WORLD TRADE  
ORGANIZATION  WT/DS397/R 
3 December 2010 
 (10-6267) 
 Original:   English 
  
 
     
 
    
EUROPEAN COMMUNITIES – DEFINITIVE  
ANTI-DUMPING MEASURES ON CERTAIN IRON  
OR STEEL FASTENERS FROM CHINA 
 
  
Report of the Panel 
  
 
  
 
 
 
 
   WT/DS397/R 
 Page i 
 
 
  TABLE OF CONTENTS 
 
Page  
I. INTRODUCTION ................................................................................................................... .1 
II. FACTUAL ASPECTS ..............................................................................................................2  
III. PARTIES' REQUESTS FOR FIND INGS AND RECOMMENDATIONS.........................2  
A. CHINA ............................................................................................................................... ...........2  
B. THE EUROPEAN UNION ...............................................................................................................5  
IV. ARGUMENTS OF THE PARTIES ........................................................................................5  
V. ARGUMENTS OF THE THIRD PARTIES ..........................................................................5  
VI. INTERIM REVIEW................................................................................................................. 5 
A. INTRODUCTION ...........................................................................................................................5  
B. GENERAL COMMENTS .................................................................................................................6  
C. SPECIFIC REQUESTS ....................................................................................................................7  
VII. FINDINGS....................................................................................................................... ........35  
A. RELEVANT PRINCIPLES REGARDING STANDARD OF REVIEW , TREATY 
INTERPRETATION AND BURDEN OF PROOF ...............................................................................35  
1. Standard of Review............................................................................................................. ....35  
2. Rules of Treaty Interpretation...............................................................................................36  
3. Burden of Proof................................................................................................................ .......37  
B. TERMS OF REFERENCE OF THE PANEL ......................................................................................37  
C. CLAIMS REGARDING COUNCIL REGULATION NO. 1225/2009  (THE BASIC AD 
REGULATION ) AS SUCH ............................................................................................................43  
1. Preliminary Objections ......................................................................................................... .43 
(a) Whether Council Regulation No. 1225/2009  Is Properly Before the Panel..............................43  
(b) Whether All Claims Raised by China in Connection With the Basic AD Regulation 
are Within the Panel's Terms of Reference...............................................................................47  
(i) Arguments of the Parties....................................................................................................... ....47  
(ii) Arguments of Third Parties..................................................................................................... ..48 
(iii) Evaluation by the Panel........................................................................................................ ....48  
2. Relevant Provisions of Council Re gulation No. 1225/2009..................................................49  
3. Whether Article 9(5) of the Basic AD Regulation is inconsistent with 
Articles 6.10, 9.2, 9.3 and 9.4 of the AD Agreement.............................................................52  
(a) Arguments of the Parties....................................................................................................... ....52  
(i) China.......................................................................................................................... ...............52  
(ii) European Union................................................................................................................. .......53  
(b) Arguments of Third Parties..................................................................................................... ..55 
(i) Brazil......................................................................................................................... ................55  WT/DS397/R 
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  (ii)
 Colombia....................................................................................................................... ............55  
(iii) India.......................................................................................................................... ................55  
(iv) Japan.......................................................................................................................... ...............55  
(v) Turkey ......................................................................................................................... ..............56  
(vi) United States.................................................................................................................. ...........56  
(c) Evaluation by the Panel ........................................................................................................ ....57  
(i) The Scope/Operation of Article 9(5)  of the Basic AD Regulation ............................................57  
(ii) Substantive Analysis........................................................................................................... .......59  
4. Whether Article 9(5) of the Basic AD Regulation is inconsistent with Article I:1 
of the GATT 1994............................................................................................................... .....72  
(a) Arguments of Parties........................................................................................................... ......72  
(i) China.......................................................................................................................... ...............72  
(ii) European Union................................................................................................................. .......73  
(b) Arguments of Third Parties..................................................................................................... ..73 
(i) Colombia....................................................................................................................... ............73  
(c) Evaluation by the Panel ........................................................................................................ ....73  
5. Whether Article 9(5) of the Basic AD Regulation is inconsistent with 
Article X:3(a) of the GATT 1994...........................................................................................75  
(a) Arguments of the Parties....................................................................................................... ....75  
(i) China.......................................................................................................................... ...............75  
(ii) European Union................................................................................................................. .......76  
(b) Arguments of Third Parties..................................................................................................... ..76 
(i) United States.................................................................................................................. ...........76  
(c) Evaluation by the Panel ........................................................................................................ ....76  
6. Whether Article 9(5) of the Basic AD Regulation is inconsistent with 
Article XVI:4 of the WTO Agreement a nd Article 18.4 of the AD Agreement.................77  
(a) Arguments of the Parties....................................................................................................... ....77  
(i) China.......................................................................................................................... ...............77  
(ii) European Union................................................................................................................. .......77  
(b) Evaluation by the Panel ........................................................................................................ ....77  
D. CLAIMS REGARDING COUNCIL REGULATION 91/2009  ("THE DEFINITIVE 
REGULATION ")..........................................................................................................................78  
1. Background of the Investigation at Issue..............................................................................78  
2. Whether Article 9(5) of the Basic AD Regulation, as applied in the fasteners 
investigation, is inconsistent with Articles 6.10, 9.2 and 9.4 of the AD Agreement...........80  
(a) Arguments of the Parties....................................................................................................... ....80  
(i) China.......................................................................................................................... ...............80   WT/DS397/R 
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  (ii) European Union................................................................................................................. .......80  
(b) Evaluation by the Panel ........................................................................................................ ....80  
3. Whether the European Union violated Article 5.4 of the AD Agreement in its 
standing determination......................................................................................................... ..81 
(a) Arguments of the Parties....................................................................................................... ....81  
(i) China.......................................................................................................................... ...............81  
(ii) European Union................................................................................................................. .......82  
(b) Evaluation by the Panel ........................................................................................................ ....82  
(i) Terms of Reference ............................................................................................................. ......82  
(ii) Substantive Analysis........................................................................................................... .......86  
4. Whether the European Union violated Articles 4.1 and 3.1 of the AD Agreement 
in defining the domestic industry ..........................................................................................90  
(a) Arguments of the Parties....................................................................................................... ....90  
(i) China.......................................................................................................................... ...............90  
(ii) European Union................................................................................................................. .......93  
(b) Arguments of Third Parties..................................................................................................... ..95 
(i) Colombia....................................................................................................................... ............95  
(ii) Japan.......................................................................................................................... ...............96  
(iii) Norway......................................................................................................................... .............97  
(iv) United States.................................................................................................................. ...........98  
(c) Evaluation by the Panel ........................................................................................................ ....99  
5. Whether the European Union violated Articles 2.1 and 2.6 of the AD Agreement 
in defining the product under consideration and/or the like product..............................115  
(a) Arguments of the Parties....................................................................................................... ..115  
(i) China.......................................................................................................................... .............115  
(ii) European Union................................................................................................................. .....116  
(b) Arguments of Third Parties..................................................................................................... 117 
(i) Chile.......................................................................................................................... ..............117  
(ii) Colombia....................................................................................................................... ..........117  
(iii) Japan.......................................................................................................................... .............117  
(iv) Norway......................................................................................................................... ...........117  
(v) Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu ....................................118  
(vi) United States.................................................................................................................. .........118  
(c) Evaluation by the Panel ........................................................................................................ ..118  
(i) Product under consideration ..................................................................................................11 8 
(ii) Like product ................................................................................................................... .........125  WT/DS397/R 
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  6.
 Whether the European Union violated Article 2.4 of the AD Agreement in its 
Dumping Determination.......................................................................................................127  
(a) Arguments of the Parties....................................................................................................... ..127  
(i) China.......................................................................................................................... .............127  
(ii) European Union................................................................................................................. .....127  
(b) Arguments of Third Parties..................................................................................................... 128 
(i) Chile.......................................................................................................................... ..............128  
(ii) Colombia....................................................................................................................... ..........128  
(c) Evaluation by the Panel ........................................................................................................ ..129  
7. Whether the European Union violated Articles 3.1 and 3.2 of the AD Agreement 
in its price undercutti ng determination ..............................................................................137  
(a) Arguments of the Parties....................................................................................................... ..137  
(i) China.......................................................................................................................... .............137  
(ii) European Union................................................................................................................. .....138  
(b) Evaluation by the Panel ........................................................................................................ ..139  
(i) Terms of Reference of the Panel .............................................................................................139  
(ii) Substantive Analysis........................................................................................................... .....141  
8. Whether the European Union violated Articles 3.1, 3.2, 3.4 and 3.5 of the 
AD Agreement in its consideration of the volume of dumped imports............................146  
(a) Arguments of the Parties....................................................................................................... ..146  
(i) China.......................................................................................................................... .............146  
(ii) European Union................................................................................................................. .....147  
(b) Arguments of Third Parties..................................................................................................... 148 
(i) Japan.......................................................................................................................... .............148  
(ii) Norway......................................................................................................................... ...........149  
(c) Evaluation by the Panel ........................................................................................................ ..150  
9. Whether the European Union violated Articles 3.1 and 3.4 of the AD Agreement 
in its consideration of the conse quent impact of dumped imports ...................................158  
(a) Arguments of Parties........................................................................................................... ....158  
(i) China.......................................................................................................................... .............158  
(ii) European Union................................................................................................................. .....159  
(b) Third parties.................................................................................................................. ..........160  
(i) Chile.......................................................................................................................... ..............160  
(ii) India.......................................................................................................................... ..............161  
(iii) Norway......................................................................................................................... ...........161  
(iv) United States.................................................................................................................. .........161  
(c) Evaluation by the Panel ........................................................................................................ ..162   WT/DS397/R 
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  10. Whether the European Union violated Articles 3.1 and 3.5 of the AD Agreement 
in its consideration of causation...........................................................................................173  
(a) Arguments of the Parties....................................................................................................... ..173  
(i) China.......................................................................................................................... .............173  
(ii) European Union................................................................................................................. .....174  
(b) Arguments of Third Parties..................................................................................................... 175 
(i) Japan.......................................................................................................................... .............175  
(ii) Norway......................................................................................................................... ...........176  
(c) Evaluation by the Panel ........................................................................................................ ..176  
11. Claims regarding alleged procedural violations ................................................................184  
(a) Introduction................................................................................................................... ..........184  
(b) Whether the European Union violated Articles 6.5, 6.2 and 6.4 of the AD Agreement 
by failing to disclose the iden tity of domestic producers........................................................184  
(i) Arguments of the Parties....................................................................................................... ..184  
(ii) Arguments of Third Parties..................................................................................................... 186 
(iii) Evaluation by the Panel........................................................................................................ ..186  
(c) Whether the European Union violated Articles 6.2, 6.4, 6.5 and 6.9 of the 
AD Agreement by failing to disclose aspects of the normal value determination..................192  
(i) Arguments of the Parties....................................................................................................... ..192  
(ii) Arguments of Third Parties..................................................................................................... 194 
(iii) Evaluation by the Panel........................................................................................................ ..195  
(d) Whether the European Union violated Articles 6.5, 6.2 and 6.4 of the AD Agreement 
in connection with the non-confidential vers ion of certain questionnaire responses..............208  
(i) Arguments of the Parties....................................................................................................... ..208  
(ii) Evaluation by the Panel........................................................................................................ ..210  
(e) Whether the European Union violated Articles 6.5, 6.2 and 6.4 of the AD Agreement 
by failing to disclose the Eurostat data on total EU production of fasteners ..........................216  
(i) Arguments of the Parties....................................................................................................... ..216  
(ii) Evaluation by the Panel........................................................................................................ ..217  
(f) Whether the European Union violated Articles 6.9, 6.2 and 6.4 of the AD Agreement 
in procedural aspects of the domestic industry definition.......................................................219  
(i) Arguments of the Parties....................................................................................................... ..219  
(ii) Evaluation by the Panel........................................................................................................ ..220  
(g) Whether the European Union violated Article 12.2.2 of the AD Agreement in 
procedural aspects of individual treatment determinations.....................................................221  
(i) Arguments of the Parties....................................................................................................... ..221  
(ii) Evaluation by the Panel........................................................................................................ ..221  WT/DS397/R 
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  (h)
 Whether the European Union violated Article 6.5 of the AD Agreement by disclosing 
confidential information....................................................................................................... ...223  
(i) Arguments of the Parties....................................................................................................... ..223  
(ii) Arguments of Third Parties..................................................................................................... 223 
(iii) Evaluation by the Panel........................................................................................................ ..224  
(i) Whether the European Union violated Article 6.1.1 of the AD Agreement by failing 
to provide sufficient time to respond to requests for information...........................................227  
(i) Arguments of the Parties....................................................................................................... ..227  
(ii) Arguments of Third Parties..................................................................................................... 228 
(iii) Evaluation by the Panel........................................................................................................ ..229  
VIII.  CONCLUSIONS AND RECOMMENDATION ................................................................233  
A. CONCLUSIONS .........................................................................................................................233  
B. RECOMMENDATION .................................................................................................................235  
  WT/DS397/R 
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  LIST OF ANNEXES 
 
ANNEX A 
 
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN 
SUBMISSIONS OF THE PARTIES 
 
Contents Page 
Annex-A-1 Executive Summary of the First Written Submission of China A-2 
Annex A-2 Executive Summary of the First Written Submission of the 
European Union A-10 
 
 
ANNEX B 
 
EXECUTIVE SUMMARIES OF THE WRITTEN SUBMISSIONS 
OF THIRD PARTIES 
 
Contents Page 
Annex B-1 Executive Summary of the Third Party Written Submission of 
Brazil  B-2 
Annex B-2 Executive Summary of the Third Party Written Submission of 
Colombia B-5 
Annex B-3 Executive Summary of the Third Party Written Submission of 
Japan B-9 
Annex B-4 Executive Summary of the Third Party Written Submission of 
Norway B-14 
Annex B-5 Executive Summary of the Third Party Written Submission of 
Turkey B-19 
Annex B-6 Executive Summary of the Third Party Written Submission of 
the United States B-21 
 
 
ANNEX C  
 
ORAL STATEMENTS OF THE PARTIES 
AT THE FIRST SUBSTANTIVE MEETING OF THE PANEL  
OR EXECUTIVE SUMMARIES THEREOF  
 
Contents Page 
Annex C-1 Executive Summary of the Opening Statement of China at the First 
Meeting of the Panel C-2 
Annex C-2 Executive Summary of the Opening Statement of the 
European Union at the First Meeting of the Panel C-9 
Annex C-3 Closing Statement of China at the First Meeting of the Panel C-18 
Annex C-4 Closing Statement of the European Union at the First Meeting of 
the Panel C-20 
 WT/DS397/R 
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  ANNEX D 
 
ORAL STATEMENTS OF THIRD PARTIES OR 
EXECUTIVE SUMMARIES THEREOF 
 
Contents Page 
Annex D-1 Third Party Oral Statement of Chile D-2 
Annex D-2 Third Party Oral Statement of Colombia D-4 
Annex D-3 Third Party Oral Statement of India D-7 
Annex D-4 Executive Summary of the Third Party Oral Statement of Japan D-10 
Annex D-5 Third Party Oral Statement of Norway D-13 
Annex D-6 Third Party Oral Statement of the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu D-17 
Annex D-7 Third Party Oral Statement of Turkey D-20 
Annex D-8 Executive Summary of the Third Party Oral Statement of the 
United States D-22 
 
 
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 
 
 
ANNEX F 
 
ORAL STATEMENTS OF THE PARTIES 
AT THE SECOND SUBSTANTIVE MEETING OF THE PANEL 
OR EXECUTIVE SUMMARIES THEREOF 
 
Contents Page 
Annex F-1 Executive Summary of the Op ening Statement of China at the 
Second Meeting of the Panel F-2 
Annex F-2 Executive Summary of the Opening Statement of the 
European Union at the Second Meeting of the Panel F-10 
Annex F-3 Closing Statement of China at the Second Meeting of the Panel F-19 
Annex F-4 Closing Statement of the European Union at the Second Meeting of 
the Panel F-20 
 
  WT/DS397/R 
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  ANNEX G 
 
REQUEST FOR CONSULTATIONS AND  
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY CHINA 
 
Contents Page 
Annex G-1 Request for Consultations by China G-2 
Annex G-2 Request for the Establishment of a Panel by China G-5 
 
 
ANNEX H 
 
DECISION CONCERNING EXHIBIT CHN-65 
 
Contents Page 
Annex H-1 Panel's Decision concerning Exhibit CHN-65 H-2 
 WT/DS397/R 
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  TABLE OF CASES CITED IN THIS REPORT 
 
WTO DISPUTE SETTLEMENT REPORTS  
Short Title Full Case Title and Citation 
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515 
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measures on Imports of Footwear , 
WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body Report WT/DS121/AB/R, DSR 2000:II, 575 
Argentina – Poultry Anti-Dumping Duties Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from 
Brazil , WT/DS241/R, adopted 19 May 2003, DSR 2003:V, 1727 
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 
Brazil – Aircraft Panel Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/R, adopted 20 August 1999, as modified by Appellate Body Report 
WT/DS46/AB/R, DSR 1999:III, 1221 
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167 
Canada – Aircraft Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft , 
WT/DS70/R, adopted 20 August 1999, upheld by Appellate Body Report 
WT/DS70/AB/R, DSR 1999:IV, 1443 
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive 
Industry , WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, 
DSR 2000:VI, 2985 
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/AB/R, adopted 
23 October 2002, DSR 2002:VIII, 3045 (Corr.1, DSR 2006:XII, 5473) 
China – Publications and Audiovisual Products Panel Report, China –  Measures Affecting Trading Rights and Distribution 
Services for Certain Publications and Audiovisual Entertainment Products , 
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate 
Body Report WT/DS363/AB/R 
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 
25 September 1997, DSR 1997:II, 591 
EC – Bed Linen Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton-Type Bed Linen from India , WT/DS141/R, adopted 12 March 2001, as 
modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, 2077 
EC – Bed Linen (Article 21.5 – India) Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the 
DSU  by India , WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 
965 
EC – Bed Linen 
(Article 21.5 – India) Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU  by 
India , WT/DS141/RW, adopted 24 April 2003, as modified by Appellate 
Body Report WT/DS141/AB/RW, DSR 2003:IV, 1269   WT/DS397/R 
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  Short Title Full Case Title and Citation 
EC – Chicken Cuts (Brazil) Panel Report, European  Communities – Customs Classification of Frozen 
Boneless Chicken Cuts, Complaint by Brazil , WT/DS269/R, adopted 
27 September 2005, as modified by Appellate Body Report WT/DS269/AB/R, 
WT/DS286/AB/R, DSR 2005:XIX, 9295 
EC – Countervailing Measures on DRAM Chips Panel Report, European Communities – Countervailing Measures on Dynamic 
Random Access Memory Chips from Korea , WT/DS299/R, adopted 
3 August 2005, DSR 2005:XVIII, 8671 
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed 
Salmon from Norway , WT/DS337/R, adopted 15 January 2008, and Corr.1, 
DSR 2008:I, 3 
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting 
of Tariff Preferences to Developing Countries , WT/DS246/AB/R, adopted 
20 April 2004, DSR 2004:III, 925 
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti-Dumping Duties on Malleable 
Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/R, adopted 18 
August 2003, as modified by Appellate Body Report WT/DS219/AB/R, DSR 
2003:VII, 2701 
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from 
Turkey , WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, 2667 
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding 
Portland Cement from Mexico , WT/DS60/AB/R, adopted 25 November 1998, 
DSR 1998:IX, 3767 
Guatemala – Cement I Panel Report, Guatemala – Anti-Dumping Investigation Regarding Portland 
Cement from Mexico , WT/DS60/R, adopted 25 November 1998, as modified 
by Appellate Body Report WT/DS60/AB/R, DSR 1998:IX, 3797 
Guatemala – Cement II Panel Report, Guatemala – Definitive Anti-Dumping Measures on Grey 
Portland Cement from Mexico , WT/DS156/R, adopted 17 November 2000, 
DSR 2000:XI, 5295 
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile 
Industry , WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 
and 2, adopted 23 July 1998, and Corr. 3 and 4, DSR 1998:VI, 2201 
Japan – Alcoholic Beverages 
II Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97 
Japan – DRAMs (Korea) Appellate Body Report, Japan – Countervailing Duties on Dynamic Random 
Access Memories from Korea , WT/DS336/AB/R and Corr.1, adopted 
17 December 2007, DSR 2007:VII, 2703 
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and 
Paper , WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179 WT/DS397/R 
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  Short Title Full Case Title and Citation 
Korea – Certain Paper Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from 
Indonesia , WT/DS312/R, adopted 28 November 2005, DSR 2005:XXII, 
10637 
Korea – Certain Paper (Article 21.5 – Indonesia) Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from 
Indonesia – Recourse to Article 21.5 of the DSU by Indonesia , 
WT/DS312/RW, adopted 22 October 2007, DSR 2007:VIII, 3369 
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R, adopted 12 January 2000, DSR 
2000:I, 3 
Mexico – Anti-Dumping 
Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dump ing Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R, adopted 
20 December 2005, DSR 2005:XXII, 10853 
Mexico – Anti-Dumping 
Measures on Rice Panel Report, Mexico – Definitive Anti-Dumping Me asures on Beef and Rice, 
Complaint with Respect to Rice , WT/DS295/R, adopted 20 December 2005, as 
modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, 
11007 
Mexico – Corn Syrup Panel Report, Mexico – Anti-Dumping Investigatio n of High Fructose Corn 
Syrup (HFCS) from the United States , WT/DS132/R, adopted 
24 February 2000, and Corr.1, DSR 2000:III, 1345 
Mexico – Olive Oil Panel Report, Mexico – Definitive Countervailing Measures on Olive Oil from 
the European Communities , WT/DS341/R, adopted 21 October 2008, DSR 
2008:IX, 3179 
Mexico – Steel Pipes and Tubes Panel Report, Mexico – Anti-Dumping Duties on  Steel Pipes and Tubes from 
Guatemala , WT/DS331/R, adopted 24 July 2007, DSR 2007:IV, 1207 
US – Anti-Dumping Measures 
on Oil Country Tubular Goods Panel Report, United States – Anti-Dumping Measures on Oil Country 
Tubular Goods (OCTG) from Mexico , WT/DS282/R, adopted 
28 November 2005, as modified by Appellate Body Report WT/DS282/AB/R, 
DSR 2005:XXI, 10225 
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 
3779 
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application 
of Zeroing Methodology , WT/DS350/AB/R, adopted 19 February 2009 
US – Corrosion-Resistant 
Steel Sunset Review Appellate Body Report, United States – Sunset Review of Anti-Dumping 
Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3  
US – Corrosion-Resistant 
Steel Sunset Review Panel Report, United States – Sunset Review of Anti-Dumping Duties on 
Corrosion-Resistant Carbon Steel Flat Products from Japan , WT/DS244/R, 
adopted 9 January 2004, as modified by Appellate Body Report 
WTDS244/AB/R, DSR 2004:I, 85  
US – Countervailing Duty 
Investigation on DRAMS Appellate Body Report, United States – Countervailing Duty Investigation on 
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea , 
WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, 8131 
US – DRAMS Panel Report, United States – Anti-Dumping Duty on Dynamic Random 
Access Memory Semiconductors (DRAMS) of One Megabit or Above from 
Korea , WT/DS99/R, adopted 19 March 1999, DSR 1999:II, 521  WT/DS397/R 
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  Short Title Full Case Title and Citation 
US – FSC Appellate Body Report, United States – tax treatment for "Foreign Sales 
Corporations" , WT/DS/108/AB/R, adopted 20 March 2000, DSR 2000:III, 
1619 
US - Gasoline Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline  ("US – Gasoline "), WT/DS2/AB/R, adopted 
20 May 1996, DSR 1996:I, 3 
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 
23 August 2001, DSR 2001:X, 4697 
US – Hot-Rolled Steel Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled 
Steel Products from Japan , WT/DS184/R, adopted 23 August 2001 modified 
by Appellate Body Report WT/DS184/AB/R, DSR 2001:X, 4769 
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, 
4051 
US – Oil Country Tubular 
Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R, 
adopted 17 December 2004, DSR 2004:VII, 3257 
US – Section 129(c)(1) URAA Panel Report, United States – Section 129(c)(1) of the Uruguay Round 
Agreements Act , WT/DS221/R, adopted 30 August 2002, DSR 2002:VII, 2581
US – Softwood Lumber V Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada , WT/DS264/AB/R, adopted 31 August 2004, 
DSR 2004:V, 1875 
US – Softwood Lumber V Panel Report, United States – Final Dumping Determination on Softwood 
Lumber from Canada , WT/DS264/R, adopted 31 August 2004, as modified by 
Appellate Body Report WT/DS264/AB/R, DSR 2004:V, 1937 
US – Softwood Lumber VI 
(Article 21.5 – Canada) Appellate Body Report, United States – Investigation of the International 
Trade Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada , WT/DS277/AB/RW, adopted 
9 May 2006, and Corr.1, DSR 2006:XI, 4865 
US – Stainless Steel (Korea) Panel Report, United States – Anti-Dumping Measures on Stainless Steel Plate 
in Coils and Stainless Steel Sheet and Strip from Korea , WT/DS179/R, 
adopted 1 February 2001, DSR 2001:IV, 1295 
US – Steel Plate Panel Report, United States – Anti-Dumping and Countervailing Measures on 
Steel Plate from India , WT/DS206/R and Corr.1, adopted 29 July 2002, DSR 
2002:VI, 2073 
US - Underwear Appellate Body Report, United States – Restrictions on Imports of Cotton and 
Man-made Fibre Underwear ("US – Underwear "), WT/DS24/AB/R, adopted 
25 February 1997, DSR 1997:I, 11 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3 
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R, 
Corr.1, and Add.1 to Add.3, adopted 21 March 2005, as modified by 
Appellate Body Report WT/DS267/AB/R, DSR 2005:II, 299 WT/DS397/R 
Page xiv  
 
  Short Title Full Case Title and Citation 
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Wheat Gluten from the European Communities , WT/DS166/AB/R, 
adopted 19 January 2001, DSR 2001:II, 717 
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R, adopted 23 May 1997, 
and Corr.1, DSR 1997:I, 323 
US – Zeroing (Japan) 
(Article 21.5 – Japan) Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan , 
WT/DS322/AB/RW, adopted 31 August 2009 
 
  GATT PANEL REPORTS  
Footwear from Brazil ("US – MFN Footwear "), DS18/R, adopted 19 June 1992, BISD 39S/128.  WT/DS397/R 
 Page xv 
 
 
  TABLE OF ABBREVIATIONS USED IN THIS REPORT 
 
Abbreviation Full Reference 
AD Agreement Agreement on Implementation of Artic le VI of the General Agreement 
on Tariffs and Trade 1994 (Anti-Dumping Agreement) 
DSU Dispute Settlement Understanding 
EU European Union 
GATT 1994 General Agreement on Tariffs and Trade 1994 
IA Investigating Authority 
IT Individual Treatment 
MET Market Economy Test 
MFN Most Favoured Nation 
NME Non-market Economy 
PCN Product Control Number 
SCM Agreement Agreement on Subsidies and Countervailing Measures 
Chinese Taipei Separate Customs Territory  of Taiwan, Penghu, Kinmen and Matsu 
WTO World Trade Organization  WT/DS397/R 
 Page 1 
 
 
 I. INTRODUCTION 
1.1 On 31 July 2009, the People's Republic of  China ("China") requested consultations1 with the 
European Communities2 (the "EC") pursuant to Articles 1 a nd 4 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes (the "DSU"), Article XXIII:1 of the General 
Agreement on Tariffs and Trade 1994 (the "GA TT 1994") and Article 17.3 of the Agreement on 
Implementation of Article VI of the Genera l Agreement on Tariffs and Trade 1994 (the 
"AD Agreement") with respect to, but not necessarily limited to, Article 9(5) of Council Regulation (EC) No. 384/96 of 22 December 1995 on Protection against Dumped Imports from Countries not Members of the European Community, as amende d, and Council Regulation (EC) No. 91/2009 of 
26 January 2009 imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners 
originating in the People's Republic of China. 
1.2 On 12 October 2009, China requested, pursu ant to Articles 4 and 6 of the DSU, 
Article XXIII:2 of the GATT 1994 and Article 17.4 of the AD Agreement, that the Dispute Settlement 
Body ("DSB") establish a Panel
3 with regard to the following measures: 
(a) Article 9(5) of Council Regulation (EC)  No. 384/96 of 22 December 1995 on 
protection against dumped imports from countries not members of the EC, as 
amended. 
(b) Council Regulation (EC) No. 91/2009 of 26 January 2009 imposing a definitive anti-
dumping duty on imports of certain iron or steel fasteners originating in China.   
1.3 At its meeting on 23 October 2009, the DSB established a panel pursuant to the request of 
China in document WT/DS397/3, in acco rdance with Article 6 of the DSU.   
1.4 The Panel's terms of reference are the following:   
"To examine, in the light of the relevant provisions of the covered agreements cited 
by the parties to the dispute, the matter referred to the DSB by China in document 
WT/DS397/3 and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements." 
1.5 On 30 November 2009, the European Commun ities requested the Director-General to 
determine the composition of the panel, pursuant to  paragraph 7 of Article 8 of the DSU.  This 
paragraph provides:   
"If there is no agreement on the panelists within 20 days after the date of the 
establishment of a panel, at the request of  either party, the Director-General, in 
consultation with the Chairman of the DSB and the Chairman of the relevant Council 
or Committee, shall determine the com position of the panel by appointing the 
panelists whom the Director-General consid ers most appropriate in accordance with 
any relevant special or additional rules or  procedures of the covered agreement or 
covered agreements which are at issue in th e dispute, after consulting with the parties 
to the dispute.  The Chairman of th e DSB shall inform the Members of the 
                                                      
1 WT/DS397/1, Annex G-1. 
2 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 Eu ropean 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. 
3 WT/DS397/3, Annex G-2. WT/DS397/R 
Page 2 
 
 
 composition of the panel thus formed no later than 10 days after the date the 
Chairman receives such a request."   
1.6 On 9 December 2009, the Director-General accordingly composed the Panel as follows: 
 Chairman:  Mr. Luiz O. Baptista  
 
 Members: Mr. Michael Mulgrew    Mr. Arie Reich   
1.7 Brazil, Canada, Chile, Colombia, India, Japan, Norway, the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu ("Chinese Taipei "), Thailand, Turkey, and the United States 
reserved their rights to participate in the Panel proceedings as third parties.   
1.8 The Panel met with the parties on 23-24 Marc h and on 2-3 June 2010.  It met with the 
third parties on 24 March 2010.  The Panel issued its interim report to the parties on 10 August 2010.  
The Panel issued its final report to the parties on 29 September 2010. 
II. FACTUAL ASPECTS 
2.1 China's request for the establishment of a pa nel challenged two measures introduced by the 
European Union:  (1) Article 9(5) of Council Re gulation (EC) No. 384/96, as amended on protection 
against dumped imports from countries not members of the European Community (the "Basic AD Regulation") and (2) Council Regulation (EC) No. 91/2009 of 26 January 2009  imposing a definitive 
anti-dumping duty on imports of certain iron or steel  fasteners originating in the People's Republic of 
China (the "Definitive Regulation").  Council Regul ation (EC) No. 384/96 was repealed and replaced 
by Council Regulation (EC) No. 1225/2009 after th e establishment of this  Panel, and China's 
submissions address Counc il Regulation No. 1225/2009.
4  China's claims with regard to Council 
Regulation 1225/2009 challenge that measure "as such ", while its claims with regard to Council 
Regulation 91/2009 challenge the specifics of that measure, which include aspects of the Basic AD 
Regulation "as applied".   
2.2 China challenged Article 9(5) of the Basic AD Regulation, the provision that deals with the 
individual treatment of producers from non-market economy ("NME") countries, including China, in the context of dumping determinations in anti-dum ping investigations, as well as the application of 
that provision in the fasteners investig ation at issue in this dispute.   
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS  
A. C
HINA  
3.1 China requests the Panel to find that: 
(a) With respect to Article 9(5) of Council Regulation (EC) No. 384/96 on protection 
against dumped imports from countries not Members of the EC and its amendments, 
as codified and replaced by Council Regulation (EC) No. 1225/2009: 
                                                      
4 The European Union considers that Council Regulation No. 1225/2009 is not before the Panel in this 
dispute.  The description of the contested measures here should not be taken to have any significance for the Panel's consideration of the European Union's objection in this regard, which is addre ssed in the Panel's findings 
at paragraphs 7.32 to 7.39.    WT/DS397/R 
 Page 3 
 
 
 (i) The EC violated Articles 6.10, 9.2, 9.3, and 9.4 of the AD Agreement, 
Articles I:1 and X:3(a) of the GATT 1994 and Article XVI:4 of the 
Agreement Establishing the WTO as well as Article 18.4 of the 
AD Agreement. 
(b) With respect to Council  Regulation (EC) No. 91/2009 of 26 January 2009 imposing a 
definitive anti-dumping duty on imports of certain iron and steel fasteners from China: 
(i) The EC violated Articles 6.10, 9.2, 9.4 of the AD Agreement since it made 
the benefit of an individual margin of dumping and the imposition of an individual anti-dumping duty dependent on compliance with the conditions 
listed in Article 9(5) of Council Re gulation (EC) No. 384/96 as amended; 
(ii) The EC violated Article 5.4 of the AD Agreement because it failed to 
properly examine before initiating the investigation whether the standing 
thresholds were met and because the complainants did not meet the standing 
thresholds; 
(iii) In its definition of the domestic industry, the EC violated Articles 4.1 and 3.1 
of the AD Agreement because:  
  - it improperly excluded from the outset producers that did not make 
themselves known within 15 days following the publication of the notice of 
initiation and those producers that did not support the investigation from the scope of the EC's industry; 
   - the domestic industry, as defined by the EC, did not include domestic 
producers whose collective output of the products constituted a major 
proportion of the total domestic production; 
   - the domestic industry was not defined in  relation to the investigation period;  
   - the EC improperly made an injury determination on the basis of a sample of 
producers that did not constitute or represent a major proportion of the total 
domestic production; 
   - the EC improperly included in the domestic industry companies that were 
related to Chinese exporting producers of  the like product or were themselves 
importers of the alle gedly dumped product; 
   - As a consequence, the EC also violated Articles 3.1, 3.2, 3.4 and 3.5 of the 
AD Agreement since the injury determination was not made in relation to a properly defined domestic industry. 
 
(iv) The EC violated Articles 2.1 and 2.6 of  the Anti-Dumping Agreement since it 
erroneously considered fasteners produced and sold by EC's industry, fasteners produced and sold on the domest ic market in India and fasteners 
produced in China and sold to the EC as being "alike"; 
(v) The EC violated Article 2.4 of the AD Agreement since it failed to make a 
comparison of the normal value and export price on the basis of the full WT/DS397/R 
Page 4 
 
 
 product control number (PCN) and because it failed to make the necessary 
adjustments for differences that  affect the price comparability; 
(vi) The EC violated Articles 3.1 and 3.2 of the AD Agreement by failing to make 
a product comparison on the basis of the full PCNs and by comparing standard fasteners without making an y adjustments for the differences 
affecting price comparability when determining the price undercutting margin; 
(vii) The EC violated Articles 3.1, 3.2, 3.4, and 3.5 of the AD Agreement in its 
examination of the volume of dumped imports; 
(viii) The EC violated Articles 3.1 and 3.4 of the AD Agreement in its examination 
of the impact of the dumped imports on domestic producers of the like product; 
(ix) The EC violated Articles 3.1 and 3.5 of the AD Agreement because it failed 
to properly demonstrate that dumped im ports are, through the effects of 
dumping, causing injury to the domestic industry and because it failed to ensure that injury caused by other factors, in particular the increase in raw 
material prices and exports by the EC producers, was not attributed to the 
alleged dumped imports;  
(x) The EC violated throughout the inv estigation the following procedural 
obligations: 
  - Articles 6.5, 6.5.1, 6.2, and 6.4 of the AD Agreement because it failed to 
disclose the identity and volume of production of the complainants; 
 
  - Articles 6.5, 6.2, 6.4, and 6.9 of the AD Agreement since it failed to disclose 
information concerning the normal value determination and the comparison with export prices including adjustments affecting price comparability; 
   - Articles 6.5, 6.2, and 6.4 of the AD Agreement since the non-confidential 
versions of the EC's producers' ques tionnaire responses and of the analogue 
country producer's questionnaire response were largely deficient; 
   - Articles 6.5, 6.2, and 6.4 of the AD Agreement by failing to disclose Eurostat 
data as well as any explanations on how  it had estimated the EC production; 
 
  - Articles 6.2, 6.4, and 6.9 of the AD Agreement by failing to disclose 
information concerning the domestic industry; 
   - Article 12.2.2 of the AD Agreement by failing to indicate all relevant 
information concerning the individual treatment ("IT") determinations;  
 
  - Article 6.5 of the AD Agreement by disclosing the document entitled 
"Assessment of Market Economy Treatment Claims by nine producers in the PRC" while confidential treatment had been requested; 
   - Article 6.1.1 of the AD Agreement by limiting the time period for the 
submission of the responses to market economy treatment and/or individual  WT/DS397/R 
 Page 5 
 
 
 treatment questionnaires to 15 days as of the date of publication of the notice 
of initiation. 
 3.2 China requests that the Panel recommend that th e DSB request the EC to bring the contested 
measures into conformity with its obliga tions under the AD Agreement and the GATT 1994. 
3.3 In addition, China requests that the Panel use its discretion under the second sentence of 
Article 19.1 of the DSU by suggesting ways in which the EC could implement the recommendations 
and rulings of the DSB.  China considers that bot h measures should be withdrawn.  As to the first 
measure, given the "as such" nature of the viol ation, it should be withdrawn.  As to the second 
measure, China considers that the nature and scope of the violations of the AD Agreement and of the 
GATT 1994 are such that it is inherently vitiated and devoid of any legal basis.  Thus, China requests 
the Panel to suggest that the EC implement the recommendations and rulings of the DSB by 
withdrawing the contested measures.   
B. T
HE EUROPEAN UNION  
3.4 The European Union requests the Panel to reject  all of China's claims and arguments, finding 
instead that, with respect to each  of them, the European Union act ed consistently with all its 
obligations under the AD Agreement, the GATT 1994, and the WTO Agreement.  
IV. ARGUMENTS OF THE PARTIES 
4.1 The arguments of the parties are set out in their written submissions and oral statements to the 
Panel and their answers to questions.  Executive summaries of the parties' written submissions, and 
their oral statements, or executive summaries thereof, are attached to  this report as annexes (see List 
of Annexes, page v).   
V. ARGUMENTS OF THE THIRD PARTIES 
5.1 Brazil, Canada, Chile, Colombia, India, Japan , Norway, Chinese Taipei, Thailand, Turkey, 
and the United States reserved their rights to partic ipate in the Panel proceedings as third parties.  
Canada, Chile, Thailand, Chinese Taipei, India did not submit third party wr itten submissions and 
Brazil, Canada and Thailand did not submit third part y oral statements.  The arguments of Colombia, 
Japan, Norway, Turkey, and the United States are set out in their written submissions and oral 
statements, the arguments of Brazil are set out in its written submission, and the arguments of Chile, India, and Chinese Taipei are set out in thei r oral statements.  Executive summaries of the 
third parties' written submissions, and third party or al statements, or executiv e summaries thereof, are 
attached to this report as annexes (see List of Annexes, page v). 
VI. INTERIM REVIEW 
A. I
NTRODUCTION  
6.1 On 10 August 2010, we issued our Interim Report to the parties.  On 24 August 2010, China 
and the European Union submitted written requests for review of precise aspects of the Interim 
Report.  On 7 September 2010, China and the Eu ropean Union submitted written comments on each 
other's requests for interim review.  Neither party requested an additional meeting with the Panel. 
6.2 The numbering of footnotes in the Final Report has changed from the Interim Report.  The 
text below refers to the footnote numbers in the Interim Report regarding wh ich the parties requested 
review.  Where we have made a change to a footnote in the Interim Report, a reference to the corresponding footnote number in the Final Report is included (in parentheses) for ease of reference.  WT/DS397/R 
Page 6 
 
 
 The numbering of paragraphs is unchaged from the Interim Report.  We have also corrected 
typographical and other non-substantive errors thr oughout the Report, including those identified by 
the parties, which are not referred to specifically below. 
6.3 In order to facilitate understanding of the in terim review comments and changes made, the 
following section is structured to follow the organizati on of the Report itself, with the review requests 
of the parties, and their comments, addressed sequentially.   
B. GENERAL COMMENTS  
6.4 The European Union observes that the name of th is case, as set out on the first page of the 
Interim Report, is " European Communities – Definitive Anti-Dumping Measures on certain Iron or 
Steel Fasteners from China ", although the European Union request ed that, in the interest of clarity, 
the name of the case be changed to "European Un ion – Definitive Anti-Dumping Measures on certain 
Iron or Steel Fasteners from China".5  The European Union notes th at several third parties have 
referred to the case in this fashion, and that Chin a did not oppose the European Union's request.  The 
European Union requests that, as both parties seem to be in agreement on this issue, the Panel modify 
the name accordingly, or provide adequate explan ation as to why it has decided to reject the 
European Union's request.  China did not comment on the European Union's request. 
6.5 At the time the underlying investigation to ok place, the European Communities was the 
relevant authority and WTO Member.  Both the request for consultations and the request for 
establishment, as well as the decision of the DSB establishing the Panel, therefore appropriately 
referred to the European Communities, and the title of the dispute was correct as of the date of 
establishment.  As set out in footnote 2 of th e Final Report, the European Union replaced and 
succeeded the European Community as of the date of entry into force of the Treaty of Lisbon, 
1 December 2009.  Our Report refers to the Euro pean Communities where appropriate as a matter of 
historical fact, for instance in d escribing the investigation process, the requests for consultations and 
establishment, and the establishment and composition of  the Panel, all of which occurred prior to the 
effective date of the Treaty of Lisbon.  However, all the submissions in this panel proceeding were 
made by the European Union after that date, and our Report refers to the European Union in that 
context.  The title of the dispute has no legal con sequence, and indeed, the European Union does not 
argue otherwise.  To our knowledge, the name of a dispute has never been changed in the past, and 
several Panel reports have issued  since the entry into force of the Treaty of Lisbon without 
incorporating European Union in the title, or in the body of the report.6  We consider that, rather than 
being in the interest of clarity as asserted by the Eu ropean Union, it would be confusing to change the 
name originally assigned to this panel proceeding,  as different documents pertaining to the dispute 
would refer to different names for the dispute, and would moreover be inaccurate as a matter of 
historical fact.  We therefore deny the European Union's request.   
6.6 China notes that "TPKM" is not an official abbr eviation and therefore requests that the Panel 
refer to "Chinese Taipei".7  The European Union did not comment on this request.   
                                                      
5 European Union request for interim review, p. 1, citing, European Union, first written submission, 
fn 1;  and European Union letter dated 29 June 2010. 
6 In this regard, we note that in DS316 - EC and certain member States – Large Civil Aircraft , the 
report was circulated on 30 June 2010, after the entry in to force of the Treaty of Li sbon, but the name of the 
dispute was not changed, and references in the body of the report are to the European Communities.  In that 
case, all submissions were made before the entry into force of the Treaty of Lisbon.  In DS375, EC – IT 
Products , the report was circulated on 16 August 2010, after th e entry into force of the Treaty of Lisbon, but the 
name of the dispute was not changed, and most of the references in the report are to the European Communities, despite the fact that the interim review submissions were made after the entry into fo rce of the Treaty of Lisbon. 
7 China, request for interim review, para. 3.  WT/DS397/R 
 Page 7 
 
 
 6.7 In the absence of any objection, and in light of  the sensitivities of Members, we grant China's 
request.   
C. SPECIFIC REQUESTS  
6.8 Paragraph 2.1 :  The European Union requests the Pa nel to take into account the comments 
made by the European Union on this paragra ph in its comments on the descriptive part of 
29 June 2010.8  China submits that paragraph 2.1 should not  be modified for the reasons explained in 
its letter commenting on the European Union's co mments on the descriptive part of the Panel's 
Report.9 
6.9 We note that we did, in fact, take the Europ ean Union's comments on the descriptive part into 
account, amending paragraph 2.1 from the original as sent to the parties for comment, so as to be 
factually accurate.  The European Union has not sp ecified what additional changes it considers should 
be made.  Therefore, having already taken the European Union's original comments into account 
insofar as we deemed it appropriate, and in the ab sence of any new or additional arguments in this 
regard, we deny the European Union's request. 
6.10 Paragraph 7.11 :  The European Union requests the Panel to modify this paragraph to use the 
same wording as in paragraph 7.15 when re ferring to the European Union's arguments.10  China did 
not comment on this request.   
6.11 Given that the requested modification reflect s the European Union's arguments as presented 
to the Panel, we have granted the European Union' s request and modified this paragraph accordingly. 
6.12 Paragraph 7.41 :  China requests the Panel to amend this paragraph to more accurately reflect 
China's arguments.11  The European Union did not comment on this request. 
6.13 Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly  
6.14 Paragraph 7.43 :  The European Union requests that th e Panel amend this paragraph in order 
to properly reflect its arguments.12  The European Union notes that it argued that (1) the individual or 
country-wide determination of dumping margins, (2) the calculation or how dumping margins are 
calculated, and (3) how the proper level of anti-dum ping duties is establishe d (e.g., equal or lower 
than the dumping margin found) are three separate issues.  China did not comment on this request. 
6.15 Given that this request concerns the European  Union's arguments as presented to the Panel, 
we have granted the European Union's request, a nd have modified the paragraph accordingly.  We 
note that, to ensure consistency, we have also m odified paragraph 7.44 as a result of our modification 
of this paragraph.   
6.16 Paragraph 7.44 :  The European Union requests the Pane l to reconsider its conclusion in the 
final sentence of this paragraph.13  In the European Union's view, even if the scope/operation of the 
measure at issue is a disputed matter between the pa rties, this does not imply that the Panel can find 
that the legal claims "are within its terms of re ference".  At most, the European Union argues, the 
                                                      
8 European Union, request for interim review, p. 2. 
9 China, Comments on the European Union's request for interim review, para. 2, citing China's letter 
dated 12 July 2010. 
10 European Union, request for interim review, p. 2. 
11 China, request for interim review, para. 4. 
12 The European Union refers in this regard to references in footnote 54 of the Interim Report. 
13 European Union, request for interim review, p. 2. WT/DS397/R 
Page 8 
 
 
 Panel may come to that conclusion "on a preliminary basis, subject to the subs tantive analysis of the 
measure at issue".  Otherwise, this approach may lead to odd results (e.g., accepting claims within the 
panel's terms of reference and then , once examined the substance, re jecting them as not falling within 
its mandate).  In this respect, th e European Union considers that the Panel should examine first the 
scope/operation of the measure at issue as part of the preliminary objections and then decide whether 
the claims raised by China are properly within the Panel's terms of reference.   
6.17 China argues that the European Union confu ses the issue of whether certain matters are 
within the Panel's terms of reference with the substa ntive question of the scope of Article 9(5) of the 
Basic AD Regulation.14  China is of the view that the scope of Article 9(5) of the Basic AD 
Regulation is a substantive issue discussed elsewh ere in the Report, and that such substantive 
discussion is not relevant for the determination of the Panel's terms of reference.  China also disagrees 
with the European Union's argument that the a pproach followed by the Panel "may lead to odd 
results".15  In China's view, the only thing that matte rs for purposes of Article 6.2 of the DSU is 
whether the panel request identifies the specific meas ures at issue and provides a brief summary of the 
legal basis of the complaint sufficient to present the problem clearly.  China contends that this is the 
only issue that the Panel must determine in order to  assess whether certain claims are within its terms 
of reference, and the fact that the scope of the measure at issue may not be in line with some of the claims does not make these claims fall outside the Panel's terms of reference.  China thus considers 
that the Panel properly examined the issue of the scope of Article 9(5) of the Basic AD Regulation, the measure at issue, as part of its substantive anal ysis and that the Panel should therefore reject the 
European Union's request.
16 
6.18 With respect to this paragraph, China itsel f requests that the Panel amend the penultimate 
sentence, which China considers is not clear.17  The European Union considers that that sentence is 
clear and asserts that China has not indicated why it is not so.18 
6.19 The European Union's request concerns the an alytical approach we followed in resolving 
China's claims under Articles 6.10, 9.3 and 9.4 of the AD Agreement concerning Article 9(5) of the 
Basic AD Regulation.  It is our view that the or der in which different aspects of these claims should 
be addressed in our analysis is a decision that is within our own discretion.  In this case, we considered it important to first resolve the jurisdic tional issues raised by the European Union and then 
address the substantive aspects of the claims that we concluded were within ou r terms of reference.  
We therefore deny the European Union's request.    
6.20 We have granted China's request and modified  the penultimate sentence so as to clarify, 
without changing, its meaning. 
6.21 Paragraph 7.47 – footnote 58 :  China suggests that the Panel modify the description of the 
MET criteria in footnote 58 in order to more accurately reflect the text of Article 2(7)(c) of the Basic AD Regulation.
19  The European Union suggests that the Pane l reproduce the text of Article 2(7)(c) of 
the Basic AD Regulation in order to address China's concerns.20 
6.22 We have granted China's request, and modified  footnote 58 (now footnot e 226) accordingly.  
                                                      
14 China, Comments on the European Union's request for interim review, para. 4. 
15 China, Comments on the European Union's request for interim review, para. 6. 
16 China, Comments on the European Union's request for interim review, para. 8. 
17 China, request for interim review, para. 5. 
18 European Union, comments on China's request for interim review, p. 1. 
19 China, request for interim review, para. 6. 
20 European Union, Comments on China's request for interim review, p. 1.  WT/DS397/R 
 Page 9 
 
 
 6.23 Paragraph 7.48 :  The European Union requests the Pa nel to add the phrase "in general" 
after "(2)" in this paragraph in order to better re flect the wording of Article 9(5) of the Basic AD 
Regulation.  China argues that the wording of Article 9(5) is quoted in extenso  in this paragraph and 
that therefore it is not necessary to add the words "in general" as requested by the European Union.21 
6.24 We have granted the European Union's request , and modified this paragraph accordingly. 
6.25 Paragraph 7.49 :  China requests that the Panel amend the last two sentences of 
paragraph 7.49 in accordance with the findings of the Panel at paragraphs 7.68 to 7.77 of the Interim 
Report.22  The European Union requests the Panel to  reject China's requested change.  The 
European Union points out that in paragraph 7.49, the Panel refers to the text of Article 9(5);  
however, China wants the Panel to anticipate its an alysis of how the measure operates (which comes 
later and is an issue disputed by the parties) in this paragraph, which is merely descriptive.23   
6.26 The European Union itself requests the Panel to amend this paragraph in order to respect the 
wording of Article 9(5).24  China did not comment on this request. 
6.27 We have granted the European Union's request  and modified this paragraph accordingly.  
However, since paragraph 7.49 comes before para graphs 7.68 and 7.77, and the scope/operation of 
Article 9(5) of the Basic AD Regulation is a cont ested issue, we have denied China's request.   
6.28 Paragraph 7.50 :  China asserts that the description of how the export price is determined for 
non-IT producers is not entirely correct, referring in  this respect to paragraph 302 of its second written 
submission as well as to paragraph 3 of the Eu ropean Union's answer to Panel question 4.25  In 
particular, China considers it essential to mention that  in case cooperation is deemed to be low, the 
weighted average export price of cooperating non-IT  producers is further weighted with the export 
prices based on other sources, e.g. import statistics.  The European Union requests the Panel to reject 
China's requested change. The European Union has pr oposed specific changes to address this issue in 
its comments on the Interim Repor t and requests the Panel to follow them. In addition, the 
European Union observes that Chin a's description is also incorrect.  Indeed, China insisted in the 
course of the proceedings to equate "low cooperati on" with "below 80%".  China has not adduced any 
evidence of the existence of a European Union pr actice on the basis of that precise threshold of 
cooperation.  There is none, as the European Union clarified inter alia  in its response to Panel 
question 4.26  
6.29 The European Union itself requ ests that the Panel modify paragraph 7.50, asserting that the 
description contained in (b)(ii) is inaccurate a nd confusing, and proposes text in this regard.27  China 
disagrees with the wording proposed by the European Union.28  China considers that it is not correct 
to state that the country-wide duty rate is "generally" calculated on the basis of the export prices of the cooperating non-IT suppliers, asserting that in most cases, the country-wide duty rate is calculated on 
the basis of the export prices of cooperating non-IT  suppliers and facts available.  Second, China 
maintains that it is not correct to describe the dete rmination of the export price, when cooperation is 
deemed to be low, as being based on the expor t prices of cooperating non-IT suppliers and " the results 
found for non-cooperating suppliers ".  According to China, this gi ves the erroneous impression that 
the export price is based on the export prices of all NME suppliers, when in fact, the export prices of 
                                                     
 
21 China, Comments on the European Union's request for interim review, para. 9. 
22 China, request for interim review, para. 7. 
23 European Union, Comments on China's request for interim review, p. 1. 
24 European Union, request for interim review, pp. 2-3. 
25 China, request for interim review, para. 8. 
26 European Union, Comments on China's request for interim review, p. 2. 
27 European Union, request for interim review, pp. 3-4. 
28 China, Comments on European Union's request for interim review, paras. 10-11. WT/DS397/R 
Page 10 
 
 
 the cooperating non-IT producers are simply averaged with best information available such as the 
highest margin of dumping or EU import statistics.29  Therefore, China contends, it is simply incorrect 
to refer to the "results found for non-cooperating suppliers". 
6.30 While the parties disagree as to how the expor t price for non-IT suppliers is determined, 
particularly in investigations where cooperation is low, both refer to the European Union's reply to 
Panel question 4 as providing an accurate description of the determination of the export price for non-
IT suppliers.  We have granted the parties' request s and have modified this paragraph accordingly.   
6.31 Paragraph 7.51 :  China requests the Panel to modify this paragraph in order to more 
accurately reflect its arguments.30  The European Union requests th e Panel to reject the proposed 
changes, asserting that it is clear that the Panel correctly summarized the most relevant elements of 
China's argument, and that China has not provide d any citations to its submission to show the 
contrary.31 
6.32 While China does not refer to its submissions in  support of the requested modification, since 
the request does reflect China's arguments as they were presented to the Panel, we have granted 
China's request, modified this paragraph accordin gly and indicated where in China's submissions 
those arguments are found. 
6.33 Paragraphs 7.51 – 7.59 :  The European Union observes th at in these paragraphs, as well as 
in other sections of the Interim Report32, there is no citation to the relevant submissions of the parties 
where the arguments were made.  The Europ ean Union considers that some of those 
paragraphs misrepresent the arguments as made by th e parties.  The European Union notes that, in 
other sections of the Report, citations to the arguments  raised by the parties and third parties are made.  
The European Union requests the Panel to insert footnotes where appropriate to the relevant 
submissions where the parties allegedly made th e stated claims and arguments.  China did not 
comment on this request. 
6.34 We have granted the European Union's request to  the extent that we have reviewed the parts 
of the Interim Report where parties' arguments are summarized, particularly the part specifically cited 
by the European Union in this regard, and added footnotes referring to the pa rties' submissions, where 
we deemed it appropriate. 
6.35 Paragraph 7.53 :  China asserts first that paragraph 7.53 does not accurately reflect what 
China said on how the export price is determined for non-IT exporting producers, referring in this 
regard to paragraph 302 of its second written submi ssion and paragraph 3 of its answer to Panel 
                                                      
29 China refers in this regard to anti-dumping inves tigations cited in China, second written submission, 
footnote 221.   
30 China, request for interim review, para. 9. 
31 European Union, Comments on China's request for interim review, p. 2. 
32 European Union, request for interim review, p. 4.  The European Union observes, at fn. 1, that it:   
"cannot find the relevant citation to the statements in para. 7.105 ("China argues that there is a 
parallel in this regard between Articles 6.10 an d 9.2 which would mean that "impracticable" 
under Article 9.2 refers to investigations where, because of the large number of producers, it 
would be difficult to manage the implementation of the measure if each supplier is named 
individually " (emphasis added ));  or para. 7.129 ("The European Union asserts that 
Article 9(5) of the Basic AD  Regulation provides for a methodology  for determining anti-
dumping duties in investigations against NMEs.  It does not contain any rules on how such 
methodology  should be administered" ( emphasis added )).  As regards para. 7.129 specifically, 
the European Union has not asserted anywhere that Article 9(5) provides for a "methodology" 
for determining anti-dumping duties against NMEs."  WT/DS397/R 
 Page 11 
 
 
 question 1, and therefore requests that the Panel modify the first sentence.33  Second, China requests 
that the Panel modify paragraph 7. 53 in order to more accurately reflect China's arguments in relation 
to its claim in connection with Article 9.3 of the AD Agreement.34 
6.36 The European Union notes that China's request for a change of the first sentence accurately 
reflects its arguments as stated in China's Second Written Submission,  paragraph 302 a nd its reply to 
Panel question 1, paragrap h 3.  However, the European Union asserts it could not find any reference 
in China's submissions with the suggested language concerning China's other requests.  Since China 
has failed to provide specific references to its su bmission, the European Union requests the Panel to 
reject the proposed changes.35 
6.37 While China does not refer to its submissions in  support of the requested modification, since 
the request does reflect China's arguments as they were presented to the Panel, we have granted 
China's request, modified this paragraph accordin gly and indicated where in China's submissions 
those arguments are found.   
6.38 Paragraph 7.80 :  In line with its comments concerni ng paragraph 7.50, China requests that 
paragraph 7.80 be modified to accurately describ e how the export price is determined for non-IT 
exporting producers.36  For the same reasons as given in r espect of China's request concerning 
paragraph 7.50 of the Interim Report, the European  Union requests the Panel to reject the change 
proposed by China.37 
6.39 With respect to this paragraph,  the European Union considers that the description of how the 
country-wide margin is calculated is inaccurate, a nd for the same reasons as expressed with respect to 
paragraph 7.50, the European Union requ ests the Panel to amend this paragraph.38  China disagrees 
with the modification requested by the European Unio n, as it did with respect to the European Union's 
request regarding paragraph paragra ph 7.50.  According to China, it is not correct to describe the 
export price as being based either on the weighted  average export prices of all cooperating producers 
or the weighted average export prices of all NME pr oducers.  China submits that if cooperation is 
deemed to be low, i.e. less than 80% in most c ases, the export price is generally determined on the 
basis of the average export price of the cooperating non-IT suppliers and best information available, 
e.g. statistics or the highest dumping margin or othe r available information.  In China's view, it is 
artificial and not in accordance with the practice of the European Union to state that in case 
cooperation is low, the export price is based on the weighted average export prices of all NME 
producers.39 
6.40 In connection with this paragraph, both parties repeat their views about paragraph 7.50 of the 
Interim Report, where the determination of export pr ice for non-IT producers is described.  As we did 
with respect to paragraph 7.50, see paragraph 6.30 above, we have modified paragraph 7.80, which 
concerns the same issue, accordingly. 
6.41 Paragraph 7.86 :  The European Union requests that the Panel modify this paragraph in order 
to properly reflect the Eu ropean Union's arguments.40  China did not comment on this request. 
                                                      
33 China, request for interim review, para. 10. 
34 China, request for interim review, para. 10. 
35 European Union, Comments on China's request for interim review, p. 2.  
36 China, request for interim review, para. 11. 
37 European Union, Comments on China's request for interim review, p. 2. 
38 European Union, request for interim review, p. 4-5. 
39 China, Comments on the European Union's request for interim review, para. 12.  In this regard, 
China refers to footnote 221 of China's second written submission. 
40 European Union, request for interim review, pp. 4-5. WT/DS397/R 
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 6.42 Given that the requested modification reflect s the European Union's arguments as presented 
to the Panel, we have granted the European Union' s request and modified this paragraph accordingly. 
6.43 Paragraph 7.100 :  The European Union requests that Pa nel to amend this paragraph in order 
to reflect the European Union's arguments as cont ained in its submissions, referring specifically to 
European Union, first written submission, paragra ph 119 and European Union, second oral statement, 
paragraph 15.41  China did not comment on this request. 
6.44 Given that the requested modification reflect s the European Union's arguments as presented 
to the Panel, we have granted the European Union' s request and modified this paragraph accordingly. 
6.45 Footnote 83 :  The European Union requests the Pane l to delete the observation in this 
footnote that the European Union "has not substantiated its argument".42  In this respect, the 
European Union refers specifically to paragraph 148 of its first written submission, where it argued 
that the use of the terms "suppliers" an d "sources" in Article 9.2, while the Anti-Dumping Agreement  
specifically employs the terms "exporter" and "producer ", must have a meaning, in particular that 
anti-dumping measures aim at identifying the supplier which is the actual source of the price discrimination.  The European Un ion observes that it makes an argu ment by implication in this 
respect, which it contends is also substantiated in view of the precedent and subsequent paragraphs of 
that section.  China maintains that there is nothing in the cited section of the European Union's first 
written submission which "substantiates" the Europe an Union's argument.  China therefore requests 
the Panel not to delete the phrase.
43 
6.46 We note that, to support its request for a modification of footnote 83 of the Interim Report, 
the European Union refers the Panel to paragraph 14 8 of its first written submission, which is already 
cited in that footnote.  In our view, there is theref ore no need to modify the footnote, and we therefore 
have denied the European Union's request.  However,  for clarity, we have added a cross reference in 
footnote 83 (now footnote 281) to paragraph 7.104 of the Report, where we rejected the proposition 
that "supplier" means something other than "exporter" or "producer". 
6.47 Paragraph 7.117 :  China requests that this paragraph be modified by adding a sentence.44  
The European Union requests the Panel to reject th e proposed changes, asserting that it is clear that 
the Panel correctly summarized the most relevant el ements of China's argument, and that China has 
not provided any citations to its submission to show the contrary and the European Union could not 
find any reference in China's submi ssions with the suggested language.45 
6.48 While China does not refer to its submissions in support of the requested modification, 
China's first and second written submissions contain language to this effect.  We have therefore 
granted China's request and modified  this paragraph accordingly.   
6.49 Paragraph 7.138 :  The European Union notes that this paragraph refers to the Commission of 
the European Union ("the Commission") whereas the Panel has referred to the Commission in 
previous sections of its Report.  The European Unio n requests the Panel to include the full name and 
the abbreviation the first time it refers to the Commission in its Report.46  China did not comment on 
the European Union's request. 
6.50 We have granted this request, and modified the Report accordingly.   
                                                      
41 European Union, request for interim review, p. 5. 
42 European Union, request for interim review, p. 5. 
43 China, Comments on the European Union's request for interim review, paras. 13-14. 
44 China, request for interim review, para. 12. 
45 European Union, Comments on China's request for interim review, p. 2. 
46 European Union, request for interim review, p. 5.  WT/DS397/R 
 Page 13 
 
 
 6.51 Paragraph 7.143 :  China requests that the Panel modify  this paragraph to accurately reflect 
the facts of this case.47  China contends that it is not correct to state that most of the producers did not 
make themselves known and that only 46 producer s came forward, asserting that, according to the 
Information Document, the Commission received info rmation from more than 114 producers.  China 
considers that it should be clarified that the 46 Community producers are those which came forward 
and provided the requested information and expressed a wish to be included in the sample within 
15 days as of the date of initiation of the inves tigation and which supported the complaint.  The 
European Union requests the Panel to refuse to make the proposed changes, asserting that the Panel 
correctly summarized the major elements of the inve stigating authorities' findings on injury referring 
each time in a footnote to the relevant recitals of the Definitive Regulation.48 
6.52 This paragraph is part of a section where the Panel summarizes the facts of the investigation 
at issue, and therefore reflects our understanding of those facts.  In our  view, China's proposed 
alternative text does not add clarity to this paragra ph, is argumentative and is not entirely correct as a 
matter of fact.  We therefore have denied China' s request, with the exception of a modification to 
reflect the fact that 46 cooperating producers expresse d their willingness to be included in the sample.   
6.53 Paragraph 7.149 :  The European Union invites the Pane l to reconsider the conclusion that:  
"Finally, we do not consider it necessary to make fi ndings under Article 9.4 of the AD Agreement in 
respect of China's "as applied" claim, for the sa me reasons that led us to find it unnecessary to make 
findings with respect to China's "as such" claim under that provision".49  The European Union asserts 
that China did not include a claim under Article 9.4 of the Anti-Dumping Agreement  in its Panel 
request and thus this claim, which the European  Union argues was included for the first time in 
China's first written submission, was out side the Panel's terms of reference.50  The European Union 
notes that China argued that this claim fell with in the Panel's terms of reference because it was 
included in the context of its "as such" claim.  The European Union considers that, by exercising 
judicial economy, the Panel seems to have found th at China's claim under Arti cle 9.4 against Council 
Regulation No 91/2009 fell within its terms of reference.  If that is the case, the European Union 
requests the Panel to provide its views as to why this result should be granted in view of the fact that 
this was an issue disputed by the parties.  Otherw ise, the European Union invites the Panel to change 
its conclusion and find that China's claim under Artic le 9.4 did not fall within its terms of reference 
since it was not included in its Panel Request.    
6.54 China notes that in reply to the European Union' s objection in its first written submission that 
China's claim under Article 9.4 [in relation to the second measure at issue] was outside the Panel's 
terms of reference, China explained that Article  9(5) of the Basic AD Regulation which is being 
challenged "as such" is also being challenged "as applied" in the framework of the anti-dumping 
investigation on imports of certain iron or steel fasteners originating in China.51  China also notes that 
it pointed out that its claim concerning the application of Article 9(5) in the fasteners investigation is 
the logical continuation of China's challenge to Artic le 9(5) "as such" and that given that Article 9.4 
of the AD Agreement is included in the panel re quest in connection with the claims against 
Article 9(5) "as such", China's claim that Article 9(5) "as applied" in the fasteners investigation 
violated Article 9.4 is within the Panel's terms of reference.  China considers that the Panel expressly 
acknowledged this "logical continuation" by descr ibing the claim in its Interim Report as being 
"whether Article 9(5) of the Basic AD Regulation,  as applied in the fasteners investigation, is 
inconsistent with Articles 6.10, 9.2 and 9.4 of th e AD Agreement".  China understands that the Panel 
                                                      
47 China, request for interim review, para. 13. 
48 European Union, Comments on China's request for interim review, p. 2. 
49 European Union, request for interim review, pp. 5-6. 
50 The European Union refers in this regard to paragraph 212 of its first written submission. 
51 China refers to paragraphs 371 – 383 of its second written submission in this regard. WT/DS397/R 
Page 14 
 
 
 implicitly concluded that China's claim under Article 9. 4 is within its terms of reference.  In China's 
view, the Panel may, for the purposes of cl arity, state this explicitly in its Report.52 
6.55 We agree that the text as originally drafted was unclear, and we therefore have granted the 
European Union's request, redrafting this paragr aph to clarify the parties' arguments and our 
conclusion. 
6.56 Paragraph 7.150 :  China considers that this paragra ph does not accurately reproduce China's 
arguments as set out inter alia  in its first and second written subm issions, and therefore requests that 
the Panel modify it.53  The European Union requests the Pa nel to reject the proposed changes, 
asserting that it is clear that the Panel correctly su mmarized the most relevant elements of China's 
argument, and that China has not provided any precise citations to its submission to show the 
contrary.54 
6.57 While China does not refer to its submissions in  support of the requested modification, since 
the request does reflect China's arguments as they were presented to the Panel, we have granted 
China's request, modified this paragraph accordin gly and indicated where in China's submissions 
those arguments are found.   
6.58 Paragraph 7.168 :  China considers that this paragra ph does not accurately reproduce China's 
argument as set out in its answer to Panel question 19, and therefore requests that the Panel modify 
it.55  The European Union requests the Panel to rej ect China's proposed amendments, asserting that the 
relevant paragraph of the Panel's Report accurately  reflects China's argument as made in China's 
answer to Panel question 19.56 
6.59 The modification proposed by China does not in any way alter the content of this paragraph, 
and we have therefore granted China's request and have modified this paragraph accordingly.    
6.60 Paragraph 7.172 :  China considers that this paragra ph does not accurately reproduce China's 
argument as set out in its answer to Panel question 19, and therefore requests that the Panel modify 
it.57  For the same reasons as above concerning China' s comments with respect to paragraph 7.168 of 
the Interim Report, the European Union requests th e Panel to reject the change proposed by China.58  
6.61 The modification proposed by China does not in any way alter the content of this paragraph 
and we have therefore granted China's request a nd have modified this paragraph accordingly.   
6.62 Paragraphs 7.172 – 7.175 :  The European Union recalls its  submissions in the course of 
these proceedings, where it explained in detail the st eps taken by the investig ating authority in the 
fasteners investigation.59  The European Union asserts that China did not dispute the steps the 
European Union asserted it had taken in ascertaini ng production figures prior to initiation.  The 
European Union requests the Panel to take this into account in its analysis with respect to the quality 
of the Commission's determination on standing, proposing that the Panel amend footnote 138 to 
                                                      
52 China, Comments on the European Union's request for interim review, paras. 15-18. 
53 China, request for interim review, para. 14. 
54 European Union, Comments on China's request for interim review, p. 2. 
55 China, request for interim review, para. 15. 
56 European Union, Comments on China's request for interim review, p. 2. 
57 China, request for interim review, para. 16. 
58 European Union, Comments on China's request for interim review, p. 3. 
59 European Union, request for interim review, pp. 6-7.  The European Union refers in particular to 
European Union, first written submission, para. 263;  Eu ropean Union Opening Oral Statement, Second Hearing 
with the Panel, para. 22 in this regard.  WT/DS397/R 
 Page 15 
 
 
 reflect this.  In addition, the European Union re quests the Panel to amend paragraph 7.152 by adding a 
footnote describing the steps taken. 
6.63 China opposes the European Union's request, asserti ng that it is incorrect that "China did not 
dispute these steps".  China notes that it stated th at the European Union explains "the methodology 
used by the investigating authority to  examine standing" in abstract terms60, but did not give any 
details about how this exam ination was carried out in the context of  the fasteners investigation.  China 
asserts that evidence it put forward in its first written submission clearly shows that the European Union examined the degree of support fo r, or opposition to, the application only after the 
initiation of the investigation.  Furthermore, th e fact that China disagr eed with the description 
provided by the European Union is clear from paragraph 22 of the European Union's opening 
statement at the second substantive meeting, where th e European Union stated that "Contrary to what 
China asserts, the figure of EU total production co ntained in the Complaint and which was finally 
included in the Note to the File was also exam ined by checking the figures in EUROSTAT".  China 
asserts that the European Union intentionally omitte d the phrase "contrary to what China asserts" in 
its comments on the Interim Report.  China mainta ins that this phrase clearly shows that China 
disagrees with the description provid ed by the European Union.  Th erefore, China requests the Panel 
not to make the modification requested by the European Union.
61 
6.64 Given that this paragraph contains the Europ ean Union's own arguments, we have granted the 
European Union's request and modifi ed this paragraph accordingly.  However, the steps taken by the 
Commission are not uncontested as a matter of fact, and we therefore have denied the 
European Union's request to modify footnote 138.   
6.65 Paragraph 7.178 :  China requests that the Panel delete the sentence "China has not disputed 
this assertion" from paragraph 7.178.62  China asserts that it is not correct that it did not dispute the 
assertion that "the European Union contends that the company-specific figures in this table do include 
a 15 percent margin of error to protect the conf identiality of the production data of individual 
producers, but that the totals indicated for complain ants and supporters are the actual, correct figures, 
and do not reflect that 15 percent margin".63  According to China, the European Union submitted no 
evidence in support of its statement that the 15% ma rgin only relates to individual company figures 
and that, moreover, this justification does not stand in view of the fact that the production figures for 
each producer in the document are anonymous.   
6.66 The European Union requests the Panel to rej ect the proposed changes, asserting that it is 
clear that China did not contest this issue.  The European Union asserts that, in response to 
question 86 from the Panel after the second hearing,  it indicated that the company-specific figures in 
question included a 15% margin of error to prot ect the confidentiality of the production data of 
individual producers, but that the totals indicated for the complainants and the supporters were the 
actual, correct figures.  The European Uni on asserts that China did not comment on the 
European Union's response, noting that while China refers to its second written submission, 
paragraph 490 to argue that it did so, China's second written submission triggered the question from 
the Panel.64 
6.67 Question 86 was put to the parties after the second s ubstantive meeting with the parties, that is 
after the receipt of China's second written submissi on.  Therefore, that submission does not establish 
that China disputed the European Union's answer to question 86.  Moreover, paragraph 490 of China's 
                                                      
60 China refers to paragraph 478 of China,  second written submission in this regard. 
61 China, Comments on the European Union's request for interim review, paras. 19-21. 
62 China, request for interim review, para. 17. 
63 China refers in this respect to paragraph 490 of China, second written submission.   
64 European Union, Comments on China's request for interim review, p. 3. WT/DS397/R 
Page 16 
 
 
 second written submission does not in any case rebut th e European Union's contention.  In that 
paragraph, China asserts that the European Union did not submit evidence in support of its position, 
and that since the production figures were listed for each producer anonymously, there is no basis for 
the assertion that the 15 percent margin of error was for confidentiality reasons.  This does not, 
however, address the European Union's contentio n that the overall figure did not include the 
15 percent margin of error.  We have therefore denied China's request. 
6.68 Paragraph 7.205 :  China requests that the Panel modify this paragraph to more accurately 
reflect China's arguments, as set out in para graphs 505 to 528 of its second written submission.65  The 
European Union did not comment on China's request. 
6.69 This paragraph is an introduction to our anal ysis of the European Union's preliminary 
objection to China's first allegation of error with re gard to the domestic industry, which we ultimately 
rejected.  In this context, we see no need to e xpand on the brief description of China's arguments in 
response to the European Union's objection.  We  have therefore denied China's request.   
6.70 Paragraph 7.213 :  China requests that the Panel modify this paragraph to more fully and 
accurately reflect China's arguments, referring in th is regard to China, Comments on European Union 
answer to Panel question 89, paragraph 16 an d paragraphs 533-534 of  China, second written 
submission.66  
6.71 The European Union requests that the Panel re ject China's request, asserting that the Panel 
correctly summarized China's position as set forth, inter alia , in paragraphs 533 – 534 of China, 
second written submission.  The European Union cons iders that the changes China requests are not 
reflected in the paragraphs of that submission ci ted by China, and that China misunderstands the 
European Union's replies to Panel questions 88 and 89 in asserting that the European Union 
acknowledged that "the 318 produ cers and the additional 54 producers not only received the sampling 
form but that they were also asked  to state their position vis-à-vis the investigation (in relation to the 
standing issue examination)".  The European Union maintains that this is not correct, and that the 
Panel was right not to include this comment in its Re port.  According to the European Union, it is not 
the case that the authorities had information about s upport for the complaint or lack thereof by the 
producers that were contacted, as it did not ask th ese producers about their position with respect to the 
complaint following initiation, stating that after in itiation, this was not a relevant question anymore.67 
6.72 China's proposed inclusions do not describe facts found or relied upon by the Panel, but rather 
describe China's arguments and interpretation of  facts, particularly with respect to the 
European Union's answers to Panel questions 88 a nd 89.  The Panel is not required to exhaustively 
summarize all of a party's arguments in the course of its  analysis, which this paragraph is part of.  We 
have therefore denied China's request. 
6.73 Paragraph 7.214, and Footnotes 247 and 249 :  China requests that the Panel modify this 
paragraph and the footnotes.68  China asserts the this paragraph misrepresents its view, and that it has 
never stated that it "accepted" that "at least one producer which was not a complainant, and had 
remained silent prior to initiation, was not only in cluded in the domestic industry, but was selected for 
the sample".  China notes that this information was and is impossible for it to verify since the identity 
of the complainants has been kept confidential.  Moreover, China asserts that the European Union did 
not provide any evidence supporting this factual asser tion, which the Panel could not therefore check.  
China asserts that the Panel erred, in footnote 247, in  stating that "it is clear that support or lack 
                                                      
65 China, request for interim review, para. 18. 
66 China, request for interim review, para. 19. 
67 European Union, Comments on China's request for interim review, p. 3.   
68 China, request for interim review, paras. 20-22.  WT/DS397/R 
 Page 17 
 
 
 thereof as a matter of fact  was not enquired into by the Co mmission" (emphasis added).  China 
asserts that the Commission sent sampling forms to  318 producers and an additional 54 producers, 
and also contacted these producers in the framework of its continuing investigation of the "standing" 
issue and requested each producer to state its position vis-à-vis  the investigation.69  Thus, China 
argues, the Commission enquired about and knew  the positions of the producers concerned vis-à-vis  
the investigation.  Finally, China notes that the Pa nel does not refer to paragraph 76 of China's second 
oral statement regarding the European Union practi ce, which China contends is evidence showing that 
support to the complaint is a necessary condition for a domestic producer to be part of the domestic 
industry.  China requests that the Panel add a re ference to this statement in footnote 249.   
6.74 The European Union requests the Panel to reject  China's requested change, asserting that the 
Panel correctly reflected the fact that in its comments on the European Union's answer to Panel 
question 89, China "appeared to accept" the fact th at the company referred to by the European Union 
in its replies had not supported the complaint but ha d remained silent.  The European Union considers 
that China's proposed change is based on the e rroneous assertion that the Commission enquired about 
producers' position in respect of the complaint.  Ac cording to the European Union, that was simply 
not the case, which it asserts is clear from the sampling forms submitted to the Panel.  The 
European Union contends that China's assertions in this regard are incorrect, noting that China did not 
submit any evidence to support them.  The European Un ion also requests that the Panel reject China's 
proposal to reflect the argument that to include on ly supporters of the complaint is standard EU 
practice.  First, China's argument about the EU's standa rd practice is not relevant in the context of this 
"as applied" claim.  Second, the European Union cont ends that it is not the case that this is standard 
EU practice, and the evidence China submitted of certa in specific cases is not convincing.  Third, the 
European Union notes that the Panel is not obliged to address each and every argument of a party, and 
considers that the Panel was correct not to address this assertion.70 
6.75 For the most part, China's proposed text reflect s its own views of the facts, as argued to the 
Panel, rather than the Panel's views.  While Ch ina continues to assert that the Commission inquired as 
to the position of EU producers with respect to the complaint, the only evidence before the Panel, the 
sampling forms, does not support that assertion.  Given th at this paragraph is part of our analysis, and 
that we did not accept China's view of the facts in this context, we see no reason to reflect China's 
arguments in further detail.  Moreover, while it is true that China referred to other EU anti-dumping 
cases in arguing its claim, it made no claim with re spect to EU practice concerning definition of the 
domestic industry.  Its claim concerned only the decision in this particular investigation.  We therefore 
see no need to include an aspect of China's argu ment which was not relevant to the Panel's 
consideration of the claim actually before it.  We ha ve therefore denied China's request.  However, to 
more fully reflect China's position, we have added a footnote in paragraph 7.214 referring to China's 
argument that it was not possible for it to verify whether one producer, which was not complainant 
and did not indicate a position in support of or op position to the complaint prior to initiation, was 
included in the domestic industry and selected for the sample.   
6.76 Paragraph 7.215 :  China submits that this paragraph also misrepresents the facts of this case 
when it refers to "the fact that at least one pr oducer who did not affirmatively state support for the 
complaint was included in the domestic industry" and requests that the Panel modify it.71  C h i n a  
makes largely the same ar guments as with respect to paragraphs 7.213 and 7.214, noting that even if 
the producer identified by the European Union as having come forward after the initiation did not 
mention its position in its sampling form, it did it in  its reply to the "standing" inquiry, and requests 
that the Report reflect this view.  For the same  reasons as given in respect of China's comments 
                                                      
69 China refers in this regard to its comments on  the European Union's reply to Panel question 89. 
70 European Union, Comments on China's request for interim review, pp. 3-4. 
71 China, request for interim review, para. 23. WT/DS397/R 
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 concerning paragraph 7.213 of the In terim Report, the European Union requests the Panel to reject the 
change proposed by China.72 
6.77 The European Union itself requests the Panel to consider deleting the last two sentences of 
this paragraph, as it considers that their relevance to the Panel's finding is not clear.73  China considers 
that the sentences that the European  Union asks the Panel to delete are relevant and therefore asks the 
Panel to reject the European Union's request.74  China recalls that its cl aim that the European Union 
acted inconsistently with Articles 4.1 and 3.1 of  the AD Agreement because the European Union had 
excluded from the definition of the domestic indus try certain categories of producers extended not 
only to the exclusion of producers that did not suppor t the complaint, but also to those producers that 
came forward more than 15 days after the publication of the Notice of Initiation.  China notes that the 
findings of the Panel in the sentences that the Eu ropean Union requests to have deleted address the 
second aspect of China's claim, namely the exclusio n of the producers that came forward more than 
15 days after the publication of the notice of initiation.   
6.78 For the same reasons as set forth with respect to paragraphs 7.213 and 7. 214, we have denied 
China's request.   
6.79 We have also denied the European Union's re quest.  The European Union has not identified 
any error or suggested any revisions, but merely cont ends that the relevance of the last two sentences 
of this paragraph to the Panel's finding is "not cl ear".  The point being made is that while producers 
that did not come forward during the 15-day period were not included, this is not the same as 
excluding them, and the fact that the Commission di d consider expanding the industry, even if it did 
not do so, supports this view.  Thus, these two sentences support the Panel's conclusion that the 
Commission did not exclude domestic producers that did not support the complaint.  We have, however, modified the last two sentences in order to clarify our views.   
6.80 Paragraph 7.219 and footnotes 254, 255 and 256 :  China considers that this paragraph is 
incorrect in several respects, and requests that the Panel modify it.
75  First, according to China, the 
fact that one of the producers included in the domestic industry allegedly was not one of the 
complainants and did not express any view before th e initiation of the investigation does not establish 
that this producer "did not support the complaint"  once it came forward after the investigation was 
initiated.  Therefore, China suggests that the Pa nel clarify that the producer concerned did not 
expressly state support for the complaint in its sampling form .  According to China, the fact that the 
sampling form did not request the producer to expressly state its support or opposition of the 
complaint cannot be considered as sufficient evidence of  the fact that this producer did not support the 
complaint.   
6.81 Second, China requests that the Panel modify footnotes 254 and 256 to clarify that it argued 
that any deadline for domestic producers to make themselves known must be "reasonable".76  Third, 
China maintains that it substantiated its claim that the 15-days allowed by the Commission was 
insufficient and unreasonable77, and requests that the evidence and arguments it submitted in relation 
to this issue be fully reported.  Fourth, China asserts China it provide d evidence of the fact that the 
                                                      
72 European Union, Comments on China's request for interim review, p. 4. 
73 European Union, request for interim review, p. 7. 
74 China, Comments on the European Union's request for interim review, para. 22. 
75 China, request for interim review, paras. 24-28. 
76 China refers in this regard to Ch ina, answer to Panel question 23.   
77 China refers in this regard to China, second written submission, paras. 577 – 581.  WT/DS397/R 
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 Commission inquired and thus necessarily kn ew about the position of that producer vis-à-vis  the 
investigation78, and requests that the evidence and argumen ts it has put forward be fully reported. 
6.82 For the same reasons as given above in respect of China's comments concerning 
paragraph 7.213 of the Interim Report, the European  Union requests the Panel to reject the change 
proposed by China.  According to the Europ ean Union, that China disagrees and made 
unsubstantiated assertions about the sufficiency of a 15-day period does not require that the Panel 
accept this view.  The European Union contends that  China made bare assertions about the alleged 
bias of the 15 day period, and that "mere speculations" are not sufficient to substantiate an argument.  The European Union also considers that the Pane l was correct to state that "China proffers no 
evidence" of its assertion that the Commission e nquired about the position of the producers with 
respect to the complaint, contending that the fact that China made an assertion to the contrary does not 
mean that it proffered any "evidence".  For th e same reasons as explained regarding China's 
comments concerning paragraph 7.213 of the Interim Re port, the European Union contends that it is 
simply not the case "that the Commission inquired and thus necessarily knew about the position of that producer vis-à-vis  the investigation".
79 
6.83 With respect to China's first comment, we ha ve denied China's request, for the reasons 
expressed above with respect to paragraph 7.214.  With respect to China's second comment, we have 
granted China's request by modifying footnote 254 (now  footnote 481) to indicate that China did not 
object to the application of reasonable deadlines.  Footnote 256 is a citation, and we see no reason to 
modify it.  With respect to China's third comment, we have denied China's request.  Paragraphs 577 
to 581 of China's second written submission set forth China's arguments as to the insufficiency of the 
15-day period, which position is reflected in paragr aph 7.219 of the Interim Report.  China asserted 
that the time limit was short, making it more likely that complainants and supporting companies 
would come forward during that period, rather than opponents, that the Commission's methodology of linking willingness to be included in the sample to inclusion in the industry was fundamentally biased 
because opposing producers would be less likely to be willing to be part of the sample, and that the 
15-day period was not the period allowed to "make oneself known", which is 40 days.
80  In our view, 
these arguments do not "substantiate" China's position, in the sense that they do not demonstrate that 
the posited consequences actually occurred in this case.  In the absence of such a demonstration, 
including evidence, we are of the view that China's arguments are sp eculation, and do not substantiate 
its position.  With respect to China's fourth co mment, we have denied China's request.  Despite 
China's assertion, paragraph 16 of China's comme nts on the European Union's answer to Panel 
question 89 does not contain evidence that the Commission enquired about and knew the position of the producer in question regarding the complaint, but  merely reiterates the arguments China had made 
previously, and which we did not accept.  China's "understanding" of events is not a fact, but an 
argument.  As footnote 255 (now footnote 482) re flects our analysis and conclusion concerning the 
evidence before us, and accurately reflects the eviden ce, we see no reason to expand the description of 
China's arguments in this regard.  
6.84 Paragraph 7.233 :  The European Union requests the Panel to consider modifying or deleting 
the fourth sentence of this paragraph, asserting that  it is neither necessary nor appropriate to suggest 
that a possible violation of Article 4.1 would necessarily violate Article 3.1.
81  The European Union 
considers that Article 3.1 relates to the manner in which an authority examines the state of the 
domestic industry ("objective examination") and the quality of the evidence used in this respect 
("positive evidence").  The European Union agrees th at if the definition of the domestic industry is 
                                                      
78 China refers in this regard to China, Comments on the European Union's answer to Panel 
question 89, para. 16. 
79 European Union, Comments on China's request for interim review, p. 4. 
80 China, second written submission, paras. 578-580. 
81 European Union, request for interim review, pp. 7-8. WT/DS397/R 
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 inconsistent with Article 4.1, it does not matter  whether an objective examination was conducted or 
not.  But that does not mean that necessarily Artic le 3.1 has been violated.  It simply becomes 
irrelevant whether Article 3.1 was complied with or not; but that is not the same as finding that this 
provision has been violated.  China considers that if a domestic industry has been wrongly defined, it 
logically follows that the injury assessment made with respect to such a wrongly defined domestic 
industry is not consistent with Ar ticle 3.1.  This sentence is in line with the Panel's finding in EC – 
Salmon (Norway) , paragraph 7.124.  China therefore su bmits that the Panel should reject the 
European Union's request.82  
6.85 This sentence reflects our agreement with the views of the panel in EC – Salmon (Norway) , 
cited in footnote 276, that "[f]urthermore, the EC 's analyses of injury and causation were based on 
information relating to a wrongly-defined industry, a nd are therefore necessarily not consistent with 
the requirements of Articles 3.1, 3.4, and 3.5".  To modify it as proposed by the European Union 
would be inappropriate, as it would no l onger be an accurate statement of the Salmon  panel's views.  
We have therefore denied the European Union's request. 
6.86 Paragraph 7.236 :  China requests that the paragraph be modified to accurately reflect its 
arguments.83  The European Union requests the Panel to re ject the proposed changes as it is clear that 
the Panel correctly summarized the most relevant elements of China's argument.  The European Union submits that China has not provided  any precise citations to its submission to show 
the contrary.
84 
6.87 China has not substantiated that the text it proposes to delete is inaccurate, and we have 
therefore denied its request.  We have, however, added a footnote referencing China's second written 
submission at paragraphs 681-684, where this argument is expressed. 
6.88 Paragraph 7.238 :  China requests that the Panel modify  this paragraph to accurately reflect 
its argument.85  According to China, its argument is not that the volume of production is irrelevant, 
but rather that "the determination of a sample merely  on the basis of the "largest volume that can 
reasonably be investigated" is not appropriate to sat isfy the representativity requirement", referring to 
paragraph 676 of its second written submission.  The European Union did not comment on China's 
request.   
6.89 The sentence to which China objects reflects our  understanding of China's argument, which 
goes on to contend that the Commission erred in relying only on volume of production, and should 
have used a statistically valid sample.86  Our understanding of China's argument as implying that 
volume of production is irrelevant to the selection of a sample for purposes of injury analysis has not 
changed, and we therefore have denied China's request.   
6.90 Paragraph 7.283 :  China requests that the Panel modify this paragraph to accurately and 
completely reflect China's arguments.87  The European Union did not comment on China's request. 
6.91 This paragraph sets forth the Panel's conclusion,  and in that context, we see no reason to 
expand the reference to China's arguments, whic h are in any case reported elsewhere.  Moreover, 
China's proposed additional text in troduces concepts that China did not argue during the proceeding, 
and for which it provides no reference, and China's ar gument with respect to a "theoretical basis" of 
                                                      
82 China, Comments on the European Union's request for interim review, para. 23. 
83 China, request for interim review, para. 29. 
84 European Union, Comments on China's request for interim review, p. 4. 
85 China, request for interim review, para. 30. 
86 China, second written submission, paras. 678-689.   
87 China, request for interim review, para. 31.  WT/DS397/R 
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 the definition of like product, and the "fact that de  facto the product concerned and the "like product" 
do not consist of the same products" is unclear.  We have therefore denied China's request.   
6.92 Paragraph 7.285 :  China requests that the Panel modify  this paragraph to accurately reflect 
China's arguments.88  The European Union did not comment on China's request. 
6.93 Since the requested modification reflects Chin a's arguments as presented to the Panel, we 
have granted China's request and m odified the paragraph accordingly. 
6.94 Paragraph 7.294 :  China requests the Panel to modify th is paragraph to accurately reflect its 
arguments, referring in particular to para graphs 769 - 788 of its second written submission.89  T h e  
European Union requests that the Panel reject the changes proposed by China, as the summary 
provided in this paragraph correctly reflects the esse ntial elements of China's claim as presented in 
paragraph 766 of China' s second written submission.90 
6.95 The additional text proposed by China concerns  two elements of its claim regarding the 
Commission's dumping determination.  Given that the first part of China's request concerns China's 
own arguments, we have granted this part of China's request and modified this paragraph accordingly.  
The second aspect of China's request concerns the procedural aspects of the Commission's 
determination, which are the subject of a separate procedural claim addressed elsewhere in the Report, 
at paragraphs 7.477-7.483.  Therefore, we have denied this aspect of China's request. 
6.96 Paragraphs 7.302 and 7.306 :  With respect to paragraph 7.302, China asserts that it provided 
ample evidence of the fact that the differences reflected in the PCN affected price comparability.91  
China requests that the Panel modify this para graph to reflect this evidence and arguments.92  A s  
regards paragraph 7.306, China maintains, as it did with respect to paragraph 7.302, that it provided 
evidence that the PCN characteristi cs reflect differences that affect price comparability and requests 
that this evidence and its arguments be reported in the Panel's Report but makes no specific textual 
suggestions.93  China also maintains that it expressly not ed that "interested parties have stressed 
throughout the investigation that it was of fundame ntal importance that the comparison be made on 
the PCN basis".94  China recalls that it explained that, if interested parties did not focus their 
comments during the investigation on the characteris tics reflected in the PCN, it was because they 
assumed that the comparison was being made on such b asis.  China further recalls that it argued that 
the absence of specific requests for adjustments conc erning physical differences reflected in the PCNs 
was due to the lack of information by the Commissi on which never informed all interested parties that 
the comparison was not being made on a PCN basis but exclusively on the basis of two product 
characteristics.95  Finally, China notes that the Panel has not addressed its argument that the failure of 
the Commission to inform the interested parties of the comparison method used and of the fact that 
the comparison was no longer made on the basis of the PCN but on the basis of other characteristics itself constitutes a violation of Article 2.4,  and in particular of its last sentence.
96 
                                                      
88 China, request for interim review, para. 32.  We no te that the suggested chan ge reflects the text of 
China, second written submission, para. 759. 
89 China, request for interim review, para. 33. 
90 European Union, Comments on China's request for interim review, p.4. 
91 China refers in this regard to China, second written submission, paras. 797 – 806. 
92 China, request for interim review, para. 34. 
93 China, request for interim review, paras. 35-39. 
94 China refers in this regard to China, second oral statement, para. 96 and China, second written 
submission, para. 806. 
95 China refers in this regard to China, second written submission, paras. 775 – 786. 
96 China refers in this regard to Chin a, second written submission, para. 796. WT/DS397/R 
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 6.97 The European Union requests that the Panel reject  China's request to reflect "evidence" which 
it contends the Panel rightly pointed out China di d not present.  The European Union argues that 
China confuses bare assertions with evidence.  The European Union refers to, for example, 
paragraphs 475 – 477 of its first written submission as we ll as paragraphs 50 – 54 of its oral statement 
at the second meeting in which aspects of China's ar guments in paragraphs 34 – 39 of its interim 
review comments are addressed.  According to the Eur opean Union, it is not appropriate to attempt to 
re-litigate this argument at the interim review stage. 
6.98 With respect to paragraph 7.302, we note that China's comments merely refer to the relevant 
parts of its second written submission where this i ssue is discussed, but do not demonstrate any error 
in the Panel's view that China " pointed to no evidence that was befo re the investigating authority" in 
support of its position.  We therefor e have denied China's request.  With respect to paragraph 7.306, 
we consider that, in its response to Panel questi on 38(b), China recognized that the Chinese producers 
did not make requests for adjustments for diffe rences affecting price comparability, with the 
exception of one Chinese producer who made a request with respect to alleged differences in quality, 
as indicated in footnote 388 of the Interim Report.  With respect to China's concern that the Panel 
failed to address its argument that, by failing to inform the Chinese producers of its decision not to 
base the dumping determinations on full PCNs, the European Union violated Article 2.4 of the 
AD Agreement, we recall that this is the main argument China raises in connection with its claim 
under Articles 6.2, 6.4, 6.5 and 6.9 of the AD Ag reement, which is addressed in the Report at 
paragraphs 7.477-7.483.  For the foregoing reasons, we have deni ed China's request concerning 
paragraph 7.306.   
6.99 Paragraph 7.313 :  China suggests several modifications  in this paragraph to clarify its 
arguments.97  First, China proposes to clarify that its ar gument is not limited to the use of simplified 
PCNs but also encompasses the ab sence of any adjustments to ta ke into account the elements 
identified in the PCNs which were not taken into account in the compar ison, referring in this regard to 
China, second written submission, paragraph 849.  Sec ond, China requests a clarif ication that the fact 
that the information was requested on a PCN basis created a presumption which implied that the Commission should have examined the PCN factors which were finally not taken into account for 
making the price undercutting analysis and concluded that they could not affect the price undercutting 
analysis.  Third, China requests clarification th at it claimed and provided evidence that the product 
characteristics which were not taken into account ha d an impact on consumer perception and market 
value.  The European Union argues that the Panel co rrectly summarized the most relevant elements of 
China's argument in this regard and inv ites the Panel to reject China's request.
98 
6.100  Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly. 
6.101  Paragraph 7.314 :  China suggests that the Panel modify the fourth and fifth sentences of this 
paragraph for the sake of clarity.99  China also requests that the Pane l modify the last three sentences 
of the paragraph to reflect China's argument more accurately.  The European Union requests the Panel 
to reject the proposed changes, arguing that the Panel correctly decided not to reflect China's 
confusing assertions with respect to "standard" fastener s.  With respect to China's request with respect 
to its argument on the adjustment for quality differe nces, the European Union also argues that this 
request should be rejected since this paragraph co rrectly reflects China's arguments in this regard.100 
                                                      
97 China, request for interim review, para. 40. 
98 European Union, Comments on China's request for interim review, p. 5. 
99 China, request for interim review, paras. 41-42. 
100 European Union, Comments on China's request for interim review, p. 5.  WT/DS397/R 
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 6.102  Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly. 
6.103  Paragraph 7.327 :  China requests that the Panel modify this paragraph to accurately 
reproduce China's arguments.101  China also asserts that the Panel did not address its arguments and 
evidence that the ch aracteristics identified in th e PCNs which were not taken into account affected 
price comparability and consumer perception and had therefore to be fully taken into account.  The 
European Union contends that this paragraph corr ectly reflects China's arguments and asks the Panel 
to reject China's request.  In any case, the European Union object s to China's assertion that it 
presented "evidence" that "the characteristics iden tified in the PCNs which were not taken into 
account affected price comparability and consumer perception ".  This, in the view of the 
European Union, is simply not correct.102 
6.104  Paragraph 7.327 reflects the Panel's understanding of the parties' arguments with respect to 
the claim on price undercutting.  China's proposed m odification would not clarify our views in this 
regard.  With regard to China's argument that the Interim Report does not reflect China's arguments 
and evidence to the effect that th e characteristics identified in the PCNs which were not taken into 
consideration by the Commission affected price co mparability and consumer perception, China has 
not specified where in its submissions such arguments  were made.  We have therefore denied China's 
request.   
6.105  Paragraph 7.333 :  China requests that the Panel revise the fourth sentence of this 
paragraph to reflect China's arguments more accurately.103  The European Union did not comment on 
this request. 
6.106  China's requested change would not affect the substance of this paragraph, and we have 
therefore granted China's request and modified this paragraph accordingly. 
6.107  Paragraph 7.337 :  China suggests replacing the phrase "several panel reports" with the 
phrase "several panel and Appellate Body  reports" in the third sentence.104  The European Union did 
not comment on China's request. 
6.108  Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly. 
6.109  Paragraph 7.338 :  China requests that the Panel modify this paragraph to reflect the second 
aspect of China's claim more accurately.105  The European Union did not comment on China's request. 
6.110  Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly. 
6.111  Paragraph 7.348 :  China suggests adding a footnote re ferring to the Definitive Regulation, 
recital 78, at the end of this paragraph.106  The European Union did not comment on China's request. 
6.112  We have granted China's request. 
                                                      
101 China, request for interim review, paras. 43-44.  China refers in this regard to China, second written 
submission, para. 834 and China, answer to Panel question 41. 
102 European Union, Comments on China's request for interim review, p. 5. 
103 China, request for interim review, para. 45. 
104 China, request for interim review, para. 46. 
105 China, request for interim review, para. 47. 
106 China, request for interim review, para. 48. WT/DS397/R 
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 6.113  Paragraph 7.351 .  China requests that the Panel modify this paragraph to reflect its claim 
more accurately.107  The European Union did not comment on China's request. 
6.114  We have granted China's request and mo dified this paragraph accordingly.   
6.115  Footnote 484 :  The European Union requests that th e figure "99.9 percent" be bracketed.108  
Alternately, the European Union suggests modifying the text of the footnote to avoid the question of 
bracketing.  China disagrees with the European Un ion's request to add the word "negligible" to 
describe the volume of exports of the two Chin ese exporting producers which were found not to be 
dumping.  China considers the word "negligible" as having a subjective connotation.  China agrees 
with the European Union's suggestion to replace the confidential figure of [99.9%] by the words 
"almost 100%".109 
6.116  The figure "99.9 percent" was not bracketed in paragraph 531 of the European Union's 
first written submission, to which it is c ited.  The European Union's first written 
submission was posted on the European Uni on's web-site as of 16 September 2010, 
http://trade.ec.europa.eu/doclib/docs/2010/april/tra doc_145984.pdf.  Thus, desp ite this information 
having been bracketed at other places in the Eu ropean Union's submissi ons, and notwithstanding 
China's agreement, the cited figure is unquestionabl y in the public domain, and there is no basis to 
bracket it as confidential information.  We therefor e have denied the European Union's request to 
bracket the figure, and there is no reason to am end the text to avoid the bracketing issue. 
6.117  Paragraph 7.372 :  China requests that the Panel modi fy the last three sentences of this 
paragraph to reflect its arguments more accurately.110  The European Union requests the Panel to 
reject China's proposed amendments as the paragra ph at issue accurately reflects China's argument as 
made in paragraphs 439 – 444 of its first written submission.111 
6.118  Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly. 
6.119  Paragraph 7.373 :  China requests that the Panel revise this paragraph to reproduce China's 
argument in relation to the Commission's conclu sions regarding profitability more accurately.112  The 
European Union requests the Panel to reject China' s proposed amendments as the paragraph at issue 
accurately reflects China's argument as made in para graphs 446 – 447 of its first written submission to 
which the Panel refers.113 
6.120  Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly. 
6.121  Paragraph 7.374 :  China requests that the Panel revi se this paragraph to describe China's 
arguments more accurately and more completely.114  The European Union did not comment on 
China's request. 
6.122  Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly. 
                                                      
107 China, request for interim review, para. 49. 
108 European Union, request for interim review, p. 8. 
109 China, Comments on the European Union's request for interim review, paras. 24-25. 
110 China, request for interim review, para. 50. 
111 European Union, Comments on China's request for interim review, p. 5. 
112 China, request for interim review, para. 51. 
113 European Union, Comments on China's request for interim review, p. 5. 
114 China, request for interim review, para. 52.  WT/DS397/R 
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 6.123  Paragraph 7.376 :  The European Union requests that the Panel consider amending the final 
sentence of this paragraph to clarify its meaning.115  China did not comment on the European Union's 
request. 
6.124  While the European Union does not refer to its submissions in support of the requested 
modification, since the request does reflect the Euro pean Union's arguments as they were presented to 
the Panel, we have granted the European Union' s request, modified this paragraph accordingly and 
indicated where in the European Union' s submissions those arguments are found. 
6.125  Paragraph 7.394 :  China requests that the Panel modify this paragraph and add a footnote.116  
China asserts that the statement "while the sp ecific numbers and degree are different, both the 
Information Document and the Definitive regulation come to the same essential conclusion, reporting 
a significant loss of market share by  the European Union industry" in this paragraph does not apply to 
sales, requests that the Report reflect this, and su ggests a footnote to clarify the differences between 
the Information Document and the Definitive Regula tion in relation to sales, similar to footnote 562 
of the Interim Report with respect to market share.   The European Union requests the Panel to reject 
China's proposed change as it simply represents a c ontinuation of the arguments China made in the 
course of the panel proceedings which confused th e Panel as to the findings of the investigating 
authorities.  The European Union submits that th e opportunity to comment on the Interim Report in 
this interim review should not be used for further litigation of the matter.  The European Union notes 
that China's argument about the alleged discrepan cy between the Information Document and the 
Definitive Regulation is addressed in its submissions.117 
6.126  China is correct that the Panel's statement con cerns only the discussion of market share in the 
Information Document and the Definitive Regulation, as is clearly stated in the text.  We therefore 
deny China's request in this regard as redundant.  Th e reference to the similar conclusions is reported 
as a matter of fact, not as an essential aspect of our  analysis, and thus the fact that the Information 
Document and the Definitive Regulation reported di fferent trends in sales is not relevant to our 
conclusion, which as stated, is based on the fact that  the parties were aware that the analysis in the 
Information Document was preliminary and that the final analysis might be based on different information.  We have therefore denied China's request. 
6.127  Paragraphs 7.396-7.397 :  China requests that the Panel modify these paragraphs to reflect 
that it has never claimed that the Commission did not ex amine the level of profitability at all, but that 
it maintains that the examination carried  out by the Commission was not objective.
118  T h e  
European Union maintains that th e Panel accurately dealt with both aspects of China's claim and that 
there is therefore no basis for making the suggested changes.119 
6.128  The phrase China proposes be deleted reflect s our understanding of China's argument as 
asserting that the Commission failed to take the incr ease in profitability into consideration in its 
analysis, as well as that the Commission failed to objec tively examine the profitability of the industry.  
The contested phrase indicates that, to the extent th at China is making the former argument, it is 
incorrect as a matter of fact.  Our understanding of China's arguments in this regard has not changed, and therefore we have denied China's request. 
                                                     
 
115 European Union, request for interim review, p. 8. 
116 China, request for interim review, para. 53. 
117 European Union, Comments on China's request for interim review, p. 5.  The European Union refers 
in this regard to paragraphs 587 – 588 of, we belie ve, its first written submission, and European Union, 
second written submission, paras. 194-195. 
118 China, request for interim review, para. 54. 
119 European Union, Comments on China's request for interim review, p. 5. WT/DS397/R 
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 6.129  Paragraph 7.404 :  China requests that the Panel modi fy the first three sentences of this 
paragraph, and the footnotes pertaining to those sentences.120  China considers that, as drafted, they do 
not correctly reflect the findings on injury reached by the Commission in the Definitive Regulation.  
In general, China notes that it would have preferre d the Panel to quote the exact statements included 
in the Definitive Regulation.  In particular, Ch ina points out that the Commission did not "conclude" 
in the Definitive Regulation that "cash flow declined by almost 20 percent from 2005 to the 
investigation period", although it recognizes that th is can be deduced from the table provided in 
section 5.4 of the Definitive Regula tion.  Moreover, China contends that the Commission did not state 
in its injury analysis that the margins of dumping we re "significant" but rather that they were "above 
de minimis ".  China further notes that, contrary to wh at the third sentence seems to suggest, the 
Commission did not even state, let alone "explai n", in the Definitive Regulation that the positive 
developments in relation to stocks and prices did not reflect the significant increase in demand which 
might have been expected to result in more rapid positive movement.  With respect to the return on 
investments, China observes that the Definitive Regulation did include a comment on the relationship 
between the development thereof and the increase in demand, but not exactly in the way described in 
this paragraph.  Furthermore, China points out some  references in the footnotes that it contends are 
not correct or are incomplete.  The European Unio n argues that the Panel correctly summarized the 
major elements of the investigating authorities' fi ndings on injury referring each time in a footnote to 
the relevant recitals of the Definitive Regulati on and therefore asks the Panel to reject China's 
request.121 
6.130  We have granted China's request in part, by modifying the paragraph to reflect that the 
Commission concluded that the dumping margins were above de minimis , and that given the volume 
and the price of the dumped imports, the impact of  the margin of dumping could not be considered 
negligible.  However, with respect  to the remainder of China's request, this paragraph reflects our 
understanding of the Definitive Regulation conclu sions as a whole, and thus synthesises some 
elements of those conclusions, rather than re-sta ting them in the terms used by the Commission.  
Merely that an aspect of the Definitive Regulation is not stated as a specific conclusion does not mean 
that our understanding in referring to that aspect as a conclusion is incorrect.  Similarly, while China 
may not view a particular aspect of the Definitiv e Regulation to "explain" certain aspects, we 
considered that, as a whole, such an explanati on can be understood from the Definitive Regulation.  
We have therefore denied the remainder of China's request. 
6.131  Paragraph 7.407 :  China requests that the Panel modify this paragraph to clarify and reflect 
its arguments more accurately.122  China refers specifically to  China, second written submission, 
paragraphs 944-947, 948 and 949 and China, answer  to Panel question 52, paragraph 172, in this 
regard.  The European Union sees no reason for the Panel to make the proposed changes as the Panel 
accurately summarized the essential elem ents of China's arguments in r espect of the injury analysis.123 
6.132  This paragraph is part of the Panel's analys is, and thus it is not necessary to summarize all 
aspects of China's arguments in detail.  Nonetheless,  we have modified paragraph 7.407 to reflect 
China's argument more fully, and included add itional references to China's submissions.   
6.133  Paragraph 7.413 :  China requests that this paragraph be  modified to clarify the distinction 
between the two main elements of its first assertion of error and reflect its arguments more accurately 
and completely.124  The European Union asks the Panel to reject China's request since the Panel 
                                                      
120 China, request for interim review, para. 55. 
121 European Union, Comments on China's request for interim review, p. 6. 
122 China, request for interim review, para. 56. 
123 European Union, Comments on China's request for interim review, p. 6. 
124 China, request for interim review, para. 57.  WT/DS397/R 
 Page 27 
 
 
 accurately summarized the essential elements of China's arguments in respect of the causation 
analysis, which, according to th e European Union, was not properly before the Panel anyway.125 
6.134  Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have granted China's request and m odified this paragraph accordingly. 
6.135  Paragraph 7.414 :  China requests that this paragraph be modified to reproduce its argument 
more accurately.126  The European Union did not comment on China's request. 
6.136  While China does not refer to its submissions in  support of the requested modification, since 
the request does reflect China's arguments as they were presented to the Panel, we have granted 
China's request, modified this paragraph accordin gly and indicated where in China's submissions 
those arguments are found. 
6.137  Paragraphs 7.415 et seq :  The European Union requests that  the Panel reflect its objection to 
the way China developed its argument on causa tion and non-attribution in its second written 
submission, which the European Union asserts effectiv ely introduced a new claim that was not part of 
the request for establishment.127  The European Union explained th at China's request for establishment 
contains a claim in respect of the non-attribu tion analysis but not on the question of causation 
per se .128  The European Union considers that this new claim of China in respect of the establishment 
of a causal link between the dumped imports and the inju ry found to exist is simply outside the Panel's 
terms of reference since it was not part of the request for establishment.  
6.138  China notes that in its first written submission, it had identified two sets of errors in the 
causation analysis129, namely that:  "(i) the EC failed to demonstrate that dumped imports are, through 
the effects of dumping, causing injury to the domestic  industry and (ii) the EC failed to ensure that 
injury caused by factors other than dumped imports  was not improperly attributed to dumped imports, 
in particular the increase in raw material pr ices and the export performance of the Community 
industry".  According to China, these arguments are properly reflected in para graphs 7.412 – 7.414 of 
the Interim Report.  China notes that the European Union did not raise any objection in its first written 
submission, at the first substantive meeting or  in its second written submission regarding these 
two aspects of its claim on causation.  In China' s view, the claim discussed by China in its 
second written submission was not "new" as alleged by  the European Union.  China asserts that it 
reflected the first aspect of China's claim on cau sation, i.e. that the European Union failed to 
demonstrate that dumped imports are, through the e ffects of dumping, causing injury to the domestic 
industry, which China had identified and substantia ted in its first written submission.  China argues 
that the European Union is not entitled to raise such a procedural objection at such a late stage of the 
proceedings.  In this regard, China recalls the Appellate Body's statement that "when a Member 
wishes to raise an objection in dispute settlement pr oceedings, it is always incumbent on that Member 
to do promptly.  A Member that fails to raise its obj ections in a timely manner, notwithstanding one or 
more opportunities to do so, may be deemed to have waived its rights to have a panel consider such 
objections".  China contends that if the European Union wished to complain about China's claim, it 
was required to raise it in its first written submission, at the latest.  Moreover, China contends that by 
raising this objection only during th e second substantive meeting, the European Union deprived China 
of the right to defend itself and to present arguments as to why this aspect of its claim is within the 
Panel's terms of reference, thus raising a due process  issue.  In any case, China submits that the first 
aspect of its claim is within the Panel's terms of re ference as its panel request unambiguously refers to 
                                                      
125 European Union, Comments on China's request for interim review, p. 6. 
126 China, request for interim review, para. 58. 
127 European Union, request for interim review, p. 9. 
128 The European Union refers in this regard to Eu ropean Union, second or al statement, para. 70. 
129 China, First Written Submission, paras. 462, 474 – 493. WT/DS397/R 
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 Articles 3.1 and 3.5 of the AD Agreement and raises  a claim of violation of these provisions through 
the causation analysis.  In China's view, that the European Union violated Articles 3.1 and 3.5 because 
(i) the European Union failed to demonstrate that  dumped imports are, through the effects of 
dumping, causing injury to the domestic industry and (ii) the European Union failed to ensure that 
injury caused by factors other than dumped imports was not properly attributed to dumped imports, 
are just arguments which substantiate the claim put forward by China.130 
6.139  It is clear that China argued both aspects of its claim in its first written submission.  We 
consider that the European Union should have raised  its objection earlier, particularly in a case where 
it made numerous similar preliminar y objections.  In order to clarify our views, we have modified 
footnote 596 (now footnote 841) to reflect the Europ ean Union's objection, as set out in its second oral 
statement, and that we consider the European Un ion's objection to be untimely and therefore decline 
to address it. 
6.140  Paragraph 7.416 :  The European Union requests the Panel to consider this paragraph to 
make it clearer and easier to read.131  China did not comment on the European Union's request.   
6.141  We have granted the European Union's request a nd redrafted this paragraph to clarify without 
altering its meaning. 
6.142  Paragraph 7.431 :  China requests that the Panel add to  this paragraph re ferences to the 
relevant parts of its submissions to the Panel,  where it addressed the reasoning developed by the 
Commission in relation to increased raw material prices.132  The European Union contends that the 
Panel should not make the proposed changes as  the Panel accurately summarized the essential 
elements of China's arguments in resp ect of the non-attribution analysis.133 
6.143  The additional text China proposes to add to pa ragraph 7.431 does not clarify the issue being 
addressed in that paragraph, but merely reiterates Chin a's argument.  As this paragraph is part of the 
Panel's analysis, we see no reason to expand the summary of China's argument.  Moreover, the 
additional references China proposes to add to footno te 651 of the Interim Report do not relate to the 
question being addressed in this paragraph, concerning  the effect of increased raw material costs, and 
China's alternative explanation in that regard.  Question 59 of the Panel concerns the export figures 
used by the Commission, and Exhibit CHN-76 does not refer to raw material costs at all.  We have 
therefore denied China's request. 
6.144  Paragraph 7.434 :  China requests that the Panel revise this to clarify the object of the 
statement that "China does not dispute this", a nd add additional references to China's arguments.134  
China notes that it understands the Panel to consider  that China does not dispute that the Commission 
addressed the question of the export performance of the domestic industry, as noted by the Panel in 
the first sentence of the preceding paragraph.  However, since the preceding paragraph also 
reproduces the considerations of the Commission in the Definitive Regulation, China suggests that the 
statement "China does not dispute this" could be mi sinterpreted to mean that China does not dispute 
the findings reached in the Definitive Regulation in relation to the export performance of the domestic 
industry, which China did dispute.  China asserts that it argued that the conclusion reached by the 
Commission, that the export performance was not a source of material injury, is not a conclusion 
which could have been reached by an unbiased and objective investigating authority on the basis of 
                                                      
130 China, Comments on the European Union's request for interim review, paras. 26-32. 
131 European Union. request for interim review, p. 9. 
132 China, request for interim review, para. 59.  China refers in this regard to China, answer to Panel 
question 59 and Exhibit CHN-76, Ch ina, first written submission, para s. 483-486, China, second written 
submission, paras. 983-990, and China, answer to Panel question 58. 
133 European Union, Comments on China's request for interim review, p. 6. 
134 China, request for interim review, para. 60.  WT/DS397/R 
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 the facts on the record.135  China also requests that the Panel a dd a reference to paragraph 490 of its 
first written submission with respect to its argume nt concerning the relevance of the increase in 
exports.  The European Union did not comment on China's request. 
6.145  We have granted China's request and modified paragraph 7.434 to clarify that China did not 
dispute that the Commission addressed the ques tion of the export performance of the domestic 
industry, and added the requested reference.   
6.146  Footnote 658 :  The European Union considers that this footnote should be revised to indicate 
that the export information of sampled producers was considered.136  The European Union notes that it 
submitted an internal document that  reflected the export performance of sampled producers, which it 
argues shows that such information was part of th e authority's considerations.  China disagrees with 
the European Union's request.  China interpre ts the phrase "the European Union does not assert 
otherwise" to mean that the European Union do es not assert that "there is an indication in the 
Definitive Regulation  that the information was actually considered by the Commission in its 
analysis".  According to Chin a, the European Union has not provided any reference in the Definitive 
Regulation  showing that the information was actually co nsidered by the Commission in its analysis.  
Therefore, China submits that footnote 658 should not be modified.137 
6.147  It is true that the European Union submitted, in its answer to Panel question 100, an "extract 
from an internal document" which reflects the expor t performance of sampled producers, and there is 
no reason not to accept that this information was, as asserted by the European Union "prepared in the 
course of the investigation [and summarized] the ve rified data ... for the sampled producers".138  We 
note, however, that the European Union did not s ubmit the actual document to the Panel, and did not 
specifically identify it, but only reproduced the information concerning exports in answering the 
Panel's question.  In any event, the mere fact th at the document existed does not demonstrate that the 
Commission considered the information concerni ng sampled producers' export performance reported 
in that document in making its decision.  Indeed , the fact that the Definitive Regulation refers 
exclusively to other information on exports, and gives no hint that any other information was 
available to the Commission, suggests to th e contrary that the information in was not actually 
considered by the Commission.  Finally, while th e European Union now argues that the document 
shows that the information was part of the auth ority's consideration, it made no such argument 
previously.  In submitting the information, the Eur opean Union asserted that it "confirms both the lack 
of importance of export sales representing only 7. 3 percent of total sales and the healthy state of 
export performance evidencing that this factor could not have been a cause of injury"139, but did not 
argue that the Commission in fact took this informati on into consideration, rather than or in addition 
to the information actually cited and relied upon in the Definitive Regulation.  We have therefore 
denied the European Union's request.   
6.148  Paragraph 7.440 :  China requests that the Panel modify this paragraph for clarity.140  T h e  
European Union did not comment on this request. 
6.149  Since the proposed modification reflects China' s arguments as presented to the Panel and 
provides more clarity, we have granted China's requ est and modified this paragraph accordingly.   
                                                      
135 China refers in this regard to China, second written submission, paras. 994 and 1000. 
136 European Union, request for interim review, p. 9-10. 
137 China, Comments on the European Union's request for interim review, paras. 33-34. 
138 European Union, answer to Panel question 100, para. 38. 
139 European Union, answer to Panel question 100, para. 38. 
140 China, request for interim review, para. 61. WT/DS397/R 
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 6.150  Paragraph 7.447 :  China requests that the Panel revise the twelfth sentence of this 
paragraph in order to avoid possible misunderstanding.141  China notes that this paragraph states, inter 
alia, that "despite China's char acterization" of its "two allegations of violation of Article 6.2, one as a 
dependent claim on a violation of Article 6.4 an d one independently", "finding a violation of 
Article 6.2 in the context of China's so-calle d "independent" claim under Article 6.2 would also 
require a prior finding, in connection with the cl aim under Article 6.5, that the identity of the 
complainants and the supporters was wrongly treated  as confidential information".  China stresses in 
this respect that its characterization of one of its claim of violation of Article 6.2 as independent and 
the other one as dependent refers to  the relationship between a violation of Article 6.2 with a violation 
of Article 6.4 and not Article 6.5,  and considers that Pa nel acknowledges, but that  the paragraph is not 
sufficiently clear in this respect.  The Eur opean Union did not comment on this request. 
6.151  The modification proposed by China does not change the content of this paragraph and we 
have therefore granted China's request and modified this paragraph accordingly.   
6.152  Paragraph 7.448 :  China requests that the Panel revise this paragraph to correctly describe 
the complaint with respect to pot ential retaliation from customers.142  The European Union did not 
comment on this request. 
6.153  We have granted China's request and mo dified this paragraph accordingly.   
6.154  Paragraph 7.449 :  China requests that the Panel modify this paragraph to clarify that 
Exhibit CHN-44 shows that the Commission inform ed those Chinese producers which had expressly 
requested that the identity of the complainants be disclosed of its  decision to accept the request for 
confidentiality of the identity of the complainants and the supporters.143  The European Union sees no 
reason for the Panel to make the proposed chang es as the Panel accurately summarized the facts and 
the essence of the disagreement betw een the European Union and China.144 
6.155  We have granted China's request and mo dified this paragraph accordingly.   
6.156  Paragraph 7.452 :  China requests that the Panel modify this paragraph.145  China considers 
that it incorrectly states that "[t]he complaining European Union producers asserted that they feared 
commercial retaliation if such customers found out th at these producers had requested the initiation of 
an anti-dumping investigation on fasteners from China,  which might have the effect of raising prices 
on such fasteners, and thus raising the costs of  these customers".  According to China, this 
explanation was not provided by the complainants in their Complaint.  The European Union did not 
comment on this request. 
6.157  We have granted China's request and mo dified this paragraph accordingly.   
6.158  Paragraph 7.454, footnote 685 :  China requests that the Panel modify the statement in 
footnote 685.146  China notes that the European Union asser ted that at least one company included in 
the sample was not, in fact , either a complainant or supporter of the complaint, but maintains that no 
evidence in this regard was provided by the Europ ean Union.  The European Union requests the Panel 
to reject the proposed changes, arguing that the Panel correctly summarized the most relevant 
                                                      
141 China, request for interim review, para. 62. 
142 China, request for interim review, para. 63. 
143 China, request for interim review, para. 64. 
144 European Union, Comments on China's request for interim review, p. 6. 
145 China, request for interim review, para. 65. 
146 China, request for interim review, para. 66.  WT/DS397/R 
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 elements of China's argument.  The European Union also submits that China has not provided any 
citations to its submission to show the contrary.147 
6.159  Footnote 685 refers to paragr aph 7.214 of the Report, where the Panel found, as a matter of 
fact, that at least one EU producer which was not a complainant or supporter of the complaint was 
subsequently included in the sample for the EU indus try.  We have denied China's request to modify 
footnote 685 of the Interim Report, but modified pa ragraph 7.454 to better reflect China's argument, 
which is cited in footnote 684 (now footnote 939).   
6.160  Paragraphs 7.477, 7.485 and 7.486 :  With respect to paragraph 7.477, China requests that 
the Panel modify this paragraph for clarity.148  China considers it important to clarify that the 
information provided by the Commission one worki ng day before the deadline for commenting on the 
General Disclosure Document concerning the char acteristics on the basis of which the comparison 
was being made was provided only to two Chinese exporting producers who had requested 
clarification in this regard repeatedly.149  China notes that this comment applies throughout the section 
addressing China's claim that the European Union viol ated Articles 6.2, 6.4, 6.5 and 6.9 by failing to 
disclose aspects of the normal value calculation.  Wi th respect to paragraphs 7.485 and 7.486, China 
requests that the Panel revise paragraph 7.48 6, for consistency and to avoid confusion.150  China notes 
that paragraph 7.485 states that "the General Disclosure Document makes it clear that the Commission based its normal value determination on "product types", as opposed to PCNs".  China 
acknowledges that the General Disclosure Document indeed makes it clear that the Commission based 
its normal value determination on "product types", but  maintains that the fact that these "product 
types" differ from the PCNs is only clear after th e letter of the Commission dated 21 November 2008, 
as stated in paragraph 7.489.  China notes that th is is also clear from paragraphs 7.490 and 7.494.  
6.161  The European Union requests the Panel to re ject China's request.  The European Union 
submits that the proposed changes attempt to improve China's arguments ex post Panel proceedings.  
Furthermore, argues the European Union, in para graph 72 of China's comments, China itself proposes 
a reference to requests by Chinese exporting producers generally.
151 
6.162  We have granted China's request to clarif y that the Commission provided information on 
product types only to the two Chinese producers that  requested such information by referring, in 
paragraphs 7.485 and 7.486, to "two Chinese producers" .  With respect to China's request regarding 
paragraph 7.485, in our view, this paragraph states the Panel's unders tanding of the General 
Disclosure Document, namely that the Commission based its normal value de termination on product 
types, not PCNs, but did not explain how those product types were established.152  We have therefore 
denied China's request. 
6.163  Paragraph 7.496 :  China requests that the Panel modify this paragraph to correctly reflect its 
claim.153  China considers that the text as drafted is in correct because first, paragraph 7.496 states that 
"China contends that the European Union violated its  obligations under Articles 6.4, 6.2 and 6.5 of the 
AD Agreement by failing to disclose, in the individual and General Disclosure Documents, 
information pertaining to the determination of the normal value".  However, China maintains that its 
claim does not relate to the failure to disclose this  information in the disclosure documents, but to the 
failure to provide the opportunity to see such in formation, including in the disclosure documents.  
                                                      
147 European Union, Comments on China's request for interim review, p. 6. 
148 China, request for interim review, paras. 67-68. 
149 China refers in this regard to Chin a, answer to Panel question 38(b).   
150 China, request for interim review, paras. 69-70.   
151 European Union, Comments on China's request for interim review, p. 6. 
152 We note that China's request for interim review re fers to paragraph 7.486 of the Interim Report, at 
paragraph 70, but the modification requested pertains to text in paragraph 7.485. 
153 China, request for interim review, paras. 71-73. WT/DS397/R 
Page 32 
 
 
 China refers in this regard to  paragraph 1085 of China's second written submission.  Second, China 
contends that the paragraph does not reflect that requests to get information on the normal value were 
made during the investigations, referring in this rega rd to paragraph  279 of China's answer to Panel 
question 64 and paragraphs 41-42 of China's replie s to Panel question 101and Exhibit CHN-74.  The 
European Union argues that the proposed cha nges attempt to improve China's arguments ex post 
Panel proceedings and asks the Panel to reject them.154 
6.164  With respect to the first elemen t of China's request, we note that this paragraph reflects our 
understanding of China's arguments with respect to the claim on the pro cedural aspects of the 
Commission's normal value determinations, and we ther efore deny China's request in this regard.  As 
regards the second element of China's request, given the Panel's legal analysis with respect to this 
aspect of China's claim, there is in our view no need to mention China's argument that the Chinese 
producers sought to obtain information on normal va lue determinations during the investigation at 
issue in this paragraph.  We have, however, am ended paragraph 7.461, where China's arguments on 
this aspect of the claim are summarized, to mention this aspect of China's argument. 
6.165  Paragraph 7.502 :  China requests that the Panel modify this paragraph.155  China considers 
that it is incorrect to state that the European Union submits that "Chi na's claim under Article 6.9 of the 
AD Agreement falls outside the Panel's term s of reference, because this claim […] was not identified 
in China's panel request " (emphasis added).  In China's view , the European Union's argument in 
relation to China's panel request onl y relates to the fact that China's panel request would not expressly 
refer to "product types", referring in this regard to the European Union's first written submission, 
paragraph 745.  The European Union requests the Panel to reject the proposed changes because the 
Panel correctly summarized the most relevant elements of the European Union's arguments.156 
6.166  We have granted China's request, and m odified this paragraph to describe the 
European Union's argument more specifically. 
6.167  Paragraph 7.506 :  China notes that this paragraph does not refer to the Panel Report in 
China – Publications and Audiovisual Products  which China considered as relevant for the purposes 
of this matter, but makes no specific request in th is regard.  The European Union did not comment on 
this request. 
6.168  China in its second written submission did refer to the Panel Report in China – Publications 
and Audiovisual Products .157  However, as China itself put it, this report "elaborated on the ... 
statement of the Appellate Body in Mexico – Anti-Dumping Measures on Rice ".158  In our view, 
having addressed China's arguments in re liance on the Appellate Body report in Mexico – Anti-
Dumping Measures on Rice , there is no need to also discuss the findings of the panel in China – 
Publications and Audiovisual Products on the same issue, and we have therefore denied China's 
request.    
6.169  Paragraph 7.512 :  The European Union requests that the Panel amend this paragraph to 
accurately reflect the European Union's arguments, re ferring in this regard to its answer to Panel 
question 72, paragraphs 174 – 181 and its Comments on China's answer to Panel question 101 [sic], 
paragraph 27.159  China contends that in the quoted paragr aphs, it is nowhere mentioned that "[t]he 
European Union notes that thereafte r, this issue has not been brough t to the Commission's attention by 
                                                      
154 European Union, Comments on China's request for interim review, p. 6. 
155 China, request for interim review, para. 74. 
156 European Union, Comments on China's request for interim review, p. 6. 
157 China, second written submission, para. 1101. 
158 China, second written submission, para. 1101. 
159 European Union, request for interim review, p. 10.  It appears that the European Union may have 
intended to refer to question 107.  WT/DS397/R 
 Page 33 
 
 
 the Chinese producers".  In China's view, this statem ent is directly contradicted by the facts which 
have been explained by China on the basis of  supporting evidence.  In China's first written 
submission, China provided evidence through Exhibit CHN-24 showing that Chinese exporting 
producers continued to draw the Commission's atten tion to the serious deficiencies of the Community 
producers' questionnaire responses even after th e letter was sent by the Commission to the 
Community producers in May 2008.  China therefore requests that the European Union's request be 
rejected.160 
6.170  Since the requested modification reflects the Eu ropean Union's arguments as presented to the 
Panel, we have granted the Eur opean Union's request and modified  this paragraph accordingly.   
6.171  Paragraph 7.536 :  With a view to reflecting its argument more accurately, China suggests 
the Panel revise this paragraph.161  The European Union requests th e Panel to reject the proposed 
changes as the Panel correctly summarized the most re levant elements of China's argument.  Further, 
the European Union contends that China has not provi ded any citations to its submissions to show the 
contrary.162 
6.172  While China does not refer to its submissions in  support of the requested modification, since 
the request does reflect China's arguments as they were presented to the Panel, we have granted 
China's request, modified this paragraph accordin gly and indicated where in China's submissions 
those arguments are found. 
6.173  Paragraph 7.539 :  China requests that the Panel modify the first sentence of this paragraph to 
more accurately reflect its arguments.163  The European Union requests the Panel to reject the 
proposed changes as the Panel correc tly summarized the most relevant elements of China's argument.  
Further, the European Union argues that China has not provided any citations to its submissions to 
show the contrary.164 
6.174  Given that this paragraph concerns China' s own arguments, and having made a similar 
modification to paragraph 7.536, we have granted China's request and modified this paragraph 
accordingly. 
6.175  Paragraph 7.542 :  The European Union requests that the Panel amend this paragraph to 
accurately reflect its arguments, referring in partic ular to its first written submission, paragraph 774.165  
China did not comment on this request. 
6.176  Since the requested modification reflects the Eu ropean Union's arguments as presented to the 
Panel, we have granted the Eur opean Union's request and modifi ed this paragraph accordingly. 
6.177  Paragraph 7.558, footnote 818 :  China requests that the Panel amend this footnote to clarify 
that China disputes the European Union's assertion that "none of the companies involved complained 
about disclosure of confidential information".166  China refers in this regard to its first written 
submission, paragraph 622, and Exhibit CHN-61.  The European Union maintains that the alleged 
                                                      
160 China, Comments on the European Union's request for interim review, paras. 35-36. 
161 China, request for interim review, para. 76.   
162 European Union, Comments on China's request for interim review, p. 6. 
163 China, request for interim review, para.77. 
164 European Union, Comments on China's request for interim review, p. 6. 
165 European Union, request for interim review, pp. 10-11. 
166 China, request for interim review, para. 78. WT/DS397/R 
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 evidence China refers to does not concern any of  the companies mentioned in the MET Disclosure 
Document and asks the Panel to reject the proposed changes.167 
6.178  Contrary to the European Union's assertion, th e MET Disclosure Document specifically refers 
to the Chinese company on whose behalf the lette r in Exhibit CHN-61 raises concerns about the 
disclosure of confidential information.168  It is not clear that any confidential information of that 
company was actually disclosed in the document, but  nonetheless, it would be more correct to indicate 
that one Chinese producer raised concerns about th e disclosure of confidential information in the 
MET Disclosure Document, as shown in the attached proposed revisions.  We have therefore granted 
China's request and modified the text of footnote 818 (now footnote 1092).   
6.179  Paragraph 7.575 :  China requests that the Panel modify this paragraph to reflect its 
arguments more accurately.169  The European Union did not comment on China's request. 
6.180  We have granted China's request and modified  footnote 853 (now footnote 1127) to reflect 
that China argued that the fact of verification s upported its contention that the MET/IT claim form 
should be considered a "questionnaire" within the meaning of Article 6.1.1 of the AD Agreement. 
6.181  Section VIII.A Conclusions :  The European Union requests that the Panel insert a section 
regarding those claims where the Panel c onsiders that China has failed to make a prima facie  case 
(e.g., paragraphs 7.497, 7.501 and 7.539).  In addition, the European Union considers that 
paragraph 8.2(e) in the conclusions should  read "Article 6.4 ... with respect to a specific aspect of the 
normal value determinations" and not "aspects".170  China submits that there is no need to include an 
additional section regarding the claims for which the Panel considers that China has failed to make a 
prima facie  case.  China argues that the conclusions part of the Panel's Report reflects all findings that 
the Panel has made with respect to all the cl aims that China has pursued in this dispute.171  China did 
not comment on the second aspect of  the European Union's request. 
6.182  With respect to the European Union's request regarding paragraph 8.2(e), we found violations 
with respect to more than one procedural aspect of  the normal value determination, and therefore we 
deny the European Union's request .  With respect to the European  Union's request regarding our 
findings concerning failure to make a prima facie  case in certain instances, our conclusions in this 
regard are part of our substantive analysis, and are discussed in the body of the Report, but do not 
constitute conclusions separate from our overall conc lusions on the respective claims.  We have 
therefore denied the European Union's request in this regard.  However, we have reviewed our 
conclusions to ensure that all our findings are approp riately reflected, and to that end, have modified 
paragraph 8.3 to state that "China has not establis hed that the European Union acted inconsistently 
with ...".  This formulation more clearly addresses both claims with respect to which we found that China did not make a prima facie  case, as well as claims with respect to which we rejected China's 
arguments on the basis of a more elaborated substantive analysis.   
                                                     
 
167 European Union, Comments on China's request for interim review, p. 7. 
168 Exhibit CHN-19. 
169 China, request for interim review, para. 79. 
170 European Union, request for interim review, p. 11. 
171 China, Comments on the European Union's request for interim review, paras. 37-38.  WT/DS397/R 
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 VII. FINDINGS 
A. RELEVANT PRINCIPLES REGARDING STANDARD OF REVIEW , TREATY INTERPRETATION AND 
BURDEN OF PROOF  
7.1 Before beginning our evaluation of the issues in this dispute, we consider it useful to outline 
the legal framework that we will apply in these pro ceedings with respect to the standard of review, 
treaty interpretation and burden of proof. 
1. Standard of Review 
7.2 Article 11 of the DSU provides the standard of re view for WTO panels in general.  Article 11 
imposes upon panels a comprehensive obligation to ma ke an "objective assessment of the matter", an 
obligation which embraces all aspec ts of a panel's examination of  the "matter", both factual and 
legal.172 
7.3 Article 17.6 of the AD Agreement, which sets fort h the special standard of review applicable 
to disputes under the AD Agreement, provides: 
 "(i) in its assessment of the facts of  the matter, the panel shall determine 
whether the authorities' establishment of  the facts was proper and whether their 
evaluation of those facts was unbiased and objective.  If the establishment of the facts 
was proper and the evaluation was unbiased and objective, even though the panel 
might have reached a different conclusion, the evaluation shall not be overturned; 
 (ii) the panel shall interpret the re levant provisions of the Agreement in 
accordance with customary rules of interpreta tion of public international law.  Where 
the panel finds that a relevant provision of  the Agreement admits of more than one 
permissible interpretation, the panel sha ll find the authorities' measure to be in 
conformity with the Agreement if it rests upon one of those permissible interpretations."  
Taken together Article 11 of the DSU and Article 17. 6 of the AD Agreement establish the standard of 
review we will apply with respect to both the f actual and the legal aspects of the present dispute. 
 7.4 Thus, we will find the challenged anti-dumping de termination to be consistent with the 
AD Agreement if we find that the EU investiga ting authorities established the facts properly and 
evaluated them in an unbiased and objective manner, and that the determinations in question were 
based on a permissible interpretation of the relevant treaty provisions.
173  In our assessment of the 
matter, we must limit our review to the "facts made  available in conformity with appropriate domestic 
procedures to the authorities of the importing Memb er", in accordance with Article 17.5(ii) of the 
AD Agreement.  We will not undertake a de novo  review of the evidence before the investigating 
authority during the proceeding, and will not substitute  our judgement for that of the EU investigating 
authorities even though we might have made a di fferent determination we re we examining the 
evidence that was before the inv estigating authorities ourselves.   
                                                      
172 Article 11 of the DSU provides in part: 
"The function of panels is to assist the DSB in discharging its responsibilities under this 
Understanding and the covered agreements.  Acco rdingly, a panel should make an objective 
assessment of the matter before it, including an  objective assessment of  the facts of the case 
and the applicability of and conformity with th e relevant covered agreements, and make such 
other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements."   
173 See below, paragraphs 7.6 - 7.8.   WT/DS397/R 
Page 36 
 
 
 7.5 The Appellate Body has clarified a panel's sta ndard of review of the facts pursuant to the 
above provisions in the following terms: 
"It is well established that a panel must neither conduct a de novo review nor simply 
defer to the conclusions of the national au thority.  A panel's examination of those 
conclusions must be critical and searching, and be based on the information contained 
in the record and the explanations given by  the authority in its published report.  A 
panel must examine whether, in the li ght of the evidence on the record, the 
conclusions reached by the investigating au thority are reasoned and adequate.  What 
is 'adequate' will inevitably depend on the f acts and circumstances of the case and the 
particular claims made, but several general lines of inquiry are likely to be relevant.  
The panel's scrutiny should test whether the reasoning of the author ity is coherent and 
internally consistent.  The panel must unde rtake an in-depth examination of whether 
the explanations given disclose how the inv estigating authority treated the facts and 
evidence in the record and whether there was positive ev idence before it to support 
the inferences made and conclusions reached  by it.  The panel must examine whether 
the explanations provided demonstrate that  the investigating authority took proper 
account of the complexities of the data before it, and that it explained why it rejected or discounted alternative explanations and in terpretations of the record evidence.  A 
panel must be open to the possibility that th e explanations given by the authority are 
not reasoned or adequate in the light of ot her plausible alternative explanations, and 
must take care not to assume itself the role of initial trier of facts, nor to be passive by 
'simply accept[ing]  the conclusions of the competent authorities.'"
174 (Footnote 
omitted.) 
2. Rules of Treaty Interpretation 
7.6 Article 3.2 of the DSU provides that the dis pute settlement system serves to clarify the 
provisions of the covered agreements "in accordance with customary rules of interpretation of public 
international law".  It is generally accepted that these customary rules are reflected in Articles 31-32 
of the Vienna Convention on the Law of Treaties ("Vienna Convention ").  Article 31(1) of the 
Vienna Convention  provides: 
"A treaty shall be interpreted in good faith  in accordance with the ordinary meaning 
to be given to the terms of the treaty in their context and in the light of its object and 
purpose." 
7.7 A number of WTO reports address the application of these provisions on treaty interpretation 
in dispute settlement in the WTO.  It is clear that interpretation must be based above all on the text of 
the treaty175, but that the context of the treaty also play s a role.  It is also well-established that these 
principles of interpretation "neither require nor cond one the imputation into a treaty of words that are 
not there or the importation into a treaty of concepts that were not intended".176  Furthermore, panels 
"must be guided by the rules of treaty interpretati on set out in the Vienna Convention, and must not 
add to or diminish rights and obligations provided in the WTO Agreement ".177  
                                                      
174 Appellate Body Report, United States – Investigation of the International Trade Commission in 
Softwood Lumber from Canada – Recourse to Article 21 .5 of the DSU by Canada  ("US – Softwood Lumber VI 
(Article 21 .5 – Canada )"), WT/DS277/AB/RW, adopted 9 May 2006, para. 93. 
175 Appellate Body Report, Japan – Taxes on Alcoholic Beverages ("Japan – Alcoholic Beverages II "), 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97, p. 11. 
176 Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical 
Products ("India – Patents (US)"), WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9, para. 45. 
177 Appellate Body Report, India – Patents (US), para. 46.  WT/DS397/R 
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 7.8 In the context of disputes under the AD Agreem ent and its separate standard of review, the 
Appellate Body has stated that:  
"The first sentence of Article 17.6(ii), echoing closely Article 3.2 of the DSU, states 
that panels  'shall' interpret the provisions of the AD Agreement  'in accordance with 
customary rules of interpretation of public international law.'  Such customary rules 
are embodied in Articles 31 and 32 of the Vienna  Convention on the Law of Treaties  
('Vienna Convention' ).  Clearly, this aspect of Article 17.6(ii) involves no 'conflict' 
with the DSU but, rather, confirms that th e usual rules of treaty interpretation under 
the DSU also apply to the AD Agreement . … 
The second  sentence of Article 17.6(ii) … presupposes  that application of the rules of 
treaty interpretation in Articles 31 and 32 of the Vienna Convention  could give rise to, 
at least, two interpretations of some provisions of the AD Agreement , which, under 
that Convention, would both be ' permissible  interpretations.'  In that event, a measure 
is deemed to be in conformity with the AD Agreement 'if it rests upon one of those 
permissible interpretations."178  (emphasis in original) 
7.9 Thus, under the AD Agreement, a panel is to fo llow the same rules of treaty interpretation as 
in any other dispute when considering the interpreta tion of the AD Agreement.  The difference is that 
Article 17.6(ii) provides explicitly that if a panel fi nds more than one permissible interpretation of a 
provision of the AD Agreement, it shall uphold a meas ure that rests on one of those interpretations. 
3. Burden of Proof 
7.10 The general principles applicable to burden of proof in WTO dispute settlement require that a 
party claiming a violation of a provision of the WT O Agreement by another Member assert and prove 
its claim.179  China, as the complaining party in this dispute, must therefore make a prima facie case 
of violation of the relevant provisions of the WT O agreements it cites, which the European Union 
must refute.  We note, however, that it is generally for each party asserting a fact, whether 
complainant or respondent, to provide proof thereof.180  In this respect, therefore, it is for the 
European Union to provide evid ence for the facts which it asserts.  We also recall that a prima facie 
case is one which, in the absence of effective refu tation by the other party, requires a panel, as a 
matter of law, to rule in favour of the party presenting the prima facie case.  As noted below, the 
European Union has asserted with respect to a numb er of claims that China has failed to make a prima 
facie  case.  Should we agree, we need not analyse such claims further, but will dismiss them.   
B. TERMS OF REFERENCE OF THE PANEL  
7.11 The European Union argues that a number of the claims addressed in China's first written 
submission are not within the Panel's terms of refere nce either because (1) they were not identified in 
China's panel request consistently with the requireme nts of Article 6.2 of the DSU, or (2) they were 
not subject to consultations.  China responds that all the claims that the European Union argues are 
outside the Panel's terms of reference are in fact within the terms of reference. 
                                                      
178 Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel 
Products from Japan ("US – Hot-Rolled Steel "), WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697, 
paras. 57 and 59. 
179 Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses 
from India ("US – Wool Shirts and Blouses "), WT/DS33/AB/R and Corr.1, adopted 23 May 1997, 
DSR 1997:I, 323, para. 337. 
180 Appellate Body Report, US – Wool Shirts and Blouses , para. 337. WT/DS397/R 
Page 38 
 
 
 7.12 Given the significant number of terms of referenc e objections raised by the European Union, 
and in order to avoid repetition, we  consider it appropriate to outline at the outset the legal standard 
under which we will assess such objections.  We w ill then apply that standard to the specific 
objections raised by the European  Union below, when we address th e claims to which each specific 
objection pertains. 
7.13 The first set of terms of reference objections rai sed by the European Union pertains to China's 
panel request.  We note that under Article 7.1 of th e DSU, it is the complaining party's request for 
establishment of a panel – that is, the panel request - that determines the terms of reference of a WTO panel.  Article 6.2 of the DSU provides, in relevant part: 
"The request for the establishment of a pane l shall be made in writing.  It shall 
indicate whether consultations were held, identify the specific measures at issue and 
provide a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly." 
Therefore, a panel request must identify the specific measures at issue  and must provide a brief 
summary of the  legal basis of the complaint  sufficient to present the problem clearly .  Together, these 
two elements constitute the "matter referred to the DSB", which forms the basis of a panel's terms of 
reference under Article 7.1 of the DSU.  It is importa nt that the panel request be sufficiently clear for 
two reasons:  first, it defines the jurisdiction of th e panel, since only the matter(s) raised in the panel 
request fall within the panel's terms of reference;   and second, it serves the due process objective of 
notifying the parties and potential third par ties of the nature of a complainant's case.
181  To ensure the 
fulfilment of these objectives, a panel has to exam ine the panel request carefully "to ensure its 
compliance with both the letter and the spirit of Article 6.2 of the DSU".182   
 7.14 The Appellate Body's analysis in Korea – Dairy  offers guidance as to how a panel should 
address the issue of whether a panel request provid es "a brief summary of the legal basis of the 
complaint sufficient to present the problem clearly" in accordance with Article 6.2 of the DSU.  First, 
the issue is to be resolved on a case-by-case basis.
183  Second, the panel must examine the panel 
request very carefully to ensure its compliance with  both the letter and the spirit of Article 6.2 of the 
DSU.184  Third, the panel should take into account the nature of the particular provision at issue –  i.e., 
where the Articles listed establish not one single, di stinct obligation, but rather multiple obligations, 
the mere listing of treaty Articles may not satisfy the standard of Article 6.2.185     
7.15 Thus, with respect to the European Union's argu ment that certain claims addressed in China's 
first written submission were not identified in its pa nel request consistently with the requirements of 
Article 6.2 of the DSU, we shall base our assessment  on the principles outlined above.  This will 
require us, in each instance, to consider the text  of China's panel request to determine whether it 
identifies the specific measure, and provides a brief summary of the legal basis of the complaint, and 
potentially whether the European Union has been prej udiced by the formulation of the panel request.  
Moreover, as stated by the Appellate Body, compli ance with the requirements of Article 6.2 of the 
                                                      
181 Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut  ("Brazil – Desiccated 
Coconut "), WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167, p. 22;  Appellate Body Report, 
United States – Continued Existence and Application of Zeroing Methodology  ("US – Continued Zeroing "), 
WT/DS350/AB/R, adopted 19 February 2009, para. 161. 
182 Appellate Body Report, European Communities – Regime for the Importation , Sale and Distribution 
of Bananas ("EC – Bananas III "), WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591, para. 142. 
183 Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy 
Products  ("Korea – Dairy "), WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3, para. 127. 
184 Appellate Body Report, Korea – Dairy , para. 130. 
185 Appellate Body Report, Korea – Dairy , para. 124.  WT/DS397/R 
 Page 39 
 
 
 DSU must be demonstrated on the basis of the text of the panel request read as a whole, and defects in 
the panel request cannot be cured in the subsequent submissions of the parties.186 
7.16 The second set of terms of reference objections raised by the European Union relates to 
consultations.  The European Union asserts that  some of the claims which it acknowledges are 
sufficiently set out in China's panel request, are nonetheless outside the Panel's terms of reference 
because they were not subject to consultations.  In support of its assertions, the European Union refers 
to alleged inadequacies in China's request for consu ltations and/or asserts th at no consultations took 
place with respect to certain claims. 
7.17 This portion of the European Union's terms of reference objections raises the question of the 
relationship between a complaining party's request  for consultations and the panel's terms of 
reference.  We note that the DS U does not contain a provision that directly addresses this issue.  
Article 4 of the DSU, entitled "Consulta tions", provides in relevant part: 
"4. Any request for consultations shall be  submitted in writing and shall give the 
reasons for the request, including identification of the measures at issue  and an 
indication of the legal basis  for the complaint. ... 
7. If the consultations fail  to settle a dispute within 60 days after the date of 
receipt of the request for consultations , the complaining party may request the 
establishment of a panel .  The complaining party may request a panel during the 60-
day period if the consulting parties jointly consider that consultations have failed to 
settle the dispute."  (emphasis added)  
Article 17 of the AD Agreement also contains provisions regarding cons ultations between WTO 
Members in disputes under that Agreem ent, providing in relevant part: 
 
"17.1 Except as otherwise provided herein , the Dispute Settlement Understanding 
is applicable to consultations and the se ttlement of disputes under this Agreement. ... 
17.3 If any Member considers that any benef it accruing to it, directly or indirectly, 
under this Agreement is being nullified or impaired, or that the achievement of any 
objective is being impeded, by another Memb er or Members, it may, with a view to 
reaching a mutually satisfactory resolution of the matter, request in writing 
consultations with the Member or Members in question .  Each Member shall afford 
sympathetic consideration to any request from another Member for consultation.   
17.4 If the Member that requested consulta tions considers that the consultations 
pursuant to paragraph 3 have failed to achiev e a mutually agreed solution, and if final 
action has been taken by the administering authorities of the importing Member to levy definitive anti-dumping duties or to accept price undertakings, it may refer the matter to the Dispute Settlement Body ("DSB")."  (emphasis added) 
7.18 Thus, Article 4.4 of the DSU provides that a request for consultations has to identify the 
measures at issue and indicate the legal basis of th e complaint.  Article 4.7 of the DSU, in turn, 
stipulates that if parties fail to settle the dispute w ithin 60 days from the receipt of the consultations 
request, the complaining party may request the establishment of a panel.  Article 17.1 of the AD Agreement states that the DSU applies to the consultations and the settlement of disputes that 
                                                     
 
186 Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant 
Carbon Steel Flat Products from Germany  ("US – Carbon Steel "), WT/DS213/AB/R and Corr.1, adopted 
19 December 2002, DSR 2002:IX, 3779, para. 127. WT/DS397/R 
Page 40 
 
 
 arise under the AD Agreement.  Article 17.3 of the AD Agreement provides that if a Member 
considers that any benefit accruing to it, directly or indirectly, under the AD Agreement is nullified or 
impaired, or that the achievement of any objectiv e is impeded by another Member, it may request 
consultations with the Member concerned.  Article 17.4 states that if parties fail to settle the dispute 
through consultations, the complaining Member may refer the matter to the DSB to seek the 
establishment of a panel.  Finally, Article 17.5 pr ovides that the DSB would, in such a situation, 
establish a panel to resolve the dispute. 
7.19 In our view, none of these legal provisions supports the proposition that a complaining 
Member is precluded from identifying in its panel re quest claims not specifically identified in its 
request for consultations.  Article 6.2 of the DSU requires that a panel request must indicate whether 
consultations were held, but neither  it nor any other provision of the DSU indicates that the scope of 
the request for consultations determines the pr ecise scope of the subsequent panel request. 
7.20 We note that the effect of a complaining Member's request for consultations on a panel's 
terms of reference has been discussed extensively in  prior panel and Appellate Body reports.  In 
Canada – Aircraft , for instance, the respondent argued that certain claims raised  with respect to 
measures that were not identified in the complaining Member's request for consultations fell outside the 
panel's terms of reference.  The panel rejected this argument.  The panel underlined the fact that a panel's terms of reference we re determined by the complaining Member's  panel request, adding that as long as 
the request for consultations and the panel request conc erned the same "dispute", the claims raised in the 
panel request would fall within its te rms of reference even if they were not raised in the request for 
consultations.  In the panel's view, "this approach [sought] to preserve due process while also 
recognising that the "matter" on which consulta tions are requested [would] not necessarily be 
identical to the "matter" identified in the request for establishment of a panel".
187  It follows from this 
reasoning that the scope of a request for consultations  and that of a panel request do not have to be 
identical.  The panel's findings on this  particular issue were not appealed. 
7.21 A similar issue arose in Brazil – Aircraft .  The respondent in that case argued that certain 
subsidy programmes not iden tified in the complaini ng Member's request for consultations were not 
within the panel's terms of reference, even though they  were identified in the panel request.  The panel 
noted that under the DSU, the terms of reference of a WTO panel were determined by the complaining Member's panel request, not its request for consul tations.  While acknowledging the importance of the 
consultations in terms of clarifying the situati on between the parties to the dispute, the panel 
nevertheless reasoned that "to limit the scope of th e panel proceedings to the identical matter with 
respect to which consultations were held could undermine the effectiveness of the panel process".
188  
According to the panel: 
"[A] panel may consider whether consultati ons have been held with respect to a 
"dispute", and that a preliminary objection may properly be sustained if a party can 
establish that the required consultations had not  been held with respect to a dispute.  
We do not believe, however, that either Artic le 4.7 of the DSU or Article 4.4 of the 
SCM Agreement requires a precise identity  between the matter with respect to which 
                                                      
187 Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft ("Canada – Aircraft "), 
WT/DS70/R, adopted 20 August 1999, upheld by Appellate Body Report WT/DS70/AB/R, DSR 1999:IV, 1443, 
para. 9.12. 
188 Panel Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "), WT/DS46/R, 
adopted 20 August 1999, as modified by Appellate Body Report WT/DS46/AB/R, DSR 1999:III, 1221, 
para. 7.9.  WT/DS397/R 
 Page 41 
 
 
 consultations were held and that with r espect to which establishment of a panel was 
requested." 189  (emphasis added) 
On appeal, the Appellate Body ag reed with the panel's reasoning: 
 
"We do not believe, however, that Articles 4 a nd 6 of the DSU, or paragraphs 1 to 4 
of Article 4 of the SCM Agreement , require a precise and exact identity  between the 
specific measures that were the subject of  consultations and the specific measures 
identified in the request for the establishment of a panel .  As stated by the Panel, 
"[o]ne purpose of consultations, as set forth in Article 4.3 of the SCM Agreement, is 
to 'clarify the facts of the situation', and it can be expected that information obtained 
during the course of consultations may enable  the complainant to focus the scope of 
the matter with respect to which it seeks estab lishment of a panel."  We are confident 
that the specific measures at issue in this  case are the Brazilian export subsidies for 
regional aircraft under PROEX .  Consultations were held by the parties on these 
subsidies, and it is these same subsidies that were referred to the DSB for the 
establishment of a panel.  We emphasize th at the regulatory instruments that came 
into effect in 1997 and 1998 did not change the essence of the export subsidies for 
regional aircraft under PROEX ."190  (footnote omitted, italic emphasis in original, 
underline emphasis added) 
7.22 More recently, the Appellate Body, in  US – Upland Cotton , underlined the importance of not 
allowing the request for consultations to inappropria tely limit the scope of the dispute, observing: 
"As long as the complaining party does not expand the scope of the dispute, we 
hesitate to impose too rigid a standard for the "precise and exact identity" between the 
scope of consultations and the request for the establishment of a panel, as this would 
substitute the request for consultations for the panel request .  According to Article 7 
of the DSU, it is the request for the estab lishment of a panel that governs its terms of 
reference, unless the parties agree otherwise."191  (footnotes omitted, emphasis added) 
7.23 In Mexico – Anti-Dumping Measures on Rice , the respondent argued that the complainant had 
broadened the scope of the legal basis of the compla int in the panel request compared with the request 
for consultations and asked the pane l to find that the claims associated with the new legal provisions 
cited in the panel request were outside the panel's te rms of reference.  The panel declined the request, 
stating: 
"In our view, the fact that certain provi sions were added to the list of alleged 
violations in the request for establishment co mpared to the request for consultations is 
a consequence of the consultation process which serves the purpose of clarifying the 
facts of the situation enabling the complain ant to focus the scope of the matter with 
respect to which it seeks the establishment of a panel.  It does not mean that no 
consultations were held on the matter, as the only difference between the request for 
consultations and the request for establishmen t consists of the fact that a number of 
closely related legal provisions alleged to have been violated were added.  The 
measures remained the same and so did the le gal basis for the complaint, as is evident 
from the narrative provided in the request for establishment.  In our view, 
                                                      
189 Panel Report, Brazil – Aircraft , para. 7.10. 
190 Appellate Body Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "), 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161, para. 132. 
191 Appellate Body Report, United States – Subsidies on Upland Cotton  ("US – Upland Cotton "), 
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3, para. 293. WT/DS397/R 
Page 42 
 
 
 consultations were thus held on the matter  on which the establishment of a Panel was 
requested.  We therefore reject Me xico's request in this respect."192 
The Appellate Body upheld the panel's findings in  this regard.  The Appe llate Body recalled its 
previous findings on this issue and pointed out that the reasoning of prior reports regarding the 
difference between the scope of the request for consu ltations and the panel request with respect to the 
specific measures at issue equally applied to the difference between these two documents with respect 
to the legal basis of the complaint.  The Appellate Body emphasised that the role of consultations was 
to allow the exchange of information necessary to refine the contours of the dispute, as a result of 
which the complaining Member might reformulate its claims in its panel request.  According to the 
Appellate Body: 
 
"[It] is not necessary that the provisions refe rred to in the request for consultations be 
identical to those set out in the panel requ est, provided that the "legal basis" in the 
panel request may reasonably be said to have evolved  from the "legal basis" that 
formed the subject of consultations.  In ot her words, the addition of provisions must 
not have the effect of changing the essence of the complaint."193  (emphasis added) 
7.24 Based on the foregoing, we consider that ther e does not have to be precise identity between 
China's request for consultations and its panel request , either with regard to the specific measures at 
issue or with regard to the legal basis of the comp laint.  As long as the request for consultations and 
the panel request concern "the same matter" or, pu t differently, as long as the legal basis of the panel 
request "may reasonably be said to have evolved from the legal basis identified in the request for 
consultations", a claim not specifically identified in China's request for consultations, but properly 
identified in the panel request, will fa ll within our terms of reference. 
7.25 Finally, with regard to consultations, we r ecall that China, in Exhibit CHN-65, submitted a 
list of questions that were allegedly sent to the European Union prior to consultations and were 
discussed during consultations.  China submitted this  document in response to the factual assertion 
made by the European Union that some claims iden tified in China's panel request were not discussed 
during consultations.194  This raises the question of what determines the scope of consultations 
between the parties to a dispute:  the request for consultations or what is actually discussed in such 
consultations?  We note that this particular issue also arose in US – Upland Cotton .  The factual 
circumstances presented in US – Upland Cotton  were very similar to those presented in these 
proceedings.  The complaining party in  that dispute presented to the panel a list of questions that had 
been submitted in writing to the respondent during consultations .  In determining whether the 
complainant had broadened the scope of the dispute in its panel request, the panel took this list into 
consideration in considering what had actually b een discussed during the co nsultations between the 
parties.195  The Appellate Body, however, disapproved the pa nel's actions in this regard, concluding that 
                                                      
192 Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef and Rice , Complaint with 
Respect to Rice ("Mexico – Anti-Dumping Measures on Rice "), WT/DS295/R, adopted 20 December 2005, as 
modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, 11007, para. 7.43. 
193 Appellate Body Report, Mexico – Definitive An ti-Dumping Measures on Beef and Rice , Complaint 
with Respect to Rice ("Mexico – Anti-Dumping Measures on Rice "), WT/DS295/AB/R, adopted 
20 December 2005, DSR 2005:X XII, 10853, para. 138. 
194 The European Union objected to the submission of this document by China an d requested a decision 
from the Panel on this matter.  The Panel's decision allowing the submission, but noting that the decision was 
"without prejudice to our cons ideration of [the exhibit's] relevance to, or the weight we may accord to it in our 
consideration of the preliminary jurisdictional objections raised by the European Uni on" was sent to the Parties 
on 7 May 2010.  See Annex H. 
195 Panel Report, United States – Subsidies on Upland Cotton  ("US – Upland Cotton "), WT/DS267/R, 
Corr.1, and Add.1 to Add.3, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R, 
DSR 2005:II, 299, para. 7.61.  WT/DS397/R 
 Page 43 
 
 
 panels should limit their analysis regarding the sc ope of consultations to the written request for 
consultations.  The Appellate Body considered that to examine what happened in consultations would be 
contrary to Articles 4.6 and 4.4 of the DSU, which provide, respectiv ely, that consultations shall be 
confidential and that the request for consultations be made in writing and no tified to the DSB.  The 
Appellate Body also noted that often it would be di fficult for a panel to find out what was discussed in 
consultations because there is no public record of those discussions and parties often disagree about 
what was discussed.196 
7.26 Taking the Appellate Body's reasoning into cons ideration, we find that it would not be 
appropriate to look into what was actually discu ssed between China and the European Union in the 
consultations between the parties, and we will ther efore limit our analysis regarding the scope of 
consultations to the text of China's request for consultations. 
7.27 In addition to its terms of reference objections  based on the alleged shortcomings in China's 
panel request and the alleged lack of consultations, the European Uni on also contends that the Panel 
cannot rule on claims raised in connection w ith Council Regulation No. 1225/2009 because this 
Regulation was not identified as a measure in China's panel request.  We address this objection below 
in connection with the China's "as such" claims against the mentioned Regulation.197  Similarly, we 
address the European Union's "preliminary" objecti ons based on China's alleged failure to set out a 
prima facie  case with respect to several claims in the course of addressing the specific claims to which 
those objections pertain. 
C. CLAIMS REGARDING COUNCIL REGULATION NO. 1225/2009  (THE BASIC AD REGULATION ) 
AS SUCH 
1. Preliminary Objections 
7.28 The European Union raises two sets of preliminar y objections with regard to China's claims 
regarding the Basic AD Regulation.  First, th e European Union submits that Council Regulation 
No. 1225/2009 was not identified as a specific measu re in dispute in China's panel request, and 
therefore it is not within the Panel's terms of refe rence.  The European Union asserts that the measure 
which was identified in China's panel request, Coun cil Regulation No. 384/96, as amended, has been 
repealed, and therefore requests us not to make fi ndings on China's claims in connection with that 
Regulation.  If we decide to make findings, the Eu ropean Union considers that we should refrain from 
making any recommendations on claims in connection with that Regulation.   
7.29 Second, the European Union argues that Ch ina's panel request does not satisfy the 
requirements of Article 6.2 of the DSU, because it does not present the problem clearly, and therefore 
China's claims under Articles 6.10, 9.3 and 9.4 of  the AD Agreement and Article X:3(a) of the 
GATT 1994 are not properly before the Panel.  Chin a disagrees with the European Union and submits 
that both Council Regulation No. 1225/2009 and all the claims raised in China's first written 
submission are within the Panel's terms of reference. 
(a) Whether Council Regulation No. 1225/ 2009 Is Properly Before the Panel 
7.30 The European Union maintains that Council Regulation No. 1225/2009 is not properly before 
the Panel because it was not identified as a specific measure at issue in China's panel request.  It 
follows that the Panel cannot make findings with resp ect to the claims that China raises in connection 
with this Regulation.  According to the European Union, the Panel could make findings regarding the 
                                                      
196 Appellate Body Report, US – Upland Cotton , para. 287. 
197 See paragraphs 7.30-7.39. WT/DS397/R 
Page 44 
 
 
 repealed Council Regulation No. 384/96, but should refrain from making recommendations in this 
regard, since Council Regulation No. 384/96 has been repealed.   
7.31 China notes that Article 9(5) of Council Regulation No. 1225/2009 is identical to Article 9(5) 
of Council Regulation No. 384/96.  In China's view, "the [European Union] adopts a purely 
formalistic approach which ignores the fact that the measure being ch allenged, namely Article 9(5), is 
identically worded in both Council Regulation (EC) No 384/96 as amended and Council Regulation 
(EC) No 1225/2009".198  Therefore, China asserts that Article 9(5) of Council Regulation 
No. 1225/2009 is properly before the Panel and the Panel should address the claims raised by China in 
connection with this Regulation.  China submits th at the need for the prompt settlement of disputes 
and to provide security and predictability would be  undermined if the Panel were to agree with the 
European Union's views. 
7.32 We begin by observing that it is undisputed that both China's request for consultations199 and 
its panel request200, dated 4 August and 13 October 2009, r espectively, identify Council Regulation 
No. 384/96 of 22 December 1995, as amended, as the measure at issue in connection with the "as 
such" claims in this dispute.  We recall that this Panel was established by the DSB on 
23 October 2009.  Council Regulation No. 384/96 was repealed by Council Regulation No. 1225/2009 
of 30 November 2009, which entered into force on 11 January 2010 – that is, both the repeal of 
Council Regulation No. 384/96 and the entry into  force of Council Regulation No. 1225/2009 
occurred after  the establishment of this Panel.  It is al so undisputed that Article 9(5) of the Council 
Regulation No. 384/96 is almost identi cal to Council Regulation No. 1225/2009.201  The changes 
made by Council Regulation No. 1225/2009 to Arti cle 9(5) of Council Regulation No 384/96, as 
amended, are indicated by bold italics  below: 
"An anti-dumping duty shall be imposed in the appropriate amounts in each case, on 
a non-discriminatory basis on imports of a product from all sources found to be 
dumped and causing injury, except as to  for imports from those sources from which 
undertakings under the terms of this Regul ation have been accepted. The Regulation 
imposing the duty shall specify the duty for each  supplier or, if that is impracticable, 
and in general where Article 2(7)(a) a pplies, the supplying country concerned. 
Where Article 2(7)(a) applies, an individua l duty shall, however, be specified for the 
exporters which can demonstrate, on the basi s of properly substantiated claims that: 
(a)  in the case of wholly or partly foreign owned firms or joint ventures, 
exporters are free to repatriate capital and profits; 
(b)  export prices and quantities, and c onditions and terms of sale are freely 
determined; 
(c)  the majority of the shares belong to private persons . State ; state  officials 
appearing on the board of Ddirectors or holding key management positions shall 
either be in minority or it must be dem onstrated that the company is nonetheless 
sufficiently independent from State interference; 
(d)  exchange rate conversions are carried out at the market rate; and 
                                                      
198 China, second written submission, para. 84. 
199 WT/DS397/1, Annex G-1. 
200 WT/DS397/3, Annex G-2. 
201 See European Union, answer to Panel question 12 , where the European Union identified the textual 
changes indicated above in bold italics .  WT/DS397/R 
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 (e)  State interference is not such as to permit circumvention of measures if 
individual exporters are given different rates of duty."202 
7.33 In our view, these minor textual differences clear ly do not affect the scope and operation of 
this provision.203  The issue therefore is whether Council Regulation No. 1225/2009 falls outside our 
terms of reference purely because it is not specifically  identified in China's panel request.  In this 
regard, we emphasize that, while the enactment of  Council Regulation No. 1225/2009, repealing and 
replacing the earlier Council Regulation, No. 384/ 96 of 22 December 1995, as amended, was 
proposed before, Council Regulation No. 1225/2009 w as not in fact enacted, and did not come into 
effect, until after  China submitted its panel request and this Panel was established. 
7.34 We note that one of the objectives of Article 6. 2 of the DSU is to ensure the due process 
rights of the respondent in dispute settlement proceed ings.  It is clear that those rights would be 
undermined where the text of the panel request do es not sufficiently inform a responding Member of 
the measure at issue and the nature of the claims raised by the complaining Member.  This, however, 
clearly is not the case in the present proceedings.  China raised certain claims in connection with a 
specific provision of Council Regulation No. 384/96 in  both its request for consultations and its panel 
request.  While it is true that this Regulation w as subsequently repealed, it was immediately replaced 
by Council Regulation No. 1225/2009 which contains , in almost identical terms, and in identical 
substance, the same provision as was specifically iden tified in China's panel request.  This repeal and 
replacement took place after China submitted its panel request, and after this Panel was established.  
To require China in such circumst ances to restart the dispute settleme nt process, potentially requiring 
a new request for consultations204, would defeat the purpose of the DSU to provide for the "prompt 
settlement of situations in which a Member consid ers that benefits accruing to it" under a covered 
Agreement are being impaired by another Member's measure, as provided for in Article 3.3 of the 
DSU.  Thus, we consider the European Union's objecti on to be formalistic, rather  than substantive.  In 
the circumstances of this dispute, the due process ri ghts of the European Union cannot be considered 
to have been undermined by allowing the dispute to go forward challenging the replacement measure 
rather than the measure named in the panel request.  Indeed, to sustain the European Union's objection 
would not be consistent with the effective functi oning of the WTO dispute settlement system, as it 
might lead to inappropriate legal manoeuvres to avoid dispute settlement, inconsistent with the 
obligation of Members to engage in dispute settleme nt "in good faith in an effort to resolve the 
dispute".205  We therefore consider that Council Regula tion No. 1225/2009 is properly before us and 
will base our findings and recommendations on China's "as such" claims on the relevant parts of that 
Regulation. 
7.35 The European Union posits that China described  the specific measure at issue in a very 
specific and narrow manner in its panel request.  Specifically, the European Union notes that China 
did not refer to "replacements, related measures or implementing measures".  Likewise, notes the 
European Union, "China did not identify the ma tter by using broader terms such as "individual 
treatment" or "individual treatment regime or practic e" of the European Union in its panel request".206  
It follows, in the European Union's view, that the specific measure at  issue in connection with China's 
"as such" claims is limited to Article 9(5)  of Council Regulation No. 384/96, as amended.207  For the 
                                                      
202 European Union, answer to Panel question 12. 
203 Indeed, the European Union does not contend otherwise. 
204 It is foreseeable that a request for establishment naming a different measure than the request for 
consultations might be challenged as raising a matter as to which consultations were not held. 
205 DSU, Article 3.10.  To be clear, we are not suggesting that the European Union engaged in any such 
manoeuvring in this dispute.  There is no reason for us to think that the European Union's decision to repeal and 
replace Council Regulation No. 384/96 bore any relationship whatsoever to  this dispute, and China has not 
suggested otherwise.  Our concern is for the potential consequences of our decision. 
206 European Union, first written submission, para. 40. 
207 European Union, first written submission, para. 40. WT/DS397/R 
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 European Union, since Council Regulation No. 1225/2009 did not amend  Article 9(5) of Council 
Regulation No. 384/96, it falls outside the Panel's terms of reference.  Again, we consider the 
proposition advocated by the European Union to be formalistic, and we do not believe that this 
consideration is decisive.  The European Union' s approach suggests that had China included, for 
instance, the words "and any replacements thereo f", Council Regulation No. 1225/2009 would have 
fallen within the Panel's terms of reference.  We decline to take such a mechanistic approach to 
determining our jurisdiction on the basis of the pane l request.  Instead, we consider it appropriate to 
look at the difference between the old and the new Article 9(5) to determine whether, in light of any textual differences between the two, the due pr ocess rights of the European Union would be 
undermined were we to proceed to resolve th is dispute with respect to Council Regulation 
No. 1225/2009, rather than Council Regulation No. 384/ 96.  Since the two texts are virtually identical, 
and with respect to substance, the two iterations of the provision in question may be deemed identical, 
we are of the view that the European Union's due process rights are well preserved.
208 
7.36 The European Union cites several panel a nd Appellate Body reports in support of its 
arguments in this context.  For instance, it notes that, in EC – Chicken Cuts (Brazil)209, the 
complainants in their submissions to the panel pres ented claims with respect to measures that had not 
been identified in their panel requests.210  The panel found that since the complainants' panel requests 
were not worded sufficiently broadly, they c ould not be interpreted as containing these new 
measures.211  However, we note that the circumstances of the present proceedings are significantly 
different from those in EC – Chicken Cuts (Brazil) .  Unlike in that dispute, here the text of the "new" 
measure is virtually identical to the old one, and substantively it is identical.  Thus, there is no 
question, in our view, whether the panel request can be interpreted as containing a "new" measure. 
7.37 The European Union also cites the panel report in China – Publications and Audiovisual 
Products .212  However, the issue in that dispute also diffe rs significantly from the issue before us.  In 
the paragraph specifically cited by the European Uni on, that panel noted that the Appellate Body had 
found that "references in a panel request to amendments, related meas ures, or implementing 
measures" could bring certain measures within a pane l's terms of reference even if such measures had 
not been identified in the panel request.213  In the present proceedings, however, the question is not 
whether the identification of Council Regulation No. 384/96 "as amended" brings Council Regulation 
No. 1225/2009 within our terms of reference despite  it not having been specifically identified in the 
panel request.  Rather, the question is whether th e identification of Council Regulation No. 384/96 in 
the panel request limits our terms of reference so as  to preclude our considera tion of its substantively 
identical replacement, Council Regulation No. 1225/2009 .  We therefore consider that the discussion 
in that panel report is not pertinent to  the issue presented in these proceedings. 
7.38 We note that the spirit of previous WTO reports  concerning whether amendments to specific 
measures identified in a panel request or new m easures introduced subsequent to a panel request 
would fall within a panel's terms of reference actually supports our approach in this regard.  While in 
                                                      
208 Equally, the inclusion of language such as "and any replacements thereof" would not, in our view, 
be sufficient to bring within a panel's terms of re ference a replacement measur e which was fundamentally 
different in substance from the identified measure. 
209 European Union, first written submission, footnote 32. 
210 Panel Report, European Communities – Customs Classification of Frozen Boneless Chicken Cuts , 
Complaint by Brazil  ("EC – Chicken Cuts (Brazil )"), WT/DS269/R, adopted 27 September 2005, as modified by 
Appellate Body Report WT/DS269/AB/R, WT/DS286/AB/R, DSR 2005:XIX, 9295, para. 7.16. 
211 Panel Report, EC – Chicken Cuts (Brazil ), paras. 7.28-7.29. 
212 European Union, first written submission, footnote 33. 
213 Panel Report, China – Measures Affecting Trading Rights and Distribution Services for Certain 
Publications and Audiovisual Entertainment Products ("China – Publications and Audiovisual Products "), 
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate Body Report WT/DS363/AB/R, 
para. 7.18.  WT/DS397/R 
 Page 47 
 
 
 those cases, the principal issue was whether the text of  the request can be understood to refer to other 
measures than those named, here, the issue is whethe r the failure to refer to a subsequent replacement 
of the named measure, identical in substance, pr ecludes us from considering it.  It is now well 
established that a measure which is not identified in the complainant's panel request may nonetheless 
fall within a panel's terms of reference if it is suffi ciently closely related to the measure identified in 
the panel request, such that the respondent can be f ound to have had adequate notice of the nature of 
the claims that the complainant might raise during the panel proceedings.214  We consider that to 
conclude, in this dispute, that a subsequent meas ure which is substantively identical to the measure 
identified in the panel request falls within our terms of  reference is consistent with this reasoning.  It 
is true that China's panel request does not contai n language such as "and am endments or subsequent 
measures", but given that the new and the old measur es are substantively identical, we do not consider 
this to be significant. 
7.39 Finally, we are of the view that our resolution of  this issue is consistent with the requirement 
of Article 11 of the DSU that a panel "make an obj ective assessment of the matter before it, including 
an objective assessment of the f acts of the case and the applicability of and conformity with the 
relevant covered agreements, a nd make such other findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in the covered agreements".  It also serves the 
principle laid down in Article 3.3 of the DSU, to  ensure prompt settlement of disputes between WTO 
Members, which is "essential to the effective f unctioning of the WTO and the maintenance of a 
proper balance between the rights and obligations of  Members".  We therefore conclude that Council 
Regulation No. 1225/2009 is  properly before us in this dis pute, and will make our findings and 
recommendations with respect to that measure. 
(b) Whether All Claims Raised by China in Connection With the Basic AD Regulation are 
Within the Panel's Terms of Reference 
(i) Arguments of the Parties 
European Union  
7.40 The European Union maintains that under the DS U, it is not enough to summarily identify the 
legal basis of the complaint, the identif ication must present the problem clearly.215  T h e  
European Union asserts that claims raised by China under Articles 6.10, 9.3 and 9.4 of the 
AD Agreement and under Article X:3(a) of the GAT T 1994 are not properly before the Panel because 
the relevant parts of China's panel request do  not present the problem clearly as required under 
Article 6.2 of the DSU.  More specifically, the Eu ropean Union submits that, with respect to these 
four claims, China failed to plainly connect the specific measure at issue to the legal provisions 
claimed to have been infringed.216  It follows, in the European Unio n's view, that these claims are not 
within the Panel's terms of reference. 
                                                      
214 See, for instance, Panel Report, Japan – Measures Affecting Consumer Photographic Film and 
Paper  ("Japan – Film "), WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179, para. 10.8;  Appellate Body 
Report, Chile – Price Band System and Safeguard Measures  Relating to Certain Agricultural Products ("Chile – 
Price Band System "), WT/DS207/AB/R, adopted 23 October 2002, DSR 2002:VIII, 3045 (Corr.1, DSR 2006:XII, 
5473), para. 135;  Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews – 
Recourse to Article 21 .5 of the DSU by Japan  ("US – Zeroing (Japan ) (Article 21 .5 – Japan )"), 
WT/DS322/AB/RW, adopted 31 August 2009, para. 113 ("We share the Panel's view that the use of the term "closely connected" earlier in paragraph 12 of the panel request provides additional support for finding that 
"subsequent closely connected measures" refers to periodic reviews of the anti-dumping duty order on ball 
bearings, which were conducted after the reviews listed in the panel request.") 
215 European Union, first written submission, para. 48. 
216 European Union, first written submission, para. 51. WT/DS397/R 
Page 48 
 
 
 China  
7.41 China contends that its panel request satisfies the requirements of Article 6.2 with regard to 
the claims subject to the European Union's objec tion.  According to Chin a, the European Union 
confuses the procedural obligations contained in the DSU with the substantive analysis of the measure 
at issue, as well as claims with arguments.  Acco rding to China, "Article 6.2 merely requires the 
complaining party to identify in its Panel Request th e specific measure at issue and the claims so as to 
enable the defending party to know the problem at issue".217  Specifically, China argues that 
Article 6.2 does not require that the scope of the specific measure at issue correspond to the scope of 
the legal provision claimed to have been violated.218  China argues that from China's panel request, the 
European Union knew very well the specific measure  at issue and the legal provisions identified as 
having been violated, and asserts that the contents of the European Union's first written submission 
demonstrate this.  China maintains that the Europ ean Union's arguments concern the substantive issue 
of whether Article 9(5) of the Basic AD Regulation addresses the calculation of dumping margins, which this Panel is called upon to  decide, rather than the procedural requirements of the DSU.
219  
China also claims that the European Union has fail ed to demonstrate that China's alleged failure to 
present the problem clearly prejudiced its ability to defend its interests.220  China therefore requests 
the Panel to find that the four claims that the Eur opean Union takes issue with are properly before the 
Panel. 
(ii) Arguments of Third Parties 
Brazil  
7.42 Brazil notes that a panel request performs two f unctions:  a) it informs the respondent of the 
nature of the claims raised by the complainant, and b) it determines the jurisdiction of the panel.  
According to Brazil, "the essence of the dispute is to be presented in the panel request in such a way 
that the responding Member can be reasonably exp ected to understand the case being brought against 
it".221  With respect to the European Union's argume nt that China's claims under Articles 6.10, 9.3 
and 9.4 of the AD Agreement are outside the Panel' s terms of reference, Brazil submits that the 
European Union conflates the threshold examination of  the panel request with the substantive analysis 
of China's claims.  In Brazil's view, China's panel requ est provides the gist of what is at issue and this 
is also confirmed by the contents of China's first wr itten submission.  Further, Brazil contends that the 
European Union has not shown that its due pro cess rights have been prejudiced by the alleged 
inadequacies in China's panel request. 
(iii) Evaluation by the Panel 
7.43 We note that the premise for the European Un ion's preliminary objection with respect to 
China's claims under Articles 6.10, 9.3 and 9.4 of th e AD Agreement is the allegation that the specific 
measure at issue, i.e., Article 9(5) of the Basic AD Regulation, addresses only the imposition of anti-
dumping duties , whereas the three provisions of the AD Agreement cited by China concern the 
determination of dumping margins  or the establishment of the level of anti-dumping duties .222  Since, 
according to the European Union,  the specific measure at issue does not address the calculation of 
dumping margins, the European Union argues that claims under the provisions of the AD Agreement 
which deal with the calculation of margins fall outside our terms of reference. 
                                                      
217 China, second written submission, para. 27. 
218 China, second written submission, para. 28. 
219 China, second written submission, para. 31. 
220 China, second written submission, paras. 41-46. 
221 Brazil, written submission, para. 4. 
222 See, European Union, first written submission, paras. 53, 54, 58 and 62.  WT/DS397/R 
 Page 49 
 
 
 7.44 In this regard, we agree with China that the European Union c onfuses the identification of the 
claims in the panel request with the arguments th at are to be developed in the subsequent panel 
proceedings.  We find it relevant and important in this regard that the European Union dedicates a 
significant portion of its substantive arguments re garding these three claims to its effort to 
demonstrate that Article 9(5) of the Basic AD Re gulation does not concern the calculation of dumping 
margins and therefore does not fall within the scope  of the obligations set forth under these three 
provisions.  Indeed, it is clear to us that whether Ar ticle 9(5) of the Basic AD Regulation is limited to 
the imposition of dumping duties, or also relat es to the calculation of dumping margins or the 
establishment of the level of anti-dumping duties, is a di sputed matter that must be resolved as part of 
the substance of this case, rather than a matter to be assumed in the context of resolving a preliminary 
objection.223  We note that this argument is the only basi s for the European Union's terms of reference 
objection in this context.  We therefore find that China's claims under Articles 6.10, 9.3 and 9.4 of the 
AD Agreement are within our terms of reference. 
7.45 With regard to China's claim under Article X:3(a) of the GATT 1994, the European Union 
makes similar arguments.  It contends that ther e is no connection between the specific measure at 
issue, i.e., Article 9(5) of the Basic AD Regulation, and th e obligations set out under Article X:3(a) of 
the GATT 1994.  According to the European Union, "China's panel request fails to explain how the 
"provisions" of Article 9(5) of Council Regula tion No 384/96 are not administered in a uniform, 
impartial and reasonable manner".224  Here too, we are of the view  that the European Union confuses 
the identification of a claim with the arguments that  may be presented in support of a claim.  The 
European Union maintains that the obligation set  out under Article X:3(a) of the GATT 1994 cannot 
apply to laws, regulations, decisi ons and rulings themselves, but only to their administration.  We 
recall that what matters for purposes of Article 6. 2 of the DSU is whether a claim is described 
sufficiently clearly in the panel request so that the respondent is informed of the nature of the claim 
and can prepare its arguments accordingly.  Whether the description of the claim makes legal sense is 
something to be scrutinized by the Panel in the course of the panel proceedings, on the basis of the 
arguments developed by the parties and the eviden ce presented.  We note that China's panel request, 
on page 2, clearly identifies a claim under Artic le X:3(a) of the GATT 1994 with respect to 
Article 9(5) of the Basic AD Regulation.  We theref ore consider this claim to be within our terms of 
reference as well. 
2. Relevant Provisions of Council Regulation No. 1225/2009 
7.46 Council Regulation No. 1225/2009, the Basic AD Regulation, is the currently-in-force EU 
legislative instrument that lays down the substa ntive and procedural requirements pertaining to anti-
dumping investigations in the European Union.  Article 2 of the Basic AD Regulation addresses the 
determination of dumping, including the determinati on of normal value.  The basic rule set out in 
Article 2(1)-(6) for the determination of norma l value essentially replicates the provisions of 
Article 2.2 of the AD Agreement, and applies to market economy countries, whether or not Members 
of the WTO.   
7.47 Paragraph 7 of Article 2 contains specific ru les on the determination of normal value in 
investigations conducted against non-market economie s ("NMEs").  It groups those countries into two 
categories:  those NMEs that are WTO Member s and those NMEs that are not, and establishes 
different rules for determining normal value for these two categories:   
                                                      
223 We note that we do not mean to suggest that we agree with European Un ion's characterization of 
China's claims as concerning the calculation of dumping marg ins, but that even assuming  this to be the case, the 
scope of Article 9(5) of the Basic AD Regulation is no t so clear as to preclude us from considering them. 
224 European Union, first written submission, para. 67. WT/DS397/R 
Page 50 
 
 
 (a) Paragraph 7(a), which applies to NMEs that are not Members of the WTO, including 
Azerbaijan, Belarus, North Korea, Tajikista n, Turkmenistan and Uzbekistan, provides 
that for these countries, normal value is determined "on the basis of the price or constructed value in a market economy third country, or the price from such a 
third country to other countries, includ ing the Community, or where those are not 
possible, on any other reasonable basis, including the price actually paid or payable in the Community for the like product, dul y adjusted if necess ary to include a 
reasonable profit margin". 
(b) Paragraph 7(b), which applies to Kazakhs tan and NMEs that are Members of the 
WTO as of the date of initiation of a given investigation, including China, provides 
that if one or more producers
225 subject to the investigation demonstrate that "market 
economy conditions prevail" for them, nor mal value is determined for those 
producers in accordance with th e basic rules set out in paragraphs 1-6 of Article 2, 
that is, the rules applicable to market economy countries.  Otherwise, normal value 
will be determined on the basis of paragraph 7(a), i.e., the rules that apply to NMEs 
that are not Members of the WTO, including for any producers who are unable to 
demonstrate that "market economy conditions prevail" for them. 
Paragraph 7(c) sets out the criteria on the basis of which a foreign producer would be expected to 
demonstrate that it operates according to market economy principles, and thus that "market economy conditions prevail" for it, in which situation, the fi rst option under paragraph 7( b) will be applied, and 
a determination of normal value in accordance with th e rules applicable to market economy countries 
will be made for that producer.  These criteria are generally referred to as the "market economy test" 
("MET").
226  There are no claims in this dispute with respect to the market economy test, either as 
such, or as applied in the investigation.  
7.48 Central to China's "as such" claims in this dis pute is paragraph 5 of Article 9 of the Basic AD 
Regulation, which explains the modalities for the imposition of anti-dumping duties.  It provides, in 
relevant part: 
"An anti-dumping duty shall be imposed in the appropriate amounts in each case, on 
a non-discriminatory basis on imports of a product from all sources found to be dumped and causing injury, except for imports from those sources from which 
undertakings ... have been accepted.  The Regulation imposing the duty shall specify 
the duty for each supplier or, if that is  impracticable, and in general where 
Article 2(7)(a) applies, the supplying country concerned ." (emphasis added) 
Thus, Article 9(5) requires that in principle a dut y be specified for each such "supplier".  It then 
introduces two exceptions to this principle:  (1) wher e it is impracticable to specify the duty for each 
                                                      
225 In this report, we use the word s "producer" and "exporter" interchangeably, with both referring to 
companies that are subject to an anti-dumping investigation in the European Union. 
226 Under Article 2(7)(c), a request for market economy treatment must be made in writing and must 
contain sufficient evidence that the producer operates und er market economy conditions, that is if:  a) decisions 
of firms regarding prices, costs and inputs, including for instance raw materials, cost of technology and labour, output, sales and investment, are made in response to ma rket signals reflecting supply and demand, and without 
significant State interference in this regard, and costs of  major inputs substantially reflect market values, b) 
firms have one clear set of basic acco unting records which are independently audited in line with international 
accounting standards and are applied for all purposes, c) the prod uction costs and financial situation of firms are 
not subject to significant distortions carried over from the former non-market economy system, in particular in 
relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts, d) the firms concerned are subject to bankruptcy and property laws which guarantee legal certainty and stability for the 
operation of firms, and e) exchange rate conver sions are carried out at the market rate.    WT/DS397/R 
 Page 51 
 
 
 supplier, and (2) in general, where Article 2(7)(a) of the Basic AD Regulation applies – that is, where 
normal value is determined on the basis of analogue c ountry prices or one of the other methods in that 
provision.  In these cases, the Regulation imposing th e duty shall specify a duty rate for the supplying 
country concerned, that is, a single "country-wide" duty rate will be specified, which will apply to all 
imports from that country.   
 7.49 Article 9(5) provides for an exception to the specification of a country-wide duty rate.  It 
provides: 
"Where Article 2(7)(a) applies, an individua l duty shall, however, be specified for the 
exporters which can demonstrate, on the basi s of properly substantiated claims that: 
"(a)  in the case of wholly or partly foreign owned firms or joint ventures, 
exporters are free to repatriate capital and profits; 
(b)  export prices and quantities, and c onditions and terms of sale are freely 
determined; 
(c)  the majority of the shares belong to private persons; state officials appearing 
on the board of directors or holding key ma nagement positions shall either be in 
minority or it must be demonstrated that the company is nonetheless sufficiently independent from State interference; 
(d)  exchange rate conversions are carried out at the market rate; and 
(e)  State interference is not such as to permit circumvention of measures if 
individual exporters are given different rates of duty." 
These criteria are generally referred to as the "ind ividual treatment ("IT")" test.  If a producer 
demonstrates that it meets these conditions and is thus entitled to IT, the EU authorities will specify 
an individual duty rate for that producer.  Exporters  who do not satisfy the IT test will be subject to 
the country-wide duty rate. 
 
7.50 In sum, when an exporter from a WTO Member  that the European Union treats as a NME is 
subject to an anti-dumping investigation conducted by the European Union,  the following possibilities 
with respect to the determination of normal value and the imposition of duty apply: 
(a) If the exporter satisfies the MET, then its  normal value will be determined on the 
same basis as for producers in market economies.  A dumping margin for that 
producer will be calculated by comparing that normal value to the export prices of 
that producer, and an individual duty ra te will be applied to that producer. 
(b) If the exporter fails the MET ("NME expor ter"), then its normal value will be 
determined on the basis of an alternat ive method (typically based on prices in an 
analogue third country).  Whether the export price used in calculating the dumping 
margin will be based on the exporter's own export sales will depend on whether the 
exporter requests and is granted IT. 
(i) If the NME exporter makes such a request  and demonstrates that it meets the 
criteria in Article 9(5) of the Basic AD Regulation, the NME exporter will have an individual duty rate applied to it, calculated on the basis of a comparison of the alternative-met hod normal value with its own export 
prices. WT/DS397/R 
Page 52 
 
 
 (ii) Otherwise, the non-IT NME exporter will be subject to a country-wide duty 
rate.  The determination of the export price used to calculate that country-
wide duty rate will depend on the level of cooperation on the part of the non-
IT exporters altogether.  If the level of cooperation is high, i.e. if the 
cooperating non-IT exporters account for close to 100 percent of all exports, 
the export price will be based on a weighted average of the actual price of all export transactions effected by these e xporters.  If, however, the level of 
cooperation is low, i.e. if the non-IT exporters account for significantly less than 100 percent of all exports, the Co mmission will resort to facts available 
to complete the missing information.  The selection of the facts available will 
depend on the gravity of non-cooperati on and may include statistical import 
data.
227 
3. Whether Article 9(5) of the Basic AD Regulati on is inconsistent with Articles 6.10, 9.2, 
9.3 and 9.4 of the AD Agreement 
(a) Arguments of the Parties 
(i) China 
7.51 China argues that the first sentence of Ar ticle 6.10 of the AD Agreement requires 
investigating authorities, as a rule, to calculate  an individual margin of dumping for each 
exporter/foreign producer of the allegedly dumped imports.228  Exceptionally, under the second 
sentence, it allows the use of a sample where the number of exporte rs, producers, importers or types 
of products involved is high.229  In China's view, sampling is the only exception to the rule set forth in 
the first sentence of Article 6.10.230  Therefore, according to China, by providing that exporting 
producers from NMEs are subject to a country-wide dumping margin unless they are able to demonstrate that they meet the five criteria of Artic le 9(5) violates Article 6.10.  According to China, 
even though the text of Article 9(5) of the Basic AD Regulation refers to "an individual duty" rather 
than "an individual margin of dumping", the ap plication of an individual duty necessitates the 
calculation of an individual margin of dumping.
231  China asserts that, as a result, Article 9(5) of the 
Basic AD Regulation violates Article 6.10 of the AD Agreement.232 
7.52 China argues that just as Article 6.10 requires the calculation of individual dumping margins, 
Article 9.2 of the AD Agreement requires the au thorities to name individual suppliers in the 
imposition of anti-dumping duties.233  Exceptionally, this provision permits the authorities to name the 
supplying country where naming individual suppliers would be impracticable.  China notes Article 9.4 
of the AD Agreement, which provides for the imposition of anti-dumping duties in cases where sampling is used, and  argues that when Article 9.2 is read in conjunction with Article 9.4, it becomes 
clear that the only instance in which the authoriti es would be permitted to assign country-wide duties 
is when sampling is used in the investigation.
234  According to China, therefore, by subjecting the 
assignment of individual duty rates to the fulfilment of certain conditions, Article 9(5) of the Basic 
AD Regulation violates Article 9.2 of the AD Agreement. 
                                                      
227 European Union, answer to Panel question 4. 
228 China, first written submission, para. 55. 
229 China, second written submission, para. 224. 
230 China, second written submission, para. 221. 
231 China, first written submission, para. 59. 
232 China, first written submission, para. 62. 
233 China, first written submission, para. 71. 
234 China, first written submission, para. 74.  WT/DS397/R 
 Page 53 
 
 
 7.53 China notes that the margins of dumping for Chinese producers that do not qualify for IT 
under Article 9(5) of the Basic AD Regulation are calculated on the basis of a comparison of the normal value calculated for the analogue country with the average export prices of all cooperating 
non-IT exporting producers which, in most cases, will be further averaged with best information 
available such as, e.g., import statistics.
235  China contends that this calcu lation is inconsistent with the 
requirements of Article 2 of the AD Agreement because it is not based on the individual export prices of the relevant producers.  As a result, those exporting producers which have company-specific export 
prices which are higher than the average export price used for non-IT exporting producers will be subject to a duty which exceeds their dumping margin established under Article 2 of the 
AD Agreement.  China claims that, as a result, the duties imposed on the basis of such margins violate 
the principle set forth in Article 9.3 of the AD Ag reement, that the anti-dumping duty imposed shall 
not exceed the margin as established under Article 2.
236 
7.54 China asserts that Article 9(5) of the Basic AD Regulation is inconsistent  with Article 9.4 of 
the AD Agreement for two reasons.  First, the dum ping margins calculated for non-sampled producers 
will reflect the weighted average of the margins ca lculated for the sampled producers which, to the 
extent sampled producers are not granted IT, will be inconsistent with Article 2 of the AD Agreement 
because they will be based on the export prices of all cooperating foreign producers, as opposed to 
those of the individual producers.237  Second, Article 9(5) of the Basic AD Regulation runs counter to 
the obligation contained in the last sentence of Artic le 9.4 of the AD Agreement in that Article 9(5) 
subjects the right to request individual margins to conditions that are not found in Article 9.4 of the 
AD Agreement.238 
(ii) European Union 
7.55 The European Union contends that the obligation set forth in the first sentence of Article 6.10 
is purely procedural.  It requires the authorities to calculate an individual margin for each known 
exporter or producer but does not address how such calculation should be made.  The calculation of 
margins is addressed elsewhere in the Agreement.239  The nature of the obligation contained in 
Article 6.10 is different from the nature of the issue raised by China, namely the assignment of 
individual, as opposed to country-wide, duty rat es.  The imposition of duties is addressed under 
Article 9 of the Agreement.240  Accordingly, the European Union maintains that Article 9(5) of the 
Basic AD Regulation does not fall within the scope of the obligation set out in Article 6.10 of the AD Agreement.
241 
7.56 On substance, the European Union posits that  sampling, allowed under the second sentence of 
Article 6.10, is not the only exception to the gene ral rule set out in the first sentence of this 
provision.242  For instance, the European Union argu es that Article 6.10 permits investigating 
authorities to treat separate companies as a single entity which is the actual source of dumping.243  The 
European Union asserts that other exceptions to the general rule are also possible, including, the 
European Union contends, that provided for in Article  9(5) of the Basic AD Regulation.  Therefore, 
Article 9(5) of the Basic AD Regulation is not in consistent with Article 6.10 of the AD Agreement.244 
                                                      
235 China, second written submission, para. 302. 
236 China, first written submission, paras. 85-86. 
237 China, first written submission, paras. 89-90;  China, second written submission, paras. 302-303. 
238 China, first written submission, paras. 91-92. 
239 European Union, first written submission, paras. 133-135. 
240 European Union, first written submission, para. 136. 
241 European Union, first written submission, para. 138. 
242 European Union, first written submission, paras. 140-142. 
243 European Union, first written submission, para. 147. 
244 European Union, first written submission, paras. 153-154. WT/DS397/R 
Page 54 
 
 
 7.57 The European Union contends that Article 9(5) of the Basic AD Regulation does not fall 
within the scope of the obligation set forth under Article 9.2 of the AD Agreement because the latter 
does not require an anti-dumping duty to be compan y-specific, but merely that the suppliers be 
"named".245  In the alternative, the European Union ma intains that, contrary to China's argument, 
Article 9.4 of the AD Agreement cannot be inte rpreted to identify the only instance where the 
investigating authorities can impose anti-dumping duties for the supplying country.246  T h e  
European Union notes that the third sentence of Ar ticle 9.2 allows authorities to name the supplying 
country when several suppliers are involved and it is impracticable to name all of them.247  According 
to the European Union, "impracticable" refers to situations where the duty would not address the 
source of dumping and therefore would be ineffective.248  The European Union therefore contends that 
Article 9(5) of the Basic AD Regula tion is not inconsistent with Artic le 9.2 of the Agreement since it 
serves to identify when it would be impracticable to assign individual duties and therefore country-wide duties should be assigned.
249 
7.58 The European Union also asserts that Article 9(5) of the Basic AD Regulation does not fall 
within the scope of the obligation set forth un der Article 9.3 of the AD Agreement, because 
Article 9(5) of the Basic AD Regulation does not address the calculation of dumping margins or the 
relationship between anti-dumping duties and dumping margins.250  Assuming that Article 9(5) of the 
Basic AD Regulation is related to the obligation set  forth in Article 9.3 of the AD Agreement, the 
European Union maintains that China's claim unde r Article 9.3 is depende nt on its claims under 
Articles 6.10 and 9.2.  Since, in the European Union's view, Article 9(5) of the Basic AD Regulation 
does not violate those two provisions, there ca n be no violation of Article 9.3 either. 251  T h e  
European Union disagrees with China's argumen t that the single anti-dumping duty imposed on a 
country-wide basis will necessarily lead  to the collection of duties in excess of the relevant margin of 
dumping.252  The European Union asserts, in this regard , that "in case of imports from China, the 
proper duty rate for the actual supplier is subj ect to the maximum ceiling of the dumping margin 
found for that supplier based on the weighted av erage of the intermediate results found for 
cooperating non-IT suppliers and the results  obtained for the non-cooperating suppliers".253 
7.59 The European Union submits that Article 9(5) of the Basic AD Regulation does not 
necessarily require the use of sampling and therefor e does not fall within the scope of the obligation 
set forth under Article 9.4 of the AD Agreement.254  Assuming that the Panel disagrees with this view, 
the European Union submits that  China's claim under Article 9.4 of the AD Agreement is entirely 
dependant on its claims under Articles 6.10 and 9.2 of the AD Agreement.  Since, in the 
European Union's view, Article 9(5) of the Basi c AD Regulation is not inconsistent with the 
obligations set forth under those two provisions, China's claim under Article 9.4 of the AD Agreement 
should also be rejected.255  Further, the European Union di sagrees with China's argument that 
Article 9(5) of the Basic AD Regulation results  in the assignment of duties to cooperating non-
sampled suppliers in excess of the weighted average of the margins of dumping of the sampled 
suppliers.256 
                                                      
245 European Union, first written submission, paras. 99- 101. 
246 European Union, first written submission, paras. 103-105. 
247 European Union, first written submission, para. 107. 
248 European Union, first written submission, paras. 108-116. 
249 European Union, first written submission, para. 122. 
250 European Union, first written submission, paras. 158-159. 
251 European Union, first written submission, para. 160. 
252 European Union, first written submission, para. 162. 
253 European Union, first written submission, para. 163. 
254 European Union, first written submission, paras. 166-168. 
255 European Union, first written submission, para. 169. 
256 European Union, first written submission, para. 171.  WT/DS397/R 
 Page 55 
 
 
 (b) Arguments of Third Parties 
(i) Brazil 
7.60 Brazil submits that Article 9(5) of the Basi c AD Regulation is not inconsistent with the 
relevant WTO disciplines.  According to Brazil, the provisions of Article 2 and those of Article 6.10 
of the AD Agreement only apply in investigations d ealing with producers that operate in accordance 
with market economy principles.  Where the authorities determine that market economy principles do not prevail in the country of export, they may use a methodology that does not take into consideration 
the domestic prices in that country.  Brazil finds supp ort for this view in paragraph 15(a)(i) of China's 
Protocol of Accession.  Brazil submits that where the producer shows that it operates independently 
from the State, it should be entitled to an individual margin of dumping as required under 
Article 6.10.  Brazil considers that the panel report in Korea – Certain Paper  lends support to this 
view.  Further, Brazil maintains that where th e test developed by that panel is applied vis-à-vis  
exporters from a non-market economy country, the burden shifts to such exporters to demonstrate that 
they operate independently from the State.  Thus Brazil considers that Article 9(5) of the Basic AD 
Regulation is not inconsistent with  Article 6.10 of the AD Agreement.  Turning to Article 9 of the 
AD Agreement, Brazil submits that there is no  provision in this Article which requires the 
determination of individual anti-dumping duties.  Th e only obligation that Brazil infers from Article 9 
is that the duty should not ex ceed the margin established in acco rdance with Article 2 of the 
AD Agreement.  But this is independent from the methodology applied in the determination of that 
margin.  Brazil therefore concludes that Article 9( 5) of the Basic AD Regulation is not inconsistent 
with the obligations contained in Article 9 of the AD Agreement either.   
(ii) Colombia 
7.61 Colombia submits that the European Union has shown that Article 9(5) of the Basic AD 
Regulation does not fall within the scope of appli cation of Article 6.10 of the AD Agreement because 
it deals with the imposition of anti-dumping duties, and not the calculation of dumping margins.  Further, Colombia contends that the investiga ting authorities are entitled to treat as one entity 
producers that are found to be related to the Stat e and to calculate a single margin of dumping for 
them.  It follows that Article 9(5) of the Basic AD Regulation is not inconsistent with Article 6.10.  
According to Colombia, under Article 9.2 of the AD Agreement, authorities are allowed to impose 
anti-dumping duties either on an individual or nati on-wide basis.  Article 9(5) of the Basic AD 
Regulation explains the conditions under whic h the Commission of the European Union 
("Commission") will apply individual, as opposed to country-wide, duties.  Therefore, it is not 
inconsistent with the obligation set fort h under Article 9.2 of the AD Agreement. 
(iii) India 
7.62 India's understanding of the obligation embodied in  Article 6.10 of the AD Agreement is that 
this provision requires investigating authorities to calculate individual margins of dumping for each 
known exporter or producer.  India presents the view  that sampling is but one exception to this 
principle and seeks clarity from the Panel in this re gard.  India notes the second paragraph of the Note 
Ad Article VI of the GATT 1994 and paragraph 15(a )(i) of China's Protocol of Accession, and argues 
that should the Panel interpret the word "sale" used  in the Protocol of Accession as referring both to 
domestic and export sales, this may confirm the view  that sampling is not the only exception to the 
general rule provided for in the first sentence of Article 6.10. 
(iv) Japan 
7.63 Japan draws a link between paragraph 15(a)(ii)  of China's Protocol of Accession and the 
conditions contained in Article 9(5) of the Basi c AD Regulation to qualify for IT.  According to WT/DS397/R 
Page 56 
 
 
 Japan, if the conditions set forth under Article 9( 5) of the Basic AD Regulation correspond to the 
conditions contained under paragraph 15(a)(ii) of China's Protoc ol of Accession to show that market 
economy conditions prevail in a given industry and if the calculation of a country-wide duty under 
Article 9(5) of the Basic AD Regulation is equiva lent to using a methodology that is not based on a 
strict comparison with domestic prices within the m eaning of paragraph 15(a)(ii) of China's Protocol 
of Accession, the Panel should find that the Europ ean Union did not violate Articles 6.10, 9.2, 9.3 
and 9.4 of the AD Agreement.  Japan invites the Pane l to clarify the relationship between Article 9(5) 
of the Basic AD Regulation and paragraph 15(a)(ii) of  China's Protocol of A ccession.  Further, with 
respect to Article 6.10, Japan agrees with the Eu ropean Union that, as clarified by the panel in 
Korea – Certain Paper , this provision allows authorities to treat related companies as a single 
producer or exporter.  However, in Japan's view , this reasoning relates to the definition of a 
"producer" or "exporter" under Article 6.10 and has no bearing on the relationship between the first 
and second sentences of this provision.  Japan is of the view that sampling is the only exception to the 
general rule set forth in the first sentence of Article 6.10. 
(v) Turkey 
7.64 Turkey notes that the first sentence of Artic le 6.10 of the AD Agreement provides for a 
general rule and that the second sentence introduces an exception to this rule, namely the use of 
sampling.  Turkey, however, does not consider samp ling to be the sole exception to this rule.  
According to Turkey, the AD Agreement contains ru les that apply to anti-dumping investigations 
conducted against companies from market economy countri es.  It is therefore normal that Article 6.10 
does not contain an exception for NMEs.  Turkey argues that in countri es where there is State 
intervention in the economy, such intervention aff ects not only costs and domestic prices but also 
export prices.  As a result, in investigations ca rried out against producers from such countries, the 
investigating authorities are permitted to disregar d the actual export prices in the calculation of 
dumping margins. 
(vi) United States 
7.65 The United States notes that, in principle, Artic le 6.10 requires investigating authorities to 
calculate individual dumping margins for each kno wn exporter or producer.  This requires the 
investigating authorities to identify the producers and e xporters in the first place.  The United States 
submits that in making this determination, the author ities should be allowed to take into consideration 
economic realities and to treat multiple entities as one if the facts demonstrate that the companies are 
sufficiently related.  According to the United St ates, these realities also include the kind of economy 
in which the companies operate.  The United States  maintains that there is ample evidence showing 
significant State intervention in the Chinese economy.   Thus, it becomes more important to analyze 
well the structures and operations of Chinese compan ies in order to determine whether they are 
independent from the State.  The United States consider s that to the extent that Article 9(5) of the 
Basic AD Regulation is designed to examine the re lationship between the producers and the State in 
the exporting country, it would not be inconsistent  with Article 6.10 of the AD Agreement.  The 
United States finds support for its views in the panel decision in Korea – Certain Paper . 
7.66 The United States contends that Article  9 of the AD Agreement does not preclude 
investigating authorities from imposing and applying a singly duty to a group of companies.  Article 9 
refers to the imposition of duties on products, not i ndividual producers or exporters.  Further, the 
United States contends that in order to decide which duty will be applied to which company, the 
investigating authorities have to know whether a gr oup of companies function as a single entity.  If it 
is determined that this is the case, there is nothing in Article 9 that would preclude the authorities 
from treating such companies as a single entity in respect of the imposition and collection of anti-
dumping duties.  WT/DS397/R 
 Page 57 
 
 
 7.67 The United States maintains that Article 9(5) of the Basic AD Regulation does not fall within 
the scope of Article X:3(a) of the GATT 1994 because it does not address the administration of any legal instrument. 
(c) Evaluation by the Panel 
(i) The Scope/Operation of Article 9(5) of the Basic AD Regulation 
7.68 We note that the parties disagree as to the sc ope/operation of Article 9(5) of the Basic AD 
Regulation.  The gist of the disagreement is whether this provision determines whether NME exporters will have individual dumping margins calculated as well as which exporters will have 
individual duty rates applied, or whether it is li mited to determining whic h exporters will have an 
individual duty rate and which ones will be subject ed to a country-wide duty rate.  China's claims 
under Articles 6.10, 9.3 and 9.4 of the AD Agreement are premised on the view that Article 9(5) of the Basic AD Regulation determines whether the Commission will calculate individual or country-
wide dumping margins, in addition to determining whether individua l or country-wide duty rates will 
be applied.  In this regard, we recall that the meaning of the national law of a WTO Member is a 
matter of fact for panels to establish.
257  We note that the European Union has not provided any 
evidence of the meaning of Article 9(5) of the Basic AD Regulation, such as, for instance, an 
interpretation from the EU courts ha ving relevant jurisdiction.  Thus, we consider that it falls upon us 
to clarify the scope/operation of Article 9(5) of the Basic AD Regulation as a factual matter before 
engaging in a substantive analysis of China's claims. 
7.69 The European Union submits that Article 9(5)  of the Basic AD Regulation deals exclusively 
with the imposition of anti-dumping duties, and does not concern the calculation of dumping margins 
at all.  At the beginning of an investigation, NME producers are invited to fill out and submit to the Commission "the MET/IT claim form" in order to demonstrate, inter alia , that they meet the 
conditions set out under Article 9(5) of the Basic AD Regulation for IT.  If these conditions are met, 
the Commission will assign an individual duty rate to that producer.  If the conditions are not met, the 
producer will be subject to a country-wide duty.  Acco rding to the European Union, this is all that 
Article 9(5) of the Basic AD Regulation does.  Other issues, such as the calculation of dumping margins and determination of the levels of th e duties to be imposed, are, according to the 
European Union, governed by other provisions of the Basic AD Regulation, not Article 9(5).  It 
follows from the European Union's argument that Ch ina's claims under Articles 6.10, 9.3 and 9.4 of 
the AD Agreement have to be dismissed because the specific measure at issue is not related to the 
obligations set out in these three provisions. 
7.70 China disagrees.  According to China, the scope of Article 9(5) of the Basic AD Regulation is 
not limited to determining whether the NME producer s will receive individual or country-wide anti-
dumping duties.  Whether the Commission will dete rmine an individual or country-wide dumping 
margin for exporters is also governed by this provision. 
7.71 We recall that Article 9(5) of the Basic AD Re gulation provides that NME producers that fail 
the IT test will be subject to the imposition of a country-wide anti-dumping duty.  NME producers that pass the IT test, on the other hand, will have their own individual duty rates imposed.  We recognize that, on its face, the text of Article 9(5) does not mention dumping margins.  But, looking at 
the operation of this provision as a whole, in the context of an anti-dumping investigation conducted 
by the European Union, we agre e that, as China argues, Article 9(5) not only determines whether a 
                                                     
 
257 See, for instance, Panel Report, United States – Anti-Dumping and Countervailing Measures on 
Steel Plate from India ("US – Steel Plate "), WT/DS206/R and Corr.1, adopted 29 July 2002, DSR 2002:VI, 
2073, para. 7.90;  Appellate Body Report, India – Patents (US), paras. 65-67. WT/DS397/R 
Page 58 
 
 
 particular NME producer will be subjected to an individual or country-wide duty, but necessarily also 
determines whether the Commission will calculate an  individual dumping margin for that producer. 
7.72 As a general matter, it is clear to us that there is a close and necessary link between the 
calculation of a margin of dumping and the imposition of an anti-dumping duty.  Article 2 of the 
AD Agreement sets out the rules that apply to the calculation of dumping margins.  These rules 
generally address the substantive aspects of margin cal culations.  Article 2.1 contains the definition of 
dumping.  Article 2.2 lays down detailed principles for the determination of normal value, including 
for such complex matters as sales below cost and lo w volume of sales that arise in determining normal 
value.  Article 2.3 provides guidance for those situ ations where the export price may be deemed to be 
unreliable, as a result of which the authorities can r esort to constructed export price.  Article 2.4 
stipulates that a fair comparison has to be carried  out between normal value and export price and sets 
out rules for how that comparison is to be undertaken. 
7.73 Article 9 of the AD Agreement, entitled "Imposition and Collection of Anti-Dumping 
Duties," sets out the disciplines governing the impos ition of anti-dumping duties.  Of the specific 
provisions set forth under Article 9, paragraph 3 seems most closely linked to the calculation of 
dumping margins, setting out the principle that an anti-dumping duty cannot exceed the margin of 
dumping established under Article 2 of the AD Agreement.  Article 9.2 stipulates that the authorities should normally name the individual suppliers of  the product concerned in connection with the 
imposition of a duty, but allows the naming of the country if naming individual suppliers would be 
"impracticable".  Article 9.4 explains how, in i nvestigations where the authorities use sampling as 
provided for under Article 6.10 of the AD Agreemen t, maximum duty rates should be calculated for 
producers and exporters not examined as part of the sample.
258 
7.74 It seems to us that, normally, an investiga ting authority would calculate the margin of 
dumping and impose the consequent anti-dumping duty on the same basis.  In other words, it seems 
logical to us that an investigating authority would impose an anti-dumping duty on a producer-
specific basis only if the underlying margins were also calculated on a producer-specific basis.  
Conversely, if the margins have been calculated on a country-wide basis, one would expect the authorities to also impose the duty on a country-wide basis.  The European Union's argument, that the basis on which duties are ultimately to be imposed is not determinative of, and indeed is somehow 
entirely separate from, the basis on which margins are calculated, seems counterintuitive.  In our 
view, it would not make sense for an investigating authority to calculate individual dumping margins 
for producers with respect to which the national legislation requires the imposition of country-wide 
anti-dumping duties.
259  Indeed, in response to questioning in this regard the European Union 
explained: 
"The EU authorities do not calculate individual dumping margins  for non-IT 
suppliers."260  (emphasis added) 
                                                      
258 Thus, the rules in Article 9.4 are, in the context of foreign producers and exporters who are not 
individually examined as a part of the sample in an investigation, the functional equivalent of the rules in 
Article 2 for calculating dumping margins, as they establish the maximum rate of duty that may be applied for 
these companies. 
259 Conversely, if the underlying margins have not been calculated on a producer-specific basis, then 
any anti-dumping duties could only be applied on an "individual basis" in the most nominal sense, as the duty 
applied "individually" to each producer would presumably be the same for all of them. 
260 European Union, answer to Panel question 6(a).  The European Union went on to observe 
"[h]owever, the export prices of non -IT suppliers are generally used to determine the dumping margin for the 
actual supplier, i.e., the State".  European Union, answer to Panel question 6(a).  Thus, it seems clear that the EU 
authorities collect the individual export prices of non-IT suppliers, but simply use them on an average basis to 
determine a country-wide dumping margin.  WT/DS397/R 
 Page 59 
 
 
 7.75 The European Union went on to state that: 
"Non-IT suppliers are considered to be re lated through the State, the actual supplier 
and source of the alleged price discrimination. Thus, the country-wide dumping 
margin  calculation aims at calculating the dumping margin for the actual supplier."261  
(emphasis added) 
Thus, the European Union acknowledges that the application of Article 9(5) of the Basic AD 
Regulation entails the calculation by the EU author ities of a country-wide margin and the consequent 
imposition of a country-wide duty vis-à-vis  non-IT producers.  Nonetheless, the European Union 
asserts that "the calculation of an individual dum ping margin for the State and its related export 
branches ( i.e., non-IT suppliers) or for MET/IT suppliers is not  established by reason of the operation 
of Article 9(5) ... the calculation of the individual dumping margin for the State and the MET/IT suppliers is carried out by reason of the operatio n of Articles 2(7) and 18 of Council Regulation 
No 384/96[.]"
262  We note, however, that the issue before us  is not the mechanics of the calculation of 
dumping margins but rather whether the Commission calculates an individual margin and assigns an 
individual duty to individual Chinese producers.  Nothing in either of the Articles cited by the 
European Union pertains to whether or not an i ndividual margin will be calculated for any foreign 
producer or exporter, and the European Union does no t assert otherwise.  These provisions only relate 
to the mechanics of the calculation of dumping marg ins, and this argument therefore is not pertinent 
to our inquiry.  
7.76 Thus, our understanding of the EU legislation is that whether or not the Commission will 
calculate individual dumping margins and assign individual anti-dumping duties with respect to exporters from NMEs is addressed exclusively in Artic le 9(5) of the Basic AD Regulation.  No other 
provision in the Basic AD Regulation or any other el ement of the EU legislation has been brought to 
our attention which would pr oduce this particular result.
263   
7.77 Based on the foregoing considerations we conc lude that Article 9(5) of the Basic AD 
Regulation concerns not only the imposition of anti-dumping duties but also the calculation of margins of dumping.  More specifically, where this provision requires that a country-wide duty be imposed on NME producers that fail the IT test, it  is undisputed that the Commission calculates only a 
country-wide dumping margin for such producers, and not individual dumping margins.  With respect to producers that pass the IT test, an individual margin is calculated a nd an individual duty is 
imposed.  We therefore consider that , in operation, the result of the IT test in Article 9(5) of the Basic 
AD Regulation determines the nature of the marg in calculation the EU authorities will undertake, 
either individual or country-wide .  Having clarified this factual issue, we now proceed to the 
substantive assessment of China's claims against Article 9(5) of the Basic AD Regulation. 
(ii) Substantive Analysis 
7.78 China maintains that Article 9(5) of the Basi c AD Regulation violates Articles 6.10, 9.2, 9.3 
and 9.4 of the AD Agreement since it requires th at NME producers from China be subject to a 
country-wide margin of dumping and a country-w ide anti-dumping duty unless they can demonstrate 
that they meet all of the conditions for IT set out in that provision. 
                                                     
 
261 European Union, answer to Panel question 6(b). 
262 European Union, answer to Panel question 82. 
263 It seems to us, for instance, th at should the Commission be challenged in the relevant EU court for 
failing to grant individual treatment to such exporters in a particular case, it would have to rely on Article 9(5) 
of the Basic AD Regulation in defending its action. WT/DS397/R 
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 7.79 We recall that, under the Basic AD Regulation, in an anti-dumping investigation involving a 
non-market economy, the NME producers are first subj ect to the market economy test, to determine 
whether the Commission will base the determination of normal value for them on a consideration of 
the domestic prices of these producers.  If a producer  passes this test, its normal value will be based 
on that producer's domestic prices and  the export prices that will be compared to that normal value 
will be based on that exporter's own export prices – it is treated exactly as if it were a producer from a market economy country.  If a producer fails the M ET, the domestic prices of that producer are not 
taken into consideration in the dete rmination of its normal value, wh ich is determined on an alternate 
basis. 
7.80 That producer is next subject to the IT test, which determines whether an individual margin 
will be calculated and an individual duty will be im posed with respect to that producer or whether a 
country-wide margin will be calculated, and the prod ucer will be subject to a country-wide duty.  The 
IT test only applies to producers who fail the MET.   As we have concl uded above, pursuant to 
Article 9(5) of the Basic AD Regulation, that a c ountry-wide duty will be imposed with respect to 
producers that fail the IT test en tails that the Commission will calc ulate a country-wide margin for 
such producers.  As described in para. 7.50(b)(ii) ab ove, the determination of the export price used to 
calculate that country-wide margin will depend on th e level of cooperation on the part of the non-IT 
exporters altogether.  If the leve l of cooperation is high, i.e. if  the cooperating non-IT exporters 
account for close to 100 percent of all exports, the ex port price will be based on a weighted average of 
the actual price of all export transactions effected by these exporters.  If, however, the level of 
cooperation is low, i.e. if the non-IT exporters account for significantly less than 100 percent of all 
exports, the Commission will resort to facts available to complete the missing information.  The 
selection of the facts available will depend on the gravity of non-cooperation and may include 
statistical import data. 
7.81 Thus, as a technical matter, the Commission calculates one single dumping margin for NME 
producers that fail the IT test.  The Commission then imposes a single "country-wide" duty rate for 
those producers, which may be less than that margin  if the EU authorities determine that a lesser duty 
would suffice.  For NME producers that pass th e IT test, the Commission will compare the same 
normal value, but with these producers' own export prices.  Thus, as a technical matter, the Commission calculates individual margins for NME pr oducers that pass the IT test and individual 
duties are imposed, which may be less than the i ndividual margins calculated if the EU authorities 
determine that a lesser duty would suffice.   
7.82 China's claims under Articles 6.10, 9.2, 9.3 an d 9.4 of the AD Agreement, therefore, only 
concern the export price aspect of dumping determin ations for NME producers.  China contends that 
disregarding the export price of non-IT producers and instead taking into consideration the weighted average export price of a group of Chinese producers as the single export price, and calculating a 
country-wide dumping margin and a country-wide duty le vel on that basis, is inconsistent with the 
cited provisions of the AD Agreement.   
7.83 China's arguments under all four provisions of the AD Agreement at issue are premised on the 
view that the AD Agreement requires individual tr eatment for producers subject to an investigation 
with respect to the dumping determination.  China contends that this individual treatment obligation 
requires the investigating authorities, as a rule, to  take into consideration a producer's own export 
prices in the calculation of that producer's individual dumping margin, and to base the duty rate for 
that producer on that individual margin.
264  China acknowledges that Articles 6.10 and 9.2 provide for 
exceptions to the individual treatment principle, but maintains that where these exceptions do not 
apply, the investigating authorities have to provide individual treatment to foreign producers. 
                                                      
264 Or, of course, a lesser duty may be imposed.  Since this may occur regardless of the basis on which 
the dumping margin is calculated, and is not at issue in this case, we do not address this circumstance.  WT/DS397/R 
 Page 61 
 
 
 7.84 Given that the gist of China's claim pertains to  the fact that Chinese producers that fail the IT 
test are not accorded individual margins and individu al duties by the European Union, we consider it 
appropriate to start our assessment with the provision of the AD Agreement that is the most directly related to the issue of individual treatment and move on, to the extent necessary, to the other 
provisions raised by China.  In our view, the provisi on that is most directly relevant to China's claim 
is Article 6.10 of the AD Agreement.  Ar ticle 6.10 provides, in pertinent part: 
"6.10  The authorities shall, as a rule, determine an individual margin of dumping 
for each known exporter or producer concerne d of the product under investigation.  In 
cases where the number of exporters, producers, importers or types of products 
involved is so large as to make such a determination impracticable, the authorities 
may limit their examination either to a reasonable number of interested parties or products by using samples which are statis tically valid on the basis of information 
available to the authorities at the time of the selection, or to the largest percentage of 
the volume of the exports from the country  in question which can reasonably be 
investigated. ... 
6.10.2 In cases where the authorities have limited their examination, 
as provided for in this paragraph, they shall nevertheless determine 
an individual margin of dumping for any exporter or producer not initially selected who submits the necessary information in time for 
that information to be considered during the course of the 
investigation, except where the number of exporters or producers is 
so large that individual examina tions would be unduly burdensome to 
the authorities and prevent the timely completion of the investigation.  Voluntary responses shall not be discouraged." 
7.85 Article 6.10 clearly concerns individual treatme nt of producers and exporters subject to anti-
dumping investigations, setting out the principle that the investigating authorities shall, "as a rule", 
"determine", i.e., calculate, an individual dumping margin for "each known producer or exporter ... of 
the product under investigation".  It also provid es that where the number of producers, exporters, 
importers or product types is "so la rge" as to make it impracticable  to calculate individual margins, 
the investigating authorities may limit their examination either to a reasonable number of interested parties or products by using samples which are statis tically valid, or to the largest percentage of the 
volume of exports from the exporting country in ques tion.  The "limited examination" provided for in 
this Article is generally referred to  as "sampling", even where a statistically valid sample is not used, 
but the second alternative for limiting examination is used.
265   
7.86 With respect to China's clai m under Article 6.10 of the AD Agreement, the disagreement 
between the parties centres on whether sampling is  the only exception to the general obligation to 
calculate individual margins for each known producer or  exporter set out in the first sentence.  China 
argues that Article 6.10 requires investigating authorities to calculate an individual dumping margin for each known exporter or producer except where, as stated in the second sentence of this provision, 
the authorities resort to sampling because of the la rge number of exporters, producers, importers or 
product types.  Although the European Union argues that Article 6.10 does not apply here, we have 
rejected that view, concluding above that Article 9(5) of the Basic AD Regulation does in fact address 
the calculation of margins.
266  The European Union also objects to China's substantive arguments.  
                                                      
265 Article 6.10 also contains provisions regarding th e selection of the foreign producers/exporters to be 
included in a sample, and the right of producers not included in the sample selected to have an individual margin 
calculated for them nonetheless, unless to do so would be  unduly burdensome for the investigating authorities.  
These provisions are not at issue in this dispute. 
266 See paragraphs 7.68-7.77. WT/DS397/R 
Page 62 
 
 
 The European Union does not disagree that the prin ciple laid down under Article 6.10 is that an 
individual margin be calculated for each known pr oducer.  It considers that Article 6.10, first 
sentence, contains the expression of a preference , as a general rule, not a st rict obligation which must 
be complied with in each and every case.  However,  it argues that sampling is not the only exception 
to this preference.267  Specifically, the European Union main tains that in non-market economies, the 
State may be found to be the source of dumping.  In such cases, the investigating authorities can, in effect, treat the State as a "producer", calculate a si ngle margin of dumping and duty rate for the State, 
and assign that country-wide duty to producers that cannot demonstrate that they are independent 
from the State. 
7.87 China's argument raises two issues:  (1) wh ether sampling as described in the second sentence 
of Article 6.10 constitutes the only exception to the principle laid down in the first sentence, and 
(2) whether a State may be seen as a producer a nd a single margin may be established and a duty 
imposed on exports from that State unless individua l exporters can demonstrate their independence 
from the State according to a set of criteria estab lished by the importing Member conducting an anti-
dumping investigation. 
7.88 We note that the first sentence of Article 6.10 provides that the investigating authorities must, 
"as a rule", calculate an individual dumping ma rgin for each known exporter or producer of the 
product under investigation.  The second senten ce states that where the number of exporters, 
producers, importers or types of product involved is  so large as to make an individual determination 
impracticable, the authorities may base their determina tions on an examination of a statistically valid 
sample or the largest percentage of the volume of  the exports from the country at issue which can 
reasonably be investigated.  In light of the text and its structure, it is clear to us that the second 
sentence of Article 6.10 introduces an exception to the principle laid out in the first sentence.  The 
question that the European Union raises, however, is  whether sampling is the sole exception to the 
principle of individual dumping determinati ons, or whether there may be other exceptions. 
7.89 With respect to the relationship between the fi rst and the second sentences of Article 6.10, the 
European Union argues: 
"The second sentence
 of 6.10 on sampling is not an exception to this general rule. 
Rather, the second sentence is si mply an affirmative statement  relating to (i) the 
conditions for sampling and (ii) the compositi on of the sample. There is no direct link 
between the general principle of the first sentence and the possibility of sampling in 
the second sentence. These two sentences ar e simply two affirmative statements  of 
what an investigating authority ought to do in general (individual margin determination), and what it is  allowed to do (sampling)."
268 
According to the European Union, there may be a dditional situations, other than sampling, which may 
justify not calculating an individual margin for a produ cer.  In this regard, the European Union refers 
to the fact that a new exporter which is related to  an exporter of a product subject to an anti-dumping 
duty is not entitled to request the calculation of an individual margin;  that individual producers that 
are related to one another are not entitled to in dividual margins under Article 6.10;  that the 
investigating authorities may calculate different marg ins for a producer and an exporter that sells the 
products of that producer;  that the authoriti es may base their margin determinations for a non-
cooperating producer on facts available; that no marg in would be calculated for an exporter which is a 
"mere trader" in the subject product;  that the auth orities may be unable to gather information with 
                                                      
267 European Union, second written submission, para. 38. 
268 European Union, answer to Panel question 7.  WT/DS397/R 
 Page 63 
 
 
 respect to some producers;  and that a margin may sometimes be determined on the basis of a 
constructed normal value and/ or constructed export price.269 
 7.90 We are not convinced by the European Union' s arguments.  The wording of Article 6.10, 
particularly the fact that the ex ception is stated immediately after the rule, seems to suggest that 
sampling is the sole exception to the rule of indi vidual margins.  Moreover, the examples that the 
European Union gives as potential other exceptions to the rule in the first sentence of Article 6.10 are 
directly based on other provisions of the AD Agreemen t, and as such, we are of the view that they 
cannot be considered even potentially as "excepti ons" to the obligation to calculate individual 
dumping margins.  Rather, they are specific right s and obligations otherwise provided for in the 
AD Agreement.  For instance, Article 9.5 provides th at new exporters of a product subject to an anti-
dumping duty are entitled to an expedited review to  determine an individual dumping margin for 
them, except for new exporters that are related to  an exporter that was subject to the underlying 
investigation and for which a duty has thus already b een imposed.  Since this situation is specifically 
provided for, we see no reason why the non-calculation of an individual margin in this context should 
be considered as a possible exception to the first senten ce of Article 6.10.  Similarly, the fact that the 
investigating authorities may calculate different marg ins for a producer and an exporter that sells the 
products of that producer cannot be interpreted as being an additional exception to the first sentence 
of Article 6.10.  Rather, that situation seems to f it the general rule, that an individual margin of 
dumping is calculated for each foreign producer and e xporter of the product.  Similarly, the fact that 
dumping determinations may be based on facts ava ilable under Article 6.8 would seem irrelevant to 
the question before us – in such case s, it is the failure of an indivi dual foreign producer or exporter to 
provide information that justifies the use of fact s available, and the margin applied to that non-
cooperating party is "individual" in that sense, regardless of how it may be calculated.  It goes without 
saying that if the investigating authorities are not awar e of a particular producer, an individual margin 
cannot be calculated for it.
270  Indeed, the first sentence of Article 6.10 only requires the 
determination, as a rule, of an individual margin  of dumping for "known" producers or exporters, so 
questions about the scope of any "exceptions" to th at rule for unknown exporters simply do not arise.  
Finally, the use of constructed normal value and/ or export price are situations governed by the 
relevant provisions of Article 2 and there is thus no reason to rely on an exception to the obligation set 
forth in the first sentence of Article 6.10 to justify their use. 
7.91 The remaining argument put forward by the European Union in this regard, i.e., that where 
several producers are related, the investigating aut horities do not have to calculate individual margins 
for such producers, requires further consideration.  The European Union submits that Article 9(5) of 
the Basic AD Regulation, through the IT test, allows the Commission to ascertain whether several 
producers are related to the State and therefore wh ether that group of suppliers, namely the State, 
should be subjected to a single margin calculation and a single duty rate.  The way the 
European Union sees it, the relationship between non-IT suppliers and the State is similar to the relationship that the panel in Korea – Certain Paper  found between several legally distinct entities 
producing the product, but for which the Korean investigating authorities had calculated a single 
margin, treating them as a single producer.  In  this regard, the European Union posits: 
"Thus, like in Korea – Certain Paper , the reasoning behind these criteria is to identify 
the actual source of price discrimination
, the single supplier of the product concerned. 
Only by doing so, the anti-dumping duty imposed will address the actual source of 
price discrimination effectively."271  (underline emphasis added) 
                                                      
269 European Union, answer to Panel question 7. 
270 Imports from producers not known to the investiga ting authority will generally be subject to an "all-
others" duty rate, subject to possible review under Article 9.5. 
271 European Union, answer to Panel question 10. WT/DS397/R 
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 7.92 We recall that in the anti-dumping investigation at issue in Korea – Certain Paper , the 
Korean investigating authorities had treated thr ee separate legal entities exporting the product under 
consideration as a single exporter, and calculated a single margin of dumping and imposed a single 
anti-dumping duty rate on them.  The issue in that case was whether Article 6.10 allowed 
investigating authorities to treat separate legal en tities as a single exporter, calculate a single margin 
of dumping, and impose a single anti-dumping duty rate on them.  The panel recalled that the 
AD Agreement did not address anywhere whether each  separate legal entity had to be treated as an 
individual producer or exporter in the context of an  anti-dumping investigation.  Based on an analysis 
of the text of Article 6.10 in light of its contex t, particularly Articles 9.5, 2.3 and 2.1 of the 
AD Agreement, the panel concluded that Article 6.10 did not preclude investigating authorities from 
treating multiple legal entities as a single producer or exporter for purposes of an anti-dumping investigation.  The panel, however, underlined that  in order to do so, "[the investigating authorities 
have] to determine that these companies are in  a relationship close enough to support that 
treatment".
272  The panel then concluded that "Article 6.10, read in its context, and in particular with 
Article 9.5, could permissibly be interpreted to a llow such treatment in other circumstances where the 
structural and commercial relationship between the co mpanies in question is sufficiently close to be 
considered as a single exporter or producer".273 
7.93 We note that the reasoning of the panel in Korea – Certain Paper was based on the structural 
and commercial relationship between separate le gal entities producing the e xported product, and was 
focussed on determining whether, despite the form of distinct entities, they were in fact appropriately 
treated as a single producer or expo rter for purposes of the first senten ce of Article 6.10.  In our view, 
the operation of Article 9(5) of the Basic AD Regulat ion is fundamentally different.  The criteria laid 
down in Article 9(5) of the Basic AD Regula tion do not go to the structural and commercial 
relationships between distinct legal entities.  We recall that the relevant criteria in Article 9(5) of the 
Basic AD Regulation are, inter alia :  whether producers are allowed to repatriate capital and profits;  
whether export prices and quantities are freely determin ed;  the involvement of the State in ownership 
of companies;  and whether exchange rate convers ions are carried out at market rates.  These 
conditions relate to the role of the State in the way business is conducted in a given country, as 
opposed to the criteria considered by the panel in Korea – Certain Paper , which relate to the 
commercial relationship between nominally distinct  companies.  The European Union's approach 
essentially presumes that the State should be cons idered as a "parent company" for potentially 
thousands of distinct legal entities producing and ex porting a product under inv estigation, and only if 
these entities can demonstrate their independence w ill they receive an individual dumping margin 
calculation.  We do not consider this to be a plau sible application of the reasoning of the panel in 
Korea – Certain Paper . 
7.94 Having said that, we do not by any means exclude the possibility that in a given investigation 
the investigating authorities might determine that one or more nominally distinct producer(s) or 
exporter(s) is/are, in fact, sufficiently related to the State to justify concluding that they are a single 
producer or exporter.  In such a situation, the authorities could well treat the producer(s)/exporter(s) 
and the State as a single exporter, calculate a single dumping margin for, and assign a single duty to, that single exporter.  As we have noted above, how ever, the criteria in Article 9(5) of the Basic AD 
Regulation do not in our view serve the purpose of fi nding this type of relationship between the State 
and individual exporters.  Rather, Ar ticle 9(5) of the Basic AD Regulation presumes that this type of 
relationship exists, and requires the fulfilment of all the specified criteria by each individual exporter 
seeking individual treatment in order to avoi d the consequences of this presumption.   
                                                     
 
272 Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from Indonesia ("Korea – 
Certain Paper "), WT/DS312/R, adopted 28 November 2005, DSR 2005:XXII, 10637, para. 7.161. 
273 Panel Report, Korea – Certain Paper , para. 7.162.  WT/DS397/R 
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 7.95 Thus, there is an important difference be tween the test applied by the panel in Korea – 
Certain Paper  and the one applied under Article 9(5) of the Basic AD Regulation with respect to the 
burden of proof.  Under the test applied by the panel in Korea – Certain Paper , the investigating 
authorities have to show that there is a suffici ently close structural and commercial relationship 
between individual producers to justify treating them as a single entity.  If this cannot be 
demonstrated, the authorities, pursuant to the first sentence of Article 6.10, must treat each legal entity 
as a separate producer/exporter, and calculate individual dumping margins for each of them.  An investigating authority applying this test starts fro m the premise that each exporter or foreign producer 
will be considered separately.  Should it appear that  this is not the case in a particular investigation, 
the investigating authority must obtain evidence on the basis of which it can affirmatively conclude 
that two or more of these nominally distinct en tities are appropriately treated as a single exporter or 
producer.  Under Article 9(5) of the Basic AD Regulation, however, the starting point is the 
presumption that NME producers are related to the State, as a result of which nominally distinct producers will not be considered separately in an y investigation.  In every case involving NME 
producers, the burden is on each such producer seeki ng individual treatment to provide evidence with 
respect to the Article 9(5) criteria sufficient to overcome the presumption to the satisfaction of the 
Commission.  The difference in the starting points of the two tests, and the different evidentiary 
burdens involved, in our view, show how different these two tests are.   
7.96 In this regard, the Europ ean Union maintains that: 
"In the context of market economy countries, the close relationship between the 
separate legal entities has to be examined on a case by case basis. In contrast, in non-
market economy countries, since the role of  the State is different than in market 
economy countries, the presumption of State control is the general rule."
274  (footnote 
omitted) 
We are not convinced by this argument and the Euro pean Union has not pointed to any legal basis that 
would support it.275  In our view, applying such a presumption to NME producers would seriously 
undermine the logic of Article 6.10 which requires th at individual margins be calculated for each 
known producer unless the conditions set forth in its  second sentence apply and sampling can be used. 
 7.97 In addition, we note that China has submitte d undisputed evidence that the Commission does, 
in fact, apply a test such as was applied by the investigating authority in Korea – Certain Paper  in the 
context of investigations involving both market and non-market economy countries, in order to 
determine whether nominally distinct companies sh ould be treated as a single exporter or producer.  
The examples submitted by China show that the Commission applies the IT test in addition
 to this test 
– that is, the Commission first determines which, if any, groups of companies should be considered as 
a single producer or exporter, and then applies the IT  test to each "single" producer or exporter it finds 
on the basis of that test.276  This clearly shows that the Commission itself distinguishes the test aimed 
at determining whether separate legal entities s hould be treated as a single producer/exporter for 
purposes of dumping determinations, from the IT test  under Article 9(5) of the Basic AD Regulation 
which determines whether individual margins should be calculated and individual duties assigned to 
NME producers. 
                                                      
274 European Union, answer to Panel question 84. 
275 We note that, while the European Union and certain other WTO Members treat China as a non-
market economy in the context of anti-dumping investigations, there are a number of other WTO Members that do not.   
276 China, answer to Panel question 3. WT/DS397/R 
Page 66 
 
 
 7.98 Based on the foregoing, we find that Article 9(5)  of the Basic AD Regulation is inconsistent 
with Article 6.10 of the AD Agreement in that it conditions the calculation of individual margins for 
producers from NMEs on the fulfilment of the IT test. 
7.99 Having resolved China's claim under Article 6.10, we note that Article 9.2 of the 
AD Agreement also concerns individual treatment , albeit with respect to duty imposition, and 
therefore turn next to China's claim under this provisi on.  China asserts that Article 9(5) of the Basic 
AD Regulation is inconsistent with Article 9.2 of the AD Agreement because it subjects non-IT 
producers to a country-wide duty rate.  According to China, Article 9.2 lays down the general 
principle that anti-dumping duties have to be imposed on an individual basis, as this is the only way to 
ensure that the amount of the duty imposed is "appr opriate" as required under Article 9.2.  The use of 
"amounts" in the plural also supports the view that duties have to be imposed individually, that is, for 
each producer.  In this regard, China considers there to be a parallel between Articles 6.10 and 9.2:  
since margins have to be calculated on an individual basis, duties should also be imposed on that basis.   
7.100  The European Union submits that the Panel s hould reject China's claim under Article 9.2, 
asserting that Article 9(5) of the Basic AD Regulati on does not fall within the scope of the obligation 
set forth in that provision, because China's claim under Article 9.2 is premised on the incorrect 
assumption that the AD Agreement takes a company-sp ecific approach with respect to the imposition 
of anti-dumping duties.  This premise being false, the European Union contends that the Panel need 
not assess the substantive arguments raised by China in this regard.  Should the Panel reject the 
European Union's objection in this regard, the Eu ropean Union maintains that Article 9.2 of the 
AD Agreement does not require a company-specific approach to the imposition of anti-dumping duties.  Assuming that there is such a general requirement, the European Union maintains that 
Article 9.2 does nonetheless allow th e imposition of country-wide duties.  In this regard, the European 
Union's arguments focus on the word "impracticable" in Article 9.2.  The European Union maintains 
that "impracticable" in the context of Article 9. 2 entails that Members are allowed to impose anti-
dumping duties on a country-wide basis in cases where the specification of individual anti-dumping duties per supplier would be ineffectiv e.  This would be the case, in particular, when the imposition of 
individual anti-dumping duties per exporter would rende r those duties ineffective, not feasible or not 
suited for being used for a particular purpose, i. e., offsetting or preventing dumping from the actual 
supplier, the State.
277 
7.101  China disagrees with this interpretation and subm its that "impracticable" in the context of 
Article 9.2 refers to situations where it is not possible, as a practical matter, to impose individual 
duties with respect to every producer.  Although im practicability would normally occur as a result of 
there being many individual producers subject to th e duty, China does not excl ude the possibility that 
impracticability may also stem from factor s other than the number of producers. 
7.102  With respect to the preliminary objection raised  by the European Union to the effect that 
Article 9(5) of the Basic AD Regulation does not fall  within the scope of the obligation contained in 
Article 9.2 of the AD Agreement, we note that China ar gues that Article 9.2 requires, in principle, that 
anti-dumping duties be imposed on an individual basis.   In other words, what the European Union 
suggests is a preliminary issue is in fact the main  substantive argument that China raises in connection 
with its claim under Article 9.2 of the AD Agreement.   We therefore reject this preliminary objection 
and proceed to address the substance of China's claim. 
                                                      
277 European Union, first written submission, para. 119;  European Union, opening oral statement at the 
second meeting, para. 15.  WT/DS397/R 
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 7.103  Article 9.2 reads: 
"When an anti-dumping duty is imposed in r espect of any product, such anti-dumping 
duty shall be collected in the appropriate amounts in each case, on a non-discriminatory basis on imports of such product from all sources found to be 
dumped and causing injury, except as to imports from those sources from which price 
undertakings under the terms of this Agreem ent have been accepted.  The authorities 
shall name the supplier or suppliers
 of the product concerned.  If, however, several 
suppliers  from the same country are involved, and  it is impracticable to name all these 
suppliers , the authorities may  name the supplying country concerned."  (emphasis 
added) 
Thus, Article 9.2 starts out by outlining the basi c parameters with respect to the imposition of anti-
dumping duties.  The first sentence states that duti es should be collected in appropriate amounts and 
on a non-discriminatory basis from all sources found to be dumping and causing injury except with respect to imports from sources for which a price unde rtaking has been accepted.  We consider that 
the word "sources" contained in the first sentence of  Article 9.2 refers to pr oducers and exporters of 
the product subject to the anti-dumping investigation.
278  We note that the term "sources" is used twice 
in this sentence, first referring to sources f ound to be dumping and then referring to sources from 
which price undertakings have been accepted.  Unde r Article 8 of the AD Agreement, undertakings to 
revise prices or cease exports at dumped prices can be accepted only from individual exporters, 
following at least a preliminary determination of dumping.279  It is therefore clear to us that the use of 
the phrase "sources from which price undertakings have b een accepted" is a reference to exporters or 
foreign producers who export the product subject to the anti-dumping investigation.280  This, in our 
view, also informs the interpretation of the first reference to "sources" and we consider that both 
references to "sources" under the first sentence of Ar ticle 9.2 are references to exporters or foreign 
producers who export the product subject to the an ti-dumping investigation.  Moreover, we have 
concluded above that dumping, in the sense of the calculation of a margin of dumping, is as a rule 
determined for individual foreign producers or expor ters of the product subject to the anti-dumping 
investigation.  7.104  We note that the second and third sentences of Article 9.2 are more directly relevant to 
China's claim.  The second sentence lays down th e principle that the authorities should name the 
individual suppliers with respect to the imposition of  the duties.  Similar to our understanding of the 
word "sources" in the first sentence of this provision, we consider that the "suppliers" referred to in 
the second and third sentences are the individual forei gn producers or exporters of the product subject 
to the anti-dumping investigation.
281  The third sentence introduces an exception to this rule, 
                                                      
278 In this regard, we note the European Union's argum ent that "sources" can be interpreted as referring 
to the State where it is the State that is the source of the actual price disc rimination.  European Union, second 
written submission, para. 54.  We would agree that the te rm "sources" may refer to the State in a case where it is 
demonstrated, in the particular investigation, that the St ate is the actual producer or exporter of the product in 
question.  However, as discussed elsewhere in our findings, we disagree that the State can be presumed  to be the 
source of price discrimination in a non-market economy.   
279 This is in contrast to the parallel provision of the SCM Agreement, Article 18, which specifically 
provides for the acceptance of undertakings from the go vernment of the exporting Me mber to eliminate or limit 
the subsidy, or take other measures concerning its effects.   In our view, this differ ence reflects the fact that 
subsidization is a matter of government action, while dump ing is, in general, a consequence of pricing decisions 
by commercial enterprises. 
280 We recognize that Article 8 refers only to "exporte rs".  However, in our view, this reference clearly 
includes those foreign producers who export the product subject to the anti-dumping investigation, as there 
would be no reason to consider undertakings from producers who do not export. 
281 In this regard, we note the European Union's ar gument that the use of the terms "suppliers" and 
"sources" in Article 9.2 "indicates that anti-dumping meas ures aim at identifying the supplier which is the actual WT/DS397/R 
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 providing that where naming individual suppliers w ould be impracticable, the authorities may name 
the supplying country.  In our view, this sentence suggests that in investigations involving multiple 
producers, the authorities may find it impracticable to name all the producers individually with respect 
to the imposition of the duties and, instead, may consider it appropriate to name the supplying 
country.  The grounds on which the authorities would made such a finding, however, are not readily 
apparent from the text.  In other words, what is meant by "impracticable" is not explicit, and each 
party assigns a different meaning to this word in the context of Article 9.2. 
7.105  China argues that there is a parallel in this re gard between Articles 6. 10 and 9.2 which would 
mean that "impracticable" under Article 9.2 refers  to investigations where, because of the large 
number of producers, it would be difficult to manage the implementation of the measure if each 
supplier is named individually.  According to the European Union, however, under Article 9.2, it 
would be impracticable to assign individual rates to individual producers if that would undermine the 
effectiveness of the measure.  This would be the case, it argues, where the source of the price discrimination is the State, not the individual produ cers.  In such situations, the duty would only be 
effective if it targets the real source of the problem, i.e., the State, which, according to the 
European Union, is what Article 9(5) of th e Basic AD Regulation is intended to do.  The 
European Union argues that, through the IT test, Article 9(5) aims at identifying circumstances in 
which the State is the source of the price discriminat ion and provides that in such situations the duty 
should be imposed with respect to the State, not the individual producers that are related to the State. 
7.106  We are not convinced by the European Union's argument that Article 9(5) of the Basic AD 
Regulation aims at finding the source of price discrimination.  By "price discrimination", we 
understand the European Union to refer to differe ntiation between the normal value and the export 
price of a product.  Since normal value for a NME producer is not based on the producer/exporter's own prices, and thus is not within its control, th is leaves us to understand that the European Union's 
argument is that Article 9(5) of the Basic AD Regul ation identifies situations where the export prices 
of a product are set by the State, rather than by  the producer itself.  However, while one of the 
relevant criteria, whether export prices are freely dete rmined, seems relevant in this regard, it is only 
one of the criteria in Article 9(5) of the Basic AD Regulation, and we recall that for a NME producer 
to be accorded an individual margin, it must satisfy  all of the criteria.  Thus, even if a given NME 
producer is able to freely determine its export pric es, which would suggest that the State is not the 
source of the price discrimination, it will fail the IT test if it fails to satisfy some of the other criteria, 
such as the repatriation of capital and profits, the determination of export prices and quantities, and 
conditions and terms of sale.  In such a circumstan ce, it is difficult to see how it can be concluded that 
the "source" of the price discrimination is the State. 
7.107  Turning to Article 9.2, we note that the third sen tence of this provision consists of two parts.  
The first part contains two conditions:  that there be several suppliers from the same country and that 
it be impracticable to name all these suppliers in  connection with the imposition of the duty.  The 
second part establishes the outcome where these tw o conditions are met – that the authorities can 
name the supplying country concerned when impos ing an anti-dumping duty.  Thus, this sentence 
may be interpreted as meaning that where two c onditions are met, the investigating authorities may 
deviate from the rule embodied in the preceding sentence of Article 9.2 and may name the supplying country with respect to the duty being imposed.  The first condition refers to the existence of several 
suppliers.  Several means, inter alia , "more than two but not many".
282  Thus, we consider that this 
                                                                                                                                                                     
source of the price discrimination,  regardless of the fact that, strictu sensu , there may be several separate legal 
entities or "exporters" shipping the product concerned to other countries".  European Union, first written 
submission, para. 148.  The European Union, however, has not substantiated this argument.  We understand this 
statement to mean that "suppliers" refers to something other than exporters and, as  mentioned above, disagree 
with it.  See paragraph.7.104. 
282 The New Shorter Oxford English Dictionary, Clarendon Press, 1993.  WT/DS397/R 
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 refers to investigations where more than two pr oducers are to be subject to anti-dumping duty.  
"Impracticable" means, inter alia , "not practicable;  unable to be carried out or done;  impossible in 
practice".283  Seen in light of the first condition in the first part of this sentence, in our view, 
"impracticable" refers to it being difficult or im possible to name all producers individually with 
respect to the imposition of an anti-dumping duty.  More over, we recall that this sentence states that if 
"several suppliers from the same country are in volved, and it is impracticable to name all these  
suppliers, the authorities may name the supplying c ountry concerned".  (emphasis added)  It seems 
clear to us that "these suppliers" refers back to the immediately preceding identification of "several 
suppliers from the same country".  Thus, unless th e authorities consider that because of the large 
number of producers involved it would be impracticable to name them individually, we conclude that 
the rule set forth in the second sentence of Artic le 9.2 would apply and the authorities would be 
required to name each producer individually, which in our view entails the imposition of an individual 
anti-dumping duty.  When the third sentence of Article 9.2 is read in its totality, the European Union's 
argument that "impracticable" refers to situati ons where individual treatment would undermine the 
effectiveness of the measure becomes untenable.284 
7.108  Our interpretation finds support when Article 9.2 is  read in light of Article 6.10 as context.  
We note that there is an important similarity betw een Articles 9.2 and 6.10.  Article 6.10 requires that 
an individual margin be calculated with respect  to each known producer or exporter and Article 9.2 
requires that each supplier be named individually with respect to the imposition of an anti-dumping duty.  Although one concerns margin calculations and the other duty imposition, we consider that 
these two provisions relate to the same general oblig ation, namely the obliga tion to provide individual 
treatment to producers in the context of anti-dum ping proceedings.  Thus, Article 6.10 represents 
relevant context for the interpretation of Article 9.2. 
7.109  We note that, compared with Article 9.2, Artic le 6.10 contains more detailed provisions with 
respect to individual treatment.  As we have explai ned above, Article 6.10 provides that, in principle, 
the authorities should calculate an individual ma rgin for each known exporter or producer.  The 
second sentence of Article 6.10 provides fo r an exception where the number of, inter alia , exporters 
or producers is so large as to make such individual  calculations impracticable, allowing authorities to 
limit their examination either by using a statistic ally valid sample or by examining the largest 
percentage of the volume of dumped imports that can  reasonably be investigated.  This sentence links 
the word "impracticable" to the large number of producers or exporters.  That is, under Article 6.10 
what makes individual dumping calculations impracti cable is set out in the provision itself – a large 
number of producers or exporters.  Unlike Article 6.10, Article 9.2 does not contain such clear 
guidance as to what is meant by "impracticable" with  respect to the naming of supplier(s).  However, 
given the, to us, clear similarity between th e functions of Articles 6.10 and 9.3, we think 
"impracticable" under Article 9.2 shoul d be interpreted consistently with the meaning of this word as 
used in Article 6.10.  This supports our view that impracticability under Article 9.2 refers to situations 
where, because of the large number of suppliers, th at is, producers or exporters, it would be difficult 
to assign a duty to each of them individually, in which case the authorities are permitted to name the 
supplying country, that is, assign a country-wide duty.   
7.110  We recognize that there is a difference between the texts of Articles 6.10 and 9.2:  
Article 6.10 refers to "exporters or producers" whereas Article 9.2 refers to "suppliers".  In this regard, 
we recall that Article 9.2 has remained unchanged si nce it was agreed as Article 8(b) of the Kennedy 
Round Anti-Dumping Code in 1967, while Article 6. 10 was negotiated in the Uruguay Round.  Thus, 
we see Article 6.10 as a further elaboration of the not ion of individual treatment originally contained 
                                                     
 
283 The New Shorter Oxford English Dictionary, Clarendon Press, 1993. 
284 We note in this regard that we consider the European Union's reliance on a draft revision of the New 
Shorter Oxford Dictionary, dated December 2009, in arguing that impracticable should be understood to mean 
ineffective, to be entirely unpersuasive. WT/DS397/R 
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 in what is now Article 9.2 of the AD Agreement.  For this reason, in addition to those set out above285, 
we consider that the term "supplier" under Article 9. 2 is equivalent to "expor ter" or "producer" under 
Article 6.10. 
7.111  Finally, we note that, the application of cust omary rules of interpretation to the text of 
Article 9.2 does not result in any ambiguity, and thus does not require resort to supplementary means 
of interpretation.286  We will nonetheless briefly address the European Union's arguments in that 
regard.  The European Union notes that the Kennedy Round Anti-Dumping Code287 incorporated the 
interpretative note to Article VI of the GATT 1947 by specifying (as does Article 2.7 of the AD Agreement) that the provisions on the determinat ion of dumping were "without prejudice to" the 
interpretive note.
288  The European Union asserts that other pr ovisions were also introduced to address 
the lack of independency of operators from the State in  international trade, referring in this regard to, 
inter alia , Article 8 of the Kennedy Round Anti-Dumping Code, which introduced the possibility to 
name the supplying country concerned when it was impracticable to name all the suppliers289 and 
which is currently reflected in almost identical te rms in Article 9.2 of the AD Agreement.  According 
to the European Union, this:  
"codified the understanding of the GATT Cont racting Parties that, in some cases, and 
in particular with respect to non-market economy countries, the actual producer was the exporting country as such and, thus, it was necessary to specify anti-dumping 
duties on a country-wide basis to address the actual source of price discrimination. Indeed, in a non-market economy country, the State control over the means of 
production and State intervention in the econom y, including international trade, imply 
that all the means of production and natural resources belong to one entity, the State. All imports from non-market economy countries are therefore considered to emanate 
from a single producer, the State."
290  
In the view of the European Un ion, this meant that with resp ect to anti-dumping duties against 
producers from NMEs, "it would not be relevant to name exporting companies separately since they 
collectively constituted one single supplier or exporting entity, i.e., the State".291  W e  f i n d  t h i s  
proposition to be unconvincing.  Assuming it were  appropriate and necessary to consider the 
negotiating history, we do not agree that the "incor poration" of the Ad Note to Article VI of the 
GATT 1947 in the Kennedy Round Anti-Dumping C ode demonstrates that Article 9.2 allows 
investigating authorities to name the State in c onnection with the imposition of anti-dumping duties in 
investigations involving producers from NMEs.  As no ted by China, other elements of the negotiating 
history suggest that Article 8 of the Kennedy R ound Anti-Dumping Code was intended to ensure that 
anti-dumping duties were imposed only on those firms found to be dumping.292  We simply cannot see 
                                                      
285 See paragraph 7.104. 
286 We note that the European Union takes the same view, albeit with respect to its own interpretation 
of the text.  European Union, second written submission, para. 59. 
287 Kennedy Round  Agreement on Implementation of Article VI of the General Agreement on Tariffs and 
Trade , TN.64/98, 20 June 1967. 
288 European Union, first written submission, para. 11.  The interpretive note provides, in relevant part: 
"It is recognized that, in the case of impo rts from a country which has a complete or 
substantially complete monopoly of its trade and where all domestic prices are fixed by the State, special difficulties may exist in determining price comparability for the purposes of 
paragraph 1, and in such cases importing contracting parties may find it necessary to take into 
account the possibility that a strict  comparison with domestic prices in such a country may not 
always be appropriate." 
289 European Union, first written submission, para. 12. 
290 European Union, first written submission, para. 12 (footnote omitted). 
291 European Union, first written submission, para. 12. 
292 China, second written submission, paras. 193-197.  WT/DS397/R 
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 that merely because the Ad Note and Article 8 of the Kennedy Round Anti-Dumping Code were 
being addressed at the same time demonstrates that they necessarily address the same issues.  7.112  Based on the foregoing considerations, we conc lude that Article 9.2 of the AD Agreement 
requires the investigating authorities to name th e individual suppliers, that is, the producers or 
exporters, on whom anti-dumping duties are imposed , except that where the number of producers or 
exporters is so large that it would be impracticab le to do so, the authorities may name the supplying 
country.  We read these provisions in parallel with the requirements of Article 6.10 of the 
AD Agreement relating to the determination of dumpi ng margins, and conclude that Article 9.2 does 
not, contrary to the European Union's view, a llow the imposition of a single country-wide anti-
dumping duty in an investigation involving a non-market  economy.  We recall that Article 9(5) of the 
Basic AD Regulation requires that a country-wide duty be imposed with respect to producers or 
exporters from NMEs unless such producers or exporters  show, on the basis of the criteria set out in 
that provision, that they are independent from their State.  We therefore find that Article 9(5) of the Basic AD Regulation violates the obligation laid down in Article 9.2 of the AD Agreement. 
7.113  Having found that Article 9(5) of the Basic AD Regulation is inconsistent  with the obligations 
set forth under Articles 6.10 and 9.2 of the AD Ag reement, we now turn to China's claims under 
Articles 9.4 and 9.3. 
7.114  Article 9.4 governs the imposition of anti-dumpi ng duties in investigations where, in 
accordance with Article 6.10, sampling has been used  in the calculation of dumping margins.  In other 
words, Article 9.4 sheds light on  the consequences with respect to duty imposition of using a sample 
at the margin calculation stage.  Article 9.4 essen tially limits the duty rate for producers not sampled 
to a maximum of the weighted average ma rgin calculated for the sampled producers.
293  A s  t o  
Article 9.3, we note that the chapeau of this provisi on, which is at issue here, establishes the principle 
that "[t]he amount of the anti-dumping duty sha ll not exceed the margin of dumping as established 
under Article 2". 
7.115  China contends that Article 9(5) of the Basic AD Regulation is inconsistent with Article 9.4 
of the AD Agreement for two reasons:  1) because it  allows the Commission to calculate the margin 
of dumping for non-sampled producers based on th e margins of sampled producers which, to the 
extent some of those sampled producers have fa iled the IT test, are not based on their individual 
export prices;  and 2) because it subjects the calcu lation of an individual duty, which non-sampled 
producers are entitled to request under the last sentence of Article 9.4, to the fulfilment of the IT test.  
The European Union submits that  China's claim under Article 9.4 is dependent on its claims under 
Articles 6.10 and 9.2 of the AD Agreement, and asserts that since Article 9(5) of the Basic AD Regulation is not inconsistent with any of these tw o provisions, it cannot be inconsistent with the 
obligations set forth in Article 9.4 either.
294 
7.116  We note that both arguments put forward by Chin a replicate its arguments in connection with 
its claims under Articles 6.10 and 9.2 of the AD Agreem ent.  The first argument takes issue with the 
fact that the application of Article 9(5) of the B asic AD Regulation to the sampled producers could, in 
some circumstances, also render the duty assigned to the non-sampled producers WTO-inconsistent.  
                                                      
293 Article 9.4 excludes from th at weighted average zero and de minimis  margins and margins 
determined on the basis of facts available. 
294 The European Union also argu es that China's description of how the Commission calculates the 
margin for non-sampled cooperating producers is wrong.  According to the European Union, what the Commission does in such investigations is compare the export prices of non- IT producers with the normal value 
for the analogue country (which the Eu ropean Union calls "intermediate re sults"), then calculate individual 
margins for producers that pa ss the MET and IT tests;  and then ca lculate the weighted average of the 
"intermediate results" and the individual dumping margins in order to obtain the margin that will be applied to 
non-sampled cooperating producer s.  European Union, first written submission, para. 171. WT/DS397/R 
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 The second argument states that there would be a violation of Article 9.4 where a non-sampled 
producer requesting the calculation of an individual dut y is subjected to the IT test under Article 9(5) 
of the Basic AD Regulation.  Given that China has presented no new or independent arguments in 
support of its claim of violation of Article 9.4, we are of the view that a finding of violation of 
Article 9.4 would add nothing to the resolution of this dispute, nor would it help in any potential 
implementation.  We therefore c onsider it appropriate to exercise judicial economy and decline to 
address this claim. 
7.117  Turning finally to China's claim under Article  9.3, we note China's argument that the 
calculation of a country-wide dumping margin for producer s that fail the IT test is inconsistent with 
Article 2.3 of the AD Agreement, which, China cont ends, requires that margin calculations be based 
on the individual export prices of such producers.  According to China, the imposition of a duty on the basis of a margin that is inconsistent with the requ irements of Article 2, in turn, violates Article 9.3, 
which requires that the duty imposed should not ex ceed the margin as established under Article 2.  
China claims that those exporting producers whic h have company-specific export prices which are 
higher than the average export price used for non- IT exporting producers will be subject to a duty 
which exceeds their dumping margin establis hed under Article 2 of the AD Agreement.
295  T h e  
European Union once more submits that China's clai m under Article 9.3 is dependent on a finding of 
violation of Articles 6.10 and 9.2, and asserts that since Article 9(5) of the Basic AD Regulation is not inconsistent with these two provisions, there is no vi olation of Article 9.3 either.  In addition, the 
European Union argues as a substantive matter that  since the duty imposed under Article 9(5) of the 
Basic AD Regulation is not higher than the margin found for the State, there can be no violation of 
Article 9.3.  Further, it contends that since Ch ina's assumption that Article 6.10 requires individual 
dumping margins is erroneous, Article 9(5) of the Basic AD Regulation cannot be found to be 
inconsistent with Article 9.3 of the AD Agreement. 
7.118  We have found Article 9(5) of the Basic AD Regul ation to be inconsistent with Articles 6.10 
and 9.2 of the AD Agreement, which in our view cont ain provisions that are more directly relevant to 
the dispute than Article 9.3.  Finding a violation of  Article 9.3 would not contribute to the resolution 
of this dispute or aid in implementation.  We ther efore consider it appropriate to exercise judicial 
economy and refrain from making findings with resp ect to China's claim under Article 9.3 of the 
AD Agreement. 
4. Whether Article 9(5) of the Basic AD Regulation is inconsistent with Article I:1 of the 
GATT 1994 
(a) Arguments of Parties 
(i) China 
7.119  China notes that Article 9(5) of the Basic AD Regulation only applies to some WTO 
Members, including China, and not to all.  Accordin g to China, as a legal instrument that governs the 
conduct of anti-dumping investigations, this Regula tion constitutes a law or formality within the 
meaning of Article I:1 of the GATT 1994.
296  China asserts that this provision requires that any 
advantage, favour, privilege or immunity granted by  any contracting party to any product originating 
in any other country shall be accorded immediatel y and unconditionally to th e like product originating 
in the territories of all other contracting parties.  China therefore argues that by not automatically 
giving the Chinese producers the right to have individual dumping margins calculated and individual 
                                                      
295 China, first written submission, para. 86;  China, second written submission, para. 306. 
296 China, first written submission, para. 96.  WT/DS397/R 
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 duty rates imposed on them, Article 9(5) of the Basic AD Regulation violates the Most Favoured 
Nation ("MFN") principle embodied in Article I:1 of the GATT 1994.297 
(ii) European Union 
7.120  The European Union submits that if the Pane l finds that the AD Agreement permits WTO 
Members to subject the right to an individual margin of dumping to the fulfilment of certain 
conditions in investigations invol ving NMEs, by virtue of the lex specialis  principle, there can be no 
violation of Article I:1 of the GATT 1994.298  Independently, the European Union also argues that 
treating two different situations in two different ways would not necessarily violate the MFN principle 
in Article I:1 of the GATT 1994.  According to th e European Union, "imports from market and non-
market economy countries may be subject to different  treatment in the context of the anti-dumping 
rules precisely because they are different in nature .  Therefore, by definition, no discrimination can 
arise".299 
(b) Arguments of Third Parties 
(i) Colombia 
7.121  Colombia contends that Article 9(5) of the B asic AD Regulation is not inconsistent with the 
obligation set forth under Article I.1 of the GATT 1 994 because it is in conformity with the second 
paragraph of Ad Article VI of the GATT 1994.   
(c) Evaluation by the Panel 
7.122  We recall that Article 9(5) of the Basic AD Regulation, which subjects the imposition of an 
individual duty rate for NME exporters to the fu lfilment of certain conditions, only applies to 
producers from certain NMEs, including China.  Producers from other WTO Members, i.e., so-called 
"market economy countries", are entitled to indivi dual treatment without having to fulfil the 
conditions set forth under Article 9(5) of the Basic AD Regulation.300 
7.123  Article I:1 of the GATT 1994 reads: 
"With respect to customs duties and charges of any kind imposed on or in connection 
with importation or exportation or imposed on the international transfer of payments 
for imports or exports, and with respect to the method of levying such duties and 
charges, and with respect to all rules a nd formalities in connection with importation 
and exportation, and with respect to all matte rs referred to in pa ragraphs 2 and 4 of 
Article III, any advantage, favour, privilege or immunity  granted by any contracting 
party to any product originating in or destin ed for any other country shall be accorded 
immediately and unconditionally  to the like product originating in or destined for the 
territories of all other contracting parties."  (emphasis added) 
Thus, Article I:1 of the GATT 1994 requires that any privilege granted to imports of any country be 
accorded immediately and unconditionally to the lik e products originating in or destined for the 
territories of all other WTO Members.  This "most- favoured-nation" ("MFN") principle is considered 
                                                      
297 China, first written submission, paras. 97-98. 
298 European Union, first written submission, para. 173. 
299 European Union, first written submission, para. 175;  European Union, second written submission, 
para. 78. 
300 We recall that producers from NMEs not Members of the WTO are subject to a different set of 
rules, but of course, Article I:1 of  GATT 1994 does not apply to them. WT/DS397/R 
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 to be "a cornerstone of the GATT and is one of the pillars of the WTO trading system".301  The MFN 
principle requires WTO Members to treat like pr oducts equally irrespective of their origin.302  Based 
on the text of Article I:1, it is clear to us that for there to be a violation of the MFN obligation, the 
complaining party must show that "there [is] an a dvantage, of the type covered by Article I and which 
is not accorded unconditionally to all "like products" of all WTO Members".303 
 7.124  Turning to the facts of the present dispute, firs t we note that Article 9(5) of the Basic AD 
Regulation constitutes a rule or formality, mainta ined by the European Union in connection with 
importation.  It is clear to us that this rule affects imports from certain countries, since it sets out 
criteria for determining whether the export prices of  producers subject to anti-dumping investigations 
will be taken into consideration,  individual margins of dumping calculated, and individual anti-
dumping duties imposed upon importation of the relevant product to the European Union.  Second, we 
consider that determining and imposing individual duties for producers subject to an anti-dumping 
investigation, that is basing the duties for such  producers on individual margins established on the 
basis of their own export prices rather than the average export price of a group of producers from the 
same country, is an advantage within the meaning of Article I.1 of the GATT 1994.  This is because 
such individual treatment ensures that an exporte r is not subjected to a duty higher than its own 
dumping margin, as would be the case for some expor ters with a country-wide duty imposed on the 
basis of a margin calculated on averag e export prices.  Third, as noted above
304, Article 9(5) of the 
Basic AD Regulation lists the WTO Members, including China, whose producers subject to anti-
dumping proceedings in the European Union are not automatically accorded the right to have 
individual dumping margins and anti-dumping duties, but  rather must fulfil the conditions set out in 
Article 9(5) of the Basic AD Regulation in order to have individual dumping margins calculated for 
and anti-dumping duties imposed on them.  Thus, it is clea r that the application of Article 9(5) will, in 
certain situations, result in imports of the same  product from different WTO Members being treated 
differently in anti-dumping investigations conducted by  the European Union.  Thus, we consider that 
Article 9(5) violates the MFN obligation of Article I:1 of the GATT 1994. 
7.125  The European Union submits that "imports from market and non-market economy countries 
may be subject to different treatment in the c ontext of the anti-dumping rules precisely because they 
are different in nature.  Therefore, by definition, no discrimination can arise".305  We disagree.  In our 
view, in anti-dumping investigations, imports from NMEs may be treated differently from imports 
from market economy countries only to the extent  the WTO Agreement or some other relevant 
provision allows such different treatment.306  The European Union, however, has not demonstrated 
that any provision of the AD Agreement, or any other provision of the WTO Agreement, allows for the different treatment of imports from NMEs provided for in Article 9(5) of the Basic AD 
Regulation.  Nor has the European Union demonstrated that there is a relevant difference in the nature 
of imports from NMEs that justifies different treatment  – it asserts this to be the case, but in our view, 
                                                     
 
301 Appellate Body Report, Canada – Certain Measures Affecting the Automotive Industry ("Canada – 
Autos "), WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 2000:VI, 2985, para. 69. 
302 Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences 
to Developing Countries ("EC – Tariff Preferences "), WT/DS246/AB/R, adopted 20 April 2004, DSR 2004:III, 
925, para. 89. 
303 Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry ("Indonesia – Autos "), 
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 and 2, adopted 23 July 1998, and Corr. 3 and 4, DSR 1998:VI, 2201, para. 14.138. 
304 See paragraph 7.46. 
305 European Union, first written submission, para. 175. 
306 We recall, for instance, that the Ad Note to Ar ticle VI of the GATT 19 94 allows for different 
treatment with respect to the determination of normal value in anti-dumping investigations against Members that 
have a complete or substantially complete monopoly of their trade.  Similarly, paragraph 15 of China's Protocol of Accession to the WTO permits different treatment w ith respect to the determination of normal value in 
investigations conducted against Chinese prod ucers provided certain conditions are met.  WT/DS397/R 
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 this is merely an assumption, without a sufficient factual basis.307  In the absence of an explicit 
authorization to do so, or a sufficient factual basi s showing that a difference in the nature of the 
imports concerned, any differentia l treatment on the basis of the origin of goods, including on the 
basis of the nature of the economy in the exporting country, would violate the MFN principle. 
7.126  Referring to the GATT panel report in US – MFN Footwear , the European Union argues that 
treating one category of products differently from another category of products does not violate the 
MFN obligation of Article I:1 of the GATT 1994.308  However, as that panel also noted309, treating 
differently like products originating in different countries violates Article I:1.  In this case, it is clear 
that the Basic AD Regulation treats different count ries differently, and thus potentially treats like 
products from different countries differently.  In this regard, we find it significant that the Basic AD 
Regulation explicitly lists the countries the producers of  which will be subject to the IT test, referring 
to NMEs that are WTO Members which also includes China.  This suggests that the Regulation itself 
demonstrates that this rule only applies to a pre-determined group of WTO Members, without 
consideration of the specific circumstances in individual cases. 
7.127  On the basis of the foregoing, we conclude th at Article 9(5) of the Basic AD Regulation 
violates the MFN principle contained in Article I:1 of the GATT 1994. 
5. Whether Article 9(5) of the Basic AD Regulation is inconsistent with Article X:3(a) of 
the GATT 1994 
(a) Arguments of the Parties 
(i) China 
7.128  China submits that its claim under Article X:3( a) of the GATT 1994 is directed against the 
manner in which the Commission administers Article 9(5) of the Basic AD Regulation.310  C h i n a  
contends that Article 9(5) of the Basic AD Regulati on falls within the scope of Article X:3(a) of the 
GATT 1994 which refers to "laws, regulations, decisions and admini strative rulings of general 
application".311  China observes that the methodology for the calculation of the country-wide margin 
of dumping varies depending on the degree of cooperation on the part of the foreign producers subject 
to an investigation.  Where the level of cooperati on is considered to be high, the Commission bases 
the country-wide margin at the level of the high est margin calculated for a cooperating producer.  
When, however, the level of cooperation is low, other methodologies are used.  Therefore, China 
submits, Article 9(5) of the Basic AD Regulation is not administered in a uniform manner in all anti-
dumping investigations.312  China also maintains that Article 9(5) of the Basic AD Regulation is not 
administered in a reasonable manner in anti-dumpi ng investigations against Chinese exporters since 
the dumping determinations against such exporters are usually made by the Commission on the basis 
of facts available even where the conditions set out under Article 6.8 of the AD Agreement are not 
                                                      
307 In this regard, we note that the fact that pr oducers in a non-market economy may be able to 
demonstrate that they operate on market economy principles, and may, under Article 9(5) of the Basic AD 
Regulation, be able to demonstrate that they are independen t of the State, suggests to us that it is not as clear as 
the European Union would have it that the mere fact that the economy of a WTO Member is classified by 
another Member (but not, by any means, all Members) as  a NME can be, without a specific factual showing, a 
sufficient justification for different trea tment under Article I:1 of the GATT 1994. 
308 European Union, first written submission, para. 177. 
309 GATT Panel Report, Footwear from Brazil ("US – MFN Footwear "), DS18/R, adopted 
19 June 1992, BISD 39S/128, para. 6.11. 
310 China, first written submission, para. 102. 
311 China, first written submission, para. 101. 
312 China, first written submission, paras. 107-112. WT/DS397/R 
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 met.313  In China's view, such non-uniform  and unreas onable application of Article 9(5) of the Basic 
AD Regulation is inconsistent with the obligati on contained in Article X:3(a) of the GATT 1994. 
(ii) European Union 
7.129  The European Union asserts that Article 9(5) of the Basic AD Regulation provides for a 
methodology for determining anti-dumping duties in inv estigations against NMEs.  It does not contain 
any rules on how such methodology should be administered.  Since the specific measure at issue does not fall within the scope of the obligation cont ained in Article X:3(a) of the GATT 1994, the 
European Union contends that the Panel should reject China's claim.
314  In this regard, the 
European Union also finds it puzzling that China has raised this as an "as such" claim.  The 
European Union submits that normally an "as such" claim is one directed at measures that mandate a 
particular result which is WTO-inc onsistent, which, according to the European Union, is not the case 
with respect to Article 9(5) of the Basic AD Regulation.315  Assuming that Article 9(5) of the Basic 
AD Regulation does address the administration of the methodology, the European Union submits that a methodology that varies depending on the level of  cooperation on the part of foreign exporters 
cannot per se  be considered as non-uniform.  According to the European Union, the application of 
Article 9(5) of the Basic AD Regulation leads to the same result where the circumstances are the 
same, and therefore is applied in a cons istent manner in all investigations.
316  The European Union 
also counters China's assertion that Article 9(5) of  the Basic AD Regulation is administered in an 
unreasonable manner.  The European Union contends that this aspect of China's claim is devoid of 
any legal basis.317 
(b) Arguments of Third Parties 
(i) United States 
7.130  The United States submits that to the extent th at China challenges Article 9(5) of the Basic 
AD Regulation as such under Article X:3(a) of th e GATT 1994, the specific measure at issue does not 
fall within the scope of the obligation contained in the legal provision invoked by China.  The 
obligation set forth under Article X:3(a) of the GATT 1994 pertains to the administration of the 
instruments identified in Article X:1.  According to the United States, laws and regulations may only 
be challenged under Article X:3(a) where they addre ss the administration of another legal instrument.  
Since Article 9(5) of the Basic AD Regulation does not address the administration of another legal instrument, it is not, in the view of the Un ited States, challengeable under Article X:3(a). 
(c) Evaluation by the Panel 
7.131  China's claim under Article X:3(a) of the GATT 1994 is two-fold.  First, China contends that 
the manner in which the European Union administer s Article 9(5) of the Basic AD Regulation is non-
uniform because the method used for the calculation of the country -wide dumping margin for NME 
producers that fail the IT test depends on the level of cooperation of those producers.  Second, China 
asserts that the administration of this provision is unreasonable because the Commission resorts to 
facts available in the calculation of the country-w ide margin of dumping for the non-IT producers.  
The European Union submits that Article 9(5)  of the Basic AD Regulation does not address the 
administration of the provisions contained therein.  It is, therefore, not clear which provision in that 
Article China challenges in connection with this clai m.  The European Union also takes issue with the 
                                                     
 
313 China, first written submission, paras. 113-114. 
314 European Union, first written submission, paras. 182-186. 
315 European Union, first written submission, para. 68. 
316 European Union, first written submission, para. 192. 
317 European Union, first written submission, para. 193.  WT/DS397/R 
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 fact that China's claim is directed at Article 9(5)  of the Basic AD Regulation "as such", arguing that a 
claim under Article X:3(a) of the GATT 1994 normally sh ould take issue with the administration of a 
measure, not with the measure itself. 
7.132  Article X:3(a) of the GATT 1994 provides: 
"Each contracting party shall administer  in a uniform, impartial and reasonable 
manner all its laws, regulations, decisions  and rulings of the kind described in 
paragraph 1 of this Article." 
Thus, Article X:3(a) lays down the principle th at WTO Members should administer their laws, 
regulations, decisions and rulings that affect trade in a uniform, impartial and reasonable manner.  In 
our view, this obligation aims at ensuring that laws, regulations, decisions and rulings that are 
substantively consistent with a Member's WTO oblig ations are also implemented in an appropriate 
manner so that exporters from other Members can pr edict the treatment their exports will be accorded 
under the regime to which their trade will be subjected in the territory of that Member.  7.133  We recall our finding that Article 9(5) of the B asic Regulation is inconsistent "as such" with 
Articles 6.10 and 9.2 of the AD Agreement.
318  China's claim under Article X:3(a) of the GATT 1994 
concerns the manner in which this measure is administered by the Commission.  Having found 
Article 9(5) of the Basic Regulation to be "as such" inconsistent with the European Union's 
obligations under Articles 6.10 an d 9.2 of the AD Agreement, we see no reason to consider whether 
this WTO-inconsistent measure is administer ed in a uniform and reasonable manner by the 
European Union.  We therefore apply judici al economy with respect to China's claim under 
Article X:3(a) of the GATT 1994. 
6. Whether Article 9(5) of the Basic AD Regulation is inconsistent with Article XVI:4 of 
the WTO Agreement and Article 18.4 of the AD Agreement 
(a) Arguments of the Parties 
(i) China 
7.134  China asserts that since Article 9(5) of the Basic AD Regulation is in consistent with the 
provisions of the AD Agreement and the GATT 1994 discussed above, it follows that it is also inconsistent with Article XVI:4 of the WTO Agre ement and Article 18.4 of the AD Agreement, which 
require WTO Members to ensure the conformity of their laws, regulations and administrative 
procedures with their WTO obligations.
319 
(ii) European Union 
7.135  The European argues that since Article 9(5) of  the Basic AD Regulation is not inconsistent 
with any of the obligations cited by China, it can not be inconsistent with the obligations set forth 
under Article XVI:4 of the WTO Agreement and Articl e 18.4 of the AD Agreement and that therefore 
this claim should be rejected.320 
(b) Evaluation by the Panel 
7.136  Article XVI:4 of the WTO Agreement reads: 
                                                      
318 See paragraphs 7.98 and 7.112 above. 
319 China, first written submission, para. 121. 
320 European Union, first written submission, paras. 195-196. WT/DS397/R 
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 "Each  Member shall ensure the conformity of its laws, regulations and administrative 
procedures with its obligations as pr ovided in the annexed Agreements." 
Article 18.4 of the AD Agreement similarly provides: 
 
"Each Member shall take all necessary steps, of a general or particular character, to 
ensure, not later than the date of entry in to force of the WTO Agreement for it, the 
conformity of its laws, regulations and ad ministrative procedures with the provisions 
of this Agreement as they may a pply for the Member in question." 
7.137  Thus, Article XVI:4 of the WTO Agreement re quires WTO Members to ensure that their 
laws, regulations and administrative provisions are c onsistent with the provisions of the agreements 
annexed to the WTO Agreement, and Article 18.4 of the AD Agreement imposes the same obligation 
with respect to laws, regulations and administra tive procedures pertaining to the conduct of anti-
dumping investigations.  We have concluded above321, that Article 9(5) of the Basic AD Regulation is 
inconsistent with Articles 6.10 and 9.2 of the AD Agreement.  We therefore also find that the 
European Union has acted inconsistently with Ar ticle XVI:4 of the WTO Agreement and Article 18.4 
of the AD Agreement by failing to ensure the confor mity of its laws, regulations and administrative 
procedures with its obligations under the relevant Agreements. 
D. CLAIMS REGARDING COUNCIL REGULATION 91/2009  ("THE DEFINITIVE REGULATION ") 
1. Background of the Investigation at Issue 
7.138  Council Regulation (EC) No. 91/200 9 of 26 January 2009, the Definitive Regulation, imposed 
a definitive anti-dumping duty on imports of certain ir on or steel fasteners originating in the People's 
Republic of China.322  The Definitive Regulation sets out the background of the investigation, and 
explains the basis for the imposition of the anti-dumpi ng duties in the investigation at issue, including 
the considerations, evidence, and reasoning underl ying the determinations of the EU investigating 
authority, the Commission, on dumping, injury, and causal link, as well as on matters such as like 
product and domestic industry, and the resolution of ar guments raised by the parties.  China raises a 
number of claims with regard to various aspects of  the Definitive Regulation.  Before addressing 
those claims, we set out below our understanding of the proceedings in the investigation.  
7.139  On 26 September 2007, the Commission received a complaint from the European Industrial 
Fasteners Institute, the complainan t, for the initiation of an anti-du mping investigation on imports of 
steel fasteners originating in China.323  Evidence submitted in connec tion with the application was 
deemed sufficient and an investigation was in itiated on 9 November 2007.  On 4 August 2008, the 
Commission provided the interested parties with an Information Document324 detailing preliminary 
findings as of that point in the investigation and inviting them to make comments.  No provisional measures were imposed, as the Commission considered  that certain aspects of the investigation 
needed further examination.  On 18 September 2008, a public meeting was organized in which all 
interested parties participated. 
7.140  The Commission used sampling in making its dumping determination.  A total of 110 Chinese 
producers made themselves known by the relevant deadline, 15 days from initiation, and were 
considered as cooperating parties.  The sample selected for purposes of the dumping determination 
                                                     
 
321 See paragraphs 7.98 and 7.112. 
322 Exhibit CHN-4. 
323 The Commission defined the "product concerned", that is, the product imported from China that was 
the subject of the investigation, in recital 40 of the Definitive Regulation, Exhibit CHN-4. 
324 Exhibit CHN-17.  WT/DS397/R 
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 initially included nine Chinese producers.  All nine producers applied for market economy treatment 
("MET").  The Commission determined that four of the nine producers provided false information and 
denied their MET requests.  The remaining five  Chinese producers were denied MET on the grounds 
that they did not meet the criteria set out in Article 2(7)(c) of the Basic AD Regulation.  These five 
producers also requested, and were granted, individua l treatment ("IT") under Article 9(5) of the Basic 
AD Regulation.  Five additional Chinese producers not selected for the sample submitted replies to 
the questionnaire, requesting that the Commission ca lculate individual margins for them pursuant to 
Articles 9(6) and 17(3) of the Basic AD Regulati on.  One of these companies did not produce the 
product under investigation, and its  request was not accepted.  The Commission concluded that one of 
the remaining four companies provided misl eading information and was considered as non-
cooperating, and therefore denied its request.325  The remaining three producers requested MET, but 
their requests were denied.  These three producers also requested IT, which requests were granted.326  
Thus, the Commission undertook to individually examine eight Chinese producers in total in making 
its dumping determination. 
7.141  Since none of the individually-examined Chinese producer was granted MET, the 
Commission determined the normal value on the basi s of information concerning an analogue third 
country, India.  The data pertaining to one coope rating Indian producer of the subject product was 
used in the determination of normal value.  Th ere is no dispute concerning the determination of 
normal value in this case.   
7.142  For all examined Chinese producers having been gr anted IT, export prices were, in principle, 
calculated under normal rules provided for in Article 2(8) of the Basic AD Regulation, i.e., on the 
basis of the price actually paid or payable for the product when sold for export from the exporting 
country (China) to the European Union.  The Commission found that the export prices reported by 
two Chinese exporting producers were not reliable and resorted to constructed export price for them.  
Dumping margins for the five sampled producers gr anted IT were based on a comparison of the 
normal value calculated for the analogue country with each company's weighted average export price.  
A weighted average of those margins was calculated and app lied to the non-sampled Chinese 
producers, except for the three non- sampled producers that were granted IT.  Individual dumping 
margins were calculated for these, based on a co mparison of the normal value for the analogue 
country with each company's weighted average export price.  For two of these companies, the calculated margin was zero, while a margin above de minimis  was calculated for the third. 
7.143  With respect to the determination of inju ry, the Commission found there were some 
300 producers of fasteners in the European Union, most of whom did not make themselves known to 
the Commission in response to the no tice of initiation.  However, 46 cooperating producers did come 
forward expressing their willingness to be included in the sample.  Of these, one did not provide sufficient information during verification to be c onsidered cooperating.  The remaining 45 producers 
were found to constitute the domestic industry.  The producers that supported the complaint and 
cooperated with the Commission represented 27 per cent  of total production of the like product in the 
EU.
327  Given the number of producers in the domestic industry, the Commission used sampling in 
investigating and assessing injury.  Based on its anal ysis of the information before it, the Commission 
determined that dumped imports from China caused material injury to the domestic industry.  
                                                      
325 Definitive Regulation, Exhibit CHN-4, recital 78. 
326 Late in the proceedings, some expo rters argued that these companies sh ould be treated as part of the 
sample, or that the sample should have been enlarged, rather than receiving individual examination under 
Article 17(3) of the Basic AD Regulation.  The Commission rejected this argument, co ncluding that the sample 
was sufficient.  Definitive Regula tion, Exhibit CHN-4, recital 21. 
327 Total production of the like product was estimated to be 1,421,602 tonnes in 2006.  Definitive 
Regulation, Exhibit CHN-4, recital 113. WT/DS397/R 
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 2. Whether Article 9(5) of the Basic AD Regulation, as applied in the fasteners 
investigation, is inconsistent with Articles 6.10, 9.2 and 9.4 of the AD Agreement 
(a) Arguments of the Parties 
(i) China 
7.144  China acknowledges that in the fasteners i nvestigation the Commission granted the IT 
requests of the eight Chinese producers examined.  However, China contends that subjecting such 
treatment to the conditions set forth under Article 9(5) of the Basic AD Regulation was inconsistent with Articles 6.10, 9.2 and 9.4 of the AD Agreement.
328  The bases of China's claims under these three 
provisions of the AD Agreement are identical to tho se China raised in connection with its claims of 
inconsistency of Article 9(5) of the Basic AD Regula tion "as such".  That is, China submits that for 
the same reasons that Article 9(5) of the Basi c AD Regulation is "as such" inconsistent with 
Articles 6.10, 9.2 and 9.4 of the AD Agreement, it s application in the fasteners investigation was 
inconsistent with these provisions.329 
(ii) European Union 
7.145  The European Union argues that China's clai m under Article 9.4 of the AD Agreement is 
outside the Panel's terms of reference because it was not included in China's panel request.330  The 
European Union notes that China's "as applied" claims repeat its "as such" claims regarding 
Article 9(5) of the Basic AD Regulation, and asserts that since the "as such" claims are unfounded, the Panel should also reject China's "as applied"  claims regarding the Definitive Regulation.
331  T h e  
European Union submits that, even if the Panel finds  that Article 9(5) of the Basic AD Regulation is 
inconsistent with the AD Agreement or the GAT T 1994 cited by China "as such", since all the 
Chinese producers that requested IT in  the investigation at issue were granted such treatment, China is 
challenging a non-existent measure.  The European Union therefore requests the Panel to reject 
China's "as applied" claims regarding Ar ticle 9(5) of the Basic AD Regulation.332 
(b) Evaluation by the Panel 
7.146  As set out in our findings above333, we have concluded that Article 9(5) of the Basic AD 
Regulation is inconsistent with Ar ticles 6.10 and 9.2 of the AD Agreement.  The issue raised by this 
claim is whether the application of Article 9(5) of the Basic AD Regulation in the fasteners investigation was also inconsistent with Articles 6.10 and 9.2 of the AD Agreement. 
7.147  We recall, and both parties agree, that in the fasteners investigation all Chinese producers that 
requested IT were granted such treatment.  This raises the question of whether the application of 
Article 9(5) of the Basic AD Regulation was neverthe less inconsistent with the cited provisions in this 
investigation.  As noted, the European Union ma intains that China is challenging a non-existent 
measure since all the IT requests were granted.  China, on the other hand, submits that it challenges 
the non-automatic character of the decision by th e Commission to grant IT to the Chinese exporters 
subject to this investigation, and thus the issue it raises is properly before the Panel. 
7.148  In our view, the fact that all the IT requests were granted in the underlying investigation does 
not preclude us from considering whether the applic ation of Article 9(5) of the Basic AD Regulation 
                                                     
 
328 China, first written submission, paras. 177, 184 and 187. 
329 China, first written submission, para. 167. 
330 European Union, first written submission, para. 212. 
331 European Union, first written submission, para. 210. 
332 European Union, first written submission, paras. 213-217. 
333 See paragraphs 7.98 and 7.112 above.  WT/DS397/R 
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 in the investigation was inconsistent with the AD Ag reement.  Having found that this provision of EU 
regulation is inconsistent with Ar ticles 6.10 and 9.2 of the AD Agreement as such, it is difficult to see 
how its application in this inves tigation could be considered consis tent with the obligations of the 
European Union under the AD Agreement.  We theref ore conclude that, having found Article 9(5) of 
the Basic AD Regulation to be inconsistent with Ar ticles 6.10 and 9.2 of the AD Agreement, and for 
the same reasons, its application in the fasteners investigation was also inconsistent with these 
two provisions.334   
7.149  We recall that we applied judicial economy with  respect to China's claim under Article 9.4 of 
the AD Agreement in connection with Article 9(5) of the Basic AD Regulation "as such".335  For the 
same reasons, we consider it appropriate to exerci se judicial economy and decline to make a finding 
on China's claim under Article 9.4 in the context of the fasteners investigation.  Since we do not 
address this claim substantively, we do not cons ider it necessary to address the European Union's 
terms of objection in this regard. 
3. Whether the European Union violated Articl e 5.4 of the AD Agreement in its standing 
determination 
(a) Arguments of the Parties 
(i) China 
7.150  China claims that the Commission's determination on standing was inconsistent with the 
requirements of Article 5.4 of the AD Agreement, and puts forward three main arguments in support 
of its claim.  First, China submits that the Comm ission failed to examine whether the figure for total 
EC production was reliable and correct.336  By not checking the adequacy and accuracy of this figure 
the Commission failed to conduct an "examinati on" on the issue of standing as required under 
Article 5.4.  Second, China argues that the Commiss ion failed to examine, prior to initiation, whether 
the application had been made by or on behalf of  the domestic industry.  In China's view, the 
Commission made its standing determination after th e initiation of the investigation.  Third, China 
maintains that the Commission's decision on standing was wrong since the EU producers supporting 
the application accounted for less than 25 per cent of total production.  In this regard, China asserts 
that the 27 per cent share cited in the Definitiv e Regulation includes the production accounted for by 
producers that made themselves known within the 15 day period following initiation provided for 
domestic producers to come forward and indicate thei r willingness to cooperate in the investigation.  
China also contends that a 15 per cent margin of error in the calculation of the production accounted 
for by the producers supporting the application also  undermined the accuracy of this calculation.  
Further, China maintains that the Eurostat da ta used to calculate the total EU production 
underestimated total production. 
                                                      
334 In addition, there is, in our view, a possibility that the very existence of Article 9(5) of the Basic AD 
Regulation as part of the legal framework that applies to anti-dumping investigations conducted by the European 
Union might have affected participation by Chinese exporters in the fasteners investigation, and/or the quality and quantity of information Chinese exporters provided to the Commission.  Specifically, we consider that the 
very existence of the test embodied in Article 9(5) of the Basic AD Regulation, as well as the nature of that test, 
including the criteria established and its application in  other investigations, may well have discouraged other 
Chinese producers from coming forward and cooperating and from requesting IT in the investigation at issue.  
This further supports our view that the application of Article 9(5) of the Basic AD Regulation in this 
investigation was inconsistent with Article s 6.10 and 9.2 of the AD Agreement.   
335 See paragraph.7.116. 
336 China, second written submission, para. 392. WT/DS397/R 
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 (ii) European Union 
7.151  The European Union submits that  China's claim under Article 5.4 is not within the Panel's 
terms of reference because:  a) it was not subject to consultations337;  b) China's panel request does not 
identify it consistently with the requ irements of Article 6.2 of the DSU338;  and c) the Notice of 
Initiation of the investigation at issue, which sets out the Commission's determination on the issue of 
standing, is not a measure identified in China's panel request.339   
7.152  Responding to the substance of China's argume nts, the European Union argues that the 
Commission did examine standing prior to the in itiation of the investigation, and that the 
complainants represented 37 per cent of the total EU  production of the like product.  Specifically, the 
European Union contends that prior to the in itiation the Commission contacted all EU producers 
identified in the complaint and asked them to submit their production figures and indicate their 
position as to the initiation of an investigation.  Th ese producers were also asked to flag any missing 
names in the list of producers.  The producers thus  brought to the attention of the Commission were 
also contacted and asked to submit the same info rmation.  All the information obtained from the 
producers was analysed prior to initiation.340  The results of this process were summarized in the Note 
to the File dated 8 November 2007.  The European Union argues that China's claim that the figures 
used for the calculation of the total EU production were not reliable should be rejected because China 
has failed to make a prima facie case in this regard.341  The European Union contends that, contrary 
what China asserts, the total EU production figur e submitted in the complaint was examined by 
checking the figures in Eurostat.342  Moreover, the European Union maintains that the Commission's 
reliance on Eurostat data to estimate total EU production of the like product was reasonable and 
objective, given that these statistics were not prepared  solely for the purpose of this investigation, but 
rather are systematically and objectively collate d over time and are used by different entities.343 
(b) Evaluation by the Panel 
(i) Terms of Reference 
7.153  As mentioned above, the European Union raises three sets of terms of reference objections 
with respect to China's claim on th e issue of standing.  China disag rees with the European Union and 
argues that China's claim with respect to standi ng is within the Panel's terms of reference. 
7.154  First, the European Union argues that this cl aim is outside the Panel's terms of reference 
because it was not subject to consultations.  The Eu ropean Union submits that in its request for 
consultations, China affirmed the fact that the Commission had found that the domestic industry 
accounted for 27 per cent of the total EU production and did not raise a claim in connection with the 
obligation set forth in the third sentence of Article 5.4 of the AD Agreement.  In its panel request, 
however, China both challenged the finding made by the Commission that the domestic industry represented 27 per cent of the total EU production and made a claim with respect to the obligation set 
forth in the third sentence of Article 5.4.  Accord ing to the European Union, "[t]his double alteration 
of determination and obliga tion necessarily [changed] the essence  of the complaint".
344 
7.155  China's request for consultations reads, in relevant part: 
                                                      
337 European Union, first written submission, paras. 242-246. 
338 European Union, first written submission, paras. 249-252. 
339 European Union, first written submission, paras. 253-254. 
340 European Union, first written submission, para. 263. 
341 European Union, first written submission, para. 269. 
342 European Union, opening oral statem ent at the second meeting, para. 22. 
343 European Union, first written submission, para. 267. 
344 European Union, first written submissi on, para. 246 (emphasis in original).  WT/DS397/R 
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 "The EC initiated  the AD investigation with the s upport of producers accounting for 
only 27 per cent  of the total domestic production, rendering the said investigation 
inconsistent with Article 5.4  of the AD Agreement".345  (emphasis added) 
China's panel request reads in pertinent part: 
 
"Article 5.4  of the AD Agreement because the EC initiated  the anti-dumping 
proceeding on the basis of a complain t by the Community producers allegedly 
representing 27%  of the total domestic production in the EC while (i) the EC failed to 
examine properly before the initiation whethe r the application has been made by or 
on behalf of the domestic industry and (ii)  the EC improperly concluded that the 
application had been made by or on behalf of the domestic industry"346  (emphasis 
added) 
7.156  Article 5.4 of the AD Agreement provides: 
"5.4 An investigation shall not be in itiated pursuant to paragraph 1 unless the 
authorities have determined, on the basis of  an examination of the degree of support 
for, or opposition to, the application expressed13 by domestic producers of the like 
product, that the application has been made by or on behalf of the domestic industry.
14  The application shall be consider ed to have been made "by or on 
behalf of the domestic industry" if it is  supported by those domestic producers whose 
collective output constitutes more than 50 pe r cent of the total production of the like 
product produced by that portion of the domestic industry expressing either support 
for or opposition to the application.  Ho wever, no investigation shall be initiated 
when domestic producers expressly supporting the application account for less than 25 per cent of total production of the like pr oduct produced by the domestic industry. 
_______________ 
13  In the case of fragmented indust ries involving an exceptionally large number of producers, 
authorities may determine support and opposition by using statistically valid sampling 
techniques.      
14  Members are aware that in the territory of certain Me mbers employees of domestic 
producers of the like product or representatives of those employees may make or support an 
application for an investigation under paragraph 1."  
We note that, generally speaking, the obligation set  forth in Article 5.4 pertains to determining 
whether the complaint (the "application" in Article  5.4) has been lodged "by or on behalf of" a 
domestic industry, and establishes numerical criteria for that determination, based on the proportion of 
domestic production of the like product attributab le to the producers supporting and opposing the 
complaint.  The first sentence of this provision sets out the general rule that no investigation can be 
initiated unless the authorities determine that the appli cation has been made by or on behalf of the 
domestic industry producing the like product in the importing country.  The following two sentences 
introduce the specific numerical criteria for this de termination, both of which must be satisfied. 
 7.157  We note that China's request for consultations st ates that by initiating the investigation with 
the support of producers accounting for "only" 27 pe r cent of total production, the European Union 
acted inconsistently with Article 5.4 of the AD Agr eement.  The language in the panel request is more 
                                                     
 
345 WT/DS397/1, Annex G-1, p.2. 
346 WT/DS397/3, Annex G-2, p.3. WT/DS397/R 
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 detailed.  It expresses disagreement with the dete rmination that the domestic  industry supporting the 
complaint accounted for 27 per cent of total producti on, and explains in clearer terms the specific 
allegations put forward by China.  We recall th at following the legal framework we set out above347 
the issue is whether or not the claim presented in  China's panel request may reasonably be said to 
have evolved from the legal basis identifie d in the request for consultations.   
7.158  The request for consultations suggests that Ch ina considers that a finding that producers 
accounting for 27 per cent of domestic production suppor t the complaint is not enough to support the 
conclusion that the complaint has been made by or  on behalf of the domestic industry.  The panel 
request, however, clearly takes issue with the conc lusion that producers accounting for 27 per cent of 
domestic production actually supported the complaint, although it is not clear whether this is because 
these producers did not actually support the compla int, or because they did not actually account for 
27 per cent of total domestic production of the like product.  In that sense, there is a difference 
between the two requests.  In our view, however, desp ite this difference, the claim in the panel request 
can reasonably be found to have evolved from the legal basis identified in the request for 
consultations. 
7.159  The request for consultations identifies a legal basis for China's complaint – a violation of 
Article 5.4 of the AD Agreement with respect to th e determination of standing.  The panel request 
more specifically sets out a claim of violation of Ar ticle 5.4 of the AD Agreement with respect to the 
determination of standing.  In our view, the questi on to be resolved in determining whether the claim 
was the subject of the consultations is whether the legal basis of the claim in the panel request may 
reasonably be said to have evolved from the legal b asis identified in the request for consultations.  
Although in this case, the legal basis set out in the request for consultations and the claim set out in the panel request may have been premised on di fferent aspects of the obligation set forth in 
Article 5.4, in our view, they pertain to the same i ssue, namely the consistency with Article 5.4 of the 
Commission's standing determination.  We do not cons ider that the difference between the request for 
consultations and the panel request changed the essen ce of China's claim.  We therefore reject the 
European Union's argument that this claim is outsi de the Panel's terms of reference because it was not 
subject to consultations. 
7.160  Second, the European Union maintains that Chin a's panel request does not identify this claim 
consistently with the requirements of Article 6.2 of the DSU.  The EU's objection in this regard 
pertains to the summary of the legal basis of th e complaint, not the identification of the specific 
measure at issue.  The European Union submits that  "it is impossible to ascertain with any certainty 
which of the several obligations or rights referenced in Article 5.4 and footnotes 13 and 14, or for that 
matter Article 4.1, of the Anti-Dumping Agreement  forms the basis of China' s claim, in a manner that 
permits one to ascertain the problem clearly".
348 
7.161  As explained above, although Artic le 5.4 contains a general ob ligation to ensure that the 
complaint is made by or on behalf of the dom estic industry producing the like product in the 
importing country, in our view that obligation has sev eral aspects, each of which may be the focus of 
a claim of violation of this provision.  Looking at China's panel request, we note that the request takes 
issue with three aspects of the Commission's dete rmination on standing.  It suggests that the 
calculation of the 27 per cent figure may not have been correct; that the Commission failed to examine whether the application had been made by or on behalf the EU industry;  and that the 
Commission improperly concluded that the application was made by or on behalf of the EU industry.  
We also note that, in the subsequent panel pro ceedings, China developed its claim on standing along 
the lines of the legal basis for that claim outlined in its panel request.  We therefore consider that the 
"brief summary" of the legal basis for China's claim of violation of  Article 5.4 of the AD Agreement 
                                                     
 
347 See paragraphs 7.11 to 7.27 above. 
348 European Union, first written submission, para. 249.  WT/DS397/R 
 Page 85 
 
 
 in its panel request was sufficient to comply with  the requirements of Article 6.2 of the DSU and 
reject the European Union's argument in this regard.   
7.162  Third, the European Union asserts that the Commission's determination on standing was 
contained in the Notice of Initiation, and given that  China's panel request does not identify the Notice 
of Initiation as a specific measure at issue, China's claim on standing falls outside the Panel's terms of 
reference.   
7.163  There is no dispute that the Definitive Regulati on reiterates the basis for the initiation of the 
investigation, including that the complaint was l odged "on behalf of producers representing a major 
proportion, in this case more than 25 per cent, of the total Community production of certain iron or 
steel fasteners".349  The European Union's argument imp lies that this statement is not a 
"determination" of standing, and thus the fact that  this is mentioned in the Definitive Regulation is 
insufficient to bring it within our terms of referenc e.  We disagree.  However, even if we did not 
consider the statement in the Definitive Regulation to be sufficient to bring China's standing claim 
before us, we would nonetheless find it to be within our terms of reference, for the following reasons.  
7.164  Article 17.4 of the AD Agreement provides that a Member may refer a matter on which 
consultations have been held to dispute settlement "if final action has been taken by the administering 
authorities of the importing Member to levy de finitive anti-dumping duties or to accept price 
undertakings [or] a provisional measure has a signi ficant impact and the Member that requested 
consultations considers that the [provisional] me asure was taken contrary to the provisions of 
[Article 7.1] ...".  In Guatemala – Cement I , the Appellate Body pointed out that "[a]ccording to 
Article 17.4, a "matter" may be referred to the DSB only if  one of the relevant three anti-dumping 
measures is in place".350  While the panel in that case had concluded that Article 17.4 was a timing 
provision, governing when a matter  could be referred to the DSB351, the Appellate Body concluded that 
the provision required that the matter referred to the DSB concern claims regarding one of these three types of measures, that is, a defi nitive anti-dumping measure, a price undertaking, or a provisional anti-
dumping measure (with conditions).
352  In this context, the Appellate Body clarified that a "matter" 
consists of the measure(s) at is sue and the claims identified by th e complaining Member in connection 
with such measures.   
7.165  Thus, it seems clear to us that Article 17.4 w ould not allow a Member to bring a case citing a 
notice of initiation as the measure at issue, or at l east not without also citing one of the three measures 
specified in Article 17.4.  However, this does not limit a complaining Member's  right to bring claims 
about any aspect of the anti-dumping investigation in question.  We note in th is regard the Appellate 
Body's statement that: 
                                                      
349 Definitive Regulation, Exhibit CHN-4, recital 1. 
350 Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from 
Mexico ("Guatemala – Cement I "), WT/DS60/AB/R, adopted 25 November 1998, DSR 1998:IX, 3767 , para. 79 
(emphasis in original). 
351 Panel Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico 
("Guatemala – Cement I "), WT/DS60/R, adopted 25 November 1998, as modified by Appellate Body Report 
WT/DS60/AB/R, DSR 1998:IX, 3797, para. 7.18. 
352 Appellate Body Report, Guatemala – Cement I , paras. 77-80. Subsequent decisions have made clear 
that a Member may bring claims concerning the legislation of the importing Member (Panel Report, United 
States – Section 129(c)(1) of the Uruguay Round Agreements Act ("US – Section 129(c)(1) URAA "), 
WT/DS221/R, adopted 30 August 2002, DSR 2002:VII, 2581, para. 6.22), as well as other acts or omissions that 
can be deemed a "measure" of the impor ting Member.  Appellate Body Report, United States – Sunset Review of 
Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan  ("US – Corrosion-
Resistant Steel Sunset Review "), WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3, para. 81. WT/DS397/R 
Page 86 
 
 
 "This requirement to identify a specific anti-dumping measure at issue in a panel 
request in no way limits the nature of the claims  that may be brought concerning 
alleged nullification or impairment of benef its or the impeding of the achievement of 
any objective in a dispute under the Anti-Dumping Agreement. "353 
Thus, we consider that in a dispute concerning a final anti-dumping measure, as this one undisputedly 
does, a complaining Member may raise any alleged violations of the WTO Agreement arising out of 
the initiation or conduct of, as well as the determinations  made and actions taken in the course of, the 
underlying anti-dumping investigation.    
7.166  This is exactly what happened in this dispute.  In its panel request, China identified the final 
anti-dumping measure imposed by the European Un ion as a specific measure at issue and raised 
numerous claims alleging violati ons of various provisions of th e AD Agreement involving various 
actions and decisions of the Commission at various  stages of the investigation, including the 
determination of standing supporting the initiation of the investigati on at issue.  In our view, all of 
these claims, regardless of whether they were initially set out in the Notice of Initiation or some other 
document, arise out of the anti-dumping investigation in which the Definitive Regulation is before us 
in this dispute.  We therefore reject th e European Union's objection in this regard. 
7.167  Based on the foregoing, we conclude that Chin a's claim with respect to the Commission's 
standing determination is within our terms of re ference and proceed to consider that claim. 
(ii) Substantive Analysis 
7.168  We note that China's first and second arguments are interconnected.  One takes issue with the 
timing of the Commission's determination and the ot her with the quality of it.  As regards timing, 
China acknowledges
354 that the Notice of Initiation shows th at the Commission considered and took a 
decision on standing prior to initiation.  China none theless asserts that the Commission only examined 
whether the application had been made by or on be half of the domestic industry once the investigation 
had been initiated. 
7.169  We note that with respect to standing, the No tice of Initiation provides, in pertinent part: 
"1. Complaint The complaint was lodged on 26 September 2007 by the European Industrial 
Fasteners Institute (EIFI) ( 'the complainant ') on behalf of producers representing a 
major proportion, in this case more than 25 %, of the total Community production of 
certain fasteners of iron or steel."
355 
Thus we consider that the Notice of Initiation clearly shows that the Commission did make a 
determination in this rega rd prior to initiation.   
 
7.170  China asserts, however, that this determina tion was somehow made subsequent to the 
initiation of the investigation.  To support this vi ew, China refers to the part of the Definitive 
Regulation which describes how the Commission looked  into the issue of standing after the initiation 
of the investigation.  Recital 26 of the Definitive Regulation reads: 
                                                      
353 Appellate Body Report, Guatemala – Cement I , para. 79. 
354 China, answer to Panel question 19. 
355 Exhibit CHN-14, p. 267/31.  WT/DS397/R 
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 "The issue of the standing of the Community industry was questioned by some 
importers in the Community and also by some exporting producers. Indeed, certain interested parties provided, after the publication of the Notice of Initiation
, lists of 
Community producers that allegedly had not been consulted as to their support or 
otherwise for the proceeding. A questionna ire was subsequently sent to all such 
producers. Moreover, several companies came  forward on their own initiative without 
having received a questionnaire. However, none of the responses received from these 
producers has reduced the level of standing  mentioned in the preceding recital. In 
fact, many of these companies supported the complaint."356  (emphasis added) 
In our view, this statement shows that, although the Commission made a determination on standing 
prior to the initiation of the investigation, the issu e was revisited in response to the allegations made 
by some importers and exporters that the investig ation had been initiated without ensuring that there 
was standing.  However, it is undisputed that, whatev er the extent of this post-initiation inquiry may 
have been, the European Union did not, in fact, substantively change its conclusion that there was 
standing.357   
 
7.171  The fact remains that a determination was made  on this issue prior to initiation.  The mere 
fact of revisiting after initiation a determination wh ich had to be and was made prior to initiation does 
not, in our view, undermine the validity of the pre-in itiation determination of st anding.  We therefore 
reject China's argument in this regard.358 
7.172  With respect to the quality of the Commission's  determination, China argues that the Notice 
of Initiation only demonstrates that the Commission considered and made a decision on standing, but 
does not necessarily show that the Commission "exa mined" this matter and made a "determination" 
on the basis of such examination as required under Article 5.4.359  China posits that unless the 
European Union produces the documents that we re before the Commission when the standing 
determination was made, it should be assumed that  no adequate examinati on was conducted on this 
issue.360  We recall, however, that it is for China to make a prima facie case of violation of a covered 
agreement before the burden shifts to the European Union to rebut China's case.  In our view, China 
has failed to make a prima facie  case that the European Union fa iled to examine the question of 
standing.   
7.173  China does not argue that an investigating au thority is barred from using the information 
submitted in the complaint for purposes of determining standing.361  As China sees it, however, 
"examination" under Article 5.4 requires at least th at the investigating aut horities check the adequacy 
and accuracy of the information th at forms the basis for the standi ng determination.  According to 
China, the European Union failed to conduct this type of examination. 
7.174  We note that the test that China refers to is  found in Article 5.3 of the AD Agreement which 
requires the authorities to examine the "adequacy  and accuracy" of the evidence submitted in the 
complaint in order to determine whether it would be justified to initiate an investigation.  We also 
note that China has not raised a claim under Article  5.3.  However, even assuming that there were 
                                                      
356 Definitive Regulation, Exhibit CHN-4, recital 26. 
357 The European Union, while acknowledging that the Commission engaged in this inquiry, 
characterizes it as being a "mistake" as it caused "confu sion".  European Union, answer to Panel question 31.  
China does not argue that the European Union was required to revisit the determination of standing, or that it 
erred in maintaining its original decision.  We therefore do not address either of these issues. 
358 As noted, China makes no claim that the European Union was required to reconsider the issue of 
standing after initiation, or allege any violations in the context of the reconsideration that  took place in this case. 
359 China, second written submission, para. 462. 
360 China, second written submission, para. 463. 
361 China, answer to Panel question 20. WT/DS397/R 
Page 88 
 
 
 such a claim, we are of the view that China h as not submitted any evidence demonstrating that the 
Commission failed to check the accuracy and adequacy  of the information in  the application which 
was used for standing purposes.362   
7.175  It is undisputed that the Commission relied on Eurostat data provided in the complaint in 
determining total EU production of the like product.  China does not argue that Eurostat statistics per 
se constituted a non-objective source of data in  terms of determining total EU production.363  China's 
arguments in this regard are limited to the asserti on that the Commission failed to take active steps in 
order to make sure that the production data obtai ned from Eurostat were reliable and correct.  We 
note, however, that China does not even assert that there was reason to doubt the reliability of that 
information in this investigation which the Commission disregarded.364  As a consequence, China's 
argument that the Commission did not examine whether the producers supporting the application accounted for at least 25 per cent of the total EU production cannot stand. 
7.176  China's third argument is that the Commission's decision on standing was wrong since the EU 
producers supporting the application as a matter of fact accounted for less than 25 per cent of total EU 
production of the like product.  In this regard, China first asserts that, in its de termination on standing, 
the Commission took into account production account ed for by producers that made themselves 
known following the initiation of the investigation.  To  support this view, China refers to recital 114 
in the Definitive Regulation, which reads: 
"2. Definition of the Community industry 
(114) The production of the Community producers that supported the complaint and 
fully cooperated in the investigation re presents 27,0 % of the production of the 
product concerned in the Community. It is therefore considered that these companies constitute the Community industry within the meaning of Articles 4(1) and 5(4) of the basic Regulation."
365 
According to China: 
 
"[T]he Community producers referred to in this statement include not only those companies listed in the Complaint as "complainants" or "supporters" but also those who made themselves known within 15 days af ter the initiation of the investigation. 
In view of this, it is more than likely that the standing threshold of 25% would not have been met if the production volume of companies which only made themselves 
known after the initiation of the inv estigation had been disregarded."
366 
                                                      
362 In this regard, we would like to note the well-es tablished principle of WTO jurisprudence that "the 
quantum and quality of evidence required at the time of initiation is less than that required for a preliminary, or 
final, determination of dumping, injury, and causa tion, made after investigation".  Panel Report, Mexico – Anti-
Dumping Investigation of High Fructose Corn Syrup (HFCS ) from the United States ("Mexico – Corn Syrup "), 
WT/DS132/R, adopted 24 February 2000, and Corr.1,  DSR 2000:III, 1345, para. 7.57; Panel Report, United States 
– Final Dumping Determination on Softwood Lumber from Canada ("US – Softwood Lumber V "), WT/DS264/R, 
adopted 31 August 2004, as modified by Appellate Body Report WT/DS264/AB/R, DSR 2004:V, 1937, 
para. 7.70;  Panel Report, Guatemala – Cement I , para. 7.57. 
363 See paragraph 7.179 below. 
364 China does not dispute that the Eurostat data are regularly collected and mainta ined for reasons 
other than the conduct of this, or any other, anti-dump ing investigation, and are routinely relied upon by the EU 
investigating authorities. 
365 Definitive Regulation, Ex hibit CHN-4, recital 114. 
366 China, first written submission, para. 216.  WT/DS397/R 
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 7.177  China's allegation has no basis in fact.  Firs t, we note that recital 114 of the Definitive 
Regulation pertains to the definition of domestic  industry, not standing.  Second, we note the 
European Union's argument, which China has not countered, that, as shown in a Note for the File prepared at the time the standing determination was made
367, the share of EU production accounted 
for by producers expressly supporting the compla int, which the Commission calculated prior to 
initiation, was 37 per cent, not 27.368  Third, we recall our finding that the Commission made its 
determination on standing prior to initiation,  as reflected in the Notice of Initiation.369  Thus, China's 
assertion that the Commission, in its standing determ ination took into consider ation the production of 
EU producers that made themselves known after th e initiation, is unfounded as a matter of fact. 
7.178  Next, China contends that there was a 15 per cen t margin of error in the calculation of the 
production accounted for by the producers supporting the application, which also undermined the 
accuracy of this calculation.  In this regard, Ch ina refers to a communication from the Commission in 
which it is stated that the figure representing to tal production accounted for by the Complainants is 
subject to a 15 per cent margin of error for confidentiality reasons.370  China argues that this is 
"sufficient to cast doubt on the complainants [sic] standing".371  In response to questioning on this 
issue by the Panel, the European Union states that the 15 per cent margin of error was intended to 
protect company-specific confidential information of the EU industry.  In this regard, the 
European Union refers to the table found in Exhi bit CHN-42 which contains a list of complainants 
and supporters of the complaint, together with th eir production figures, as well as the total figures for 
complainants and supporters.372  The European Union contends th at the company-specific figures in 
this table do include a 15 per cent margin of error to protect the confidentiality of the production data 
of individual producers, but that the totals indi cated for complainants and supporters are the actual, 
correct figures, and do not reflect that 15 per cent ma rgin.  China has not disputed this assertion.  We 
therefore reject China's allegation that the 15 per cen t margin of error undermined the reliability of the 
Commission's calculation. 
7.179  Finally, China argues that the Eurostat data used to estimate total EU production of the like 
product underestimated that production.  As previous ly noted, China does not question the objectivity 
of the process whereby the data are collected by na tional authorities.  It contends, however, that 
Eurostat statistics do not provide a proper basis for measuring total domestic production of fasteners 
because they only reflect production sold, as oppo sed to total production, and do not include 
production of small and medium enterprises.373 
7.180  We note that the AD Agreement does not contain rules governing the sources or collection of 
data to be used in an investigation.  Article 3. 1 requires that an injury determination be based on 
positive evidence and include an objective examination of the relevant injury factors.  However, 
China does not argue, much less demonstrate, that th e Eurostat statistics are not positive evidence, or 
                                                      
367 The Note for the File reads, in relevant part, th at "the request is supported by Community producers 
representing in total more than 37% of Community produ ction in 2006 and more than 41% in the first half 
of 2007".  Exhibit EU-6, p. 1. 
368 European Union, first written submission, para. 26 6;  European Union, second oral statement, 
para. 23.  We recognize that there is a discrepancy between the 27 per cent and 37 per cent support figures cited 
in the Definitive Regulation, and the Note to the File.  However, China has not made any arguments in this 
regard.  Moreover, we note that the Note to the File is not  the determination at issue, and the 37 per cent referred 
to in that document is not the subject  of China's claim.  While we do not know the reasons for this discrepancy, 
we consider it of no importance in these circumstances. 
369 See paragraph 7.169 above. 
370 Exhibit CHN-39, p.1. 
371 China, first written submission, para. 223. 
372 European Union, answer to Panel question 86.  The list does not disclose the names of EU 
producers.   
373 China, first written submission, paras. 217-2 19;  China, answer to Panel question 87(a). WT/DS397/R 
Page 90 
 
 
 that they were not objectively examined.  Rather, Ch ina's argument is that the investigating authority 
should have relied on some other data in determining standing.  In our view, however, these 
arguments do not suffice to make out a violation of Article 5.4. 
7.181  With respect to this aspect of China's claim,  we questioned China regarding whether, in 
China's view, there was a better s ource of data for the estimation of domestic production of the like 
product, available to the Commission at the time , but which the Commission failed to take into 
consideration.  China refers to three alternative s ources.  First, China mentions a study concerning the 
fastener market in Italy, produced by DATABAN K which, China argues, was submitted to the 
Commission during the fasteners investigation and which the Commission could have checked prior 
to initiation.  Second, China points to evidence concerning the EU automotive industry which was 
submitted to the Commission during the fastener s investigation and which the Commission could 
have taken into account prior to initiation.  Th ird, China posits that the Commission could have 
requested information from various producers associations in the EU member States.374   
7.182  We disagree that any of these was necessar ily a better source of information on EU 
production of fasteners, much less that the Commi ssion could have and shoul d have relied on one of 
these sources rather than the Eurostat data.  Firs t, it does not appear that information from these 
sources would have been more accurate and more comple te than Eurostat statistics.  In this regard, we 
note that the first source China mentions pertains to domestic production of fasteners in only one EU 
member State, the second to only one sector of the domestic industry, and the third is entirely hypothetical.  Second, China's argument that the Commission could have checked these sources is, in 
our view, pure speculation.  China has not demons trated that these sources were available to the 
Commission prior to initiation, which is when the standing determination was made.
375  Even 
assuming that the information in these sources bette r reflected total EU production of fasteners, a 
proposition we have rejected, we cons ider it would be inappropriate to  base a finding of violation of 
Article 5.4, concerning a decision made prior to in itiation, on the investigating authority not having 
considered information brought to its attention after the determination has been made and the 
investigation initiated.  Thus, none of China's argu ments shows that there were credible alternative 
sources of information regarding total EU producti on of fasteners, at the time the standing 
determination was made, of which the Commission wa s aware and which it declined to take into 
consideration.  We therefore find that China' s allegations in this regard have no basis. 
7.183  Based on the foregoing, we reject China's clai m that the Commission's standing determination 
was inconsistent with Article 5.4 of the AD Agreement. 
4. Whether the European Union violated Arti cles 4.1 and 3.1 of the AD Agreement in 
defining the domestic industry  
(a) Arguments of the Parties 
(i) China 
7.184  China raises five allegations of error with re gard to the domestic industry definition in the 
investigation at issue.   
                                                      
374 China, answer to Panel question 87(c). 
375 As noted above, paragraph 7.181, China itself acknowledges that the study concerning the fastener 
market in Italy, produced by DATABANK, was submitted to the Commission during the investigation, not prior to initiation.  China, answer to Panel question 87(c).  China has not otherwise alleged that the Commission was 
aware of this study prior to initiation.  WT/DS397/R 
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 7.185  First, China asserts that the Commission violated Articles 4.1 and 3.1 of the AD Agreement 
by excluding from the domestic industry definitio n producers that made themselves known after the 
15-day deadline following the publication of the No tice of Initiation, and those that did not support 
the complaint.376  According to China, the European Uni on thus considered that an investigating 
authority may exclude individual domestic producers of  the like product, or groups of such producers, 
from the domestic industry, provided that the produc ers included in the industry account for a major 
proportion of domestic production of the like product.377  China considers this position inconsistent 
with Article 4.1, which in China's view does not  allow exclusion of producers from the domestic 
industry for reasons other than those set out in subparagraphs (i) and (ii) of Article 4.1, and 
inconsistent with Article 3.1, as it does not allow th e investigating authority to carry out an objective 
examination of the effects of dumped imports.378 
7.186  Second, China argues that the domestic industry as defined by the Commission did not 
include domestic producers of the like product ac counting for a "major proportion" of total EU 
production as required under Article 4.1 of the AD Agreement.379  China's claim in this regard is 
based on two grounds.  First, China asserts that th e data relied on by the European Union to estimate 
the volume of total domestic production did not re flect the actual total production in the European 
Union, and in fact largely underestimated that production.380  In this respect, China relies on the same 
arguments it raised in connection with its argume nts concerning the Commission's determination of 
standing – that the Eurostat data concerned the volu me of production sold, rather than total volume of 
production, and do not include production of small and medium-sized enterprises.381  Second, China 
asserts that a 27 per cent share of total domestic production does not constitute a "major proportion" 
within the meaning of Article 4.1.  In this regard, China argues that the European Union's 
presumption, as set out in Article 5(4) of the B asic AD Regulation, that 25 per cent constitutes a 
"major proportion" within the meaning of Article 4.1, is not correct.382  China argues that "major" 
means "important, serious or significant", and thus "major proportion" must refer to an "important, 
serious, or significant" part of total domestic producti on.  In addition, China considers that the use of 
the word "proportion" entails that the domestic pr oducers included in the major proportion must be 
"representative" of the whole.383  In its first written submission, China argued that it was obvious that 
27 per cent cannot be regarded as significant.384  In any event, China argu es that, even granting that 
27 per cent of total domestic production may constitut e a "major proportion" within the meaning of 
Article 4.1, this can only be the case if the overall circumstances of the case indicate that the 
proportion of domestic production at issue is sufficient to be deemed "major".  China contends that 
the European Union failed to consider this questio n at all, simply relying on the presumption that 
25 per cent is sufficient.385 
7.187  Third, China contends that the Commission violated Article 3.1 of the AD Agreement by not 
defining the domestic industry in relation to  the Investigation Period, 1 October 2006-
30 September 2007.386  China notes that the data relied on by the European Union in considering the 
question of major proportion related to calendar year  2006, rather than the Investigation Period.  
                                                      
376 China, first written submission, paras. 239-240. 
377 China, first written submission, para. 241. 
378 China, first written submission, paras. 243-244. 
379 China, first written submission, para. 247. 
380 China, first written submission, para. 250. 
381 China, first written submission, para. 249.  See China, First written submission, paras. 218-222. 
382 China, first written submission, paras. 262-265, China, second written submission, paras. 593, 616-
622.   
383 China, second written submission, paras. 597-598 , 632;  answer to Panel question 22, para. 95;  
China, first oral statement, para. 98. 
384 China, first written submission, para. 266. 
385 China, second written submission, para. 629. 
386 China, first written submission, para. 269. WT/DS397/R 
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 China contends that the domestic industry must be de fined in relation to the same period that is used 
for assessing the injury factors.387  China recognizes that there is no express requirement in the 
AD Agreement requiring the use of the investiga tion period for the definition of the domestic 
industry, but argues that since the injury determin ation is made with respect to the data for the 
domestic industry for the investigation period, it foll ows that the domestic industry must be defined in 
relation to the same period.388 
7.188  Fourth, China argues that th e European Union violated Articles 3.1 and 4.1 of the 
AD Agreement by basing its injury determination on a sample of domestic producers that was not 
representative.  In this regard, China argues that a sample in the context of an injury determination 
must comply with the requirements of Article 4.1 of the AD Agreement, and that the sample in this 
cased was made up of six producers accounting for 17.5 per cent of total domestic production of the 
like product, and thus violated Article 4.1.389  In addition, China argu es that the sample, since it 
consisted of only six producers representing only 17.5 per cent of total domestic production, could 
hardly be considered as "representative" of total domestic production, and thus  was inconsistent with 
Article 3.1 of the AD Agreement, which requires th at the injury determination be based on positive 
evidence and an objective examination of the volume, price effects, and impact of dumped imports.390  
China specifically disagrees with the European Union's view that  the sample selected must be 
representative of the domestic industry as defined by  the investigating authority, but need not be 
representative of domestic producers as a whole.391  China argues that, to the extent the sample 
selected was based on a definition of domestic industr y itself inconsistent with Articles 3.1 and 4.1 of 
the AD Agreement, it is necessarily inconsistent with Article 3.1.392  China further contends that the 
European Union acted inconsistently with Article  3.1 by selecting the sample based on volume of 
production as the sole criterion, arguing that this is  not appropriate to satisfy the requirement of 
representativeness.393  In any event, China asserts that th e output of the domestic producers selected 
for the sample does not constitu te the largest volume of production of the like product in the 
European Union which would reasonably be investigated.394   
7.189  Fifth, China considers that the European Union acted inconsistently with Article 4.1 of the 
AD Agreement by not excluding from the domestic indus try definition producers that were related to 
the exporters or importers or were themselv es importers of the pro duct under consideration.395  In this 
regard, China notes the undisputed fact that certain  of the producers in the domestic industry, and 
included in the sample, were related parties.  China asserts that the European Union erroneously 
concluded that the Chinese subsidiaries of these producers were established predominantly to serve 
the Chinese market, and that the interests of these producers remain ed centred in the 
European Union.396  According to China, the European Union failed to objectively examine the 
relationship between the EU producers and their Chin ese subsidiaries, and thus abused its discretion 
under Article 4.1 by not excluding those re lated producers from the domestic industry.397  While 
China acknowledges that Article 4.1 does not impo se an obligation on investigating authorities to 
exclude related domestic producers, it considers that the investigating authorities do not have 
unlimited discretion in deciding whether or not exclusi on is warranted in a particular case, and that the 
                                                      
387 China, first written submission, para. 272. 
388 China, second written submission, paras. 654, 657. 
389 China, first written submission, para. 276. 
390 China, first written submission, paras. 279-282. 
391 China, second written submission, para. 666. 
392 China, second written submission, para. 669. 
393 China, second written submission, para. 676. 
394 China, second written submission, para. 683. 
395 China, first written submission, para. 296. 
396 China, first written submission, paras. 286-290. 
397 China, first written submission, paras. 291-295.  WT/DS397/R 
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 determination must be based on an objective examination of positive evidence, pursuant to 
Article 3.1.398 
(ii) European Union 
7.190  The European Union argues that China's first allegation of error is not within the Panel's 
terms of reference because it was not subject to cons ultations.  According to the European Union, the 
request for consultations did not set forth a claim that failure to include domestic producers who came 
forward more than 15 days after initiation was inconsistent with Artic les 4.1 and 3.1 of the 
AD Agreement.399   
7.191  With respect to the substance, the European  Union contends that, contrary to China's 
argument, Articles 4.1 and 3.1 of the AD Agreemen t do not require an investigating authority to 
define the domestic industry so as to include all producers, or even the largest possible group of producers.
400  The European Union notes that while Chin a refers to several different documents in 
support of its arguments, the investigating authorit y's determination with respect to the domestic 
industry is set out in the Definitive Regulation, and asserts that the Panel should focus on the information therein in evaluating China's claim.
401  The European Union asserts that Articles 4.1 and 
3.1 of the AD Agreement impose no obligation on an investigating authority to include all domestic 
producers, regardless of when they make themselves known.  In the European Union's view, there is 
no hierarchy between the two ways of defining dom estic industry under Article 4.1, either by 
including all producers, or by including those w hose production constitutes a major proportion of total 
domestic production of the like product.402  The European Union acknowledges that an investigating 
authority may not exclude categories of producers which actually produce a like product, but asserts 
that the Commission did not do so in this case.403  Moreover, in the European Union's view, this does 
not mean that if the producers it includes constitute  a major proportion of total domestic production of 
the like product, the investigating authority must look further to include additional producers of the 
like product.404  The European Union asserts that the Commission contacted all known producers of 
the like product, and invited them to participate in the investigation, but set a deadline of 15 days for 
producers to come forward and indicate willingness to participate, and did not include producers who 
made themselves known after the 15-day deadline.405  The European Union considers that once it was 
clear in this investigation that the producers w ho came forward within the 15-day period accounted 
for a major proportion of total domestic production there was no need to add more producers to the domestic industry.  In the European Union's view , producers who come forward after the deadline do 
not constitute a "category" of producers who ma y not be excluded from the domestic industry.
406  The 
European Union considers that Article 3.1 of th e AD Agreement does not impose any obligations with 
respect to the definition of the domestic industry, but merely requires an objective examination based 
on positive evidence of the impact of the dumped imports on the domestic industry, and thus the 
                                                      
398 China, second written submission, paras. 689-690. 
399 European Union, first written submission, para. 285. 
400 European Union, first written submission, para. 279. 
401 European Union, first written submission, paras. 280-281. 
402 European Union, first written submission, para. 298. 
403 Specifically, in response to questions from the Panel, the European Union maintained that it did not 
exclude producers who did not express support for the investigation, as a group, from the domestic industry, asserting that as a matter of fact, at least one such producer was included not only in the domestic industry, but 
in the sample.  European Union, answer to Panel question 89, para. 19. 
404 European Union, first written submission, para. 301. 
405 European Union, first written submission, para. 302.  The European Union notes that during the 
Panel's first substantive meeting with  the parties, China indicated that it accepts that investigating authorities 
may impose deadlines on interested pa rties to come forward and make their interest in participating in the 
investigation known.  European Union, second written submission, para. 90. 
406 European Union, second written submission, para. 100. WT/DS397/R 
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 European Union contends that the Article 3.1 asp ect of China's claim is entirely dependant on its 
claim with respect to the definition of the domestic industry.407  Finally, the European Union notes 
that because the Commission was goi ng to use sampling in its injury determinations, there was no 
reason to add additional producers to the domestic industry definition.408   
7.192  With regard to China's second allegation of e rror, the European Union asserts that the 
Eurostat data provided a reasonable estimate of tota l EU production of the like product, referring to its 
arguments in this regard with r espect to the standing determination.409  Moreover, the European Union 
submits that in the circumstances of this investig ation, 27 per cent did represent a major proportion of 
total production within the meaning of Article 4.1 of the AD Agreement.410  The European Union 
notes that the AD Agreement does not define the term  "major proportion", and contends that China's 
argument that the domestic industry should prefer ably include all domestic producers of the like 
product is not correct.411  In the European Union's view, there is noting in the term "proportion" that 
requires that producers accounting for a major proportion of total domestic production of the like product in some way "represent" all producers.
412  The European Union contends that China failed to 
make a prima facie case that 27 per cent is not a major propor tion in this case, asserting that not only 
is the legal premise of China's argument wrong, it is  not true that the European Union limited itself or 
failed to include as many producers as possible, an d China has failed to provide any evidence why 
27 per cent is necessarily insufficient.413  The European Union contends that 27 per cent is "important, 
serious or significant" in view of the record of the investigation.414  Moreover, European Union 
considers that the "circumstances of the case" that are relevant to determining whether a particular 
proportion is sufficient to be considered "major" in any case do not include the number of producers 
of the like product.415 
7.193  With regard to China's third allegation of error,  the European Union asserts  that China errs in 
its description of the facts.  The European Union not es that China refers, in connection with this claim 
to the period of investigation for the dumping determ ination, and that this is not the period used for 
assessment of the injury factors.416  The European Union agrees that the period of investigation for the 
dumping determination was the period 1 October 2006 to 30 September 2007, but maintains that the 
period for the assessment of the injury factors w as from January 2003 to October 2007.  This period 
included calendar year 2006, the period with respec t to which the determination of domestic industry 
was made, and which was the last full year prio r to initiation for which data was available.417  
Moreover, the European Union submits that China' s claim should be rejected because Article 3.1 of 
the AD Agreement does not require that the assessmen t of "major proportion" be based on the period 
of investigation for dumping determinations.418   
7.194  In response to China's fourth allegation of erro r, the European Union argues that China fails 
to make a prima facie case of a violation, since Article 4.1 of the AD Agreement does not require that 
the sample used for injury determinations  represent a major proportion of total production.419  The 
                                                      
407 European Union, first written submission, paras. 306-307. 
408 European Union, first written submission, para. 284. 
409 European Union, first written submission, paras. 313, 265-274. 
410 European Union, first written submission, para. 316. 
411 European Union, first written submission, para. 32 6, referring to China, first written submission, 
para. 256. 
412 European Union, second written submission, para. 101. 
413 European Union, first written submission, paras. 330-334. 
414 European Union, first written submission, para. 337. 
415 European Union, second written submission, para. 122. 
416 European Union, first written submission, para. 354. 
417 European Union, second written submission, para. 128. 
418 European Union, first written submission, paras. 359-363. 
419 European Union, first written submission, paras. 374-377.  WT/DS397/R 
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 European Union notes that Article 4.1 does not refer to sampling at all, and that to read Article 4.1 as 
requiring that a sample of the domestic industry must represent a major proportion of total domestic production makes no sense, as it ignores the essence of sampling as a concept.
420  Thus, the 
European Union argues, China's argume nt confuses the notion of the domestic producers  as a whole, 
and the domestic industry  as a whole.  According to the European Union, a proper sample must be 
representative of the domestic industry as a whole.  However, the European Union contends that, if 
the domestic industry is defined as producers of a ma jor proportion of total domestic production of the 
like product, a proper sample must be representative of  that industry, but need not be representative of 
the domestic producers as a whole.421   
7.195  With regard to China's fifth allegation of error, the European Union contends that the 
Commission heard and considered the views of the EU importers and Chinese exporters that some 
related domestic producers should be  excluded from the domestic industry in the investigation at 
issue, but made a reasoned determination to the contrary.422  Further, the Europ ean Union argues that 
Article 4.1 of the AD Agreement does not require  the exclusion of related producers from the 
definition of domestic industry, but simply allows  such exclusion if circumstances justify this.423  In 
addition, the European Union argues that Article  3.1 imposes no obligation with respect to an 
investigating authority's decision whether to ex clude related domestic producers from the domestic 
industry, and asks the Panel to reject this aspect of China's claim as well.  
(b) Arguments of Third Parties 
(i) Colombia 
7.196  Colombia takes the view that Article 3.1 of the AD Agreement  does not prescribe a 
methodology that must be followed by an investiga ting authority in conducting an injury analysis.  
However, the discretion afforded an investigating authority does not mean it can use arbitrary or not 
verifiable methods.424  Colombia considers that the objective examination principle demands a correct 
assessment of the effect of the dumped imports, and to make that evaluation, investigating authorities 
are required to conduct a correct determination of the domestic producers/domestic industry in every 
case, which analysis shall be conducted accord ing to Article 4.1 of the AD Agreement.425  Colombia 
agrees with the European Union that under Article 4.1, the domestic industry may be defined so that 
either all eligible producers (domestic producers as a whole), or those producers that represent "a 
major proportion" of the eligible domestic production, are included, and that either of these definitions 
is valid.426  However, using one or the other alternative does not allow the investigation to be limited 
to a segment of the domestic industry.427  The requirement to conduct an investigation over the totality 
of the domestic industry does not, however, prevent investigating authorities from either sampling or 
examining a domestic industry by part, sector or segment.428  Colombia also agrees, referring to the 
report in EC – Salmon (Norway) , that an investigating authority ma y proceed on the basis of a sample, 
so long as the sample is representa tive, such that an objective examination under Article 3.1 can be 
undertaken.429  Colombia considers that an investigating authority should rely on statistical methods 
                                                      
420 European Union, first written submission, paras. 380-381. 
421 European Union, first written submission, para. 384-394. 
422 European Union, first written submission, para. 397. 
423 European Union, first written submission, paras. 404-405. 
424 Colombia, written submission, paras. 65-67. 
425 Colombia, written submission, para. 72. 
426 Colombia, written submission, para. 73. 
427 Colombia, written submission, para. 74, citing, Appellate Body Report, US – Hot Rolled Steel , 
para. 190. 
428 Colombia, written submission, para. 77 
429 Colombia, written submission, paras. 79-80. WT/DS397/R 
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 when selecting the domestic producers to be part of a sample.430  For Colombia the burden of proof to 
show that a sample is representative of the indus try, in order to fulfil the objective examination 
requirement of Article 3.1 of the AD Agreement,  lies on the national authorities and has to be 
interpreted in the context of the obligati ons under Article 5.4 of the AD Agreement.431  
(ii) Japan 
7.197  Japan indicates that the definition of the dom estic industry has broa d implications for 
antidumping investigations, including the de terminations of injury and causation.432  Japan considers 
that China's arguments relating to Article 4. 1 of the AD Agreement raise three key issues. 
7.198  With respect to the first issu e, whether the European Union violated Article 4.1 of the 
AD Agreement by excluding from the outset from the domestic industry companies that did not 
support the investigation, Japan's primary concern is ensuring fairness in the investigation process.433  
Without commenting on the specific facts of this ca se, Japan believes that domestic producers that do 
not support an AD complaint but fully cooperate in  an AD investigation may not from the outset be 
excluded from the domestic industry.  Japan consid ers that the European Union's interpretation of 
"domestic industry" to mean that so long as the producers included in the domestic industry constitute 
"a major proportion" of the domestic production of the like product, investigating authorities are not 
required to include any other domestic producers of the like product in the "domestic industry" could 
allow investigating authorities to define the domestic  industry in a results-oriented way, for example, 
by including only unprofitable producers (e.g., complainants) and excluding profitable producers 
(e.g., cooperating producers opposing the complaint).  Assessing injury with respect to such a 
domestic industry would, in Japan's view, be incons istent with the obligation of Article 3.1 of the 
AD Agreement to conduct an "objective examination" of injury.434  Thus, Japan disagrees with the 
European Union's view that there is no obliga tion on investigating authorities in respect of the 
definition of the domestic industry.435  Japan notes that "the concept of 'domestic industry' is critical  
to an injury determination, as it defines th e framework for data collection and analysis"436, and 
considers that there is a general obligation to conduct AD investigati ons in an unbiased and objective 
manner, regardless of which aspect of the investigat ion is at issue.  Moreover, Japan considers the 
European Union's approach proble matic to the extent that it allows domestic producers themselves to 
tailor the "domestic industry" by designating those companies for which injury is more likely to be 
found as supporting the complaint, whereas those comp anies for which injury is less likely to be 
found as not supporting the complaint, as inherently unfair and making it impossible for the 
investigating authority to conduct an objective examination as required by Article 3.1 of the 
AD Agreement. 
7.199  As regards the second issue (the domestic i ndustry's share in total domestic production), 
Japan notes that the term "major proportion" is not defined in Article 4.1 of the AD Agreement or in 
any other provision of the AD Agreement.  Therefore, without commenting on the specific facts of 
this case, Japan agrees neithe r with China's argument that 27 per cent of domestic production a priori 
does not constitute a "major proportion" nor with the European Union's argument that 25 per cent is a 
priori  sufficient to reach the "major proportion" threshold.437  Japan recognizes the difficulty of 
                                                      
430 Colombia, written submission, para. 82. 
431 Colombia, written submission, para. 82. 
432 Japan, written submission, para. 18. 
433 Japan, written submission, para. 20. 
434 Japan, written submission, paras. 22-23. 
435 Japan, written submission, para. 27. 
436 Japan, written submission, para. 28, citing Panel Report, Mexico – Anti-Dumping Duties on Steel 
Pipes and Tubes from Guatemala  ("Mexico – Steel Pipes and Tubes "), WT/DS331/R, adopted 24 July 2007, 
DSR 2007:IV, 1207, para. 7.321 (emphasis added by Japan). 
437 Japan, written submission, para. 31.  WT/DS397/R 
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 quantifying what constitutes an "important, serious or significant" proportion of domestic production.  
Thus, in Japan's view, it is sufficient that the investigating authority assess what constitutes a major 
proportion on a case-by-case basis in  an unbiased and objective manner438, and requests that the Panel 
carefully consider the facts of this case.439 
7.200  As regards the third issue (sampling), Japan r ecognizes that there are no clear provisions in 
the AD Agreement applicable to the post-initiation ph ase of the investigation that permit investigating 
authorities to engage in sampling of the domestic industry.440  However, Japan notes that the panel in 
EC – Salmon (Norway  concluded that the AD Agreement allows authorities to conduct sampling of 
the domestic industry where there are so many domestic industry members that individual 
examination of all of them would be impracticable.441  Japan disagrees with China's argument that 
sampled domestic producers must account for a major proportion of total domestic production.442  In 
Japan's view, the Article 4.1 requirement concerni ng "major proportion" of total domestic production 
must be clearly distinguished from the requirements for the selection of a sample.443  Japan observes 
that accepting China's argument that  the collective output of the sample must constitute a major 
proportion of total domestic production would vitiate the purpose of sampling in cases where there are 
so many domestic industry members that an i ndividual examination of each of them would be 
impracticable, which, by hypothesis, would be th e only instance in which investigating authorities 
would resort to sampling.444  Japan considers that the second sente nce of Article 6.10, which relates to 
sampling of exporters, producers, importers or types of products, would be helpful also in the context 
of sampling for the injury determination.  The requirement explicitly imposed by the second sentence 
of Article 6.10 for the selection of a sample is that the sample be either statistically valid or based on 
the largest volume of sales i.e., exports, that can be reasonably investigated.  However, in Japan's 
view, the primary requirement for the selection of a sample for the injury determination is that, as 
explained by the panel in  EC – Salmon (Norway) , the sample must be sufficiently representative of 
the domestic industry.445 
(iii) Norway 
7.201  Norway focuses on one of the issues raised by  China, the alleged exclusion of certain 
categories of domestic EU producers that produced the domestic "like product" during the relevant 
period.446  Norway argues that the investigating aut hority in the determination of the domestic 
industry cannot exclude groups of producers.447  In Norway's view, the European Union argues that an 
investigating authority has the discretion to exclude whichever producers it wishes, provided that the 
remaining producers represent a "major proportion" of the industry.448  Norway disagrees that 
Article 4.1 permits such a determination, which would prevent an objec tive examination of the 
industry, as required by the AD Agreement.  Norw ay observes that, under Article 4.1, the "domestic 
industry" comprises producers "as a whole" of the lik e products.  In the alternative, the industry may 
be limited to a "major proportion" of the industry.  However, the only category of producers that may 
                                                      
438 Japan, written submission, para. 33. 
439 Japan, written submission, para. 34. 
440 Japan, written submission, para. 35.  Japan notes that footnote 13 of the AD Agreement appears to 
provide for the possibility of sampling domestic producers before initiation of an anti-dumping investigation.  
Id. at footnote 22. 
441 Japan, written submission, para. 36. 
442 Japan, written submission, para. 37. 
443 Japan, written submission, para. 38. 
444 Japan, written submission, para. 39. 
445 Japan, written submission, paras. 40-41. 
446 Norway, written submission, para. 4. 
447 Norway, written submission, para. 5. 
448 Norway, written submission, para. 9, referring  to European Union, first written submission, 
paras. 296-297. WT/DS397/R 
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 be entirely excluded from the industry is "related" producers, thereby ensuring the inclusion of 
domestic producers from all segments and sectors of the industry on an equal footing, and that any 
determinations made with respect to the "domestic i ndustry" will be representative of that industry as 
a whole. Norway asserts that Article 4.1 does not authorise an authority to limit an industry solely to 
the producers that supported the investigation, or exclude "silent" producers.449  Norway considers 
that this reading of Article 4.1 is supported by st rong contextual evidence in Articles 3 and 5 of the 
AD Agreement450, as well as by footnote 13 of the AD Agreement, attached to Article 5.4.451  
Accordingly, it is Norway's view that an inv estigating authority cannot exclude categories of 
producers from the definition of the domestic industry, whether these categories are based on the 
production of a particular type or model of the like  product or their opposition or silence in respect of 
the investigation.452  
(iv) United States 
7.202  The United States considers that China argues that the EU acted inconsistently with 
Article 3.1 of the AD Agreement by (1) excludi ng domestic producers that did not support the 
application from its examination of injury, and (2) evaluating injury factors on the basis of different 
groupings of domestic producers.453  While it takes no position on the merits of China's factual 
allegations, the United States agrees with China that , under either of these conditions, an investigating 
authority fails to undertake an "objective examination" of the impact of dumped imports on the domestic industry as required by Ar ticle 3.1 of the AD Agreement.
454 
7.203  The United States notes that, as the Appellate Body has recognized, "an 'objective 
examination' requires that the domestic industry, and the effects of dumped imports, be investigated in 
an unbiased manner, without favouring the interests of any interested party, or group of interested 
parties, in the investigation ".455  The United States considers that, in light of this understanding of 
Article 3.1, an investigating authority's inclusion of only supportive domestic firms, to the exclusion 
of other domestic firms, in its ex amination of the domestic industry appears to show a selection bias 
ab initio .456  When an investigating authority chooses to  investigate data con cerning only a portion of 
the domestic industry, with no objective explanation therefor, it falls short of the requirement in 
Article 3.1 to conduct an "objective examination" of  the state of the domestic industry, particularly 
where the selected partial data is that c hosen by the supporters of the application.457 
7.204  Furthermore, the United States asserts that, wh ere an investigating authority has failed to 
conduct an "objective examination" as required by Ar ticle 3.1, that error permeates the investigating 
authority's analyses of market share, price effe cts, impact, and causation under Articles 3.2, 3.4, 
and 3.5, respectively, as a consequence of the fa ct that, instead of conducting these analyses in 
relation to an objectively-determined "domestic indus try", the investigating authority analyzed these 
                                                      
449 Norway, written submission, para. 10. 
450 Norway, written submission, para. 11. 
451 Norway, written submission, para. 17. 
452 Norway, written submission, para. 20. 
453 United States, written submission, para. 29, referri ng to China, first written submission, paras. 241-
242 and 435-445. 
454 United States, written submission, para. 29. 
455 United States, written submission, para. 30, citing, Appellate Body Report, US – Hot-Rolled Steel , 
para. 193 (emphasis added). 
456 United States, written submission, para. 31. 
457 United States, written submi ssion, para. 31, referring to  Appellate Body Report,  Mexico – Anti-
Dumping Measures on Rice , paras. 180-181;  Panel Report, Mexico – Anti-Dumping Measures on Rice , 
para. 7.86.  WT/DS397/R 
 Page 99 
 
 
 elements solely by reference to those member s of the domestic industry that supported the 
antidumping application.458   
(c) Evaluation by the Panel 
7.205  In addition to substantively responding to Ch ina's arguments, the European Union asserts, as 
a preliminary matter, that China's first allegation of  error was not the subject of consultations, and is 
therefore not within the Panel's jurisdicti on, and that China has failed to make a prima facie  case with 
respect to its claims concerning "major proportion"  and representativeness of the sample chosen.  
With respect to China's first allegation of error, that the failure to include in the domestic industry 
producers coming forward after the 15-day dead line established in the Notice of Initiation was 
inconsistent with Articles 3.1 and 4.1 of the AD Agr eement, the European Unio n alleges that the brief 
summary of the legal basis in the request for c onsultations does not identify this allegation as the 
matter in dispute.459  China responds by asserting that its requ est for consultations is broad enough to 
cover the more specific issue, which it identifies in its panel request.460  China also asserts that the 
European Union errs as a matter of law in suggesting that the request for consultations must set forth 
the identical "matter" as is identified in the panel request. 
7.206  We recall the principles we addressed ear lier in this report in this respect461, and that 
Article 4.4 of the DSU requires that a request for consultations contain "an indication of the legal 
basis for the complaint".  We consider that this  is a different, and in our view less stringent, 
requirement than those of Article 6.2 of the DSU with  respect to a panel request.  Moreover, it is clear 
to us that, to the extent it suggests that the request for consultations must set forth the identical matter 
that is subsequently identifi ed in the panel request, the European Union is in error.462  In this case, 
China's request for consultations contains mu ltiple references to Articles 3.1 and 4.1: 
"2. China considers that the EC's imposition of anti-dumping duties on imports 
of certain iron or steel fasteners originating in the People's Republic of China  is 
inconsistent with the EC's obligations under Articles VI and X:3(a) of the GATT 
1994;  Articles 1, 2.1, 2.2. 2.4, 2.6, 3.1, 3.2, 3.4, 3.5, 4.1, 5.4, 6.1, 6.2, 6.4, 6.5, 6.10, 
9.2, 9.4 and 17.6(i) of the AD Agreement as well as Part I, paragraph 15 of China's Protocol of Accession.  ... 
 (vi) The EC based its injury de termination on data from EC producers 
accounting for only 27 per cent of the estim ated total EC production of the product 
concerned in 2006, thereby acting inconsis tently with Articles 3 and 4.1 of the 
AD Agreement; 
 (vii) The EC failed to determine which proportion of the total domestic 
production was represented by the EC producers in relation to which the injury 
                                                     
 
458 United States, written submission, para. 32.  In this respect, the United States recalls that the 
analyses set out in Articles 3.2, 3.4 and 3.5 all form part of the determination as to whether there is material 
injury to the domestic industry .  See Footnote 9 to the AD Agreement.  The United States also notes that, in 
Mexico – Olive Oil , the panel discussed the overarching importance of the domestic industry definition to 
various aspects of the injury determination in Article 15 of the SCM Agreement, which provisions parallel those 
of Article 3 of the AD Agreement.  See  Panel Report, Mexico – Definitive Counterva iling Measures on Olive Oil 
from the European Communities ("Mexico – Olive Oil "), WT/DS341/R, adopted 21 October 2008, 
DSR 2008:IX, 3179, paras. 7.197-7.201. 
459 European Union, first written submission, paras. 285-290. 
460 China, second written submission, paras. 521, 527. 
461 See paragraphs 7.16 to 7.24 above. 
462 See, Panel Report, Brazil – Aircraft , para. 7.10;  Appellate Body Report, Brazil – Aircraft , para. 132. WT/DS397/R 
Page 100 
 
 
 determination was made throughout th e investigation period, thereby acting 
inconsistently with Articles 3 and  4.1 of the AD Agreement; 
 (viii) The EC conducted the injury de termination on the basis of a sample 
of EC producers accounting for only 17.5 per cent of the total EC production of the 
product at issue in 2006, thereby acting inc onsistently with Articles 3 and 4.1 of the 
AD Agreement;  ... 
 (ix) The EC failed to exclude from the scope of the domestic industry EC 
producers that are related to the exporters or  importers or are themselves importers of 
the allegedly dumped product, thereby acting inconsistently with Articles 3 and 4.1 of 
the AD Agreement." 
7.207  Articles 3.1 and 4.1 are provisions setting fo rth multiple obligations for investigating 
authorities.  While the Appellate Body has indicated that a mere listing of legal provisions alleged to 
be violated may not be sufficient to provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly in the context of a panel request
463, it is not clear to us that a 
similar approach should be taken with respect to a request for consultations.  Unlike Article 6.2 of the 
DSU, which requires that a panel request provide a brief summary of the legal basis of the complaint 
sufficient to present the problem clearly, Article 4.4 of the DSU requires only that a request for 
consultations contain "an indication of  the legal basis for the complaint".  In our view, this is a lesser 
requirement than that of Article 6.2, and may we ll be satisfied in a particular case by listing the 
Articles allegedly violated.  China's request for consultations clearly indicates that it seeks 
consultations with the European Union concerning  alleged violations of the provisions of the 
AD Agreement set out in the chapeau of paragraph 2,  including Articles 3.1 and 4.1.  In the following 
subparagraphs, China sets out additional information as to the circumstances of the alleged violations, 
including with respect to the definition of the dom estic industry.  While not specifically identifying 
the failure to include in the domestic industry pr oducers coming forward after the 15-day deadline 
established in the Notice of Initiation, China's requ est for consultations makes it clear that China 
considered that there were several errors in the European Union's definition of the domestic industry.  
In this case, we consider that the reference to Artic les 3.1 and 4.1 in the chapeau of paragraph 2 of the 
request for consultations itself gives an "indication" th at the legal basis of the complaint is a violation 
of some aspect of those provisions, with some furt her explanation in the following subparagraphs for 
some of the Chinese concerns.  Moreover, we note that there is no dispute that the panel request 
clearly sets out a claim of violation with respect to the failure to include in the domestic industry 
producers coming forward after the 15-day deadline estab lished in the Notice of Initiation.  Thus, it is 
clear to us that the panel request concerns the same  dispute, and evolved from the matter set out in the 
request for consultations.  In these circumstances, we conclude that China's request for consultations 
does contain a sufficient "indication of the legal basis"  for the first allegation of error with respect to 
its claim of violation of Articles 3.1 and 4.1 of th e AD Agreement, which is therefore within our terms 
of reference. 
7.208  With respect to whether China made out a prima facie  case regarding its claims concerning 
"major proportion" and representativeness of the sample chosen, we recall that "[a] prima facie  case is 
one which, in the absence of effective refutation by the defending party, requires a Panel, as a matter 
of law, to rule in favour of the complaining party presenting the prima facie  case ".464  T h e  
European Union's assertion of failure to present a prima facie  case with respect to the "major 
proportion" issue appears to rest, in significant part, on a disputed interpretation of the AD Agreement.  In this situation we consider it a ppropriate to resolve that question of interpretation 
                                                     
 
463 Appellate Body Report, Korea – Dairy , para. 124. 
464 Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones ) (EC – 
Hormones ), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135, para. 104.  WT/DS397/R 
 Page 101 
 
 
 first.  We will then consider the parties' argume nts with respect to China's claims, including the 
European Union's assertions regarding China's alleged failure to present a prima facie  case.   
7.209  Before turning to the parties' arguments, we set  out below our conclusions with respect to the 
facts surrounding the definition of domestic industry in  this case.  Some of these facts were disputed 
by the parties, and we have resolved those di sputes as necessary in order make our decision.   
7.210  In this anti-dumping investigation, the Commission did not specifically set out a "definition" 
of the domestic industry per se .  However, its views on the subject are clear from the Definitive 
Regulation.  First, the Commission defined the "p roduct concerned" in the investigation, as:  
"certain iron or steel fasteners, other than of stainless steel, i.e. wood screws 
(excluding coach screws), self-tapping screws, other screws and bolts with heads 
(whether or not with their nuts or washer s, but excluding screws turned from bars, 
rods, profiles or wire, of solid section, of a shank thickness not exceeding 6 mm and excluding screws and bolts for fixing railway track construction material), and washers, originating in the People's Repub lic of China (all together hereinafter 
referred to as fasteners or product concerned).  
The product concerned is normally declar ed within CN codes 7318 12 90, 7318 14 
91, 7318 14 99, 7318 15 59, 7318 15 69, 7318 15 81, 7318 15 89, ex 7318 15 90, ex 7318 21 00 and ex 7318 22 00.  
Fasteners are used to mechanically join two or more elements in construction, 
engineering, etc., and are used in a wide variety of industrial sectors, as well as by 
consumers. Based on their basic physical and technical characteristics and end uses, 
all fasteners are considered to constitute a single product for the purpose of the proceeding. Within the same national or international standards, fasteners should 
comply with the same basic physical and technical characteristics including notably strength, tolerance, finishing and coating."
465 
7.211  At paragraphs 48-56 of the Definitive Regulation, the Commission addressed various 
arguments of the parties to the investigation con cerning the issue of like product, and concluded at 
paragraph 57 that: 
"the fasteners produced and sold by th e Community industry in the Community, 
fasteners produced and sold on the domestic  market in the PRC and those produced 
and sold on the domestic market in India,  which served as an analogue country, and 
fasteners produced in the PRC and sold to the Community are alike within the 
meaning of Article 1(4) of the basic Regulation."  
7.212  Referring to the indication at the outset of the investigation, in the Notice of Initiation, that 
sampling might be used, the Definitive Regulation states that: 
"in view of the large number of producers, sampling of the domestic industry was 
proposed...  In order to enable the Commission to decide whether sampling would be 
necessary, and if so to select a sample, Co mmunity producers were requested to make 
themselves known within 15 days from the da te of the initiation of the investigation 
and to provide basic information on thei r production and sales, and the names and 
activities of all their related companies i nvolved in the production and/or selling of 
the product concerned....46 Community producers that produced the product 
                                                      
465 Definitive Regulation, Exhi bit CHN-4, recitals 40-42. WT/DS397/R 
Page 102 
 
 
 concerned in the Community during the inv estigation period and expressed a wish to 
be included in the sample within the afor esaid period were considered as cooperating 
companies and were taken into account in  the selection of the sample ....These 
Community producers represented over 30% of the estimated production in the 
Community in 2006. These producers are c onsidered to constitute the Community 
industry as mentioned in recital 114."466 
The Commission concluded, at recital 114 of the Definitive Regulation, that:  
 
"The production of the Community producers that supported the complaint and fully 
cooperated in the investigation represents  27,0% of the production of the product 
concerned in the Community. It is ther efore considered that these companies 
constitute the Community industry within the meaning of Articles 4(1) and 5(4) of the basic Regulation." 
7.213  In response to questions from the Panel, the European Union clarified that, at the time of 
initiation, it sent sampling forms to 318 EU produ cers of fasteners, asking for certain basic 
information concerning their operations, which coul d be used to determine the composition of the 
intended sample, and setting a 15-day deadline.
467  Five national associations of producers were also 
sent letters, and the Notice of Initiation invited any other domestic producers who so wished to come 
forward and provide the requested in formation within the 15-day period.468  Another 54 producers, 
whose names had been provided by exporters, we re subsequently contacted by the Commission, 
which sent sampling forms to 45 and received 10 co mpleted forms in return, but none of these 
producers were ultimately included in the domestic industry.469  The sampling forms do not contain 
any questions concerning support for or opposition to the application.470  China asserts that this does 
not mean the EU investigating authority was not aw are of the positions of all companies with respect 
to the investigation.471  In this respect, China notes that the Information Document, sent to the parties 
at the time it was decided not to impose provisiona l measures, indicates that of 114 companies who 
came forward with relevant information, tho se who produced the product under investigation and 
expressed a wish to be included in the sample were  considered as "cooperati ng" and were taken into 
account in the selection of the sample.  Of these cooperating companies, 86, representing 36 per cent 
of estimated EU production, supported the compla int, while 25, accounting for 9 per cent of EU 
production, opposed the complaint, and three did not express an opinion.   
7.214  We note that the Definitive Regulation suggests,  by using the term "producers that supported 
the complaint", that, as alleged by China, only pr oducers expressing support for the complaint were 
included in the domestic industry.  While the In formation Document also seems to support this 
conclusion, we accept that, as asserted by the Europ ean Union, this is a working document reflecting 
progress in the investigation to that point, with no lega l status in EU law, which was made available to 
the parties despite there being no obligation to do so, and is not th e measure before us.472  Thus, we do 
                                                      
466 Definitive Regulation, Exhi bit CHN-4, recitals 22-25. 
467 European Union, answer to Panel question 88, para. 17. 
468 European Union, answer to Panel question 88, para. 17. 
469 European Union, answer to Panel question 89, para. 20.  One of these companies had in fact been 
contacted at initiation, and was thus already included in the domestic industry.  Id. 
470 See Exhibits EU-30 and EU-31. 
471 China, Comments on European Union answer to Panel question 89, para. 16. 
472 European Union, answer to Panel question 30, pa ra. 88.  China disagrees with the European Union 
in this regard, referring to the title of the cover lette r transmitting the Information Document, which refers to 
"Preliminary findings  and continuation of the investigation without imposition of provisional measures".  
China, second oral statement, para. 63 (emphasis added by China).  However, we do not consider that the title of the document binds the Euro pean Union, and accept th e European Union's repres entation of the document's 
status under EU law.  WT/DS397/R 
 Page 103 
 
 
 not consider the representations in the Informa tion Document as constituting part of the measure 
which we must evaluate.  We note that the European Union indicates473 that at least one producer 
which was not a complainant, and had remained silent  prior to initiation, was not only included in the 
domestic industry, but was selected for the sample.474  The European Union indicates that, based on 
arguments made by Chinese exporters, it continued to consider the question of standing after the 
initiation, that this continued examination confused  the question of the definition of the domestic 
industry, and that the "unfortunate standard formul ation" in the Definitive Regulation (referring to the 
use of the term "producers that supported the co mplaint" with respect to the domestic industry)475, did 
not affect the definition of the domestic industry,  with respect to which no distinction was made 
between producers who supported the complaint and those that did not.476  
7.215  We are sympathetic to China's position with r espect to the question of whether producers who 
do not support the complaint may be excluded from the domestic industry in the abstract.  Issues 
might arise should an investigating authority systematically exclude from the domestic industry companies that produce the like product but do not support the complaint.  On the other hand, we also have sympathy for the European Union's view th at producers who do not support the complaint are 
not likely to cooperate, and thus cannot effectivel y be considered as part of the domestic industry 
unless they specifically come forward and agree to par ticipate in the investigation.  We consider that, 
on the facts before us, China has not demonstrated th at the EU investigating authority in this case did, 
in fact, exclude producers that did not support the complaint from the domestic industry.  In our view, this is demonstrated by the fact that at least one producer who did not affirmatively state support for 
the complaint was included in the domestic industry.   In addition, while it seems clear that producers 
who did not make themselves known within the 15- day period established at initiation were not 
included in the domestic industry, we find that the i nvestigating authority did not act to exclude such 
producers.  There seems to have been a process of  considering additional producers for inclusion in 
the domestic industry, based on arguments made by the exporters.  While none of the producers so 
considered were in the end included in the domest ic industry, in our view, the fact that the 
Commission considered including them the domestic industry supports our view that it did not simply exclude producers who did not come forward within the 15-day period.    
7.216  Finally, we note that the Definitive Regulation indicates that the Commission chose the 
sample by selecting, from the 46 producers c onstituting the Community in dustry, those with the 
largest production volumes, "so as to achieve the largest representative volume of production of the 
like product produced in the Community which coul d reasonably be investigated within the time 
available".
477  From the completed sampling forms received from domestic producers, the 
investigating authority selected a sample compri sing seven producers, accounting for approximately 
70 per cent of the production of the Community indu stry, as defined by the Commission, that is, the 
46 producers.  Subsequently, one sampled producer  was considered as not cooperating, and dropped 
from the sample, resulting in a sample comprising six producers accounting for approximately 65 per 
cent of the production of the Community industry as defined by the Commission.  Questionnaires 
                                                      
473 China asserted, in its request for interim review, that the European Union did not provide any 
evidence in this regard, and that China could not independently verify this fact, as the identities of the complainants was confidential.  China, request for interi m review, para. 20.  However, we have no reason to 
doubt the European Union's assertion of fact in this regard. 
474 European Union, answer to Panel question 89, para. 19;  China, Comments on European Union 
answer to Panel question 89, para. 15.  China asserts that the fact that this company did not express a view prior 
to initiation does not mean that it did not support the complaint when it came forward after initiation and 
expressed a willingness to be included.  Id.  Whether this is true or not is not relevant to our evaluation, since it 
is clear that the support or lack th ereof as a matter of fact was not enquired into by the Commission, and thus 
was not an aspect of the inclusion of this company in the domestic industry. 
475 European Union, answer to Panel question 89, para. 18. 
476 European Union, answer to panel question 34, para. 105. 
477 Definitive Regulation, Exhibit CHN-4, recital 27. WT/DS397/R 
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 were sent to the sampled companies and replies from all of them were received within the deadlines 
established by the Commission.478 
7.217  Turning to the first aspect of China's claim, we  recall that Article 4.1 of the AD Agreement 
provides: 
"4.1 For the purposes of this Agreement,  the term "domestic industry" shall be 
interpreted as referring to the domestic produ cers as a whole of the like products or to 
those of them whose collective output of the products constitutes a major proportion of the total domestic production of those products, except that: 
 (i) when producers are related
11 to the exporters or importers or are 
themselves importers of the allegedly dumpe d product, the term "domestic industry" 
may be interpreted as referring to the rest of the producers; 
 (ii) in exceptional circumstances the territory of a Member may, for the 
production in question, be di vided into two or more competitive markets and the 
producers within each market may be regarded as a separate industry if (a) the 
producers within such market sell all or al most all of their production of the product 
in question in that market, and (b) the demand in that market is not to any substantial 
degree supplied by producers of the product in question located elsewhere in the territory.  In such circumstances, injury may be found to exist even where a major 
portion of the total domestic industry is not injured, provided there is a concentration 
of dumped imports into such an isolated market and provided further that the dumped 
imports are causing injury to the producers of all or almost all of the production 
within such market. 
_______________ 
11  For the purpose of this paragraph, producers shall be deemed to be related to exporters or 
importers only if (a) one of them directly or indirectly controls the other;  or (b) both of them 
are directly or indirectly controlled by a third person;  or (c) together they directly or 
indirectly control a third person, provided that there are grounds for believing or suspecting that the effect of the relationship is such as to cause the producer concerned to behave 
differently from non-related producers.  For the purpose of this paragraph, one shall be 
deemed to control another when the former is le gally or operationally in a position to exercise 
restraint or direction over the latter.
" 
7.218  Thus, the plain language of Article 4.1 makes it clear that domestic producers of the "like 
product" are the starting point for the definition of th e domestic industry.  It is also clear from the 
plain language of Article 4.1 that the domestic indus try is to be defined as producers "as a whole" of 
the like product defined in the investigation, or, in  the alternative, those producers whose output of 
that product constitutes a major proportion of total domestic producti on of this product.479  I n  
addition, it is clear that Article 4.1 sets out circ umstances in which some producers of the like product 
may be left out of the domestic industry.  Thus, Article 4.1(i) provides for exclusion of producers 
related to the exporters or impor ters, or producers who are themselves importers of the allegedly 
dumped product, while Article 4.1(ii) provides that , in the exceptional circumstances of two or more 
competitive markets within the territory of a Memb er, producers within each market may be regarded 
                                                      
478 Definitive Regulation, Exhi bit CHN-4, recitals 28-30. 
479 See, Panel Report, European Communities – Anti-Dumping Measure on Farmed Salmon from 
Norway ("EC – Salmon (Norway )"), WT/DS337/R, adopted 15 January 2008, and Corr.1, DSR 2008:I, 3, 
para. 7.110.  WT/DS397/R 
 Page 105 
 
 
 as a separate industry if certain conditions are satis fied.  However, we agree with the views of the 
panel in EC – Salmon (Norway) , that:   
"nothing in the text of Article 4.1 gives any support to the notion that there is any 
other circumstance in which the domestic i ndustry can be interpreted, from the outset, 
as not including certain categories of producers of the like product, other than those 
set out in that provision.283  Thus, we see no basis in the text of Article 4.1 which 
would allow for the exclusion from the domestic industry, as a category or group, of producers of any form of the like product... 
_______________ 
283 By this, we do not mean to suggest that a determination based on information from fewer 
than all domestic producers of the like product will necessa rily be insufficient  as an element of 
a decision to impose anti-dumping duties.  However, we do see a clear distinction between the 
definition of the domestic industry as set out in Article 4.1, and whether the information 
obtained during the investigation concerning the domestic industry, as defined, is sufficient to 
form the basis of a determination of injury and causation ."480 
7.219  On its face, it is clear that Article 4.1 of the AD Agreement does not establish any particular 
procedure or methodology for investigating authoriti es in defining the domestic industry.  There is 
nothing in Article 4.1 which would preclude inv estigating authorities from establishing deadlines for 
companies to come forward in order to be c onsidered for inclusion in the domestic industry.481  We 
have concluded, on the basis of the facts before  us, that the Commission, the EU investigating 
authority, did not act to exclude the "category" of producers asserted by China,  that is, "producers that 
did not support the complaint", from the definition of  the domestic industry.  As noted, at least one 
producer that did not support the complaint was, in fact, included in the domestic industry, and in the 
sample.482  In addition, we consider, and China does not disagree483, that it is reasonable for 
investigating authorities to impose deadlines for domestic producers to make themselves known and 
then define the domestic industry on the basis of thos e that come forward within that deadline.  While 
China suggests that the 15-days a llowed by the Commission was insuffi cient, it does not substantiate 
this position, and we see no basis for concluding that the 15-day period was necessarily insufficient.484  
Moreover, it seems clear that the Commission did consider the possible inclusion of additional 
producers in the domestic industry, although it ultimatel y did not include any.  In our view, the mere 
fact that the domestic industry as ultimately defi ned does not include any particular proportion of 
producers expressing different views with respect to  the complaint, or producers who did not come 
forward within the 15-day period, does not demonstrat e that the European Union acted inconsistently 
with Article 4.1 of the AD Agreement in defining th e domestic industry.  Thus, we find that China has 
failed to demonstrate that the European Union excl uded producers that did not support the complaint, 
and has failed to demonstrate that the definition of the domestic industry was inconsistent with 
Article 4.1 of the AD Agreement in this regard.   
                                                      
480 Panel Report, EC – Salmon (Norway ), para. 7.112. 
481 Indeed, China does not dispute that  such deadlines may be applied, so  long as they are reasonable.  
China, answer to Panel question 23, para. 101. 
482 China contends that the fact that this company did not indicate support for the complaint prior to the 
initiation does not mean that it did not support the complaint when it came forward after the initiation.  China, 
comments on European Union, answer to Panel question 89, para. 15.  However, China proffers no evidence 
which might suggest that the Commission inquired whether this company supported the complaint, that the company did, in fact support the complaint, or that th e Commission took this question into consideration at all. 
483 China, answer to Panel question 23, para. 101. 
484 We recall that in connection with its claim under Article 6.1.1 of the AD Agreement with respect to 
the time given to fill out the MET/IT claim forms, China does not argue that the 15-day deadline given to fill out 
those forms is unreasonable.  See, footnote 1130 below. WT/DS397/R 
Page 106 
 
 
 7.220  Finally, although China asserts that the two lega l bases it posits for this aspect of its claim, 
Articles 3.1 and 4.1 of the AD Agreement, are indepe ndent of one another, China has not, in our view, 
made a prima facie  case of violation of Article 3.1 of the AD Agreement.  Article 3.1 of the 
AD Agreement provides: 
"A determination of injury for purposes of  Article VI of GATT 1994 shall be based 
on positive evidence and involve an objective examination of both (a) the volume of 
the dumped imports and the effect of the dumped imports on prices in the domestic 
market for like products, and (b) the consequent impact of these imports on domestic 
producers of such products." 
7.221  China asserts that it is only possible to un dertake an objective examination pursuant to 
Article 3.1 if the result of the examination is not  predetermined by the way the domestic industry is 
defined.485  We do not disagree.  However, we have re jected China's position with respect to this 
aspect of its claim challenging the domestic industr y definition in this case.  China makes no other 
allegations in support of its claim of violation of Ar ticle 3.1, and we therefore dismiss that aspect of 
China's claim. 
7.222  China's second allegation of error has two aspects:   (a) whether, in the circumstances of this 
investigation, the Eurostat data considered by the Commission constituted a reliable basis for 
estimating total EU production of fasteners in  assessing whether the producers included in the 
domestic industry accounted for a "major proportion" of total domestic production of the like product, 
and (b) whether the 27 per cent of total EU production accounted for by the producers found to 
constitute the domestic industry was sufficient to constitute a "major proportion" of total domestic 
production of the like product, under Article 4.1 of the AD Agreement.   
7.223  We note that China's arguments concerning the first aspect essentially reprise its arguments in 
the context of its claim with respect to standing.  As discussed in more detail above, and for the same 
reasons, we do not consider that the European Un ion erred in relying on the Eurostat data in 
estimating total EU production of fasteners.486  China acknowledges that the specific data used, 
PRODCOM statistics, are gathered according to objec tive rules, but asserts that these rules themselves 
make the data unsuitable for calculating domestic production.  However, similar to the standing 
determination, the definition of the domestic industr y takes place at an early stage of the proceedings, 
when the information available to the investigatin g authority is necessarily limited.  In our view, 
reliance on a set of data gathered and maintained on an objective basis for reasons not linked to the 
anti-dumping investigation is a reasonable basis for an investigating authority to make decisions 
concerning the definition of the domestic industry, including whether a group of producers accounts for a sufficient proportion of total domestic production to be considered a "major proportion" of that 
production.  We do not preclude the possibility that su ch a decision might be revisited at a later stage 
of the proceedings, when more information has beco me available to the investigating authority.  
However, there is nothing in the facts before us  that would support the view that the Commission 
should have approached the Eurostat data with suspicion.   
7.224  China contends that the alleged underestima tion of production volumes in the data was 
confirmed by evidence provided by inter ested parties during the investigation.
487  Even assuming that 
to be true, we fail to see how this could be taken into account at the beginning stages of the 
investigation when the Commission was assessing wh ether producers considered for inclusion in the 
domestic industry accounted for a major proportion of total EU production of fasteners.  Although 
China asserts that other information was available to  the investigating author ity on EU production of 
                                                      
485 China, answer to Panel question 23, para. 107. 
486 See, paragraphs 7.179 to 7.182 above. 
487 China, answer to Panel question 87, para. 3.  WT/DS397/R 
 Page 107 
 
 
 fasteners, we note that this information at best relates to only some production, in Italy and for the 
automotive industry488, and we cannot see how such partial information would constitute a more 
appropriate basis for estimating total domestic produ ction than the data actually relied upon.  Thus, 
we conclude that the European Union did not viol ate Article 4.1 by relying on Eurostat data in 
estimating total EU production for purposes of defining the domestic industry.  
7.225  The principal issue raised by China is whether the European Union violated Article 4.1 in 
defining producers accounting for 27 per cent of esti mated total EU production of fasteners as the 
domestic industry on the basis that these producer s accounted for a "major proportion" of total 
domestic production within the meaning of Article  4.1.  China argued that the Commission wrongly 
relied on a presumption that producers accounting for 25 per cent of total domestic production 
constitute a major proporti on of domestic production.489  Whether or not the Commission relied on 
such a presumption, it is for China to make a prima facie  case that the Commission's definition of 
domestic industry is inconsistent with Artic le 4.1 in the investigation in dispute.490  Although China's 
first written submission asserted that a "major propor tion" must be as close as possible to domestic 
production "as a whole"491, at the first meeting of the Panel, China's representative acknowledged that 
there is no proportion, in the abstract, that must be  satisfied to constitute a "major proportion", and 
that depending on the circumstances, even something less than 25 per cent might be sufficient.  In our 
view, the assertion that the Commission relied on a presu mption is not alone suffic ient to demonstrate, 
prima facie , that the definition of domestic industry in this  case is inconsistent with Article 4.1 of the 
AD Agreement.  We therefore do not consider it necessary to address China's argument that the 
European Union erred by presuming that produ cers accounting for 25 per cent of total domestic 
production will constitute a major propor tion, and thus satisfy the require ments of Article 4.1 in this 
regard.  We now turn to the question whether, in this case, the European Union erred in concluding 
that producers of 27 per cent of estimated total EU production of fasteners accounted for a "major 
proportion" of total domestic production within the meaning of Article 4.1 
7.226  We recall the provisions of Article 4.1, quoted  above, which do not define the term "major 
proportion".  As the parties have r ecognized, a "major" proportion is one that is "important, serious, or 
significant".492  The parties also agree that the "major proportion" referred to in Article 4.1 of the 
AD Agreement may be something less than 50 per cent, and that the lower limit is not determinable in 
the abstract, but will depend on the facts of the case.  This is consistent with the views of the panel in 
Argentina – Poultry , which concluded:  
"an interpretation that defines the domestic industry in terms of domestic producers of 
an important, serious or significant pr oportion of total domestic production is 
permissible.  Indeed, this approach is entir ely consistent with the Spanish version of 
Article 4.1, which refers to producers representing "una proporción importante" of 
domestic production.  Furthermore, Artic le 4.1 does not define the "domestic 
industry" in terms of producers of the  major proportion of total domestic production.  
Instead, Article 4.1 refers to producers of a  major proportion of total domestic 
production.  If Article 4.1 had referred to the  major proportion, the requirement 
would clearly have been to define the "domestic industry" as producers constituting 
50+ per cent of total domestic production.224 However, the reference to a  major 
                                                      
488 See, China, answer to Panel question 87, para. 8. 
489 China, first written submission, para. 265. 
490 We note in this regard that China did not bring a claim against Article 4(1) of the Basic AD 
Regulation, which links "major proportion" for purposes of the domestic industry definition, by reference, to 
Article 5(4) of the Basic AD Regulation, which in turn incorporates the numerical tests for standing set out in 
Article 5.4 of the AD Agreement. 
491 China, first written submission, para. 256. 
492 China, first written submission, para. 253;  European Union, first written submission, para. 319. WT/DS397/R 
Page 108 
 
 
 proportion suggests that there may be more than one "major proportion" for the 
purpose of defining "domestic industry".  In the event of multiple "major 
proportions", it is inconceivable that each individual "major proportion" could – or 
must – exceed 50 per cent.  This therefore supports our finding that it is permissible 
to define the "domestic industry" in term s of domestic producers of an important, 
serious or significant proportion of total domestic production.  For these reasons, we find that Article 4.1 of the AD Agreement  does not require Members to define the 
"domestic industry" in terms of domestic producers representing the majority, or 50+ per cent, of total domestic production. 
_______________ 
224 If Article 4.1 had referred to "the" major propor tion, we may have been required to accept 
Brazil's interpretation of Article 4.1. "493 
The panel in that case went on to observe that there w as "nothing on the record to suggest that, in the 
circumstances of this case, 46 per cent of total dom estic production is not an important, serious or 
significant proportion of total domestic production", and accordingly rejected Brazil's claim that 
Argentina violated Article 4.1 of the AD Agreemen t by defining "domestic industry" as consisting of 
domestic producers accounting for 46 per cent of total domestic production.  7.227  We agree with these views, and consider it approp riate to apply them in our analysis in this 
dispute.  Thus, the question for us is whether, in light of the facts on the record of the anti-dumping 
investigation before us, there is anything that s upports China's contention that 27 per cent of estimated 
EU production of fasteners is not an important, serious, or significant pr oportion of total domestic 
production of that product.   
7.228  In its first written submission, China did not make  any arguments with respect to the facts of 
this case, but did raise such arguments at the first meeting of the Panel with the parties, and in 
subsequent submissions.  We note that the Eur opean Union asserts that China fails to make a prima 
facie  case with respect to this claim, as it failed to provide any relevant evidence of why 27 per cent of 
total domestic production does not constitute a "major proportion" of total domestic production.  In its 
second written submission, China asserted the following specific circumstances in support of its contention that 27 per cent of domestic production di d not satisfy the major proportion requirement:  
(a) that the domestic producers included in the dom estic industry are not representative of the whole 
of domestic production, (b) that it was feasible, as a practical matter, to include more domestic producers, (c) that the producers included represen t only a small portion of the total number of 
domestic producers, and (d) that the domestic industr y definition excluded producers other than those 
referred to in Article 4.1(i) and (ii).
494  China also argues that invest igating authorities are required to 
examine and determine, in light of the specifi c circumstances of each case whether the major 
proportion test has been satisfied, including not onl y quantitative elements, but  also aspects such as 
those set out in (a) – (d) above.495  According to China, the EU invest igating authority simply failed to 
consider the circumstances of the case, and instead rested on the fact that 27 per cent is more than 
25 per cent, and therefore was sufficient.  China asse rts that this failure cannot be cured by the fact 
                                                      
493 Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from Brazil ("Argentina – 
Poultry Anti-Dumping Duties "), WT/DS241/R, adopted 19 May 2003, DSR 2003:V, 1727 Panel Report, 
para. 7.341 (footnote 223 deleted, emphasis in original). 
494 China, second written submission, paras. 632-639. 
495 China, second written submission, para. 628.  WT/DS397/R 
 Page 109 
 
 
 that the domestic industry as defined did, in fact , include large and smaller companies and producers 
of different types of the like product.496 
7.229  We recall that Article 4.1 is a definitional pr ovision.  Thus, while it does impose an obligation 
on an investigating authority to ensure that it de fines a "domestic industry" in a manner consistent 
with that provision, Article 4.1 does not set out any requirements with respect to how an investigating 
authority is to do this.  We see no basis in the te xt of Article 4.1 for the proposition put forward by 
China that an investigating authority must, of its  own accord, "examine and determine" whether the 
major proportion test has been satisfied by consid ering the specific circumstances of the case with 
reference to the criteria proposed by China.  We do no t mean to suggest that an investigating authority 
may ignore relevant evidence, and in particular argum ents made by interested parties, suggesting that 
a particular definition of domestic industry is inconsistent with Artic le 4.1.  But the only requirement 
clearly set out in that provision is that the domestic  industry consist of "domestic producers of the like 
product", either as a whole, or those of them accounting for a major proportion of total domestic 
production.  We see no basis in the text of the AD Agreement to impose on investigating authorities 
an affirmative obligation to examine non-quantitativ e factors in defining a domestic industry on the 
basis of producers accounting for a major proportion of domestic production of the like product.497  
Nor, in our view, does the report in Argentina – Poultry  suggest otherwise.  While the panel in that 
dispute did note that "[t]here is nothing on the record to suggest that, in the circumstances of this case, 
46 per cent of total domestic production is not an im portant, serious or significant proportion of total 
domestic production"498, we do not understand this to impo se an affirmative obligation on the 
investigating authority to examine and determin e unspecified "circumstances" in defining the 
domestic industry.   
7.230  Even assuming non-quantitative factors are relevant  to the definition of a domestic industry 
under Article 4.1, we do not consider that the factors China raises in this rega rd are relevant in this 
case, or in general.  For instance, we see nothing in  Article 4.1 that would require an investigating 
authority, in defining the domestic industry, to  examine and determine whether producers accounting 
for a major proportion, are, in addition, some how "representative" of the whole of domestic 
production.499  Nor do we see anything in the text of Ar ticle 4.1 that would require an investigating 
authority to include as many producers as is "prac tically feasible", so long as the producers that are 
included account for a sufficient quantity of dom estic production to be considered a "major 
proportion".  Similarly, we consider irrelevant whether the number of producers included in the 
domestic industry is a small or a large portion of the total number of producers.  Article 4.1 refers to 
the volume of production accounted for by producers,  a consideration which is, in our view, not 
addressed by taking account of the number of producer s.  Moreover, as the European Union observes, 
                                                      
496 China, second written submission, para. 629. 
497 We note that this does not mean that we agree that any domestic industry which includes producers 
accounting for more than 25 pe r cent of total domestic production will nece ssarily be consistent with Article 4.1 
of the AD Agreement, nor that  an examination of injury to such an industr y will necessarily be consistent with 
the provisions of Article 3 of the AD Agreement. 
498 Panel Report, Argentina – Poultry Anti-Dumping Duties , para. 7.342. 
499 We note in this regard China's contention that:  
"[b]y failing to include in the domestic industry domestic producers that opposed the 
complaint or remained silent, the EU investigating authorities defined a domestic industry that is not "representative" of the whole industry a nd thus does not constitute a "proportion" of the 
total domestic production and a fortiori  not a "major proportion" of that production."   
China, second written submission, para. 633.   We consider this contention fundamentally flawed.  As China recognizes, there are two alternative 
bases for the definition of the domestic industry.  Nothing in Article 4.1 suggests that an industry defined on the 
basis of domestic producers of a major proportion must somehow "represent" the putative industry that would be defined on the basis of domestic producers as a whole.  Indeed, such a requirement would be illogical and 
circular. WT/DS397/R 
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 it is precisely in the situation of a "fragmented" indu stry with many producers that a definition of the 
domestic industry based on the "major proportion" is most likely500, and to require that an industry in 
that situation must include a major proportion of  the number of the producers would vitiate the 
effectiveness of the major proportion option.  Finally,  as noted above, we have rejected as a matter of 
fact China's contention that the Commission wrongly excluded certain categories of producers.  We 
therefore conclude that the European Union did not act inconsistently with Article 4.1 of the AD Agreement in defining a domestic industry co mprising producers accounting for 27 per cent of 
total estimated EU production of fasteners. 
7.231  Turning to China's third allegation of error, we recall our conclusion above that there is 
nothing in Article 4.1 that establishes any methodol ogical requirements with respect to the definition 
of the domestic industry.  In particular, there is nothing in that Article that establishes any period of 
time for which total domestic production must be calcu lated in the context of determining whether the 
major proportion requirement is satisfied.  Similarly,  we can see nothing in Article 3.1, even assuming 
it is relevant to the defin ition of the domestic industry per se , which would establish that the definition 
of the domestic industry must relate to any specific period, and in particular, the period for which data 
is collected for purposes of the dumping margin calculations.   
7.232  In this regard, we note that the period China considers relevant is what the European Union 
refers to in its practice as the "Investigation Peri od", which we understand to be the period for which 
data is collected for purposes of calculating dumpi ng margins.  However, we note that there was 
another relevant period defined in  this investigation, from January  2003 to October 2007, referred to 
in EU practice as "the period considered", which was the period for which information was collected 
for purposes of examining the question of injury to the domestic industry.
501  The information on 
which the calculation of major pr oportion was made covered calendar year 2006, and thus was within 
the period considered.  China argues that "the exis tence of material injury within the meaning of 
Article 3.4 of the AD Agreement was assessed on the basis of the status of the domestic industry 
during [the Investigation period 1 October 2006-30 Sept ember2007].  The previous periods were used 
only in order to detect trends".502  On this basis, China considers that the EU authorities were required 
to define the domestic industry in relation to the Investigation Period.  We do not agree. 
7.233  In our view, even assuming China is correct that  the existence of injury was determined with 
respect to the Investigation Period, a question which is not before us and wh ich we do not address, we 
do not see that this would necessarily establish that the definition of the domestic industry must be 
based on data for the same period.  China suggests that to do otherwise will necessarily result in a 
failure to undertake an "objective examination", as requi red by Article 3.1, in the context of the injury 
determination.  We fail to see why a definition of  domestic industry based on data for production of 
the like product for the last full calendar year for wh ich data is available should necessarily result in 
an injury determination based on a non-objective exam ination.  We agree that a determination based 
on a wrongly defined domestic industr y will be inconsistent with Ar ticle 3.1, as regardless of how 
"objective" in the abstract the examination of positive evidence concerning that wrongly defined 
industry may be, the conclusion would simply pertain to the wrong industry.503  However, there is no 
period defined in the AD Agreement with respect to  which the injury determination must be made, 
and indeed, China does not allege otherwise.  Thus, a definition of industry based on a major 
proportion calculated for the last full calendar year prior to initiation is not necessarily "wrongly 
defined".  We therefore do not agree that a de finition of domestic industry based on a major 
                                                      
500 European Union, second written submission, para. 122. 
501 Definitive Regulation, Exhibit CHN-4, recital 39. 
502 China, second written submission, para. 649. 
503 See, Panel Report, EC – Salmon (Norway ), para. 7.124.  WT/DS397/R 
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 proportion calculated for data relating to a period othe r than the period for which data is collected for 
the dumping determination necessarily is inconsis tent with Article 3.1 of the AD Agreement.504   
7.234  Turning to China's fourth allegation of error, we note that China does not dispute that an 
investigating authority may use sampling in making its injury determination, but asserts that it must 
be "consistent with the genera l obligations for investigating authorities, in accordance with 
Article 3.1, to conduct an objective examination based on positive evidence".505  In this context, China 
focuses on the assertion that the sample selected wa s not representative because the share of domestic 
production accounted for by sampled producers was t oo small, and because it represented, at best, a 
domestic industry defined inconsis tently with Articles 3.1 and 4.1 of the AD Agreement.   
7.235  We agree with China that, as stated by the panel in EU – Salmon (Norway) ,  
"the AD Agreement establishes some general parameters for the use of sampling in 
the injury context.  Thus, in our view, the obligation in Article 3.1 that a determination of injury be based on "pos itive evidence" and involve an "objective 
examination" of the volume, price effects, and impact of dumped imports, limits an investigating authority's discretion both in choosing a sample to be examined in the 
context of injury, and in collecting and evaluating information obtained from the 
sampled producers.  The Appellate Body stated, in US – Hot-Rolled Steel , that "an 
'objective examination' [under Article 3.1] requires that the domestic industry, and the 
effects of dumped imports, be investigated in an unbiased manner, without favouring 
the interests of any interested party, or  group of interested parties, in the 
investigation."  A sample that is not sufficiently representative of the domestic 
industry as a whole is not likely to allow for such an unbiased investigation, and therefore may well result in a determinati on on the question of injury that is not 
consistent with the requirements of Article 3.1 of the AD Agreement."
506   
We have above rejected China's allegations that domestic industry was defined inconsistently with 
Articles 3.1 and 4.1 of the AD Agreement, and we th erefore dismiss that aspect of China's allegation 
that the sample selected by the EU investigati ng authority was not representative of the domestic 
industry.507    
 7.236  China also argues that by using volume of produc tion as the sole criterion for selection of the 
sample, and in doing so, failing to include in th e sample producers whose output represented the 
largest volume of production of the like product whic h could reasonably be investigated within the 
                                                     
 
504 We note, in addition, that China has made no other arguments suggesting that the period actually 
considered by the Commission, calendar year 2006, was inappropriate or unreasonable.  In this regard, we 
consider pertinent the Europ ean Union's argument that this represented the last full calendar year prior to 
initiation for which data were available, which would at a minimum support a conclusion that the period was 
reasonable, were we to address the question. 
505 China, second written submission, para. 667, referring to Panel Report, EC – Salmon (Norway ), 
para. 7.130. 
506 Panel Report, EC – Norway (Salmon ), para. 7.130 (footnotes omitted). 
507 In this respect, we note that we agree with the European Union that a sample for purposes of 
assessing injury in an anti-dumping investigation must be sufficiently representative of the domestic industry as 
defined by the investigating authority in the particul ar case, always assuming, however, that the domestic 
industry was defined consistently with the requirements of  Article 4.1.  Thus, we reject China's argument that, 
since the sample consisted of only six producers representing only 17.5 per cent of total domestic production, it 
could not be considered as "representative" of tota l domestic production.  China, first written submission, 
paras. 279-282.  The percentage of total domestic production  represented by the sample is in our view 
irrelevant to the question of the representativeness of a sample of domestic industry defined as producers 
accounting for a major proportion  of total domestic production of the like product.   WT/DS397/R 
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 time available, the EU investigating authorit y selected a sample that was not representative.508  We 
note that no provision of the AD Agreement addr esses the question of sampling in the context of 
injury determinations, including the selection of a sa mple.  This is in contrast to the context of 
dumping determinations, where Article 6.10 explicitl y authorizes sampling, and sets out guidance for 
the selection of an appropriate sample.  One of th e methods set out in Article 6.10 for selection of a 
sample for the dumping determination is to " limit [the] examination ... to the largest percentage of the volume of the exports from the country in questi on which can reasonably be investigated".   
7.237  As noted above, the Commission selected the sample based on the volume of production of 
the producers who expressed willingness to be include d in the sample.  China argues that selection on 
the basis of volume of production is not appropriate to satisfy the requirement that the sample be 
representative of the domestic industry.
509  In this respect, China argues that, unlike in the context of a 
dumping determination based on sampling, where ther e is a possibility for subsequent refunds in the 
future for exporters who do not actually dump, or du mp at lower margins, there is no similar system 
which would take account of the absence of uninjur ed domestic producers, and thus it is particularly 
important that the sample be sufficien tly representative of the domestic industry.510  China asserts that 
the EU investigating authorities should have used  a statistically valid sample, which is the only 
guarantee of having a sufficiently representative sample of the domestic industry.511   
7.238  We note the statement of the panel in EC – Salmon (Norway) , which China relies upon in 
making its argument: 
"In addition, we see no basis to impose the criteria of Article 6.10 on sampling in the 
context of injury.  It is not clear that the "largest volume that can reasonably be 
investigated" criterion of Article 6.10 w ould [be] an appropriate basis for the 
selection of a sample in the context of an injury investigation.  On the dumping side, ensuring that an adequate portion of total expor ts is investigated might be sufficient to 
justify imposition of an anti-dumping duty, particularly given that there is a 
possibility for subsequent refunds if an indi vidual producer is not actual dumping.  In 
the investigation of injury, factors other than the volume of production would seem at least equally, if not more, relevant to ensuring that a sample adequately represents the domestic industry as a whole, sufficient to justify a finding of injury to the domestic industry.  Thus, while the volume of producti on covered by a sample may be relevant 
in assessing whether a determination based on information from sampled domestic 
producers satisfies the requirements of Article  3.1, other considerations may also be 
as relevant, or potentially more relevant."
512 
In our view, this statement does not suggest, as Ch ina implies, that the volume of production is 
irrelevant to the selection of a sample in the contex t of injury determinations, but merely suggests that 
other considerations may be relevant.  Other than to  assert that the EU investigating authority did not 
include in the sample it selected producers accounting for the largest percentage of volume that could 
reasonably be selected, however, China makes no ar gument as to other potentially relevant factors 
                                                      
508 China, second written submission, paras. 681-684. 
509 At the second meeting of the Panel with the parties, the European Union asserted that this 
constituted a new claim that was not part of the request fo r consultations or the Panel request, and is outside the 
Panel's terms of reference.  European Union, second oral statement, para. 40.  However, we do not consider this 
argument to constitute an entirely new claim, as alleged by the European Union, but rather a newly developed 
argument in support of China's claim that the European Union failed to make a determination of injury with respect to the relevant domestic industry, in part because the sample included producers accounting for only 
17.5 per cent of domestic production. 
510 China, second written submission, paras. 674-675. 
511 China, second written submission, para. 679. 
512 Panel Report, EC –Salmon (Norway ), footnote 309.  WT/DS397/R 
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 that might have been relevant to the selection of th e sample in this case.  No r does China even suggest 
that any such factors were raised during the cour se of the investigation but not considered by the 
investigating authority.  The European Union asser ts that the sample selected in fact included 
producers of all types of fasteners and small as well as large producers.513  In our view, in the absence 
of any arguments concerning relevant factors eith er ignored or dismissed by the investigating 
authority, and given that the sample selected do es appear to include producers whose production is 
representative of that of the industry defined in th e investigation, we conclude that China has not 
demonstrated that the sample selected is not repr esentative of the domestic industry solely because it 
was selected on the basis of volume of production. 
 
7.239  China also asserts that the EU investigating au thority failed to select as the sample producers 
whose output constitute the largest volume of produc tion that could reasonably be investigated, and 
that it should have used a statistically valid method for selecting the sample, as provided for in 
Article 6.10 of the AD Agreement.  In this respect,  we note that Article 6.10 is not, by its own terms, 
applicable to the selection of a sample for purposes of the injury determination.514  We recall that 
there is no guidance in the AD Agreement on the s ources, collection or verification of information 
concerning injury, and that the question of sampling in this context is not addressed in the AD Agreement.  Thus, there is absolutely no basis in the text from which we can derive any specific 
methodological guidance in this respect.  We certain ly would not disagree that a statistically valid 
sample would most likely be sufficiently represen tative to serve as the basis of an injury 
determination, but we can see significant difficulties in  attempting to construct such a sample in any 
particular anti-dumping investigation, given that in our understanding, a first requirement for a 
statistically valid sample is a significant amount  of information concerning the "universe" or 
"population" that is to be sampled.  In an anti- dumping investigation, on the other hand, and certainly 
at the beginning stages when a sample for purposes of the injury investigation is likely to be selected, 
there may be only very limited information c oncerning domestic producers available to the 
investigating authority.  Given the time cons traints for the conduct of an investigation
515, it seems 
clear to us that to require a statistically valid sample would, in many cases, make it impossible for a 
sample to be selected.  Since we  consider that sampling is permitted in the context of injury 
determinations, a view China does not contest, we cannot accept the contention that only a statistically 
valid sample will be sufficiently representativ e for purposes of an injury determination. 
7.240  Similarly, in the absence of any methodological gu idance for the selection of a sample in the 
context of an injury determination, we cannot conclude that a selection based on volume of production is necessarily unsatisfactory.  With resp ect to China's assertion that the EU investigating 
authority did not, in fact, select as the sample producers whose output constitute the largest volume of production that could reasonably be investigated, we note that the only support China asserts for this 
contention is the fact that, for some of the injury factors, the European Union considered data for the 
                                                     
 
513 European Union, first written submission, para. 392. 
514 Article 6.10 of the AD Agreement, which is  not in dispute in this context, provides: 
"The authorities shall, as a rule, determine an individual margin of dumping for each known 
exporter or producer concerned of the product under investigation.  In cases where the number of exporters, producers, importers or types of products involved is so large as to make such a 
determination impracticable, the authorities may limit their examination either to a reasonable 
number of interested parties or products by using samples which are statistically valid on the basis of information available to the authorities at the time of the selection, or to the largest 
percentage of the volume of the exports from the country in question which can reasonably be 
investigated." Thus, it is clear to us that Article 6.10 sets out requirements with respect to the selection of samples in 
the context of making dumping determinations, but does not refer to the selection of samples in the context of an 
injury determination. 
515 Article 5.10 of the AD Agreement provides that  an anti-dumping investigation shall be completed 
within 12 months, or, in exceptional circumstan ces, no more than 18 months, after initiation. WT/DS397/R 
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 sampled producers, while for other factors, it consider ed data for the entire domestic industry.  We do 
not see how this demonstrates that the EU investig ating authority could have  carried out the entire 
injury examination for the domestic industry it had defined, or at least included more producers in the sample, as China asserts.
516  China quotes the views of the panel in EC – Salmon (Norway),  which 
stated that:   
"the volume of export sales that may be reas onable for an investigating authority to 
investigate is a question that must be assessed on a case-by-case basis, taking into 
account all relevant facts that are before the investigating authority, including the 
nature and type of interested parties, the products involved and the investigating 
authority's own investigating capacity and resources."517   
7.241  However, China neglects to mention that this comment was not made in connection with the 
issue of sampling in the injury context, but rather  in the context of the dumping determination, as 
Norway had challenged the selection of the sample of  exporters for the dumping determination in that 
dispute.  Moreover, even assuming the matters referr ed to by the panel in that case, the nature and 
type of interested parties, the products involved and the investigating authority's own investigating 
capacity and resources, would be relevant factors in  assessing whether the sample in an injury context 
represents a sufficiently large volume of domestic  production, a question we do not consider it 
necessary to resolve, China has ma de no representations concerning these factors in this case.  We 
therefore reject China's arguments that the European  Union acted inconsistently with Article 3.1 of 
the AD Agreement in the selection of a sample of the domestic industry.  
7.242  Finally, we turn to China's allegation that the European Union acted  inconsistently with 
Articles 4.1 and 3.1 of the AD Agreement by includ ing in the domestic industry and in the sample 
producers that were related to the exporters or impor ters or were themselves importers of the allegedly 
dumped product.  We recall the language of Article 4.1(i), which provides that: 
"when producers are related to the exporters or importers or are themselves importers 
of the allegedly dumped product, the term "domestic industry" may be interpreted as 
referring to the rest of the producers" (footnote deleted, emphasis added). 
China recognizes that Article 4.1 does not require the exclusion of related producers or importing 
producers.518  Nonetheless, China submits that inves tigating authorities do not have unlimited 
discretion in determining whether or not to exclude such producers, that the "objective examination" 
and "positive evidence" requirements of Article 3.1 a pply to the decision of investigating authority in 
such cases, and asserts that the basis of the EU inv estigating authority's decision not to exclude related 
producers or importing producers is not supported by the evidence in the record of the investigation.   
 7.243  It is clear to us, as China acknowledges, that the use of the term "may" in Article 4.1 makes it 
clear that investigating authorities are not requ ired to exclude related producers or importing 
producers.  There is nothing in the text of Article 4.1(i) that would establish any criteria that might be 
relevant to an investigating authority's decision in this regard.
519  In this case, th e European Union 
explained its reasons for not excluding certain re lated producers in the definitive Regulation, at 
                                                      
516 China, second written submission, para. 683. 
517 Panel Report, EC – Salmon (Norway ), para. 7.188. 
518 China, second written submission, para. 689. 
519 We note that proposals were made in the Rules Negotiations under the Doha Development Agenda 
that would establish criteria for determining whether or not to exclude related producers or importing 
producers from the domestic industry, and the Chairman's first draft text in fact proposed amending the 
AD Agreement in this respect.  Do cument TN/RL/W/213, dated 30 November 2007, p. 10, Article 4.1(i), 
proposed footnotes 17, 18.  That negotiators proposed amending the AD Agreement in this regard supports the 
view that the text as currently in force does not establish any criteria.  WT/DS397/R 
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 recitals 115-118.  China does not suggest that the bases cited by the European Union are irrelevant, 
but rather asserts that the evidence c ontradicts the conclusion reached.   
7.244  We are not persuaded by China's view that Ar ticle 3.1 of the AD Agreement applies to the 
decision whether to exclude related or importi ng domestic producers in the manner proposed by 
China.  The European Union suggests that the re ason Article 4.1 allows th e exclusion of related 
producers is because such producers may be less re presentative of the interests of the domestic 
industry, and may be benefiting from the dumped im ports themselves.  Thus, the European Union 
argues that, if anything, the exclusion of such rela ted producers is in the exporting country's interest, 
which undermines the assertion that the failure to ex clude them in this case is an abuse of the 
discretion provided for in Article 4.1.520  In our view, there is nothing in  Article 3.1, or in Article 4.1, 
that limits the discretion of investigating authoriti es to exclude, or not, related or importing domestic 
producers.  Moreover, even assuming we considered  it necessary to review the European Union's 
decision not to exclude related producers in this case, we fail to see the relevance of the factual basis 
for China's argument.  The fact that two of the e xporters to which EU producers were related stated 
that they produce principally for export, rather th an for sale in the domestic Chinese market is in our 
view irrelevant to a decision whether to exclude the related EU producers from the domestic industry.  
In the absence of any criteria in the AD Agreement against which the decision not to exclude related 
producers might be assessed, we reject China's asserti on that the European Union acted inconsistently 
with Articles 3.1 and 4.1 of the AD Agreement by failing to exclude related producers from the 
domestic industry.   
5. Whether the European Union violated Arti cles 2.1 and 2.6 of the AD Agreement in 
defining the product under consideration and/or the like product  
(a) Arguments of the Parties 
(i) China 
7.245  China asserts that, in the inv estigation which led to the definitive anti-dumping measure at 
issue, there was great uncertainty concerning the precise scope of the "product under consideration" 
and whether fasteners produced by the Community industry were comparable  to fasteners produced 
by the producer in the analogue country, India, and to those produced in China and exported to the EC.
521  China asserts that the Definitive Regulation defined the "product concerned", and it is this 
definition which is being ch allenged in this dispute.522  Thus, in China's view, its claim is properly 
before the Panel.   
7.246  China claims that the European  Union acted inconsistently with Articles 2.1 and 2.6 of the 
AD Agreement by including in the scope of the pr oduct under consideration bot h standard and special 
fasteners as "like" products, despite readily appare nt differences in characteristics and uses.  In 
particular, China contends that, by concluding th at fasteners produced and sold by the Community 
industry, fasteners produced and sold on the domestic market in India and fasteners produced in the 
PRC and sold to the Community were alike, the Eu ropean Union violated Articles 2.1 and 2.6 of the 
AD Agreement.523  In China's view, Articles 2.1 of th e AD Agreement, in combination with 
Article 2.6, sets forth an obligation concerning the de finition of the product concerned, such that the 
product concerned can only include products that are "like, in order to ensure that the dumping 
                                                      
520 European Union, first written submission, para. 410.  China did not respond to the European Union's 
argument in this respect. 
521 China, first written submission, para. 298. 
522 China, second written submission, para. 696.   
523 China, first written submission, para. 331.   WT/DS397/R 
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 determination is based on a comparis on between products which are "like"".524  In support of its 
position, China refers to the text of the provisions, as well as to Articles 6.10, 2.4, and 2.4.2 of the AD Agreement as relevant context, and to the object and purpose of the AD Agreement.
525  C h i n a  
notes that the product under consideration in the investigation included both standard and special 
fasteners, and that the "like product" for purpo ses of both the dumping and injury assessments also 
included both standard and special fasteners.526   
7.247  China argues that fasteners pr oduced in China for export to the European Union and those 
produced by the Community industry are not "like" due to differences in physical and technical characteristics, lack of interchangeab ility and different end-uses and prices.
527  China states that the 
Commission recognized that the Chinese producer s exported to the European Union almost 
exclusively standard fasteners whereas the EU pr oducers mainly produced special fasteners, and 
therefore only compared standard fasteners for purposes of its dumping and injury determinations.528  
China argues that the differences in terms of ph ysical and technical characteristics, end-uses and 
prices between fasteners produced by the Chinese exporting producers for export to the European Union, fasteners produced  by the Indian producer, and fasteners produced by EU producers, 
establish that they are not like.
529  Given this situation, the Commission, in China's view, acted 
inconsistently with Articles 2.1 a nd 2.6 of the AD Agreement by including special fasteners in the like 
product. 
(ii) European Union 
7.248  The European Union contends that the pr oduct under consideration for purposes of the 
investigation at issue was defined in the Notice of  Initiation, which, since it was not identified in 
China's request for establishment, is not a measure wi thin the Panel's terms of reference, and therefore 
requests that China's claim be rejected.530  With respect to the substance of China's claim, the 
European Union distinguishes the determination of the "product concerned" a nd the determination of 
the "like product".  With regard to the former, th e European Union argues that Articles 2.1 and 2.6 of 
the AD Agreement are definitional provisions which cannot be the basis of a claim of inconsistency 
with the AD Agreement.531  Moreover, the European Union argu es that Article 2.1 does not contain 
any obligation regarding the selection of the pr oduct concerned, and that Article 2.6 of the 
AD Agreement is not relevant to China' s claim regarding the product concerned.532  I n  t h e  
European Union' view, the product c oncerned can contain multiple models.533     
7.249  With regard to the determination of the like product, the European Union asserts that this 
claim is not within the Panel's terms of referenc e because China's panel request only refers to the 
selection of the product concerned, on the assump tion that the like product standard applies.534  In any 
event, the European Union argues that, if the Panel concludes that this claim is within its terms of 
reference, the like product definition in the investig ation at issue was that "fasteners (standard and 
special) [were] like fasteners (standard and special)"535, which definition the European Union asserts 
                                                      
524 China, second written submission, para. 707. 
525 China, second written submission, paras. 711-725. 
526 China, first written submission, paras. 303, 326. 
527 China, first written submission, para. 340. 
528 China, first written submission, para. 327.  China se ts out what it considers the relevant facts in this 
regard in paragraphs 341-354 of its first written submission. 
529 China, second written submission, para. 739. 
530 European Union, first written submission, paras. 424-425. 
531 European Union, first written submission, para. 423. 
532 European Union, first written submission, paras. 427, 432-439. 
533 European Union, first written submission, para. 431. 
534 European Union, first written submission, para. 440. 
535 European Union, first written submission, para. 441.  WT/DS397/R 
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 is consistent with Article 2.6 of the AD Agreemen t.  The European Union adds that the Commission 
never made a determination to the effect that  standard and special fasteners were alike.536 
(b) Arguments of Third Parties 
(i) Chile 
7.250  Chile notes that, with respect to the comparis on of the normal price with the export price, 
Article 2.1 and 2.6 of the AD Agreement preclude co mparison of the prices of products that are not 
identical without first separating them into categor ies.  In Chile's view, the AD Agreement requires 
the investigating authority to conduct a thorough analysis of the characteristics of the product in question before making the comparison between normal value and export price.
537 
(ii) Colombia 
7.251  Colombia agrees with the European Union th at Article 2.6 of the AD Agreement is a 
definitional provision, and in this sense, the determ ination of the product concerned is not the subject 
of any specific obligation under Articles 2.1 and 2.6 of the AD Agreement.538  However, when 
considering likeness between the product concerne d, which may be freely determined by the 
investigating authorities, and the like domestic pr oduct, the investigating authorities are bound by the 
provisions of those Articles.539  Colombia considers that the sp ecific assessment of likeness should be 
made on a case-by-case basis, in light of the facts of the investigation.540  With respect to the present 
dispute, Colombia considers that the challenged me asure is in conformity with the provisions of 
Articles 2.1 and 2.6 of the AD Agreement.541 
(iii) Japan 
7.252  Japan asks the Panel to "carefully examine" whether the European Union correctly defined 
the product under consideration542, but notes that there is no requirement that the product under 
consideration include only "like" products, or that each individual item within the "like product" be 
like each individual item within the product under consideration.543  Japan considers that the 
AD Agreement does not provide any guidance on how  the product under consideration should be 
determined, and that Article 2.6 requires the identifi cation of those products that are "like" the product 
under consideration.544 
(iv) Norway 
7.253  Norway considers that, contrary to the arguments  of the European Union, Articles 2.1 and 2.6 
of the AD Agreement contain obligations with re spect to the determination of the product under 
consideration that must be fulfilled.545  In Norway's view, all models of the product included in the 
scope of the "product under consideration" must  be "like" each other, within the meaning of 
Article 2.6 of the AD Agreement.546  Norway contends that, to the extent that the Panel finds that 
                                                      
536 European Union, first written submission, para. 441. 
537 Chile, oral statement, para. 8. 
538 Colombia, written submission, para. 89.   
539 Colombia, written submission, para. 90. 
540 Colombia, written submission, para. 97. 
541 Colombia, written submission, para. 102. 
542 Japan, written submission, para. 44. 
543 Japan, oral statement, para. 14. 
544 Japan, oral statement, paras. 15-17. 
545 Norway, written submission, paras. 22-25. 
546 Norway, written submission, para. 32. WT/DS397/R 
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 standard and special fasteners are not, in fact, "like"  each other, this would entail a finding of violation 
of Articles 2.1 and 2.6 of the AD Agreement.547 
(v) Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
7.254  The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu ("Chinese Taipei"), 
while not taking a position on the factual arguments of the parties, disagrees with the 
European Union's view that Articles 2.1 and 2.6 are not relevant to the selection of the product concerned.
548  In Chinese Taipei's view, whether the European Union correctly determined the 
products under consideration and th e like products is an important issue in this dispute, as these 
determinations set the parameters of the investigation.549  Chinese Taipei considers that the 
intertwined relationship between th e determination of the scope of the product concerned and the like 
product definition, as provided for in Articles 2. 1 and 2.6 of the AD Agreement, need further 
clarification by the Panel, as do the questions of how an investigating authority determines the scope 
of the product under consideration, and how much la titude the AD Agreement al lows in this regard.550 
(vi) United States 
7.255  The United States disagrees with China's understa nding of the definition of "like product" in 
anti-dumping investigations, but takes no position w ith respect to the mer its of China's factual 
assertions.551  In the United States' view, as a purely definitional provision, Article 2.6 itself imposes 
no obligation on WTO Members.552  Moreover, the United States contends that the scope of any 
"product" may contain any number of items that va ry in limited degree from one another, and that 
there is no requirement under the AD Agreement that  each individual item within the like product be 
"like" individual items within the product under consideration.553  W h a t  i s  r e q u i r e d ,  i n  t h e  
United States' view, is a comparison of the overall scope of the product under consideration with the 
overall scope of the like product.554  The United States asserts that this view is confirmed by the 
context of Article 2.6, including Articles 6.10 and 2.4 of the AD Agreement.555 
(c) Evaluation by the Panel 
7.256  In addressing China's claims with r espect to product under consideration556 and like product, 
we consider first the European Union's preliminar y objections, before turning, if necessary, to the 
substance of those claims. 
(i) Product under consideration 
7.257  The European Union asserts that the definiti on of the product under consideration in the 
underlying investigation was set out in the Notice of Initiation, which is not a measure in dispute, and 
                                                      
547 Norway, written submission, para. 39. 
548 Chinese Taipei, oral statement, para. 5. 
549 Chinese Taipei, oral statement, para. 8. 
550 Chinese Taipei, oral statement, paras. 11-12. 
551 United States, written submission, para. 23. 
552 United States, written submission, para. 25. 
553 United States, written submission, para. 26. 
554 United States, written submission, para. 26. 
555 United States, written submission, paras. 27-28. 
556 With respect to terminology, we note that the European Union uses the phrase "product concerned", 
and China, and some third parties, do so as well in some instances, where the AD  Agreement refers to the 
"product under consideration".  There is no dispute th at these two phrases refer to  the same concept in the 
context of anti-dumping investigations.  Except when referri ng to the parties' and third parties' arguments, we 
prefer to use the terminology of the AD Agreement itself.  WT/DS397/R 
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 therefore that this claim is not within the Panel's jurisdiction.557  We note that the European Union 
raised a similar argument with respect to the de termination of standing, which we have rejected.558  
Moreover, we note that the definition of the prod uct under consideration is clearly set forth in 
recital 40 of the Definitive Regulation, a measur e which the European Union does not dispute is 
before the Panel.559  As discussed in more detail above560, we consider that in a dispute concerning a 
final anti-dumping measure, a complaining Member may raise any alleged violations of the WTO 
Agreements arising out of the initiation or conduct of, as well as the determinations made and actions 
taken in the course of, the underlying anti-dumping inv estigation.  We therefore conclude that China's 
claim with respect to the product under considerat ion, which is undisputedly set out in the panel 
request, is properly before us.    
7.258  Turning to the substance of China's claim with  respect to product under consideration, we 
note that China does not argue that any provision of the AD Agreement sets out a definition of the product under consideration for purposes of an an ti-dumping investigation.  Rather, China has 
constructed an argument by combining Article 2.1 of the AD Agreement, which defines dumping for 
purposes of the AD Agreement, and Article 2.6, whic h defines the term "like product" for purposes of 
the AD Agreement.  We are not persuaded by Ch ina's arguments that these two provisions, taken 
together, establish the obligations on an investigatin g authority with respect to the definition of the 
product under consideration asserted by China.  We note that China makes no argument under Article 2.1 independent of its asser tion that Article 2.1, in combination with Article 2.6, imposes 
obligations with respect to the defin ition of the product under consideration.
561   
7.259  To recall briefly the relevant facts, in this case, the Commission defined the "product 
concerned" in the investigation, as:  
"certain iron or steel fasteners, other than of stainless steel, i.e. wood screws 
(excluding coach screws), self-tapping screws, other screws and bolts with heads (whether or not with their nuts or washer s, but excluding screws turned from bars, 
rods, profiles or wire, of solid section, of a shank thickness not exceeding 6 mm and 
excluding screws and bolts for fixing railway track construction material), and washers, originating in the People's Repub lic of China (all together hereinafter 
referred to as fasteners or product concerned).  
The product concerned is normally declar ed within CN codes 7318 12 90, 7318 14 
91, 7318 14 99, 7318 15 59, 7318 15 69, 7318 15 81, 7318 15 89, ex 7318 15 90, ex 
7318 21 00 and ex 7318 22 00.  
Fasteners are used to mechanically join two or more elements in construction, 
engineering, etc., and are used in a wide variety of industrial sectors, as well as by consumers. Based on their basic physical and technical characteristics and end uses, all fasteners are considered to constitute a single product for the purpose of the 
proceeding. Within the same national or international standards, fasteners should 
comply with the same basic physical and technical characteristics including notably strength, tolerance, finishing and coating."
562 
                                                      
557 The European Union makes no objection based on the request for consultations or the panel request 
with respect to China's claim regarding product under consideration. 
558 See paragraphs 7.162 to 7.166 above.   
559 Definitive Regulation, Exhibit CHN-4, para. 40. 
560 See paragraphs 7.162 to 7.166 above. 
561 China, answer to Panel question 37. 
562 Definitive Regulation, Exhi bit CHN-4, recitals 40-42. WT/DS397/R 
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 The Commission went on to consider, and reject, ar guments by the parties, concerning the scope of 
the product under consideration.563 
 7.260  In considering China's claims concerning product under consideration, we note first that there 
is no specific provision in the AD Agreement concerni ng the selection, description, or determination, 
of a product under consideration, and China does not argue otherwise.  China asserts that the product 
under consideration can only include products that are "like" within the meaning of Article 2.6 of the 
AD Agreement, in order to ensure that the determination of dumping is based on a comparison of products which are "like" within the meaning of th at provision.  China argues that the facts in the 
investigation demonstrate that the product under c onsideration included both standard and special 
fasteners, which China contends are not "lik e" within the meaning of Article 2.6.   
7.261  Thus, the question for us is whether China's prem ise, that Articles 2.1 and 2.6 in combination 
require that all individual items within the product unde r consideration be "like" each other, is correct.  
If not, then China's legal argument is incorrect, and we  need not consider its contentions regarding the 
facts of this case. 
7.262  Article 2.1 of the AD Agreement provides: 
"For the purpose of this Agreement, a produc t is to be considered as being dumped, 
i.e.  introduced into the commerce of another country at less than its normal value, if 
the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of  trade, for the like product when destined 
for consumption in the exporting country." 
7.263  Beyond noting that Article 2.1 requires that th e comparison that must be made to determine 
whether there is dumping must be carried out betw een the export price of a product and the price for 
the "like product ... in the exporting country"
564, China does not address this provision in its 
arguments.  We agree that Article 2.1 refers to "a product" as being dumped, but cannot see that it 
establishes any specific obligation concerning the scope  of that product.  Nothing in the text of 
Article 2.1 provides any guidance as to what the para meters of "a product" with respect to which a 
determination of dumping is made  should be.  The mere fact that a dumping determination is 
ultimately made with respect to "a  product" says nothing about the scope of that product.  There is 
certainly nothing in the text of Article 2.1 that can be understood to require any consideration of 
"likeness" in the scope of the exported product investigated, contrary to China's argument.565   
7.264  At the same time, other provisions of the AD Agreement, relevant as context to our 
understanding of Article 2.1, suggest that whatever the parameters of "a product" in Article 2.1 may 
be, the concept is not so limited as China argues.  For instance, Article 6.10 provides for "limited 
examination" (that is, sampling) in cases where the number of "types of products involved" in an 
investigation is so large as to make it impracticable to determine an individual margin of dumping.  If 
the meaning of "a product" in Ar ticle 2.1 were limited as China argues, there would be no possibility 
that more than one "type of product" would be at i ssue in any investigation, and thus no need for this 
aspect of Article 6.10.   
                                                      
563 Definitive Regulation, Exhi bit CHN-4, recitals 43-47. 
564 In this case, the price for the like product in the exporting country was determined on the basis of 
the prices in the anal ogue country, India. 
565 We do not exclude the possibility that there may be a group of goods whose range is so broad as to 
preclude their being considered "a product", for instance, a product denominated "transportation equipment" that 
includes bicycles and jet aircraft.  Bu t we do reject the view that the concept of likeness as set out in the 
Article 2.6 definition of "like product" is the appropriate basis for evaluating whether any particular group of 
goods comprises such a broad range of goods as to preclude being treated as a product under consideration.    WT/DS397/R 
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 7.265  China agrees that the product under investigation can include different types or models of the 
product concerned, but argues that this does not mean  that the investigating authorities may include in 
the scope of the product under cons ideration products that are so substantially different that the 
differences can not be compensated by making adjustments.  We note that, as China correctly 
observes, Article 2.4 requires that an investiga ting authority make due allowance for differences 
which affect price comparability, including differences in physical characteristics.  In our view, this 
clearly demonstrates that there may be differenc es within the product under consideration and like 
product.  However, the fact that Article 2.4.2 of the AD Agreement requires a comparison of a weighted average normal value with a weighted aver age of prices of all comparable transactions does 
not, in our view, support the view that a product must necessarily include only "like" goods, such that 
all of them are comparable to each other.
566  Rather, and as recognized by the Appellate Body, under 
Article 2.4.2, an investigating authority may di vide a product being investigated into groups or 
categories of comparable goods for purposes of co mparison of normal value and export price – the 
practice of "multiple averaging".567  This would be unnecessary if China's position with respect to the 
definition of product under considera tion were correct.  These considerati ons lead us to conclude that, 
while Article 2.1 establishes that a dumping determin ation is to be made for a single "product under 
consideration", there is no guidance for determining the parameters of that product, and certainly no 
requirement of internal homogeneity of that product, in that Article. 
7.266  In essence, China's claim is grounded in Article 2.6, which provides: 
"Throughout this Agreement the term "like product" ("produit similaire") shall be 
interpreted to mean a product which is identical, i.e. alike in all respects to the 
product under consideration, or in the absence of such a product, another product 
which, although not alike in all respects, has characteristics closely resembling those of the product under consideration." 
7.267  It is clear to us that the subject of Article 2.6 is not the scope of the product that is the subject 
of an anti-dumping investigation at all.  Rather, the purpose of Article 2.6, apparent from its plain 
language, is to define the term "like product" fo r purposes of the AD Agreement.  The plain language 
of Article 2.6 calls for an assessment of  "likeness" between some group of goods
568 and "the product 
under consideration" in order to identify a "like pr oduct".  Thus, logically, the scope of the "product 
under consideration" referred to in Article 2.6 mu st already be known before the provisions of 
Article 2.6 regarding "likeness" come into play.  That is, it must be known what the comparator is, 
before any comparison can be made to assess whet her another product is "identical" to or, in the 
absence of an identical product, "has characteris tics closely resembling those of", the imported 
"product under consideration".  China's position w ould, in our view, require that any difference 
between categories of goods, and potentially even  between individual goods, within a product under 
consideration would require that each such categor y or individual good be treated individually, as a 
separate product under consideration.569  This would be problematic , as, given that a "domestic 
industry" for purposes of the AD Agreement is defined as producers of a like product, such a 
                                                      
566 See, China, second written submission, para. 716. 
567 Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from 
Canada  ("US – Softwood Lumber V "), WT/DS264/AB/R, adopted 31 August 2004, DSR 2004:V, 1875, 
para. 81. 
568 In an anti-dumping investigation, the question of "like product" arises in two contexts – identifying 
domestically produced goods that are "like" the product under consideration, and identifying goods sold in the 
market of the investigated foreign producers/exporters that are "like" the product under consideration.  The identification of "like product" in these two contexts is for different purposes in the investigation.   
569 Indeed, it appears that China considers that the European Union would have acted consistently with 
the AD Agreement had it conducted separate investigati ons of standard fasteners and special fasteners.  
However, even assuming such separate investigations woul d themselves be appropriate,  this does not mean that 
such separate investigations are required by the AD Agreement. WT/DS397/R 
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 fragmented product under consideration, and corr espondingly fragmented like products, would result 
in the definition of, and determination of injury to, multiple, narrowly defined "industries" which may 
bear little if any resemblance to the economic re alities of the production of those goods in the 
importing country.   
7.268  We note that, on its face, Article 2.6 does not a pply to the question of "determining" anything 
at all – it defines the term "like product" for pur poses of the AD Agreement, by reference to the 
"product under consideration" in the anti-dumping in vestigation, whose scope, as we have noted, must 
logically have been defined previously.570  While it seems self-evident to us that an investigating 
authority must, at the time it initiates an anti-dumpi ng investigation, make a decision as to the scope 
of that investigation, and give notice of the "product involved"571, we are not persuaded that either 
Article 2.1 or Article 2.6 of the AD Agreement establishes a requirement for making an elaborated determination in that regard. 
7.269  Essentially, China's argument raises an issue of  policy, suggesting that the absence of limits 
on the scope of the product under consideration migh t result in erroneous dumping determinations by 
investigating authorities.  China argues that, if pr oducts that are not "like" are treated as the product 
under consideration in a single investigation, a dum ping determination would not reflect a comparison 
between a product's export price and the domestic pr ice of its like product.  China gives, as an 
example, an investigation in which apples and tomatoes are treated as one product under investigation.
572  China argues that the investigating author ity could compare the prices of the apples 
and find they are dumped, and could compare the prices of the tomatoes and find they are not 
dumped, but an anti-dumping duty would nonetheless be  imposed on both apples and tomatoes, which 
would be an unfair result.   
7.270  We are not persuaded by this example.  In the first place, it is not clear that, in this 
hypothetical situation, a calculation of the dumping margin for the product under consideration consistent with Article 2 of the AD Agreement would support the imposition of an anti-dumping duty 
at all.  Moreover, the scope of the product under consideration will have consequences throughout the 
investigation, and the broader that scope, the more  serious those consequences might be, complicating 
the investigating authority's task of collecti ng and evaluating relevant  information and making 
determinations consistent with the AD Agreement.  This would clearly be of concern with respect to 
the determination of injury to the domestic indus try producing the like product.  Thus, it seems to us 
that the possibility of an erroneous determinati on of dumping, and the erroneous imposition of an 
anti-dumping duty, based on an overly broad product under consideration, is remote.  That remote 
possibility is certainly not enough to persuade us to read obligations into th e AD Agreement for which 
we can find no basis in the text of the Agreement.   
7.271  Moreover, we consider it noteworthy that, while  the AD Agreement speci fically defines "like 
product" by requiring a comparison between dom estically-produced or foreign goods and the 
imported goods that are the product under considera tion, there is no specific definition of "product 
under consideration".  In our view, the very fact that there is a definition of like product in the 
AD Agreement indicates that Members were well able to define terms carefully and precisely when they considered it necessary.  Th eir failure to provide any defin ition of product under consideration, 
much less to require that the scope of that prod uct be determined on the basis of the concept of 
                                                     
 
570 In view of our conclusions, we do not consider it necessary to ad dress the question, raised by the 
European Union in connection with China's like product claim, whether a definitional provision may give rise to 
a finding of violation. 
571 AD Agreement, Article 12.1.1(i). 
572 China, second written submission, para. 720.  WT/DS397/R 
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 likeness set out in Article 2.6, indicates that they did not intend to do so.573  This implies to us that the 
Members intended to allow investigating author ities wide discretion to determine a product under 
consideration.574  In our view, this supports the conclusion that it would be absurd to impose the 
definition of like product from Article 2.6 onto the undefined term product unde r consideration.  We 
simply see no basis in the text of Articles 2.1 a nd 2.6 of the AD Agreement for the obligation China 
seeks to impose on investigating authorities w ith respect to product under consideration. 
7.272  Thus, we conclude that, contrary to China's claim, Articles 2.1 and 2.6 of the AD Agreement 
do not establish an obligation on investigating authorities to ensure that the product under consideration include only "like" products.  We therefore do not consider it necessary to address 
China's arguments concerning the facts.  Whether sta ndard and special fasteners are or are not "like" 
each other within the meaning of Article 2.6 is not  a relevant question with respect to the product 
under consideration, in light of our decision on  the interpretation of Articles 2.1 and 2.6. 
7.273  Finally, we note that this very issue, a nd the arguments raised by China (as well as other 
arguments not raised by China here), have been pr eviously addressed, and rejected, by other panels.  
China has for the most part neither addressed nor a ttempted to distinguish the views of those panels 
from the circumstances of this case.  While we are not bound by the decisions  of other panels, we 
nonetheless consider their decisions relevant a nd potentially helpful in our assessment of the 
arguments in this case.   
7.274  The most elaborated discussion of the issue of product under consideration to date was in the 
report of the panel in EC – Salmon (Norway) .  Virtually every argument made by China in this case 
was made by Norway in that case.
575  The panel in EC – Salmon (Norway) rejected each of Norway's 
arguments.  It found it "clear that the subject of Arti cle 2.6 is not the scope of the product that is the 
subject of an anti-dumping investigation at all".576  The panel stated that:  
"[t]he plain language of Article 2.6 calls  for an assessment of "likeness" between 
some group of goods228 and "the product under consideration" in order to identify a 
"like product".  Thus, logically, the scope  of the "product under consideration" 
referred to in Article 2.6 must already be  known before the provisions of Article 2.6 
come into play.  That is, it must be known what the comparator is, before any 
assessment can be made as to whether anothe r product is "identical" to or, in the 
absence of an identical product, "has charact eristics closely resembling those of" the 
imported "product under consideration".   
_______________ 
228 In an anti-dumping investigation, the question of "like product"  arises in two contexts – 
identifying domestically produced goods that ar e "like" the product under consideration, and 
identifying goods sold in the market of the i nvestigated foreign produc ers/exporter that are 
"like" the product under consideration.  The identification of "like product" in these two 
contexts is for different pu rposes in the investigation. "577 
The panel concluded: 
                                                      
573 We note that proposals to establish a definition of "product under investigation" have been made in 
the context of the negotiations on anti-dumping under the Doha Development Agenda.  See, e.g., document 
TN/RL/W/143 at page 11, paragraph 17. 
574 As noted above, China has made no argument con cerning Article 2.1 apart from its arguments with 
respect to Article 2.6.   
575 Indeed, in its third party submission in this dispute, Norway repeats many of those same arguments. 
576 Panel Report, EC – Salmon (Norway ), para. 7.51. 
577 Panel Report, EC – Salmon (Norway ), para. 7.51. WT/DS397/R 
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 "contrary to Norway's claim, Articles 2.1 and 2.6 of the AD Agreement do not 
establish an obligation on investigating au thorities to ensure that where the product 
under consideration is made up of categories of products, all such categories of 
products must individually be "like" each other, thereby constituting a single 
"product"."578 
7.275  In US – Softwood Lumber V , which involved facts and arguments very similar to those of 
EC – Salmon (Norway) , the panel also rejected arguments much  like those of China in this case.  The 
panel in US – Softwood Lumber V  found that Article 2.6 addresses the definition of the product that is 
to be considered "like" the product under considerati on.  According to the panel, the starting point for 
the application of Article 2.6 was the product under c onsideration.  However, the panel could find no 
guidance in the AD Agreement on the way in which the "product under consideration" itself should be 
determined.  The panel stated that:  
"[w]hile there might be room for discussi on as to whether [the approach advocated by 
Canada] might be an appropria te one from a policy perspective, whether to require 
such an approach is a matter for the Memb ers to address through negotiations.  It is 
not our role as a panel to create obligati ons which cannot clearly be found in the 
AD Agreement itself."579   
This aspect of the panel's report was not appeal ed, and was thus adopted by the DSB without 
modification.    
7.276  In another case, Korea – Certain Paper , the panel referred to the product under consideration 
in the context of its consideration of a claim concerning the determina tion of like product under 
Article 2.6.  In that case, the Korean Trade Commission (KTC) had init iated an investigation 
concerning dumped imports of "p lain paper copier" ("PPC") and "wood-free printing paper" ("WF") 
from Indonesia.  Indonesia made no claims conc erning the product under consideration, which 
included both categories of paper, but did dispute the KTC's decision that there was one domestic 
industry producing the two categories of paper, and the determination of injury to that industry, 
despite having made separate dump ing determinations for the two categories of paper.  Indonesia 
argued that PPC and WF are not like products, a nd that under Article 2.6, the KTC should have 
analyzed the effects of imports of PPC on produ cers of PPC, and the effects of imports of WF on 
producers of WF.  Korea argued that under Article 2. 6, like product is defined by reference to the 
imported product, and that Indonesia's reference to the differences among the products produced by 
the domestic industry had no legal basis under the Agreement.   
7.277  In its analysis, the panel noted that the inv estigation initiated by the KTC concerned dumped 
imports of PPC and WF, that the KTC determined  that Korean PPC and WF were identical to 
imported PPC and WF, and made a single injury determ ination.  The panel considered that the issue 
before it was whether Article 2.6 of the AD Agreement required the KTC to determine that PPC and 
WF were like products before proceeding to carry out a single injury determination.  The panel 
concluded that it did not, stating:  
"once the product under consideration is defi ned, the investigating authority has to 
make sure that the product it is using in its injury determination is like the product 
under consideration.  As long as that determ ination is made consistently with the 
                                                     
 
578 Panel Report, EC – Salmon (Norway ), para. 7.68. 
579 Panel Report, US – Softwood Lumber V , para. 7.157.  WT/DS397/R 
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 parameters set out in Article 2.6, the inv estigating authority' s like product definition 
will be WTO-consistent."580   
The panel went on to state that it saw  
 
"no basis in Article 2.6 for the proposition that the like product definition also applies 
to the definition of "the product under consid eration".  We are aware of no provision 
in Article 2.6, or any other Article in the Ag reement, that contains a definition of "the 
product under consideration" itself,"  
citing in this regard US - Softwood Lumber V .  We agree with the views expressed by these Panels, 
and consider that they support our conclusions  on China's claim under Articles 2.1 and 2.6. 
 7.278  Based on the foregoing, and in the light of st andard set out in Article 17.6(i) of the 
AD Agreement, we do not accept China's view that Ar ticles 2.1 and 2.6 must be  interpreted to require 
the European Union to have defined the product unde r consideration to include only products that are 
"like".  As a consequence, we di smiss China's claim that the produc t under consideration identified by 
the European Union was inconsistent with th e requirements of Articles 2.1 and 2.6 of the 
AD Agreement.  
(ii) Like product 
7.279  Turning first to the European Union's preliminar y objection, we note that in its request for 
establishment in this dispute, Ch ina sets out the following claim: 
"China submits that [the Definitive Regula tion] is inconsistent, at least, with the 
following provisions of the AD Agreement and of the GATT 1994 
- Articles 2.1 and 2.6 of the AD Agreement by including in the scope of the product 
under consideration both standard and special fasteners as "like" products despite their readily apparent differences and uses."
581 
7.280  The European Union contends that this passage "unequivocally related to the selection of the 
product concerned (albeit on the erroneous assumpti on that the like product standard applies)" and 
goes on to assert that the request for establishment "contains no clai m regarding the determination of 
the like product".582  According to China, on the other hand,  the quoted passage su ffices to set forth a 
claim with respect to the definition of the like produc t in the underlying dispute.  China considers that 
the fact, which China acknowledges, that "the pa nel Request does not refer specifically to the 
determination made by the EU concerning the " likeness" of fasteners produced by the Chinese 
exporting producers, fasteners produced by the Indian producer and fasteners produced by the Community producers" does not cause the claim to fall out side the panels' terms of reference.  In the 
regard, China asserts that the EU knows the essence of  the issue from the request for establishment, 
and has not demonstrated that the alleged procedur al deficiency has prejudiced the European Union's 
ability to defend itself.
583   
7.281  Keeping in mind the principles concerning suffici ency of a panel request outlined above, we 
agree with the European Union.  In our view, the passage on which China relies as providing "a brief 
                                                      
580 Panel Report, Korea – Certain Paper , para. 7.219. 
581 Annex G-1, p. 3. 
582 European Union, first written submission, para. 440. 
583 China, second written submission, para. 732. WT/DS397/R 
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 summary of the legal basis of the complain t sufficient to present the problem clearly"584 makes clear 
that China is making a claim with respect to the selection of the product under consideration.  While 
we agree that China raised the c oncept of "likeness" as an element of  its claim with respect to the 
product under consideration, we consider that this  alone is not sufficient to set out a claim with 
respect to the definition of the like product per se .  It is only under the most generous reading 
imaginable that one can, focussing on the phrase ""lik e" products" as used in China's panel request 
even have an inkling that China might intend to rai se a claim with respect to the definition of the like 
product in this dispute.  We recall that Article 2.6 of the AD Agreement, which defines the term "like 
product", establishes how an investigating authority is to define like product when it refers to a 
product which is "identical" to the product under consideration, or, if there is no such product, another 
product which "has characteristics closely resembling those of the product under consideration".  There is nothing in the passage cited above which suggest that China intended to present arguments 
with respect to alleged errors in the course of this  comparison of products.  In our view, if a claim 
cannot reasonably be discerned as allegedly set out in  the request for establishment, it is not necessary 
to consider whether the defending party has been pr ejudiced in its ability to defend itself.  Thus, we 
consider that the panel request in this case does not set forth a claim with respect to the definition of 
the like product in the underlying investigation.  
7.282  In any event, even had we concluded that Ch ina did set out a claim with respect to the 
definition of the like product in its panel request, we  would have found that claim without merit in this 
case.  Our review of the Definitive Regulation leav es us in no doubt that the like product defined in 
the underlying investigation is co-extensive with th e product under consideration.  We agree with the 
views of the panel in Korea – Certain Paper , which concluded that  
"once the product under consideration is defi ned, the investigating authority has to 
make sure that the product it is using in its injury determination is like the product 
under consideration.  As long as that determ ination is made consistently with the 
parameters set out in Article 2.6, the inv estigating authority' s like product definition 
will be WTO-consistent."
585   
7.283  China contends that, in this investigation th e product under consideration and the like product 
do not include the same products.586  We disagree.  It is clear to us from the Definitive Regulation that 
the product under consideration and the like product both  include standard and sp ecial fasteners, albeit 
not in the same proportion.  Even China only argues that imports from China consist " almost " 
exclusively  of standard fasteners, thus acknowledging that  there are imports of special fasteners from 
China.587  Given that fact, it is clear to us that the like product defined by the European Union is 
coextensive with the product under consideration.  Thus , even if we considered that the question were 
within our terms of reference, we  would conclude that China has fa iled to establish a violation of 
Article 2.6 of the AD Agreement with respect to  the definition of like product in this case. 
                                                      
584 As required by Article 6.2 of the DSU. 
585 Panel Report, Korea – Certain Paper , para. 7.219. 
586 Answer to Panel question 36, para. 125.  China seeks on this basis to distinguish this case from the 
facts in US – Softwood Lumber V , where the panel reached the same conclusion. 
587 Answer to Panel question 36, para. 125.    WT/DS397/R 
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 6. Whether the European Union violated Article 2.4 of the AD Agreement in its Dumping 
Determination 
(a) Arguments of the Parties 
(i) China 
7.284  China argues that the Commission violated Artic le 2.4 of the AD Agreement in its dumping 
determination for two reasons:  first, because it did not make the comparison between the normal 
value and the export price on the basis of produc t categories based on "Product Control Numbers" 
("PCNs") which the Commission itself had defined in requesting information;  and second, because it 
failed to make adjustments for quality differe nces and for certain differences in physical 
characteristics which were included in the PCNs, but  not reflected in the factors on which product 
categories for the comparison were ultimately based and which affected price comparability.588 
7.285  China notes that in the exporter s' questionnaire, the Commission requested information to be 
provided on the basis of product categories identif ied by unique PCNs.  Chinese producers submitted 
information on this basis.  The questionnaire sent to the Indian exporter also requested information on 
the basis of the same PCNs.  In the General Di sclosure Document, however, the Commission stated 
that normal value had been determined on the basis of product types, not PCNs.  In comparing normal 
value and export price, the Commission took into consideration two factors, strength class and the distinction between special and standard fasteners,  and compared the prices of the product types so 
defined.  China argues that all the product characte ristics reflected in the PCNs represent physical 
differences that affect price comparability within th e meaning of Article 2.4, and which, therefore, 
had to be taken into account when making the co mparison between normal value and export price in 
order to carry out a "fair comparison".
589  By basing its product categorization on other factors, 
however, the Commission disregarded these important physical differences and acted inconsistently 
with Article 2.4.590 
7.286  China also contends that the Commission viol ated Article 2.4 by failing to make certain 
adjustments.  In this regard, Ch ina maintains that the Commission should have considered whether the 
PCN characteristics that were not reflected in  the product types actually compared nonetheless 
required adjustments.591  Second, China asserts that the Commission should have made an adjustment 
for differences in the quality of Chinese fasteners and fasteners produced by the Indian producer.  
China asserts that the Commission made only one ad justment, for differences in quality control costs 
of the Chinese producers and the Indian producer .  However, China maintains that there was a 
significant quality difference between the fastener s produced by the Chinese producers and those of 
the Indian producer and that the adjustment made for quality contro l did not fully address the quality 
difference.592  According to China, by not making these adjustments, the Commission violated 
Article 2.4 of the AD Agreement. 
(ii) European Union 
7.287  The European Union contends that the Defi nitive Regulation explains the Commission's 
dumping determinations, and that China simply igno res these explanations in making its arguments.  
According to the European Union, by not linking its arguments to the relevant parts of the Definitive 
                                                      
588 China, first written submission, para. 377;  China, second written submission, para. 790. 
589 China, second written submission, para. 759. 
590 China, first written submission, para. 383. 
591 China, second written submission, para. 793. 
592 China, first written submission, para. 387. WT/DS397/R 
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 Regulation, China fails to make a prima facie case of violation.593  In the European Union's view, the 
fact that information was requested on the basis of particular PCNs does not mean that each element reflected in those PCNs affects price comparability.
594  The European Union disagrees with China's 
assertion that the fair comparison obligation in Ar ticle 2.4 required in this investigation that 
adjustments be made for each PCN element.  Acco rding to the European Union, no such obligation 
can be found in the AD Agreement.  The European Union contends that PCNs provide a tool for the 
collection of data for the investigating authoriti es' dumping determinations.  Certain elements of 
PCNs are standard in each investigation wh ile other elements are added depending on the 
particularities of a given investigation.  This is wh at the Commission did in this investigation.  It 
designed the PCNs to describe th e product manufactured in China, in the European Union and in 
India, and asked that information be provide d for the PCN categories, which would allow a 
mechanical comparison to take place.595  However, the Indian producer did not provide its information 
on the basis of PCNs, and therefore the Commission decided to base its dumping determinations on 
comparisons of product classified according to tw o factors, namely the strength class and the 
distinction between special and standard fastener s.  The European Union contends that some 
interested parties also argued that the product cl assification should be made on the basis of these two 
factors.596  The European Union also maintains that no interested party made a substantiated request 
during the fasteners investigation for adjustments to be made with respect to other product characteristics reflected in the PCNs. 
7.288  With respect to the alleged quality differenc es between Chinese fasteners and fasteners 
produced by the Indian producer, the European Un ion acknowledges that some interested parties 
presented this argument during the investigation.
597  However, the European Union contends that, as 
explained in recital 56 of the Definitive Regul ation, the Commission found that the Chinese and 
Indian fasteners had the same basic physical and technical characteristics.  The Commission made adjustments for differences in quality control costs between Indian and Chinese fasteners, as well as 
for other factors such as transport, insurance, packing handling costs etc.
598  The European Union 
argues that in the absence of substantiation that di fferences demonstrated to affect price comparability 
were ignored, this aspect of China's clai m, therefore, should also be rejected. 
(b) Arguments of Third Parties 
(i) Chile 
7.289  Chile considers that investigating authorities have  to take into account all the characteristics 
of the product under consideration before engaging in the comparis on between normal value and the 
export price.  According to Chile, the AD Agreemen t does not allow the comparison of the prices of 
products that are not identical without breaking them into models. 
(ii) Colombia 
7.290  Colombia submits that Article 2.4 of the AD Agreement contains obligations for both the 
investigating authorities and foreign producers subj ect to anti-dumping investigations.  According to 
Colombia, if the European Union demonstrates that  the Commission duly evaluated all the differences 
                                                      
593 European Union, first written submission, paras. 455-456. 
594 For example, the European Unio n argues that one element of the PCNs in this dispute, customs 
classification (CN Codes), is not a difference affecting price comparability, but simply a way of identifying a 
product.  European Union, answer to Panel question 43(b). 
595 European Union, answer to Panel question 43. 
596 European Union, answer to Panel question 43(b). 
597 European Union, first written submission, para. 452. 
598 European Union, first written submission, paras. 452-453.  WT/DS397/R 
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 that the Chinese producers argued affected price comparability, the Panel should find that the 
European Union acted consistently w ith its obligations under Article 2.4. 
(c) Evaluation by the Panel 
7.291  China puts forward two main arguments in s upport of its claim regarding the Commission's 
dumping determinations.  It argues that the Commis sion violated the fair comparison obligation set 
forth in Article 2.4 of the AD Agreement by:  a)  not basing the comparison between the normal value 
and the export price on full PCNs, and b) failing to  make adjustments for quality differences and for 
differences in physical characteristics that affect ed price comparability.  Below, we address these 
two arguments in turn. 
Failure to Use Full PCNs  
7.292  Turning first to the relevant facts, we note that  the Commission, in the questionnaires sent to 
the producer in India and to the Chinese producers,  requested that information on the investigated 
products be reported on the basis of categories de fined by PCNs.  The relevant part of the 
questionnaire sent to the Chinese producers reads: 
"B-3 Comparison of export and domestic products  
1- Product control number 
In order to ensure a fair comparison betw een prices of the imports from China and 
prices charged and costs incurred by th e Community producers, the Commission 
intends to classify the product concerned in to different categories. The product has 
been categorised according to a "Product Control Number" (PCN) (see table below). 
The PCN consists of 10 characters/digits. 
.... The product control number will be used to compare prices of imports from the 
country concerned and prices charged by Community producers and to compare sales data to the cost of production.  In this respect, it is of great importance that you apply 
the product control numbers throughout your  questionnaire response (including the 
computer files) in an absolutely correct and consistent manner ."599  (emphasis in 
original) 
7.293  The following elements make up the PCNs iden tified by the Commission: type of fasteners 
(by CN code)600;  strength/hardness;  coating;  presence of chrome on coating, diameter;  and 
length/thickness.  The questionnaire sent to the produ cer in India also requested that information be 
provided on the basis of the same PCNs.  However, the Indian producer did not provide information 
categorized on the basis of the PCNs as requested.  Thus, the Commission could not base its comparison between the normal value and the export price on full PCNs.
601  Therefore, it resorted to 
"product types" defined by two factors, strength cl ass and the distinction between standard and special 
                                                      
599 Exhibit CHN-51, pp. 11-13. 
600 This element identified fasteners by CN code but did not distinguish between standard and special 
fasteners.  The latter distinction was made later in the proceeding, after the adversar ial meeting, but was not a 
part of the PCNs.  Definitive Regulation, Exhibit CHN-4, recital 51. 
601 European Union, answer to Panel question 43(b). WT/DS397/R 
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 fasteners, in the price comparisons for the dumping determination.602  In other words, in its price 
comparison, it did not categorize the price informati on on the basis of all the factors reflected in the 
PCNs.   
7.294  China argues that the Commission violated  its obligation under Article 2.4 of the 
AD Agreement by not taking into consideration all the characteristics reflected in the PCNs in the 
comparison between normal value and export price.  China does not claim that the Commission violated Article 2.4 merely by not making the price comparison on the basis of full PCNs.  Rather, it 
asserts that in the investigation at issue all the phys ical characteristics identified in the PCNs, namely 
the type of fasteners (by CN code), strength/ha rdness, coating, presence of chrome on coating, 
diameter and length and thickness, were differenc es that affected price comparability within the 
meaning of Article 2.4, and therefore they should  all have been taken in to consideration by the 
Commission.
603  According to China, the fact that the in formation was requested on the basis of PCNs 
means that the product characteristics reflected in the PCNs "were all relevant and all affected price 
comparability".604  The European Union states that the Commission regularly requests interested 
parties to provide information on the basis of PC Ns.  According to the European Union, PCNs 
provide a tool for information gathering in an inv estigation, but the inclusion of a factor in a PCN 
does not establish that it affects price comparab ility, and therefore its relevance for the price 
comparison to be carried out by the investigating authorities.605  In addition, the European Union 
argues that since not all factors in a PCN affect pr ice comparability, there is no obligation to explain 
why certain PCN features did not lead to an adjustment at a later stage.606  I n  t h e  v i e w  o f  t h e  
European Union, therefore, the Commission was not required to base its price comparison on full 
PCNs. 
7.295  Article 2.4 of the AD Agreement provides, in pertinent part: 
"2.4 A fair comparison shall be made between the export price and the normal 
value.  This comparison shall be made at the same level of trade, normally at the 
ex-factory level, and in respect of sales ma de at as nearly as possible the same time.  
Due allowance shall be made in each case, on its merits, for  differences which affect 
price comparability, including differences in  conditions and terms of sale, taxation, 
levels of trade, quantities, physical char acteristics, and any other differences which 
are also demonstrated to affect price comparability.7  In the cases referred to in 
paragraph 3, allowances for costs, incl uding duties and taxes, incurred between 
importation and resale, and for profits accruing, should also be made.  If in these 
cases price comparability has b een affected, the authorities shall establish the normal 
value at a level of trade equivalent to th e level of trade of the constructed export 
price, or shall make due allowance as warra nted under this paragraph.  The authorities 
shall indicate to the parties in question what information is necessary to ensure a fair 
comparison and shall not impose an unreasonable burden of proof on those parties. 
_______________ 
7 It is understood that some of the above factors may overlap, and authorities shall ensure that 
they do not duplicate adjustments that have been already made under this provision.  " 
                                                      
602 Definitive Regulation, Exhibit CHN-4, recital 102; Letter from the Commission, Exhibit CHN-31, 
p. 2. 
603 China, second written submission, para. 759. 
604 China, second written submission, para. 766. 
605 European Union, first written submission, paras. 465-466;  European Union, answer to Panel 
question 43(b). 
606 European Union, answer to Panel question 43(b).  WT/DS397/R 
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 7.296  We note that Article 2.4 of the AD Agreement requires that a fair comparison be carried out 
between the normal value and the export price, and that the comparison should be made at the same 
level of trade and with respect to sales made at as nearly as possible the same time.  The requirement for a "fair comparison" is aimed at making sure that the authorities compare the prices of products that 
are in fact comparable.  Normal value and export price may reflect differences, and thus may not be 
comparable.  Article 2.4 stipulates that the inves tigating authorities shall make "due allowance" for 
such differences that affect price comparability.  Di fferences that affect pr ice comparability may exist 
for various reasons, some of which are specifically cited in Article 2.4, i.e., conditions and terms of 
sale, taxation, levels of trade quantities and physical characteristics.  However, the list in Article 2.4 is 
not exhaustive, and the authorities must make due al lowance for "any other differences which are also 
demonstrated to affect price comparability".
607 
7.297  There is no methodological guidance in Article 2.4 as to how due allowance for differences 
affecting price comparability is to be made.  We  understand that, in order to comply with the 
requirement of Article 2.4 to make due allowa nce for differences affecting price comparability 
between sales of the imported product and sales of th e like product in the country of exports, most 
investigating authorities either make comparisons of transaction prices for groups of goods within the 
like product that share common characteristics608, or by making an adjustments for each difference 
affecting price comparability to either the normal va lue or the export price of each transaction to be 
compared.  It is clear to us that investigating authorities may find the first method more practical in certain cases, since it may minimize, or even el iminate, the need to make adjustments for each 
difference that affect price compar ability, which may be a difficult task.
609  However, the authorities 
are free to follow the second approach and make adjustments for each di fference in physical 
characteristics that affects price comparability.  
7.298  It seems clear to us that, under Article 2.4, it is the investigating authorities, not the foreign 
exporters, that must ensure a fair comparis on between the normal value and the export price.610  This 
does not, however, mean that the exporters have  no obligation in this process.  Although the 
obligation to make a fair comparison lies with the i nvestigating authorities, it is for the exporters, who 
would be expected to have the necessary knowledge of  the product in question, to make substantiated 
requests for adjustments in order to ensure such comparison.611  If it is not demonstrated to the 
authorities that there is a difference affecting pri ce comparability, there is no obligation to make an 
adjustment.612  Moreover, the fair comparison obligati on does not mean that the authorities must 
accept each request for an adjustment .  The authorities "must take steps to achieve clarity as to the 
                                                      
607 Appellate Body Report, US – Hot-Rolled Steel , para. 177. 
608 In this regard, we note the reasoning of the panel in US – Stainless Steel (Korea ) that the 
investigating authorities are not precluded by Article 2. 4.2 of the AD Agreement from using the practice of 
"multiple averaging" when comparing normal value and export price on the basis of weighted averages.  In 
"multiple averaging", the investigating authority groups comparable goods within the like product into categories or comparison groups, and calculates a weig hted average normal value and export price for each 
category, which are then compared, and the results aggregated to determine the dumping margin for the product.  
According to the panel, "a Member is not required to  compare a single weighted average normal value to a 
single weighted average export price in cases where certain export transactions  are not comparable to 
transactions that represent the basis for the calculation of the normal value".  Panel Report, United States – Anti-
Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea ("US – 
Stainless Steel (Korea )"), WT/DS179/R, adopted 1 February 2001, DSR 2001:IV, 1295, para. 6.111. 
609 For instance, we can well imagine the complexities that may arise in quantif ying such differences as 
size, weight, raw materials, etc., once it is determined that a particular differenc e affects price comparability. 
610 Appellate Body Report, US – Hot-Rolled Steel , para. 178. 
611 Panel Report, European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe 
Fittings from Brazil  ("EC – Tube or Pipe Fittings "), WT/DS219/R, adopted 18 August 2003, as modified by 
Appellate Body Report WT/DS219/AB/R, DSR 2003:VII, 2701, para. 7.158. 
612 Panel Report, Korea – Certain Paper , para. 7.147. WT/DS397/R 
Page 132 
 
 
 adjustment claimed and then determine whether and to what extent that adjustment is merited ".613  
If no adjustment is requested, or if an adjustment is  requested with respect to a difference that is not 
demonstrated to affect price comparability, or if the authority determines that an adjustment is not 
merited, no adjustment need be made.  It follows that, in order to make a prima facie case of violation 
of Article 2.4 in this dispute, China has to demons trate to the Panel that an adjustment should have 
been made with respect to (1) a difference (2) that was demonstrated to affect price comparability 
between the normal value and the export price, and that the Commission failed to make the 
adjustment.614  With this background in mind, we now turn to China's argument. 
7.299  We recall that China's claim concerns allege d differences in physical characteristics of 
Chinese fasteners and fasteners produced by the Indi an producer.  China argues that the Commission 
should have based its dumping dete rminations on full PCNs because, in China's view, all PCN factors 
represented a difference in the physical characteri stics of the Chinese and Indian fasteners that 
required due allowance within the meaning of Artic le 2.4.  The European Union disagrees, asserting 
that the fact that information was requested on th e basis of PCNs does not necessarily mean that each 
element of those PCNs was relevant to  the Commission's dumping determination. 
7.300  China submits that all the factors reflected in the PCNs affected price comparability and 
should have been taken into c onsideration by the Commission: 
"[T]he main purpose of the PCNs is to id entify comparable products and thereby to 
minimize the need for ad justments when making the comparison between export 
price and normal value as well as between the export prices and the prices of the like 
products in the importing country. To meet th is objective, the PCNs must necessarily 
include those product characteristics which would justify an adjustment  for 
differences in physical characteristics. It can, therefore, be expected that  if the EU 
requires that domestic producers, impor ters and exporting producers submit all 
information requested in the questionnaire organized by PCN, they do so because 
they consider the distinction relevant fo r the comparisons which must be made. The 
differences identified through the PCNs can th erefore be presumed to be relevant for 
comparison purposes."615 
China contends that if the Commission asked the in terested parties to submit information on the basis 
of PCNs it must be because the Commission consider ed each and every element of PCNs to represent 
a difference in physical characteristics which would necessarily affect price comparability.   
 
7.301  We disagree.  In our view, the fact that th e Commission sought information on the basis of 
PCNs certainly suggests that the EU authorities c onsidered, at least in the early stages of the 
investigative process, that these elements might af fect price comparability, and that they therefore 
envisioned comparisons based on the PCNs in order to avoid possible problems of non-comparability.  
That is, it suggests that the Commission intended, at the outset, to follow the first method that we 
described above616, whereby due allowance for differences affecting price comparability would be 
taken into consideration through comparisons based on PCNs, and therefore there would be no need 
to make individual adjustments for such differences .  Since, however, the Indian producer did not 
submit its information on the basis of PCNs, the Commission was unable to make the comparison between the normal value and the export price on th e basis of PCNs, and decided on an alternative 
basis for grouping the product into comparable categories.   
                                                     
 
613 Panel Report, EC – Tube or Pipe Fittings , para. 7.158 (emphasis added). 
614 Panel Report, Korea – Certain Paper , para. 7.138. 
615 China, answer to Panel question 41. 
616 See paragraph 7.297 below.  WT/DS397/R 
 Page 133 
 
 
 7.302  China asserts that each  PCN characteristic constituted a di fference in physical characteristics 
that affected price comparability, and that therefore, if the products were not grouped by PCNs, an adjustment had to be made for each characteristic re flected in the PCNs.  In this regard, while it may 
be plausible that the PCN char acteristics described in this case
617 indicate differences affecting price 
comparability, China has pointed to no  evidence that was before the investigating authority that would 
support this conclusion.  Moreover, it is clear that the Commission did not, in this case, reach such a 
conclusion, and thus, even if there were evidence to support it, it would be inappropriate for us, under 
the standard of review, to consider it for ourselves.  We therefore consider that, as argued by the European Union, PCNs are a tool for gathering information, but there is no inherent reason to 
conclude, and no evidence in this dispute that w ould demonstrate, that every element of the PCN, 
either in general, or in this case, necessarily re flects a difference which affects price comparability for 
the product in question.   
7.303  Moreover, when, as in this case, necessary in formation is not received in the format 
requested, that is, categorized according to PCNs, the investigating authority must nonetheless make a 
fair comparison of normal value and export pr ice, including due allowance for differences 
demonstrated to affect price comparability.  Whil e information organized on the basis of PCNs may 
well facilitate the comparison process, by enabling what the European Union calls a "mechanical 
comparison"
618, the obligation to make a fair comparis on under Article 2.4 does not vary depending 
on the form in which information is requested or re ceived.  Ultimately, the price comparison must be 
judged against the requirements of Article 2.4, a nd not on the basis of the information-gathering 
procedures of the investigating authority.  We th erefore reject China's argument that the Commission 
acted inconsistently with the obligation set forth unde r Article 2.4 of the Agreement by not taking into 
consideration all the PCN characteristics in making price comparisons in its dumping determination. 
7.304  We note, however, that the fact that PCNs were  not used in the price comparisons in this 
investigation does not absolve the Commission from its obligation under Article 2.4 to carry out a fair 
comparison between the normal value and the export price.  In the absence of a comparison based on 
full PCNs, the Commission was required to make adjustments for differences demonstrated by the 
Chinese producers to affect pri ce comparability.  This takes us to the second argument raised by 
China, namely that the Commission failed to make  adjustments for factors that affected price 
comparability. 
Alleged Failure to Make Necessary Adjustments  
7.305  China's second argument is that the Commissi on violated the obligation set forth in 
Article 2.4 of the AD Agreement by failing to ma ke the necessary adjustments for differences that 
affected price comparability.  In th is regard, China raises two issues.  First, China submits that the 
Commission erred by not considering whether adjustme nts needed to be made for elements of the 
PCNs which were not reflected in the "product types" on which it based its price comparisons. 
Second, China maintains that the Commission violated  Article 2.4 by not making an adjustment for 
quality differences between Chinese fastener s and those of the Indian producer. 
7.306  With respect to the first aspect of its argument, China contends: 
"The EU investigating authorities never ex amined, once they decided to exclude from 
the PCNs a number of physical characteri stics initially used to categorize products, 
whether the excluded characteristics were to be considered as differences in physical 
characteristics affecting price comparability and a fortiori never determined whether 
                                                      
617 These were, we recall, type of fasteners (by CN co de);  strength/hardness;  coating;  presence of 
chrome on coating, diameter;  and length/thickness. 
618 European Union, answer to Panel question 43. WT/DS397/R 
Page 134 
 
 
 or not an adjustment was required. Thus, by failing to evaluate the differences in 
physical characteristics which the investig ating authorities had themselves identified 
as being relevant for the purposes of making a fair comparison, these authorities failed to act in compliance with Article 2.4, third sentence of the AD Agreement."
619 
China thus maintains that once it decided to ex clude from its dumping margin calculation certain 
elements of the PCNs and to make its price co mparison on the product categories defined by strength 
class and the distinction between special and sta ndard, the Commission was required under Article 2.4 
to consider whether adjustments for those elements  of the PCNs were nonetheless required.  We note 
that this aspect of China's argument effectively rep eats its first argument, namely that the Commission 
acted inconsistently with Article 2.4 by not b asing its comparison on full PCNs, which we have 
rejected above.620  Having concluded that the European Union was not required to carry out its 
comparison on the basis of the PCNs, partly because the PCN elements do not necessarily reflect differences affecting price comparability and there is no evidence to demonstrate that they do in this 
case, we consider that the argument that the Commission should have considered whether the 
elements excluded from the comparison nonetheless required adjustments does not amount to a prima 
facie  case of violation of Article 2.4.  In th is regard, we note, as China acknowledges
621 that, in the 
course of the investigation at issue, none of the Chinese producers argued that there were factors 
which affected price comparability within the meani ng of Article 2.4 other than those used by the 
Commission to categorize the product for comparison purposes, that is, strength class (which was an element of the PCNs) and the distinction between st andard and special fasteners (which was not an 
element of the PCNs).  Given the absence of su ch a request from the Chinese exporters, and any 
showing that there was a factor which affected pr ice comparability which should have been apparent 
to the Commission such that ignoring it would lead to a biased determination, China's argument is 
unfounded, and we therefore reject it.  
7.307  The second aspect of China's argument relates to  adjustments for quality differences.  China 
submits that the Commission violated Article 2.4 by  not making an adjustment for quality differences 
between the Chinese fasteners and tho se of the Indian producer.  In this regard, China asserts that, at 
recital 52 of the Definitive Regulation, the Commission acknowledged that there were quality 
differences between these two groups of products.  Recital 52 states: 
"The submission from the PRC authorities mentioned in recital 48 enclosed an 
analysis report detailing a lleged quality differences betw een fasteners of a given 
standard (DIN 933 is used as an example)  manufactured in the Community and the 
PRC. This analysis took into account varia tions in geometry, hardness and chemical 
composition. It was claimed that, although both products tested conformed to the DIN standard, the Community-produced fasteners had a greater consistency, i.e. less 
variation with respect to all parameters analysed, than the PRC-produced fasteners. 
On this basis, the PRC authorities concl uded that the Community-produced product, 
given its superior quality, could not be compared to the PRC product. In that respect, it should be noted that the purpose of DIN and other widely accepted standards is to 
ensure that products satisfy certain essentia l user requirements. Any residual variation 
must be within limits which do not substa ntially affect the fastener's quality and 
function. Therefore, a fastener which is marketed as a DIN 933 bolt must be 
essentially comparable to another fastener marketed under the same standard. Any 
                                                      
619 China, second written submission, para. 793. 
620 See paragraphs 7.294 to 7.302 above.   
621 China generally recognizes that  the Chinese producers did not re quest an adjustment for factors 
other than those included in the PCNs .  China, answer to Panel question 38(b), para. 138.  China, however, 
argues that one Chinese producer requested an adjustme nt for differences in quality and we consider this 
argument below in paragraph 7.310.  WT/DS397/R 
 Page 135 
 
 
 perceived differences in quality, which ma y subsist from a user's point of view, can 
be dealt with through an adjustment for phys ical differences (see recital 103) but do 
not mean that the two products are not comparable. "  (emphasis added) 
7.308  We note that recital 52 relates to the issue of like product, not dum ping determinations.  
Moreover, it refers to an analysis of differences between fasteners produced in China, and fasteners 
produced in the European Union, provided in su pport of China's argument that Chinese and EU 
fasteners are not comparable, and therefore should not be considered "like".  In response to the 
argument of the Chinese authorities that alleged quality differences between Chinese fasteners and 
fasteners produced by the EU producers made th e products not "like", the Commission stated that 
fasteners that met, for instance, a particular DIN standard were comparable, and that any perceived 
quality differences can be dealt with through adjustments.   In this regard, recital 52 refers to recital 
103, which contains the Commission's explanations re garding the adjustment ma de with respect to the 
differences between the quality control costs of  the Chinese producers and those of the Indian 
producer.  It is clear, however, that this recita l does not even address the question of, much less 
demonstrate that the Commission did in fact determ ine that there were differences in quality between 
Indian and Chinese fasteners. 
7.309  China's argument seems to rest on the premise th at the Commission stated in recital 52 that 
any perceived quality differences would  be dealt with through adjustme nts, and that therefore such 
adjustments should have been made.622  We note, however, that recital 52 says that any perceived 
differences in quality can  be dealt with through adjustments.  Mo reover, as noted, it is clear that this 
recital does not even address any differences between Indian and Chinese fasteners.  Thus, despite the 
reference to recital 103, where th e Commission explains the adjustment  made for differences in the 
cost of quality control between Indian and Chinese producers, we do not see what relevance recital 52 
has to the issue raised by Chin a, that the Commission should have  made an adjustment for quality 
differences between Chinese and Indian fasteners.  I ndeed, the analysis referred to in recital 52, which 
is the evidence China relies on to support the asser tion of quality differences, concerns fasteners 
produced in China and the European Union, and does not even mention fasteners produced in India.  
Nor does China argue that the Commission anywhere  else concluded that there were differences in 
quality between Indian and Chinese fasteners whic h affected price comparability and therefore 
required adjustment.623  Thus, we do not consider the statemen t in recital 52 to demonstrate that the 
Commission recognized any quality differences between  Indian and Chinese fasteners, much less any 
such differences that affected  price comparability and therefore required an adjustment. 
7.310  China argues that one Chinese producer referred  to the issue of quality differences between 
the Chinese fasteners and fasteners produced by the Indian producer and requested an adjustment, 
citing in this respect a letter dated 24 Novemb er 2008, on behalf of Ningbo Yonghong Fasteners Co. 
Ltd., setting out this company's comments on the Commission's final disclosure dated 
3 November 2008.  The letter reads, in relevant part: 
"As explained above and as earlier explaine d in the comments of 4 September 2008, 
Chinese producers, [LIMITED]*, mainly focus on low-end, low-quality fasteners 
whereas producers in India, and particularly the cooperating producer in India, mostly 
focus on high-end, high-quality fasteners for automotive and aero-space applications. 
When making the comparison between the Chinese export prices and the normal 
value as established on the basis of data  from the cooperating Indian producer, the 
                                                      
622 China, answer to Panel question 94. 
623 We recall that the Commission made an adjustment for differences in the costs of quality control 
between the Chinese fasteners and fasteners produced  by the Indian producer.  Definitive Regulation, 
Exhibit CHN-4, recital 103. WT/DS397/R 
Page 136 
 
 
 Commission Services apparently (due to the lack of disclosure with respect to the 
normal value determination, it could not be checked whethe r such an adjustment has 
indeed been made) made an adjustment for the cost of quality control incurred by the 
cooperating Indian producer. 
However, even though the Commission Se rvices hereby acknowledge that there are 
quality differences between the products so ld by Chinese producers and the products 
produced by the cooperating Indian producer, no adjustment seems to have been 
made for differences in quality . 
Clearly, such differences in quality affect price and price comparability and an 
adjustment should therefore be made accord ing to Article 2(10)(a) basic Regulation. 
In fact, it has been the Commission Services ' practice to make such adjustments if 
there is a difference in the quality of the fi nal products or in the quality of the raw 
materials... 
Since the Commission Services acknowledged in recital (94) that there are quality 
differences between the products exported by Chinese manufacturers and the 
products produced by the cooperating Indi an producer, Yonghong hereby requests an 
adjustment for the differences in quality of the products concerned  and a difference in 
quality of the raw materials, i.e. wire rod, pursuant to Article 2(10)(a) or 2(10)(k) of 
the basic Regulation."624  (emphasis added) 
7.311  We note that this letter shows that Yonghong re quested that an adjust ment be made with 
respect to quality differences betw een the Chinese fasteners and fast eners produced by the Indian 
producer.  However, nothing in this letter indi cates that any evidence was proffered to the 
Commission to demonstrate that this alleged diffe rence in quality affected price comparability, a 
demonstration required under Ar ticle 2.4 of the AD Agreement.625  Moreover, it is not clear to us that 
the Commission did, as recited in the letter, "ac knowledge that there are quality differences between 
the products sold by Chinese producers and the products produced by the cooperating Indian 
producer" within the categories that were actually compared.  Recital 94 of the Disclosure document, referred to in this regard, is the same as reci tal 103 of the Definitive Regulation, and as discussed 
above, concerns difference in the costs of quality control procedures of the Indian producer and 
Chinese cooperating exporting producers, for which an adjustment was made.  Thus, this recital does 
not support the assertion that the Commission recogni zed the existence of quality differences between 
Chinese and Indian fasteners.  China has made no other argument in this regard.  Based on the 
foregoing, we reject China's claim that the Commiss ion violated Article 2.4 of the AD Agreement by 
not making the necessary adjustments in its dumping de terminations in the investigation at issue. 
                                                     
 
624 Exhibit CHN-74, pp. 10-11 . 
625 We note, in this regard, that the record does not show that Yonghong submitted information to 
support its argument that there was a difference between  the Chinese fasteners and fasteners produced by the 
Indian producer.  This might have been because of the fact that the Chinese producers were not informed in a 
timely fashion of the basis on which the Commission made its price comparison.  We recall that this is the main 
basis of China's claim regarding the procedural aspects of the Commission's dumping determination, which we 
address below, at paragraphs 7.470 to 7.508.  WT/DS397/R 
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 7. Whether the European Union violated Articl es 3.1 and 3.2 of the AD Agreement in its 
price undercutting determination 
(a) Arguments of the Parties 
(i) China 
7.312  China submits that the Commission violated the obligations set forth in Articles 3.1 and 3.2 of 
the AD Agreement in its price undercutting determin ation.  China acknowledges that Article 3.2 does 
not prescribe a particular methodology with respect to price undercutting determinations.  However, 
argues China, the general obligation set forth under Article 3.1 to base an injury determination on 
positive evidence and an objective examination a pplies to price undercutting determinations.  
According to China, "[t]he requirement of "objectiv ity" implies that the comparison must be made in 
an even-handed manner and that comp arable products must be compared".626  China maintains that 
the Commission failed to observe these principles fo r two reasons, and therefore requests the Panel to 
find that the Commission's price undercutting dete rmination was inconsistent with Articles 3.1 
and 3.2 of the Agreement. 
7.313  First, China notes that the Commission request ed information on a PCN basis both from the 
Chinese and the EU producers.  However, the Commission did not base its price undercutting 
determination on a comparison of product categories defined by full PCNs.  Instead, the Commission used simplified PCNs, eliminating the factor of  diameter, and using only length in centimetres.
627  
According to China, the use of such simplified PC Ns resulted in a situation in which product types 
with 30 per cent price difference  or more were grouped together.628  This rendered the results of the 
Commission's price undercutting determinations unreliable.629  Therefore, China submits that "by 
failing to take into account the full PCNs or to make  adjustments, the European Union ignored certain 
important differences in physical characteristi cs which affect price comparability and consumer 
perception and made a finding of injury more likely,  thereby violating Articles 3.1 and 3.2 of the AD 
Agreement".630  According to China, the fact that the Commission requested information on the basis 
of PCNs "create[d] a presumption that all the PCN characteristics were relevant in order to ensure a 
comparison which is even-handed and objective".631  In China's view, as a result of this presumption, 
the Commission should have at least examined these factors which were finally not taken into account 
for making the price undercutting analysis and concluded why they could not affect the price undercutting analysis.
632 
7.314  Second, China asserts that the error caused by use of simplified PCNs was "compounded by 
the methodology applied by the EC to differentia te between special and standard fasteners".633  China 
notes that the Commission in its price undercutting de termination made a distinction between standard 
and special fasteners.  That is, the prices of sta ndard Chinese fasteners were compared with the prices 
of standard fasteners produced by the EU industry,  and the prices of special Chinese fasteners were 
compared with the prices of special fasteners produ ced by the EU industry.  However, China submits 
                                                      
626 China, first written submission, para. 393. 
627 China, first written submission, para. 391.  We note that in paragraph 841 of its second written 
submission, China argues that the Commission omitted not only length but also diameter.  As we have noted in 
paragraph 7.326 below, the facts on the record show that  with respect to its price undercutting determinations 
the Commission combined "length" and "diameter" into "size". 
628 China argues that this price gap could go up to 80 per cent.  China, first written submission, 
para. 394. 
629 China, first written submission, para. 394. 
630 China, answer to Panel question 42, para. 147;  China, second written submission, para. 849. 
631 China, second written submission, para. 845. 
632 China, second written submission, para. 834. 
633 China, first written submission, para. 395. WT/DS397/R 
Page 138 
 
 
 that "the EU investigating authorities classified a ll fasteners as "standard" fasteners provided they met 
the industry standards".  Therefore, such "standa rd" fasteners also included fasteners which, in 
addition to complying with industry standards, met the specific additional requirements of their 
customers.634  Asserting that, unlike standard fasten ers exported by the Chinese producers, the 
majority of standard fasteners produced by the EU  producers also met specific customer requirements, 
China submits that these fasteners were naturally mo re expensive than Chinese standard fasteners and 
that comparing these two resulted in artificially high price undercutting margins.635  Further, China 
argues that the Commission failed to make an ad justment for quality differences between Chinese 
standard fasteners and standard fasteners produced by  the EU industry.  In this regard, China notes 
that recital 52 of the Definitive Regulation, which addresses the issue of "like product", states that any 
perceived difference between the quality of Chinese and EU fasteners would be dealt with through 
adjustments.636  China also notes that recital 125, whic h explains the Commission's price undercutting 
determinations, states that a similar method was us ed as the one described in recitals 102 and 103 
which explain the Commission's dumping determina tions.  Given that recital 103 states that an 
adjustment for differences in quality control costs was made in the context of dumping 
determinations, China argues that it does not appear fr om the file that such an adjustment was actually 
made.637  Even if an adjustment for differences in  the costs of quality control was made, China 
contends that this is different from that for qua lity differences mentioned in recital 52 of the 
Definitive regulation, and that such  an adjustment would, therefore, not be sufficient to address the 
quality differences between Chinese and EU-made fasteners.638  China concludes that not taking into 
consideration the quality differences  between Chinese and EU-made fasteners, which China contends 
are obviously important from a consumer's point of view and which affect prices639, rendered the 
Commission's price undercutting determinations non-objective.640 
(ii) European Union 
7.315  The European Union  asserts that this claim is outside th e Panel's terms of reference because it 
was not subject to consultations.641  The European Union recognizes that China's Panel request 
identifies a claim with respect to  the Commission's price undercutting determination, but argues that 
no such claim was raised in the request for consu ltations, and this matter was not discussed in the 
consultations between the parties.  The European  Union also submits that China's claim on price 
undercutting has different legal and factual bases compar ed with the other injury-related claims raised 
in China's request for consultations .  Therefore, argues the European Union, this claim is outside the 
Panel's terms of reference.642 
7.316  If the Panel finds this claim to be within its terms of reference, the European Union requests 
the Panel to reject the substantive arguments pres ented by China.  The European Union argues that 
Article 3.2 of the AD Agreement does not impose a particular methodology with respect to price 
undercutting determinations.  In th is regard, the European Union fi nds support in previous panel 
reports, including, among others, EC – Tube or Pipe Fittings , where the panel reasoned that 
Article 3.2 does not require that a price undercutting analysis in the injury context include adjustments 
in the same way that Article 2.4 does for pr ice comparisons in dumping margin calculations.643  
Therefore, submits the European Union, the Commis sion cannot be said to have violated Articles 3.2 
                                                      
634 China, second written submission, para. 850. 
635 China, second written submission, para. 850. 
636 China, second written submission, para. 854. 
637 China, second written submission, para. 854. 
638 China, second written submission, para. 855. 
639 China, second written submission, para. 856. 
640 China, second written submission, para. 856. 
641 European Union, first written submission, para. 485. 
642 European Union, paras. 488-491. 
643 European Union, first written submission, para. 496.  WT/DS397/R 
 Page 139 
 
 
 and 3.1 of the AD Agreement by not basing its  price undercutting determination on full PCNs.644  The 
European Union notes that China's reasoning is based on the text of Article 2.4 and contends that, as 
the panel in EC –- Tube or Pipe Fittings  found, the requirements of Article 2.4 cannot be transposed 
into Article 3.2.645 
7.317  The European Union also maintains that in the fasteners investigation, the Commission 
compared like and essentially comparable products .  According to the European Union,  
"the comparison was actually made on the basis of 5 out of the 6 PCN features.  In 
addition, and at the express insistence of Ch inese interested parties, a distinction was 
made between special and standard fasteners.  In so doing the EU authorities ensured 
a comparison which was undoubtedly fair and unbiased since the authorities went 
well beyond what they were obliged to do under the [AD Agreement]."646   
The European Union contends that merely becau se different product types included in the same 
product group had different prices does not make the Commission's price undercutting analysis non-objective.
647  Further, the European Union maintains that  in response to interested parties' argument 
regarding the alleged quality diffe rences between Chinese fasteners a nd the fasteners produced by the 
EU producers, a distinction was made between stan dard and special fasteners which eliminated the 
possibility of comparing inexpensive standard Ch inese fasteners with generally more expensive 
special fasteners produced by the EU producers.648  Thus China's arguments about quality differences 
not having been taken into consideration are unfounded. 
 
(b) Evaluation by the Panel 
(i) Terms of Reference of the Panel 
7.318  The European Union contends that China's clai m is outside the Panel's terms of reference 
because it was not subject to consultations.  Accord ing to the European Union, this claim is not 
identified at all in China's request for consultations  and was not discussed during consultations either.  
China maintains that this claim was identified in China's request for consultations and discussed 
during consultations.  China argues that the list of the questions649 that China sent to the 
European Union prior to consultations confirms this. 
7.319  China's request for consultations contains two re ferences to Article 3.2 of the AD Agreement.  
One is found in the chapeau of paragraph 2.  This paragraph reads: 
"2. China considers that the EC's imposition of anti-dumping duties  on imports 
of certain iron or steel fasteners originating in the People's Republic of China  is 
inconsistent with  the EC's obligations under Articles VI and X:3(a) of the GATT 
1994;  Articles 1, 2.1, 2.2. 2.4, 2.6, 3.1, 3.2 , 3.4, 3.5, 4.1, 5.4, 6.1, 6.2, 6.4, 6.5, 6.10, 
9.2, 9.4 and 17.6(i) of the AD Agreement as well as Part I, paragraph 15 of China's Protocol of Accession."  (emphasis added) 
China argues that this part of its request for c onsultations is where its price undercutting claim is 
identified.  The remainder of para graph 2 lists 14 aspects of China's complaint with respect to the 
Definitive Regulation.  The second reference to Article  3.2 is in item (x) of that list, which states: 
                                                     
 
644 European Union, first written submission, para. 498. 
645 European Union, second written submission, para. 166. 
646 European Union, second written submission, para. 167. 
647 European Union, first written submission, para. 504. 
648 European Union, first written submission, paras. 501-502. 
649 Exhibit CHN-65. WT/DS397/R 
Page 140 
 
 
 "The EC failed to exclude from the volume of imports, for injury determination 
purposes, non-dumped imports, thereby acting in consistently with Article 3.1 and 3.2 
of the AD Agreement and Article VI:1 of the GATT 1994."   
7.320  We note that, in the chapeau of paragraph 2, the request for consultations refers to the 
imposition of the anti-dumping duties in the steel f asteners investigation, therefore the specific 
measure at issue is properly identified.  As to "t he legal basis for the complaint", the second element 
that Article 4.4 of the DSU requires to be included in a request for consultations, the chapeau lists the 
various Articles of the AD Agreement with which Ch ina asserts the specific measure is inconsistent.  
The following fourteen sub-paragraphs list aspects of  China's complaint with respect to the Definitive 
Regulation, but do not refer in so many words to  the question of price undercutting.  Thus, the 
threshold question for us is whether the reference to Article 3.2 of the AD Agreement in the chapeau 
of paragraph 2 of the request for c onsultations satisfies the requirement  of Article 4.4 of the DSU with 
respect to China's complaint concerning the price unde rcutting analysis in the fasteners investigation.  
In our view, the resolution of this question depends in  part on the nature of the obligation(s) set forth 
in the particular provision(s) cited as having been viol ated by the measure at issue, and in part on the 
specific terms of the request for consultations. 
7.321  Article 3.2 of the AD Agreement provides: 
"3.2 With regard to the volume of the dum ped imports, the investigating authorities 
shall consider whether there has been a significant increase in dumped imports, either 
in absolute terms or relative to production or consumption in the importing Member.  
With regard to the effect of the dumped imports on prices, the investigating 
authorities shall consider whether there has been a significant price undercutting by 
the dumped imports as compared with the price of a like product of the importing Member, or whether the effect of such imports is otherwise to depress prices to a significant degree  or prevent price increases, which otherwise would have occurred, 
to a significant degree.  No one or several of these factors can necessarily give 
decisive guidance." 
Thus, Article 3.2 addresses the details of two of the th ree main elements of an injury determination, 
namely the consideration of the volume of dumped imports and of the impact of the prices of such imports on the prices of the domestic industry produc ing the like product in the country of imports.  
With respect to volume, it provides that the author ities have to consider whether there has been an 
increase in the volume of dumped imports, either in absolute terms of rela tive to production or 
consumption in the importing country.  With respect to the price analysis, Article 3.2 states that the 
investigating authorities have to consider whethe r there has been significant price undercutting by 
dumped imports, or whether the prices of the domestic industry have been significantly depressed or suppressed by the prices of dumped imports.
650 
 
7.322   Article 3.2 is a provision that contains multip le obligations for investigating authorities.  
While the Appellate Body has indicated that a mere listing of legal provisions alleged to be violated 
may not be sufficient to provide a brief summary of  the legal basis of the complaint sufficient to 
present the problem clearly in the context of a panel request651, it is not clear to us that a similar 
approach should be taken with respect to a request  for consultations.  Unlike Article 6.2 of the DSU, 
which contains the requirement that a panel request provide a brief summary of the legal basis of the 
complaint sufficient to present the problem clearly, Ar ticle 4.4 of the DSU requires only that a request 
                                                      
650 Price depression is the situation where prices in the importing country decline, while price 
suppression is the situation where prices in the importin g country either do not incr ease, or increase less than 
would otherwise be the case.  Neither of these situa tions was at issue in the underlying investigation. 
651 Appellate Body Report, Korea – Dairy , para. 124.  WT/DS397/R 
 Page 141 
 
 
 for consultations contain "an indica tion of the legal basis for the complaint".  In our view, this is a 
lesser requirement than that of Article 6.2, and may well be satisfied in a particular case by listing the Articles allegedly violated.  China's request for consultations clearly indicates that it seeks 
consultations with the European Union concerning  alleged violations of the provisions of the 
AD Agreement set out in the chapeau of paragr aph 2.  While it is true that the following 
subparagraphs set out additional information as to th e circumstances of the alleged violations, but not 
with respect to price undercutting, it is not clear to  us that this is strictly necessary for purposes of 
Article 4.4.
652  In this case, we consider that the referen ce to Article 3.2 in the chapeau of paragraph 2 
of the request for consultations is sufficient to give an "indication" that the legal basis of the 
complaint is a violation of some aspects of that pr ovision.  Moreover, we note that there is no dispute 
that the panel request clearly sets out a claim of violation with respect to the price undercutting 
analysis, and thus may be considered to concern the same dispute, and to have evolved from the 
matter set out in the request for consultations.  On this basis, we conclude that China's request for 
consultations does contain a sufficient "indicati on of the legal basis", Article 3.2 of the 
AD Agreement, with respect to its complaint concerning the Commission's price undercutting 
analysis and that this claim is therefore within our terms of reference. 
7.323  Turning to China's claim under Article 3.1 of the Agreement, we note that China's panel 
request, on page 4, cites Article 3.1, in addition to  Article 3.2, with respect to the claim on price 
undercutting.  In its submissions to the Panel, China invokes both Articles 3.1 and 3.2 in connection 
with this claim.  Turning to whether the request  for consultations indicates the legal basis for a 
complaint under Article 3.1 in relation to price underc utting, we note that the chapeau of paragraph 2 
of the request for consultations cites Article 3.1.  We recall that Article 3.1 sets forth the general 
obligations imposed on the investigating authorities w ith respect to injury determinations and sets out 
the three main components of an injury determinati on.  Had China's request for consultations referred 
to Article 3.1 alone, it might have been difficult to  conclude that the request contained a sufficient 
indication of the legal basis for a claim on price undercutting, which is specifically addressed in 
Article 3.2.  However, the same chapeau sentence in the request for consultations refers to Article 3.2 
of the AD Agreement.  We consider that the allege d violation of Article 3.1 is dependent on a finding 
of violation of the obligations in one or more of other Articles of the AD Agreement referred to in the 
first sentence of paragraph 2, which contain more sp ecific elaboration of th e general requirement set 
out in Article 3.1.  Since we have concluded that  the request for consultations covers China's price 
undercutting claim, we also find that  the alleged dependent violation of  Article 3.1 is also within the 
scope of the request.653   
(ii) Substantive Analysis 
7.324  China's claim is based on two main arguments:  a) that the Commission acted inconsistently 
with Articles 3.1 and 3.2 of the AD Agreement by not basing its price undercutting determination on 
full PCNs;  and b) that the method used to distingui sh between standard and special fasteners did not 
result in an objective determination on price undercu tting.  Below, we address both arguments in turn. 
7.325  With respect to China's first argument, we  note that Article 3.2 of the AD Agreement 
stipulates, inter alia , that, in an injury determination, the i nvestigating authorities have to consider 
whether there has been significant price undercuttin g by the dumped imports as compared with the 
prices of the like product in the importing countr y.  Article 3.2 does not, however, prescribe a 
particular methodology for the consideration of price undercutting, nor does it require that a 
                                                      
652 We do consider that a greater degree of particularity in a request for consultations might be 
desirable and would likely provide better focus for the consultations. 
653 Consequently, we need not go on to consider whether, had we not found the Article 3.2 complaint 
with respect to price undercutting within the scope of the request for consultations, we would nonetheless have 
found the Article 3.1 complaint, independently, within the scope of that request. WT/DS397/R 
Page 142 
 
 
 determination of price undercutting be made.654  Thus the investigating authorities have a certain 
degree of discretion with respect to the methodol ogy that they will follow in considering price 
undercutting and making any de termination.  This discretion is not, however, unlimited.  Rather, the 
general obligation set forth in Article 3.1 of the AD Agreement to carry out an objective examination 
on the basis of positive evidence, sets the limits of  the authorities' discretion in the context of 
considering price undercutting.655  Therefore, in order to establish a prima facie case of violation, 
China has to establish that the Commission's pr ice undercutting analysis did not constitute an 
objective examination based on positiv e evidence as required under Article 3.1 of the AD Agreement.  
In this regard, we note the A ppellate Body's statement, in US – Hot-Rolled Steel , that "an 'objective 
examination' [under Article 3.1] requires that the domestic industry, and the effects of dumped 
imports, be investigated in an unbiased manner, w ithout favouring the interests of any interested 
party, or group of interested parties, in the investigation".656  We shall therefore consider whether 
China has adduced evidence showi ng that the Commission acted in a biased manner or favoured the 
interests of certain interested parties in its pri ce undercutting determination in the investigation at 
issue. 
7.326  The facts before us indicate that in the f asteners investigation the price information was 
submitted on a PCN basis by the Chinese and the EU pr oducers.  Originally, the PCNs defined by the 
Commission included six elements.  In its price undercutting analysis, however, the Commission "simplified" the PCNs by replacing two separate el ements, "diameter" and "length", with a single 
more general "size feature".
657  This resulted in a "modified" or "simplified" PCN with five 
characteristics, instead of six, and the pricing in formation was categorized according to the modified 
PCNs for purposes of the price undercutting comparisons. 
                                                      
654 Panel Report, EC – Tube or Pipe Fittings , para. 7.278, where the panel noted that while the calculation 
of a dumping margin was determinative in a dumping dete rmination, price undercutting was not determinative of 
injury, but was part of the overall assessment of injury to  the domestic industry.  The panel went on to observe that 
"[w]hile this certainly gives no basis or jus tification for an arbitr ary or non-even-handed 
examination, particularly in light of the f act that the Agreement contains no specific 
conditions or criteria or methodology, it permits an investigating authority a degree of 
discretion in carrying out the price undercutting assessment." Id.  See also, Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from Turkey 
("Egypt – Steel Rebar "), WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, 2667, para. 7.73. 
655 Panel Report, EC – Tube or Pipe Fittings , para. 7.292, where the panel observed, referring to the 
requirement in Article 3.1 to conduct an "objective examination" on the basis of "positive evidence", that the 
investigating authorities' examination must: 
"conform to the dictates of the basic principl es of good faith and fundamental fairness.  The 
investigating authority must therefore ensure an  even-handed treatment of the information and 
data on the record of the investigation.  However, in view of the stark contrast in the text, context, legal nature and rationale of  the provisions in Article 2 of the Anti-Dumping 
Agreement  relating to the calculation of the dumping margin and Article 3 relating to the 
injury analysis, we decline to transpose wholesale the more detailed methodological obligations of Article 2 concerning dumping into the provisions of Article 3 concerning injury 
analysis." 
The panel also observed that relevant differences in  prices might not be the same in the context of a 
price undercutting analysis and a dumping margin analysis.  Id., para. 7.293. 
656 Appellate Body Report, US – Hot-Rolled Steel , para. 193. 
657 These simplified PCNs are shown in Exhibit CHN-55.  The table in this exhibit contains the 
simplified PCNs in the first column and the correspo nding original full PCNs in the second column.  The 
European Union explained, in its answer  to Panel question 43(b), that the last three digits in the original PCNs 
refer to "length", the second last three to "diameter" a nd that these two were replaced by "size" as reflected in 
the last two digits of the simplified PCNs.  China has not contested the European Union's explanations in this 
regard.  WT/DS397/R 
 Page 143 
 
 
 7.327  In response to a question from the Panel, China st ated that it "does not claim in the abstract 
that the Commission is required to necessarily and always examine these issues on the basis of the PCNs".
658  It contends, however, that the purpose of requesting information on a PCN basis was to 
make sure that the same product types would be  compared and therefor e the need to make 
adjustments would be minimized.  Therefore, s ubmits China, "the PCNs must necessarily include 
those product characteristics which would justify an adjustment for differences in physical 
characteristics".659  We note that this argument is essen tially the same argument made by China 
regarding the non-use of full PCNs in the contex t of the Commission's dumping determinations.  
Here, China contends that since the Commission asked  the interested parties to submit information on 
a PCN basis, the price undercutting determination sh ould have been based on full PCNs.  That is, in 
China's view, the Commission in its price undercutti ng determination either should have taken into 
account the full PCNs or made adjustments for differences that affect ed price comparability.660  The 
European Union, however, argues that the fact th at information was requested on a PCN basis does 
not mean that all the product characteristics reflec ted in the PCNs were relevant to the price 
undercutting analysis.  It also maintains that there is nothing inherently biased for or against foreign 
producers in the use of PCNs in making the price comparisons.  According to the European Union, 
unlike Article 2.4, Article 3.2 does not even require that adjustments be made in the context of price 
undercutting analysis.661 
7.328  It is clear that the text of Article 3.2 provides no methodological guidance as to how an 
investigating authority is to "consider" whether there has been significant price undercutting.  In our 
view, price undercutting may be demonstrated by comparing the prices of the like product of the 
domestic industry with the prices of the dumped im ports, as the European Union did in this case.  
However, there is no equivalent requirement unde r Article 3.2 to that of Article 2.4 of the 
AD Agreement with respect to "due allowance" fo r differences affecting price comparability.  In our 
view, while it is clear that the general requireme nts of objective examination and positive evidence of 
Article 3.1 limit an investigating authority's discre tion in the conduct of a price undercutting analysis, 
this does not mean that the requirements of Article 2.4 with respect to due allowance for differences 
affecting price comparability are applicable.662  Thus, for instance, adjustments in the context of price 
undercutting analysis may be a useful means of  ensuring that the requirements of objective 
examination of positive evidence in Article 3.1 are satisfied, as might the use of carefully defined product categories for the collection of price informat ion.  In this case, the Commission had requested 
price information on the basis of PCNs consisting of six elements, and then when it undertook the 
price undercutting comparisons, it "simplified" the PCN by referring to "size" ra ther than "length" and 
"diameter".  In the first place, it is not at all clear  to us, and China has not made any argument in this 
respect, that the feature of size is not an appropriate proxy for the two separate features of length and diameter.  Thus, we do not consider that, by simplifying the PCNs on the basis of which the price 
undercutting analysis was conducted, the European Un ion acted inconsistently with the obligation to 
undertake an objective examination on the basis of pos itive evidence, as required by Article 3.1 of the 
AD Agreement.  More importantly, however, given that  there is no obligation to make due allowance 
for the purposes of price undercutting analysis even  with respect to differences for which due 
allowance must be made under Article 2.4 when ma king dumping comparisons, the mere fact that the 
Commission did not do so does not, in our view, establish a violation of Articles 3.1 and 3.2 of the 
AD Agreement.   
7.329  In any event, we recall that we rejected Chin a's claim that the failure to use full PCNs, or 
make adjustments for those elemen ts of the PCNs which were not reflected in the product types 
                                                     
 
658 China, answer to Panel question 41. 
659 China, answer to Panel question 41. 
660 China, first written submission, para. 396;  China, answer to Panel question 41. 
661 European Union, second written submission, para. 166. 
662 Panel Report, EC – Tube or Pipe Fittings , para. 7.292.   WT/DS397/R 
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 actually compared in the dumping determination,  was inconsistent with Article 2.4 of the 
AD Agreement.  Given that conclusion, we see no b asis for any different conclusion with respect to 
China's claim concerning price unde rcutting, where there is even less guidance on methodology.   
7.330  China's second argument is that the method used  by the Commission to distinguish standard 
and special fasteners did not result in an objec tive determination on price undercutting.  China 
acknowledges that the Commission made a distincti on between standard and special fasteners, and 
that in its price undercutting determination it comp ared the prices of standard Chinese fasteners with 
those of the standard EU fasteners.663  It argues, however, that, as defined in recital 54 of the 
Definitive Regulation, "the "standard" fasteners produced by the Community producers included not 
only standard fasteners which merely comply with industry standards but also fasteners which, in 
addition to complying with industry standards, m eet the specific additional requirements of their 
customers."664  China describes standard fasteners that only meet the industry requirements as "basic 
standard fasteners" and those that also meet customer requirements as "standard-plus fasteners".665  
According to China, "the EU investigating au thorities should have made a comparison between 
Chinese-made "basic standard fasteners" and EU-m ade "basic standard fasteners" and another 
comparison between Chinese-made "standard-plu s fasteners" and EU-made "standard-plus 
fasteners"".666   
7.331  The European Union disagrees with China's descri ption and argues that "[a] standard fastener 
simply meets a norm, which is specified by the produ cer, if produced for stock, or by the customer, if 
produced for order".667  The European Union also maintains that  fasteners that conform to the industry 
requirements but additionally also meet specific cu stomer requirements would be treated as special 
fasteners irrespective of country of origin.  The Eu ropean Union adds that a customer can "order a 
"standard" fastener by simply specifying the nor m, the strength, the thickness and the diameter".668 
7.332  In support of its argument that the Commission treated as "standard" fasteners what it calls 
"standard-plus" fasteners, i.e., those which, in addition to meeti ng the relevant industry specifications, 
also met certain customer requirements, China refe rs to the following part of recital 54 of the 
Definitive Regulation: 
"While it is recognised that not all types of fasteners can be used for all applications, 
and that this is particularly the case for 's pecial' fasteners and high-end applications, it 
was found that, within the same standard, all types of fasteners were found to be 
interchangeable for most of the other applications. "669  (emphasis added by China) 
We note that this excerpt first underlines the fact th at not all types of fasteners can be used for all 
applications, with specific reference to special fasten ers.  The part highlighted by China implies that 
fasteners that satisfy the same standards would gene rally all be suitable for the same needs.  In our 
view, this does not support China's allegation that  in the investigation at issue the Commission 
compared the prices of the so-called EU-made "stand ard-plus fasteners" produced with the prices of 
Chinese "basic standard fasteners".  Indeed, it is not  even clear to us what the "standard-plus" and 
"basic standard" categories posited by China consist of .  Much less can we find any indication in the 
Definitive Regulation suggesting that the Commissi on accepted that these categories existed.  Thus, 
we find that China has failed to make a prima facie  showing that the Commission compared Chinese-
                                                      
663 China, second written submission, para. 851;  China, answer to Panel question 93(a). 
664 China, second written submission, para. 850. 
665 China, answer to Panel question 93(a). 
666 China, answer to Panel question 93(a). 
667 European Union, comments of China's answer to Panel question 93(a). 
668 European Union, comments of China's answer to Panel question 93(a). 
669 China, second written submission, para. 850.  WT/DS397/R 
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 made "basic standard fasteners" and EU-made "standa rd-plus fasteners" (or vice versa), and therefore 
has failed to demonstrate in this respect that th e comparisons made by the Commission resulted in a 
non-objective price undercutting determination.  
7.333  Next, China submits that the Commission failed to take into consideration the quality 
differences between Chinese fastener s and fasteners produced by the EU  producers.  In this regard, 
China notes that in connection with the issue of like product, recital 52 of the Definitive Regulation 
mentions that any perceived difference between the quality of Chinese and EU fasteners would be 
dealt with through adjustments.  China also notes that recital 125 mentions that in its price 
undercutting determinations the Commission followed an  approach similar to that followed in the 
dumping determinations in undertaking comparisons by product type, which takes into consideration 
the characteristics of the product bei ng compared.  China then refers to recital 103 which states that an 
adjustment for differences in quality control costs was made in the context of the dumping margin 
calculations, and contends that it does not appear from the file that a similar adjustment was made in 
the context of price undercutting determinations.  Even if such an adjustment was made, China 
contends that this would not be sufficient to ad dress the quality differences between Chinese and EU-
made fasteners. 
7.334  With respect to the adjustment for differences between costs of quality control, we note that 
this adjustment was made in the context of the cal culation of the dumping margin, and with respect to 
Indian produced and Chinese produced fasteners.  Thus , it is in our view irrelevant to the question 
before us here, whether the Commission's price comparison of Chinese fasteners exported to the 
European Union and fasteners produced by the EU industry was consistent with Articles 3.1 and 3.2 
of the AD Agreement.  Similarly, China's argument with respect to whether or not an adjustment for 
quality control eliminates a difference in quality
670 is also irrelevant, not only because, as discussed 
above, "adjustments" in the sense of due allowance under Article 2.4 of the AD requirement are not 
required in the price undercutting context, but also because the adjustment in question was not related 
to the comparison of Chinese fasteners exported to the European Union and fasteners produced by the 
EU industry.   
7.335  In addition, China contends that there were  quality differences between the raw materials 
used to make Chinese and EU-made fasteners, and as serts that this difference should have been taken 
into consideration.671  We note that, in recital 54 of the Definitive Regulation, the Commission made 
the following findings regarding alleged quality diff erences between fasteners made in China and in 
the European Union: 
"Moreover, notwithstanding the lower pr ices observed in the PRC, the European 
Association of the Iron and Steel Industry (Eurofer) confirmed that there is no major 
quality difference  between the steel produced in the PRC and the steel produced in 
the Community when the steel corresponds to a standardised grade. As a result, it is 
concluded that raw material quality diffe rences do not affect the comparability 
between fasteners exported from the PRC and those produced and sold in the 
Community. "  (emphasis added) 
Thus, it is clear that the Commission concluded, in the context of its discussion of like product, that 
alleged differences between the quality of the raw materials used in the production of Chinese and 
EU-made fasteners did not affect the comparability of the two.  China further maintains that the issue 
of quality differences was broader than the differenc es in raw materials, and included other elements 
such as coating etc.672  China does not, however, substantiate th is assertion.  Thus, we consider that 
                                                      
670 China, second written submission, para. 855. 
671 China, answer to Panel question 95. 
672 China, answer to Panel question 95. WT/DS397/R 
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 China has failed to make out a prima facie  case that there were differenc es in quality between Chinese 
and EU produced fasteners, and therefore has failed to demonstrate that the Commission did not undertake an objective examination of price undercutting in this respect.  
7.336  Based on the foregoing, we reject China's claim that the Commission's price undercutting 
determination was inconsistent with Ar ticles 3.1 and 3.2 of the AD Agreement.
673 
8. Whether the European Union violated Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement 
in its consideration of the volume of dumped imports  
(a) Arguments of the Parties 
(i) China 
7.337  China argues that the Commission violated Articles 3.1, 3.2, 3.4 and 3.5 of the 
AD Agreement by treating all imports from China as being dumped.  With respect to the first aspect 
of its claim, China notes that two Chinese produ cers subject to individual examination in the 
investigation at issue were found not to be dumping by the investigating authority.674  China relies on 
the text of Articles 3.1 and 3.2 of the AD Agreem ent, two panel reports and one Appellate Body 
report to support its assertion that the European Union was obliged to exclude imports from these 
two importers in examining the effects of "dumped imports" on the domestic industry.675  China 
acknowledges that while there is no specific methodolo gy to be followed in calculating the volume of 
"dumped imports", the prerequisite for the examin ation of dumped imports is that it involves only 
"dumped" imports as opposed to imports  that are found not to be dumped.676  Thus, China considers 
that the inclusion of non-dumped imports in the volume of "dumped imports" examined necessarily 
constitutes a violation of Articles 3.1 and 3.2 of the AD Agreement.677  China considers the 
European Union's reliance on the fact that the volume of non-dumped imports in this case was small 
to be problematic, since it is not possible to know  what percentage of non-dumped imports will be 
sufficiently small to still satisfy the requirements of Articles 3.1 and 3.2.678  
7.338  With respect to the second aspect of its claim, China argues that taking into consideration the 
fact that these two individually-examined Ch inese producers were found not to be dumping, the 
Commission could not legitimately treat all imports  from Chinese producers for which an individual 
dumping margin was not calculated as dumped.679  China recalls that, in view of the large number of 
exporting producers in China, the EU investigating authority used sampling, and a sample of nine 
Chinese companies was select ed, of which five were granted indi vidual treatment.  In addition, three 
other companies not included in the sample recei ved individual treatment, for two of which, no 
dumping was found.680  China submits that the European Uni on violated Articles 3.1 and 3.2 of the 
AD Agreement by treating the imports of all Chin ese producers who were not sampled or not subject 
to individual examination as being dumped.681  China considers that, following the reasoning of 
previous panel and Appellate Body reports, the fact  that individually examined exporters were found 
not to be dumping must be taken into account, regardless of the fact that those exporters were not 
                                                      
673 We note that China has not made a claim w ith respect to the due process aspects of the 
Commission's price undercutting determination.  China, answer to Panel question 40; China, second oral 
statement, para. 105. 
674 China, first written submission, para. 402. 
675 China, first written submission, paras. 403-408. 
676 China, second written submission, paras. 861, 865. 
677 China, second written submission, para. 864. 
678 China, second written submission, para. 866. 
679 China, first written submission, para. 410. 
680 China, first written submission, para. 409. 
681 China, first written submission, para. 410.  WT/DS397/R 
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 included in the sample.682  Thus, China asserts that the European Union was not entitled to extrapolate 
from the sample, without taking into account the ev idence that two producers for which individual 
dumping margins were calculated were found not to be dumping.683 
7.339  China asserts that, by failing to properl y determine the "dumped imports", the 
European Union also violated Articles 3.4 of the AD Agreement, which requires investigating 
authorities to examine the impact of "dumped impo rts" on the domestic industry, and Article 3.5, 
which requires investigating authorities to demonstr ate that the "dumped imports" are causing injury 
to the domestic industry. 
(ii) European Union 
7.340  The European Union concedes that the Commissi on based the consideration of the volume of 
dumped imports under Article 3.2 on Eurostat data , which statistics did not filter out the import 
volumes from the two Chinese producers which were found not to be dumping.684  However, the 
European Union asserts that imports from these tw o producers were very small, that these two 
producers were not included in the sample of Chinese producers, and that all of the sampled producers were found to be dumping at a significant margin.
685  According to the Euro pean Union, these facts 
distinguish this case from the previ ous panel reports relied on by China.686  The European Union notes 
that Article 3 does not establish any particular methodology for the consideration of the volume of dumped imports, and asserts that the Panel should ex amine whether China has demonstrated that the 
analysis of whether there was a significant incr ease in imports was not satisfactory because it included 
the small volume of non-dumped imports.
687  In this respect, the European Union argues that it is 
obvious that, given the small volume of non-dumped imports in question, their inclusion in the 
volume of dumped imports could not affect the outco me, and thus could not affect the objectivity of 
the injury determination within the meaning of Article 3.1 of the AD Agreement.688  Excluding 
imports in such small quantities would not have cha nged the outcome of the injury determination.  
The European Union underlines that its argument is not  one of "harmless error".  Rather it argues that 
substantively there was no violation of the obliga tion to conduct an objective examination because of 
the inclusion of non-dumped imports that accounted for a very small percentage of all imports from 
China.689  
7.341  With respect to the second aspect of China' s claim, the European Union disagrees with 
China's contention that the Commission was wrong to treat imports from all non-sampled Chinese 
producers as dumped in examining the volume of dump ed imports.  The European Union recalls that 
the investigating authority conducted its investigatio n of dumping on the basis of a sample of Chinese 
producers, found that all producers in the sample we re dumping, and pursuant to Article 9.4 of the 
AD Agreement, calculated a margin of dumpi ng for all non-sampled producers who were not 
individually examined.690  The European Union maintains that it was entitled to consider all of these 
imports for which more than de minimis  margins were established as dumped imports for the purposes 
of the volume and injury analysis.691  The European Union contends that this conclusion is supported 
by the panel reports relied on by China.692  According to the European  Union, in a situation of 
                                                      
682 China, second written submission, para. 880. 
683 China, second written submission, paras. 884, 887. 
684 European Union, first written submission, paras. 510-511. 
685 European Union, first written submission, paras. 513-515. 
686 European Union, first written submission, para. 516. 
687 European Union, first written submission, para. 517. 
688 European Union, first written submission, para. 523. 
689 European Union, first written submission, para. 532. 
690 European Union, first written submission, paras. 535-536. 
691 European Union, first written submission, para. 537. 
692 European Union, first written submission, paras. 541-547. WT/DS397/R 
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 sampling, when not all exports are examined, the only way to make an objective determination about 
the volume of dumped imports from non-sampled produ cers is by extrapolation from the sample.693  
7.342  Finally, the European Union notes that China's claims under Articles 3.4 and 3.5 of the 
AD Agreement are dependent on a finding of viola tion of Articles 3.1 and/or 3.2, and should be 
rejected, and that in any event,  China has failed to set out a prima facie case of violation of those 
provisions.694 
(b) Arguments of Third Parties 
(i) Japan 
7.343  Japan believes that the European  Union violated Articles 3.1 and 3.2 of the AD Agreement to 
the extent it failed to exclude imports that were  found not to have been dumped from the volume of 
"dumped imports".  Japan notes that previous pa nel and Appellate Body reports have found that 
imports that were not found to have been dump ed must be excluded from the injury analysis.695  
Therefore, for Japan, it follows that, to the exte nt that the European Union considered non-dumped 
imports as having been "dumped" for the injury and causation analyses, it violated Articles 3.1 and 3.2 of the AD Agreement in light of past WTO jurisprudence.
696 
7.344  Japan believes that the European Union did not violate Articles 3.1 and 3.2 of the 
AD Agreement by including in the volume of "dumped imports" all imports from non-sampled 
exporting producers that were not individually exam ined, given that the European Union found that 
all sampled exporting producers were engaged in dum ping, and accordingly, its determination that all 
non-sampled exporting producers that were not indivi dually examined were also engaged in dumping 
may be considered as based on "positive evidence" and an "objective examination" without additional 
inquiry.697  Japan notes that there is no requirement in  the AD Agreement for investigating authorities 
to follow a specific methodology when applying sampli ng, other than to conduct the investigation on 
the basis of "positive evidence" and to ensure that the injury determination results from an "objective 
examination",698 and that investigating authorities have a right to apply sampling as long as they 
"satisfy the requirements of 'positive evidence' an d an 'objective examination,' without having to 
investigate each producer or exporter individually".699  In Japan's view, these requirements are not 
violated where the findings concerning the sample are extrapolated to all non-sampled producers that were not individually examined.
700  Moreover, Japan stresses that  nothing in the AD Agreement 
requires investigating authorities to take into account information from outside the sample when 
extrapolating the findings of the sample to non-ex amined producers outside of the sample, and asserts 
                                                      
693 European Union, second written submission, para. 181. 
694 European Union, first written submission, paras. 551, 553. 
695 Japan, written submission, para. 51, citing, Panel Report, Argentina – Poultry Anti-Dumping Duties , 
para. 7.303; Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen 
from India  ("EC – Bed Linen "), WT/DS141/R, adopted 12 March 2001, as modified by Appellate Body 
Report WT/DS141/AB/R, DSR 2001:VI, 2077, para. 6.138; Appellate Body Report, European Communities – 
Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India – Recourse to Article 21 .5 of the DSU by 
India ("EC – Bed Linen (Article 21 .5 – India )"), WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 
965, paras. 111-112 & 115. 
696 Japan, written submission, para. 55. 
697 Japan, written submission, para. 56. 
698 Japan, written submission, para. 58.  Appellate Body Report, EC – Bed Linen (Article 21 .5 – India ), 
paras. 113, 116 and 117. 
699 Japan, written submission, para. 58, citing, Appellate Body Report, EC – Bed Linen (Article 21 .5 – 
India ), para. 117. 
700 Japan, written submission, para. 59.  WT/DS397/R 
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 that such an obligation would vitiate the whole purpose of the sampling.701  Indeed, Japan observes 
that the purpose of sampling is to make an assess ment for non-examined companies based on findings 
relating to a representative, albeit limited, group of companies.702 
(ii) Norway 
7.345  Norway notes that Article 3.1 requires the inv estigating authority to examine objectively "the 
volume of the dumped imports", and Article 3.2 el aborates on this obligation, requiring examination 
of whether there has been a "si gnificant increase in dumped imports", while Article 3.5 adds that the 
authority must demonstrate that "the dumped imports are, through the effects of dumping, as set forth in paragraphs 2 and 4, causing injury".  In Norway 's view, these Articles show that it is only dumped 
imports that are to be included in the determination of injury.
703  Norway considers that panels and the 
Appellate Body have conf irmed this interpretation.704  Accordingly, the imports of the two Chinese 
producers that were found not to be dumping should have been tr eated as non-dumped, and should not 
have been included in the volume of dumped imports.705 
7.346  Norway recalls that Article 3.1 requires an " objective examination" of "the volume of the 
dumped imports", based on "positive evidence".706  Norway maintains that investigating authorities 
are precluded from conducting an investigation "in su ch a way that it becomes more likely that, as a 
result of the fact-finding or evaluation process, th ey will determine that the domestic industry is 
injured".707  Norway considers that, by automatically considering that the volume of imported 
products from all non-sampled and non-examined pr oducers are at dumped prices, it does become 
more likely that an investigating authority w ill find that the domestic industry is injured.708  I n  
Norway's view, by extending conclusions reached regarding the sampled producers to non-sampled 
producers, in this case, the EU assumed that impor ts from non-sampled producers were all dumped, 
despite having found that two exporting producers that were subject to individual examination 
(although not included in the original sample) were not in fact dumping.  Norway asserts that whether it is established through sampling or through individu al examination that there are producers that are 
not dumping is irrelevant.  Norway argues that the Pa nel should reject the European Union's view that 
this case must be distinguished from the cases cited because all the producers se lected for the original 
sample were found to be dumping.
709  Norway does not generally disagree that there may be cases 
were extrapolation from sampled producers is warrante d, but argues that in this case, the individual 
examination of two additional companies not incl uded in the sample implies that an automatic 
extrapolation from the original sample was not warranted.710  Therefore, Norway considers that the 
European Union failed to make an "objective examin ation", on the basis of "positive evidence", of the 
                                                      
701 Japan, written submission, para. 61.  In th is regard, Japan refe rs to Panel Report, EC – Salmon 
(Norway ), para. 7.634 and footnote 780. 
702 Japan, oral statement, para. 21. 
703 Norway, written submission, para. 50.   
704 Norway, written submission, para. 51, citing, Panel Report, EC – Bed Linen , para. 6.138;  Appellate 
Body Report, EC – Bed Linen  (Article 21 .5 - India ), para. 115;  Panel Report Argentina – Poultry Anti-Dumping 
Duties , para. 7.303;  Panel Report, EC – Salmon (Norway ), paras. 7.627-7.628. 
705 Norway, written submission, para. 53. 
706 Norway, written submission, para. 55. 
707 Norway, written submission, para. 56 , citing, Appellate Body Report, US – Hot-Rolled Steel , 
para. 196. 
708 Norway, written submission, para. 57. 
709 Norway, written submission, para. 59, referrin g to European Union, first written submission, 
para. 545. 
710 Norway notes that it is not aw are of any additional evidence in this respect put forward by the 
European Union.  Norway, written submission, para. 60. WT/DS397/R 
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 volume of dumped imports from non-examined exporting producers, in violation of Article 3.1 of the 
AD Agreement.711 
(c) Evaluation by the Panel 
7.347  Before examining China's claims concerning th e volume of dumped imports, we recall certain 
relevant facts, which we understand to be undisputed. 
7.348  For purposes of the determination of dumping, the EU investigating authority selected a 
sample of nine Chinese producers, representing 61 pe r cent of exports by cooperating companies of 
the product under investigation, or 39 per cent of total exports from China.712  All nine responded to 
the dumping questionnaire in a timely fashion, but f our were subsequently de emed to have provided 
false or misleading information and were thereafter treated as non-cooperating713, leaving 
five companies in the sample.  Five other comp anies, not selected for the sample, voluntarily 
submitted responses to the dumping questionnaire and requested individual examination under 
Articles 9(6) and 17(3) of the Basic AD Regulation.714  Four of these requests were granted, but the 
Commission rejected arguments that the originally -selected sample should be enlarged to include 
these companies, concluding that the sample comp rising the five remaining companies of those 
originally selected remained suffi ciently representative, accounting for 54 per cent of total exports by 
cooperating companies, and the granting of indivi dual treatment under Article 17(3) of the Basic AD 
Regulation was distinct and separate from the sampling exercise.715  One of these four companies was 
found to have provided misleading informati on and was thereafter treated as non-cooperating.716   
7.349  Thus, there remained five cooperating companie s in the sample, and three companies granted 
individual examination unde r Article 17(3) of the Basic AD Regulation.  Each of these requested and 
was granted IT under Article 9(5) of the Basic AD Regulation.717  All five of the sampled companies 
were found to be dumping, with margins ranging from 63.1 per cent to 105.3 per cent.718  Of the three 
companies separately granted individual examination,  one was found to be dumping, with a margin of 
26.5 per cent, while for the other two companies,  CELO Suzhou Precision Fasteners Co., Ltd and 
Yantai Agrati Fasteners Co., Ltd, margins of zero, that is, no dumping, were calculated.719   
7.350  The volume of imports from China was obtained fro m Eurostat data, and is reported in recital 
121 of the Definitive Regulation.  There is nothing in  the Definitive Regulation that suggests that the 
volumes of imports from individual exporters were  either specifically requested, or otherwise 
determined or examined.  However, in respon se to the sampling forms and questionnaires sent to 
exporters examined individually (whether included in the sample, or granted individual treatment 
                                                      
711 Norway, written submission, para. 60. 
712 Definitive Regulation, Exhibit CHN-4, recital 16. 
713 Definitive Regulation, Exhibit CHN-4, recital 62. 
714 This request is distinct from a request for individual treatment under Article 9(5) of the Basic AD 
Regulation.  Under Articles 9(6) and 17(3) of the Basic AD Regulation, where the Commission uses sampling, 
an individual dumping margin will nonetheless be calculated for companies not included in the sample who submit the necessary information in a timely fashion, unless there are so many that to do so would be unduly 
burdensome and would prevent the completion of the investigation in a timely fashion.  These provisions of the 
Basic AD Regulation reflect Article 6.10.2 of the AD Agre ement, and apply in all investigations, regardless of 
whether the investigation invo lves a non-market economy. 
715 Definitive Regulation, Exhi bit CHN-4, recitals 20-21. 
716 Definitive Regulation, Exhibit CHN-4, recital 78. 
717 Definitive Regulation, Exhibit CHN-4, recitals 83 and 85. 
718 Definitive Regulation, Ex hibit CHN-4, recital 107. 
719 Definitive Regulation, Exhibit CHN-4, recital 109.  The European Union did not impose a duty on 
imports from the two producers for which dumping margin s of zero were calculated.  Definitive Regulation, 
Exhibit CHN-4, Article 1, paragraph 2.  WT/DS397/R 
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 under Article 17(3) of the Basic AD Regulation) info rmation concerning the volume of imports to the 
EU market attributable to them was provided by both CELO Suzhou Precision Fasteners Co., Ltd and Yantai Agrati Fasteners Co., Ltd.
720 
7.351  Turning to the issues before us, we note that China's claim with respect to the volume of 
dumped imports has two aspects:  (1) whether, by re lying on Eurostat data in considering the volume 
of dumped imports, without distinguishing or co nsidering the volumes attributable to the two 
exporters for which dumping margin s of zero were calculated in the investigation, the European 
Union acted inconsistently with the requirement s of Articles 3.1, 3.2, 3.4 and 3.5 of the 
AD Agreement; and (2), whether, by treating all imports from producers not individually examined, 
whether by being included in the sample or othe rwise, as "dumped imports", the European Union 
violated Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement.   
7.352  Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement provide: 
"3.1 A determination of injury for pur poses of Article VI of GATT 1994 shall be 
based on positive evidence and involve an objective examination of both (a) the 
volume of the dumped imports and the effect of the dumped imports on prices in the 
domestic market for like products, and (b) the consequent impact of these imports on 
domestic producers of such products." 
"3.2 With regard to the volume of the dumped imports, the investigating 
authorities shall consider whether there h as been a significant increase in dumped 
imports, either in absolute terms or re lative to production or consumption in the 
importing Member.  With regard to the effect of the dumped  imports on prices, the 
investigating authorities shall consider wh ether there has been a significant price 
undercutting by the dumped imports as compar ed with the price of a like product of 
the importing Member, or whether the effect of such imports is otherwise to depress prices to a significant degree  or prevent price increases, which otherwise would have 
occurred, to a significant degree.  No one or several of these factors can necessarily 
give decisive guidance." 
"3.4 The examination of the impact of the dumped imports on the domestic 
industry concerned shall include an evalua tion of all relevant economic factors and 
indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market shar e, productivity, return on investments, or 
utilization of capacity;  factors affecting domestic prices;  the magnitude of the 
margin of dumping;  actual and potential negative effects on cash flow, inventories, 
employment, wages, growth, ability to raise capital or investments.  This list is not exhaustive, nor can one or several of these factors necessarily give decisive guidance." 
"3.5 It must be demonstrated that the dumped imports are, through the effects of 
dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this 
Agreement.  The demonstration of a causal  relationship between the dumped imports 
and the injury to the domestic industry shall be based on an examination of all relevant evidence before the authorities.  The authorities shall also examine any 
known factors other than the dumped imports which at the same time are injuring the 
domestic industry, and the injuries caused by these other factors must not be 
attributed to the dumped imports.  Factors which may be relevant in this respect 
include,  inter alia , the volume and prices of imports not sold at dumping prices, 
                                                     
 
720 EU, answer to Panel question 97, para. 19, and Exhibit EU-27 (BCI). WT/DS397/R 
Page 152 
 
 
 contraction in demand or changes in the pa tterns of consumption, trade restrictive 
practices of and competition between the foreign and domestic producers, 
developments in technology and the export performance and productivity of the domestic industry." 
7.353  Turning to the first aspect of China's claim, we  note that the question before us requires that 
we determine whether the referen ces to "dumped imports" in Articles 3.1, 3.2, 3.4 and 3.5 of the 
AD Agreement mean that the European Union's admitte d inclusion of imports attributable to the two 
Chinese producers for which zero margins were calcula ted in the volume of imports considered under 
those provisions constitutes a violation of one or more of those provisions. 
7.354  We consider that the text of the AD Agreement is  perfectly clear in this regard, and that the 
consideration of "dumped imports" for purposes of ma king an injury determination consistent with 
Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement entails the consideration of only those imports for which a margin of dumping greater than de minimis  is established in the course of the investigation.   
7.355  We note that this is not the first dispute to  raise this question, and previous panel and 
Appellate Body reports have been clear in concluding that the phrase "dumped imports" in 
Articles 3.1, 3.2, 3.4, and 3.5 of the AD Agreement refers to imports from a producer or exporter for 
which a proper calculation results in a dumping margin greater than de minimis .
721  For instance, the 
panel in EC – Bed Linen (Article 21.5 – India) observed: 
"the question of which imports are to be considered dumped is readily answered – 
'dumped imports' are all imports attributable  to producers or exporters for which a 
margin of dumping greater than de minimis  is calculated."722  
The original panel in the same dispute observe d that, should a proper calculation lead to the 
conclusion that a producer should be attributed a zero or de minimis  margin, "the imports attributable 
to such a producer/exporter may not be consider ed as "dumped" for purposes of injury analysis".723  
We also note the statement of the Appellate Body on review of this panel report that "if a producer or 
exporter is found not to be dumping, all imports from th at producer or exporter must be excluded from 
the volume of dumped imports".724     
 7.356  Our view in this regard is also supported by logic concerning the imposition of anti-dumping 
measures.  It is undisputed that no anti-dumping duties can be imposed in the absence of a finding of dumping.  Similarly, Article 5.8 of the AD Ag reement provides that there shall be "immediate 
termination in cases where the authorities de termine that the margin of dumping is de minimis ", and 
                                                     
 
721 Panel Report, EC – Salmon (Norway );  Panel Report, Argentina – Poultry Anti-Dumping Duties ;  
Panel Report, EC – Bed Linen . 
722 Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen 
from India – Recourse to Article 21 .5 of the DSU  by India  ("EC – Bed Linen (Article 21 .5 – India )"), 
WT/DS141/RW, adopted 24 April 2003, as modified by Appellate Body Report WT/DS141/AB/RW, DSR 2003:IV, 1269, para. 6.133.  The European Union notes that this issue was not before the panel in EC – 
Bed Linen (Article 21 .5 – India ), and that therefore the panel's statement in this regard is merely obiter dictum .  
European Union, first written submission, para. 526.  However, our understanding of the phrase "dumped 
imports" as used in the relevant Articles of the AD Agreement is the same as was expressed by that panel, 
whose views thus lend support to our own conclusion, even though it did not make a legal conclusion in this 
regard.   
723 Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen 
from India ("EC – Bed Linen "), WT/DS141/R, adopted 12 March 2001, as modified by Appellate Body Report 
WT/DS141/AB/R, DSR 2001:VI, 2077, para. 6.138.  See also, Panel Report, Argentina – Poultry Anti-Dumping 
Duties , para. 7.303. 
724 Appellate Body Report, EC – Bed Linen (Article 21 .5 – India ), para. 115 (emphasis in original).  WT/DS397/R 
 Page 153 
 
 
 no anti-dumping duties can be imposed on such imports.  It would seem illogical to allow these 
imports to be treated as "dumped" for purposes of th e injury analysis, when th ey cannot be treated as 
dumped for purposes of imposition of anti-dumping duties in the same case.    
7.357  We note that in this case, the European Union does not suggest that it was entitled to consider 
the imports of the two Chinese producers for wh ich dumping margins of zero were calculated as 
"dumped imports", and acknowledges that it did not exclude those imports from the volume of 
imports it considered in its examination of the volum e of dumped imports and analysis of injury and 
causation.  However, the European Union asserts that  since the volume of imports attributable to these 
two producers was very small725, their consideration as "dumped" imports did not undermine the 
objectivity of the injury determination within the meaning of Article 3.1 of the AD Agreement, as 
excluding them would not have changed the outcome of the injury determination.  In this regard, we 
note that the European Union emphasises that its argument is not one of "harmless error".726  Rather it 
argues that substantively there was no violation of  the obligation to conduct an objective examination 
because of the inclusion of non-dumped imports that  accounted for a very small percentage of all 
imports from China in the examination of the volume of dumped imports.  The European Union asks 
the Panel to avoid approaching this matter in a "m echanistic" fashion, asserting that the inclusion of 
non-dumped imports will only constitute a violation of  Articles 3.1 and 3.2 if the failure to exclude 
such imports "jeopardizes the objectivity of the examination".727   
7.358  We do not agree.  In our view, the question of whether the investigating authority undertook 
an objective examination is secondary in this context – first comes the question whether the 
investigating authority considered the relevant " positive evidence".  In our view, data concerning 
imports that includes imports that the investiga ting authority itself has determined are not dumped 
cannot simply be substituted for evidence of the actua l volume of imports that are properly treated as 
dumped.  This is so regardless of the volume of  non-dumped imports involved.  Articles 3.1 and 3.2 
are perfectly clear that the rele vant consideration is of the vol ume of "dumped imports" without 
equivocation.728 
                                                      
725 Although the exact figure is co nfidential, we accept, an d China does not dispute, that the volume of 
imports attributable to these two companies is, both in terms of absolute volumes, and as a proportion of total 
imports, justifiably considered "very small".  The European Union notes that "99.9% of imports were dumped".  European Union, first written submission, para. 531.  China noted in its second written submission that the 
European Union's assertion concerning the volume of imports attributable to the two producers found not to be 
dumping was "not substantiated" but did not dispute that the volume was small.  China, second written 
submission, para. 867.   
726 European Union, first written submission, para. 532. 
727 European Union, second written submission, para. 179. 
728 We do not exclude the possibility that an investigating authority may in some circumstances rely, in 
its analysis, on data that includes some imports that are not dumped as a proxy for the actual volume of dumped imports.  However, in our view to do so consistently with the requirements of th e AD Agreement would entail 
an explanation by the investigating authority at the time it makes its determination as to why it has done so, and 
why its consideration of that information is nonetheless reasonable.  For instance, we  can envision a situation 
where the volume of imports would be entitled to confiden tial treatment if the volume attributable to a single 
producer were excluded.  In such a case, should the inve stigating authority wish to explain its analysis of the 
volume of imports in a public document, it might rely on public information concerning all imports, but explain that the volume of non-dumped imports included in that data is so small as to have no effect on its conclusions.  
However, in the absence of such an explanation, the investigating authority will have failed to explain how its 
consideration of "dumped imports" supports its injury determination.  Moreover, ex post  explanations, even 
where we might have found them sufficient had they been given at the time of the determination, are not in our 
view acceptable.  A panel reviewing th e determination of an i nvestigating authority sh ould base its finding on 
the authority's reasoning set out in the published determination.  See,  Appellate Body Report, Japan – 
Countervailing Duties on Dynamic R andom Access Memories from Korea ("Japan – DRAMs (Korea )"), 
WT/DS336/AB/R and Corr.1, adopted 17 December 2007, DSR 2007:VII, 2703, para. 159;  Appellate Body WT/DS397/R 
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 7.359  The European Union does not contend that the investigating authority itself considered and 
determined, at the time it made the final determ ination, that the volume of non-dumped imports 
included in the consideration of "dumped imports" w as so small that it could have no effect on the 
outcome, but rather, asks the Panel to reach that c onclusion, relying in this respect on the Appellate 
Body report in Japan – DRAMs (Korea) .729  In our view, the circumstances of this dispute do not 
justify our consideration of this question.  In Japan – DRAMs (Korea) , the Appellate Body faulted the 
Panel for not considering whether, in the absen ce of an intermediate finding the Panel found 
unsupported, the determination ultimately reached by  the investigating author ity could nonetheless be 
sustained based on the totality of the other evidence.  In doing so, the Appellate Body noted that the 
investigating authority could not have undertaken  this consideration, because it could not "be 
expected to proceed on the basis that certain aspects of its reas oning would later be found to be 
faulty".730  In this case, the European Union did not make an erroneous intermediate finding which 
may not have been determinative of the ultimate dete rmination, but rather based its consideration of 
the volume of dumped imports and their effects on erroneous information concerning the volume of 
dumped imports.  The European Union certainly kn ew or should have known that the information it 
was considering in examining the volume of dumped imports included imports that were not 
dumped.731  The consideration of the volume of dumped imports is a necessary element of the 
determination of injury under Article 3.  Thus, we do not agree that this case presents the same issue 
as Japan – DRAMs (Korea) .  In our view, it is not appropriate for us to conclude that the investigating 
authority could have made an affirmative determinat ion of injury in the absence of consideration of 
the volume of imports properly treated as dumped.732  Such an analysis would effectively constitute a 
de novo  review of the evidence, which we are not to undertake under the applicable standard of 
review.   
7.360  We therefore conclude that the European Union erred in treating imports attributable to two 
companies which it found not to be dumping as dumped in the context of its injury determination.  As 
a result, the European Union acted inconsistently with Articles 3.1 and 3.2 in considering the volume 
of dumped imports.  We do not consider it neces sary to address China's consequential claims of 
violation of Articles 3.4 and 3.5, which are based on the same considerations as addressed above.  A 
finding of violation of Articles 3.4 and 3.5 would add nothing to the resolution of this dispute, nor would it aid in any potential implementation, and ther efore we conclude that the exercise of judicial 
economy in this respect is warranted. 
                                                                                                                                                                    
 
Report, United States – Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors 
(DRAMS) from Korea  ("US – Countervailing Duty Investigation on DRAMS "), WT/DS296/AB/R, adopted 
20 July 2005, DSR 2005:XVI, 8131, paras. 186-188. 
729 European Union, first oral statement, para. 40;  European Union, answer to Panel question 47, 
referring to Appellate Body Report, Japan – DRAMs (Korea) . 
730 Appellate Body Report, Japan – DRAMs (Korea ), para. 133. 
731 Moreover, the European Union must be presumed to have been aware of previous WTO dispute 
settlement concerning this issue, particularly as it wa s a party or third party in some of those disputes. 
732 At most, we might consider whether, had the in vestigating authority cons idered the correct facts 
regarding the volume of dumping, it could have reached the same conclusion.  While the small volume of the 
imports at issue may well suggest that their inclusion in the volume of dumped imports did not have a significant impact on the ultimate determ ination, were we to take this into consideration, we would essentially 
be concluding that the failure to consider only dumped im ports in the analysis of injury was harmless.  If this 
were not the conclusion, then we can see no basis on which a panel might decline to consider a similar error involving a much larger and potentially significant volume of imports.  The European Union's position would 
imply that a reviewing panel should not find a violation in any case where the investigating authority based its 
analysis on erroneous facts, but rather, should in such cases consider whether the same conclusion could have 
been reached on the basis of the correct facts.  In our view, such consideration by a reviewing panel would 
constitute an inappropriate, de novo consideration of the facts that were before the investigating authority.    WT/DS397/R 
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 7.361  The second aspect of China's claim with respect  to the volume of dumped imports concerns 
the treatment of imports attributable to producers/e xporters who were not included in the sample used 
for the dumping determination and not separ ately granted individual examination ("non-
sampled/unexamined exporters") as  "dumped imports" for purposes of the injury determination under 
Article 3.  We recall that the EU investigating au thority determined that all sampled producers were 
dumping, and calculated a dumping margin for non -sampled/unexamined producers on the basis of 
the dumping margins determined for the sampled producer s.  The question for us is whether, in these 
circumstances, the European Union acted consisten tly with Articles 3.1 and 3.2 of the AD Agreement 
in treating all imports from non-sampled/unexa mined producers as dumped, even though two 
producers who were not included in the sample but were individually examined were found not to be 
dumping.733, 734     
7.362  China agrees that an investigating authority  may treat imports from non-sampled/unexamined 
exporters as dumped in its injury analysis if th ere is evidence to support extrapolating from the 
selected sampled producers to all imports, but asserts  that the facts preclude such treatment in this 
investigation, because two exporte rs who were not part of the sample examined by the EU 
investigating authority were individua lly examined and found not to be dumping.735  T h e  
European Union recalls that all sampled producers were found to be dumping, and asserts that this 
constitutes positive evidence from which it was entitle d to extrapolate a conclusion regarding all 
imports from non-sampled/unexamined producers.736   
7.363  In our view, it is clear that the conclusion of the investigating authority with respect to the 
sampled producers, that they were dumping, is not undermined by the fact that two producers not 
included in the sample were found not to be dumpi ng upon being individually examined.  The purpose 
of sampling foreign producers/exporters in an anti-du mping investigation is to allow an investigating 
authority to extrapolate from the sample to  draw conclusions about dumping for all non-
sampled/unexamined foreign producer s/exporters on the basis of a detailed examination of fewer than 
all of them.  Article 9.4 of the AD Agreement makes clear that, if the sample for the dumping 
determination is selected consistently with the AD Agreement, a matter China has not challenged in 
this dispute, then the investigating authority may treat the findings of dumping made with respect to 
that sample of companies as establishing the exis tence of dumping by all non-sampled/unexamined 
companies for purposes of the imposition of anti-dumping duties.   
7.364  In our view, a similar result should follow with  respect to the treatment of imports as dumped 
for purposes of the injury determination.  That is , if the sample for the dumping determination is 
selected consistently with the AD Agreement, a matter  China has not challenged in this dispute, then 
the investigating authority may treat the findings of  dumping made with respect to that sample of 
companies as evidence that imports from the non- sampled/unexamined companies are dumped.  To 
                                                      
733 We emphasize that we do not mean to imply that the imports from the two producers not in the 
sample who were individually examined could be treated as dumped imports – that question is resolved 
separately in connection with the first aspect of China's claims above.  This part of our evaluation refers to the 
treatment of imports attributable to producers not incl uded in the sample who did not separately request and 
receive individual examinati on – the group we refer to as "non-sampled/unexamined". 
734 In this regard, we recall that, pursuant to Article  9.4 of the AD Agreement, the European Union was 
entitled to apply an anti-dumping duty to imports from n on-sampled/unexamined producers, so long as the duty 
rate did not exceed the weighted aver age margin of dumping calculated fo r the sampled producers, excluding 
any zero or de minimis  margins and margins based on facts availa ble.  China does not challenge either the 
calculation of a margin of dumping for non-sampled/unexamined producers on the basis of the margins calculated for the sampled producers, or the impos ition of anti-dumping duties on imports from all non-
sampled/unexamined producers, but only their inclusion as "dumped imports" for purposes of the injury 
analysis. 
735 China, first written submission, paras.416-417. 
736 European Union, first written submission, paras. 545-547. WT/DS397/R 
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 do otherwise would limit the utility of Article 6. 10 of the AD Agreement, as it would require the 
investigating authority to gather and consider in formation for non-sampled/unexamined producers in 
order to be able to make individual j udgments as to whether the imports from non-
sampled/unexamined producers are dumped, despite the decision to proceed on the basis of a sample.   
7.365  In our view, an investigating authority is not  required to consider facts concerning the 
individual operations of non- sampled/unexamined producers per se  and decide the extent to which 
findings for the sampled producers may be relied upon in drawing conclusions concerning whether 
imports attributable to non-samp led/unexamined producers are dumped.  To us, it seems inconsistent 
and illogical to accept that conclusions about dumping for sampled producers can be the basis for the 
imposition of anti-dumping duties on non-sampled/une xamined producers, but not to accept that those 
same conclusions about dumping may serve as evidence that imports attributable to non-
sampled/unexamined producers are dumped  in the same investigation.  
7.366  The question of treatment of imports attributable to unexamined producers was addressed by 
the Appellate Body in the EC – Bed-Linen (Article 21.5 – India) implementation dispute.  In that case, 
the European Communities, in implementing the or iginal panel and Appellate Body reports, re-
examined the dumping determinations for sampled producers, and found that three of the five 
producers in the sample were dumping, and two were not .  In its injury analysis in the implementation 
context, the European Communities excluded th e imports attributable to the two non-dumping 
producers from the volume of dumped imports, but in cluded all imports attributable to producers 
which were not in the sample.  The pane l concluded that this was permissible.737  
7.367  The Appellate Body reversed.  The Appellate Body concluded that the fact that sampled 
producers accounting for 47 per cent of examined  imports were found to be dumping was not a 
sufficient evidentiary basis to justify treating imports from unexamined producers as dumped for 
purposes of the injury determination.  The Appe llate Body noted that there was no specified 
methodology for determining the volume of dumped imports, but stated that any such methodology 
must be based on positive evidence and an objective ex amination of relevant evidence.  The Appellate 
Body went on to state that evidence of dumpi ng margins calculated for examined producers is 
relevant "positive evidence" for determining whet her imports from non-examined producers may be 
treated as dumped.738  The Appellate Body acknowledged that  the calculation of a dumping margin 
under Article 2 was not required for unexamined pr oducers, given that sampling was authorized in 
Article 6.10, but observed that there might be "other evidence" that could be relied upon in 
determining whether imports from unexa mined producers were dumped imports.739   
                                                      
737 Panel Report, EC-Bed-Linen (Article 21 .5-India ), para. 6.144. 
738 Appellate Body Report, EC-Bed-Linen (Article 21 .5-India ), para. 130.  Similarly, the panel in EC – 
Salmon (Norway ) referred to "the relevance of the findings of dumping for the examined producers as evidence 
that imports from non-examined producers are dumped for purposes of the injury analysis".  Panel Report, EC – 
Salmon (Norway ), para. 7.630. 
739 In this context, the Appellate Body noted: 
"evidence such as witness testimony and different types of documentary evidence about 
critical aspects of the market, conditions of  competition, production characteristics, and 
statistical data relating to the volume, prices, an d effects of imports.  In  the circumstances of a 
specific investigation, such cate gories of evidence may qualify as affirmative, objective, and 
verifiable, and thus form part of the "positive evidence" that an investigating authority may 
properly take into account when determining, on the basis of an " objective examination", 
whether or not imports from non-examined producers are being dumped." 
Appellate Body Report, EC-Bed-Linen (Article 21 .5-India ), para. 129 and fn. 162.   
It may be noted that in some cases, under the Ap pellate Body's interpretation, imports which are 
subject to the imposition of anti-dumping duties pursuant to Article 9.4 may not be considered as "dumped 
imports" for purposes of the injury determination under Articl e 3.  We are troubled by this reasoning, as it seems  WT/DS397/R 
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 7.368  In EC-Bed-Linen (Article 21.5-India) , the Appellate Body concl uded that the determination 
that  all  imports attributable to  non-examined  producers were dumped was not based on an objective 
examination of the evidence of the sample, given that  the evidence concerning the sample showed that 
53 per cent of total imports from sampled producers we re attributable to sampled producers who were 
not dumping.740  The facts are different in this case – all sampled producers were found to be 
dumping.  Therefore, in our view, that evidence supports the European Union's treatment of all 
imports from non-sampled/unexamined producers as dumped for purposes of the injury determination. 
7.369  We recognize that in this case, there were two exporters not included in the sample who were 
individually examined separately, and found not to be dumping.  However, this difference does not 
affect our conclusion.  That two producers not included in the sample but individually examined were found not to be dumping does not in our view affect  the relevance or probative value of the evidence 
drawn from the sample when all sampled producers were found to be dumping.
741  Thus, in our view, 
that two exporters not included in the sample were found not to be dumping does not preclude the 
investigating authority from treating all impor ts from non-sampled/unexamined producers as dumped 
in this case, based on the eviden ce of the sample itself.   
7.370  We note that, like the panel in EC – Salmon (Norway) , we are troubled by the notion that an 
investigating authority may consider "different a nd additional evidence" to evaluate whether imports 
from non-sampled/unexamined producers are dumped for purposes of injury analysis, given that 
Article 2.1 of the AD Agreement makes clear that "a product is to be cons idered as being dumped" 
only if the export price is less than the normal value,  and establishes detailed rules for that calculation.  
We too consider it unclear "how such "other ev idence" can provide a legally sound basis for a 
conclusion that imports attributable to unexamined producers are dumped" and consider that "the fact 
that imports from unexamined producers are, under the AD Agreement, recognized as dumped for purposes of the imposition of anti-dumping duties, an d that those duties may be collected in amounts 
limited by calculations made pursuant to Article 2 of the AD Agreement, does establish a legally 
sound basis for the treatment of those imports as  dumped for purposes of the injury analysis".
742  
However, we also agree with the panel in EC – Salmon (Norway)  in seeing "no reason why, if all 
[sampled] producers are found to be dumping, an investigating authority should be required to consider "other evidence" that might indicate that imports from some unexamined producers are not 
dumped".
743  In this case, as all producers in the sample were found to be dumping, we consider that 
the Commission was entitled to, relying on that evidence, treat all imports from non-
sampled/unexamined producers as dumped for purposes of its injury determination. 
7.371  We therefore conclude that the European Un ion did not err in treating all imports from non-
sampled/unexamined producers and exporters as dumped, in the context of its injury determination, 
and thus did not act inconsistently with Articles 3.1 and 3.2 in considering the volume of dumped 
imports.  We also dismiss China's consequential clai m of violation of Articles 3.4 and 3.5, which are 
based on the same considerations we have  rejected above, for the same reasons. 
                                                                                                                                                                     
to result in a logical inconsistency in anti-dumping prac tice, in that the same imports may be considered as 
dumped for purposes of imposition of duty and not dumped for purposes of assessment of  injury.  However, this 
inconsistency is mitigated if the finding of dumping ba sed on the sample is considered to constitute positive 
evidence that imports from non-sampled/unexamined producers are dumped.  We note that the panel in EC – 
Salmon (Norway ), reached the same conclusion.  Panel Report, EC – Salmon (Norway ), para. 7.630.   
740 Appellate Body Report, EC – Bed-Linen (Article 21 .5-India ), para. 133. 
741 We note that the European Union did not impose a duty on imports from the two producers for 
which zero margins were calculated.  Definitive Regulation, Exhibit CHN-4, Article 1, paragraph 2. 
742 Panel Report, EC – Salmon (Norway ), para. 7.633. 
743 Panel Report, EC – Salmon (Norway ), para. 7.634. WT/DS397/R 
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 9. Whether the European Union violated Articl es 3.1 and 3.4 of the AD Agreement in its 
consideration of the consequent impact of dumped imports 
(a) Arguments of Parties 
(i) China 
7.372  China argues that the European  Union violated Articles 3.1 and 3.4 of the AD Agreement, 
because the Commission failed to objectively exam ine the impact of the dumped imports on the 
domestic industry on the basis of positive evidence.  China makes four allegations of error in this 
regard.  First, China argues that the Commission did not examine all injury factors in relation to a 
domestic industry defined in a consistent manner.744  In this regard, China notes that the Commission 
examined the factors of production, production capac ity, capacity utilization, sales, market share, 
employment and productivity for the industry as defined by the Commission, that is the 46 EU producers of fasteners, while it examined the factor s of stocks, profitability, cash flow, investments, 
return on investments, ability to raise capital, wages, magnitude of the dumping margins for the 
sampled EU producers.
745  China maintains that the Commission should have consistently used the 
same set of companies with respect to its consideration of all injury factors.746  China points to 
differences in the conclusions regarding sales a nd market share between the Information Document, 
where the sample was considered , and the Definitive Regulation, where the EU industry was 
considered, in support of its assertion that the an alysis was biased as a result of this lack of 
consistency.747  China contends that information for th e industry, and information for the sample, 
cannot be considered interchangeable bases of  examining injury to the domestic industry.748  China 
argues that the fact that the analys is of data for certain injury fact ors with respect to the sampled EU 
producers, or with respect to the EU industry, lead s to different results constitutes evidence that the 
examination was not carried out objectively and wa s fundamentally biased.  China asserts that the 
Commission selectively used data relating to the EU  industry or to the sampled EU producers, and 
thereby favored the interests of  the complainants and made a finding of injury more likely.749 
7.373  Second, China alleges that the European Uni on did not objectively examine the profitability 
of the domestic industry.  In this regard, China asserts that the reported da ta show a substantial 
improvement in the profitability of the industry, fro m 2.1 per cent in 2003 to 4.4 per cent during the 
investigation period.750  China asserts that the statement that the level of profitability was "low", and 
the conclusion that the dumped imports had a negati ve impact on profitability are inconsistent with 
this evidence, thus demonstrating th at the conclusions were not objective.751  Moreover, China 
contends that since the increase in profitability "n early reached the "reasonable" target profit margin 
of 5%" established by the Commission in consideri ng the injury margin, the conclusions regarding 
profitability cannot be considered objective.752  
7.374  Third, China asserts that the Commission's overall assessment of the impact of dumped 
imports on the EU industry was not objective.  In this  respect, China asserts that the relevant factors 
show that the industry was in a positive state.753  According to China, the only injury factor that 
possibly showed a negative trend during the inve stigation period was market share, and China 
                                                      
744 China, first written submission, para. 435. 
745 China, first written submission, paras. 436-437. 
746 China, first written submission, para. 438. 
747 China, first written submission, paras. 439-443.   
748 China, second written submission, para. 893. 
749 China, second written submission, para. 897. 
750 China, first written submission, paras. 446-447. 
751 China, first written submission, para. 450. 
752 China, second written submission, para. 915. 
753 China, first written submission, para. 451.  WT/DS397/R 
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 contends that a finding of material inju ry cannot be based on one negative factor.754  China contends 
that having found that all factors showed a positive trend, the Commission shoul d have concluded that 
the EU industry had not suffered material injury.755  China asserts that the Commission did not 
explain whether and how positive trends for most injury factors were outweighed by any negative 
factor.756  China also considers the Commission's explana tion as to why trends for certain factors were 
"negative developments" to be unpersuasive.757  China considers that an objective examination of the 
Article 3.4 factors could only have led to a conc lusion that the EU industry had suffered no injury.758 
7.375  Finally, China contends that the Commission im properly considered the displacement of EU-
manufactured fasteners by Chinese imports from certain market segments in making its determination.  
China relies on the panel report in EC – Pipe Fittings  to argue that injury cannot be found to result 
from a displacement of sales from one product segment  to another product segment within the same 
like product.759  Moreover, China asserts that the entire injury analysis is premised on the distinction 
between two market segments, and that the Europ ean Union's conclusions are based on the industry 
moving from production of standard fasteners to more production of special fasteners, allegedly 
because of pressure from dumped imports.760  According to China, this demonstrates that the injury 
determination was not ba sed on the like product the Commission had defined, which includes both 
standard and special fasteners.761 
(ii) European Union 
7.376  With regard to China's first argument, th e European Union acknowledges that in the 
assessment of the consequent impact of dumped imports, the Commission used data pertaining to the 
sampled domestic producers except for seven fa ctors (production, production capacity, capacity 
utilisation, sales, market share, employment and productivity).762  For these, it used data pertaining to 
the entire domestic industry as  defined in the investig ation at issue.  But, the European Union argues, 
China has failed to make a prima facie case that this led to a non-objective injury determination.763  In 
the view of the European Union, information c oncerning the domestic i ndustry as defined and the 
sample may both be considered, and for different fact ors, in making an injury determination, because 
the data for the sampled producers was reflective of the state of the entire domestic industry as 
defined.764  Thus, all the information considered related to the same domestic industry.765  T h e  
European Union considers that nothing in the Comm ission's analysis reflects a limit on the scope of 
the analysis to a part or segment of the domestic industry.766  The European Union adds that, when 
sampling is used, it is the general practice of the Commission to base its injury analysis regarding 
"macroeconomic" factors on the entirety of the dom estic industry and of "m icroeconomic" factors on 
the sampled producers, and maintains that nothing  about this practice demonstrates a failure to 
conduct an objective examination.767  The European Union contends that the alleged difference in the 
                                                      
754 China, first written submission, paras. 453-454. 
755 China, second written submission, para. 921. 
756 China, second written submission, paras. 927-929. 
757 China, second written submission, paras. 930-934. 
758 China, first written submission, para. 456. 
759 China, first written submission, para. 460. 
760 China, second written submission, para. 948. 
761 China, second written submission, para. 948. 
762 European Union, first written submission, paras. 561-562. 
763 European Union, first written submission, para. 560. 
764 European Union, first written submission, para. 573. 
765 European Union, second written submission, para. 190. 
766 European Union, first written submission, para. 574. 
767 European Union, first written submission, para. 585.  The European Union notes that this is 
explained in the Information Document, id., footnote 483, referring to Exhibit CHN-17, p. 16. WT/DS397/R 
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 Information Document and the Definitive Regulation relied upon by China to support its allegation of 
bias is based on an inaccurate presentation of the facts, and that no such difference exists.768 
7.377  With regard to China's second argument, the Eu ropean Union contends that the Commission 
did take into consideration the slight increase in profitability registered during the period considered, 
but reasonably found that profitability was low compar ed to the reasonable target profit margin of 
5 per cent.769  The European Union considers that China' s argument asks the Panel to substitute its 
judgment for that of the investigating authority, which the Panel may not do.770  Moreover, the 
European Union maintains that, viewed in context a nd in light of the explanations in the Definitive 
Regulation, the conclusion that profitability remained  low, particularly in light of the significant 
increase in consumption, was reasonable.771 
7.378  In response to China's third argument, the European Union asserts that the Definitive 
Regulation shows that while only market share showed significant declines, evaluation of a number of other factors, including production, productivity and capacity utilization and profitability also 
revealed a negative assessment.
772  The European Union further notes that the Definitive Regulation 
explains how even some positive developments, in  context, do not reflect the significant increase in 
demand, and thus do not underm ine the conclusions reached.773  The European Union maintains that 
the AD Agreement does not require that there be negativ e trends with regard to every injury factor in 
order to determine that the domestic industry suffers injury.774   
7.379  With respect to China's fourth argument, th e European Union submits that the Commission 
did not find that injury was caused only to one segment of the market.775  The European Union asserts 
that the Definitive Regulation examined trends in the different segments of the market, i.e., the 
standard and special fastener segments, to explain how the EU industry tried to deal with the impact 
of competition from dumped imports, which was con centrated in the standard fastener segment.776  
The European Union maintains that the Commission' s conclusion clearly related that assessment to 
the finding of injury to the industry as a whole.777  The European Union urges the Panel to refrain 
from engaging in a de novo review of the Commission's determination.   
(b) Third parties 
(i) Chile 
7.380  Chile considers the determination of inju ry to the domestic industry made by the 
European Union to be inconsistent with Article 3.1 and 3.4 of the AD Agreement.  In Chile's view, the 
European Union considered that the displacement  of domestic sales of one segment of the product 
("special fasteners") w as a result of the increase of imports  from another segment of the product 
                                                      
768 European Union, first written submission, paras. 582-588;  European Union, second written 
submission, para. 195. 
769 European Union, first written submission, para. 594. 
770 European Union, first written submission, para. 592. 
771 European Union, first written submission, para. 598. 
772 European Union, first written submission, paras. 607-613. 
773 European Union, first written submission, paras. 617-618. 
774 European Union, second written submission, para. 204, citing, Panel Report, EC – Bed Linen 
(Article 21 .5 – India ), para. 6.213. 
775 European Union, first written submission, para. 627. 
776 European Union, second written submission, para. 207. 
777 European Union, second written submission, para. 207.  WT/DS397/R 
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 ("standard fasteners").  Chile considers this analys is at variance with the basic principles that should 
guide any investigating authority when determining injury.778 
(ii) India 
7.381  India considers that the European Union's in jury determination, based on the sample of 
domestic producers representing 17.5 per cent of  domestic production, was not in accordance with 
Articles 4.1 and 3.1 of the AD Agreement.  India notes that the European Union conducted the injury 
analysis on the basis of a sample of producers accoun ting for  17.5 per cent of total EU production of 
the like product, and that the "Co mmunity industry" defined by the European Union consisted of 
those domestic producers whose collective output cons tituted 27 per cent of domestic production, and 
that the European Union considers that it is in respect of this Community industry's total production 
that one should examine the repr esentativeness of the sample.  In ot her words, India asserts that the 
European Union argues that the sampled domestic  producers need not necessarily represent a major 
proportion of total domestic production, but ar e representative of the Community industry.779  I n  
India's view, this argument raises an important i ssue whether the European Union's determination on 
injury was consistent with the requirement of " objective examination".  India notes that Article 3.1 
requires that a determination of injury be b ased on positive evidence and involve an objective 
examination of the effect of the dumped imports on the domestic producers, while Article 3.4 requires 
the examination of the impact of the dumped impor ts on the domestic industry concerned.  According 
to India, Article 3.4 does not envisage sampling, and Article 4.1 does not mention sampling.  India 
considers that, for an objective examination of inju ry under Article 3, the domestic industry has to be 
interpreted as referring to the domestic producers as a whole of the like products or those whose 
collective output of the product constitutes a major proportion of the total dome stic production.  Even 
if an investigating authority resorts to sampling of domestic producers, the obligation of Article 4.1 
regarding the definition of domestic industry must prevail for injury examination under Article 3.780  
(iii) Norway 
7.382  Norway contends that the strict discipline on i nvestigating authorities' injury determination, 
especially Article 3.1, requires the investigating authority to determine the impact of the dumped 
products on the domestic producers of the "like products".781  Norway asserts that, once the European 
Union determined the product scope to be standard and special fasteners, this product scope remains 
constant throughout the investigation, and that Artic le 3.1 entails an obligation to look at the product 
as a whole, not certain segments or models within the product.782  For Norway, it follows logically 
from this that injury cannot be found to result from a displacement of sales from one segment to 
another, within the same "like product".783  Therefore, Norway asserts that, to the degree that the 
Panel finds that the European Union  in its determination of material injury did find the displacement 
of sales from one product segment to another to be a factor, this would be contrary to Article 3.1 of 
the AD Agreement.784 
(iv) United States 
7.383  The United States maintains that, once an i nvestigating authority defines which entities 
comprise the "domestic industry" that will form th e basis for its injury analysis, an "objective 
examination" requires that the authority seek and, to  the extent possible, use a consistent data set 
                                                      
778 Chile, oral statement, para. 9. 
779 India, oral stat ement, para. 6. 
780 India, oral stat ement, para. 7. 
781 Norway, written submission, para. 41. 
782 Norway, written submission, para. 42. 
783 Norway, written submission, para. 43. 
784 Norway, written submission, para. 44. WT/DS397/R 
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 reflecting the performance of those entities.785  The United States recognizes that an investigating 
authority may be confronted with unreliable or in complete data furnished by one or more domestic 
producers.  In such situations, if the investiga ting authority does not receive complete and accurate 
information through supplementary requests, or resort to a reasonable estimation methodology that 
will yield results that are reflective of the state of  the domestic industry, the investigating authority 
should, at the very least, provide an explanation as to  why it must examine injury factors on the basis 
of different groupings of domestic producers.  Without such an explanation, it could appear that the investigating authority did not conduct an objective examinati on based on positive evidence as 
required by Article 3.1, but instead selectively c hose data to show injury where it may not exist.
786 
(c) Evaluation by the Panel 
7.384  Before addressing the issues raised by China's claim and the parties' arguments, we recall 
briefly the facts regarding the determination of injury in the investigation in dispute.   
7.385  The Commission, the EU investigating authority, addressed the impact of dumped imports in 
the section of the Definitive Regulation entitled "situation of the Community industry", at 
recitals 127-161, concluding in the latter recital th at "the Community industry suffered material 
injury".  There is no dispute that the Commission cons idered all the factors set out in Article 3.4 of the 
AD Agreement.  Nor is there any dispute that, in its consideration of some factors, specifically 
production, production capacity, capacity utilization, sal es, market share, average prices, employment, 
and productivity, the Commission referred to data fo r the entire domestic industry, as defined in the 
investigation, that is, the 46 EU fasteners producers.787  In its consideration of the remaining factors, 
specifically stocks, profitability and cash flow, inv estment, return on investments, ability to raise 
capital, and wages, the Commission referred to data  for the sampled EU fasteners producers, the 
7 companies included in the sample.788  The Definitive Regulation addresses the information 
on profitability at recitals 141-143, and the Commissi on's overall conclusions are set out at recitals 
153-160, in particular recitals 155-157 concer ning profitability, and recital 160, concerning 
"displacement ... in some important market segments". 
7.386  We recall that Article 3.1 of the AD Agreement provides:   
"A determination of injury for purposes of  Article VI of GATT 1994 shall be based 
on positive evidence and involve an objective examination of both (a) the volume of 
the dumped imports and the effect of the dumped imports on prices in the domestic 
market for like products, and (b) the consequent impact of these imports on domestic 
producers of such products." 
In turn, Article 3.4 provides: 
 
"The examination of the impact of th e dumped imports on the domestic industry 
concerned shall include an evaluation of all relevant economic factors and indices 
having a bearing on the state of the industry, including actual and potential decline in 
sales, profits, output, market share, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of the margin of dumping; actual and potential negativ e effects on cash flow, inventories, 
employment, wages, growth, ability to raise capital or investments.  This list is not 
                                                     
 
785 United States, written submission, pa ra. 33, referring to Panel Report, Mexico – Steel Pipes and 
Tubes , paras. 7.326-7.328. 
786 United States, written submission, para. 33. 
787 See Definitive Regulation, Exhibit CHN-4, recitals 127, and sections 5.1, 5.3, and 5.6. 
788 See Definitive Regulation, Exhibit CHN-4, recitals 127, and sections 5.2, 5.4, 5.5 and 5.7.  WT/DS397/R 
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 exhaustive, nor can one or several of these factors necessarily give decisive 
guidance." 
7.387  China has made four separate allegations of e rror with respect to th e Commission's analysis 
and determination regarding the im pact of dumped imports on the EU industry in support of its claim 
that the Commission failed to make an objectiv e examination based on positive evidence:   
(a) that the Commission did not base its determination on the same group of producers 
with respect to all injury factors that were analyzed; 
(b) that the Commission did not conduct an obj ective assessment of the profitability of 
the EU industry, since it disregarded the improvements in profitability observed 
during the POI and treated the 4.4 per cent profitability rate as being low;   
(c) that the Commission's overall assessment of the impact of dumped imports on the EU 
domestic industry was not objective, since the only injury factor that showed a negative trend was market share, and a r easonable investigating authority would not 
have concluded under those circumstances th at the domestic injury was suffering 
injury;  
(d) that the Commission made a determination that dumped imports displaced the EU 
products in certain market segments, and th is differentiation between different market 
segments resulted in a determination inconsis tent with Articles 3.1 and 3.4 of the AD 
Agreement.   
We will address each of these arguments below in turn.   
 
7.388  In addition to substantively responding to the claims, the European Union asserts, as a 
preliminary matter, that China has failed to make a prima facie  case that the EU investigating 
authority failed to conduct an "objective examination" with respect to the first aspect of its claim of 
violation.
789  We note that "[a] prima facie  case is one which, in the absence of effective refutation by 
the defending party, requires a Panel, as a matter of  law, to rule in favour of the complaining party 
presenting the prima facie  case ".790  It seems to us that China's claim rests in part on its interpretation 
of the AD Agreement and the definition of domestic i ndustry.  Therefore, we consider it appropriate 
to consider the substantive arguments regarding th is claim, and address whether China has presented a 
prima facie  case as warranted in the course of that assessment. 
7.389  The European Union acknowledges that the Commission based its assessment of certain 
injury factors on information for the sample and its  assessment of the others on information for the 
entire EU industry.  We understand China to argue that such an approach is per se  inconsistent with 
Articles 3.1 and 3.4 of the AD Agreement.791  In response to a question from the Panel, China asserted 
that: 
"According to China, it is necessary, once the set of producers is defined for the 
purposes of the injury analysis – either the domestic industry as defined by the IA (as 
the domestic producers as a whole or a number of them representing a major 
                                                      
789 European Union, first written submission, para. 560. 
790 Appellate Body Report, EC – Hormones , para. 104. 
791 China also asserts that it demonstrates that this approach resulted in a determination inconsistent 
with the obligations of Articles 3.1 and 3.4 in this case,  by showing that whether a specific injury factor is 
examined with respect to the industry as defined by the Commission or the sample, the outcome is substantially different, such as to influence the outcome of the injury an alysis.  China, answer to Panel question 50, para. 169.  
We address this contention further below. WT/DS397/R 
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 proportion of total domestic production) or a sample of producers of the domestic 
industry, as defined – the IA must use consis tently that set of producers throughout its 
injury examination. … China submits that switching back and forth between the domestic industry as defined and a sample of  such industry, is not an objective 
methodology since by selecting the set of producers being examined, one can 
influence the outcome of the injury analysis."
792 
The European Union has explained that its practice, where sampling is used, is to gather information 
on "microeconomic" factors from the sampled producers,  and take that information into account in its 
analysis of injury, while information on "macr oeconomic" factors is obtained from all producers 
comprising the domestic industry, and is taken into acc ount in the analysis.  We have elsewhere in this 
report rejected China's arguments with respect to  the definition of the domestic industry and the 
selection of the sample in the underlying investigation.793  In these circumstances, logic would suggest 
that the fact that some information is only co llected and analysed for the sample, while other 
information is collected and analysed for all producers in the industry cannot per se  render the 
examination not objective.  The purpose of a sample  is to allow the investigating authority to 
extrapolate from the sample to the whole.  More over, the Commission's practice of collecting and 
examining information on such factors as stocks, profitability and cash flow, investment, return on 
investments, ability to raise capital, and wages onl y from the sampled producers is not unreasonable 
on its face, and China has not argued otherwise.    
7.390  China argues that the investigating authority did not consider the injury factors "in relation to 
a Community industry defined in a consistent manner",
794 suggesting that it considers that the 
investigating authority changed its definition of the industry in the course of its examination, or relied 
on different definitions of the industry with respect to different factors.795  In this regard, we consider 
China's argument to rest on a false premise.  The Commission defined the domestic industry in this 
case as comprising 46 EU producers of fasteners, and subsequently selected a sample of those 
producers for purposes of the investigation.  It is clear  that the sample is not the domestic industry.  In 
our view, if, as we have found in this case, the sa mple is properly constitute d, information for the 
sample may be relied upon as representative of th e entire domestic industry.  Thus, reliance on 
information for the sample for some factors, and on information for the entire domestic industry for others, does not mean that the investigating authority did not consider the injury factors in relation of 
an industry defined in a consistent manner – there is only one industry defined in this case, the 46 EU 
producers of fasteners.  The sample is not a different  "definition" of the domestic industry.  We agree 
with China to the extent that, once the domestic industry has been defined, it is clear that the 
examination, analysis, and determination of injury mu st be with respect to th at industry.  However, 
this does not limit the right of the investigating authority to rely on information for a properly 
constituted sample of the domestic industry in that ex amination, analysis and determination.  As the 
panel observed in Mexico – Steel Pipes and Tubes , "once an investigating au thority has identified the 
framework for its analysis ... it must use this id entified framework consis tently and coherently 
throughout an investigation".
796  In our view, that is what the Commission did in this case, making a 
                                                      
792 China, answer to Panel question 50, para. 169. 
793 See Section V II.D.4(c) above. 
794 China, first written submission, para. 435. 
795 China, second written submission, para. 896.  See also, China, answer to Panel question 50, 
para. 169, quoted in text at paragraph 7.389 above. 
796 Panel Report, Mexico – Steel Pipes and Tubes , para. 7.322.  We consider China's arguments relying 
on the report of the panel in Mexico – Steel Pipes and Tubes  to be based on an incorrect understanding of that 
report.  In that case, the question being addressed in th e section of the report cited by China was whether the 
investigating authority's collection and reliance on certain categories of data pertaining to three firms, and other 
categories of data pertaining to only one firm, was consistent with Mexico's obligations under Articles 3.1, 3.2, 3.4 and 3.5 concerning injury to the "domestic industry" as defined in Article 4.1.  There was no allegation that 
either the one firm, or the group of three firms, constituted a sample of the domestic industry.  Indeed, the  WT/DS397/R 
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 determination with respect to the domestic industry as it was defined in this investigation.  The use of 
information relating to both the industry and the sample does not affect this view. 
7.391  Finally, we note that this is not the first case in which the Commission's practice in this regard 
has been considered by a panel.  The panel in EC – Bed Linen  addressed a similar claim in a case in 
which the Commission considered information for al l the producers in the domestic industry for some 
factors, and information for a sample of  that industry for the other factors.797  The panel, noting that 
pursuant to Article 3.4, a determination of injury mu st be reached for the domestic industry that is the 
subject of the investigation, stated:  
"it would be anomalous to conclude th at, because the European Communities chose 
to consider a sample of the domestic industr y, it was required to close its eyes to and 
ignore other information available to it concerning the domestic industry it had 
defined.  Such a conclusion would be in consistent with the fundamental underlying 
principle that anti-dumping investigations should be fair and that investigating 
authorities should base their conclusions on an  objective evaluation of the evidence.  
It is not possible to have an objective evaluation of the evidence if some of the 
evidence is required to be ignored, even t hough it relates precisely to the issues to be 
resolved.  Thus, we consider that the European Communities did not act 
inconsistently with Articles 3.1, 3.4, an d 3.5 of the AD Agreement by taking into 
account in its analysis information rega rding the Community industry as a whole, 
including information pertaining to companies that were not included in the 
sample."798 
We agree with these views.    
 7.392  Based on the foregoing, we reject China's alle gation that the fact that the Commission 
considered some injury factors on the basis of in formation for the domestic industry as defined, and 
for the remaining factors on the basis of information fo r the sample of that industry, demonstrates that 
the determination was not an objective examination based on positive evidence. 
7.393  Having concluded that consideration of info rmation for both the industry as defined and a 
sample of that industry is not per se  inconsistent with Articles 3.1 and 3.4, we turn next to consider 
whether China has demonstrated that, in this case, doing so resulted in an examination of the evidence 
that was not objective.  In this context, we note th at China does not dispute the facts relied on by the 
investigating authority, but rather takes issue with  the choice of facts for certain groups, asserting that 
"the fact that the analysis of injury factors w ith respect to the domestic industry as constituted by 
45 producers or with respect to the sampled producer s lead to different resu lts constitutes substantial 
evidence that the examination was not carried out objectively and was fundamentally biased".
799  In 
support of its position, China asserts that, in the Information Document, the Commission considered 
                                                                                                                                                                     
definition of the domestic industry was not at issue in that dispute at all.  In our view, there is no inconsistency 
between our conclusion here, and that  panel's view that "once an investigating authority defines which entities 
comprise the domestic industry that will form the basis for its in jury analysis, it should seek and use a consistent 
data-set reflecting the performance of those entities".  Panel Report, Mexico – Steel Pipes and Tubes , 
para. 7.326.  Both information for the entire domestic industry and for a properly-constituted sample "reflect[s] 
the performance" of the domestic industry with respect to which a determination of injury must be made, and 
thus, in our view, constitutes a "consistent data-set" for purposes of an injury analysis. 
797 In that case, the investigating authority also considered informa tion concerning producers who were 
not included in the domestic industry it had defined.  The panel concluded that such information, since it did not 
concern the domestic industry as defined, was not relevant to the determination.  Panel Report, EC – Bed Linen , 
paras. 6.182-6.183.  However, that factual situation does not arise in this case. 
798 Panel Report, EC – Bed Linen , para. 6.181. 
799 China, second written submission, para. 897. WT/DS397/R 
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 data on sales and market share in relation to the sampled producers, while in the Definitive 
Regulation, the Commission analysed sales a nd market share of the entire EU industry.800  While we 
have noted elsewhere in this report that the Inform ation Document is not a measure in this dispute, 
and we accept the European Union's assertion that it is an intermediate working document, in the 
context of this argument, we consider it appropriate  to take the Information Document into account in 
our consideration whether differences in appr oach between that document and the Definitive 
Regulation supports China's allegation that the Commission undertook a selective examination of data 
in a biased manner.  We start by noting, however, that the mere fact of differences between the preliminary views set out in the Information Docu ment and the final conclusions reached in the 
Definitive Regulation is not sufficient, in our view , to demonstrate that the investigating authorities 
conducted their investigation in such a way as to "orient the evaluation process an make a finding of 
injury more likely".
801  As noted, the Information Document is at most a preliminary view of the facts.  
Thus, the fact that certain conclusions in the De finitive Regulation are based on the information for 
the entire domestic industry, while the Informa tion Document addresses information for the sample 
does not alone demonstrate a "selective" review of the facts in the Definitive Regulation, which we 
recall is the measure before us.802   
7.394  Turning to the facts, we not e that the Information Document sets out the Commission's 
practice with respect to consideration of informati on for both the industry and the sample, stating that: 
"[i]n cases of sampling of the Community industry, it is the practice of the 
Commission's services to examine "macroec onomic" elements (typically production, 
capacity, sales volume, market share and em ployment on the basis of information 
collected at the level of the entire Commun ity industry (not just for the sampled 
companies).  However, as stated above, many producers in the Community did not cooperate in the investigation thereby not  allowing for all these elements to be 
examined for the entire Community industry.  As a consequence, the analysis of the 
situation of the Community industry was carried out for the sampled companies, 
except for sales and market share, wher e the figures are for all the cooperating 
Community producers.  The other "macroec onomic" elements will continue to be 
investigated to the extent possible."
803 
Thus, it is clear that the parties receiving the In formation Document were made aware that the 
analysis in that document was preliminary, that the investigation of certain elements to be analyzed 
would continue, and that the analysis in the De finitive Regulation might well be undertaken on the 
basis of different information, as indeed it was in this case, consistent with the Commission's usual 
practice of examining "macroeconomic" factors on th e basis of information for the entire industry, 
where possible.804  In our view, this alone suffices as a b asis to reject China's argument that the 
Commission's examination of information in the Definitive Regulation was "selective".  Moreover, 
we note as a matter of fact that, while the specific numbers and degree are different, both the 
                                                      
800 China, first written submission, paras. 439-442, citing Information Document, Exhibit CHN-17, 
pp. 17, 21;  Definitive Regulation, Exhibit CHN-4, recitals 136, 154. 
801 China, second written submission, para. 897.   
802 This is in contrast with the situation in Mexico – Steel Pipes and Tubes , where the investigating 
authority, in its final determination, considered facts for two different groups of producers neither of which was a properly-constituted sample of the entire domestic indus try in the investigation. 
803 Information Document, Exhibit CHN-17, p. 16.   
804 It is not clear why, having indicated, as quoted  above, that the figures fo r sales and market share 
were for all cooperating Community producers, the table on page 17 of the Information Document, and the 
accompanying text at page 18, indicate that information for sales was for th e sampled producers.  In our view, 
however, this reinforces the preliminary nature of th e information and analysis in  the Information Document, 
and further supports our view that differences between it and the Definitive Regulation do not demonstrate that 
the analysis in the Definitive Regulation was not objective.  WT/DS397/R 
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 Information Document and the Definitive regulation come to the same essential conclusion, reporting 
a significant loss of market share by the EU industry.805 
 7.395   Thus, we conclude that China has not demonstr ated that the consideration of data for the 
sample of the EU industry for some factors, and fo r the entire EU industry for others, resulted in this 
case in bias in the analysis and outcome, and reject this aspect of China's claim. 
7.396  Turning to the allegation that the Commission failed to objectively examine the profitability 
of the domestic industry, we note that, to the extent China asserts error on the basis that the 
Commission failed to take into consideration the im provement in profitability during the POI, we find 
this to be unfounded as a matter of fact, as it is cl ear that the Definitive Regulation addresses the data 
on profitability, and notes the increase relied upon by China in its arguments.  Indeed, China 
recognizes as much.
806 
7.397  Thus, we turn to the principal allegation, Ch ina's assertion that characterising a 4.4 per cent 
profit rate as "low", and concluding that dumped im ports had a "negative impact" on profitability, in 
light of evidence that profitability improved from 2003 to  the investigation period , is inconsistent with 
Articles 3.1 and 3.4 of the AD Agreement.807  In China's view, the Commission's explanation of its 
conclusion, that the improvement in profitability wa s due to the domestic industry's concentration on 
the supply of high quality products generating higher re venues, shows that the investigating authority 
"ignored" the positive trend.808 
7.398  We do not agree.  We recall that the Comm ission addressed the profitability of the EU 
industry at various points in the Definitive Regulati on.  We note in particular the table preceding 
recital 141, which shows that the profitability of th e industry's sales of the like product in the EU 
market was 2.1 per cent in 2003, 4.7 per cent in 2004, 3.4 per cent in 2005, 2.9 per cent in 2006, and 4.4 per cent in the investigation period, 1 Oc tober 2006-30 September 2007, and the following 
statements and conclusions: 
"(141) The levels of profits from the sale of the like product by the Community 
industry fluctuated throughout the period c onsidered while only reaching moderately 
positive levels. 
(142) Profitability was at its lowest level in  2003 (2,1 %) but it has since improved, 
which is linked partly to the efforts of the Community industry to reduce manufacturing costs and increase productivity and the fact that they concentrated 
their efforts on the supply of high quality products generating higher revenues than 
standard products, the former being less affected by dumped imports from the PRC 
than the latter. 
(143) It should be noted that the overall  positive profitability during the period under 
consideration coincided with  an expanding market during an expansion phase of the 
economic cycle which took place during 2004 a nd beginning of 2008, and it is likely 
to deteriorate significantly when these trends are reversed. Indeed, as a widespread 
                                                     
 
805 Compare, Information Document, Exhibit CHN-17, p. 18 ("the market share of the Community 
industry declined significantly, by 8.8% in less than three years") with Definitive Regulation, Exhibit CHN-4, 
recital 139 ("the market share of the Community producers declined by 24% in less than three years).   
806 China, answer to Panel question 51, para. 170, where China observes: 
"China's analysis starts from the facts and evidence on the record, namely recital 140 of the 
Definitive Regulation which shows that profitability has increased between 2003 to the IP 
from 2.1% to 4.4%." 
807 China, answer to Panel question 51, para. 170. 
808 China, answer to Panel question 51, para. 171. WT/DS397/R 
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 industrial product, fasteners are highly sensitive to the variations of the general 
economic situation and the industr ial production in particular. ... 
(154) At the same time, while the Commun ity consumption increased by 29 %, the 
sales volume of the Community industry only decreased by 1 %. Its market share fell 
by 24 % and it could not fully pass on the gl obal increase in raw material prices to its 
customers, resulting in continuing low levels of profitability.  ... 
(156) The impact of the dumped imports  upon the profitability of the Community 
industry was somewhat mitigated during the period under consideration by the 
Community market expansion and the favour able economic cycle. However, this 
situation could be reversed when this cycle comes to an end. ... 
(223) The level of any anti-dumping measures should be sufficient to eliminate the 
injury to the Community industry caused by the dumped imports, without exceeding 
the dumping margins found. When calculating the amount of duty necessary to remove the effects of the injurious dumping, it was considered that any measures should allow the Community industry to obtain a profit before tax that could be 
reasonably achieved under normal conditions of competition, i.e. in the absence of 
dumped imports. For this purpose, it was cons idered that a profit margin of 5 % is an 
appropriate level that the Community industr y could be expected to obtain also with 
regard to the like product in the absence of injurious dumping."
809  
7.399  We note that China does not dispute the facts referred to in these passages, but merely the 
characterization of the overall profitability of th e industry as "low", and the conclusion that the  
dumped imports had a negative impact on profitability.  With respect to the first point, we note that 
there is nothing in the AD Agreement that prescribes a threshold level of profitability that might be 
considered sufficiently "low" to s upport a conclusion of injury.  Ind eed, it is clear to us that this 
question is one which must be considered in each c ase, in light of the nature of the industry and the 
facts and circumstances of the investigation.  In  this case, the Commission found, and China does not 
dispute, that a profit margin of 5 per cent was a leve l the industry could be expected to achieve in the 
absence of injurious dumping.810  In these circumstances, we see absolutely no basis on which we 
might conclude that the Commission's conclusion th at the level of profitability was "low" in the 
circumstances of this industry demonstrates a failure to examine the facts objectively.   
7.400  With respect to the second point, we recall that  China does not dispute the facts on which the 
Commission's conclusion that dumped imports had a negative impact on the profitability of the 
industry rests.  Rather, China asserts that, since the 4.4 per cent profit margin achieved during the 
investigation period is "close" to the 5 per cent level the Commission considered appropriate, and 
profitability doubled between 2003 and the inves tigation period, the Commission "could not 
objectively conclude" that dumped imports had a negative impact on profitability.811  This is no more 
than an alternative interpretation of the facts, and as such, is in our view insufficient to demonstrate 
that the Commission failed to examine the (uncontested ) evidence in an objective manner.  Moreover, 
we note that the industry's profitability did not increase steadily throughout the period 2003-
30 September 2007, but rather fluctuated812, and that even at the end of that period at the top of the 
business cycle, had not reached the level the industry could be expected to achieve in the absence of 
injurious dumping.  The standard of review we are to apply under Article 17.6(i) makes it clear to us 
                                                      
809 Definitive Regulation, Exhibit CHN-4,  recitals 141-143, 154-156, 223. 
810 We note that this does not necessarily mean that such a level of profit would be "high", or even that 
there would be no injury to the industry if it operated at this level of profit. 
811 China, first written submission, para. 450;  China, second written submission, para. 915. 
812 See paragraph 7.398 above, quoting Defin itive Regulation, Exhibit CHN-4, recital 141.  WT/DS397/R 
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 that the mere fact that a different conclusion can be reached, even if that different conclusion were 
one we might have reached ourselves (which we do not suggest is the case here) is insufficient to 
warrant overturning the evaluation of the investig ating authority.  We therefore reject China's 
allegation that the European Union failed to objectiv ely examine the profitability of the EU industry.   
7.401  China's third allegation is that the Commission' s overall analysis of the impact of dumped 
imports on the domestic industry was not objective.  In support of this allegation, China asserts that 
the Commission improperly found that the industry suffe red injury, since "examination of the relevant 
factors pursuant to Article 3.4 shows a positive state of the domestic industry".813  With regard to this 
aspect of China's claim, we recall that we are not to engage in a de novo review of the Commission's 
determination.  Moreover, we recall also that Article 3.4 contains no methodological guidelines for 
the required consideration of relevant economic factors,  but does provide that the list of factors in that 
provision is not exhaustive, and that no one or several of the listed factors can give decisive guidance.  
In particular, we consider that there is nothing in the text of Article 3.4 which requires that any particular factor or group of factors demonstrat e "negative trends", which we understand to mean 
declines, in order for a determination of injury to be made.
814  China focuses on its assertion that 
market share was the only "negative factor", and ar gues that, having found that "all factors showed a 
positive trend over the period concerned" the Co mmission should have concluded that the EU 
industry had not suffered material injury.815 
7.402  In our view, a "negative factor" in the assessmen t of the condition of the domestic industry is 
not limited to a factor for which the information de monstrates an actual decline in performance.  Our 
view is supported by the text of Article 3.4, wh ich requires investigating authorities to evaluate all 
relevant factors, "including actual and potential dec line" in certain factors, and "actual or potential 
negative effects" on certain other factors.  The New Shorter Oxford English Dictionary defines 
"potential" as "Possible as opp[osed] to actual;  capable of coming into being or action;  latent".816  
The use of the word "potential" in the context of  the Article 3.4 non-exhaustive list of relevant 
economic factors indicates to us that a declin e need not have occurred during the period under 
consideration in order for an investigating authority to find injury. 
7.403  Turning to the facts of this case, we recall th at the fasteners market in the European Union 
expanded significantly during the period concerned in the injury analysis, with a reported increase in 
demand of 29 per cent between 2004 and the investigation period817, a fact China does not dispute.  In 
this market context, it seems reasonable to us that relevant economic factors wh ich China refers to as 
"positive trends"818, because they show increases, may be inte rpreted as "negative factors" when those 
increases are significantly less than the expansion in demand.819  Thus, to us, China's argument 
                                                      
813 China, first written submission, para. 451. 
814 Thus, it seems to us that it may be possible that even if the evidence before the investigating 
authority showed a decline only with re spect to one factor considered, for in stance, market share, this would not 
necessarily preclude a finding of injury, consistent with Ar ticle 3.4.  Clearly, in such  a case, the other evidence, 
including the nature of the product, industry, and market, as well as the reasoning of the investigating authority, 
would be critical considerations for a reviewing panel.    
815 China, second written submission, para. 921. 
816 New Shorter Oxford English Dictionary, Clarendon Press, 1993. 
817 Definitive Regulation, Ex hibit CHN-4, recital 129. 
818 China, second written submission, para. 922. 
819 We do not mean to suggest that a domestic industry is somehow entitled to benefit from the entirety 
of an expansion in its domestic market, or that a fa ilure of its performance to in crease commensurate with an 
increase in demand necessarily demonstrates injury, but mere ly that in such a situation, the fact that certain 
indicators of the industry's perfor mance increased less than demand may be a negative consideration in an 
investigating authority's analysis of injury to that industry. WT/DS397/R 
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 confuses "negative trends", that is, declines in th e reported data for injury factors, and "negative 
factors", which in our view may be found even where the reported data shows increases.820   
7.404  In this case, the Commission concluded, inter alia , that profitability remained low821, and that 
the increase in profitability was disproportionately low when compared to the increase in demand822;  
that production capacity grew "only slightly" resulti ng in low levels of capacity utilization throughout 
the period823;  that sales decreased by 1 per cent, while  consumption increased by 29 per cent, 
resulting in a decline in market share of 24 per cent in less than three years824;  that cash flow declined 
by almost 20 per cent from 2005 to the investigation period, almost to the level recorded in 2003825;  
and that the margins of dumping were above de minimis , and given the volumes and prices of dumped 
imports, the impact of the margin of dum ping could not be considered negligible.826  Moreover, the 
Commission recognized certain positive developments, in cluding a decline in the level of stocks, and 
the fact that return on investments and prices increased.827  The Commission explained, however, that 
these improvements did not reflect the significant increase in demand, which might have been expected to result in more rapid positive movement.
828  Based on our review of the Definitive 
Regulation, and our view of when a factor may be viewed as "negative" for purposes of evaluating 
injury factors, we reject China's assertion that it is "incorrect, as a matter of fact, to allege that a 
"significant number of injury factors" were negative".829  Considering the Commission's evaluation of 
the data before it with an eye to th e specific facts and circumstances of this dispute, and in light of the 
explanations given by the Commission in the Definitive Regulation, we conclude that the 
Commission's overall evaluation of the relevant injury factors reflects an objective examination of 
positive evidence, and its conclusions were such as could reasonably be reached by an objective 
decision-maker, on the basis of the facts and arguments before it, and we therefore reject China's allegation in this regard.
830   
7.405  China's final allegation of error with respect to the injury determination is that, to the extent 
the Commission's finding is based on the fact that there was a significant displacement of EU product 
from some market segments, this conclusion is inconsistent with Articles 3.1 and 3.4 of the 
AD Agreement.831  The European Union contends that China's argument goes to the question of 
causation, not the existence of injury, and is in any event contradicted by the facts, asserting that the 
Commission made its injury determ ination with reference to the entire industry, not any segment 
                                                      
820 We use the terms "increases" and "declines" in this discussion as indicating positive and negative 
developments.  Of course, for some factors, an increasing trend may actually be a negative development, for 
instance, with respect to inventories. 
821 A characterization which, we recall, we have not found unjustified in this case. 
822 Definitive Regulation, Ex hibit CHN-4, recital 141. 
823 Definitive Regulation, Ex hibit CHN-4, recital 130. 
824 Definitive Regulation, Ex hibit CHN-4, recital 139. 
825 Definitive Regulation, Ex hibit CHN-4, recital 144. 
826 Definitive Regulation, Exhibit CHN-4, recital 151.   We note that China acknowledges that the 
margins of dumping were a negative factor, but considers it unclear how they can be an  injury factor on their 
own.  China, second written submission, para. 922, 10th tiret.  While this is an interesting question, the fact 
remains that Article 3.4 lists the margin of dumping as a relevant economic factor to be considered, and thus we 
must treat it as relevant to the investiga ting authority's evaluation of those factors. 
827 Definitive Regulation, Exhibit CHN-4, recitals 146, 138. 
828 Definitive Regulation, Exhibit CHN-4, recitals 157, 138. 
829 China, second written submission, para. 925. 
830 We do not dispute that an alternative evaluation of the facts, such as proposed by China, might be 
possible.  We note, however, that in this case, China do es not even argue that this alternative explanation was 
raised before the Commission.  We consider, moreover, that the explanations provided by the Commission in 
the Definitive Regulation, and by the European Union in support of that determination, are "reasoned and 
adequate" even in light of the proffered alternatives.  See, Appellate Body Report, US – Softwood Lumber VI 
(Article 21 .5 – Canada ), para. 117, footnote 176. 
831 China, first written submission, para. 461.  WT/DS397/R 
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 thereof, and explained that the negative impact of the dumped imports was mitigated by the move of 
the industry into the higher-end, special fastener segment of the market.832   
7.406  China refers, in support of its position, to r ecital 160 of the Definitive Regulation, which 
states: 
"The investigation has since confirmed that material injury resulted from the 
significant displacement of Community products by Chinese imports in some 
important market segments , with a negative impact on capacity utilisation and 
profitability, although this impact has been somewhat attenuated by the fact hat [sic] 
the industry managed to compensate lower production volumes by focusing on 
market segments and products generating higher revenues." (emphasis added by 
China) 
The European Union refers to the same stat ement in support of its position, emphasising the 
conclusion at the end of the recital that "this impact  has been somewhat attenuated by the fact [t]hat 
the industry managed to compensate lower produc tion volumes by focusing on market segments and 
products generating higher revenues".  According to the European Union, China's argument suggests 
that the loss of market share is due to the indus try's decision to move into the higher end market 
segment, but that in fact, the opposite is true, a nd the industry was forced out of the lower end, 
standard fasteners segment, but was able to incr ease its sales in the higher end, thus avoiding the 
worst.833  Moreover, the European Union asserts, the Commission did not make a finding of market 
displacement, but related its injury  finding to fasteners as a whole.834   
 
7.407  China asserts for all the inju ry factors which showed a positive trend, the Commission 
systematically considered that these should not be  treated as "positive", since the positive trend was 
only due to the fact that the domestic industry prod uced more special fasteners and fewer standard 
fasteners.835  China considers that, by doing so, the Commi ssion examined the injury factors only in 
terms of standard fasteners, since the positive tr ends induced by increased production of special 
fasteners were systematically set aside in the injury  analysis.  Therefore, China asserts that the entire 
injury analysis of the Commission is premised on the distinction between the two market segments, 
and contends that, whether the state of the domes tic industry is better because the domestic producers 
have moved from standard fasteners to the more lucr ative segment of the market is irrelevant since 
both are within the like product.836  China considers that the Co mmission's injury analysis is 
effectively based on the standard fastener market segment, as the conclusion appears to be based on 
the fact that the EU industry could not continue to  produce standard fastener s because of the pressure 
exerted by dumped imports.837  China relies on the Appellate Body's report in US – Hot-Rolled Steel  
in support of its view that, by focussing on one segment of the market, the Commission's injury 
determination is in consistent with Articles 3.1 and 3.4.838   
7.408  China's arguments in this regard raise two qu estions; first, whether the Commission did, in 
fact, focus its injury determination on one segment of the market, and second, if it did, whether this 
demonstrates that its determinati on was inconsistent with Articles 3.1 and 3.4.  In our view, China's 
argument fails because, taking into consideration the entirety of it analysis and conclusions with 
                                                      
832 European Union, first written submission, paras. 623-624. 
833 European Union, first written submission, para. 624. 
834 European Union, second written submission, para. 207. 
835 China, second written submission, paras. 944-947. 
836 China, second written submission, paras. 942-9 43, 948;  China, answer to Panel question 52, 
para. 172. 
837 China, second written submission, para. 948. 
838 China, second written submission, para. 949;  China, answer to Panel question 52, para. 172.   WT/DS397/R 
Page 172 
 
 
 respect to injury, it is clear that the Commission did not find injury to only the standard fasteners 
segment of the market, and thus did not conclude that injury resulted from a displacement of sales 
from one segment of the market to another.  All the data considered by the Commission with respect 
to the condition of the EU industry refers to th e industry as a whole – there is no separate data 
reported for different market segments.  Thus, it is cl ear to us that, in its evaluation of the relevant 
factors, the Commission did not focus on one segment, and discount the other, but rather, made a determination with respect to the entire industry, and explained certain aspects of its analysis by 
referring to developments in different segments of the market.  We note in this regard the views of the 
Appellate Body in US – Hot-Rolled Steel : 
"it seems to us perfectly compatible with Article 3.4 for investigating authorities to 
undertake ... an evaluation of particular part s, sectors or segment s within a domestic 
industry.  Such a sectoral analysis ma y be highly pertinent, from an economic 
perspective, in assessing the state of an industry as a whole." 
839 
In our view, the Commission's evaluation of information and conclusions in the Definitive Regulation 
are entirely consistent with this statement. 
 
7.409  The factual circumstances of this case, moreover, are entirely different from those in US – 
Hot-Rolled Steel .  In that case, the US investigating aut hority, the United States International Trade 
Commission ("USITC"), was considering an industr y which produced steel for captive consumption, 
and for sale in the "merchant market".  The USITC' s final determination cont ained frequent reference 
to data for the merchant market, but did not contai n, describe, or otherwise refer to, data for the 
captive market.  In these circumstances, the Appell ate Body concluded that while the statute which 
directed the USITC to "focus primarily" on the me rchant market in its analysis of injury for an 
industry with both captive consumption and mercha nt market sales was not inconsistent with 
Articles 3.1 and 3.4 as such, the application of the statute in that investigation constituted a selective 
examination of one part of a domestic industry, an d thus was not an objective examination of positive 
evidence regarding the industry.  Th e Appellate Body observed that:  
"where one part of an industry is the subj ect of separate examination, the other parts 
should also be examined in like manner.  Here, we find that the USITC examined the merchant market, without also examining th e captive market in like or comparable 
manner, and that the USITC provided no ade quate explanation for its failure to do 
so."
840 
7.410  In this case, by contrast, it is clear that the Commission did not "examine the [higher end 
specialty fastener] market, without also examining th e [lower end standard fastener] market".  Indeed, 
the Commission did not examine separate markets per se  at all in this case.  Rather, it examined the 
performance of the industry as a whole, and expl ained how some of the developments observed 
reflected the shift of the industry to production of more specialty fasteners.  Therefore, we conclude 
that, as a matter of fact, the Commission did not "s egment" its analysis of injury, and did not focus 
only on the standard fastener segment of the mark et.  Thus, China has failed to demonstrate the 
premise of its final allegation of error, a nd we therefore reject China's allegation. 
7.411  Based on the foregoing, we conclude that China has failed to demonstrate that the 
European Union's examination of the impact of dumped imports on the domestic industry is 
inconsistent with Articles 3.1 and 3.4 of the AD Agreement.  
                                                      
839 Appellate Body Report, US – Hot-Rolled Steel , para. 195 (footnote omitted). 
840 Appellate Body Report, US – Hot-Rolled Steel , para. 214.  WT/DS397/R 
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 10. Whether the European Union violated Articl es 3.1 and 3.5 of the AD Agreement in its 
consideration of causation  
(a) Arguments of the Parties 
(i) China 
7.412  China contends that the European Union viol ated Articles 3.1 and 3.5 of the AD Agreement 
in concluding that dumped imports from China caused  material injury to the EU Industry.  China 
bases its claim on two assertions of error:  first, that the Commission failed to demonstrate that the 
dumped imports, through the effects of dumping, are causing injury; and second, that the Commission failed to ensure that injury caused by factors othe r than dumped imports was not attributed to dumped 
imports.
 841 
7.413  In support of its first allegation, China subm its that the Commission failed to establish a 
causal relationship between the dumped imports and the injury, as required by Article 3.5.  China 
argues first that the Commission's reasoning, which China asserts is based on a coincidence between 
the significant increases in the volume of dumped im ports and the continuously declining loss of 
market share by EU producers, does not support the conclusion that dumped imports are causing 
injury to the EU industry through the effects of the dumping, as China argues is required.842  China 
maintains that a mere "coincidence", that is, si multaneity of an increase in the volume of dumped 
imports and the existence of injury, is insufficien t to establish the causal relationship required by the 
AD Agreement.843  Second, China submits that the conclu sion that there is a causal relationship 
between dumped imports and injury must be b ased on positive evidence, and argues that the 
Commission failed to adduce such evidence in its examination of the reasons why the EU industry 
produced more special and fewer standard fasteners.844  According to China, the Commission failed to 
consider this latter fact, and that the loss in mark et share was due to this "strategic decision", which 
may be motivated by factors other than the presence of dumped imports.845  China considers that it 
was manifestly necessary, as part of the analysis of causation, to determine why EU producers shifted 
from producing standard fasteners to producing special  fasteners, and contends that the Commission's 
conclusion that the shift was a reaction to increasi ng quantities of dumped imports is not based on 
positive evidence and thus is not substantiated.846 
7.414  With respect to the second assertion, China cont ends that the Commission failed to properly 
assess the injurious effects of increased raw material  prices, and the effects of exports to third 
countries, and failed to ensure that injury caused  by these factors was not attributed to dumped 
imports.  Concerning increased raw material prices, China notes that the EC considered it a factor 
causing injury, but concluded it was not "the decisive factor" and would not per se  break the causal 
link between dumped imports from China and the injury to the EU industry.847  China maintains that 
the European Union failed to separate and distingu ish the injurious effects of the increase in raw 
                                                      
841 China, first written submission, para. 462.  We note that the European Union, in its second oral 
statement, objected to the second aspect  of China's argument, asserting that no  claim in this regard was set out in 
China's panel request.  European Unio n, second oral statement, para. 70.  However, as noted, China clearly 
argued this aspect of its claim in its first written submission.  We consider the European Union's objection 
untimely, particularly in this case, where the European Union had previously made numerous similar objections, and decline to address it. 
842 China, first written submission, paras. 475-476. 
843 China, second written submission, para. 960. 
844 China, second written submission, para. 957. 
845 China, first written submission, para. 476. 
846 China, second written submission, paras. 968-972. 
847 China, first written submission, para. 478, citing Definitive Regulation, Exhibit CHN-4, 
recitals 176, 179. WT/DS397/R 
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 material prices from the injuri ous effects of dumped imports.848  China argues that the increase in raw 
material prices made it more attractive to produce high quality fasteners, in which raw material costs 
are a smaller portion of total costs, and thus led th e EU industry to focus on production of high quality 
fasteners, which explains the decrease in the EU industry's market share.849  According to China, the 
Definitive Regulation does not contain a satisfactory explanation of the nature and extent of the 
injurious effects of this factor, as distinguished from the injurious effects of the dumped imports, as 
China considers is required by Article 3.5 of the AD Agreement.850  With respect to exports to third 
countries, China asserts that that the European Union violated Articles 3.1 and 3.5 of the AD Agreement.  China asserts first that the conclu sion that export performance was not causing injury 
was not based on positive evidence and did not invo lve an objective examination of the evidence 
submitted.
851  Second, China maintains that the Co mmission based its assessment of export 
performance on data which do not relate to the domestic industry as defined in the investigation.852  
China notes that the information in  the Definitive Regulation concer ning exports, which showed an 
increase in exports to third countries, is for all EU  producers of fasteners, and not for either the 
industry as defined in the investigation, or the sample examined.853  China considers that the 
Commission's conclusions, that exports were only 11  per cent of the EU industry's production in 
2006, and were at prices higher than those in the EU market, do not relate to the EU industry, as they 
are not based on data for that industry.854  China submits an alternate calculation of changes in 
exports, which it asserts shows a completely different trend, a decrease of almost 50 per cent.855  
China maintains that the Commission fa iled to examine to what extent this alleged loss in export sales 
caused injury to the EU industry.856  Moreover, China maintains that it is not possible to determine the 
possible influence of export performance on the inju ry suffered by the EU industry without assessing 
the export performance of that industry, which must be based on data for that industry, and not some 
other, larger group of producers.857 
(ii) European Union 
7.415  The European Union contends th at China fails to establish a prima facie  case with respect to 
both aspects of its causation claim.858  The European Union contends that China's argument unduly 
limits the injury to loss of market sh are, contrary to the facts of reco rd.  It also argues that, concerning 
causation, China's argument is limited to speculati on that if the domestic industry had not decided to 
move into the specialty fastener segment of th e market, it would not have lost market share.859  For the 
European Union, this is insufficient to make out a prima facie  case.860  The European Union asserts 
that the actual findings of the Commission are set out in the Definitive Regulation, referring 
particularly to recitals 163 th rough 171.  The European Union contends that these findings 
demonstrate that the Commission's analysis w as reasonable and well-reasoned.  Moreover, the 
European Union considers that China has not made  any argument otherwise with respect to this 
analysis.861 
                                                      
848 China, first written submission, para. 481. 
849 China, first written submission, paras. 486-488. 
850 China, second written submission, paras. 983-993. 
851 China, second written submission, paras. 994-1004. 
852 China, second written submission, paras. 1006-1017. 
853 China, first written submission, para. 489. 
854 China, first written submission, paras. 490-492. 
855 China, first written submission, para. 492. 
856 China, first written submission, para. 493. 
857 China, second written submission, paras. 1007-1008. 
858 European Union, first written submission, para. 632. 
859 European Union, first written submission, para. 634. 
860 European Union, first written submission, para. 635. 
861 European Union, first written submission, paras. 637-638.  WT/DS397/R 
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 7.416  With respect to the second aspect of China's claim, the European Union contends that, 
contrary to China's arguments, the Commission did not consider the loss of market share by the EU 
industry as a cause of injury, but as an indicator of injury caused by the effects of dumped imports, finding a clear and direct link between the increase in  dumped imports, their increase in market share, 
and the consequent loss of mark et share of the EU industry.
862  The European Union contends that 
China does not point to any flaws in the Commission 's reasoning, or any evidence that would suggest 
that the Commission failed to separate and distinguish  the effects of other factors from the injurious 
effects of dumped imports.  Rather, the European  Union asserts, China merely disagrees with the 
Commission's evaluation of those effects.863  In any event, the European  Union notes that there is no 
specified methodology for conducting a non-attribution an alysis, and that what is important is that 
injuries caused by other factors are not lumped t ogether with injury caused by the dumped imports.864  
The European Union notes that the Commission addressed  the effect of raw material price increases at 
length, finding that these prices increased worldwide,  but that the increases could not be passed on to 
consumers by EU producers, as would normally be the case, due to pressure on prices in the EU market from dumped imports.
865  For the European Union, this supports the reasonable conclusion 
that increased raw material prices were not the decisi ve factor in the injury, as normally they would be 
passed on to consumers, but in this case could not be.866  The European Union asser ts that the analysis 
in the Definitive Regulation did not lead to the conclusion that a direct link between increased raw material prices and the injury existed, as the time pattern did not match, the price increases were not 
specific to the European Union, an d these increases could not be passed on to consumers.  According 
to the European Union, this analysis sufficiently addressed the nature and extent of the injury caused 
by increased raw material prices.
867  With respect to exports to third countries, the European Union 
asserts that the Commission found that export perfo rmance was not a cause of injury to the EU 
industry, and thus no further analysis of the natu re and extent of the effect of this factor was 
required.868  With respect to the information cons idered in the Definitive Regulation, the 
European Union contends that consideration of da ta for all EU producers is one way of examining 
export performance of the EU industry, especially wh ere, as here, no interested party raised export 
performance as an important "other factor" causing injury.869  The European Union considers that the 
alternative information relied on by China in its argume nts is not part of the record, and was not raised 
during the investigation.  Thus, the European Union argues that it would be an unwarranted de novo  
review for the Panel to consider this information,  which the European Union contends is incorrect.870  
(b) Arguments of Third Parties 
(i) Japan 
7.417  Japan requests that the Panel carefully revi ew whether the European Union violated 
Articles 3.1 and 3.5 of the AD Agreement by attributing to dumped imports injury caused to the EU industry by other known factors, in particular the effects of increased raw material prices.
871  Japan 
notes the requirements of Articles 3.1 and 3.5, and recalls that investigating authorities must separate 
and distinguish the injurious effects of the dumpe d imports from the injurious effects of other known 
                                                      
862 European Union, first written submission, paras. 642-644. 
863 European Union, first written submission, para. 647. 
864 European Union, first written submission, paras. 650-652. 
865 European Union, first written submission, paras. 653-655. 
866 European Union, first written submission, para. 656. 
867 European Union, second written submission, para. 216. 
868 European Union, first written submission, paras. 661-662. 
869 European Union, first written submission, para. 664. 
870 European Union, first written submission, paras. 665-666. 
871 Japan, written submission, paras. 64, 67. WT/DS397/R 
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 factors.872  Japan considers the principle of "separating and distinguishing" the effects of other known 
factors to be of paramount importance in every anti-dumping investigation.873   
(ii) Norway 
7.418  Norway does not take a position on whether th e European Union fulfilled its obligations 
according to Articles 3.1 and 3.5 in this case, but  highlights certain arguments it considers may be 
important to the Panel's interpretation and application of those provisions.874  Norway recalls the text 
of those provisions, and the requirement that the investigating authorities "separate and distinguish" 
the injurious effect of the dumped imports from the injurious effects of other known factors.875  
Norway notes that this requires "a satisfactory explan ation of the nature and extent of the injurious 
effects of the other factors, as distinguished from the injurious effects of the dumped imports".876  
Norway attaches great importance to these principles , as an important mechanism to ensure that the 
injury from dumped imports is isolated from the injurious effects of other factors, fulfilling the objective of Article 3.5.  Norway therefore asks the Panel to carefully review whether the EU in this 
case fulfilled its obligation to "separate and distin guish" the effects of the dumped imports from the 
injurious effects of the increase in raw material  prices and exports to third countries by the EU 
industry, and whether the EU ensured that any in jurious consequences from such other factors were 
not attributed to the dumped imports.
877  
(c) Evaluation by the Panel 
7.419  Article 3.5 provides: 
"It must be demonstrated that the dumped imports are, through the effects of 
dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this 
Agreement.  The demonstration of a causal  relationship between the dumped imports 
and the injury to the domestic industry shall be based on an examination of all relevant evidence before the authorities.  The authorities shall also examine any 
known factors other than the dumped imports which at the same time are injuring the 
domestic industry, and the injuries caused by these other factors must not be 
attributed to the dumped imports.  Factors which may be relevant in this respect 
include,  inter alia , the volume and prices of imports not sold at dumping prices, 
contraction in demand or changes in the pa tterns of consumption, trade restrictive 
practices of and competition between the foreign and domestic producers, 
developments in technology and the export performance and productivity of the 
domestic industry.
" 
China's claim alleges error with both the Commiss ion's conclusion that dumped imports from China 
caused injury to the EU industry producing fastener s, and with the Commission's examination of any 
"known factors other than dumped imports" which were  injuring the EU industry at the same time as 
dumped imports.  We address each of these in turn below.    
7.420  First, however, we recall that the Commission addressed causation in the Definitive 
Regulation at recitals 162-184, concluding in the latte r recital that "the dumped imports originating in 
the PRC have caused material injury to the Community industry".  The Definitive Regulation 
                                                     
 
872 Japan, written submission, paras. 65-66.   
873 Japan, written submission, para. 67. 
874 Norway, oral statement, para. 18. 
875 Norway, oral statement, para. 19 citing, Appellate Body Report, US – Hot Rolled Steel , para. 226. 
876 Norway, oral statement, para. 20, citing, Appellate Body Report, US – Hot Rolled Steel , para. 226. 
877 Norway, oral statement, para. 21.  WT/DS397/R 
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 addresses the effect of dumped imports at recitals 163-171, addresses the effect of other factors, 
specifically, imports from third countries, export perfo rmance of the EU industry, and increase in raw 
material prices, at recitals 172-17 9, and draws conclusions at recita ls 180-184.  China does not dispute 
any of the factual information considered by the in vestigating authority, except, as discussed below, 
the use of export data for all EU producers. 
7.421  We recall that Article 3.1 of the AD Agreement,  also cited by China with respect to this 
claim, provides that:   
"A determination of injury for purposes of  Article VI of GATT 1994 shall be based 
on positive evidence and involve an objective examination of both (a) the volume of 
the dumped imports and the effect of the dumped imports on prices in the domestic 
market for like products, and (b) the consequent impact of these imports on domestic 
producers of such products." 
7.422  In this case, there is no dispute concerning the evidence considered  by the Commission in 
finding causation.878  Thus, the question before us is whether,  in examining the consequent impact of 
dumped imports on domestic producers of the like products , that is, the EU industry as defined by the 
Commission in this investigation, the Commissi on engaged in an objective examination of the 
evidence.  We recall in this regard  that "an 'objective examination' [ under Article 3.1] requires that the 
domestic industry, and the effects of dumped imports , be investigated in an unbiased manner, without 
favouring the interests of any interested party, or gr oup of interested parties, in the investigation".879  
It is, we consider, the task of the investigating authority to weigh the evidence and make a reasoned 
judgement – this implies that there may well be  evidence, and arguments, that detract from the 
conclusions reached.880  We recall that Article 17.6(i) of th e AD Agreement requires us, on review, to 
determine whether the authorities' establishment of the facts was proper and whether their evaluation 
of those facts was unbiased and objective.  If we find this to be so, we may not overturn the 
authorities' determination even if we would have r eached a different conclusion.  In our view, this 
means that, unless a complaining party in disput e settlement demonstrates that the evidence and 
arguments before the investigating authority were  such that an unbiased and objective investigating 
authority could not reach a particular conclusion, we are obliged to sustain the investigating 
authority's judgment, even if we would not have r eached that conclusion ourselves.  Moreover, we do 
not consider that a determination can be sustaine d on review only if every argument and conflict in 
the evidence was resolved by the investigating author ity in favour of the determination made – that is, 
it may reach conclusions on some issues that do not support its determination, but so long as its 
explanations are reasonable and supported by th e evidence cited, merely that another overall 
conclusion might have been reached does not de monstrate that the investigating authorities' 
determination is inc onsistent with either Article 3.1 or 3.5 of the AD Agreement.881   
                                                      
878 There is disagreement between the parties concer ning the evidence with re spect to the Commission's 
examination of "other factor s", which we address below. 
879 Appellate Body Report, US – Hot-Rolled Steel , para. 193. 
880 We note in this regard the statement of the Appellate Body in US – Countervailing Duty 
Investigation on DRAMS , concerning the role of a panel as a review er of agency action, rather than as initial 
trier of fact:  "[A] panel examining the evidentiary basi s for a subsidy determination should, on the basis of the 
record evidence before the panel, inquire whether the evidence and explanation relied on by the investigating 
authority reasonably supports its conclusions".  Appellate Body Report, United States – Countervailing Duty 
Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea  ("US – 
Countervailing Duty Investigation on DRAMS "), WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, 
8131, para. 188.  While the agency dete rmination at issue in that case concer ned the existence of a subsidy, we 
consider that this view is equally applicable in the co ntext of review of a determination of causation in an anti-
dumping investigation. 
881 See, Appellate Body Report, US – Softwood Lumber VI (Article 21 .5 – Canada ), para. 117. WT/DS397/R 
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 7.423  With respect to the first asp ect of China's claims, we not e that China asserts that the 
Commission's reasoning for its finding of causati on is based on a "mere coincidence" between 
significant increases in the volume of dumped imports and the decline in the EU industry's market share.  China acknowledges that there is no require d methodology for the analysis and determination 
of causation in the AD Agreement.  However,  referring to the Appellate Body report in US – Wheat 
Gluten , China asserts that the fact that two elements  occur simultaneously does not establish that the 
one element "brings about", "produces" or "induc es" the other element, which China considers 
necessary to demonstrate causation.
882  China considers that, in order to make a determination of 
causation consistent with Article 3.5, the EU author ities were required to demonstrate with supporting 
evidence that the loss of production volumes and the loss in market share were caused, i.e., produced, 
by the dumped imports.  China asserts that, by b asing the conclusion on a mere coincidence, they 
failed to do so, and ignored that the factors consider ed to show injury, and in particular the loss of 
market share, may well be explained by the domestic industry's increased production of special fasteners.
883   
7.424   However, a review of the Definitive Regulation makes clear to us that while the coincidence 
in time of the increase in dumped imports and the decline in the EU industry's market share is 
certainly an element in the Commission's reasoning, it is not the entire basis for the conclusion that 
dumped imports caused injury to the domestic industr y.  China does not explain why, in its view, the 
fact that the increase in the volume of dumped impo rts coincided with the declining trends in the 
situation of the domestic industry is insufficient as a basis for finding causation, but merely speculates 
that the loss of market share might be explained by  the EU industry's move to increased production of 
specialty fasteners.  We note that, as the panel in Argentina – Footwear  observed,  
"While such a coincidence by itself cannot prove  causation (because, inter alia , 
Article 3 requires an explanation – i.e., "findings and reasoned conclusions"), its 
absence would create serious doubts as to th e existence of a causal link, and would 
require a very compelling analysis of why causation still is present."884 
Argentina – Footwear  was a dispute under the Safeguards Agreem ent, but we note that the Appellate 
Body has treated the causation standard under that agreement and under the AD Agreement as similar, 
and therefore we consider it re levant to our determination.885  In that dispute, the Appellate Body 
stated that it saw "no error in the Panel's in terpretation of the causation requirements ... of the 
Agreement on Safeguards ".886 
 
7.425  In this case, as is clear from the Definitive Re gulation, the Commission did not find that the 
EU industry was injured solely because market share declined887, and did not consider the declining 
                                                      
882 China, answer to Panel question 56, para. 191, quoting, Appellate Body Report, United States – 
Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities ("US – Wheat 
Gluten "), WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, 717, para. 67. 
883 China, answer to Panel question 56, para. 192. 
884 Panel Report, Argentina – Safeguard Measures on Imports of Footwear ("Argentina – Footwear 
(EC) "), WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body Report WT/DS121/AB/R, 
DSR 2000:II, 575, para. 8.238. 
885 See Appellate Body Report, US – Hot-Rolled Steel , para. 229, where the Appellate Body observed 
that its interpretation of Article 3.5 of the AD Agreem ent, in particular the non-a ttribution requirement, is 
"fortified" by its interpretation of Article 4.2(b) of the Agreement on Safeguards, the causation requirement in 
that Agreement, citing in this regard the Appellate Body Reports in US – Wheat Gluten  and United States – 
Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia ("US – 
Lamb "), WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, 4051. 
886 Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear ("Argentina – 
Footwear (EC) "), WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515, para. 145. 
887 See Section V II.D.9(c) above.  WT/DS397/R 
 Page 179 
 
 
 market share to be a cause of injury, but rath er a factor demonstrating that injury existed.888  T h e  
Commission also found that a number of other injury factors supported the finding of injury, in the context of an industry facing increased demand.  Moreover, the Commission explained its conclusion 
that the decline in market share supported its finding that dumped imports caused injury.
889  We note 
in particular the statement that:  
"In reaction to the increasing quantities of im ports of standard pr oducts originating in 
the PRC, the Community industry has developed its production activities of special parts (based on drawings from customers), t hus managing to maintain its production 
volumes and avoid a further deterioration of  profitability.  Howe ver, these products, 
belonging to the higher end of the market ca nnot fully compensate for the loss of high 
volumes of production of standards [sic] products."
890 
7.426  In our view, this is a reasonable interpretation of  the facts, and one which could be reached by 
an unbiased and objective investigating authority on th e basis of the information before it.  Moreover, 
contrary to China's argument, it specifically addresses the question of why EU producers chose to move into production of special fasteners.  Chin a acknowledges that the European Union explained 
this shift as a reaction to increased quantities of Chinese imports of standard fasteners
891, but contends 
that this explanation is unsubsta ntiated by evidence, and that ther e are other reasonable explanations 
for this shift.  However, China has itself proffered no evidence to support its alternative 
explanations.892  Moreover, a lack of direct evidence for such reasoning is in our view not fatal, 
particularly where, as in this case, the reasoning itsel f is a rational explanation of the observed facts, 
and is not undermined by evidence before the investigating authority.  We consider that China has not 
demonstrated a failure of reasoning or expl anation in the Commission's determination893, but has 
rather put forward an unsubstantiated different  interpretation of the relevant facts.   
7.427  We recall that it is not our role to review the evidence de novo , or to choose which of 
alternative interpretations of the facts is most convi ncing to us, or would be ours were we to make our 
own conclusion.  It is our task to undertake a ca reful scrutiny of the Commission's determination to 
assess whether the conclusions therein could be reach ed by an unbiased and objective decision maker, 
taking into account the facts that were before the investigating authority, and in light of the explanations given.  We recall, in this rega rd, the statement of the Appellate Body that 
"a panel is not compelled under Article 11 to  "automatically reject" the explanation 
given by an investigating authority merely  because a plausible alternative explanation 
has been proffered.  At the same time, a panel may find the investigating authority's 
explanation inadequate when, even though that explanation seemed "reasoned and 
adequate" at the outset, or in the abstract, it no longer seems so when viewed in the 
light of the plausible alternatives.  In ot her words, it is not the mere existence of 
plausible alternatives that renders the investigating authority's explanation 
"implausible".  Rather, in undertaking its review of a determination, including the 
authority's evaluation (or lack thereof) of a lternative interpretations of the evidence, a 
                                                     
 
888 Definitive Regulation, Exhibit CHN-4, recitals 154, 160. 
889 Definitive Regulation, Exhibit CHN-4, recitals 165-167.   
890 Definitive Regulation, Ex hibit CHN-4, recital 167. 
891 China, second written submission, para. 969. 
892 China does not assert that these alternatives were argued before the investigating authority and 
rejected, and there is no indication in the Definitive Regu lation that any party proposed these alternatives during 
the investigation.  Thus, it is difficult for us to see on what basis the investigating authority could now be 
required to have considered them. 
893 We recall that China does not di spute the facts in question in connection with this aspect of its 
claim. WT/DS397/R 
Page 180 
 
 
 panel may conclude that conclusions that  initially, or in the abstract, seemed 
"reasoned and adequate" can no longer be characterized as such.176 
_______________ 
176 A panel's duty to consider whether the inves tigating authority's explanation is "reasoned 
and adequate" in the light of alternative plausible explanations should not be read as a 
requirement that panels must reject the authority's explanation if it does not rebut the alternatives.  Rather, a panel must verify that the investigating authority has taken account of 
and responded to plausible alternative explanatio ns that were raised before it and that, having 
done so, the explanations provided by it in support of its determination remain "reasoned and 
adequate
".894 
In our view, the Commission's determination that dumped imports caused the injury it had found the 
EU industry to be experiencing was a reasonable conclusion, based on the evidence and arguments 
before it, and we therefore reject this aspect of China's claim.    7.428  Turning to the second aspect of China's claim, China argues that the European Union did not 
separate and distinguish the effects of other factor s, specifically, the increase in raw material prices 
and the export performance of the EU industry, whic h might be contributing to the injury suffered by 
the domestic industry, from the effects of dum ped imports, as required by Article 3.5 of the 
AD Agreement.  We recall that Artic le 3.5 provides in pertinent part: 
"The authorities shall also examine any known factors other than the dumped imports 
which at the same time are injuring the domestic industry, and the injuries caused by 
these other factors must not be attributed to the dumped imports."   
Previous panel and Appellate Body reports make it clear that while an investigating authority is 
required to consider the effects of other factors known to the investigating authority which may be 
causing injury to the domestic industry, there is no required method of analysis in undertaking that 
examination.
895  As previously discussed, we consider that it is our task to undertake a careful scrutiny 
of the Commission's determination to assess whether the conclusions therein could be reached by an 
unbiased and objective decision maker, taking into account  the facts that were be fore the investigating 
authority, and in light of the explanations given.896 
 7.429  We note, and China does not dispute, that the Definitive Regulation does discuss the effect of 
"other" factors causing injury, including specifically increased raw material prices
897, and does 
address the export performance of the EU industry.  T hus, the issue for us is whether that discussion 
and the explanations given in light of the facts fa ll short of the requirements of Article 3.5 of the 
AD Agreement.  In this context, we recall that Article 3.5 contains no guidance on the assessment of 
other factors, and the reports of the Appellate Body  concerning the need to "separate and distinguish" 
                                                      
894 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 117. 
895 Appellate Body Report, US – Hot-Rolled Steel , para. 178;  Appellate Body Report, EC – Tube or 
Pipe Fittings , para. 189;  Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 154. 
896 Panel Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 7.19;  Appellate Body 
Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 112;  Appellate Body Report, United States – 
Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea 
("US – Countervailing Duty Investigation on DRAMS "), WT/DS296/AB/R, adopted 20 July 2005, para. 151 & 
footnote 278. 
897 The Commission also considered the effect of imports from third countries in this regard, Definitive 
Regulation, Exhibit CHN-4, recitals 172-174, and concluded that they "could not have contributed to the injury suffered by the Community industry".  Id., recital 174.  China has not challenged this aspect of the Definitive 
Regulation.  WT/DS397/R 
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 the effects of dumped imports from those of other factors causing injury similarly do not provide any 
direction to investigating authorities as to how this is to be done.  We consider it appropriate to 
evaluate whether the explanations given by the Commission as to why the increase in the price of raw 
materials did not per se  break the causal link between dumped im ports and material injury, and why 
the export performance of the domestic industry w as not a source of injury, are such reasonable 
conclusions as could be reached by an unbiased and objective investigating authority in light of the 
facts and arguments before it and the explanations given.   
7.430  Turning first to the Commission's consideration of increased raw material prices, we note that, 
in the Definitive Regulation, the Commission found that, while there was evidence of some increase 
in steel prices during the period, increased raw material  prices were not a decisive factor in the injury 
to the EU industry, which was mainly reflected in lost market share.  The Commission also found that 
average selling prices in the European Union increased mainly due to the shift to production of special 
fasteners, which are more costly to manufacture, by the EU industry.  The Commission went on to observe that sales prices could not be increased  to make up for these cost increases, due to 
inflexibility in prices caused by the simultaneous su rge in dumped imports at prices significantly 
below those of the EU producers.
898  Finally, the Commission noted th at increased raw material prices 
should have affected all manufacturers, and therefor e could not be considered a particular factor 
affecting the EU industry, since the unit prices of  Chinese product remained stable despite increased 
raw material prices.   
7.431  In light of this, it is clear that the Commission did consider the effect of increased raw 
material costs.  Indeed, China does not dispute this, but rather once more proposes an alternative 
interpretation of the facts.  China posits that the increase in raw material prices made it attractive for 
the EU industry to focus on special fasteners, where th e share of raw material costs in the total cost of 
production is smaller, a nd revenues are higher, and thus expl ains the industry's increasing production 
of special fasteners.  This, China asserts, explains th e loss of market share, and thus the injury to the 
EU industry.899   
7.432  While China characterizes its explanation as demonstrating errors in the Commission's 
reasoning900, in our view, its alternative explanation does not address the Commission's reasoning at 
all, but rather proposes an alternative analysis.  Mo reover, it is an alternative that focuses on different 
considerations, and does not take account of certain  salient factors which the Commission considered 
relevant, such as the increased volume of dumped imports sold at prices significantly below those of 
the EU producers and thereby exerting pressure on EU prices.  Thus, in our view, China has not 
demonstrated that the Commission's determination, that increased raw material costs did not break the 
causal link between dumped imports and injury, w as not a reasonable conclusion, reached by an 
unbiased and objective investigating authority in lig ht of the facts and arguments before it.  
7.433  With respect to the export performance of the domestic industry, we note that the 
Commission also addressed this question.  The Commission observed that exports were only 11 per 
cent of the EU industry's production in 2006, in creased by 81 per cent between 2003 and the 
investigation period, and were consistently at  prices significantly above sales prices on the EU 
                                                      
898 The Commission found price undercutting averaging more than 40 per cent.  Definitive Regulation, 
Exhibit CHN-4, recital 126.  We recall that we have rejected China's claim with respect to the Commission's 
price undercutting analysis.  See paragraph  7.336 above. 
899 China, first written submission, paras. 483-488.  We note that China has not asserted that this 
alternative was argued to the investigating author ity during the course of the investigation. 
900 China, first written submission, para. 483. WT/DS397/R 
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 market.  Thus, the Commission concluded that the export performance of the EU industry "was not a 
source of material injury to the Community industry".901   
7.434  China does not dispute that the Commission conc luded that the export performance of the EU 
industry "was not a source of material injury to the Community industry".  China considers that this 
conclusion is not one which coul d have been reached by an unbiased and objective investigating 
authority on the basis of the facts before it.  Ch ina raises a different issue in respect of export 
performance, asserting that the information with resp ect to exports considered by the Commission in 
its analysis was for all EU producers of fasteners,  and was not specific to the domestic industry as 
defined, i.e., the 46 producers, or the sample considered.  According to China, this information cannot 
be extrapolated to the EU industry.902  China argues that the increase in exports cited by the 
Commission was equivalent to nearly 4 per cent of the EU market, and was t hus substantial, and had 
it been sold in the EU market, EU producers would ha ve retained most, if not all, of the EU market 
share.903  Moreover, China has submitted to the Panel an  alternative calculation of the EU industry's 
export trends, which it asserts is completely different from that relied upon by the Commission.904  
China asserts that the investigating authority coul d not carry out a proper analysis of whether other 
factors could have caused injury to the domestic industry by assessing such other factors on the basis 
of information relating to a broader group of produc ers than the industry with respect to which the 
injury determination was made.905 
7.435  The European Union responds by asserting that  China speculates about what might have 
happened if all export sales had been made on th e EU market, which was not the case, and notes 
moreover that since the export sales were at higher prices, they would not have been competitive in 
the EU market, where prices were under pressure from dumped imports.906  The European Union 
acknowledges that the data concerning exports on  which the Commission relied was for all EU 
producers, but argues that, in a case where, as here, no interested party raised the issue of export 
performance as an important "other factor", it was reas onable to rely on publicly available data rather 
than seeking company specific data through questionnaires.907  In addition, in response to a question 
from the Panel, the European Union noted its usual practice is to consider macroeconomic factors at 
the industry level, rather than at the company sp ecific level, and that export performance is also 
normally examined at the industry level ra ther than at the company specific level.908  T h e  
European Union further stated that: 
                                                      
901 Definitive Regulation, Ex hibit CHN-4, recital 175. 
902 China, first written submission, paras. 489-492.   
903 China, first written submission, para. 490. 
904 Specifically, China compares the volume of sales by the EU industry on the EU market with data for 
EU industry production and stocks of sampled producers, and calculates that exports declined by almost 50 per cent from 2003 to the investigation period.  China, first written submission, para. 492. 
905 China, second written submission, para. 1007. 
906 European Union, first written submission, para. 663. 
907 In this regard, we note that, in response to ques tions from the Panel, the Eu ropean Union stated that, 
consistent with its usual practice, in this case, th e Commission requested "information relating to sales (both 
domestic and export sales) in the injury questionnaires sent to the sampled producers".  European Union, answer to Panel question 100, para. 37.  Thus, it is clear that the Commission had information on exports for the 
sampled producers, and indeed, it provided an extract from an internal document prepar ed in the course of the 
investigation summarising the verified data of the injury indicators for the sampled producers, including data on exports.  The European Union asserts that this data confir ms both the lack of importance of export sales, and the 
healthy state of export performance, thus demonstrating that export performance could not have been a cause of 
injury.  However, there is no indication in the De finitive Regulation that this information was actually 
considered by the Commission in its analysis, and indeed, the European Union does not assert otherwise. 
908 European Union, answer to Panel question 100, para. 37.  WT/DS397/R 
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 "[s]ince global data for the whole EU  industry was available in COMEXT 
(EUROSTAT) it could be compared with the total Community Industry figure ( i.e. 
PRODCOM 1.431 K MT) to assess its relative importance.  This approach was consistent with the use of  the remaining data quoted under Chapter E. of Council 
Regulation No 91/2009 on causation which was related to total imports from the rest 
of the world and imports from a selected number of countries (Taiwan, Japan, USA). COMEXT statistics are an objective and reliable source of information.  Such use of general statistical information is all the mo re permissible given that this factor does 
not really concern the state of the domestic industry (Article 3.4) but is examined in 
order to evaluate its possible relevance fo r determining the impact of factors other 
than dumped imports (Article 3.5)."
909   
Finally, the European Union disputes China's alte rnative calculation, contending that it compares 
information for the EU industry of 45 producers for sales and production with stocks figures for the sampled producers, which the European Union asserts is clearly incorrect, and that this information 
should therefore not be used.
910 
 
7.436  We note that, while the discussion of export pe rformance is in the section of the Definitive 
Regulation entitled "Effect of other factors", it appears that the Commission did not, in fact, find that export performance was an "other factor which was in juring the domestic industry at the same time as 
dumped imports" within the meaning of Article 3.5 of  the AD Agreement.  However, it is also clear 
that this conclusion was based on information fo r all EU producers of fasteners, and not on 
information related to either the domestic indus try as defined by the Commission, or the sampled 
producers examined in the investigation.  Th e European Union asserts that the Commission's 
consideration of this data on exports was nonetheless permissible, particularly since it was compared 
to data for EU industry production.   
7.437  We do not agree.  It seems clear that a compar ison of data on exports by a larger group of 
producers, including producers not included in the EU industry, with production data for the EU 
industry, will not necessarily give an accurate indication of the export performance of the EU industry.  We recall that, with respect to the evalua tion of the Article 3.4 factors concerning injury, the 
panel in EC – Bed Linen  concluded that:  
"information concerning companies that are not within the domestic industry is 
irrelevant to the evaluation of the "rel evant economic factors and indices having a 
bearing on the state of the industry" required under Article 3.4.  This is true even 
though those companies may presently produce,  or may have in the past produced, 
the like product, bed linen." 
The European Union argues that: 
 
"one cannot simply transpose the EC – Bed Linen  finding in respect of industry 
indicators under Article 3.4 to causation i ndicators under Article 3.5. ... Clearly, since 
the purpose of Article 3.5 is not to evaluate the state of the domestic industry but rather to examine whether the injury allege d to exist is not caused by other factors, 
these other factors may be of a general statistical nature."
911 
However, in our view, this ignores the fundamental pr inciple reflected in the statement of the panel in 
EC – Bed Linen , which in our view is that the analysis of injury to the domestic industry should rest 
                                                      
909 European Union, answer to Panel question 100, para. 37. 
910 European Union, first written submission, para. 666. 
911 European Union, answer to Panel question 99, paras. 34-35. WT/DS397/R 
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 on information related to that industry, and not so me other group of producers.  We see no reason why 
the same fundamental principle should not be adhere d to in the context of analysis of causation, 
including the examination of other factors which may be causing injury to the domestic industry at the 
same time as imports.912  It is undisputed that the Commission's conclusions with respect to export 
performance rest on consideration of information fo r a broader group of producers than the domestic 
industry as defined by the Commission in this investigation.    7.438  We therefore conclude that, by relying on in formation concerning producers not part of the 
domestic industry in considering whether exports of  the EU industry may have contributed to the 
injury suffered by the industry, the European Union failed to undertake an objective examination of 
the relevant facts in concluding that the export perfo rmance of the domestic industry was not a source 
of material injury to the EU industry.  Thus, we consider that its conclusion concerning the effect of 
other factors is, in this respect, inconsistent  with Articles 3.1 and 3.5 of the AD Agreement.
913 
11. Claims regarding alleged procedural violations 
(a) Introduction 
7.439  China raises a series of claims  of violation with respect to  the conduct of the fasteners 
investigation.  While it argues these claims separate ly, there is a significant degree of overlap in its 
assertions, and in the factual situations it asserts dem onstrate the violations alleged.  The relevant 
provisions under which violations are asserted are Articl es 6.1.1, 6.2, 6.4, 6.5, 6.9, 12.2 and 12.2.2 of 
the AD Agreement.  We examine ea ch of China's claims below. 
(b) Whether the European Union violated Articles 6.5, 6.2 and 6.4 of the AD Agreement by 
failing to disclose the identity of domestic producers  
(i) Arguments of the Parties 
China  
7.440  China contends that the Commission did not discl ose the identity of the complainants and the 
supporters of the complaint914, treating this information as confidential on the grounds that its 
                                                      
912 We do not preclude the possibility that information for all producers might, in some circumstances, 
be an appropriate proxy for information specific to the domestic industry at issue, for instance where 
information for the industry is not available or not provided.  However, in such a situation, we would consider it 
imperative that the investigating authority explain why, in the particular case, it considers reliance on information to be appropriate, and how any weaknesses in the information have been taken into account. 
913 We note that we do not consider it appropriate to consider the information on export volumes and 
trends submitted by China, as China calculated export information for the EU industry by subtracting data for sales by the entire EU industry from data for productio n by the entire EU industry, and comparing the result 
with data for inventories reported by the seven sampled producers, to derive the proffered data on exports.  We 
consider this comparison improper, and that the resu lting information on exports constitutes an inappropriate 
basis for analysis in this case.  Moreover, it is clear, an d China does not argue otherwise, that no arguments in 
respect of such information were made before the investigating authority.  Similarly, we decline to consider the 
information submitted by the European Union in response to questioning by the Panel on this issue.  While it appears this information was in the record of the inves tigating authority, there is no indication in the Definitive 
Regulation that it was considered by the Commission, and the Definitive Regulation itself, as explained by the 
European Union, indicates that it did not.  We do not co nsider it appropriate to eval uate whether other data, not 
referred to by the Commission, could have been the basis of the determination actually made.  In our view, to do 
otherwise would require us to engage in de novo  consideration of the eviden ce, which we are precluded from 
undertaking, pursuant to the standard of review in Article 17.6(i). 
914 Although initially China also seemed to take issue with the non-disclosure of the volume of 
production of the subject product by the complainants and the supporters of the complaint, it subsequently  WT/DS397/R 
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 disclosure could lead to retaliation from complain ants' and supporters' customers who import the 
subject product from China.  The identity of comp lainants is, in China's view, essential information 
that an application must contain.  China first clai ms that the European Uni on's failure to disclose the 
identity of the complainants and supporters of the complaint constitutes a violation of Article 6.5 of 
the AD Agreement.  China maintains that a clai m of "potential commercial retaliation" does not 
amount to "good cause" being shown for confidential treatment within the meaning of Article 6.5 of 
the AD Agreement.  In China's view, the argument  presented by the complainants and the supporters 
of the complaint that disclosure of their identity may  trigger commercial retaliation by their customers 
referred to a hypothetical detrimental effect and di d not establish "good cause".  Further, China asserts 
that the companies that were included in the sample  for the Commission's injury determination did not 
request that the Commission keep their identity confidential.  Sin ce the sampled companies were all 
also complainants or supporters of the complaint,  China contends that the fact that confidential 
treatment of their identities was not required during the investigation shows that the ground on which 
they sought confidential treatment for their identit y at the time of the complaint, namely "potential 
commercial retaliation", was not "good cause" w ithin the meaning of Article 6.5 of the 
AD Agreement.  China also argues that the complain ants and the supporters of the complaint did not 
submit evidence to support their claim of potential commercial retaliation.  As China sees it, good 
cause cannot be established on the basis of allegatio ns or conjecture but must be based on evidence.915   
7.441  China argues that the identity of  the complainants constitutes rele vant information used by the 
authorities in an investigation.  Failure to disclose that information therefore also violated Article 6.4 
of the AD Agreement, which requires that interest ed parties be given timely opportunities to see all 
non-confidential information which is used by the au thorities and which is relevant to the preparation 
of their cases.  China is of the view that a violati on of the obligation set forth in Article 6.4 necessarily 
leads to a violation of Article 6.2, and that therefor e, by not disclosing the identity of the complainants 
and the supporters, the European Union also act ed inconsistently with Article 6.2 of the 
AD Agreement.  Independently from this, China ma intains that the Commission violated Article 6.2 
since the non-disclosure of the identity of the comp lainants and supporters deprived the Chinese 
exporters of an opportunity to review the information on standing and to make comments.916 
European Union  
7.442  The European Union notes that although in the h eading and the introductory part of this claim 
China refers to Article 6.5.1 of the AD Agreement, along with the chapeau of Article 6.5, it develops 
the claim essentially on the basis of the latter.  Th e European Union therefore considers China to have 
dropped the Article 6.5.1 aspect of this claim.917  With respect to the claim under Article 6.5, the 
European Union notes that China seems to accept that in principle the identity of complainants can be 
treated as confidential information within the meani ng of Article 6.5, but asserts that in this case no 
good cause was shown for such treatment .  According to the European Union, any detrimental effect 
that may result from the disclosure of busine ss confidential information is by definition 
hypothetical.918  It is, in the European Union's view, impo ssible to predict with any degree of certainty 
the consequences of disclosing confidential informati on.  The European Union, therefore, disagrees 
with China's contention that there had to be compelling evidence to show the existence of commercial 
retaliation from the customers of the complainants and the supporters of the complaint in the fasteners 
investigation.919  The European Union posits that potentia l commercial retaliation constitutes "good 
                                                                                                                                                                     
clarified that this claim was limited to the non-disclosure of the identity of the complainants and the supporters 
of the complaint.  China, second written submission, para. 1049. 
915 China, second written submission, para. 1052. 
916 China, first written submission, para. 545. 
917 European Union, first written submission, para. 711. 
918 European Union, first written submission, para. 715. 
919 European Union, first written submission, para. 715. WT/DS397/R 
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 cause" within the meaning of Article 6.5.  There was,  in the European Union's view, a serious risk that 
customers importing fasteners from China whose cost s would have gone up with the imposition of an 
anti-dumping measure on fasteners from China w ould retaliate against the complainants and 
supporters.920  The European Union also disputes Chin a's assertion that the sampled EU producers 
whose identity was disclosed were  themselves complainants or supporters of the complaint, 
maintaining that this assertion has no factual basis.921 
7.443  As regards China's claims under Articles 6.4 and 6.2, the European Union submits that these 
claims fall outside the Panel's terms of reference because China's panel request makes no reference to the identity of the complainants in connection with these two provisions.
922  The European Union 
notes that the panel request refers to "the composition of the domestic industry", but argues that this is 
not the same as "the identity of the complainants".923  Assuming China's clai ms under Articles 6.4 and 
6.2 are within the Panel's terms of reference, the European Union argues that , with the exception of 
the independent claim under Article 6.2, these two cl aims are purely consequential to China's claim 
under Article 6.5.  According to the European Union, since there is no violation of Article 6.5, there should be no violation of Articles 6.4 or 6.2 eith er.  Assuming that the Panel finds a violation of 
Article 6.5, the European Union disagrees that this would necessarily lead to a violation of 
Articles 6.4 and 6.2 of the Agreement without further examination.
924  While recognizing the inter-
linkages between the different paragraphs of Article  6, the European Union contends that each such 
paragraph contains distin ct rights and obligations.925  With respect to China's independent claim under 
Article 6.2, the European Union contends that Ch ina ignores the third sentence of Article 6.2, which 
excludes confidential information from the scope of th e right conferred upon interested parties in that 
provision.  Therefore, argues the European Union, this claim is also depe ndent on China's claim under 
Article 6.5, and even if the Panel finds this claim to be within its terms of reference, it should be 
rejected on substance.926 
(ii) Arguments of Third Parties 
Chile  
7.444  Chile submits that a correct application of Article 6.5 of the AD Agreement requires that the 
reason for the disclosure of confidential information must be known by the interested party that has 
submitted the information.  According to Chile, wher e the investigating authorities determine that the 
request for confidentiality is not warranted, they mu st expressly so state.  Chile considers that the 
disclosure of information considered by the auth ority to be non-confidential must be properly 
substantiated and expressly authorized by the part y submitting the information.  Not so doing would 
violate that party's due process rights. 
(iii) Evaluation by the Panel 
7.445  China's claim consists of several distinct alle gations.  China argues that confidential treatment 
of the identities of the complainan ts and the supporters of the complaint violated Article 6.5 of the 
                                                      
920 European Union, first written submission, para. 716. 
921 European Union, first written submission, paras. 717-718. 
922 The European Union's terms of reference objection in this regard applies both to the claims under 
Articles 6.2 and 6.4 that the European Union characterizes as being dependent on a finding of inconsistency 
with Article 6.5 and to the independent claim under Arti cle 6.2.  European Union, first written submission, 
para. 724. 
923 European Union, first written submission, para. 720. 
924 European Union, first written submission, paras. 721-723. 
925 European Union, answer to Panel question 62. 
926 European Union, first written submission, para. 724.  WT/DS397/R 
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 AD Agreement.927  Since, according to China, the identity  of the complainants and the supporters was 
not confidential information within the meaning of Article 6.5, withholding that information from 
access by the Chinese producers also vi olated Article 6.4 of the AD Agreement.  In China's view, any 
violation of Article 6.4 necessarily leads to a violation of Article 6.2.928  Thus, submits China, by not 
disclosing the identity of the complainants and suppor ters, the Commission also violated Article 6.2.  
This allegation of a violation of Ar ticle 6.2 is dependent on a finding of  violation of Article 6.4.  In 
addition, China maintains that the Commission violat ed Article 6.2 because by treating the identity of 
the complainants and supporters as confidential in formation, the Commission  deprived the Chinese 
producers of the opportunity to examine whether the standing requirements were met.929   
7.446  The European Union argues that China's clai ms under Articles 6.4 and 6.2 are outside our 
terms of reference because China's panel request does not refer to these two provisions in connection 
with the non-disclosure of the identity of the comp lainants and supporters.  China objects to this 
assertion and submits that its panel request does rais e a claim under Articles 6.4 and 6.2 with respect 
to the non-disclosure of the identity of the compla inants and supporters.  In this regard, China 
contends that its panel request not  only raises this claim but also goes further and identifies some of 
the arguments supporting the claim.  According to  China, however, such arguments do not limit the 
scope of the claim raised in the panel request.  Fu rther, China contends that the European Union has 
not shown that the alleged procedural deficiency in China's panel request prejudiced its ability to 
defend itself in these proceedings.930 
7.447  We note that the central element of China's clai m is an alleged violation of the chapeau of 
Article 6.5 of the AD Agreement.  China conte nds that the Commission erred in treating as 
confidential information the identity of the complain ants and the supporters of the complaint.  With 
respect to its claims under Articles 6.4 and 6.2, Ch ina disagrees with the European Union's contention 
that these claims are dependent on China's claim under Article 6.5.931  We agree with China that these 
claims do not seem to be dependent on the claim under Article 6.5 in the sense that China does not 
argue that since Article 6.5 was violated Articles 6. 4 and 6.2 were also violated.  However, we note 
that both Articles 6.4 and 6.2 exempt confidential information from the scope of the rights that they confer upon interested parties in an investigation.  Article 6.4 gives interested parties the right "to see 
all information that is relevant to the presentation of their cases, that is
 not confidential  as defined in 
paragraph 5". (emphasis added)  Article 6.2 which con cerns the interested parties' right to defend their 
interests, and to that end meet other interested parties, provides, in its third sentence, that the 
"[p]rovision of such opportunities must take account of the need to preserve 
confidentiality [.]"(emphasis added)  Thus, the rights of interested parties set forth in these two 
provisions do not apply to confidential information.  It follows that to find a violation of Articles 6.4 
and 6.2, we necessarily have to find a violation of Article 6.5, which would mean that the identity of 
the complainants and the supporters should not have been treated as confidential information.  It is 
only if that information was wrongly treated as conf idential that we can engage in a substantive 
analysis of China's claims under Articles 6.4 and 6.2.   In this regard, we recall that China raises two 
allegations of violation of Article  6.2, one as a dependent claim on a violation of Article 6.4 and one 
independently, on the basis that by treating the id entity of the complainants and the supporters as 
confidential information the Commission precluded the Chinese producers from examining properly whether the standing requirements were met in the fasteners investigation.  We note that finding a 
violation of Article 6.2 in the context of China's claim under Article 6.2 which it characterizes as 
being independent from a violation of Article 6.4, would also require a prior finding, in connection 
with the claim under Article 6.5, that the identity of the complainants and the supporters was wrongly 
                                                     
 
927 China, second written submission, para. 1047. 
928 China, first written submission, para. 544. 
929 China, first written submission, para. 545;  China, second written submission, para. 1070. 
930 China, second written submission, paras. 1057-1064. 
931 China, second written submission, para. 1067. WT/DS397/R 
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 treated as confidential information.  In this re gard, we see no difference between China's dependent 
and independent claims under Article  6.2.  Consequently, we will st art our evaluation with the claim 
under Article 6.5.  If we find that the Commission did not err in treating the information at issue as 
confidential and that therefore there was no violation of Article 6.5, we will also find that Articles 6.4 
and 6.2 were not violated either.  We recall, howev er, the European Union's argument that the claims 
under Articles 6.4 and 6.2 are not within our terms of reference.  Therefore, we will only reject 
China's claims under these two provisions if we find them  to be properly before us.  Conversely, if we 
find that the Commission's treatment of this informat ion violated Article 6.5, we will go on to address 
the European Union's preliminary objection, and assuming we conclude that the claims under 
Articles 6.4 and 6.2 are within our terms of refe rence, will assess China's cl aims in light of the 
specific rights and obligations set out in these two provisions. 
7.448  With these considerations in mind, we now turn to China's claim under Article 6.5.932  W e  
note that the facts pertaining to this claim are unc ontested.  The complaint requesting the initiation of 
the investigation at issue requested not to disclose the identity of the complainants in order to avoid 
potential retaliation which could be caused by some  of their customers who also buy fasteners 
imported from China.  The complaint reads, in relevant parts: 
"The Complainants and the Supporters have  expressed the willing [sic] not to have 
their names published, to avoid a potential retaliation which could be carried out by 
some of their Customers who also buy products directly from P.R. China . 
A non-confidential summary cannot be sub sequently given without disclosing the 
name of the complainants and the Supporters."933  (emphasis added) 
7.449  The Commission accepted this request for confid entiality and conveyed its decision to the 
Chinese producers who had questioned the Commission on the complainants' identity.934  T h e  
disagreement between the parties relates to whet her or not potential commercial retaliation from 
customers constitutes good cause within the meaning of  Article 6.5 of the AD Agreement, justifying 
the treatment of the information as confidential. 
7.450  The chapeau of Article 6.5 of the AD Agreement reads: 
"6.5 Any information which is by nature  confidential (for example, because its 
disclosure would be of significant competitiv e advantage to a competitor or because 
its disclosure would have a significantly adverse effect upon a person supplying the 
information or upon a person from whom that  person acquired the information), or 
which is provided on a confidential basis by  parties to an investigation shall, upon 
good cause shown, be treated as such by the au thorities.  Such information shall not 
be disclosed without specific permissi on of the party submitting it."  (footnote 
omitted) 
7.451  We note that Article 6.5 addresses the treatment of information submitted to the investigating 
authorities in an anti-dumping investigation by inte rested parties for which confidential treatment is 
sought.  It states that information which is by nature confidential or which is submitted on a 
confidential basis must be treated as confidential by the investigating authorities provided good cause 
                                                      
932 China's claim only relates to the chapeau of Article 6.5 and does not extend to Article 6.5.1.  China, 
first written submission, para. 1050. 
933 Exhibit CHN-15, p. 5. 
934 The relevant communication from the Commission states that "[t]he Commission services have 
accepted this request from these interested parties in orde r to avoid eventual adverse commercial consequences".  
Exhibit CHN-44, p. 1.  WT/DS397/R 
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 is shown.  It also provides that such informati on cannot be disclosed without specific permission from 
the party submitting the information.  We note th at it is now well establis hed that the good cause 
requirement for confidential treatment applies both to information that is by nature confidential and to 
information submitted on a confidential basis.935  Thus, whether the identity of the complainants and 
the supporters was by nature confidential or was submitted on a confidential basis is not relevant to 
our analysis.  Article 6.5 does not, however, explain what "good cause" means.  In our view, this is 
something that has to be assessed by the investigati ng authorities in light of the circumstances of each 
investigation and each request for confidential treat ment.  We also consider that what constitutes 
"good cause" will depend on the nature of the inform ation at issue for which confidential treatment is 
sought.936  The "good cause" alleged to exist, in tu rn, will determine the kind of supporting evidence 
that may be needed in order to demons trate the existence of  such "good cause". 
7.452  We recall that in this dispute the core of the disagreement between the parties is whether 
"potential commercial retaliation" constitutes good cause to justify confidential treatment of the 
identity of the complainants and the supporters of the complaint.  On its face, we see nothing in 
Article 6.5 that would exclude potential commercia l retaliation from constitutin g good cause for the 
confidential treatment of any information, including the identity of the complainants.  China does not 
contest the factual assertion that some of the custom ers of the complainants and the supporters of the 
application also bought the subject product from Chinese producers.  The complaining EU producers 
asserted that they feared commercial retaliation.  We understand this assertion to imply that if such 
customers found out that these producers had requested the initiation of an anti-dumping investigation 
on fasteners from China, this might have the effect of  raising prices on such fasteners, and thus raising 
the costs of these customers.  China has not proffere d any evidence, or even argued, that this assertion 
was unfounded, unreasonable, or untrue.  China me rely argues that the potential retaliation was 
"hypothetical", something that "could" happen, but that there was no evidence that it "would" happen.  
We recall that in elucidating what may constitute  information that is by nature confidential, 
Article 6.5 refers to, inter alia , situations where the disclosure of the information "would have a 
significantly adverse effect upon a person supplying the information or upon a person from whom that 
person acquired the information".  We can certainly  see that "potential commercial retaliation" from 
the complainants' customers who, in addition to buying the subject product from the complainants, 
also purchase imports from the country subject to the complaint, might have a "significantly adverse effect" upon the complainants.   
7.453  China argues that the Commission erred by ma king its decision without any evidence that 
showed the existence of the alle ged potential commercial retaliation.
937  It is clear that the only 
"evidence" before the Commission was the complaint, which alleged that the disclosure of the identity 
of the complainants could trigger commercial reta liation from their customers who also bought the 
subject product from China.  The Commission relied on this statement, although there is no indication 
that the complainants submitted evidence to support th eir concern in this regard.  However, in the 
circumstances of this investigation, we do not consider this to be a fatal lack of evidence.  First, in our 
view, "potential commercial retaliation" is not a su fficiently concrete phenomenon that evidence of its 
existence is likely to be obtainable.938  Thus, unless there is some reason to believe that the fear of 
                                                      
935 Panel Report, Korea – Certain Paper , para. 7.335;  Panel Report, Guatemala – Definitive Anti-
Dumping Measures on Grey Portland Cement from Mexico ("Guatemala – Cement II "), WT/DS156/R, adopted 
17 November 2000, DSR 2000:XI, 5295, para. 8.219. 
936 Panel Report, Korea – Certain Paper , para. 7.335;  Panel Report, Mexico – Steel Pipes and Tubes , 
para. 7.378. 
937 China, second written submission, paras. 1052-1053. 
938 We do not exclude the possibility of there being some situation in which such an allegation can be 
substantiated by some more concrete evidence than the testimony of the party seeking confidential treatment for 
the information that it submits.  However, it is difficult to conceive of what such evidence might be – the likelihood of complainants being able to produce a written document, or an audio recording, of a customer 
threatening commercial retaliation seems far-fetched, and yet in the absence of such  evidence, we do not see WT/DS397/R 
Page 190 
 
 
 retaliation is unreasonable, unfounded, or untrue – a nd China has proffered none – we consider that 
the allegation of the complainants in this case is a sufficient basis for the Commission's conclusion.  
We note in this regard that, in our view, the pur pose of granting confidential treatment as provided for 
in Article 6.5 is precisely to make sure that a f eared adverse effect, in this case "potential commercial 
retaliation", remains hypothetical, and does not actually  materialize.  Second, we note that in this 
investigation the basis for treating the identity of  the complainants as confidential was not a mere 
assertion by the complainants that disclosing their identity would cause retaliation.  The record shows 
that, by stating that their customers were also th emselves importers of the subject product from China, 
the complainants substantiated their assertion to a certain degree by explaining the circumstances 
which they thought showed that commercial retali ation could happen.  We therefore disagree with 
China's contention that the "potential commercia l retaliation" alleged by complainants did not 
constitute good cause within the meaning of Article 6.5.    
7.454  China argues that the seven EU producers that made up the sample for purposes of the 
Commission's injury determination were also compla inants and supporters and that they did not ask 
the Commission to treat their identity as conf idential information during the course of the 
investigation after initiation.  This, in China's view , shows that there was no logical reason to keep the 
identity of these companies confid ential at the complaint stage.939  In our view, however, the fact that 
the names of the companies that made up the sa mple for purposes of the injury analysis were 
disclosed does not affect the analysis with respect to the confidential treatment of the names of the 
complainants and supporters.  The sampled comp anies can clearly be identified as cooperating, 
otherwise they would not have been included in th e sample, but this is not necessarily the same as 
being identified as complainants themselves, and t hus might not cause the same concerns for those 
companies.940  We are therefore not convinced by this argument. 
7.455  Based on the foregoing, we conclude that the Commission did not err in granting the request 
of the complainants and the supporters of the comp laint to treat their identities as confidential, and 
therefore reject China's claim under Article 6.5.941 
7.456  We now turn to China's claims under Articles 6.4 and 6.2 of the AD Agreement.  We recall 
that the European Union argues that  these claims are outside our terms of reference because they were 
not identified in China's panel request consistently w ith the requirements of Article 6.2 of the DSU.  
The European Union argues that the panel request does not refer to the non-disclosure of the identity 
of the complainants in the list of the claims unde r Articles 6.2 and 6.4.  The European Union notes 
that in this particular section the panel request refers to "the composition of the domestic industry" but 
maintains that this issue is addressed in a diffe rent section of China's first written submission.942  
China disagrees, arguing that the European Union mix es claims with arguments.  China maintains that 
it raised a claim under Articles 6.4 and 6.2 of th e AD Agreement arguing, as indicated in its panel 
request, that the Commission failed to give the Chinese exporters timely opportunities to see all 
relevant information that was relevant to the pr esentation of their cases and the opportunity to defend 
                                                                                                                                                                     
what could be proffered as evidence to support a fear of such retaliation, and China has made no suggestions or 
argument in this regard. 
939 China, first written submission, paras. 537-538. 
940 We recall, moreover, that at least one company included in the sample was not, in fact, either a 
complainant or supporter of the complaint.  See paragraph  7.214 above. 
941 That said, however, we would like to underline that our finding only reflects our view on this issue 
in light of the particular circumstances of the fasteners i nvestigation.  Our reasoning should not be interpreted as 
giving investigating authorities carte blanche  to treat the identities of all complainants in all anti-dumping 
investigations as confidential.  Nor should our conclusion here be interpreted to mean that an asserted fear of 
potential commercial retaliation would always be sufficient, of itself, to justify confidential treatment, or could 
not be challenged as unfounded, unreasonable, or untrue. 
942 European Union, first written submission, para. 720.  WT/DS397/R 
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 themselves.943  China contends that it then went on and gave examples as to how these obligations 
were violated.  According to Chin a, the fact that China added argu ments as to how the specific rights 
and obligations found in Articles 6.4 and 6.2 were  violated by the Commission does not narrow the 
scope of these claims so as to justify the conclusion that they do not extend to the non-disclosure of 
the identity of the complainants and supporters.944  Furthermore, China submits that the phrase 
"including, but not limited to" used in the panel re quest in connection with these claims shows that 
China intentionally submitted a non-exhaustive list of arguments in support of these claims.945  
Finally, China posits that the Panel should reject  the European Union's terms of reference objection 
since the European Union failed to show that its due process rights were prejudiced by this alleged 
deficiency in China's panel request.946 
7.457  We recall that in line with the legal framework outlined above947, in assessing the 
European Union's terms of reference objection, we mu st consider China's panel request, in its entirety, 
to see whether a claim has been ra ised under Articles 6.4 and 6.2 of the AD Agreement with respect to 
the non-disclosure of the identity of the complainants  and the supporters of the complaint.  We note 
that the European Union's objec tion only concerns whether the panel request provides a brief 
summary of the legal basis for a claim under Articles 6.4 and 6.2 with respect to the non-disclosure of 
the identity of the complainants and supporters.  The panel request provides, in relevant part: 
"China submits that this measure is in consistent, at least, with the following 
provisions of the AD Agreement  and of the GATT 1994 : 
... 
Articles 6.2 and 6.4 of the AD Agreement  and paragraph 151 (c)(e) of the Working 
Party Report on the Accession of China  because the EC failed to ensure throughout 
the investigation to Chinese producers/exporte rs the full opportunity for the defence 
of their interests and failed to provide timely opportunities for them to see all 
information that is relevant to the presentation of their cases, including, but not 
limited to the composition of the domestic industry , data concerning normal value 
determination, information on the adjustments for differences affecting price comparability, Eurostat data on the basis of  which are based the total EC production 
and EC consumption figures[]"  (underline emphasis added) 
7.458  We note that the request clearly refers to Articles 6.4 and 6.2 of the AD Agreement and 
argues that the Commission failed to give the Ch inese exporters full opportunity for the defence of 
their interests and timely opportunities to see all the information that was relevant to the presentation 
of their cases, throughout the fasteners investigation.  We also note that this  explanation repeats the 
text of Articles 6.4 and 6.2, which provide, resp ectively, that "[t]he authorities shall whenever 
practicable provide timely opportunities for all interested  parties to see all information that is relevant 
to the presentation of their cases[]" and that  "[t]hroughout the anti-dumping investigation all 
interested parties shall have a full opportunity for th e defence of their interests".  In our view, this 
made it clear that China sought to bring a claim rega rding an alleged violation of the obligations set 
forth in Articles 6.4 and 6.2 in the fasteners inve stigation.  China's panel request goes further, 
however, and contains more specific explanations as to the factual circumstances in which Articles 6.4 and 6.2 were allegedly violated in the fasteners investigation.  Thus, the panel request 
asserts that Articles  6.4 and 6.2 were violated, inter alia , in connection with the composition of the 
                                                     
 
943 China, second written submission, para. 1060. 
944 China, second written submission, paras. 1059-1061. 
945 China, second written submission, para. 1063. 
946 China, second written submission, para. 1064. 
947 See paragraph 7.15 above. WT/DS397/R 
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 domestic industry, data concerning normal value determination, information on the adjustments for 
differences affecting price comparability, and Euro stat data on the basis of which the total EC 
production and EC consumption figur es were calculated.  These specific explanations are preceded by 
the phrase "including, but not limited to".  Having reviewed China's panel request, we agree with 
China that the more specific explanations provide d cannot be interpreted as limiting the scope of the 
claims under Articles 6.4 and 6.2 of the AD Agreemen t.  In our view, the nature of the rights and 
obligations set forth in Articles 6.4 and 6.2 is such  that a reference to these provisions, without further 
explanation, could suffice to put the responding Member on notice of the nature of the claim that the complainant might bring.  We therefore find China's claims under Articles 6.4 and 6.2 of the 
AD Agreement with respect to the non-disclosure of the identity of the complainants and the 
supporters of the complain t are properly before us. 
7.459  Turning to the substance of China's claims, we recall our observation above
948, that the 
obligations in Articles 6.4 and 6.2 of the AD Ag reement do not apply to information which is 
confidential within the meaning of Article 6.5 of  the AD Agreement.  Having concluded that the 
Commission did not err in treating the information as confidential, it is clear that there can be no 
violation under Articles 6.4 and 6.2 in the non-disclos ure of that information.  We therefore reject 
China's claim of violation of Articles 6.4 and 6.2 in  connection with the non-disclosure of the identity 
of the complainants and the supporters of the complaint. 
(c) Whether the European Union violated Articles 6.2, 6.4, 6.5 and 6.9 of the AD Agreement by 
failing to disclose aspects of the normal value determination  
(i) Arguments of the Parties 
China  
7.460  China argues that the Commission violated its procedural obligations under Articles 6.2, 6.4 
and 6.9 of the AD Agreement in connection with its dumping determination.  First, China argues that 
the Commission acted inconsistently with the requirements of Articles 6.4 and 6.2 of the 
AD Agreement by failing to disclose information concerning the product types used in the 
determination of normal value.  China contends that  it was in the General Di sclosure Document that 
the Commission informed the Chinese producers for the first time that normal value for the Indian 
producer was calculated on the basis of product t ypes.  However, China maintains that despite 
repeated requests from the Chinese producers, th e Commission did not explain what those product 
types were.  According to China, it was only one working day before the d eadline for comments on 
the General Disclosure Document that the Commi ssion informed the Chinese producers that the 
normal value had not been calculated on the basis of PCNs.  China asserts that by remaining silent despite Chinese producers' repeated  requests for information on the product types, the Commission 
violated the obligations set forth in Article 6. 4 of the AD Agreement.  China argues that the 
information on product types was used by the Commi ssion, was relevant to the preparation of the 
Chinese producers' cases and was not confidential.  Therefore, argues China, the Chinese producers 
should have been allowed to see this information.  Ch ina also submits that by refusing to provide this 
information the Commission also violated the more general due process obligation set out in Article 6.2 of the AD Agreement.
949   
7.461  Second, China submits that the Commission violated Article 6.4, and therefore also 
Article 6.2, of the AD Agreement by failing to di sclose information on normal value calculations.  
China argues that the Chinese producers sought to obta in information on normal value determinations 
                                                      
948 See paragraph 7.455 above. 
949 China, first written submission, para. 565.  WT/DS397/R 
 Page 193 
 
 
 during the investigation at issue.950  China asserts that the Commissi on failed to disclose information 
on normal values calculated for each product type, a nd the calculations as to whether each product 
type was sold in representative qua ntities in the Indian market.951  China argues that through these 
violations, the Commission made it impossible fo r the Chinese producers to properly defend their 
interests in the investigation at issue.   
7.462  Third, China argues that the Commission violat ed Articles 6.4 and 6.2 of the AD Agreement 
by failing to disclose information regarding th e comparison between the normal value and export 
price.  China maintains that despite repeated requests from th e Chinese producers, the Commission 
refused to provide information on the adjustments th at were made.  Specifically, China argues that the 
Commission did not provide any information on how the distinction between standard and special 
fasteners was made and how the adjustment for quality control costs was made.952  In the absence of 
this information, argues China, it was impossi ble for the Chinese producers to challenge the 
Commission's normal value determinations and dumping calculations.953   
7.463  Fourth, China maintains that as a result of these th ree violations, that is by failing to provide 
information on product types, normal value determ inations and the comparison between the normal 
value and the export price, the Commission also viol ated Article 6.9 of the AD Agreement.  In this 
regard, China argues that these thr ee pieces of information constitute "facts" that established the basis 
of the European Union's decision as to whether or not definitive anti-dumping measures should be 
applied, and should therefore have been disclosed  to the Chinese producers pursuant to Article 6.9.954 
European Union  
7.464  In response to China's claims under Article s 6.4 and 6.2 of the AD Agreement, the 
European Union generally notes that China bases th ese claims on the disclosure documents issued by 
the Commission.  The European Union contends, however, that these disclosure documents are 
susceptible to scrutiny under Article 6.9 of the AD Agreement, not Articles 6.4 or 6.2.955  With regard 
to China's first  claim, the European Union argues that this claim is not within the Panel's terms of 
reference because China's panel request refers to "data concerning normal value determination", not to 
"product types for the normal value calculation".956  Assuming this claim is within the Panel's terms of 
reference, the European Union argues that China' s claim should be rejected.  The European Union 
notes that in connection with this claim, China refers to the relevant parts of the Definitive 
Regulation, certain disclosure documents and correspondence between the Commission and a law 
firm representing Chinese producers.  According to the European Union, the Definitive Regulation 
cannot be challenged under Articles 6.4 and 6.2 in th is context, although it could have been (but was 
not) challenged under Article 12 of the AD Agreement.  Therefore, that part of China's evidence is 
irrelevant.957  As to the disclosure documents and th e correspondence between the Chinese producers 
and the Commission, the European Union argues that those could in theory only be evidence of an 
alleged violation of Article 6.9 of  the AD Agreement, but not of alleged violations of Articles 6.4 
or 6.2.  In any case, argues the European Union,  the evidence submitted by China shows that the 
Chinese producers had the opportunity to see all the relevant information wh ich was not confidential 
                                                      
950 China, answer to Panel question 64, para. 279;  Ch ina, answer to Panel question 101, paras. 41-42. 
951 China, first written submission, para. 568. 
952 China, first written submission, para. 576. 
953 China, first written submission, para. 578. 
954 China, first written submission, para. 586. 
955 European Union, first written submission, paras. 707 and 726. 
956 European Union, first written submission, para. 725. 
957 European Union, first written submission, para. 726. WT/DS397/R 
Page 194 
 
 
 and which was relevant to the presentation of their cases.958  There can therefore be no violation of 
Articles 6.4 or 6.2 of the AD Agreement in this regard.   
7.465  With regard to China's second claim, the Eur opean Union posits that given the amount of 
information provided in the Definitive Regulation, China's claims under Articles 6.4 and 6.2 of the 
AD Agreement should be rejected.  The European Union argues that the pieces of evidence on which 
China bases its claims, namely the General and I ndividual Disclosure Documents, fall within the 
scope of the obligation set forth in Article 6.9 of the AD Agreement, not Articles 6.4 or 6.2, because 
these two provisions do not impose an active notifi cation obligation on the investigating authorities.959  
The European Union contends that the General Di sclosure Document contained enough information 
on the Commission's normal value determination.  According to the Europ ean Union, since the 
information on the normal values of the Indian producer was treated as confidential under Article 6.5 of the AD Agreement, a decision China has not ch allenged, China's claim under Article 6.2 fails, 
because the obligation under this provision do es not apply to confidential information.
960   
7.466  Regarding China's third claim, the European Union notes that China bases this claim on the 
disclosure documents which, according to the Europ ean Union, are susceptible to a challenge under 
Article 6.9 of the AD Agreement, not Articles 6.4 or 6.2.961  Further, the European Union submits that 
the information on the comparison between the nor mal value and the export price was treated as 
confidential information by the Commission, a decisi on China has not challenged, and is therefore not 
within the scope of the obligation under Articles 6.4 and 6.2.962  The European Union also argues that 
China's factual description with regard to th is claim is incomplete and inaccurate.   
7.467  In response to China's fourth claim, con cerning Article 6.9 of the AD Agreement, the 
European Union asserts that this claim is not within  the Panel's terms of reference, because China has 
failed to consult on this claim, and it is not proper ly identified in China's panel request.  According to 
the European Union, as far as alleged procedural violations were concerned, the essence of the 
consultations was an alleged failu re to provide access to the file a nd an alleged violation of the 
confidentiality rules.  The European Union main tains that the disclosure obligations were not 
discussed in the consultations.963  If the Panel is of the view that th is claim does fall within its terms of 
reference, the European Union contends that Chin a's argument is limited to  providing a summary of 
the obligation set forth in Article 6.9, and that China has thus failed to demonstrate a prima facie 
violation of this provision.964 
(ii) Arguments of Third Parties 
Norway  
7.468  Norway contends that the requirements of Ar ticles 6.4 and 6.9 of the AD Agreement also 
serve to achieve the purpose of Article 6.2, namely  to enable interested parties to defend their 
interests.  Norway therefore subm its that whenever an investigating authority violates Articles 6.4 or 
6.9 of the AD Agreement, it also violates Article 6.2.  With respect to Article 6.4, Norway argues that 
whether a particular document is relevant to an in terested party's defence should be assessed from the 
point of view of that party, not that of the investigating authorities.  Norway asserts that the only exception to this is confidential information whic h, if submitted, has to be accompanied by a non-
confidential summary.  With respect to Article 6.9, Norway maintains that the obligation set forth in 
                                                     
 
958 European Union, first written submission, para. 726. 
959 European Union, first written submission, paras. 735-736. 
960 European Union, first written submission, para. 738. 
961 European Union, first written submission, para. 739. 
962 European Union, first written submission, para. 741. 
963 European Union, first written submission, para. 744. 
964 European Union, first written submission, paras. 746-747.  WT/DS397/R 
 Page 195 
 
 
 this provision is not to disclose all facts, but tho se facts which establish the basis of the authorities' 
decision whether definitive measures will be applie d.  This obligation, argues Norway, cannot be 
fulfilled by giving access to all the files in the inves tigation file.  Rather, the investigating authorities 
should identify the facts that establish the basis of  the decision whether definitive measures should be 
imposed. 
United States  
7.469  The Unites States agrees with China's conten tion that Article 6.4 of the AD Agreement 
requires the investigating authorities to provide access to all non-confidential information submitted 
during an investigation.  The United States also  agrees that not doing so would violate not only 
Article 6.4 but also Article 6.2 of the AD Agreemen t, since without access to information described in 
Article 6.4 interested parties cannot have a fu ll opportunity to defend their interests.  The 
United States maintains that an interested party's ri ght to defend its interests is particularly important 
with respect to information pertaining to normal values and the comparison between the normal value 
and the export price.  The Unites States asserts that  without access to such information an interested 
party cannot be said to have benefited from th e right to defend its interests as required under 
Article 6.2. 
(iii) Evaluation by the Panel 
7.470  China maintains that th e Commission violated the obligations set forth under Articles 6.2, 6.4, 
6.5965 and 6.9 in its dumping determination in the fasten ers investigation.  In support of this claim, 
China puts forward four arguments.  The first th ree arguments concern alleged violations of 
Articles 6.4 and 6.2 of the AD Agreement, and asser t that the Commission failed to allow the Chinese 
producers access to information pertaining to di fferent aspects of the Commission's dumping 
determinations, namely information on:   1) product types;  2) the nor mal value determination;  and 3) 
the comparison between the normal value and the expor t price.  With respect to each of these, China 
argues that despite the Chinese producers' requests,  the Commission failed to provide the requested 
information.  Given the commonality of their premi se, we consider it appropriate to evaluate these 
three arguments together.  After we have considered  these three arguments, we will proceed to China's 
argument under Article 6.9 of the AD Agreement. 
Alleged Violations of Articles 6.4 and 6.2 of the AD Agreement in connection with the 
Commission's dumping determinations  
7.471  China submits that the Commission violated the obligations set forth in Articles 6.4 and 6.2 of 
the AD Agreement by failing to provide the Chinese  producers with access to information pertaining 
to certain aspects of its dumping determinations in  the fasteners investigation.  As noted above, 
China's claim under Articles 6.4 and 6.2 take issue with three specific elements of the Commission's 
dumping determinations, namely access to in formation on the product types, normal value 
determinations, and the comparison between the nor mal value and the export price.  As far as the 
claim with respect to information on product types is  concerned, the European Union argues that this 
claim is not properly before us.  We therefore have  to resolve this objection before proceeding to a 
substantive assessment of China's claim. 
7.472  The European Union asserts that this claim is not within our terms of reference because it was 
not identified in China's panel request.  The Euro pean Union notes that the claims identified in 
China's panel request in connecti on with Articles 6.4 and 6.2 of the AD Agreement refer to "data 
concerning normal value determinati on", and maintains that this cannot be the basis of China's claim 
                                                      
965 See, footnote 989. WT/DS397/R 
Page 196 
 
 
 regarding the alleged failure to disclose "infor mation on product types".  The European Union 
therefore argues that the Panel should refrain from ma king findings with respect to this claim.   
7.473  China argues that the reference in its panel request to "data concerning the normal value 
determination" also covers "information on prod uct types" used by the Commission in its normal 
value determinations.  Specifically, China maintains th at the word "data" is broad enough to cover all 
information used in connection with the normal va lue determination, including that concerning the 
product types used for that determination.966  China also argues that in making this terms of reference 
objection the European Union mixes claims with  arguments.  Finally, China posits that the 
European Union's objection should be rejected since it has not shown that the alleged deficiency in 
China's panel request prejudiced the European Union's due process rights in these proceedings.967 
7.474  China's panel request provides in relevant part: 
"Articles 6.2 and 6.4 of the AD Agreement  and paragraph 151 (c)(e) of the Working 
Party Report on the Accession of China  because the EC failed to ensure throughout 
the investigation to Chinese producers/exporte rs the full opportunity for the defence 
of their interests and failed to provide timely opportunities for them to see all 
information that is relevant to the presentation of their cases, including, but not 
limited to the composition of the domestic  industry, data concerning normal value 
determination , information on the adjustments for differences affecting price 
comparability, Eurostat data on the basis of  which are based the total EC production 
and EC consumption figures;"  (emphasis added) 
7.475  Central to the Parties' disagreement is the meaning of the phrase "data concerning normal 
value determination" as used in China's panel reque st.  Specifically, the issue is whether this phrase 
may be interpreted as referring to information on product types used by the Commission in making 
normal value determinations.  We recall that dumping determinations are based on a comparison 
between the export price of a product, that is, th e price of a product when sold to the importing 
country, and the normal value of a like product, that is, the price of a like product when sold in the 
market of the exporting country.  In some investiga tions, as in the fasteners investigation, the product 
at issue in the investigation may comprise different t ypes of the product.  In such investigations, data 
concerning normal value determinations may be co llected and subsequently compared to the export 
price on the basis of such product types.  In our vi ew, a reference to the data concerning normal value 
determination may reasonably be understood as also  referring to the relevant product types on the 
basis of which data may be collected and analysed.  We therefore consider that China's claim that the 
Commission acted inconsistently with Articles 6.4 and 6.2 of the AD Agreement by failing to disclose 
information concerning the product types used in th e determination of the normal value is properly 
before us, and we proceed to a substantive assessment of this claim. 
7.476  As discussed above968, we have rejected China's claim under Article 2.4 of the AD Agreement 
with respect to the substantive aspects of the Co mmission's dumping determinations.  In rejecting 
China's claim, we relied, inter alia , on the fact that China had not  demonstrated that the Chinese 
producers made a substantiated request for adjustme nts with respect to differences affecting price 
comparability between Chinese fasteners and those of the producer in India.  China argues that the 
reason why the Chinese producers did not make such a request in the fasteners investigation is 
because they were not provided timely opportuniti es to see information necessary to make such a 
request, in violation of Article 6.4 of the AD Agreem ent, and were thus deprived of the opportunity to 
defend their interests, in violation of Article 6.2 of the AD Agreement.   
                                                      
966 China, second written submission, para. 1074. 
967 China, second written submission, para. 1075. 
968 See paragraphs 7.294 to 7.302 above.  WT/DS397/R 
 Page 197 
 
 
 7.477  China contends that the Commission violated Articles 6.4 and 6.2 of the AD Agreement by 
failing to provide information to the Chinese producer s with respect to three issues related to its 
dumping determination.  China's arguments seek to  show that, as far as the dumping determination 
was concerned, the fasteners investigation was conduct ed in a manner that disregarded the basic rights 
of interested parties under Articles 6.4 and 6.2.  We understand China to argue that, by not respecting 
these rights, the Commission left the Chinese produ cers in the dark for a long time during the 
investigation, making it impossible for them to defe nd their interests, and more specifically, to make 
requests for adjustments to ensure a fair comparis on between the normal value and the export price.  
We recall that China acknowledges that the Chinese producers did not make a request for adjustments 
in the investigation at issue.969  China contends, however, that this was due to their understanding that 
the comparison between the normal value and the e xport price would be made on the basis of full 
PCNs.  According to China, by informing the two Chinese producers who had repeatedly requested 
clarification in this regard of the fact that th e comparison would not be based on full PCNs only one 
working day before the deadline for comments on the Disclosure Documents, the Commission made it 
impossible for them to request adjustments.970  The issue for us, therefor e is whether the Commission 
disregarded the rights of the Chinese producers under  Articles 6.4 and 6.2 of the AD Agreement, and 
thereby prevented them from taking necessary steps to  ensure that the Commission's determination of 
dumping was based on a fair comparison.   
7.478  Article 6.4 of the AD Agreement provides: 
"6.4 The authorities shall whenever prac ticable provide timely opportunities for 
all interested parties to see all information that is relevant to the presentation of their 
cases, that is not confidential as defined in  paragraph 5, and that is used by the 
authorities in an anti-dumping investigation, and to prepare presentations on the basis 
of this information." 
7.479  We note that Article 6.4 generally stipulates that  the authorities shall give interested parties 
"opportunities" to see all information used by the investigating authorities in an anti-dumping 
investigation.  This right, however, is not unlimited.   First, it applies to information which is used  by 
the authorities.  Second, the information must be relevant  to the presentation of the interested parties' 
cases.  Third, this right do es not apply to confidential  information.  Fourth, the investigating 
authorities have to provide these opportunities "whenever practicable ", and on a "timely" basis.971  
The panel in EC – Salmon (Norway)  explained these obligations as follows: 
"It seems clear to us that the timeliness  of the opportunities must be assessed by 
reference to the right of the interested parties to prepare presentations on the basis of the information seen.  It is similarly clear to us that whether particular information is relevant  is not determined from the investigating authorities' perspective, but with 
reference to the issues to be considered by the investigating authority under the 
AD Agreement.
880 Thus, information which relates to issues which the investigating 
authority is required to consider under the AD Agreement, or which it does, in fact, consider, in the exercise of its discreti on, during the course of an anti-dumping 
investigation, presumptively falls within the scope of Article 6.4.
881  Clearly, an 
investigating authority may not allow inter ested parties to see information which is 
properly treated as confidential  under the AD Agreement.882  Finally, the question of 
                                                      
969 See footnote 621 above. 
970 China, answer to Panel question 38(b). 
971 Appellate Body Report, EC – Tube or Pipe Fittings , para. 142;  Panel Report, Korea – Anti-Dumping 
Duties on Imports of Certain Paper from Indonesia – Recourse to Article 21 .5 of the DSU by Indonesia  ("Korea 
– Certain Paper (Article 21 .5 – Indonesia )"), WT/DS312/RW, adopted 22 October 2007, DSR 2007:VIII, 3369, 
para. 6.82. WT/DS397/R 
Page 198 
 
 
 whether information is " used " by the investigating authority cannot, in our view, be 
assessed from the perspective of whether the in formation is specifically referred to or 
relied upon by the investigating authority in  its determination.  If the investigating 
authority evaluates a question of fact or an  issue of law in the course of an anti-
dumping investigation, then, in our view, all information relevant to that question or 
issue that is before the investigating aut hority must necessarily be considered by the 
investigating authority, in order to make an objective and unbiased decision.  Consequently, it seems clear to us that  whether information is "used" by the 
investigating authority must be assessed by reference to whether it forms part of the 
information relevant to a particular issue th at is before the investigating authority at 
the time it makes its determination.
883"  
_______________ 
880 We find support for this conclusion in the views of the Appellate Body in EC – Tube and 
Pipe Fittings , paras. 145-146. 
881 We thus reject the view of the EC that, in th e context of whether information is relevant to 
the presentation of an interested party's case, "the investigating authority may decide on which 
information access should be granted".  EC, FWS, para. 531. 
882 Except to the extent that disclosure is made pursuant to protective orders, as provided for in 
footnote 17 of the AD Agreement. 
883 We find support for this conclusion in the views of the Appellate Body in EC – Tube and 
Pipe Fittings , para. 147."972 
7.480  In addition, we agree with the European Union that Article 6.4 does not obligate the 
investigating authorities to actively discl ose information to interested parties.973  China generally 
recognizes that Article 6.4 requires the authorities to  allow interested partie s to see all information 
which is relevant to the presentation of their c ases, and bases its claims under Article 6.4 on the 
assertion that the Commission refused to "provide " certain information to the Chinese producers 
despite numerous requests.974  We note, however, that, in its response to question 101 from the Panel, 
China argues that "the investigating authorities were under the obligation to provide such normal 
value information even in the absence of a request for disclosure".  To the extent this may suggest that 
China considers the Commission to have been re quired to actively disclose information under 
Article 6.4, we reject that view.  In our view, a violation of Article 6.4 would normally require a 
showing that the investigating authorities denied an interested party's request to see information used 
by the authorities, which was relevant to the presenta tion of that interested party's case and which was 
not confidential.   
7.481  Article 6.2 provides: 
"6.2 Throughout the anti-dumping investigati on all interested parties shall have a 
full opportunity for the defence of their inter ests.  To this end, the authorities shall, on 
request, provide opportunities for all interest ed parties to meet those parties with 
                                                      
972 Panel Report, EC – Salmon (Norway ), para. 7.769 (emphasis added). 
973 European Union, answer to Panel question 62, para. 143.  In this regard, we find support in the 
finding of the panel in Korea – Certain Paper (Article 21 .5 – Indonesia ) that Article 6.4 of the AD Agreement 
"does not ... impose an independent disclosure obligation on the authorities".  Panel Report, Korea – Certain 
Paper (Article 21 .5 – Indonesia ), para. 6.87.  We note that Article 6.9, in contrast, does contain an obligation to 
actively disclose "essential facts".  China's claims under that provision are addressed elsewhere in this report.   
974 See, for instance, China, first written submission , para. 563;  China, answer to Panel question 61.  WT/DS397/R 
 Page 199 
 
 
 adverse interests, so that opposing views may be  presented and rebuttal arguments 
offered.  Provision of such opportunities must take account of the need to preserve 
confidentiality and of the convenience to the parties.  There shall be no obligation on any party to attend a meeting, and failure to do so shall not be prejudicial to that 
party's case.  Interested parties shall also  have the right, on justification, to present 
other information orally." 
The Appellate Body has interpreted Article 6.2 to re quire that interested parties in an anti-dumping 
investigation be given "liberal opportu nities ... to defend their interests".
975  To ensure this, Article 6.2 
requires that the authorities provide opportunities for interested parties to meet other parties with 
opposing views so that an exchange of views ca n take place, subject to the need to preserve 
confidentiality.  Thus it is clear to us that the rights of interested parties under Article 6.2 do not 
include any right to see information treated as conf idential consistently with the provisions of 
Article 6.5 of the AD Agreement.  We also note th at, like Article 6.4, Article 6.2 does not require the 
investigating authorities to actively disclo se information to interested parties. 
 
7.482  Having outlined the requirements of the two pr ovisions that China has cited in connection 
with its claim, we now turn to the facts of the fasteners investigation to consider whether these 
provisions were, as argued by China, violated by th e Commission.  We recall that China's claim under 
Articles 6.4 and 6.2 alleges that the Commission faile d to "provide" three categories of information, 
that is, information on:  1) product types used in the determination of the normal value;  2) normal 
value determinations;  and 3) the comparison between the normal value and the export price. 
7.483  We note that with respect to all three of these alleged violations the European Union submits 
that China's claim does not pertain to the obligati ons set forth in Articles 6.4 and 6.2 since these 
provisions do not require the investigating authorities to actively disclose any information.976  Thus, 
the European Union appears to focus on China's use of  the word "provide" in its claim and arguments, 
suggesting that this entails disclosures, and thus China's allegations under Articles 6.4 and 6.2 do not 
correspond to the obligations in these two provisions.   In our view, however, it is clear that China 
bases its claims under Articles 6.4 and 6.2 on the allegation that two Chinese producers requested  
information from the Commission which the Commissi on failed to then make available to them.  
Thus, it is clear to us that China's allegations fall within the scope of a claim under, at least, Article 6.4, as we have  described above.    
 Product Types 
 
7.484  With respect to information on product types , China maintains that th e first time the Chinese 
producers were informed of the fact that the Comm ission had based its normal value determination on 
product types, as opposed to PCNs, was in the Genera l Disclosure Document.  China asserts that even 
then, however, the Commission did not explain what  those product types were until very late in the 
period allowed for comments on the General Discl osure.  China contends that the Commission 
refused to provide information concerning the product  types, despite repeated requests made by two 
Chinese producers, until one working day before the period for comments ended.
977   
                                                      
975 Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country 
Tubular Goods from Argentina ("US – Oil Country Tubular Goods Sunset Reviews "), WT/DS268/AB/R, 
adopted 17 December 2004, DSR 2004:VII, 3257, para. 241;  Panel Report, Korea – Certain Paper  
(Article 21.5 – Indonesia ), para. 6.76. 
976 European Union, first written submission, paras. 726, 736 and 739. 
977 China, first written submission, paras. 555-556. WT/DS397/R 
Page 200 
 
 
 7.485  The General Disclosure Document contains the following information, in relevant parts: 
"3.3.3 Normal value  ... 
(84) It was examined whether each type of the product  concerned sold in 
representative quantities on the Indian domestic  market could be considered as being 
sold in the ordinary course of trade pursuant to Article 2(4) of the basis Regulation.  
This was done by establishing for each product type  the proportion of profitable sales 
to independent customers on the domestic market during the investigation period. 
(85) Where the sales volume of a product type , sold at a net sales price equal to or 
above the calculated cost of production, re presented more than 80% of the total sales 
volume of that type, and where the weighted average price of that type  was equal to 
or above the cost of production, normal value was based on the actual domestic price. This price was calculated as a weighted average of the prices of all domestic sales of that type
 made during the IP, irrespective of whether these sales were profitable or 
not. 
(86) Where the volume of profitable sales of a product type  represented 80% or 
less of the total sales volume of that type, or  where the weighted average price of that 
type was below the cost of production,  normal value was based on the actual 
domestic price, calculated as a weighted average of profitable sales of that type  only. 
(87) Depending on the product type , normal value was established based on 
weighted average sales prices of all sal es or weighted average sales prices of 
profitable sales only, on the domestic market of the analogue country based on the 
verified data of one producer in that country."978  (emphasis added) 
Thus, the General Disclosure Document makes it clear that the Commission based its normal value 
determination on "product types", as opposed to PCNs , but does not provide any information as to the 
relevant characteristics of those groups, or how they were determined.  We note in this regard that the 
European Union does not contest the fact that th e Chinese producers were informed of this for the 
first time when they received the General Disclos ure Document, which, as noted, was issued on 
3 November 2008.  7.486  Having received the General Disclosure Document, two Chinese producers wrote to the 
Commission on 8 November 2008 seeking clarification regarding the product types used to determine 
normal value: 
"On several occasions, the disclosure document mentions that the comparison for 
dumping purposes is based on "product type
". It would appear that there are no PCN 
types with the degree of detail as produced by Kunshan and/or Jinding. Kunshan and Jinding would therefore be eager to
 see a listing of such "product types" and a linkage 
with the PCNs of Kunshan and Jinding . It should be possible to disclose such 
information, i.e. which Indian fastener type (normal value) was compared to which 
PCNs (export sales) in the calculation table, without disclosing confidential business information of the Indian company."
979  (emphasis added)  
In our view, this letter clearly conveys these tw o Chinese producers' request to see information 
regarding the product types that established the basi s of the Commission's normal value determination 
                                                      
978 Exhibit CHN-18, pp. 18-19. 
979 Exhibit CHN-28, p.2.  WT/DS397/R 
 Page 201 
 
 
 and the relationship between these product types an d the PCNs pertaining to the Chinese producers' 
products.  7.487  In an email dated 13 November 2008, the Commission replied to this request: 
"Q2:  The exact normal values used cannot be disclosed since they would reveal the 
prices of the analogue country producer. As explained under point 4 below, beside 
product characteristics as specified in the PC N, a distinction was introduced between 
standard and special products since this was found to have a significant impact on 
prices. 
Q4:  As mentioned in our document, the relevant distinction made was between 
standard and special products. 
For the investigated Community producers,  standard products represented about 40% 
of the produced volume. 
For the Indian producer, a very substantial part (the % is confidential) of their 
domestic sales were also standard products. 
For your two clients, their entire export volume was considered as being standard 
products. 
As for the fasteners sold to  the automotive sector, they can buy either standard or 
special fasteners."
980 
We agree with China that this reply does not e xplain how the product types were established in the 
determination of normal value, or the rele vant characteristics of those product types. 
 7.488  These two Chinese producers sent another letter to the Commission, dated 
17 November 2008: 
"From Pooja Forge's non-confidential files, we cannot find any indication that Pooja 
Forge did report transaction-by-transaction sales listings on a PCN basis. We likewise 
cannot see whether Pooja Forge reported any cost tables on a PCN basis. In abstract 
terms, was normal value established on a PCN basis, or were more general types 
of Pooja's fasteners matched with groups of PCNs from our clients?  In that 
context, it would still be very useful for us if we could have a listing simply of which type of fastener or which PCNs of Pooja were matched with the PCNs of 
our clients . […] we trust that the (abstract) disclosure of which types/PCNs were 
used on the normal value side for comparison purposes does in no way constitute confidential information, but it would simply give use an idea of what was compared with what, for the purposes of providing our comments."
981  (emphasis in original) 
This letter clearly repeats these Ch inese producers' request to see in formation on the basis of which 
the product types for the Indian producer were established. 
 
                                                      
980 Exhibit CHN-29. 
981 Exhibit CHN-30, p. 2. WT/DS397/R 
Page 202 
 
 
 7.489  The Commission replied to this request  in a letter dated 21 November 2008: 
"The comparison was not made on the basis of the full PCN , but on part [sic] of the 
characteristics of the product, namely the strength class as well as the abovementioned distinction between special and standard products."
982  (emphasis 
added) 
This letter is the first time the Commission clear ly informs these two Chinese producers that the 
Commission did not make its normal value determinati ons on the basis of full PCNs, but rather on the 
"characteristics" of strength class and the distinctio n between standard and special fasteners.  China 
asserts, and the European Union does not dispute, th at this letter came one working day before the 
deadline to make comments on the General Disclosure Document.   
 7.490  Thus, it is clear, and largely undisputed, that the two Chinese producers who requested 
clarification in this regard learned only shortly before the deadline to make comments on the General 
Disclosure, which we understand to have been the last opportunity for interested parties to present 
arguments to the Commission with respect to the investigation, that the normal value data were 
established on the basis of product types, as opposed to PCNs, and of the characteristics on which 
those product types were determined.  In our vi ew, the correspondence betw een the Commission and 
two Chinese producers quoted above shows that until the receipt of the General Disclosure Document, 
the Chinese producers were under the impression that the Commission would make its dumping 
determinations on the basis of PCNs, as requested  in the questionnaires sent to the Chinese and the 
Indian producers.  Shortly before the deadline for their last opportunity to make comments on the 
Commission's dumping determinations, however, they learned that this was not the case, and two who 
requested clarification in this regard received so me information as to the actual basis on which the 
price comparisons would be made. 
7.491  Ensuring that the comparison of normal value and export price is based on comparable goods 
is, as provided for in Article 2.4, an obligation on investigating authorities.  Foreign producers have a 
role in that process, by requesting due allowanc e for differences demonstrated to affect price 
comparability.  In order to fulfil their role, and thus ensure that their interest in a fair comparison is 
protected, however, it is necessary that they know the basis on which the investigating authority 
undertakes to make the comparison of normal value a nd export price, and in sufficient time to allow 
the exporters to make and substantia te requests for due allowance.  In  a case such as this one, where it 
appears from the structure of the questionnaires th at such requests will not be necessary because of 
the categorization of the product according to PCN gr oups, we consider that it is not unreasonable for 
exporters to not request specific adjustments whic h are already reflected in those PCN groups.  
However, once the investigating authority informs th e exporters that the comparison will not be based 
on those PCN groups, it seems to us that the investig ating authority is also obliged to provide an 
opportunity to see, in a timely fashion, informa tion concerning the basis on which the comparison will 
actually be made.  Without that information, it would be difficult if not impossible, for foreign 
producers to request adjustments that  they consider necessary in order to ensure a fair comparison. 
7.492  The facts of this case are clear.  Chinese producer s were informed very late in the proceedings 
of the product types that formed the basis of the comparisons underlying the Commission's dumping 
determinations.  Two of them re quested information pertaining to those product types, but were not 
given a timely opportunity to see the relevant information by the Commission.
983  T h e  
European Union does not argue that the information at issue was not relevant to the presentation of 
                                                      
982 Exhibit CHN-31, p. 2. 
983 We note, in this context, that an opportunity to "see" information may obviously be satisfied by an 
active provision of that information, in a letter or othe r communication.  This is different, however, from an 
affirmative obligation to actively disclose information.  WT/DS397/R 
 Page 203 
 
 
 the Chinese exporters' case.  Thus, the facts above s uggest that the European Union failed to provide a 
timely opportunity for the Chinese exporters to see in formation relevant to the presentation of their 
cases, in violation of Article 6.4 of the AD Agreement.   
7.493  However, the European Union disputes the asser tion by China that the information on product 
types at issue was not confidential, arguing that China has not made a claim under Article 6.5 of the 
AD Agreement regarding the confidentiality of some  of the information pertaining to the Indian 
producer.984  We do not consider that the fact that China did not make a claim under Article 6.5 in this 
context undermines its claim under Article 6.4 in this case.  There is no indication in the correspondence discussed above that  the Commission refused to provide the information on product 
types, as opposed to the actual normal values, becau se it was confidential – in fact, in the last 
communication, the Commission did explain the b asis for the product type groups.  In these 
circumstances, we consider that the European Union has failed to de monstrate that the information in 
question was confidential, or was withheld from access on the basis of confidentiality, and therefore 
do not consider that China's arguments have been rebutted. 
7.494   The European Union also submits that Chin a's allegation that the Commission repeatedly 
refused to provide information on the product types is contradicted by Exhibit CHN-31.
985  T h a t  
Exhibit is the 21 November 2008 letter from the Commission which, as discussed above, informed the 
two Chinese producers who requested clarification in th is regard for the first time in the investigation 
that the Commission had based its normal value determ inations on product types, not PCNs, and that 
those product types were based on strength class a nd the distinction between special and standard 
fasteners.  Given our view that this information wa s not provided in a timely fashion, as required by 
Article 6.4, we consider that the European Uni on's argument is unavailing, and does not rebut China's 
arguments.  We therefore conclude that the Europ ean Union violated Article 6.4 of the AD Agreement 
by not providing a timely opportunity for Chinese producers to see information regarding the product types on the basis of which normal value was establi shed, information relevant to the presentation of 
their case.   
7.495  Moreover, while in general we might not consider it necessary to go on to address China's 
claim under Article 6.2, in this case, we consider th at the discussion above is also relevant to a proper 
application of the obligation to ensure all interested  parties a "full opportunity for the defence of their 
interests".  In our view, the Chinese exporters could not defend their interests in this investigation 
because the Commission only provided information concerning the product types used in the 
determination of the normal value at a very late  stage of the proceedings, when it was no longer 
feasible for them to request that adjustments be made  in order to ensure a fair comparison, which until 
that time they reasonably considered were not necessar y.  We therefore conclude that the European 
Union acted inconsistently with Article 6.2.   
 Normal Value Determinations 
 7.496  We turn now to China's allegation that th e Commission failed to provide information on 
normal value determinations .  China contends that the Europ ean Union violated its obligations 
under Articles 6.4, 6.2 and 6.5 of the AD Agreemen t by failing to disclose, in the individual and 
General Disclosure Documents, information pertaini ng to the determination of the normal value.  
China puts forward two arguments in support of its cl aims under Articles 6.4 and 6.2:  first, that the 
Commission failed to disclose the nor mal values, either on a general basis or on a product type basis; 
and second that the Commission failed to disclo se for each product type the outcome of its 
determination of whether the product had been sold in representative quantities in the Indian 
                                                     
 
984 European Union, first written submission, para. 730. 
985 European Union, first written submission, para. 732. WT/DS397/R 
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 market.986  The European Union submits that Articles 6.4 and 6.2 do not require the investigating 
authorities to actively provide any information.  According to the European Union, the disclosure 
documents that China cites in connection with this  claim fall within the scope of the obligation set 
forth under Article 6.9, not Articles 6.4 or 6.2.  With respect to the substantive arguments presented 
by China, the European Union main tains that the General Disclosure Document contains considerably 
more information than China suggests.987 
7.497  We note that this aspect of China's claim is speci fically directed at alleged deficiencies in the 
disclosure by the Commission to the Chinese producer s, as reflected in the General and Individual 
Disclosure Documents.  This is clear from the fi rst written submission of China, which clearly links 
this claim to the General and Individual Disclosur e Documents issued by the Commission:  "In both 
the Individual and General Disclosure Documents, th e EC failed to provide any relevant information 
regarding the determination of the normal value".988  We recall that Articles 6.4 and 6.2 of the 
AD Agreement do not impose any affirmative disclosur e obligations on the investigating authorities.  
We therefore consider that China has failed to make a prima facie case of violation under these two 
provisions with respect to the alleged non-di sclosure of information on the normal value 
determinations in the General and Individual Discl osure Documents, and therefore reject China's 
claim.989 
 Comparison between the Normal Value and the Export Price 
 
7.498  With regard to the Commission's alleged failure to provide information on the comparison 
between the normal value and the export price , China submits that since the Individual and 
General Disclosure Documents sent by the Commissi on did not contain sufficient information on fair 
comparison, two Chinese companies requested informati on on this issue.  Chin a contends that despite 
these Chinese producers' requests,  the Commission did not provide the required information and 
therefore violated Articles 6.4 and 6.2 of the AD Agreement.  The European Union repeats its 
argument that Articles 6.4 and 6.2 do not impose a disclosure obligation on the investigating 
authorities.  The European Union also mainta ins that China's descrip tion of the Commission's 
disclosure documents and the subsequent excha nge of letters between the Commission and the 
Chinese producers is incomplete and inaccurate.990 
7.499  The evidence before us indicates that Ch inese producers did make a request to see 
information concerning fair comparison: 
"The individual disclosure documents, in  Annex B on dumping, No. 2 "Comparison", 
only state in general terms that "due allowa nce in the form of adjustments was made 
for differences affecting price comparability". Kunshan and Jinding would like to 
know at least what kind of adjustments of normal value were made  for comparison 
purposes, in particular for physical differences, if any."991  (emphasis added) 
                                                      
986 China, first written submission, paras. 567-568. 
987 European Union, first written submission, para. 737. 
988 China, first written submission, para. 566 (int roducing China's argument regarding this claim). 
989 We note that although China cites Article 6.5 in its submissions to the Panel in connection with this 
claim, it does not articulate this aspect of its claim.  In response to questioning in this regard, China states that 
its argument is that treating normal value information as  confidential is inconsistent  with Article 6.5 of the 
AD Agreement, China, answer to Panel question 69, but makes no specific arguments with respect to the 
information at issue in this case.  We do not consider this general statement to be sufficient to make out a prima 
facie case of violation and consider this aspect of China' s claim to have been insufficiently elaborated, and 
therefore do not make findings in this regard. 
990 European Union, first written submission, para. 742. 
991 Exhibit CHN-28, Question 3 on p.2.  WT/DS397/R 
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 In response, the Commission stated: 
 
"The adjustment was calculated based on th e costs of quality control incurred by the 
Indian producer. The amount of these costs cannot be disclosed, but they were clearly 
higher than that of the Chinese producers." 992 
In a subsequent letter which mainly addressed the issue of product types used for the dumping 
determinations, Chinese producers asked whether the Commission had made any adjustment for 
physical differences between the products of the Indian producer and those of the Chinese 
producers.993  In response, the Commission stated: 
 
"Physical differences are addressed by the divi sion into special and standard types, as 
described above, and by the adjustment for the cost of quality control which reflects 
the general difference in quality level."994 
7.500  This exchange of letters shows that the Chinese producers sought information on the fair 
comparison made by the Commission and the la tter responded to these requests with relevant 
information.  We understand China to recognize that information was provided, but to argue that the 
explanations provided by the Commission were not suffi cient.  For instance, Ch ina maintains that, in 
its last communication in this regard, the Commissi on "failed ... to precisely explain which products 
were 'standard' fasteners and which products were 'special' fasteners[]"995 and that "regarding the 
adjustment for 'costs of quality control', the EU  investigating authorities merely noted that an 
adjustment had been made but failed to provi de any detail regarding this adjustment[.]"996   
7.501  We do not consider that China's allegations in  this regard are sufficient to constitute a prima 
facie case of violation of Article 6.4 of the Agreemen t.  China has not shown that a request to see 
information used by the Commission which was re levant to the presentation of Chinese producers' 
cases was rejected by the Commission.  Indeed, the focus of China's argument is the alleged 
insufficiency of the explanation given by the Commi ssion, not a lack of information.  However, we 
see nothing in the text of either Article 6.4 or Artic le 6.2 that requires an investigating authority to 
give any explanation at all with respect to th e information it makes available to the parties.997  Thus, 
we consider that China has not made a prima facie case of violation of Article 6.4 in this regard, and 
therefore reject China's claim.  Having rejected Ch ina's claim under Article 6. 4, and in the absence of 
any additional arguments with respect to the alleged violation of Article 6.2 of the AD Agreement, we 
also reject China's claim under the latter provision.   
Alleged Violation of Article 6.9 of the AD Ag reement in connection with the Commission's 
dumping determinations  
7.502  China submits that by failing to disclose info rmation on product types, the normal value 
determinations and the comparison between the nor mal value and the export price, the Commission 
failed to disclose "essential facts" as required by Ar ticle 6.9 of the AD Agreement.  China contends 
that these three elements constituted "facts" within  the meaning of Article 6.9 and therefore should 
                                                      
992 Exhibit CHN-29, Response to Question 3. 
993 Exhibit CHN-30. 
994 Exhibit CHN-31, p.2. 
995 China, answer to Panel question 102(b). 
996 China, answer to Panel question 102(b). 
997 Other provisions do require the investigating aut hority to explain its analysis and conclusions with 
respect to that information, including Article 12.2 of the AD Agreement, which requires that an investigating 
authority set forth, "in sufficient detail the findings and conclusion reached on all issues of fact and law 
considered material".   WT/DS397/R 
Page 206 
 
 
 have been disclosed by the Commission.998  The European Union subm its that China's claim under 
Article 6.9 of the AD Agreement falls outside the Pa nel's terms of reference, because this claim was 
not subject to consultations, and because in China's panel request no reference is made to information 
on "product types".   
7.503  China acknowledges that its request for cons ultations does not contain any reference to 
Article 6.9, but argues that this does not necessarily mean that its claim under Article 6.9 in its panel 
request cannot reasonably be said to have evolved fro m its request for consultations.  China states that 
the issues of "the data concerning the normal valu e" and "the adjustments for differences affecting 
price comparability" were subject to consultations.  A ccording to China, the fact that Articles 6.2, 6.4 
and 6.5 were cited in this connection in China' s request for consultations shows that the Chinese 
producers raised the concern that they were not pr ovided with adequate opportunities to have access 
to information which was not confidential.  China goes on to contend that: 
"The additional reference to  Article 6.9 means that this very same issue  raised 
concerns also in terms of the EU's failure  to properly disclose the facts. In other 
words, the additional reference to Article 6. 9 in the panel request does, therefore, not 
change the essence of the dispute which conti nues to relate to the same issue, namely 
access to facts and information used by the i nvestigating authority. In that respect the 
legal basis in the panel request has merely evolved from the legal basis mentioned in 
the request for consultations."999  (emphasis in original) 
7.504  We begin by observing that it is undisputed that  China's request for consultations contains no 
reference to Article 6.9 of the AD Agreement.  Ch ina's panel request, on the other hand, states, in 
pertinent part: 
"China submits that [the Definitive Regula tion] is inconsistent, at least, with the 
following provisions of the AD Agreement  and of the GATT 1994 : ... 
- Articles 6.2 and 6.9 of the AD Agreement  because the EC failed to inform the 
interested parties of the essential facts under consideration which form the basis for 
the decision whether to apply definitive measures, including, but not limited to the following elements: data concerning the nor mal value determination and information 
on how the price comparison was carried out, including data on the adjustments for differences affecting price comparability."  
7.505  We recall that, as discussed above
1000, while there does not have to be precise identity 
between China's request for consultations and its pa nel request, the request for consultations and the 
panel request must concern "the same matter" or, put differently, we must be able to conclude that the 
legal basis of the panel request "may reasonabl y be said to have evolved from the legal basis 
identified in the request for consultations", in orde r for a claim not specifically identified in China's 
request for consultations, but properly identified in  the panel request, to fall within our terms of 
reference.  We do not consider that this standard  is satisfied with resp ect to China's claim under 
Article 6.9. 
7.506  Based on the jurisprudence, China submits that  its claim under Article 6.9 "does not change 
the essence of the issue" and that the legal basis for this claim merely evolved from the legal basis 
identified in its request for consultations.  It follo ws, in China's view, that its claim under Article 6.9 
                                                      
998 China, first written submission, paras. 585-586. 
999 China, second written submission, para. 1104. 
1000 See paragraph 7.24 above.  WT/DS397/R 
 Page 207 
 
 
 is within the Panel's terms of reference.  In this regard, China refers to the Appellate Body's reasoning 
in Mexico – Anti-Dumping Measures on Rice : 
"In our view, the same logic applies with respect to the legal basis  of the complaint.  
A complaining party may learn of additi onal information during consultations—for 
example, a better understanding of the opera tion of a challenged measure—that could 
warrant revising the list of treaty provisions with which the measure is alleged to be 
inconsistent.  Such a revision may lead to a narrowing of the complaint, or to a reformulation of the complaint that tak es into account new information such that 
additional provisions of the covered agreemen ts become relevant.  The claims set out 
in a panel request may thus be expected to be shaped by, and thereby constitute a 
natural evolution of, the consultation process.  Reading the DSU, as Mexico does, to limit the legal basis set out in the panel requ est to what was indicated in the request 
for consultations, would ignore an important  rationale behind the requirement to hold 
consultations—namely, the exchange of in formation necessary to refine the contours 
of the dispute, which are subsequently set out  in the panel request.  In this light, we 
consider that it is not necessary that the provisions referred to in the request for 
consultations be identical to those set out in  the panel request, provided that the "legal 
basis" in the panel request may reasonably be said to have evolved from the "legal 
basis" that formed the subject of consultations.  In other words, the addition of 
provisions must not have the effect of changing the essence of the complaint ."1001  
(underline emphasis added) 
In our view, the facts of this dispute are diffe rent from the hypothetical situation posited by the 
Appellate Body.  In this case, there is no reference to Article 6.9 in China's request for consultations 
nor any narrative description indicating that China mi ght intend to raise a claim under Article 6.9 in 
the context of the Commission's dumping determinations .  Thus there is no indication at all of a legal 
basis in the request for consultations from which the claim in this regard set forth in the panel request 
could have evolved.    7.507  In our view, it is clear that the obligation set forth in Article 6.9 of the AD Agreement is 
different in nature from the obligations set forth in Articles 6.4 and 6.2.  We recall the text of 
Article 6.9, which provides: 
"The authorities shall, before a final dete rmination is made, inform all interested 
parties of the essential facts under considerati on which form the basis for the decision 
whether to apply definitive measures.  Such disclosure should take place in sufficient time for the parties to defend their interests." 
The obligations of this provision are quite straight forward – the investigating authority shall inform 
interested parties of "essential f acts under consideration" prior to ma king a final determination, but in 
sufficient time for the interested parties to defend th eir interests.  Thus, as we have noted earlier, and 
as is clear from the second sentence, Article 6.9 clear ly requires an affirmative act of disclosure of 
information by the investigating authorities, and sp ecifies what information must be disclosed – the 
"essential facts under consideration which form the b asis for the decision whether to apply definitive 
measures".  Moreover, in our view, the disclos ure required under Article 6.9 is a one-time act
1002, and, 
as is clear from the text, takes place near the end of the process ("before a final determination is 
                                                      
1001 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 138. 
1002 See, Panel Report, EC – Salmon (Norway ), paras. 7.797-7.802, where the panel concluded that 
Article 6.9 did not require an additional disclosure in a case where, subsequent to the Article 6.9 disclosure and 
comments thereon by interested parties, the investigatin g authority changed its views, and reached a different 
conclusion than that foreshadowed in the disclosure. WT/DS397/R 
Page 208 
 
 
 made ... in sufficient time for parties to defend thei r interests").  On the other hand, as we have 
discussed above, Articles 6.4 and 6.2 do not require any affirmative disclosure by the investigating 
authority, but rather concern the provision of tim ely opportunities to see in formation, and a full 
opportunity to defend interests.  Moreover, both of these obligations apply throughout the course of an 
anti-dumping investigation – Article 6.2 specifically so states, and Article 6.4 requires the authorities 
"whenever" practicable to provide "opportunities", in the plural, for parties to see information. 
 7.508  Thus, in our view, even though China's clai m under Article 6.9 is premised on the same 
factual basis, given that there was no reference whatsoever to Article 6.9 in the request for 
consultations, nor any explanation that might sugg est that this information was not disclosed as 
required by Article 6.9, we are of the view that this  claim cannot be said to concern the "same matter", 
or to have "evolved from the legal basis", set fort h in the request for consultations.  We therefore 
conclude that consultations were not held with r espect to China's claim under Article 6.9, and that 
therefore, pursuant to Article 6.2 of the DSU, this  claim is not within our terms of reference, as 
defined in Article 7.1 of the DSU.
1003   
(d) Whether the European Union violated Article s 6.5, 6.2 and 6.4 of the AD Agreement in 
connection with the non-confidential vers ion of certain questionnaire responses  
(i) Arguments of the Parties 
China  
7.509  China argues that the non-confidential vers ions of the questionnaire responses by EU 
producers, and that of the producer in India, were  deficient compared with the requirements of 
Article 6.5 of the AD Agreement.  China submits that this issue was brought to the Commission's 
attention by the Chinese producers several times during the investigation.1004  China posits that after 
the Commission relayed these concerns to the EU  producers, some of them submitted additional 
information in the non-confidential ve rsion of their questionnaire responses.1005  With respect to the 
alleged deficiencies in the non-confidential versi on of the EU producers' questionnaire responses, 
China gives two specific examples, namely the quest ionnaire responses of A. Agrati S.p.A. ("Agrati") 
and Fontana Luigi S.p.A ("Fontana Luigi").  With  respect to Agrati, China contends that the non-
confidential version of this producer's questionna ire response did not contain any non-confidential 
summary of certain important injury information, and did not contain an adequate statement of the 
reasons why such a summary was not possible.1006  As regards Fontana Luigi, China maintains that 
the non-confidential version of this producer's questionnaire response did not contain any data 
concerning certain injury factors, and did not contai n an adequate statement of the reasons why such a 
summary was not possible, but stated that the in formation was by nature confidential because its 
disclosure would be of significant competitive advantage for a competitor.1007  China argues that the 
Commission violated Article 6.5.1 of the AD Agre ement by not requiring non-confidential summaries 
of the confidential information submitted by these tw o producers which were sufficiently detailed to 
permit a reasonable understanding of  the confidential information.1008 
                                                      
1003 Having found that this claim was not the subject of consultations, we do not consider it necessary 
to consider whether it was identified in China's panel request  consistently with the requirements of Article 6.2 of 
the DSU. 
1004 China, first written submission, para. 588. 
1005 China, first written submission, para. 589. 
1006 China, first written submission, para. 592. 
1007 China, first written submission, para. 591. 
1008 China, answer to Panel question 103.  WT/DS397/R 
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 7.510  With respect to the non-confidential version of  the Indian producer's questionnaire response, 
China alleges a violation of both Articles 6.5 and 6.5.1.1009  China contends that the non-confidential 
version of the questionnaire response does not contain an y information at all, particularly with respect 
to the product types on the basis of which the information was provided by this producer.  China 
argues that the Commission erred by treating the information in this questionnaire response as 
confidential without good cause and thus acted inconsistently with Article 6.5 of the 
AD Agreement.1010  If the Panel finds that the information was properly treated as confidential, China 
claims a violation of Article 6.5.1 of the AD Agreement on the basis that the non-confidential 
summaries in the questionnaire response are not  sufficiently detailed to permit a reasonable 
understanding of the information in the confidentia l version of the questionnaire response and did not 
contain an adequate statement of the reasons why such a summary was not possible.1011 
7.511  China also asserts that by failing to make sure that these three questionnaire responses 
included all relevant information, whether in conf idential or non-confidential format, the Commission 
also violated the Chinese producers' procedural rights under Articles 6.4 and 6.2 of the AD Agreement.
1012 
European Union  
7.512  The European Union argues that China has not developed its claim under Articles 6.4 and 6.2 
of the AD Agreement.1013  With respect to the claim under Article  6.5, the European Union argues that 
China has not developed this claim in connectio n with the questionnaire response of the Indian 
producer.1014  The European Union contends that the domestic producers submitted non-confidential 
summaries of their questionnaire responses as re quired under Article 6.5.1.  Further, the 
European Union notes that, on 16 May 2008, the Commission requested all sampled EU producers to make sure that adequate non-conf idential versions of their ques tionnaire responses were provided, 
specifically, summaries in sufficient detail so as to provide a reasonable understanding of the substance of the confidential information. The produ cers were also requested to provide copies of all 
publicly available documents contained in their questionnaires.
1015  Almost all producers replied 
within the 15-day deadline, submitting additional n on-confidential information.  The European Union 
also maintains that China's own ev idence regarding one EU producer demonstrates that the allegations 
are factually unfounded.1016  Further, most of the information th at China refers to is "manifestly and 
by nature confidential" and not susceptible of summarization.1017  In any event, the European Union 
asserts that  the non-confidential versions of the que stionnaires demonstrate that "it has clearly been 
possible for the interested parties to defend themselves in respect of injury factors".1018  T h e  
European Union concludes that  China has failed to make a prima facie  case under Article 6.5.1019 
                                                      
1009 China, answer to Panel question 103. 
1010 China, answer to Panel question 71. 
1011 China, second written submission, para. 1114;  China, answer to Panel question 103. 
1012 China, second written submission, para. 1117. 
1013 European Union, first written submission, para. 749. 
1014 European Union, first written submission, para. 748. 
1015 European Union, first written submission, para. 751. 
1016 European Union, answer to Panel question 72, para. 178. 
1017 European Union, first written submission, para. 753. 
1018 European Union, answer to Panel question 72, para. 174. 
1019 European Union, first written submission, para. 755. WT/DS397/R 
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 (ii) Evaluation by the Panel 
7.513  China's claim takes issue with the non-confidential versions of the questionnaire responses of 
two EU producers1020 and that of the Indian producer whose da ta was used in the determination of the 
normal value in the fasteners investigation.  China' s claim consists of two elements:  first, China 
alleges a violation of Articles 6.5 and/or 6.5.1 with respect to the manner in which confidential 
information in the questionnaire responses was trea ted by the Commission; and second, it alleges a 
violation of Articles 6.4 and 6.2, on the grounds that because of the alleged violations of Articles 6.5 
and/or 6.5.1, the Commission also violated th e Chinese producers' procedural rights under these 
two provisions.  The claims under Articles 6.4 and 6. 2 are, in our view, dependent on a finding of 
inconsistency with respect to the claims under Artic les 6.5 and 6.5.1.  We shall therefore start our 
evaluation with the claims under Articles 6.5 and 6. 5.1 and, if necessary, proceed to consider the 
dependent claims under Articles 6.4 and 6.2. 
7.514  With respect to the non-confidential summaries of confidential information in the two EU 
producers' questionnaire responses, China asserts that  the Commission violated Article 6.5.1 of the 
AD Agreement by failing to make sure that the non-confidential summaries of confidential 
information in the responses of these two EU produ cers, Agrati and Fontana Luigi, were sufficiently 
detailed so as to allow a reasonable understanding of the substance of the confidential information.  
Article 6.5.1 reads: 
"6.5.1 The authorities shall require interested parties providing confidential 
information to furnish non-confidential su mmaries thereof.  These summaries shall be 
in sufficient detail to permit a reasonable understanding of the substance of the 
information submitted in confidence.  In exceptional circumstances, such parties may 
indicate that such information is not su sceptible of summary.  In such exceptional 
circumstances, a statement of the reasons why summarization is not possible must be provided." 
We recall that, as discussed above
1021, the chapeau of Article 6.5 sets forth the general principle that, 
provided good cause is shown, information that is  by nature confidential and information submitted 
on a confidential basis must be treated as confid ential, and the investigating authorities may not 
disclose such information without specific permissi on from the party submitting it.  Article 6.5.1, in 
turn, stipulates that investigating authorities sha ll require interested parties submitting confidential 
information to submit a non-confidential summary thereo f, which must be prepared in such a way as 
to allow other interested parties to have a reasonable understanding of the substance of the 
confidential information.  In exceptional circumst ances, where such summarization is not possible, 
Article 6.5.1 requires that the interested party in stead indicate that summarization is not possible and 
state the reasons for that conclusion.    
7.515  In our view, Article 6.5.1 serves to balance the goal of ensuring that the availability of 
confidential treatment does not unde rmine the transparency of the investigative process, with 
recognition of the importance of maintaining the c onfidentiality of information where appropriate.  
We consider that it is the investigating authorities'  obligation to ensure that  all the requirements of 
                                                     
 
1020 While China suggests that this claim concerns the non-confidential version of the questionnaire 
responses of all EU producers, particularly those in th e sample, China, first written submission, para. 587, our 
analysis and conclusions are limited to the two EU pr oducers with respect to which China submitted evidence 
and arguments.  Claims under Article 6.5 (and Articles 6.2 and 6.4) require, as a general rule, a close 
consideration of the facts, and thus in the absence of sp ecific evidence, we consider  it inappropriate to make a 
more general ruling.   
1021 See paragraph 7.450.  WT/DS397/R 
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 Article 6.5.1 are respected by interested parties.1022  That is, we consider that the investigating 
authority must ensure that an appropriate non-c onfidential summary is provided, or in exceptional 
circumstances, if that is not possible, that an a ppropriate statement of reas ons why summarization is 
not possible is given.1023  Clearly, in the absence of scrutiny of the non-confidential summaries or 
stated reason why summarization is not possible by th e investigating authority, the potential for abuse 
of confidential treatment by interesting parties would be unchecked unless and until the matter were 
reviewed by a panel.  This would obviously defeat  the goal of maintaining transparency during the 
course of the investigation itself that is one of th e purposes of Article 6.5.  Thus, in our view, the 
investigating authorities must ensure  that where an interested party asserts that a particular piece of 
confidential information is not susceptible of summary , the reasons for that assertion are appropriately 
explained. 
7.516  With these considerations in mind, we now turn  to the facts underlying China's claim.  With 
respect to the EU producer Agrati1024, we note that the non-confidential questionnaire response of this 
company contains non-confidential summarized info rmation on some injury factors, including 
employment, sales and re-sales of the subject product (both in volume and value terms), inventories, 
production, capacity and capacity utilization.  Howe ver, the questionnaire response does not contain 
any non-confidential summary of the confidential info rmation on other injury factors, including return 
on investment, investments, profitability (with respect to the product concerned and the overall 
company), cash flows, cost of production, suppliers  of direct (raw) materials during the investigation 
period, volume of raw materials used to produce th e subject product, extraordinary items with respect 
to costs, list of all sales to unrelated customers in the European Union, and allocation of different cost 
elements among different types of products.  In each instance, the r eason given for the lack of a non-
confidential summary is the following: 
"The information cannot be summarized without disclosing confidential information 
which can cause a damage to our company.   The information has been provided as 
limited." 
                                                      
1022 We find support for this conclusion in the statement of the panel in Mexico – Steel Pipes and Tubes : 
"Although Article 6.5.1 does not explicitly provide that "the authorities shall require" 
interested parties to provide a statement of th e reasons why summarization is not possible, we 
consider that Article 6.5.1 will be meaningfully  construed if the interested party on its own 
initiative gives the reasons why summarization is not possible, in which case it will be for the 
investigating authority to ensure compliance with  the mandate in Article 6.5.1.  Accordingly, 
we consider that Article 6.5.1 imposes an ob ligation on investigating authorities to require 
parties that indicate that information is not su sceptible of summary to provide a statement of 
the reasons why summari zation is not possible." 
Panel Report, Mexico – Steel Pipes and Tubes , para. 7.379.  See also, Panel Report, Guatemala – 
Cement II , para. 8.213, where the panel made a similar finding.   
We also find support for this conclusion in the report of the panel in Mexico – Olive Oil , a dispute 
concerning Article 12.4.1 of the SCM Agreement, the parallel provision to Article 6.5.1.  In that case, the panel 
concluded that while Article 12.4.1 "imposes an obliga tion on the interested party claiming confidentiality, in 
our view it also imposes an obligation on the investigating authority to require that such a statement be 
provided".  Panel Report, Mexico –Olive Oil "), para. 7.89.   
1023 Reading Article 6.5.1 to impose an obligation on the investigating authority in this regard is, in our 
view, consistent with the principle of effective treaty in terpretation which, the Appellate Body has observed, is 
"[o]ne of the corollaries of the "general rule of interpre tation" in the Vienna Convention[.]"  See, Appellate Body 
Report, United States – Standards for Reformulated and Conventional Gasoline  ("US – Gasoline "), 
WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3, p. 23.  See also, Appellate Body Report, Japan – 
Alcoholic Beverages II , p. 12;  Appellate Body Report, United States – Restrictions on Imports of Cotton and 
Man-made Fibre Underwear  ("US – Underwear "), WT/DS24/AB/R, adopted 25 February 1997, 
DSR 1997:I, 11, p. 16. 
1024 Exhibit CHN-52. WT/DS397/R 
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 We recall that Article 6.5.1 requires a party subm itting confidential information to also submit a non-
confidential summary in sufficient detail to perm it a reasonable understanding of the substance of the 
confidential information or, if that is not possible,  to provide a statement of reasons explaining why 
such a summary is not possible.  Moreover, as di scussed above, we consider that the investigating 
authorities must ensure that the reasons given in th is regard are appropriate.  There is nothing in the 
Definitive Regulation, or any other evidence that has been proffered, that would even suggest that the 
Commission ever considered whether Agrati's st ated reason for the lack of a non-confidential 
summary of such information as profitab ility, or cash flows was more than pro forma .  Agrati's 
statement simply reflects one of the bases on which information may be considered "by nature 
confidential" - that its disclosure would have a si gnificantly adverse effect on the person supplying it 
– and asserts that the confidential information cannot be summarized without disclosure.  The 
statement does not, however, relate to any of th e specific information for which no non-confidential 
summary is provided, or to anything having to do with Agrati itself, the party supplying it.1025  We 
also note the fact that Fontana Luigi was able to provide non-confidential summaries with respect to 
some of the information for which Agrati did not provide such a summary1026, which to us suggests 
that these categories of information are in fact suscep tible of summary.  There is certainly nothing in 
Agrati's stated reason which would demonstrate ot herwise.  We therefore consider that the 
Commission failed to ensure Agrati's compliance with  the requirements of Article 6.5.1, and thus 
acted inconsistently with that provision with respect to Agrati.  
7.517  Turning to the questionnaire response of the ot her EU producer, Fontana Luigi, we note that 
the non-confidential version this producer's questionnaire response contains almost no non-
confidential summarized information regarding injury  factors, except for total EU consumption and 
currency exchange rates.  In response to a question from the Panel, the European Union explained that 
the non-confidential version of Fontana Luigi' s questionnaire response submitted by China
1027 does 
not reflect additional non-confidential summaries that  were submitted by Fontana Luigi following the 
Commission's request for additional information.   The European Union submitted these additional 
relevant annexes to Fontana Luigi's questionnaire response as Exhibit EU-28.1028  Those annexes 
contain non-confidential summaries of confidentia l information concerning volume of production, 
production capacity, capacity utilisation, total purchases  in value and volume, stocks in volume of 
finished goods, sales and re-sales in value and volume both to related and unrelated companies, 
captive use, cost of production, consumption of ra w materials, profitability for the product in question 
and total company profitability, cash  flows, investments, return on net assets, and employment and 
labour costs both for the product concerned and for th e company.  China does not dispute that this 
additional information was made available to the in terested parties in the fasteners investigation.1029  
However, there remained other in formation, such as distribution system and price setting, for which 
no non-confidential summaries were provided, either originally, or after the Commission's request.  In 
each instance where a non-confidential summary is not  provided, the reason given for the lack of a 
non-confidential summary is the following: 
"This information is by nature confiden tial because its disclosure would be of 
significant competitive advantage to a Competitor." 
                                                      
1025 We note in this regard the conclusion of the panel in Mexico – Olive Oil , considering similar facts: 
"We consider that general statements of this sort are not sufficient as they constitute an unsupported assertion rather than a statement of reasons as required by Article 12.4.1." 
Panel Report, Mexico – Olive Oil , para. 7.101. 
1026 See paragraph 7.517 below. 
1027 Exhibit CHN-60. 
1028 European Union, answer to Panel question 105. 
1029 The European Union submitted documents showing th at representatives of the interested parties 
had access to all of these documents and had taken copi es thereof.  European Union, answer to Panel 
question 105, Exhibit EU-29.  WT/DS397/R 
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 There is nothing in the Definitive Regulation, or an y other evidence that has been proffered, that 
would even suggest that the Commission ever cons idered whether Fontana Lu igi's stated reason for 
the lack of a non-confidential summary of such in formation as distribution system and price setting 
was more than pro forma .  Fontana Luigi's statement does not  even assert that the confidential 
information cannot be summarized, but simply asserts th at the information is "by nature confidential".  
Fontana Luigi's statement is not related to the specific information for which no non-confidential 
summary is provided, or to anything having to do with Fontana Luigi itself, the party supplying it.  We therefore consider that the Commission failed to ensure Fontana Luigi's compliance with the 
requirements of Article 6.5.1, and thus acted inconsis tently with that provision with respect to Fontana 
Luigi.   
 7.518  Turning to the questionnaire response of th e Indian producer, Pooja Forge Ltd. ("Pooja 
Forge") we note that the non-confidential version of this company's questionnaire response contains 
information only on company turnover, production, capacity and capacity utilization, all of which 
appears to be in indexed form.
1030  No information on sales to independent customers, costs and 
profits is provided, on the grounds of confidenti ality.  No non-confidential summary of this 
information is provided, and no reason for the lack of such a summary is given.  In response to a 
question from the Panel, the European Union conf irmed that exhibit CHN-53 contains the latest 
version of this document, and that the Commissi on did not ask Pooja Forge to provide more non-
confidential information, as it had with respect to the sampled EU producers.1031  We also note that the 
questionnaire sent to Pooja Forge contains explana tions and guidance concerning the preparation of a 
non-confidential version of the questionnaire res ponse, including examples of how a respondent may 
summarize confidential information, for instance, by indexing, which, as noted, Pooja Forge appears 
to have done with respect to some information.1032 
7.519  Before considering the parties' arguments on this  claim, we note that the development of this 
claim over the course of these panel proceedings raises concerns for us with regard to due process in 
dispute settlement proceedings in the WTO.  China, in its first written submission, contends that the 
non-confidential versions of the questionnaire res ponses of the EU producers and Pooja Forge were 
"largely deficient", and that this constituted vi olations of Articles 6.2, 6.4 and 6.5 of the 
AD Agreement.1033  Although China provided evidence and ma de arguments in support of its claim 
under Article 6.5 with respect to the questionnair e responses of the two EU producers, Agrati and 
Fontana Luigi, it did not make arguments with respect to the questionnaire response of the Indian 
producer, Pooja Forge, although it did submit th e non-confidential versi on of its questionnaire 
response.  Further, China's first written submis sion does not develop its claims under Articles 6.2 
and 6.4 of the AD Agreement at all – there is no ar gument or discussion of Articles 6.2 and 6.4 in this 
regard.  The European Union, in its first written submission, pointed this out, and argued that China 
appeared to have dropped the part of its claim under Article 6.5 pertaining to the non-confidential 
version of Pooja Forge's questionnaire response.1034  The European Union also pointed out that China 
did not develop its claims under Articles 6.2 and 6.4,  and asserted that this indicated that China was 
not pursuing these claims.1035   
7.520  In its second written submission, China asser ted that it had not dropped its claim under 
Article 6.5 with respect to the non-confidential ve rsion of Pooja Forge's questionnaire response, and 
                                                      
1030 Exhibit CHN-53. 
1031 European Union, answer to Panel question 109. 
1032 European Union, answer to Panel question 108.  Exhibit EU-32 contains the cover letter sent to the 
Indian producer along with the questionnaire in which it is mentioned that non-confidential summaries have to 
be provided for confidential information and that such summaries could be prepared in the form of indices. 
1033 China, first written submission, paras. 587-593. 
1034 European Union, first written submission, para. 748. 
1035 European Union, first written submission, para. 749. WT/DS397/R 
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 clarified its claim, arguing that the non-confiden tial version of this questionnaire response did not 
provide any information, in particular with respect  to product types on the basis of which information 
had been submitted and that this viol ated Article 6.5 of the AD Agreement.1036  China also elaborated 
its claims under Articles 6.2 and 6.4, arguing that "[b]y failing to make sure that the questionnaire 
responses of the Community producers and of the producer in the analogue country included all 
relevant information (if necessary in the form of  non-confidential summary), the EU investigating 
authorities manifestly violated Article s 6.4 and 6.2 of the AD Agreement".1037  In response to 
question 71 from the Panel, China further elaborat ed its claims, arguing chiefly that the Commission 
violated Article 6.5 because no good cause was show n for the confidential treatment of certain 
information in Pooja Forge's questionnaire response.   It also argued that the Commission violated 
Article 6.5.1 because no non-confidential summary w as provided for certain confidential information.  
In its response, China also referred, in one sentence,  to its claims under Articles 6.2 and 6.4.  In its 
oral statement at the second meeting, the European  Union noted China's explanations and argued that, 
taking into consideration paragra ph 16 of its working procedures, "t he Panel should not go any further 
because China had its opportunity to try to make its case but it failed to even try".1038  In its second 
written submission, the European Union made no refere nce to China's arguments with respect to these 
claims.   
7.521  In response to question 103 from the Panel, following the second meeting, China reiterated 
that it makes a claim under both Articles 6.5 and 6. 5.1 with respect to Pooja Forge's questionnaire 
response.  In comments on China's response to que stion 103, the European Union contended that 
China's clarification of the legal basis of its claim in this response was inconsistent with the Panel's 
working procedures and the basic principles of due process.  With respect to China's substantive 
arguments, the European Union submits that China' s argument that the non-confidential version of 
Pooja Forge's questionnaire response contains no info rmation is counterfactual and, with respect to 
product types, it argues that the non-confidential questionnaire response mentions that the product 
concerned is "fasteners" generally. 
7.522  We note that the way in which China has pursued this claim in this dispute is far from ideal.  
We are particularly troubled by the fact that the claim was not developed at all in China's first written 
submission.  In that sense, we share the European Union's due process concerns.  It seems to us that, 
by failing to put forward a fuller explanation of a nd argument in support of its claim with respect to 
the Indian producer's questionnaire response at the first opportunity, that is, in the first written 
submission, China left the European Union in a di fficult position in attempting to respond to a claim 
that was unclear.  Indeed, this lack of clarity led us to pose questions to China in this regard, and 
China subsequently provided, in its second written submission and its answer to our question 71, a 
sufficiently clear argument in support of its cl aim to allow the European Union an adequate 
opportunity to respond, as it did, up to its final submission, with comments on China's answers to 
questions from the Panel concerning this claim.  Mo reover, we recall that one of the purposes of the 
DSU is to provide for the "prompt settlement of situ ations in which a Member considers that benefits 
accruing to it" under a covered Agreement are being impaired by another Member's measure, as provided for in Article 3.3 of the DSU.  In this re gard, we recall the statement of the Appellate Body 
in US – FSC  that  
"Article 3.10 of the DSU commits Member s of the WTO ... to engage in dispute 
settlement procedures "in good faith in an e ffort to resolve the dispute". ...The 
procedural rules of WTO dispute settlement are designed to promote, not the 
                                                     
 
1036 China, second written submission, para. 1110. 
1037 China, second written submission, para. 1117. 
1038 European Union, second oral statement, para. 116.  WT/DS397/R 
 Page 215 
 
 
 development of litigation techniques, but simply the fair, prompt and effective 
resolution of trade disputes."1039   
Ultimately, in this case, we do not consider that the European Union was deprived of due process by 
the manner in which China pursued this claim, an d we therefore consider it appropriate to make 
findings on it and proceed to our s ubstantive analysis.  We would, however, urge complaining parties 
to make every effort to pursue their claims with  the fullest possible exposition of their arguments in 
their first written submissions.  In our view, this  would help ensure that responding parties have a 
sufficient opportunity to respond to those claims, and demonstrate that Members are engaging in 
dispute settlement "in good faith in an effort to r esolve the dispute", as provided for in Article 3.10 of 
the DSU.   
 7.523  Turning to the substance, we note that Ch ina's claim with respect to Pooja Forge's 
questionnaire response is two-fold.  China argues, in the first place, that the Commission violated 
Article 6.5 by treating as confidential certain inform ation in this questionnaire response, particularly 
product types, which, according to China, do not c onstitute confidential information.  If the Panel 
finds that this information was properly treated as confidential, China submits that the Commission 
violated Article 6.5.1 by failing to require Pooja Forge to submit a non-confidential summary which would permit other interested parties to have  a reasonable understanding of the confidential 
information.
1040 
7.524  The European Union argues that  China's claim with respect to Pooja Forge's questionnaire 
response is limited to information on product types.  As noted above, we consider that evaluation of a 
claim under Article 6.5 requires a careful review of th e facts with respect to the claim, and note that 
China has not put forward any evidence or arguments with respect to the confidential treatment of any 
other category of information than that concerning product types.  Therefore, although China's claim takes issue with the treatment of all the information in Pooja Forge's questionnaire response
1041, we 
limit our analysis to whether the Commission erred in treating information on product types as 
confidential. 
7.525  The European Union asserts that Pooja Forg e's questionnaire response mentions that the 
product concerned is "fasteners" generally, suggesting that  in its view, this is su fficient information on 
product types.1042  However, China's claim is that the in formation on product types was treated as 
confidential inconsistently with Article 6.5 of  the AD Agreement because  good cause was not shown 
for such treatment.  There is nothi ng in the evidence before us, and the European Union does not even 
assert, that a showing of good cause was made for trea ting this information as confidential.  We recall 
that Article 6.5 clearly requires that "good cause" be  shown for confidential tr eatment of information, 
whether such treatment is requested for information which is by nature conf idential, or information 
submitted on a confidential basis.1043  The non-confidential version of Pooja Forge's questionnaire 
response gives no information concerning the produc t types for which information was provided, with 
no assertion or explanation of "good cause" for conf idential treatment.  We therefore find that the 
Commission acted inconsistently with its obliga tions under Article 6.5 of the AD Agreement with 
respect to the treatment of the confidential info rmation in Pooja Forge's questionnaire response.  
                                                      
1039 Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" ("US – 
FSC"), WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, 1619, para. 166. 
1040 China, answer to Panel questions 71 and 103;  China, second written submission, paras. 1110-1115. 
1041 See, for instance, China, second written submissi on, para. 1110 (non-confidential version of Pooja 
Forge's questionnaire response "does not contain any information , and in particular information on the "product 
types" on the basis of which the information has been provided by this producer which is obviously not 
confidential".) 
1042 European Union, comments on China, answer to Panel question 103, para. 24. 
1043 See paragraph 7.451 above. WT/DS397/R 
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 Having found a violation of Article 6.5, we need  not, and do not, make findings with respect to 
China's claim under Article 6.5.1.1044 
7.526  With respect to China's claim that the allege d deficiencies in the questionnaire responses of 
Agrati, Fontana Luigi  and Pooja Forge also violated the obligations set forth in Articles 6.4 and 6.2 of 
the AD Agreement, we recall that, in our view , China's claims under Articles 6.4 and 6.2 are 
dependent on the claims under Ar ticles 6.5 and 6.5.1.  Having found violations of Article 6.5.1 in 
connection with the non-confiden tial versions of the questionnaire responses of Agrati and Fontana 
Luigi, and of Article 6.5 in connection with the questionnaire response of Pooja Forge, we consider 
that additional findings on China's claims under Ar ticles 6.4 and 6.2 would not contribute to the 
resolution of this dispute or be potentially useful in implementation.  We therefore exercise judicial 
economy with respect to these claims.1045 
(e) Whether the European Union violated Articles 6.5, 6.2 and 6.4 of the AD Agreement by 
failing to disclose the Eurostat data on total EU production of fasteners 
(i) Arguments of the Parties 
China  
7.527  China asserts that, in the complaint underlying th is investigation, the complainants calculated 
total EU consumption of fasteners by adding total imports to total production, and then subtracting 
total exports from that sum.  China contends that  although the complaint provided the source data for 
total exports and imports, data for total production were not provided on the grounds that this was 
confidential information.  According to China, by  treating this information as confidential, which 
China contends was from public sources, the Commission violated Article 6.5 of the 
AD Agreement.1046  China goes on to argue that, in the De finitive Regulation, the Commission stated 
that the figure for total EU production had been estimated on the basis of Eurostat industrial production data, but failed to explain how this estim ation had been made.  According to China, the 
Commission violated Article 6.5 of the AD Agreemen t by treating as confidential the Eurostat data 
and information as to how the estimation of tota l EU production was made, and particularly as to 
whether adjustments had been made to the Eurostat data.
1047  China argues that the Eurostat data and 
the information as to how the estimation of total EU production had been made, including any adjustments to the Eurostat data, was informati on used by the Commission and was relevant to the 
presentation of the Chinese producers' cases.  Accord ingly, argues China, failing to provide access to 
such information also violated Artic les 6.2 and 6.4 of the AD Agreement.
1048  
European Union  
7.528  The European Union contends that Article 6. 5 refers to information, not documents or 
original sources, and asserts that what matters under this provision is the content of the information, 
not the original document.  The European Un ion maintains that the information on domestic 
consumption and the methodology for its calculation were disclosed to the Chinese producers in the 
investigation at issue.  Specifically, the Eur opean Union asserts that the Chinese producers were 
                                                      
1044 Thus, we need not address the European Union's c ontention that a reference to fasteners in general 
suffices to give a "reasonable understanding" of the produ ct types used in the determination of normal value.   
1045 We would note, however, that the basis for China's claims under Articles 6.2 and 6.4 with respect 
to the questionnaire responses remains unclear to us, as Ch ina has not, in our view, elucidated how, in its view, a 
failure to require a showing of good cause for the treat ment of information as c onfidential, even if true, 
constitutes a violation of these provisions. 
1046 China, first written submission, para. 595.   
1047 China, second written submission, para. 1126. 
1048 China, second written submission, para. 1128.  WT/DS397/R 
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 "given access to the relevant Eurostat information,  including the fact that source of the information 
was Eurostat".1049  Therefore, the European Union contends , there was no violation of Article 6.5.  
The European Union asserts that this information was contained in unlimited Annex C 1-2 to the complaint, and that subsequently it was include d in other documents, such as the Information 
Document and the General Disclosure Document.
1050  The European Union asserts that China's claims 
under Articles 6.2 and 6.4 are consequential,  and requests the Panel to reject them.1051 
(ii) Evaluation by the Panel 
7.529  China argues that the Commission violated Artic les 6.5, 6.2 and 6.4 of the AD Agreement1052 
by treating as confidential the original source on whic h the estimate of total EU production of the like 
product was based, and by not explaining how the est imation of total EU production was made and 
whether adjustments to the Eurostat data were made .  We note that, in our view, China's claims under 
Articles 6.2 and 6.4 are dependent on the claim under Article 6.5, since China's allegation of a 
violation of Articles 6.2 and 6.4 assumes that th e Commission erred in treating the information at 
issue as confidential.  We will therefore start our evaluation with China's claim under Article 6.5. 
7.530  China maintains that the Commis sion violated Article 6.5 by treating Eurostat data on total 
EU production, and how the estimation of total EU production was made, including whether any 
adjustments were made to Eurostat data, as confidential.1053  With respect to the second aspect of 
China's claim, we note that the obligation set forth in Article 6.5 applies to the confidential treatment 
of information, not the methodology used and determ inations made by the investigating authorities.  
Whether the Commission made adjustments to the Euro stat data in calculating total EU production is 
not, in our view, information, but rather an aspect of the Commission's analysis and determination in 
the investigation.  In our view, whether or not these matters can be kept confidential or must be disclosed does not fall within the scope of Article 6.5.
1054  We therefore reject this part of China's 
claim. 
7.531  As regards the Eurostat data, we recall that the complainants submitted information on total 
EU production of fasteners in two annexes:  Unlimited Annex C 1-11055 and Limited Annex C 1-21056.  
The table in Unlimited Annex C 1-1 is titled "EU 27 Total Production of the CN Codes Involved in 
the Complaint in Tons Source:  Eurostat" and contains production data, for the period 2004-first 
quarter 2007, on the basis of CN codes.  The ta ble in Limited Annex C 1-2 is titled "EU 27 Total 
Production of the CN Codes Involved in the Complain t in Tons Original Source".  The titles indicate, 
and a comparison of the two tables shows, that the table in Limited Annex C 1-2 is the source from 
which the data in the Unlimited Annex C 1-1 ha ve been derived.  Complainants asked the 
Commission to treat Limited Annex C 1-2 as conf idential on the grounds that "[t]his information 
                                                      
1049 European Union, first written submissi on, para. 761 (emphasis in original). 
1050 European Union, first written submission, para. 761. 
1051 European Union, first written submission, para. 765. 
1052 China's claim does not extend to Articles 6.5.1 and 6.5.2 of the AD Agreement.  China, answer to 
Panel question 104. 
1053 Specifically, China alleges th at this information was not placed in the non-confidential 
investigation file.  However, the manner in which the assert ed violation took place is not relevant to our analysis 
of China's claim under Article 6.5, which does not contain any guidelines as to how non-confidential information is to be handled by the investigating authorities in terms of its filing. 
1054 We do not mean to suggest that we take the view that an investigating authority can keep secret its 
methodology and determinations, merely that any obligations in this regard flow from provisions of the AD Agreement other than Article 6.5.  We note in this regard, for instance, Article 12.2 of the AD Agreement, 
which requires the investigating authority to set forth, in  a public notice, and in suff icient detail, its "findings 
and conclusions on all issues of fact and law cons idered material by the investigating authorities". 
1055 Exhibit CHN-15, p.45. 
1056 Exhibit EU-11. WT/DS397/R 
Page 218 
 
 
 [was] by nature confidential becau se its disclosure would be of significant competitive advantage to a 
Competitor".1057  The Commission accepted this request and did not place this annex in the non-
confidential file. 
7.532  China contends that the Commission violated Article 6.5 by treating Limited Annex C 1-2 as 
confidential, because "good cause" was not  shown to justify such treatment.1058  China argues that the 
data in the Limited Annex C 1-2 di ffers from the data in the Unlimited Annex C 1-1 in that, unlike the 
latter, the former contains information on the b asis of specific PRODCOM codes, not CN codes, and 
it indicates for each figure whether any of the national figures in the EU 27 were estimated.1059   
7.533  In response to question 76 from the Panel, the European Union argues: 
"Only the original downloaded screen shot  from the EUROSTAT database ([Exhibit] 
EU-11) was not in the non-confidential file. The Commission did not insist that the complaint be modified in this respect b ecause the same information was available in 
the non-confidential file and, in fact, al so publicly through  EUROSTAT's website. In 
this respect it should be noted that the codes in Exhibit EU-11 correspond exactly to the CN codes on p. 45 in Exhibit CHN-15. The table on p. 45 of Exhibit CHN-15 
gives product data by CN code at 8 dig it level. Exhibit EU-11 gives production data 
by PRODCOM code using the NACE 1.1 classification.  EUROSTAT publishes a "look-up list" to match CN codes (export codes) to PRODCOM codes (production 
codes) and this is availa ble on the  EUROSTAT website.
69 
_______________ 
69 See CN 2006 - PRODCOM 2006 
http://ec.europa.eu/eurostat/ramon/relations /index.cfm?TargetUrl=ACT_OTH_REL_DLD&St
rNomRelCode=CN%202006%20-%20PRODCOM%202006&StrLanguageCode=EN&StrFormat=HTML (last visited 
16 April 2010).
"1060 
7.534  The European Union's explanation confirms that , as China argues, the Eurostat information in 
Limited Annex C 1-2 was available from a public s ource, namely the Eurostat website.  It seems 
apparent to us that information that is publicly available is not confidential within the meaning of 
Article 6.5 of the AD Agreement.  However, the Co mmission treated this information as confidential 
information, despite that good cause had not been shown.   This, in our view, wa s inconsistent with the 
letter of Article 6.5 of the AD Agreement, which requires that "good cause" be shown to justify 
confidential treatment of information.  The fact that this information was available in the public 
domain is not, in our view, an excuse for disregarding the requirements of Article 6.5.  This undoubtedly constitutes a fault on the part of the Commiss ion with respect to Article 6.5, even if this 
violation did not materially affect the ability of Chinese producers to defend themselves in the 
investigation at issue. 
7.535  Turning to China's claim under Article 6.4, we recall that this provision does not require the 
investigating authorities to actively discl ose information to interested parties.
1061  Rather, Article 6.4 
requires the authorities "provide timely opportunities for all interested parti es to see all information 
that is relevant to the presentati on of their cases, that is not confidential ... and that is used by the 
authorities".  We note that in the fasteners invest igation, the information in question, total EU 
                                                      
1057 Exhibit CHN-15, p.178. 
1058 China, second written submission, para. 1122. 
1059 China, answer to Panel question 74; Chin a, second written submission, para. 1121. 
1060 European Union, answer to Panel question 76. 
1061 See paragraph 7.480 above.  WT/DS397/R 
 Page 219 
 
 
 production of fasteners, was, available to inter ested parties, both from public sources, and more 
importantly, in Unlimited Annex C 1-1.  It is therefore clear that the Chinese producers had adequate opportunities to see that information.  We therefore reject China's claim that the Commission violated 
the obligation set out under Article 6.4 of the AD Agreem ent with respect to this information.  Having 
rejected the claim under Article 6.4, we also rej ect China's claim under Artic le 6.2, which concerns 
the more general right of interested parties with to have a "full opportunity for the defence of their 
interests".  Since the information in question was av ailable to interested parties, we see no basis on 
which we might conclude that interested parties did not have a full opportunity for the defence of their 
interests in this regard.  
(f) Whether the European Union violated Article s 6.9, 6.2 and 6.4 of the AD Agreement in 
procedural aspects of the domestic industry definition  
(i) Arguments of the Parties 
China
 
7.536  China submits that the Commission's determ ination regarding the number of producers 
included in the domestic industry definition was unclear, and specifically, that the Commission 
indicated in the Information Document that the num ber of producers in the industry was 114, and in 
the General Disclosure Document (and in the Defi nitive Regulation) indicated that the number of 
producers in the domestic industry was 46.1062  China contends that by failing to give access to 
relevant information concerning the definition of th e domestic industry, and in particular, how many 
producers were actually included in the domestic i ndustry definition and their identity as well as the 
identity of the producers that were excluded from th e scope of the domestic industry, the Commission 
violated Articles 6.2 and 6.4 of the AD Agreement.1063  China adds that by not disclosing in the 
Disclosure Document (i) the number of companies c onstituting the domestic industry, (ii) whether or 
not such companies supported the complaint, (iii) their identity and (iv) the reason for the reduction 
from 86 to 46 companies, the Commission also  violated Article 6.9 of the AD Agreement.1064 
European Union  
7.537  The European Union asserts that the "evidence"  China relies on to support its claims under 
Articles 6.2 and 6.4 is certain recitals in the Defi nitive Regulation, and contends that these recitals 
cannot constitute evidence of a vi olation of these two provisions.1065  Moreover, the European Union 
notes that China's arguments also refer to alleged inconsistencies in the number of domestic producers 
referred to in two recitals of the Definitive Regulati on, and explains that this discrepancy is explained 
in the Definitive Regulation itself, at recital 112.1066  The European Union considers that China has 
failed to make a prima facie case in connection with its claims under Articles 6.2 and 6.4.1067  The 
European Union contends that China's claim unde r Article 6.9 is outside the Panel's terms of 
reference, because the parties did not consult on this claim.  If the Panel disagrees, the European Union considers that China has failed to present any evidence or argument in support of this 
claim, and therefore has failed to make a prima facie case with regard to this claim.
1068   
                                                      
1062 China, first written submission, paras. 599-604. 
1063 China, first written submission, paras. 605-607. 
1064 China, first written submission, para. 609. 
1065 European Union, first written submission, paras. 766-767. 
1066 European Union, first written submission, para. 768. 
1067 European Union, first written submission, para. 769. 
1068 European Union, first written submission, paras. 770-771. WT/DS397/R 
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 (ii) Evaluation by the Panel 
7.538  China's claim alleges violations of Articles 6.2, 6.4 and 6.9 of the AD Agreement, on the 
grounds that the Commission failed to provide information on the number and identity of the producers making up the domestic industry.   
7.539  The factual basis for China's claim is the Co mmission's alleged failure to give access to 
information on the number and identity of the domestic producers making up the domestic industry as well as on the identity of the producers that were  excluded from the scope of the domestic industry 
defined by the Commission in the fasteners i nvestigation.  We recall that, as discussed above
1069, in 
our view, Articles 6.2 and 6.4 do not impose any affirmative obligation on investigating authorities to 
actively disclose information to interested parti es.  We also observe that Article 6.4 requires 
investigating authorities to provide timely opportunities for interested parties to see information .  
However, China's claim does not refer to a failure to  provide opportunities to see information.  China's 
claim focuses on the definition of  the domestic industry, specifically the number and identity of 
producers in that industry.  In our view, the defin ition of the domestic industry is an aspect of the 
Commission's analysis and determination,  and does not constitute information per se .  China 
acknowledges that the Commission informed parties, at various stages, of its views in this regard, in 
the Information Document, and in the General Disc losure Document, and ultimately explained its 
definition of the domestic industry in the Defin itive Regulation.  The differences between the 
statements in these documents do not, in our view, have any relevance to a claim under Ar ticles 6.4, 
as they are not, as we have noted, information per se , but conclusions reached by the Commission.  
Merely because the conclusion at an early stage of  the investigation may be different from that 
ultimately reached does not change this fact.  In our view, China has failed to establish a prima facie  
case of violation of Article 6.4 of the AD Agreem ent because the facts and argument it presents are 
not relevant to the obligation set out in Article 6.4.  Similarly, we fail to see how the fact that the 
Commission made, and notified parties concerning, conc lusions with respect to the definition of the 
domestic industry at various stages of the proceeding establishes, even prima facie , a violation of the 
Article 6.2 requirement to provide interested pa rties a full opportunity for the defence of their 
interests.  Indeed, quite the contrary, the fact that the interested parties were notified of these 
conclusions if anything enabled them to defend their interests by giving insight as to the development of the Commission's analysis, and enabling them to present their own arguments.  We therefore reject 
China's claims under Articles 6.2 and 6.4, as China has failed to substantiate  them sufficiently to 
present a prima facie  case.  
7.540  With respect to China's claim under Article 6.9, we recall that we have concluded that China's 
claims under Article 6.9 with respect to the nor mal value calculations were not the subject of 
consultations, given that the request for consulta tions contains no reference to Article 6.9, and 
therefore found these claims not to be within our terms of reference.
1070  In light of the basis for that 
conclusion, we consider that this claim under Article 6.9 is also not within our terms of reference, and 
we therefore do not address it further. 
                                                      
1069 See paragraphs 7.478 to 7.481 above.   
1070 See paragraphs 7.503 to 7.508 above.  WT/DS397/R 
 Page 221 
 
 
 (g) Whether the European Union violated Article 12.2.2 of the AD Agreement in procedural 
aspects of individual treatment determinations  
(i) Arguments of the Parties 
China  
7.541  China argues that determinations concerning indi vidual treatment constitute "matters of fact 
and law" within the meaning of Article 12.2.2, and that therefore, the Commission was required to 
explain the reasons for its determination with respect to each request.1071  However, in the Definitive 
Regulation, the Commission merely stated that, on th e basis of the information available, the requests 
met the requirements to be granted IT, without explaining the reasons.  China asserts that the 
requirement to explain is not limited to situations where requests for IT are rejected.  Therefore, China 
asserts, by not explaining the basis for its deci sions granting the requests for IT, the Commission 
acted inconsistently with the obligation set forth under Article 12.2.2 of the AD Agreement.1072 
European Union  
7.542  The European Union first asserts that this claim is not within the Panel's terms of reference 
because China failed to consult with the Eur opean Union with regard to Article 12.2.2.1073  If the 
Panel disagrees, the European Union submits that the Definitive Regulation states that all Chinese 
producers that requested individual treatment were  granted such treatment because each of them 
satisfied the criteria set out in Article 9(5) of the Basic AD Regulation.  According to the European Union, this is a positive decision for the relevant interested parties, which provides the 
relevant information on the matters of  fact and law and reasons for such determination.  Therefore, the 
European Union maintains that there can be no ne ed to explain such a decision in the Definitive 
Regulation in any more detail be yond explaining that the relevant conditions have been fulfilled.
1074   
(ii) Evaluation by the Panel 
7.543  With respect to the European Union's prelimin ary objection, we note that China's request for 
consultations specifically states: 
"2. China considers that the EC's imposition of anti-dumping duties on imports 
of certain iron or steel fasteners originating in the People's Republic of China  is 
inconsistent with the EC's obligations under Articles VI and X:3(a) of the GATT 
1994;  Articles 1, 2.1, 2.2. 2.4, 2.6, 3.1, 3.2, 3.4, 3.5, 4.1, 5.4, 6.1, 6.2, 6.4, 6.5, 6.10, 9.2, 9.4 and 17.6(i) of the AD Agreement as well as Part I, paragraph 15 of China's Protocol of Accession. 
(i) The EC imposed a countrywide duty on the sole basis that China is a non-
market economy country and exempted from this duty only those few Chinese exporters that were able to meet the so-c alled "Individual Treatment" criteria, thereby 
acting inconsistently with Articles 2, 6.10, 9.2, 9.3, 9.4 and 12.2.2  of the 
AD Agreement..."  (emphasis added) 
                                                     
 
1071 China, first written submission, paras. 613-614. 
1072 China, first written submission, para. 615. 
1073 European Union, first written submission, para. 772. 
1074 European Union, first written submission, para. 774. WT/DS397/R 
Page 222 
 
 
 Thus, it is clear to us as a matter of fact that  China's request for consultations encompassed its 
complaint under Article 12.2.2 with respect to the Definitive Regulation.  We therefore reject the 
European Union's preliminary objection.  
7.544  Turning to the substance of China's claim, we re call that we have concl uded that Article 9(5) 
of the Basic AD Regulation is inconsistent w ith Articles 6.10 and 9.2 of the AD Agreement.
1075  We 
also found that the application of that provision in th e fasteners investigation was inconsistent with the 
same two provisions.1076  We consider as a general matter that, where there is a substantive 
inconsistency with the provisions of the AD Agreem ent, it is not necessary to consider whether there 
is a violation of Article 12, as the question of wh ether the notice is "sufficient" under Articles 12.2 
and 12.2.2 is immaterial.1077 
7.545  In this case, however, we consider that the br oader issue raised by China's assertion that the 
Commission's explanation of its decision granting individual treatment was inconsistent with 
Article 12.2.2 merits consideration, as this is an  issue which may well arise, even if in another 
context, in implementation.  We recall that the Commission explained its decision by stating that each 
of the producers requesting individual treatment had met all the requirements to be granted such 
treatment in accordance with the relevant provision of  EU law.  In our view, China is correct to the 
extent that it argues that whether a decision in  the course of an anti-dumping investigation is 
favourable to relevant interested parties or not, does not determine whether the notice provided of the 
decision is sufficient under Article 12.2.2.   
7.546  We recall that Article 12.2.2 of the AD Agreement provides: 
"A public notice of conclusion … of an inv estigation in the case of an affirmative 
determination providing for the imposition of  a definitive duty … shall contain, or 
otherwise make available through a separat e report, all relevant information on the 
matters of fact and law and reasons wh ich have led to the imposition of final 
measures or the acceptance of a price undert aking, due regard being paid to the 
requirement for the protection of confidential  information.  In particular, the notice or report shall contain the information descr ibed in subparagraph 2.1, as well as the 
reasons for the acceptance or rejection of re levant arguments or claims made by the 
exporters and importers, and the basis for any decision made under subparagraph 10.2 
of Article 6".  
Article 12.2 provides, in pertinent part, that "Public  notice ... of any preliminary or final determination 
… shall set forth, or otherwise make available through a separate report, in sufficient detail the 
findings and conclusions reached on all issues of fact and law  considered material by the 
investigating authorities".  (emphasis added)  
7.547  It is clear to us that the obligations with r espect to explanation of determinations are not 
limited only to determinations that are unfavourable  to a particular interested party or group of 
interested parties.  On the other hand, however, it is also clear to us that the nature and content of the 
explanation given may well differ depending on the nature of the determination or decision in 
question.  We do not exclude that, in a situati on where a relevant provision establishes detailed 
requirements for factual criteria that must be satisfi ed in order to justify a particular decision, an 
explanation that the party in question satisfied  the relevant criteria may be sufficient under 
Article 12.2.2.   
                                                     
 
1075 See paragraphs 7.98 and 7.112 above. 
1076 See paragraph 7.149 above. 
1077 Panel Report, EC– Bed Linen , para. 6.259.  WT/DS397/R 
 Page 223 
 
 
 7.548  In this case, however, since we have found the pr ovisions of Article 9(5) of the Basic AD 
Regulation at issue in connection with this clai m are inconsistent with the European Union's 
obligations, both as such and as applied, we do not consider it appropriate to rule on whether the 
Definitive Regulation in this case was consistent  with the requirements of Article 12.2.2.  
(h) Whether the European Union violated Article  6.5 of the AD Agreement by disclosing 
confidential information 
(i) Arguments of the Parties 
China  
7.549  China notes that each of the nine Chinese expor ting producers included in the sample for the 
dumping determination requested market economy tr eatment, and provided information in support of 
those requests as called for in the MET/IT Claim Fo rm.  The information supplied in those forms was 
verified by the Commission at the premises of the companies.  The assessment  of the claims for MET 
was disclosed by the Commission in a single document for all nine producers, which was provided to 
the nine Chinese producers, to the Chinese authorities, and to the interested parties, including the 
complainant in the investigation.1078  China states that the document contains confidential information 
for each of the nine Chinese producers, concerning ow nership of the company, sales, costs, profits, 
subsidies, accounting systems, assets, etc, whic h is sensitive and was submitted on a confidential 
basis, as indicated by the label "LIMITED" on the MET/IT Claim Forms.1079  China asserts that by 
failing to treat the information as confidential and di sclosing it to interested parties other than the 
producers whose information it was, the European Union violated Article 6.5 of the 
AD Agreement.1080  
European Union  
7.550  The European Union contends that China's claim is based on general assertions and that 
China has failed to make a prima facie case of violation.1081  The European Union also asserts that the 
information in the document is very general and does not disclose any specific information submitted 
on a confidential basis.  Moreover, the European  Union contends that none of the companies 
concerned have complained about confiden tial information having been disclosed.1082    
(ii) Arguments of Third Parties 
Chile  
7.551  Chile notes that Article 6.5 of the AD Agreemen t distinguishes between information which is 
by nature confidential, and information which is provided on a confidential basis by parties to an 
anti-dumping investigation.  Nevertheless, for Chile, the treatment of information as confidential will 
be contingent upon there being good cause for tr eating the information in question as such.1083  Chile 
considers that for this provision to be correctly ap plied, the reasons justifying the disclosure of the 
information provided must be known to those who provided the information, and if the authority 
concludes, in the course of the investigation, that  good cause for maintaining the confidentiality of the 
information does not exist, it must expressly so stat e.  For Chile, this cannot  happen subsequently, still 
less once dispute settlement proceedings have begun.  The disclosure of information considered by the 
                                                      
1078 China, first written submission, paras. 617-619. 
1079 China, second written submission, para. 1142, citing Exhibit CHN-71. 
1080 China, first written submission, paras. 620-621. 
1081 European Union, first written submission, paras. 777-778. 
1082 European Union, first written submission, para. 779. 
1083 Chile, oral statement, para. 10. WT/DS397/R 
Page 224 
 
 
 authority to be non-confidential must be properly s ubstantiated and must be expressly authorized by 
the party that supplied the information, otherwise,  the position of the investigated party would be 
undermined and the rules of due process violated.1084 
United States  
7.552  While it takes no position on the merits of China' s factual allegation, the United States agrees 
with China that, where an investigating authorit y accepts information being submitted as confidential, 
the authority's failure to so treat that information, in particular by disclosing it to interested parties 
other than each of the exporting producers that fu rnished the information, is inconsistent with 
Article 6.5 of the AD Agreement.1085 
(iii) Evaluation by the Panel 
7.553  Before turning to the substance of China's claim we recall the salient facts, which we 
understand to be undisputed.  Nine  Chinese exporting producers were selected as the sample for the 
investigation of dumping.  All nine requested  market economy treatment (MET), and provided 
information supporting those claims to the Commission, which informa tion was subsequently verified 
at their premises.  The cover pages of the MET/ IT forms submitted by th ree Chinese producers are 
clearly labelled "limited".1086  The information submitted in those forms served as the basis for the 
Commission's analysis and determination with respect to the requests, which were ultimately denied.  
The assessment of the MET claims by the Comm ission was set out in a single document entitled 
"MET Disclosure Document – Assessment of market Economy Treatment Claims by nine producers in the PRC".
1087  That document was made available to all nine Chinese exporting producers in the 
sample, to the Chinese authorities, and to other in terested parties, including the complainants. 
7.554  We understand, and the European Union has not ass erted otherwise, that in EU practice, the 
label "limited" on a document indicates that the docum ent so labelled is submitted on a confidential 
basis as containing confidential information within th e meaning of Article 6.5 of the AD Agreement.  
In response to question 80 from the Panel, the European  Union stated that "it is true that the original 
MET Disclosure Document is labelled "L imited" and contains a footnote stating inter alia  that it "is 
for internal use only" and that it "is a confid ential document pursuant to Article 19 of Council 
Regulation EC No 384/96".1088  The footnote in question reads, in full: 
"This document is for internal use only. It is protected pursuant to Article 4 of 
Regulation (EC) No 1049/2001 of the European  Parliament and of the Council (OJ L 
145, 31.5.2001, p. 43).  It is a confidential document pursuant to Article 19 of 
Council Regulation EC No 384/96 (OJ L 56 6.3. 1996, p.1) and Article 6 of the WTO 
Agreement on Implementation of Article  VI of the GATT 1994 (Anti-dumping 
Agreement)." 
7.555  The principal question for us in resolving Ch ina's claim is whether, by providing the MET 
Disclosure Document to each of the nine Chinese e xporting producers in the sample, to the Chinese 
authorities, and to other interested parties, incl uding the complainants, the European Union disclosed 
confidential information.  We recall that Article 6.5 provides, in pertinent part: 
                                                      
1084 Chile, oral statement, para. 11. 
1085 United States, written submission, para. 38. 
1086 Exhibit CHN-71.   
1087 Exhibit CHN-19.   
1088 European Union, answer to Panel question 80, para. 187.  The first three paragraphs of Article 19 
of Council Regulation EC No 384/96 largely replicate the provisions of Article 6.5 of the AD Agreement.  WT/DS397/R 
 Page 225 
 
 
 "6.5 Any information which is by nature  confidential (for example, because its 
disclosure would be of significant competitiv e advantage to a competitor or because 
its disclosure would have a significantly adverse effect upon a person supplying the 
information or upon a person from whom that  person acquired the information), or 
which is provided on a confidential basis by  parties to an investigation shall, upon 
good cause shown, be treated as such by the au thorities.  Such information shall not 
be disclosed without specific permission of the party submitting it.17 
_______________ 
17  Members are aware that in the territory of certain Members disclosure pursuant to a 
narrowly-drawn protective order may be required. " 
 
7.556  The European Union does not deny that the M ET/IT claim forms submitted by the Chinese 
producers were submitted on a confidential basis.  This is borne out by the fact that the 
three documents submitted as Exhibit CHN-91 each bear s, on the cover page, the indication that it is 
the "Limited Version", with a footnote to that indication which states:  
"Please note that confidential information falls under the term ' limited ' according to 
the internal rules of the European Commission.  Hence, only documents labelled 
'limited' are considered confidential do cuments pursuant to Article 19 of Council 
Regulation (EC) No. 384/96 (OJ L 56, 6.3.1996 p.1) and Article 6 of the WTO Agreement on Implementation of Article VI of the GATT 1994 (Anti-Dumping Agreement).  Documents which do not contai n this label are considered to be non-
confidential documents pursuant to these provisions.  Therefore, any replies which 
contain confidential information must be labelled 'Limited'."  
We note that the MET/IT Claim Forms were prepared  by the Commission, and were provided by it to 
Chinese exporters to enable them to claim market  economy and/or individual treatment in the anti-
dumping investigation in question.  In addition, we  note that the option "Limited Version" is one of 
two options which can be chosen by the company su bmitting the form – the other is labelled "Version 
for Inspection by Interested parties".  In light of  these facts, it is eviden t to us that the Chinese 
exporting producers provided the information in these forms to the Commission on a confidential 
basis.  Moreover, we consider it clear, in view of the footnote, that they were entitled to expect that 
the information would be treated as confidential by the Commission in the course of the investigation, 
as required by EU law and the relevant provision of Article 6 of the AD Agreement, that is 
Article 6.5.  While China did not provide copies of the forms submitted by the other six producers, the 
European Union does not contend that they were not  submitted on the same "limited" basis as those in 
Exhibit CHN-71, and we have no reason to consider th at they were any different in this regard.  The 
European Union has made no argument that the Commi ssion denied confidential treatment to any of 
the information submitted in the MET/IT cl aim forms by the nine Chinese producers.  
 
7.557  The European Union also does not de ny that the MET Disclosure Document
1089 bears the 
label " Limited ", with a footnote, which states: 
"This document is for internal use only. It is protected pursuant to Article 4 of 
Regulation (EC) No 1049/2001 of the European  Parliament and of the Council (OJ L 
145, 31.5.2001, p. 43).  It is a confidential document pursuant to Article 19 of 
Council Regulation EC No 384/96 (OJ L 56 6.3. 1996, p.1) and Article 6 of the WTO 
Agreement on Implementation of Article  VI of the GATT 1994 (Anti-dumping 
Agreement)." 
                                                      
1089 Exhibit CHN-19. WT/DS397/R 
Page 226 
 
 
 In our view, it is thus clear that the European  Union treated the MET Disclosure Document as one 
containing confidential information, to be treated as such as required by EU law and the relevant 
provision of Article 6 of the AD Agreement, that is , Article 6.5.  Moreover, we note that the MET 
Disclosure Document reports information concerni ng, and the Commission's conclusion with respect 
to each of the nine Chinese producers, individually and by name1090, and the European Union has not 
demonstrated that the information reported in that  form was not submitted on a confidential basis.   
 7.558  The European Union asserts that the "Limited" label can be explained on the basis that the 
document was originally an internal working docum ent, but ceased to be "Limited" once it was sent to 
interested parties as an  MET Disclosure Document, and the "Limited" label, and the footnote, should 
have been omitted when the document was sent to the parties.
1091  The European Union considers that 
the labelling of the document cannot itself amount to a violation of Article 6.5, and asserts that the 
information in the document is "very general a nd does not disclose any information submitted on a 
confidential basis", and that none of the companies involved complained about disclosure of confidential information.
1092  We consider the fact that the docum ent was considered to be for internal 
use only, as indicated by the footnote, to be irrelevant for purposes of our consideration of China's 
claim.  Clearly, it is within the power of the Comm ission to disclose internal documents to whomever 
it may choose, provided that it does not, by so doing, violate some other relevant obligation, as China claims it has done in this case. 
7.559  We consider the following facts to be indisputable:   
(a) nine Chinese producers submitted information in MET/IT claim forms on a 
confidential basis;  
(b) the Commission made no decision concluding that the information so submitted was 
not properly treated as confidential;  
(c) the Commission neither sought nor received the permission of each of the Chinese 
producers to disclose the information so submitte d, either as such, or in generalized or 
summary form;  and  
(d) the Commission provided a document, which reports information so submitted for 
each Chinese producer individually and by na me, to all nine Chinese producers, to the 
Chinese authorities, and to other interested parties, including the complainants, in the 
fasteners investigation.   
In light of these facts, we consider the conclusi on that the European Union disclosed confidential 
information in the anti-dumping investigation underlying this dispute to be inescapable. 
 7.560  Finally, we note that, in the circumstances of  this case, we do not consider it necessary for us 
to determine whether or not the information in th e MET/IT Claim Forms, or in the MET Disclosure 
Document, was properly treated as confidential unde r Article 6.5 of the AD Agreement.  We agree 
                                                     
 
1090 Exhibit CHN-19. 
1091 European Union, answer to Panel question 80, para. 188. 
1092 European Union, answer to Panel question 80, para. 189.  With respect to the latter point, we note 
that, contrary to the European Union's contention that none of the companies mentioned in the MET Disclosure 
Document voiced such concerns, the MET Disclosure Do cument specifically refers to one Chinese producer 
who expressed concerns to the Commission with respect to  disclosure of confidential information in the MET 
disclosure document.  China, first written submission, pa ra. 622, Exhibit CHN-61.  While it is not clear whether 
any confidential information of that co mpany was actually disclosed in the document, it is clear that at least  one 
Chinese producer raised concerns ab out the disclosure of confidential information in the MET Disclosure 
Document.    WT/DS397/R 
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 with the European Union that merely because a document is labelled as such does not demonstrate 
that the information it contains is confidential within the meaning of Article 6.5.  It is clear that an 
investigating authority may conclude that inform ation submitted as confidential does not merit such 
treatment.  However, in such a case, Article  6.5.2 of the AD Agreement establishes certain 
requirements, not least of which is to give the s upplier of the information an opportunity to make the 
information public or to authorize its disc losure in generalized or summary form.1093  Moreover, even 
if the investigating authority concludes that a request  for confidentiality is not warranted, Article 6.5.2 
provides that if the supplier is unwilling to make th e information public or to authorize its disclosure 
in generalized or summary form, the au thorities may disregard the information.1094  Article 6.5.2 does 
not, however, authorize the authorities to provide th e information to other interested parties in the 
investigation.  In any event, even assuming, as the European Union asserts, that the MET Disclosure 
Document does not contain any data on the volume, value, or unit price of sales, actual costs of the 
companies concerned, percentage or value of profits , value of any subsidy received, or the value of 
the assets of the companies examined1095, this does not, in our view, demonstrate that the document 
contains only non-confidential information.  In formation which may properly be treated as 
confidential under Article 6.5 is not necessarily lim ited to data of the types referred to by the 
European Union, but may include any type of information submitted on a confidential basis.   
7.561  Based on the foregoing, we conclude that the European Union violated Article 6.5 of the 
AD Agreement by disclosing confidential information.   
(i) Whether the European Union violated Article 6.1.1 of the AD Agreement by failing to 
provide sufficient time to respond to requests for information  
(i) Arguments of the Parties 
China  
7.562  China notes that Article 6.1.1 of the AD Agreement provides that "foreign producers 
receiving questionnaires used in an anti-dumping inv estigation shall be given at least 30 days for 
reply", and footnote 15 provides that the time period shall be counted from the date of receipt, as a 
general rule, deemed to be one week fr om the date the questionnaire was sent.1096  China asserts that, 
in this case, the Commission gave Chinese producers only 15 days from the date of the Notice of Initiation to submit "questionnaires" for companies claiming market economy status and/or individual 
treatment.
1097  In China's view, the Commission should have given Chinese producers 30 days to 
submit their claims for market economy treatment and/or for individual treatment, and should have 
started to count that period from the date of receipt.1098 
                                                      
1093 We recall that Article 6.5.2 of the AD Agreement provides: 
"If the authorities find that a request for confiden tiality is not warranted and if the supplier of 
the information is either unwilling to make the information public or to authorize its 
disclosure in generalized or summary form, the authorities may disregard such information unless it can be demonstrated to their satis faction from appropri ate sources that the 
information is correct." (footnote omitted). 
1094 There is no indication, and the European Union does not contend, that the Chinese producers who 
supplied the information agreed to make it public or authorized its disclosure in generalized or summary form.  
We note that the European Union does not contend that the information in the MET Disclosure Document is in 
"generalized or summar y form".  We recall in this regard that the information is reported for each submitting 
Chinese producer individually, identified by name.   
1095 European Union, first written submission, para. 779. 
1096 China, first written submission, para. 625, quoting Article 6.1.1 (footnote omitted). 
1097 China, first written submission, paras. 623-624. 
1098 China, first written submission, para. 628. WT/DS397/R 
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 European Union  
7.563  The European Union notes that the premise of China's claim is that the document in question 
is a "questionnaire" within the meaning of Article 6.1.1 of the AD Agreement.1099  T h e  
European Union asserts that this premise is fundame ntally flawed, asserting that the provision applies 
to the initial overall questionnaire, citing in this regard the panel report in Egypt – Steel Rebar .1100  
According to the European Uni on, the claim form for MET and IT cannot be a questionnaire for 
purposes of Article 6.1.1 because it is for a different  purpose than the questionnaire foreseen in that 
provision.1101  The European Union notes that, according to  China's Protocol of Accession, it is for 
Chinese producers in an anti-dumping investigation to  show that market economy conditions prevail, 
and the claim form is a means to allow that showing.1102  Moreover, the European Union contends that 
the decision whether to grant MET and/or IT must  be made early in the investigation, as it has 
important consequences for the investigation, and thus consideration of claims in this regard must not 
become an obstacle to the conduct of the investigation.1103  Finally, the European Union asserts that 
the 15-day period was reasonable, noting that the same period was given to other parties for submission of basic information.    
(ii) Arguments of Third Parties 
Japan
 
7.564  Japan shares the European Union' s view that Article 6.1.1 of the AD Agreement applies only 
to the initial questionnaire, and does not require that investigating authorities provide respondents 
with a minimum 30-day period to reply to all possible information requests.1104  Japan considers it 
sufficient that respondents are afforded a reasonable period of time to supply other information, given 
the time restraints on AD investigations.1105  Japan notes that an MET/IT  claim form is an additional 
element used only in AD investigations concerning non-market economy countries, and that the deadlines for investigations regarding market  economy and non-market economy countries are 
identical.  As the resolution of these claims can ha ve an important impact on the remainder of the 
investigation, Japan considers that they should be d ealt with as swiftly as possible, and that a period of 
less than 30 days to submit an MET/IT claim form is entirely reasonable.
1106 
United States  
7.565  The United States agrees with the European Union that China's claim is premised on a 
fundamental misunderstanding of  the scope of Article 6.1.1.1107  The United States refers to the report 
of the panel in Egypt – Rebar  to argue that the original antidumpi ng questionnaire in an investigation 
is the single document considered "the ques tionnaire" for purposes of the AD Agreement.1108  T h e  
United States considers that the opportunity provided by an investigating authority to permit Chinese 
companies to claim market economy treatment or indi vidual treatment is a precursor to the issuance of 
the actual antidumping questionnaire, and therefore is not subject to the obligations in Article 6.1.1 – 
indeed, the United States notes that the informati on submitted enables the investigating authority to 
                                                      
1099 European Union, first written submission, para. 782. 
1100 European Union, first written submission, para. 783. 
1101 European Union, first written submission, para. 783. 
1102 European Union, first written submission, para. 785. 
1103 European Union, first written submission, para. 786. 
1104 Japan, written submission, para. 71. 
1105 Japan, written submission, para. 75. 
1106 Japan, written submission, paras. 76-77. 
1107 United States, written submission, para. 39. 
1108 United States, written submission, paras. 41-42.  WT/DS397/R 
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 identify those companies that will receive the antidumping questionnaire for which the minimum 30-
day response period applies.1109 
(iii) Evaluation by the Panel 
7.566  In order to resolve China's claim under Article 6. 1.1, we must answer two questions.  First, 
we must interpret Article 6.1.1 to ascertain the sc ope of the obligation set forth therein, and second, 
we must determine, as a matter of fact, whether the documents concerned in China's claim fall within 
that scope.  We address these questions in turn below. 
7.567  First, however, we recall the salient facts, wh ich we understand to be undisputed.  In the 
Notice of Initiation, the European Union indicated  that "Duly substantiated claims for market 
economy treatment ... and/or for individual treatment pursuant to Article 9(5) of the basic Regulation, 
must reach the Commission within 15 days" of the publication of the notice.  Chinese exporting 
producers were sent a letter, attaching a copy of the form for requesting market economy treatment and/or individual treatment, stating that compan ies wishing to "submit a claim for individual 
treatment in this proceeding ... must submit the attached claim form ... within 15 days, i.e. by 
26 November 2007". 
7.568  The European Union asserts that, having fa iled to present the document in question as 
evidence to support its claim, China has failed to make a prima facie  case.  We consider, however, 
that the failure to submit a copy of the document with its first written subm ission is not fatal to 
China's claim.  China may well have proceeded on the understanding that the Panel could address this 
claim without reference to the speci fic form itself.  China did submit a copy of the form, which is 
entitled "Market Economy Treatment and/or Indivi dual Treatment claim form", with its second 
written submission.
1110  The European Union also offered to provide us with a copy, but argues that 
this would undercut the Panel's working procedures,  which require the submission of evidence by the 
first meeting, as a general matter.1111  We recall that we posed questio n 81 to China with respect to the 
basis for the assertion that this document is a "ques tionnaire" within the meaning of Article 6.1.1.  
Thus, even were we to take a strict view of our  working procedures, which we do not consider is 
required1112, China's submission falls within the express provision of our working procedures allowing 
for the submission of factual evidence neces sary for purposes of answers to questions.1113   
7.569  Turning to the substantive issues, we recall th at Article 6.1.1 of the AD Agreement provides, 
in pertinent part:  
"6.1.1 Exporters or foreign producers receiving questionnaires used in an 
anti-dumping  investigation shall be given at least 30 days for reply.15  Due 
consideration should be given to any requ est for an extension of the 30-day period 
and, upon cause shown, such an extension should be granted whenever practicable. 
_______________ 
15  As a general rule, the time limit for exporters sh all be counted from the date of receipt of 
the questionnaire, which for this purpose shall be deemed to have been received one week 
from the date on which it was sent to the respondent or transmitted to the appropriate 
                                                      
1109 United States, written submission, para. 43. 
1110 Exhibit CHN-72. 
1111 See Working Procedures for the Panel, para. 16.   
1112 Our working procedures provide for exceptions, upon a showing of good cause, to the general rule 
requiring factual evidence to be submitted no later than the first substantive meeting.  Working Procedures for 
the Panel, para. 16.   
1113 Working Procedures for the Panel, para. 16.   WT/DS397/R 
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 diplomatic representative of the exporting Me mber or, in the case of a separate customs 
territory Member of the WTO, an official  representative of the exporting territory." 
The fundamental questions for us are what is the m eaning of "questionnaire" in this provision, and 
whether the "Market Economy Treatment and/or I ndividual Treatment claim form" which is the 
subject of China's claim is such a "questionnaire".    7.570  We note that the first sentence of Article 6.1. 1 clearly requires investigating authorities to 
allow at least 30 days for replies to "questionnaires" .  However, neither this sentence, nor any other 
provision in the AD Agreement, defines the term " questionnaires".  The only qualification of the term 
"questionnaire" in Article 6.1.1 is the fact that th e 30-day period is accorded to "exporters or foreign 
producers receiving questionnaires".  Therefore, we ex amine the ordinary meaning of this term in its 
context, and in light of the object and purpose of the provision to inform our understanding.   
7.571  Neither party has relied on the dictionary definiti on of the word questionnaire in this dispute.  
Nonetheless, we note that the New Shorter Ox ford English Dictionary defines the word 
"questionnaire" as "a formulated series of questi ons by which information is sought from a selected 
group, usu[ally] for statistical analysis".
1114  While this is an appropriate  definition in our view, it does 
not suffice to answer the question before us.  In the course of an anti-dumping investigation, it is not unusual for there to be multiple instances in which the investigating authorities seek information from 
a selected group through a "formulated series of ques tions".  However, it seems clear to us that 
Article 6.1.1 cannot apply to each such instance, as this could make it impossible for the authorities to 
obtain necessary information while still respecting th e time limits on investigation set forth in 
Article 5.10 of the AD Agreement.
1115   
7.572  This was the question considered by the panel in Egypt – Rebar .  In its report, the panel 
considered whether "questionnaires" as referred to in  Article 6.1.1 are only the original questionnaires 
in an investigation, or whether this term also in cludes all other requests for information, or certain 
types of requests, including requests in additi on and subsequent to original questionnaires.1116  The  
panel considered that context, referring to the only other use of the term "questionnaire", in 
paragraphs 6 and 7 of Annex I to the AD Agr eement, supported the conclusion that the term 
"questionnaire" in Article 6.1.1 refers only to the original questionnaires sent to interested parties at 
the outset of an investigation.1117  Considerations regardi ng the conduct of anti-dumping 
investigations1118, and the particular requests for information at issue in that case, which were in the 
nature of follow-up questions to those in the original questionnaire1119, led the panel to conclude that 
those requests did not constitute questionnaires in the sense of Article 6.1.1, and that therefore the 
                                                      
1114 The New Shorter Oxford English Dictionary, Clarendon Press, 1993.   
1115 We recall that Article 5.10 provides that "[i]nves tigations shall, except in  special circumstances, be 
concluded within one year, and in no case more than 18 months, after their initiation".  In considering similar 
questions, the Appellate Body has consistently balanced the due process rights of interested parties against the 
need of investigating authorities to control the conduct of the investigation and to carry out the multiple steps 
required to reach a timely completion of the investigation.   
"[T]he due process rights in Article 6 of the AD Agreement—which include the right to 
30 days for reply to a questionnaire—'cannot ex tend indefinitely' but, instead, are limited by 
the investigating authority's need 'to 'control the conduct' of its inquiry and to 'carry out the multiple steps' required to reach a timely completion' of the proceeding." 
Appellate Body Report on Mexico – Antidumping Measures on Rice , para. 282 (quoting Appellate 
Body Report, US – Oil Country Tubula r Goods Sunset Reviews , para. 242, quoting in turn, Appellate Body 
Report, US – Hot Rolled Steel , para. 73, in turn quoting Panel Report on US – Hot Rolled Steel , para. 7.54). 
1116 Panel Report, Egypt – Steel Rebar , para. 7.275. 
1117 Panel Report, Egypt – Steel Rebar , para. 7.276. 
1118 Panel Report, Egypt – Steel Rebar , para. 7.277. 
1119 Panel Report, Egypt – Steel Rebar , para. 7.278.  WT/DS397/R 
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 less-than-30-day deadline imposed for responses to those requests was not inconsistent with that 
Article.1120 
7.573  We note in addition that footnote 15 to Article 6.1.1 of the AD Agreement provides further 
support for the conclusion that the questionnaires referred to in the provision are the original 
questionnaires sent at the outset of the investigation.  This footnote lengthens the 30-day rule by one 
week for questionnaires sent to exporters, provi ding generally that "the time-limit for exporters  shall 
be counted from the date of receipt of the  questionnaire, which for this purpose shall be deemed to 
have been received one week from the date on which it was sent to the respondent".  This reference to 
"the questionnaire" in the singular suggests that one questionnaire, sent to all exporters, is the subject 
of this obligation.  However, as noted by the European Union1121, the information to support requests 
for market economy and/or individual treatment is sought only from exporters in non-market 
economies, and thus is not sent to all exporters.  Had the drafters intended the term "questionnaires" in 
Article 6.1.1 to refer to any and a ll information requests in the form of  a series of questions, a plural 
formulation, or an indefinite formulation such as "any" or "a" "questionnaire", in footnote 15, might 
be expected.   
7.574  To us, these considerations indicate that the term  "questionnaires" in Article 6.1.1 refers to 
one kind of document in an investigation.  Turning to the question of what that document might be, we note that the considerations of context referred to above
1122 suggest that it refers to the initial 
comprehensive questionnaire issued in an anti-dumping investigation to each of the interested parties 
by an investigating authority at or following the initiation of an investigation, which questionnaire 
seeks information as to all relevant issues pertaining to  the main questions that will need to be decided 
(dumping, injury and causation).1123    
7.575  China appears to accept the view that Article 6.1. 1 refers to an "original" questionnaire sent at 
the outset of an investigation.1124  Indeed, China notes that the docum ents in question in this dispute 
"were sent to the interested parties at the outset of the investigation" and therefore argues that they fall 
within the scope of Article 6.1.1 of the AD Agreement.1125  China points out that, unlike the requests 
for information at issue in Egypt – Rebar , the documents at issue here were not requests for 
information in addition and subseque nt to the "original" questionnaire.1126  China asserts that the 
questions posed in the MET questionnaire are obviousl y not in the nature of follow-up questions to 
any "original questionnaire response" - on the cont rary, China asserts that the MET questionnaire is 
                                                      
1120 Panel Report, Egypt – Steel Rebar , para. 7.279. 
1121 Third party Japan also made this point. 
1122 For instance, paragraph 6 of Annex I refers to "[v]isits to explain the questionnaire," which 
suggests that such a questionnaire is a substantial in formation request, otherwise there would be no need to 
provide for a possible visit to explain it.  Similarly, paragraph 7 of Annex I provides that, as the main purpose of 
an on-the-spot investigation is to "verify information pr ovided or obtain further details", normally that visit 
should take place "after the  response to the  questionnaire has been received".  This also suggests that "the 
questionnaire" is a substantial enough information request to  warrant a visit to verify the information, and that it 
is sent early in the investigation.  The procedures re quired for such a visit, in cluding advance notice and the 
agreement of the exporting Member, si milarly suggest that the visit itself is a significant event, and not 
something likely to occur repeatedly, with respect to repeated "questionnaires". 
1123 We recognize that there may be differences in the initial comprehensive questionnaires sent to the 
different interested parties, reflectin g their different activities and interest s in the investigation.  Moreover, 
depending on how a Member organizes the conduct of anti-dumping investigations, there may be separate and 
distinct initial questionnaires concerning the issues of dumping and injury and causation.  These circumstances do not affect our fundamental conclusion, that the initial comprehensive document, or set of documents, 
covering all of these issues are encompassed by  the term "questionnaires" in Article 6.1.1. 
1124 China, second written submission, para. 1147. 
1125 China, second written submission, para. 1148. 
1126 China, answer to Panel question 81, para. 356. WT/DS397/R 
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 the original questionnaire.1127  China considers that satisfying the MET and IT tests is of fundamental 
importance to Chinese exporting producers, as the outcome of those tests determines whether a 
country-wide duty is applied to them, and asserts th at therefore, it is critical that an exporting 
producer has sufficient time to gather and pr esent the voluminous data requested by the EU 
investigating authorities.1128 
7.576  We do not agree that the "Market Economy Treatment and/or Individual Treatment claim 
form" in question can be considered a "questionnair e" within the meaning of Article 6.1.1, as we 
understand that term.  We certainly do not agree w ith China's contention that it is the "original 
questionnaire" as we understand that  term, and as the panel in Egypt – Rebar  understood it.  In our 
view, merely that it is the first request fo r information sent to Chinese exporters does not, ipso facto , 
demonstrate that it is a questionnaire within the m eaning of Article 6.1.1.  We consider that the 
substance of the document is critical to dete rmining whether it is such a questionnaire. 
7.577  We have reviewed the form in question, and it clearly is not a comprehensive questionnaire 
seeking all the information on the issues of dumpi ng, injury and causation that the investigating 
authority considers will be required, at least at the outset of the investigation, in order to make its 
determinations on those issues consistently with th e requirements of the AD Agreement.  Rather, it 
elicits information relevant to th e market economy test and individual treatment test applied by the 
European Union in anti-dumping investigations  involving certain non-market economies.  We 
consider that these questions, which are not relevant in all investigations, and are not directly related 
to the determinations of dumping, injury  and causation required by the AD Agreement1129, are 
properly treated as preliminary requests for informat ion, necessary for the investigating authority to 
determine, inter alia , which interested parties will receive the comprehensive questionnaires that are 
within the scope of Article 6.1.1.1130  We recognize that the resolution of the MET and IT tests is 
important for the Chinese exporting producers, but we do not consider that this changes the nature of 
the questionnaire, or brings it within the scope of Article 6.1.1.   
7.578  We recall that there is no basis in the text of the AD Agreement to differentiate between 
different types of requests for information, and that to require at least 30 days response time for every request for information would either make it impossi ble for investigating authorities to complete their 
investigation within the allowed overall timeframe, or require them to stop seeking information, and 
thus base their decision on less complete or less accu rate information.  Furthe r, we have interpreted 
the term "questionnaires" in Article 6.1.1 as refe rring only to the comprehensive questionnaire(s) 
issued at the outset of the investigation, in part because this strikes an appr opriate balance between the 
due process rights of interested parties and the ri ght of investigating authorities to obtain the 
information they need to conduct their investiga tions in the manner and within the time limits 
prescribed in the AD Agreement.  To treat th e "Market Economy Treatment and/or Individual 
Treatment claim form" as a "questionnaire" within the meaning of Article 6.1.1 would mean that a 
                                                     
 
1127 China, answer to Panel question 81, para. 363.  We note that China also referred to the fact that the 
information provided in the MET/IT claim forms was verified in support of its contention that they should be 
considered a "questionnaire" within the meaning of Artic le 6.1.1 of the AD Agreement, citing the Panel Report 
in Egypt – Rebar  in this regard.  China, first written submission , para. 137, China, answer to Panel question 81, 
paras. 364-365. 
1128 China, answer to Panel question 81, para. 371. 
1129 We recall that there is no requirement under the AD Agreement to treat ex porters in non-market 
economies differently with re spect to any aspect of an investigation,  although such different treatment with 
respect to the determination of normal value is allowed for by Article 2.7. 
1130 China has not made any claim, independent of Article 6.1.1, that the time for response to the 
"Market Economy Treatment and/or Individual Treatment claim form" was unreasonable or inadequate, and we 
therefore need not address that question.  We would note , however, that the same 15-day period for response is 
used by the European Union with respect to other requests for information it considers to be preliminary to the 
issuance of comprehensive questionnaires, which would suggest that the period is not per se  unreasonable.  WT/DS397/R 
 Page 233 
 
 
 subsequently issued comprehensive questionnaire see king all the relevant information needed for the 
determinations of dumping, injury and causation would be something other than a "questionnaire" 
within the meaning of Article 6.1.1.  This would, in  our view, deny exporters precisely the right that is 
afforded them by that provision, a result we find untenable. 
7.579  We therefore conclude that the "Market Ec onomy Treatment and/or Individual Treatment 
claim form" in question is not a "questionnaire" within the meaning of Article 6.1.11131, and that 
therefore, the European Union did not violate Article 6.1.1 of the AD Agreement by not providing Chinese exporters with 30 days to submit their responses.   In light of our conclusion, we consider it 
unnecessary to address China's claim that, by starting to count those 15 days as from the publication 
of the Notice of Initiation, the European Union acted inconsistently with the requirements of 
footnote 15 to Article 6.1.1 of the AD Agreement.   
VIII.  CONCLUSIONS AND RECOMMENDATION 
A. C
ONCLUSIONS  
8.1 Having considered the European Union's prel iminary objections, we have made no findings 
with respect to the following claims, which we have  concluded are not within  our terms of reference 
for the reasons set out in the foregoing sections of our Report: 
(a) Claim under Article 2.6 of the AD Agreement with respect to the definition of like 
product; 
(b) Claim under Article 6.9 of the AD Agreem ent with respect to the alleged non-
disclosure of aspects of the nor mal value determination; and 
(c) Claim under Article 6.9 of the AD Agreement with respect to the procedural aspects 
of the domestic industry definition. 
8.2 In light of the findings we have set out in th e foregoing sections of our Report, we conclude 
that the European Union acted inconsistently with: 
(a) Articles 6.10, 9.2 and 18.4 of the AD Agre ement, Article I:1 of the GATT 1994 and 
Article XVI:4 of the WTO Agreement with respect to Article 9(5) of the Basic AD 
Regulation; 
(b) Articles 6.10 and 9.2 of the AD Agreement w ith respect to the individual treatment 
determinations in the fasteners investigation; 
(c) Articles 3.1 and 3.2 of the AD Agreement w ith respect to the consideration of the 
volume of dumped imports in the fasteners investigation; 
(d) Articles 3.1 and 3.5 of the AD Agreement with  respect to the causation analysis in the 
fasteners investigation; 
(e) Articles 6.4 and 6.2 of the AD Agreement with respect to aspects of the normal value 
determination; 
                                                      
1131 We emphasize that our conclusion is not based on the name of the document, but on our 
consideration of its substance and its  purpose in anti-dumping investigations conducted by the European Union. WT/DS397/R 
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 (f) Article 6.5.1 of the AD Agreement with r espect to non-confidential versions of 
questionnaire responses of two European  producers and Article 6.5 of the 
AD Agreement with respect to confiden tial treatment of information in the 
questionnaire response of the Indian producer; 
(g) Article 6.5 of the AD Agreement with resp ect to the confidential treatment of the 
Eurostat data on total EU production of fasteners;  and 
(h) Article 6.5 of the AD Agreement by disclosing confidential information. 
8.3 In light of the findings we have set out in th e foregoing sections of our Report, we conclude 
that China has not established that the European Un ion acted inconsistently with: 
(a) Article 5.4 of the AD Agreement with resp ect to the standing determination in the 
fasteners investigation; 
(b) Articles 4.1 and 3.1 of the AD Agreement with  respect to the definition of domestic 
industry in the fasteners investigation; 
(c) Articles 2.1 and 2.6 of the AD Agreement with respect to the product under 
consideration in the fasteners investigation; 
(d) Article 2.4 of the AD Agreement with resp ect to the dumping determination in the 
fasteners investigation; 
(e) Articles 3.1 and 3.2 of the AD Agreement with respect to the price undercutting 
determination in the fasteners investigation; 
(f) Articles 3.1, 3.2, 3.4 and 3.5 of the AD Ag reement with respect to the consideration 
of imports from non-sampled/unexamined producers and exporters as dumped in the 
fasteners investigation; 
(g) Articles 3.1 and 3.4 of the AD Agreement w ith respect to the consideration of the 
consequent impact of dumped im ports on the domestic industry; 
(h) Articles 6.5, 6.4 and 6.2 of the AD Agreement in connection with the non-disclosure 
of the identity of the complainants and the supporters of the complaint; 
(i) Articles 6.2 and 6.4 of the AD Agreement w ith respect to the confidential treatment 
of the Eurostat data on total EU production of fasteners; 
(j) Articles 6.2 and 6.4 of the AD Agreement with respect to the procedural aspects of 
the domestic industry definition;  and 
(k) Article 6.1.1 of the AD Agreement with respect to the amount of time provided for 
responses to requests for information. 
8.4 In light of the findings we have set out in paragraph 8.2, we make no findings, based on 
judicial economy, with respect to China's claims under: 
(a) Articles 9.3 and 9.4 of the AD Agreement and Article X:3(a) of the GATT 1994 with 
respect to Article 9(5) of the Basic AD Regulation,  WT/DS397/R 
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 (b) Article 9.4 of the AD Agreement with respect to the individual treatment 
determinations in the fasteners investigation; 
(c) Articles 3.4 and  3.5 of the AD Agreement with respect to the volume of dumped 
imports;  
(d) Article 6.5.1 of the AD Agreement with r espect to the questionnaire response of the 
Indian producer;  
(e) Articles 6.2 and 6.4 of the AD Agreement with respect to the non-confidential 
versions of questionnaire responses of tw o European producers and the confidential 
treatment of information in the questionnai re response of the Indian producer;  and 
(f) Article 12.2.2 of the AD Agreement with r espect to the procedural aspects of the 
individual treatment determinations. 
B. RECOMMENDATION  
8.5 Pursuant to Article 3.8 of the DSU, in cases wh ere there is infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a case of 
nullification or impairment of bene fits under that agreement.  Accord ingly, we conclude that to the 
extent the European Union has acted inconsistent ly with the provisions of the AD Agreement and 
GATT 1994, it has nullified or impaired benefits accruing to China under those Agreements.  We 
therefore recommend that the Dispute Settlement Bo dy request the European Union to bring its 
measure into conformity with its obligat ions under the AD Agreement and GATT 1994. 
8.6 China requests that the Panel use its discreti on under the second sentence of Article 19.1 of 
the DSU by suggesting ways in which the Euro pean Union could implement the recommendations 
and rulings of the DSB.  China asserts that, given the "as such" nature of the violation, the first 
measure should be withdrawn.  China further asserts th at the nature and scope of the violations of the 
AD Agreement and of GATT 1994 with respect to th e second measure are such that the measure is 
devoid of any legal basis, and shoul d be withdrawn.  Therefore, China requests that the Panel suggest 
that the European Union implement the recommenda tions and rulings of the DSB by withdrawing 
both contested measures.1132  The European Union does not address China's request in this respect.   
8.7 Article 19.1 of the DSU provides: 
"Where a panel or the Appellate Body concl udes that a measure is inconsistent with a 
covered agreement, it shall recommend that the Member concerned bring the measure 
into conformity with that agreement.  In  addition to its recommendations, the panel or 
Appellate Body may suggest ways in which the Member concerned could implement 
the recommendations".  (Footnote omitted.) 
Thus, a panel must ("shall") reco mmend that a Member found to have acted inconsistently with a 
provision of a covered agreement "bring the measure into conformity", but has discretion to ("may") 
suggest ways in which a Member could implement that recommendation.  Clearly, however, a panel is 
not required to make a suggestion shoul d it not deem it appropriate to do so.1133  We also note 
                                                      
1132 China, first written submission, para. 634.   
1133 The Appellate Body has explained that the second sentence of Article 19.1 "does not oblige panels 
to make ... a suggestion".  Appellate Body Report, United States – Anti-Dumping Measures on Oil Country 
Tubular Goods (OCTG) from Mexico , ("US – Anti-Dumping Measures on Oil Country Tubular Goods "), 
WT/DS282/AB/R, adopted 28 November 2005, DSR 2005:XX, 10127, para. 189. WT/DS397/R 
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 Article 21.3 of the DSU, which requires Members to inform the DSB regarding implementation of 
panel and Appellate Body recommendations, providing: 
"At a DSB meeting held within 30 days afte r the date of adoption of the panel or 
Appellate Body report, the Member concerne d shall inform the DSB of its intentions 
in respect of implementation of the r ecommendations and rulings of the DSB".  
(footnote omitted). 
8.8 Most panels reviewing anti-dumping (and c ountervailing duty) measures have declined 
requests for suggestions.  Where the panel has explai ned its reasoning, it has generally noted that, in 
view of the different violations found, while re vocation of the measure is a possible means of 
implementation, other means might also be available.1134  Several panels, in declining to make a 
suggestion, have noted that Article 21.3 of the DSU gives the authority to  decide the means of 
implementation, in the first instance, to the Member found to be in violation.1135  Many other panels 
have declined requests for suggestions as well.1136  In the few cases in which panels have made a 
suggestion in an anti-dumping disput e, the panels have focussed on the conclusion that one of the 
violations found concerned initiation, and thus vitia ted the entire proceeding, which should never have 
been initiated, or on the "fundamental and pervasive nature" of the violations, leading the panel to 
conclude that revocation was th e only means of implementation.1137   
                                                      
1134 Panel Report, US – Hot Rolled Steel , para. 8.11 (panel declined to make specific suggestions, 
observing that the variety of different violations found might necessitate differing responses in order to bring the 
measure concerned into conformity with obliga tions under the AD Agreement); Panel Report, US – DRAMS , 
para. 7.4 (panel declined to make any suggestions on the grounds that there was a range of possible ways through which the United States could appropriately implement the panel's recommendation);  Panel Report, 
US – Steel Plate , para. 8.8 (panel saw "no particular need to suggest a means of implementation");  Panel 
Report, US – Stainless Steel (Korea) , para. 7.10 (panel found the determination regarding the margin of 
dumping inconsistent with the AD Agreement in a number of respects, but observed that it could not say that 
had the investigating authority acted consistently with the AD Agreement, it would not have found dumping.  
Noting that while revocation would be one way in which the United States could implement the recommendation to bring its measure into conformity, the panel was not prepared to conclude that it was the 
only way to do so, and declined to make a suggestion);  Panel Report, US – Line Pipe , para. 8.6 (panel declined 
Korea's request for a specific suggestion on ways in which the United States might implement the 
recommendations, stating that there may be other ways in which the United States could implement its 
recommendation);  Panel Report, US – Steel Plate , para. 8.8 (panel indicated that it was "free to suggest ways in 
which [it believed] the [defendant] could appropriatel y implement [the panel's] recommendation" but decided 
not to do so). 
1135 E.g., Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products 
from Japan ("US – Hot-Rolled Steel "), WT/DS184/R, adopted 23 August 2001, as modified by Appellate Body 
Report WT/DS184/AB/R, DSR 2001:X, 4769, para. 8.13.  The panel in this dispute observed that the means of 
implementation is, pursuant to Article 21.3 of the DS U, for the Member concerned, in the first instance. 
1136 Panel Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant 
Carbon Steel Flat Products from Japan  ("US – Corrosion-Resistant Steel Sunset Review "), WT/DS244/R, 
adopted 9 January 2004, as modified by Appellate Body Report WT/DS244/AB/R, DSR 2004:I, 85, para. 8.2;  Panel Report, US – Softwood Lumber V , para. 8.6;  Panel Report,  US – Softwood Lumber VI , para. 8.8;  Panel 
Report, Korea – Certain Paper , para. 9.4;  Panel Report, European Communities – Countervailing Measures on 
Dynamic Random Access Memory Chips from Korea ("EC – Countervailing Measures on DRAM Chips "), 
WT/DS299/R, adopted 3 August 2005, DSR 2005:XVIII, 8671, paras. 8.6-8.7;  and Panel Report, United States 
– Anti-Dumping Measures on Oil Countr y Tubular Goods (OCTG) from Mexico  ("US – Anti-Dumping 
Measures on Oil Country Tubular Goods "), WT/DS282/R, adopted 28 November 2005, as modified by 
Appellate Body Report WT/DS282/AB/R, DSR 2005:XXI, 10225, para. 8.18. 
1137 In Guatemala – Cement I , the panel concluded that Guatemala had violated the provisions of the 
AD Agreement by initiating an investigation when there was not sufficient evidence to justify such an initiation 
under Article 5.3 of the Agreement.  With respect to the request for a suggestion on implementation, the panel 
stated:  WT/DS397/R 
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 8.9 In this case, although we have found the co ntested measures inconsistent with the 
AD Agreement, the GATT 1994 and the WTO Agreement in a number of respects, we do not find it appropriate to make a suggestion with respect to im plementation, and therefore deny China's request.  
 
 
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"[T]he entire investigation rested on an insufficient basis, and therefore should never have 
been conducted. This is, in our view, a violati on which cannot be corrected effectively by any 
actions during the course of the ensuing inves tigation. Therefore, we suggest that Guatemala 
revoke the existing anti-dumping measure on impor ts of Mexican cement,  because, in our 
view, this is the only appropriate m eans of implementing our recommendation." 
Panel Report, Guatemala – Cement I , para. 8.6.  The second panel to hear the same dispute also 
suggested revocation of the measure, for similar reasons.  Panel Report, Guatemala – Cement II , para. 9.7.   
In Argentina – Poultry Anti-Dumping Duties,  the panel concluded that the violations it had found were 
of a "fundamental nature and pervasive", stated "[i]n light of  the nature and extent of the violations in this case, 
[the panel does] not perceive how Argentina could properly implement [the panel's] recommendation without revoking the anti-dumping measure at issue in this disput e" and suggested that Argent ina repeal the measure.  
Panel Report , Argentina – Poultry Anti-Dumping Duties , paras. 8.6-8.7.