered on their 
merits, and none failed to meet the re quirements of DSU Article 6.2.   
 8. China additionally notes that in light of the iden tical nature of the as such claims at issue in 
the two disputes and the close temporal relationshi p between them (i.e. no AB report has made any 
statement which would cast doubt upon the validity of the panel's reasoning in the EC - Steel 
Fasteners ), as well as the common parties, China consider s the issue of whether or not Article 9(5) is 
inconsistent with Article 6.10, 9.2 and I:1 of the GATT to have been resolv ed such that any major 
contradiction with respect to th e result in the two disputes would be difficult to accord with 
Article 3.2 of the DSU the AB's holding that, while not binding, panel reports create legitimate 
expectations among Members.   9. As to the substance, China considers that  the EU clearly has no legal basis on which to 
consider that the actual status of China's economy is  relevant for the purposes of this dispute, and the 
Panel report in EC - Steel Fasteners has effectively rejected any form of the proposition that either the 
Working Party report, the Protocol, or any of the EU 's "evidence" as to the current state of China's 
economy can form the basis of a justification to institute a rebuttable presumption which applies to 
China on a discriminatory basis and has nothing to do with the calculation of normal value.  
 10. It is on this basis that the Panel held for China with respect to the GATT I:1 claim.   It is also 
noteworthy, as a foundational issue that equally undermines the EU's defenses with respect to each of 
the provisions at issue, that the Panel in EC - Steel Fasteners held that in determining whether a 
company is related to the state as a factual matter, be it in the context of whether the state is a single 
producer for Article 6.10 purposes or a supplier for Ar ticle 9.2 purposes, the burden of proof shall not 
be shifted to the exporters, irrespective of the ec onomy from which that producer comes.  In China's 
view, the panel held the same burden of proof issue to, in itself, constitute a violations of Articles 6.10 
and 9.2 of the Anti-Dumping Agreement , as well as GATT I:1.  
 
IV. CHINA'S CLAIMS CONCERNING THE REVIEW REGULATION 
 
11. China recalls that the analogue country selec tion process falls within the scope of the fair 
comparison obligation of Article 2.4, first sentence.  In paragraphs 154-193 of China's replies to the 
questions of the Panel in connection with the firs t meeting with the Panel, China provided a detailed 
response to the Panel's request that China respond to the EU's argument in its FWS, paragraph 171, 
that the obligation in Article 2.4 of the AD Agreem ent to make a fair comparison comes into play 
after such a normal value has b een identified, but not before. 
 
12. China's principal argument in that respect is that the fair comparison obligation contained in 
Article 2.4, first sentence, is an  independent, overarching obligation which stands alone from the more 
specific obligations relating to the examples of due allowances which follow it.  China considers that 
the analogue country selection and selection proces s effectively precluded a fair comparison, and 
therefore the EU is in violation of that obligatio n.  China finds support for this argument in various 
AB reports' interpretation of the fair comparison obligation, as well as the drafting history of the 
Article and the wording of China's Protocol of Accession, which considers the "comparison" to be 
essentially synonymous with the establishment of normal value.  
                                                      
1 See generally EC - Steel Fasteners, paras. 7.11-7.50 for holdings on preliminary issues and 7.51 to 
7.137 for holdings on substantive issues  relating to the as such claims.   WT/DS405/R 
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 13. Along with the substantive criteria in making the selection and the result, the Fair Comparison obligation informs the procedural fairness aspects of analogue country selection.  It would be difficult 
to imagine that the "comparison" could be truly "fai r" in a situation where th e substantive criteria used 
to derive the normal value on which the comparison was based were fair (which is not the case here 
either), but the actual procedure were effectively rigged so as to favour the interests of the domestic 
producers such that the final normal value were sure to be unrealistically high.   14. Article 2.1 of the Anti-Dumping Agreement may form the basis of a claim.  In response to the 
EU's reliance on the AB in US - Zeroing (Japan), China notes that it is not  reading Article 2.1, and 
particularly what it considers to be the necessity to establish a comparable price , in isolation.  Rather, 
the obligation to establish a comparable price is in  fact found throughout various provisions of the 
Anti-Dumping Agreement such that it cannot be said that Article  2.1 independently imposes it, and the 
independent imposition of an obligation by a provis ion is not a necessary prerequisite to its being 
capable of citation as the basis of a claim. 
 
15. Certain procedural fairness issues must be c onsidered to fall within the scope of Article 2.1. 
even though there is no embedded due-process language contained within Article 2.1, as is the case 
with Article 2.4.  Nevertheless, China considers that  if there is an obligation to secure a comparable 
price, a process by which that price is secured whic h is effectively rigged in such a way that the 
resulting price will not be, or will be far less likel y to be "comparable," then that obligation is 
violated.  At the least, China would consider that certain of the facts of this case, which evidence 
blatant bias in favour of the domestic producers throughout the selection of the analogue country, should violate the general principle of good faith.   16. As to the actual way in which Article 2.1 a nd 2.4 place limits on authorities' discretion with 
respect to the analogue country selection process, Chin a considers that the EU's interpretation of the 
significance of the silence of the contracting parti es as to the specific criteria to be used in the 
analogue country selection is misp laced, and the AB report in US-Hot Rolled Steel  lends clear support 
to this view.  A reasonable analogue country selecti on process undertaken in the event of a finding of 
distortion of domestic prices must at least aim in the direction of finding a proxy normal value for 
that which would have prevailed if not for the dist ortion.  The EU's argument that the only "inferred 
requirement" is that the country operate under market  conditions is not tenable in light of the object 
and purpose of the Anti-Dumping Agreement .  
 17. In that respect, China considers th at the actual criteria which the EU used in this case to select 
the analogue country were, taken as a whole, ina ppropriate as a means to find a comparable price 
which could permit a fair comparison because they did not include any factor which could evidence 
an intention to find a proxy normal value for the actual country under investigation.  18. That conclusion notwithstanding the criteria in this case were analysed in an unreasonable 
manner because the EU placed a manifestly unr easonable amount of importance on sales volume as 
an analogue country selection criterion, and this was primarily responsible for the inappropriate 
selection of Brazil.  Furthermore, the sales volumes analysed were derived as the result of a violation 
of the interested parties' due process rights, and thus the procedural fairness issues tainted those 
analyses.  19. Those arguments notwithstanding, China also  considers that the EU's analysis of the 
"competition" criterion was unreasonable because the effects of the protection of a market must be 
considered as a counterweight to the fact that th ere are a significant number of producers in that 
market.  Furthermore, the analysis of the "lik e product" criterion was unreasonable because Brazilian 
producers did not even produce one of the major subsets of the product concerned.    WT/DS405/R 
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20. With regard to the claim concerning the PCN classification system, China has explained that 
the existence of an overly broad PCN system with  broad PCN categories precluded a fair comparison 
in the review investigation.  The differences on acc ount of the physical characteristics and technical 
differences which affected the production costs and sales prices were not captured by the PCN system 
used in the review investigation.  Chinese produ cers could not possibly quantify these differences for 
the hundreds of extremely different footwear types cl assified under the same PCN in order to be able 
to request specific adjustments with in the PCN.  China has also estab lished that there was a change in 
the methodology of classification of sports, sports -like and trekking footwear from one category to 
another, contrary to the EU's claim in the FWS that there was merely a rectification of the classification errors.  The changed classification fu rther prevented a fair comparison between the 
PCN-based Chinese export prices and Brazilian normal value within the meaning of Article 2.4 and 
consequently the EU's evaluation of 'dumping ' was inconsistent with Article 2.1 of the Anti-Dumping 
Agreement  and Article VI:1 of the GATT 1994. 
 21. Having mentioned the foregoing, China notes that the legal basis of its claims II.1 and II.13 
are Articles 2.1, 2.4, and 17.6(i), and Article VI:1  GATT and Article 11.3.  Ch ina first established the 
legal basis for the applicability of Article 2 provi sions in the expiry review with reference to 
Article 11.3; then it provided detailed factual a nd legal arguments establishing the violation of the 
provisions of Articles 2.1, 2.4, 17.6(i) and GATT Article VI:1.  Thereafter, China argued the breach of Article 11.3 based on the establishment of th e violation of the provisions of Article 2 and 
Article VI:1 GATT 1994. 
 
22. With regard to claims II.2-II.5, China submits that the EU's assertion of a legal error by China 
is incorrect and must be rejected.  China claims th at an investigating authority is not required to or 
mandated to make an injury determination again in the context of a likelihood of injury determination 
under Article 11.3.  However, as was the case in the re view investigation, if an investigating authority 
makes an injury determination and relies upon it for th e likelihood of injury determination, then the 
provisions of Article 3 would be rele vant in the context of that inju ry determination and the violation 
of the provisions of Article 3 can be alleged in the context of that injury determination. 
 23. Article 11.3 being termed as a consequential claim in China's FWS does not indicate that it is 
not the legal basis of China's claim.
2  
 
24. In China's view, if a panel finds that an  investigating authority conducted an injury 
determination which is in consistent with the Article 3 prov isions, and relied upon that injury 
determination for its likelihood-o f-injury determination, then th e latter determination of the 
investigating authority is also def ective and inconsistent with Article 11.3.  Such a likelihood of injury 
determination cannot form a prope r foundation for the continuation of the anti-dumping duties under 
Article 11.3.3  
 25. China has established that the EU made an  injury determination in this case based on the 
provisions of Article 3.  The scheme of the injury determination in the review investigation mirrored 
that of the original investigati on.  This injury determination th en became the essential basis of the 
EU's finding of a likelihood of continuation of injury.  The EU's assertion that " [t]he determination of 
likelihood of injury that is made in the Review Regulation is based…  also on an examination of the 
individual factors pertaining to both injury and caus ation that are relevant to such a determination. 
In fact, by far the greatest emphasis is placed on this examination "
4 is factually incorrect.  The 
likelihood determination of the EU was simply b ased on a finding of continued dumping and injury to 
                                                      
2 Panel Report, US - OCTG Sunset Reviews , paras. 7.273-7.274. 
3 AB in US - OCTG Sunset Reviews  also held that the requirement of Article 3.1 that an injury 
determination be based on "positive evidence" and an "objective examination" is equally relevant to likelihood 
determinations under Article 11.3. 
4 Para. 93, EU's response question 43 from the Panel. WT/DS405/R 
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the exclusion of any additional analysis.  The alle ged likelihood-of-injury causation analysis was not a 
part of the likelihood-of-injury analysis of the EU but merely its response to the arguments raised by interested parties.  Thus, to the extent the EU  made an injury determination in the review 
investigation, it was required to comp ly with the Article 3 provisions.  
 
26. As regards the sampling of the EU producers, China considers that since some information for 
the complainant producers was available to the EU-w hich was (a) not the relevant information nor the 
kind of evidence which is necessary for sampling and can be considered "positive evidence"; and (b) 
not at the same level and to the extent as that so licited for the purpose of sampling through a sampling 
form and was solicited from the other interested  parties including non-complainant producers – the 
EU did not comply with the objective examination and positive evidence  requirement of Articles 3.1 
and 17.6(i) in selecting the eight complainant producers in the sample.  By not sending the sampling forms to the complainant producers only, the EU di d not gather the requisite "positive evidence" and 
did not 'identify' the facts for the purpose of sample selection and consequently the injury 
determination, on the basis of an objective exam ination.  China notes that by soliciting sampling 
information through sampling forms an investigating authority in addition to gathering the relevant 
data ensures to a certain extent that th e data qualifies as "positive evidence".   
 27. If the Panel were to accept the EU's new de finition of the domestic industry, it would only 
lend further support to China's assertions in the c ontext of the present clai m because while the EU 
claims to have investigated th e existence of injury both with respect to the complaining and non-
complaining producers, it solicited the informati on relevant for sampling, i.e. positive evidence, 
exclusively from the non-complainant producers.  28. The EU's entire defence is based on an assu mption unsupported by any evidence, that the 
"positive evidence", i.e. the information relevant fo r sampling, that would have been obtained through 
completion of sampling forms by each individual complainant, was available to it for all the 
complainant producers individually at the time of sa mple selection, i.e. before 10 October 2008.  This 
assumption has been refuted by China.  With re gard to the complaint, the EU's response to 
question 45 from the Panel makes clear that the data for the full RIP was not available in the 
complaint; information regarding the sales data for the years 2006, 2007 and the RIP, and information 
about the product types produced were not provided by each complainant.  The declarations of 
support provided only the production data for 2007 and January 2008 and no information was 
solicited for sales or sector/product segments.  Additionally, the standing forms requested the 
production and sales volume for the years 2006, 2007 and first half of 2008 and were allegedly 
completed by 'some' complainants. Even if two, five or ten complainants completed the standing 
form, clearly the EU did not have the data from each complainant.  The EU's assertion that the 
aggregate data for majority of the complainants th at did not complete the standing forms was obtained 
from the national associations is irrelevant as deseg regation of the data of individual producers from 
the aggregate data of all companies that were members of the national associations is impossible.  Aggregate data of the national associations is ne ither the same as the individual data that the 
complainants would have provided if they would have completed the sampling forms, nor can that 
aggregate data be considered "positive evidence" .  Simply considering the full year 2007 data 
provided by some complainants in the standing form responses, equal to or representative of the data 
for the last six months which were part of the RIP amount to extrapolation and not "positive 
evidence".  Product/sector segment information was not sought in the standing form.  Last, the EU's 
use of estimates provided by CEC in the letter of  29 October 2008, to further confirm estimates 
provided in the complaint, cannot be considered re levant "positive evidence" for sampling.  In any 
event, the reference to the CEC letter of 29 Octobe r 2008 which post-dated the sample selection, i.e. 
10 October 2008, does not establish that the selection of the eight producers sampled on 10 October 2008 was based on positive, credible and a ffirmative data relevant for sample selection. 
 29. China has explained the basis on which it posits  the applicability of Article 6.10 for sampling 
in the context of injury in this case.  Based on th at reasoning and the interpretation of the panel ruling  WT/DS405/R 
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in EC - Salmon , China considers that if an investigating authority claims to have based the sample 
principally on the volume of production of the dom estic producers, it is obliged to follow the criteria 
prescribed in Article 6.10 and there is no other methodology which would en sure that the domestic 
industry as a whole is represented by the sample.  The contrary would lead to anarchic situations like 
the present case where the EU industry's sample co mprises of only eight companies of which one 
completely outsourced production in the RIP to a non-EU country, and in total the sampled companies 
account for only 8.2 per cent of the domestic industr y production if the domestic industry were to be 
accepted as comprising of the complainants and 3.1 pe r cent of the total production of the EU industry 
should the Panel consider that the domestic industry comprises of complainants and non-complainants. 
 
30. Additionally, if the Panel were to accept the new definition of the domestic industry, China 
considers that the sample of the EU producers sel ected from a pool of complainant producers only is 
biased and unrepresentative of the domestic industry as whole which includes non-complainant 
producers representing 65 per cent of the total dom estic industry production.  In violation of 
Articles 3.1 and 17.6(i) of the Anti-Dumping Agreement , the EU ensured that only one segment of the 
domestic industry, notably the complainants that clai med the existence of injury to begin with, were 
represented in the sample.  31.  China submits that the inclusion of a company in the domestic industry sample that 
definitively ceased EU production and outsourced its entire production at some point during the RIP 
to a third country and was no longer representativ e of the entire domestic industry as a whole after 
that point in time, cannot be justified on the groun d that it represented an important business model 
because such business model pertained to an importe r and representativity of business models was not 
one of the criteria for sample selection as admitted by the EU in the FWS.  Even if the data of this 
company pertaining only to its activity as a producer was taken into account for the injury 
determination, China considers that the effect of outsourcing on this company would be attributed to 
the allegedly dumped imports and transposed to  the situation of the other EU producers.  
Consequently an injury analysis based on a sample  including such a producer cannot be considered 
objective and based on positive evidence.  32. China requests the Panel not to accept the EU's ex-post definition of the 'domestic industry' as 
consisting of complainants and non-complainants.  The contrary would make the provisions of 
Articles 3.1 and 3.4 practically ineffective.  Ampl e evidence on the record as  noted by China in the 
SWS disproves the EU's new definition.  The Review  Regulation and the Notes for the File show that 
the EU represented since the beginning of the re view investigation that the domestic industry 
consisted of the complainant producers only, as is ind eed standard EU practice.  Thus, the EU violated 
Article 3.4 because it analyzed the macroeconomic injury indicators on the basis of data that included 
the data of non-complainant producers accounting for around 65 per cent of the EU production.  33. If however, the domestic industry were to be  considered by the Panel as consisting of 
complainants and non-complainants then also Chin a's claim stands as the Prodcom data as well as the 
data of the national associations for the various macroeconomic indicators used by the EU included 
the data pertaining to the domestic producers th at had delocalized production to the countries 
concerned; or were related to Chinese exporters  or imported significant quantities of the product 
concerned from China and/or Viet Nam.  An unsubs tantiated assumption forms the basis of the EU's 
evaluation of the macroeconomic indicators that only three EU companies out of 18,000 producers outsourced production outside the EU and/or were  related to Chinese producers.  Additionally, 
irrespective of the domestic industry definition, Ch ina has established in the SWS that the EU's 
assessment of the injury indicators was not ba sed on "positive evidence" and an "objective 
examination" of evidence.  Notably, Prodcom data  is an un-objective source of data, it is available 
only for calendar years (not the RIP) and at th e CN code level; and th e data of the national 
associations contained significant estimates and re presented only 80 per cen t of the EU production. 
 WT/DS405/R 
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34. With regard to causation, China consider s that the EU did not objectively separate and 
distinguish the injurious effects of certain duly dem onstrated factors and made boilerplate statements 
without analyzing the nature and extent of the injury  caused by those factors.  This is evident from the 
explanations provided by the EU in the Review Regul ation.  The EU simply attributed the injurious 
effect of those other known factors to the dumped im ports in violation of Article 3.5.  Additionally, 
with respect to certain other known factors, the EU admittedly refused to analyze the injurious effects 
of those factors.  Consequently, the EU did not co mply with its overarching obligation to demonstrate 
causation and the non-attribution analysis was not done in compliance with Article 3.5.    
 35. With regard to the procedural issues, in the context of the violation of Article 6.1.2 by the EU, 
China considers that in the absence of any proof that would establish that the five sampled EU 
producers did not submit Community interest questionnaire responses, China's claim stands. Concerning the delay in making available the inju ry questionnaire responses of four sampled EU 
producers, China notes that the condition in Article 6. 1.2, i.e. "subject to the requirement to protect 
confidential information",  which is the basis of a ll the arguments of the EU, does not come into play 
as the subject questionnaires were the properly f iled non-confidential versions.  Investigating 
authorities have no obligation to ascertain whether the submitted evidence labe lled 'non-confidential' 
is indeed non-confidential.  It is the party s ubmitting evidence/a documen t that has to request 
confidentiality and demonstrate good cause for confiden tiality and in the absence thereof, it is the 
investigating authority's obligation to promptly  make available the evidence submitted by one 
interested party to another.  If the EU's inte rpretation of Article 6.1.2 were to be accepted, 
investigating authorities will virtually never have to bother to make promptly available any evidence 
to interested parties.   36. In the context of claim II.7, China's notes that its claims under Article 6.2 are not merely 
consequential to its claims under Article 6.4.  Chin a has also established an independent violation of 
Article 6.2.  Based on the panel ruling in Guatemala–Cement II China considers that there may be 
cases in which a panel will nevertheless need to ma ke additional findings under Article 6.2, although 
the more specific provision has not been violated.  In the specific context of Article 6.4, China has 
refuted the misconceived interpretation of the terms 'information', information 'used' by investigating 
authorities, and timeliness, forwarded by the EU.  If the EU's interpretation of Article 6.4 were to be 
accepted, procedural issues among others concer ning the sample selection and analogue country 
selection cannot be challenged under this Article.  
 37. With regard to the violation of Articles 6.5 and 6.5.1, China has refuted at length the 
erroneous interpretations and factually incorrect ar guments of the EU in the FWS and in response to 
the Panel questions.  The EU violated Article 6.5 (a) by granting confidential treatment to the names 
of the EU producers including complainants, suppor ters, sampled producers and producers sampled in 
the original investigation; by granting confidential tr eatment to some information in the expiry review 
request, standing forms, CEC submissions, injury  questionnaires of sampled EU producers; and 
analogue country questionnaires, which were not co nfidential; and (b) by granting confidentiality to 
certain information in the above-mentioned docum ents on its own accord in the absence of "good 
cause" showing by the parties concerned.  The EU al so violated Article 6.5.1 (a) by failing to require 
the parties concerned to provide non-confidential summaries of the confidential information submitted 
and/or to give a statement of reasons as to why summarization was not possible; and (b) by failing to 
ensure that the non-confidential summaries pr ovided permitted a reasona ble understanding of the 
confidential information submitted.  
38. China reiterates its claims II.9-II.12 and refers to its detailed rebuttal in the SWS of the EU's 
arguments in the context of these claims.   WT/DS405/R 
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V. CHINA'S CLAIMS CONCERNING THE DEFINITIVE REGULATION 
 
39. China considers that sampling does not apply to the MET determination because Article 6.10 
and 6.10.2 do not concern the methodology and da ta to be used for calculating the margin of 
dumping.  The EU was under an obligation to base th e margin of dumping on prices or costs in China 
even to non-sampled exporting producers whic h can show to operate under market economy 
conditions.   40. Alternatively, the criterion "largest volume of export sales" does not guarantee that the sample is representative for a determination whether pr oducers operate under market economy conditions, as 
it excludes small and medium-sized exporters.  Also, by requesting non-sampled companies to 
respond to MET questionnaires in a very short de adline and then not looking at them, creating a 
reasonable expectation that they could be gran ted MET and granting no additional opportunity to 
apply for individual examination once it was decided to disregard the information supplied by them, 
the EU did not act in respect of the general prin ciple of good faith and fundamental fairness and the 
"proper establishment" requirement of Article 17.6(i). 
 41. China considers that the EU was not excused  from individually examining any subsequent 
submission of non-sampled companies because the size of the sample was extended at the request of 
the Chinese authorities.  It is for the EU to provid e evidence that its administrative capacities did not 
allow for the examination of four additional co mpanies.  In any event, in case of sampling, 
investigating authorities should always allocate some resources in case any company requests an 
individual examination as otherwise, Artic le 6.10.2 would be rendered meaningless. 
 42. China considers that the EU was not allowed to disregard the sales of companies not granted 
MET for the calculation of the cap for the establishm ent of the amounts for SG&A and profits for the 
Chinese company granted MET.  In addition, the EU could have used the profit realized by exporting 
producers in the textile sector – which together with  footwear belong to the broader category "Fashion 
and design industries" – to calculate the cap.  In any event, that the method used was unreasonable, 
because the EU used criteria not provided in Article 2. 2.2(iii) to arbitrarily restrict the amount of data 
that could be used.  
43. With regard to the analogue country selection process, China refers to its arguments made in 
the context of the review regulation that (i) th e EU places an unreasonable amount of weight on 
domestic sales volume as a means to select an analogue country, (ii) the criteria taken as a whole are 
manifestly unreasonable and necessarily cannot not acco rd with the obligations to secure and make a 
fair comparison as the EU does not seriously take into account any criterion which aims at finding a 
proxy normal value for that which would have exis ted but for the distortion in the Chinese market. 
With regard to instances of procedural bias Chin a considers among others that (i) exporting producers 
did in fact request the EU to undertake more ex tensive and diligent efforts to secure producer 
cooperation and better assess the appr opriateness of India and Indonesi a as analogue countries, (ii) the 
burden of proving that there were fewer (known) prod ucers in Indonesia lies with the EU and (iii) the 
EU has been unable to rebut the prima facie ev idence that the several Brazilian companies were 
granted more time, (iv) and the failure to even consider the numerous and repeated arguments made 
by an interested party constitutes an  improper establishment of the facts. 
  44. China considers that the PCN methodology was t oo broad to allow for a fair comparison, thus 
violating Article 2.4 because the EU only made one adjustment even though many differences 
affecting cost of production were not reflected in  the PCN.  The method used to exclude STAF was 
unreasonable because the EU "deemed to be STAF" a ll PCNs reported with a weighted average CIF 
price above a price threshold.  China notes also that the EU is stating something else in the context of 
this dispute than what is contained in the pub lished Regulation, namely that the leather cost 
adjustment was based only on world market prices, and that the EU refused as a matter of principle to 
make adjustments in previous investigations becau se the companies were not granted MET, while in WT/DS405/R 
Page E-10  
 
the footwear case, the EU was prepared to make  an exception for the calculation of a significant 
adjustment upwards.  45. China considers that the EU effectively de termined that STAF and non-STAF were not 'like 
products' because the test it applied effectively cons titutes a 'like product' test or indeed an even 
stricter test than the 'like product' test.  Give n the absence of any production of STAF in Brazil and – 
or hardly any – in the EU, the EU violated Article 2.6 read together with Articles 3.1 and 4.1 by determining that the product concerned and all co rresponding types of footwear produced and sold in 
Brazil, as well as those produced and sold by th e Community industry on the Community market are 
alike. 
 
46. With regard to the use of different sa mpling procedures for Chinese exporters and EU 
producers, China refers to its claim II.2.  Also, the EU's conclusion that, in the case of relatively small 
and medium sized companies, losses cannot be sustai ned for a significant period without being forced 
to close down, was based on data from associations wh ich included companies that were not parts of 
the industry.  China cons iders that the requirement to conduct an objective determination of injury 
based on positive evidence in this case required a veri fication of the informatio n provided, given that 
the information was collected at the complaint stage.  47. China considers that its description of the lesser duty calculation methodology is in line with 
the wording of Article 9.1, which is relevant to the dispute because it creates the possibility to have a 
lesser duty and sets the context within which such a rule would operate.  While the lesser duty rule 
provision is voluntary, China submits that, once it is used, an authority is bound to interpret the term 
"injury" in terms of Article 3.  China consid ers that the lesser duty calculation is covered by 
Article 17.6(i), as export prices are the facts to be evaluated.   
48. China stands by the arguments and conclusions  that (i) by mixing data from 2003, the IP and 
2005, the EU did not conduct an unbiased and objectiv e examination and this violated Articles 3.1 
and 17.6(i), (ii) an unbiased and objective authority would not apply a different standard either (a) in 
terms of ensuring a fair comparison by not including all export sales when using the lesser duty rule or (b) by using different datasets for dumping and injury margin calculations, (iii) by basing the 
profitability on one part of the Community industry, es pecially in light of the fact that profit had never 
exceeded 2 per cent even in the 2003 non-injurious s ituation, the EU violated Article 3.1 by not 
conducting an objective examination, and (iv) by collecting a higher duty for China than Viet Nam when all objective measures indicated that the opposite was true, the EU violated Article 9.2. 
 49. China considers that the EU failed to consider an important asymmetry between the 
development of the import volumes from China and from Viet Nam, as the 2001 import volumes from 
China were much lower than for Viet Nam a nd the increase in imports from China occurred only 
towards the end of the IP, and thus the volume of imports did not develop "in parallel".  The 
Definitive and Provisional Regulation do not contai n any compelling explanation as to why, in light 
of the suppression of the quota in 2005 and the acceler ation of imports during th e first quarter of 2005 
due particularly to the development of the Chinese  imports, the EU still considered that a cumulative 
assessment of the imports was appropriate. 
 50. China did not purport to propose a definition of production capacity that would fit in all circumstances and in any event the EU cited an exam ple which does not apply to the facts of this case 
or referred to figures which are not on record.  In addition, by taking employment as a proxy for 
production capacity, the EU analysed this factor only fo r part of the Complainants.  With regard to the 
analysis of "other factors" China consider s that EU's arguments should be rejected. 
 51. Concerning causation, the one common theme is that the explanations given by the EU evidence the erroneous understanding of the non-a ttribution requirement as being an obligation  WT/DS405/R 
 Page E-11 
 
 
completely distinct from the obligation to dem onstrate that the dumped imports are, through the 
effects of dumping causing injury as set forth by Article 3.5, first sentence. 
 52. As to the 15 days to reply to the MET questi onnaire, a recent panel report has ruled that there 
may be a set of initial questionnaires.  China reit erates that there is absolutely no bar to the 
consideration of an uncited provision (para. 151 of  the WPR and Article 6.1) in support of a claim 
relating to a provision which was cited in a panel request.  53. China does not consider that specific and subjective valuations made by one party from 
Viet Nam, concerning the additional disclosure, could simply be extended to all parties.  Furthermore, 
the EC – Salmon (Norway) applied to a reassessment of facts, while in the present case the disclosure 
used facts occurring after the period of investigation, namely in the calendar year 2005.  
 54. By including exports of STAF in the la rgest volume of exports of non-STAF from China, 
such as exports from the company PWC, the EU failed to base the sample on the largest percentage of 
the exports from the country in question which can reasonably be investigated.  In addition, the 
consideration of domestic sales by the EU is ba sed on a wrong interpretation of the notion of 
reasonableness as it appears in Article 6.10.  55. As regards the claims arising as a consequence of the fact that Article 9(5) of the Basic AD 
Regulation is inconsistent with  the provisions as such, unless the panel disagrees with the clear 
holdings of the EC – Steel Fasteners  panel with respect to China's Article 9.2 and 6.10 claims, then it 
must find that the EU violated those articles in  the context of the as applied claims as well. 
 56. China reiterates its claims III.10 to III.12 and III.19 and refers to its detailed rebuttal in the 
SWS of the EU's arguments in the context of these claims. 
 
 WT/DS405/R 
Page E-12  
 
  
ANNEX E-2 
 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN 
SUBMISSION OF THE EUROPEAN UNION 
 
 
INTRODUCTION 
 
1. Pending the Panel's response to the EU Request for a Preliminary Ruling, the EU notes that 
this Request has affected the way in which the European Union has b een arguing its claims before the 
Panel.  The fact that the European Union addressed in good faith (fully or at least partially) some 
other China's claims which were the subject of th e Request does not mean that the European Union 
accepted that those claims had been brought prope rly within the Panel's terms of reference. 
 2. Instead of repeating the EU arguments, the European Union focuses on addressing those 
assertions and arguments brought by China at the First substantive meeting as well as in China's 
Responses to Questions from the Panel and the Europ ean Union.  The fact th at the European Union 
does not specifically comment on a certain statement or a response made by China does not mean that 
the European Union agrees with it.  Rather, it means that the European Union considers those 
statements irrelevant to the claims at issue or re butted by the arguments made by the European Union 
in previous submissions.  
 
ARTICLE 17.6(I) OF THE ADA  
3. There is no question that WTO Members should establish facts properly and evaluate them in 
an unbiased and non-objective way when discharging their WTO obligations in the conduct of 
domestic anti-dumping proceedings.  The standard of  review established in Article 17.6(i) achieves – 
from the practical perspective – just that objective.   In essence, this standard reflects a corresponding 
obligation (obligations) which is  (are) imposed on WTO Members by "other provisions" (Appellate 
Body Report, US – Hot-Rolled Steel , para. 56) of the ADA .  It follows that to achieve China's 
objective to make WTO Members establish facts properly and evaluate them in an unbiased and non-objective way, it is not necessary to construe Article  17.6(i) as a separate legal basis.  Conversely, 
doing so would be counterproductive and of concern for the WTO system.  CHINA'S "AS SUCH" CLAIM AGAINST ARTICLE 9(5) OF THE BASIC AD REGULATION  
4. The European Union observes that China has not yet addressed the arguments made by the 
European Union in its request for preliminary ruli ngs and First Written Submission that China's Panel 
Request failed to meet the requirements of Article 6. 2 of the DSU.  Essentially , China seems to try to 
identify the specific measur e in the description of the legal claims.  This in itself implies that the 
identification of the specific measure, as required by Article 6.2 of the DSU, was insufficient.  The 
European Union has also explained that Article 9(5) addresses a threshold question and provides for 
the imposition of anti-dumping duties on an individual basis (in the case of IT suppliers) or on a country-wide basis (in the case of non-IT suppliers).  Other provisions of the Basic AD Regulation 
address the individual calculation of dumping margins,  how those margins are calculated and how the 
level of anti-dumping duties is established.  Likewi se, the European Union recalls that the dumping 
margin does not serve in all cases as the basis for establishing the level of  anti-dumping duties since 
the European Union has adopted the lesser duty rule (i.e., the anti-dumping duty may be based on an  WT/DS405/R 
 Page E-13 
 
 
injury margin).  Thus, the explanations as to why Article 9(5) violates the covered agreements do not 
relate to the specific measure identified by China in  its Panel Request; rather, those explanations seek 
to expand the measure at issue to other aspects of  the Basic AD Regulation which were not identified 
by China in accordance with Article 6.2 of the DS U.  The European Union further observes that 
compliance with the requirements under Article 6.2 of the DSU is not only a due process issue, but 
also a jurisdictional matter.  What China cannot do is to specify Article 9(5) in its Panel Request, state 
that it "effectively" provides for one specific i ssue (in relation to the imposition of anti-dumping 
duties) and then allege violations of other provisi ons which relate to other aspects which may or may 
not derive from the Article 9(5) determination, al one or in combination with other provisions (not 
identified by China) of the Basic AD Regulation.  This is therefore both a jurisdictional and a due 
process issue into which the Panel should look carefu lly.  Consequently, for all the reasons mentioned 
in its previous submission, the European Union main tains that China's Panel Request failed to meet 
the requirements of Article 6.2 of the DSU with resp ect to its claims relating to Articles 6.10, 9.3 and 
9.4 of the ADA  and Article X:3(a) of the GATT 1994.  
 
5. The European Union observes that China has not made any new arguments concerning its 
claims under Articles 9.4 and 18.4 of the ADA , Article X:3(a) of the GA TT 1994 and Article XVI:4 of 
the WTO Agreement.  Accordingly, the Eur opean Union will only address China's arguments 
concerning Articles 6.10, 9.2 and 9.3 of the ADA  and Article I:1 of the GATT 1994.  In particular, the 
European Union will divide its anal ysis into China's claims under the ADA  and China's claims under 
Article I:1 of the GATT 1994.  
 
6. With respect to Ch ina's claims under the ADA , the European Union has explained in detail in 
its submissions why China's claims are without mer it.  To recall, China's main argument is that 
Article 6.10 mirrors Articles 9.2 and 9.4 of the ADA .  According to China, since sampling is the only 
exception to the individual determination of dum ping margins contained in Article 6.10, first 
sentence, the imposition of anti-dumping duties in ac cordance with Article 9.2 must also be done on 
an individual basis.  The European Union has s hown that sampling is not the only exception to the 
general preference of individual determination of dumping margins.  The European Union has 
provided examples taken from its own practice to sh ow this.  The European Union can also provide 
other hypothetical examples, such as the one already explained during the First Hearing.  Indeed, in a case where sampling is not used (e.g. there are three known cooperating exporters representing almost 
the totality of exports), it may occur that the inves tigating authority has to construe the normal value 
for the three of them on the basis of the same in formation (facts available – e.g. because relevant 
information is not provided in the questionnaire responses), and may have to use the same export 
prices for all of them (e.g. if it finds double invoi cing or the accounts/records of the company are not 
complete).  In those circumstances, the inves tigating authority would calculate one single dumping 
margin for all three suppliers and would impose a single anti-dumping duty on all three.  This is 
permitted by Articles 6.10 and 9.2.  Needless to say, the three suppliers would be entitled to request a 
refund pursuant to Article 9.3.1 if they can show  later on that the anti-dumping duty imposed does not 
reflect their specific level of dumping.  This is the mechanism envisaged in the ADA  to prevent abuses 
by Members while ensuring an adequate protecti on pursuant to an anti-dumping investigation.  
 
7. Moreover, if other provisions of the ADA  (such as Articles 6.8 or 9.5, as China recognises)  
directly and expressly permit to depart from the "mandatory rule" (as Ch ina posits) contained in 
Article 6.10, first sentence, the only conclusion that th e treaty interpreter can reach is that Article 6.10 
cannot be interpreted in such a rigid manner.   
8. If anything, China's reaction to the exam ples posed by the European Union shows the 
weakness of its case.  First, China recognises that , pursuant to Article 6.8, investigating authorities do 
not need to calculate an individual dumping marg in (in the sense of specifying a duty rate for an 
exporter by name) when the exporter fails to cooperate in the middle of  the investigation.  In other 
words, even if the exporter or producer is "known" , such an exporter or producer would fall under the 
category or group of non-cooperating suppliers/residual duty/all others rate.  Its own data would not WT/DS405/R 
Page E-14  
 
be used to calculate an individual dumping margin  and its name would not be specified in the anti-
dumping measures (just as part of the residual duty or  "all others" rate).  Second, in the case of the 
trader, China ignores that the panel in EC – Salmon (Norway)  already concluded that, according to 
Article 2.5 of the ADA , "investigating authorities may be entitled to focus their determination of the 
existence of dumping on a producer's pricing beha viour, notwithstanding the existence of a known 
exporter that is responsible for the export sales under inv estigation".  In other words, even if there is a 
"known" exporter (i.e., trader), there is no need to  calculate an individual dumping margin for that 
trader.  Third, in cases where it is not possibl e to identify the actual producer of the product 
concerned, China argues that the producer is not known.  While the identity of the producer may be 
known, the true problem is to relate specific transact ions to the known producer .  In any event, China 
fails to see that in those cases the "exporter" w ill be "known" and, despite of that, no individual 
dumping margin is calculated for that "known exporter"  (yet again another exception to the strict rule 
posited by China in Article 6.10, first sentence).  Fourth, with respect to the example where the 
information gathered does not allow to calculate individual dumping margins per supplier, China only 
asserts that just because the drafters did not envision and list other hypothetical scenarios which 
would necessarily call for a derogation of the general ru le contained in Article 6.10, first sentence, this 
does not imply that the exception in Article 6.10 is one of many.  The Europ ean Union disagrees.  The 
recognition of other situations where investiga ting authorities can depart  from the general rule 
contained in Article 6.10, first sentence, implies that  such a rule is a general preference or principle 
that may not be followed in some cases.  This furt her implies that Article 6.10, second sentence (i.e., 
sampling) is not the only exception to that general preference.    
 
9. Moreover, the panel in Korea – Certain Paper  identified situations wh ere, even if there were 
several legal entities involved, all together could be  considered as a single exporter or producer "for 
the purposes of the dumping determinations in anti-dum ping investigations".  In this respect, as the 
Appellate Body has acknowledged, it is well recognised  in international econom ic and trade literature 
that "dumping" is "international price discrimin ation".  As Article VI:2 of the GATT 1994 and 
Article 9.1 of the ADA  further state, the purpose of imposing and collecting anti-dumping duties is to 
"offset or prevent dumping", that is, to address the source of price discrimination.  Consequently, a 
proper identification of the single exporter or pr oducer in a case where there are several related 
companies allows the imposition of anti-dumping duties on the "actual source of price discrimination" (or, in other words, on the supplier found to be the source of dumping).  This also permits avoiding 
potential circumvention at a later stage.  Article 9( 5) follows the same logic and seeks to identify the 
relevant supplier (i.e., an IT supplier which acts i ndependently from China, or China and its related 
export branches (non-IT suppliers) which are not  acting independently from the State).  The 
application of a single duty rate then also beco mes necessary to avoid circumvention of the duties 
(i.e., the channelling of exports through the supplier with the lowest duty rate).   
 
10. The differences in the elements examined in Korea – Certain Paper  and the Article 9(5) 
criteria lie in the different context where the panel made its findings.  The reversal of the burden of 
proof in cases on non-market economy countries, or put in different terms, the fact that NME exporters have to show that they comply with the Ar ticle 9(5) criteria, is further justified in the case of 
imports from China.  Indeed, China has not contest ed the evidence provided by the European Union 
(which relies not only on two reports,  but also on extensive findings made in the context of anti-
dumping investigations and on China's constitution and institutional framework) showing how China 
interferes in the export activities of private compani es in China.  Moreover, under Section 15(d) of 
China's Protocol of Accession, the European Un ion is entitled to consider China as a non-market 
economy country until 2016, although it has the possibility to acknowledge that market economy 
conditions prevail in certain industries or sectors.  The European Union has not made use of this 
possibility and, despite recognising the efforts made by China in this respect, still considers that China 
is not a full market economy for the purpose of anti-dumping proceedings.  11. There is specific wording in Section 15(a) of  China's Protocol of Accession already providing 
for the reversal of the burden of proof when dete rmining price comparability under Article VI of the  WT/DS405/R 
 Page E-15 
 
 
GATT 1994 and the ADA .  "Price comparability" in the sense of Article VI of the GATT 1994 and 
Article 2.1 of the ADA  refers to the dumping determination.  As per Section 15(a)(ii), in determining 
the existence of dumping, the importing WTO Member  may use a methodology that is not based on a 
strict comparison with domestic prices or costs in  China "if the producers under investigation cannot 
clearly show that market economy conditions prevail in the industry producing the like product with 
regard to manufacture, production and sale of that  product".  The term market economy "conditions" 
does not encompass the situation when State interven tion in the economy including international trade 
is so substantial that operators cannot act indepe ndently from the State in their export activities.  
Likewise, the term "sale" also includes "export" sales.  Thus, Section 15(ii) of China's Protocol of Accession allows investigating authorities to have recourse to "a methodology that is not based on a 
strict comparison with domestic prices or costs in  China" when determining the existence of dumping 
if the producers under investigation fail to show  the existence of market economy conditions.  
 12. With respect to China's claim under Article I:1 of the GATT 1994, the European Union notes 
that China's argument is based on the presumption that the ADA  does not allow for treating suppliers 
from non-market economy countries differently.  In  other words, China assumes what it pleads for 
(i.e., that Article 9(5) violates certain provisions of the ADA ) in order to conclude that there is no 
conflict with Article I:1 of the GATT 1994.  Such a circular argument should be rejected.  More so 
where there are other references in the ADA  which allow WTO Members to treat non-market 
economy countries differently.  What China seems to  argue is that even in cases where there are 
recognised exceptions to the non-discrimination principle in the ADA  (or elsewhere, such as 
Section 15 of China's Protocol of Accession), tho se exceptions are contrary to Article I:1 of the 
GATT 1994.  That approach ignores the fundamental principle of lex specialis  and the General 
Interpretative Note to Annex 1A of the WT O and reduces all exceptions to nullity.   
 13. Consequently, the European Union requests the Pa nel to reject China's claim that Article 9(5) 
is "as such" inconsistent with Articles 6.10, 9.2, 9.3, 9.4 and 18.4 of the ADA , Articles I and X:3(a) of 
the GATT 1994 and Article XVI:4 of the WTO Agreement.  
REVIEW REGULATION 
 
14. Claims II.1 and II.13.  Members are free to use a PCN system when comparing export prices 
and normal values unless it prevents a fair comparison.  Differences that are not reflected in the system can be taken account of when making comp arisons.  China has gone outside the terms of 
reference in complaining about the way particular comparisons were made.  It can find no authority 
illustrating its argument that Article 2.4 applies to  the choice of the normal value, and the case law 
points in the opposite direction.  The terms of th e Accession Protocol clearly establish that the only 
obligations arising from the Working Party Report ar e those binding China.  China's new criterion for 
choosing the normal value – what the value would have  been if sales had been made in the ordinary 
course of trade at the same level of trade in the domestic market – has no support outside one specific, 
limited context.  Its attempts to justify this crite rion by examining the relevant texts are unsuccessful. 
The term 'appropriate' is not explicitly attached  to any rule governing how the choice of analogue 
country should be made, but that fact is not si gnificant since there is no doubt that the choice is 
subject to implicit rules and principles, even if these cannot be stated with great certainty.  The 
European Union took into account competitiveness and representativeness in choosing Brazil as the 
analogue country, and such rules may require consideration of this kind.  
15. Issues common to Claims II.2 to II.5 and II.11.  It seems that  China, the European Union 
and the United States agree that errors or inconsiste ncies with Article 3 made in the finding of injury 
made in the context of an expiry review do not automatically or necessarily lead to a finding of a violation of Article 11.3 ADA .  Rather, inconsistencies in the injury finding with Article 3 can lead to 
a violation of Article 11.3 of the ADA  only "if the investigating authority bases its likelihood of injury 
determination entirely on the injury determinati on" (as phrased by China), or if "IA based its 
likelihood determination to a decisive degree  on a defective finding of injury" (the European Union) WT/DS405/R 
Page E-16  
 
or if "defects in this new present injury finding are critical to the expiry review and undercut the 
factual basis underlying the determination of contin uation or recurrence of injury" (the United States). 
The applicable legal test, described above, has prof ound implications for the ways in which the Panel 
should dispose of China's claims.  First, these clai ms are, factually, based upon China's unsupported 
assertion that the European Union relied entirely in it s determination of the likelihood-of-injury on its 
finding of injury.  This is incorrect and the Panel can dismiss China's claim on this basis alone.  Such 
a ruling would be fully consistent with the legal te st that China itself considers applicable and with 
respect to which the evidentiary onus thus lies on Chin a.  Second, China asked the Panel to rule on its 
claim of a violation of Article 11.3 ADA  as a mere consequential claim.  This construction of claims 
contradicts China's own legal test concerning the ap plicability of Article 3 in the expiry reviews and 
invites (and mandates) the Panel to adopt the theory that some defects (regardless of their extent) in 
the finding of injury made in the context of an expiry review automatically and necessarily  render the 
determination of the likelihood of inju ry inconsistent with Article 11.3 ADA .  This is legally erroneous 
and, hence, the Panel should dismiss China's claims .  As a final remark, the European Union stresses 
that what is at issue is whether the EU's dete rmination of the likelihood-of-injury satisfied the 
obligations of Article 11.3 ADA .  This is what China should be ask ed to prove in a claim against an 
expiry review.  So far, however, all the debate  before the Panel concerned the compliance with 
Article 3 of the ADA .  China's way of framing its claims sugg ests that the Panel should review China's 
claims with respect to the injury finding in is olation from the disciplines of Article 11.3 of the ADA . 
Yet, the correct focus of the in jury should be whether China has established  that the EU IA's 
determination of likelihood of injury contradi cted the requirements of Article 11.3 of the ADA .  This 
is not the case. 
 16. Claim II.2 .Instead of clarifying the issues, Chin a's response to Question 39 obfuscates them 
by departing from the original claim set out in the Panel request and developed in China's First 
Written Submission.  China's res ponse includes contradictory statements which make it difficult for 
the European Union to understand what actually China's argument is. 
 17. Claim II.3 With respect to applicability of Article 6.10 of the ADA  to injury sampling, for 
careful readers of the EC – Salmon (Norway)  case China's argumentation comes as a déjà vu .  China 
does not bring any new element or idea into the discu ssion.  When considered carefully in light of the 
facts of the present case, in effect, China is saying that in the circumstances at hand an investigation 
of injury cannot take place.  Eventually, the Panel does not need to inquire into the representativeness 
of the sample.  What China claims  under its Claim II.3 is that the EU producers' sample was neither 
statistically valid nor represented the largest perc entage of production as required by Article 6.10 
ADA .  Since there are no legal requirements to sample  companies in an injury  analysis in accordance 
with Article 6.10, China's claim can simply be reject ed on law.  The issue of whether the EU IA acted 
inconsistently with Article 3.1 ADA  under Claim II.3 depends on whether there was sufficient 
information on the record for a selection of the sample in accordance with the requirements of 
Article 3.1 ADA .  As the European Union explained also in its First Written Submission,
 in the context 
of a discussion under Article 3 of the ADA , there may indeed be very good reasons for keeping a 
company which discontinued production in the RIP in  a sample.  China did not make a claim under 
Article 4.1 of the ADA . 
 
18. Claim II.4 Regarding Prodcom, if China is really of  the view that the possible presence of 
related companies invalidates a legal analysis under Article 3.4 of the ADA , China is effectively 
saying that in situations where the domestic industry is  very large, an analysis of the relevant factors 
cannot be made consistently with Article 3.4 ADA , since there is always the risk that some such 
companies would be included.  Regarding China' s assertion concerning the reliance on information 
from the national associations in the analysis of the injury factors assessed  at the macroeconomic 
level, China misunderstands the analysis which was unde rtaken.  The European Union also does not 
see a reason for which reasonable estimates should not constitute positive evidence. 
  WT/DS405/R 
 Page E-17 
 
 
19. Claim II.5  A determination of likelih ood of injury under Article 11.3 should not be equated 
with a determination of likelihood of dumping in so  far as reliance is placed on a finding of existing 
injury or dumping.  20. Claim II.6  The failure of one interested party to appreciate that some EU producers had not 
replied to the Community Interest questionnaires was not the European Union's fault.  The burden lies 
on China to prove the factual assertions (disputed by th e European Union) that form part of its claim. 
China's reiterations of its criticis ms of the grant of identity confidentiality to EU producers remain 
unconvincing.  The EU producers' had limited legal assistance.  The Commission assisted all interested parties, without discrimination, in pr oviding the information that had been requested of 
them. 
 21. Claim II.7  The obligation in Article 6.4 to 'provi de timely opportunities for all interested 
parties to see all information' available does not ex tend to the investigating authority's intentions or 
reasoning.  China's contentions regarding the notifi cation obligations of the investigating authority 
during the course of the investigation have no basi s in law.  The European Union's decision on the 
analogue country did not become irrevocable at  the stage that is alleged by China.  
 22. Claim II.9  China has not produced further effective criticisms of the decision to accord EU 
producers confidentiality for their identities.   
23. Claim II.10  The European Union prefers to use actual data rather than 'facts available', even 
if that means accepting corrections to evidence that h as been submitted.  Such efforts are just what is 
required by Article 3.1.  China has provided no ev idence that could establish a case of discrimination 
by the European Union in exercising this power.  DEFINITIVE REGULATION  
 
24. Claim III.1 and III.20 The European Union considers th at the examination of the MET 
applications was not required with respect to exporting producers which, as was the case in the 
Footwear investigation, did not fall within the samp le and did not qualify for individual examination. 
On this basis, the Panel should rej ect China's claims in their entiret y.  Moreover, China fundamentally 
ignores that, according to paragraph 342 of China's Working Party Report, the commitments listed 
therein "are incorporated in paragraph 1.2 of [China's Protocol of Accession]".  Thus, only the 
commitments listed in paragraph 342 of the Working Party Report are integral part of the covered 
agreements.  Since paragraphs  150 and 151 of China's Working Party Report are not listed in 
paragraph 342, it should be concluded that they ar e not part of the covered agreements.  China also 
takes issue with the meaning of Section 15(a)(ii) of  its Protocol of Accession and argues that the term 
"industry" does not imply that the use of NME methodologies is precluded only if it can be established that the "industry", rather than the si ngle operators within such industry, operate on 
market economy conditions.  The European Union di sagrees.  In general terms producers requesting 
MET must show that market economy conditions pr evail in the industry (as opposed to individual 
companies) producing the like product with regard to manufacture, production and sale of that 
product.  However, as a unilateral concession vis-à-vi s China, the European Union examines whether 
an individual producer can be considered as a market  economy producer (and thus grant MET) even if 
market economy conditions cannot be shown to preva il in the industry or sector producing the like 
product.  Finally, China considers that sampling cannot apply to a determination whether market economy conditions prevail in the industry concerned.  In this respect, the Eu ropean Union notes that 
China again disregards the consequences of usin g sampling.  Even in cases concerning market 
economy countries, prices or costs of non-sampled cooperating exporting producers are not examined and there is no obligation to do so, other than Article 6.10.2 of the ADA .  Similarly, there was no 
obligation to examine MET applications of non- sampled cooperating exporting producers in the 
Footwear investigation.  In view of the above, the Panel should reject China's claim in their entirety. 
 WT/DS405/R 
Page E-18  
 
25. Claim III.2  China's proposal of an alternative basi s for determining administrative, etc., 
expenses and profits is irrelevant in the light of the standard of review set by Article 17.6(i) in regard 
to evaluations of the facts.  China could succeed only by showing bias or non-objectivity on the part 
of the European Union.  
26. Claim III.5 The European Union decided to opt for the bifurcated approach and based its 
analysis on multiple sources of information, subject  to multiple cross-checking.  This method is 
entirely reasonable and yields possibly the most reliable results under the circumstances.  China 
satisfies itself with criticizing this method without o ffering a credible and feasible alternative.  The 
EU IA could, instead of relying on its bifurcated  approach, simply extrapolate information from the 
sample composed of complainants  to the entire domestic industry.  Intuitively, it would seem that 
China would not really prefer such an approach, gi ven the context of a discu ssion provided by China's 
claim II.4.  27. Claim III.9  The issue of the collective effect of 'oth er factors' as a cause of injury was not 
raised by any interested party in the investigation,  nor in this dispute by China until the Panel itself 
poses a question.  China's notion that the Europe an Union's 'break the causal link' methodology 
precludes a collective assessment is mere assertion.  China has given no basis for its contention that 
the European Union should have carried out a quan titative analysis.  It has adduced no evidence to 
support a claim that failure to make a collective assessment in the initial in vestigation 'attributed 
improperly to dumped imports the injuries caused by  other factors.' Since the European market 
operates in euros it is in that currency rather than  dollars that undercutting must be assessed.  The 
causation issue to be determined under the ADA  is the effect of the 'dumped imports' and not that of 
the margin of dumping.  The concentration of dumped imports at a particular time is not an 'other 
cause' of injury but may constitute an exacerbate d form of injury caused by the dumped imports. 
 CONCLUSION  
 
28. For the reasons set out in this and previous  submissions by the European Union, China's 
claims should be rejected in their entirety.   
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