WORLD TRADE  
ORGANIZATION   
WT/DS414/R/Add.1 
15 June 2012  
 
(12-3104) 
 Original:   English 
  
 
     
 
    
CHINA - COUNTERVAILING AND  ANTI-DUMPING DUTIES 
ON GRAIN ORIENTED FLAT-ROLLED ELECTRICAL 
STEEL FROM THE UNITED STATES 
 
 
Report of the Panel 
 
 
Addendum 
  
 This addendum  contains Annexes A to H to the Report of the Panel to be found in document 
WT/DS414/R.      
_______________ 
 WT/DS414/R/Add.1 
Page i 
 
 
   
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 the United 
States A-2 
Annex A-2 Executive Summary of the First Written Submission of China A-11 
 
 
ANNEX B 
 
WRITTEN SUBMISSIONS, OR EXECUTIVE SUMMARIES THEREOF, 
OF THE THIRD PARTIES 
 
Contents Page 
Annex B-1 Executive Summary of the Third Party Written Submission of 
Argentina B-2 
Annex B-2 Executive Summary of the Third Party Written Submission of the 
European Union B-4 
Annex B-3 Third Party Written Submission of Honduras B-8 
Annex B-4 Executive Summary of the Third Party Written Submission of 
Japan B-11 
Annex B-5 Executive Summary of the Third Party Written Submission of the 
Kingdom of Saudi Arabia B-17 
Annex B-6 Executive Summary of the Third Party Written Submission of 
Korea B-21 
 
 
ANNEX C 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF OF 
THE PARTIES AT THE FIRST SUBSTANTIVE MEETING 
 
Contents Page 
Annex C-1 Executive Summary of the Opening Statement of the United States 
at the First Meeting of the Panel C-2 
Annex C-2 Executive Summary of the Opening Statement of China at the First 
Meeting of the Panel C-10 
Annex C-3 Closing Statement of the United States at the First Meeting of the 
Panel C-15 
Annex C-4 Closing Statement of China at the First Meeting of the Panel C-17 
 WT/DS414/R/Add.1 
Page ii  
 
   
ANNEX D 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF OF 
THE THIRD PARTIES AT THE FIRST SUBSTANTIVE MEETING 
 
Contents Page 
Annex D-1 Third Party Oral Statement of Argentina  D-2 
Annex D-2 Executive Summary of the Third Party Oral Statement of the 
European Union  D-4 
Annex D-3 Third Party Oral Statement of Honduras  D-7 
Annex D-4 Executive Summary of the Third Party Oral Statement of India D-9 
Annex D-5 Third Party Oral Statement of Japan  D-14 
Annex D-6 Third Party Oral Statement of the Kingdom of Saudi Arabia D-18 
Annex D-7 Third Party Oral Statement of Korea  D-20 
 
 
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 the 
United States E-2 
Annex E-2 Executive Summary of the Second Written Submission of China E-11 
 
 
ANNEX F 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF, OF 
THE PARTIES AT THE SECOND SUBSTANTIVE MEETING 
 
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 Open ing Statement of the United States 
at the Second Meeting of the Panel F-7 
Annex F-3 Closing Statement of China at the Second Meeting of the Panel F-15 
Annex F-4 Closing Statement of the United States at the Second Meeting of 
the Panel F-17 
 
 
ANNEX G 
 
REQUEST FOR THE ESTABLISHMENT OF A PANEL 
 
Contents Page 
Annex G-1 Request for the Establishment of a Panel by the United States G-2 
  WT/DS414/R/Add.1 
 Page iii 
 
 
  ANNEX H 
 
RELATIONSHIP BETWEEN DOMESTIC PRODUCTION AND SUBJECT IMPORTS 
 
Contents Page 
Annex H-1 Relationship between dom estic production and subject imports 
  (BCI redacted) H-2 
 
   WT/DS414/R/Add.1 
 Page A-1 
 
 
   
 
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 the 
United States A-2 
Annex A-2 Executive Summary of the First Written Submission of China A-11 
 
 WT/DS414/R/Add.1 
Page A-2  
 
  ANNEX A-1 
 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN 
SUBMISSION OF THE UNITED STATES 
 
 
I. INTRODUCTION 
 
1. In this dispute, the United States is challe nging various aspects of the definitive anti-dumping 
and countervailing duty measures that the Government  of the People's Republic of China ("China") 
has adopted with respect to imports of grain oriented flat-rolled electrical steel ("GOES") from the United States.  Several aspects of these measures are inconsistent with China' s obligations under the 
General Agreement on Tariffs and Trade 1994 ("GA TT 1994"), the Agreement on Implementation of 
Article VI of the General Agreement on Tari ffs and Trade 1994 ("AD Agreement"), and the 
Agreement on Subsidies and Countervailing Measures ("SCM Agreement").  
 
2. Transparency and due process commitments are important elements of the AD and SCM 
Agreements.  From the very outset, China's c onduct of the GOES investigation raised serious 
transparency and due process concerns.  Following  China's wide-ranging inve stigation, in which it 
requested detailed information on companies' entir e production lines including products unrelated to 
GOES, data on sales stretching back fifteen years, a nd on laws and regulations that had no relation to 
the companies or product at issue, and after both the United States and U.S. companies provided over a dozen questionnaire responses, the serious due pr ocess and transparency problems evident from the 
beginning of the proceeding became even more a pparent as China began issuing its determinations.  
These due process and transparency problems impaired  the ability of the United States and interested 
parties to understand the basis for China's de terminations or to defend their interests.   
 
II. FACTUAL BACKGROUND 
 
A. THE IMPOSITION OF DUTIES ON U.S. IMPORTS 
 
1. The Petition 
 
3. On 27 April 2009, two Chinese steel producers,  Wuhan Iron and Steel (Group) Corporation 
and Baosteel Group Corporation, filed a petition w ith China's Ministry of Commerce ("MOFCOM") 
requesting relief under China's AD and CVD laws on behalf of  China's domestic GOES industry.  The 
petitioners alleged that U.S. producers of GOES, in  particular AK Steel Corporation ("AK Steel") and 
ATI Allegheny Ludlum Corporation ("ATI"), had engaged in injurious dum ping and benefitted from 
various countervailable subsidies.
1 
 4. Regarding subsidies, the petitioners alle ged that 27 federal and state laws provided 
countervailable subsidies to the U.S. companies.  Among the laws challenged were several federal 
procurement statutes.  Regarding the dumping alle gations, petitioners estimated a dumping margin for 
GOES imports from the United States of 25 per cent.  The petition alleged that imports of GOES from the United States and Russia caused and threatened injury to the Chinese industry.  Citing China's AD 
regulations, the petitioners argued that a cumulative assessment of injury should be performed, which 
would collectively take into consideration GOES imports from the United States and Russia.  The 
petition then alleged price undercutting, price depression, and price suppression caused by the 
imports.  
 
                                                      
1 The petition also alleged that Russian producers of GOES engaged in injurious dumping.  WT/DS414/R/Add.1 
 Page A-3 
 
 
  5. To support virtually their allegations, the pe titioners purportedly relied on a wide variety of 
data and information.  Virtually none of th is information was disclosed, however, because the 
petitioners sought and obtained from MOFCOM confid ential treatment for nine broad categories of 
data and information that it claimed was confidential.  
 
6. On 1 June 2009, MOFCOM initiated the anti- dumping, countervailing duty, and injury 
investigations.  For the anti-dumping and counter vailing duty proceedings, MOFCOM set a period of 
investigation from 1 March 2008 to 28 February 2009, and for injury, MOFCOM set the period of 
investigation from 1 January 2006 to 31 March 2009.    2. Subsidy Questionnaires and New Allegations  
7. On 26 June 2009, MOFCOM issued initial subs idy questionnaires to AK Steel and ATI, as 
well as to the United States.  MOFCOM asked the United States for purchase data relating to GOES 
during the period of investigation.  The results of a search of the federal proc urement database showed 
that GOES was not purchased by the U.S. government. 
 8. In the subsidy questionnaires issued to AK Steel and ATI, MOFCOM demanded volumes of 
information unrelated to the subject merchandise.  For example, MOFCOM demanded that AK Steel 
provide detailed transaction data for billions of  dollars in transactions involving non-subject 
merchandise – products that are neither inputs for GOES nor substitutable for GOES.  Because of the 
volumes of information requested, neither AK Steel nor  ATI could fulfil all of the requests made in 
the CVD proceeding.  In addition, and in connectio n with demands for all sales data for all products, 
AK Steel referenced the fact that it had already submitted detailed sales data for GOES in the parallel 
anti-dumping proceeding, and asked MOFCOM to review that data for purposes of the CVD, since China's anti-dumping laws and regulations do not provide for separate inv estigative records.   
 
9. The U.S. companies further demonstrated that  they did not sell any GOES to any government 
entity.  In addition to referring MOFCOM to detailed sales data for GOES, AK Steel provided 
MOFCOM customer lists for all products showing that no sales were made to the government.  ATI 
provided customer lists for the subject merchandise.  
10. On 20 July 2009, the petitioners filed new s ubsidy allegations regarding various federal and 
state laws.  Despite serious deficiencies pertai ning to these allegations, on 19 August 2009, 
MOFCOM initiated an investigati on covering five programmes.  
 11. After filing its initial questionnaire response on 10  August 2009, in a span of just eight weeks, 
AK Steel received and responded to five lengthy su pplemental questionnaires issued by MOFCOM in 
the CVD investigation.  On 9 September 2009, AK Steel noted the considerable burden resulting from 
MOFCOM's investigation, and stressed its willingne ss to cooperate.  AK Steel responded to all of 
MOFCOM's requests.    
3. Preliminary Determination  
 
12. On 20 December 2009, MOFCOM published the pr eliminary determination.  Regarding the 
government procurement statutes, MOFCOM applied what it termed facts available and calculated a 
subsidy rate of 11.7 per cent for AK Steel and 12 per cent for ATI.  MOFCOM asserted that it  applied 
facts available to the U.S. compan ies because it determined that the U.S. companies did not cooperate 
in its investigation.  MOFCOM specifically cited U. S. companies' failure to provide data on all sales 
of all steel products.   13. Regarding its benefit dete rmination for the federal pr ocurement statutes, MOFCOM 
concluded that competitive bidding under the procurement statutes does not result in a valid market WT/DS414/R/Add.1 
Page A-4  
 
  price. While conceding that competitive bidding exists, MOFCOM nonetheless concluded, without 
explaining it conclusion, that the qualification crite ria for bid participants prevented the price from 
reflecting true market conditions.    14. MOFCOM calculated preliminary dumping ma rgins of 10.7 per cent for AK Steel, 19.9 per 
cent for ATI, and 25 per cent for all others.  Th e only explanation MOFCOM  provided regarding how 
it calculated the all others rate was a single sente nce in its report.  MOFCOM provided no further 
explanation of its calculation of the all others dumping rate, and it did not disclose the information 
forming the basis for the calculation of this rate.  The all others subsidy rate in the preliminary 
determination was 12 per cent.  
 4. On-Site Verification  
15. Between 5 January 2010 and 13 January 2010 , MOFCOM conducted an on-site verification 
of each of the two U.S. companies subject to indi vidual investigation.  The detailed sales data for 
GOES and customer lists for all products subm itted by AK Steel and detailed GOES sales data 
submitted by ATI before the verification were usable for the determination of the subsidy rate because 
the data showed records for all sales, as well as the absence of sales to the government.  MOFCOM 
could have used these data, in conjunction with the information supplied by the United States from its 
procurement database, to determine that GOES was not purchased by the U.S. government under any 
federal procurement programmes.   Because the detailed sales data for GOES and customer lists for 
all products submitted by AK Steel provided a basis for MOFCOM to determine the level of sales to 
government entities, the U.S. companies requested th at MOFCOM verify the customer lists submitted 
before the preliminary determination was issued.  Despite this request, MOFCOM did not verify the 
customer lists in the CVD proceeding.  5. Disclosure Documents  
(a) Factual Disclosure on Dumping Margin and Subsidy Rate 
 16. Prior to issuing the Final Determinat ion for the anti-dumping and countervailing duty 
investigations, MOFCOM released its Final Disclos ure, in which it revealed that it had nearly 
quadrupled the all others subsidy rate to 44.6 per ce nt.  As with the Preliminary Determination, the 
Final Disclosure provided only one sentence referring to its CVD regulations to explain the source of 
the all others subsidy rate.  MOFCOM did not disclose the facts that led it to conclude that the use of 
facts available was justified for all other U.S. compani es.  It also did not disclose the facts that led it to 
conclude that 44.6 per cent was a justifiable rate or the calculations performed to determine this rate.  
Also in the Final Disclosure, MOFCOM revealed th at it was increasing the all others dumping rate to 
64.8 per cent.  Again, MOFCOM simply provided a vague reference to China's anti-dumping law, and 
beyond that offered not a single piece of informa tion regarding how the rate was calculated.  
 
(b) Injury Disclosure 
 
17. On 5 March 2010, the Industry Injury Inves tigation Bureau of MOFCOM issued a document 
titled "Basic Facts Based on Which the Industry Injury Determination of the Anti-dumping Investigation into GOES Imports from the United St ates and Russia and the CVD Investigation into 
GOES Imports from the United States was Made" ("Injury Disclosure Document").  
18. The Injury Disclosure Document provided some basic information about the volume of the 
imports under investigation, as well as trend inform ation concerning the condition of the domestic 
industry.  Nevertheless, with respect to an i ssue that was critical to the subsequent injury 
determination – pricing – MOFCOM disclosed strikingly few facts . 
  WT/DS414/R/Add.1 
 Page A-5 
 
 
  19. What MOFCOM characterized as "pricing" da ta in a section entitled "Price of the Subject 
Merchandise" were in fact average unit value data for transactions derived from Customs statistics.  
MOFCOM combined average unit value data fo r products imported from the United States and 
Russia, notwithstanding the fact that separate data for each country could be derived from the Customs statistics.  MOFCOM also decided to use only one annual observation for calendar years 
2006, 2007, and 2008.  Consequently, in a three and one-quarter year period of investigation 
concerning products from two countri es, MOFCOM reported – and appa rently relied upon – only four 
observations of average unit values for the imports  under investigation.  In short, MOFCOM's 
disclosure included no information  concerning actual prices charged for any product  in any 
commercial transaction. 
 
20. MOFCOM did not state how it generated any information on the pricing of the domestically 
produced product.  The minimal information disclo sed concerning pricing trends suggests that, as 
with the imports, MOFCOM relied on only four pr icing observations for domestically produced 
products. 
 
21. Another issue central to the final dete rmination was price suppression and the Chinese 
producers' purported inability to recover increasing costs.  While the Injury Disclosure Document 
provided some information concerning trends in sales revenue and profits before tax, it disclosed 
nothing concerning the level, trends, or co mposition of the domestic industry's costs. 
 
22. On causation, MOFCOM disclosed that th e Chinese industry's capacity increased by over 
50 per cent in 2008, and was 80 per cent higher in the first quarter of 2009 than during the first quarter 
of 2008.  The large capacity increases facilitated s ubstantial increases in production.  These increases 
in production outstripped even robust increases in de mand – particularly so in the first quarter of 
2009.   
 6. Final Determination  
(a)  Subsidy and Dumping Findings  
 
23. On 10 April 2010, MOFCOM issued the final determination for the anti-dumping and countervailing duty investigations.  MOFCOM applied a dumping margin of 7.8 per cent to AK Steel, 
and 19.9 per cent to ATI.    24. For the subsidy rate, MOFCOM continued to u se what it termed facts available to calculate 
subsidy rates for the federal procurement statutes because the respondents did not provide 15 years of 
detailed sales data for non-subject merchandise.  To  calculate the amount of the subsidy purportedly 
benefitting GOES products, MOFCOM, relying on fact s available, assumed that AK Steel and ATI 
sold only carbon steel, and sold all of their output to the government, despite the fact that the record 
demonstrated there were no sales of GOES to the government, AK Steel did not sell any product to any government entity during the POI, and only a limited amount of non-GOES AK Steel and ATI 
products could even as a theoretical matter ha ve been purchased in connection with alleged 
government procurement.  Without any analysis, MO FCOM determined that U.S. carbon steel prices 
were 25 per cent above pr ices for foreign products .  MOFCOM calculated subsidy rates for the federal 
procurement statutes indicating that GOES from AK Steel benefitted from subsidies at the rate of 11.918 per cent and GOES from ATI benefitte d at the rate of 11.65 per cent. 
 
25. Regarding the procurement statutes, MOFC OM also concluded that the prices obtained 
through the competitive bidding process provided for unde r U.S. law do not reflect real market prices.  
In doing so, MOFCOM dismissed the position of the United States that procurement in the 
United States occurs under competitive bidding cond itions and that foreign companies may compete WT/DS414/R/Add.1 
Page A-6  
 
  for bids.  Repeating its position in the preliminar y determination, MOFCOM simply stated that the 
prices generated by competitive bidding do not reflect market prices.  26. Ignoring U.S. comments explaining the flaws in th e all others subsidy rate  calculation, filed in 
response to the disclosure document,  MOFCOM, in th e final determination, imposed a final all others 
subsidy rate of 44.6 per cent.  Again, at no time prior to the final determination did MOFCOM 
disclose to the United States or other interested pa rties the essential facts under consideration that 
formed the basis for the near quadrupling of the all ot hers subsidy rate, other than stating that the rate 
was based on information from the petitioners pursu ant to China's CVD regulations.  MOFCOM's 
explanation did not change from the preliminary de termination and disclosure document to the final 
determination.  
 27. In the final determination, MOFCOM calculated  an all others dumping rate of 64.8 per cent, 
332 per cent higher than that in its preliminary determ ination.  It did so despite the fact that the 
dumping rates it calculated for the two respondents, AK Steel and ATI, were substantially lower that 
64.8 per cent – that is, 7.8 per cent and 19.9 pe r cent, respectively.  Again, MOFCOM's only 
explanation was that it relied upon its Anti-Dumping Regulation.  The Final Determination contains 
no other explanation of  how MOFCOM calculated the rate, the data it relied on, or why an increase 
from 25 per cent was warranted for other U.S. producers/exporters that it did not examine.  
 
(b) Injury Findings 
 
28. In its final determination, MOFCOM found that China' GOES industry sustained material 
injury and there was a causal link between the dumped imports of GOES from Russia and the dumped and subsidized imports of GOES from the United St ates and this injury.  A critical aspect of the 
causation analysis concerned the purportedly si gnificant price effects of the imports under 
investigation.  
 
29. MOFCOM repeatedly stated that the importers had a "strategy" of charging "low prices."  
One critical finding at the beginning of the section is  that "[t]he contracts and original records from 
the price formulation process provided by petitioners  showed that the subject merchandise adopted a 
pricing strategy of selling at a price lower than Chinese like products in the Chinese domestic market.  
Because subject merchandise was kept at a low price, and the import volume of subject merchandise 
increased greatly since 2008, domestic producers had to lower their prices to keep market share."  
MOFCOM failed to specify the nature of these contra cts or records, or summarize their content in the 
Final Determination.  As previously discussed, the Injury Disclosure Document contained no 
information concerning actual prices charged for any product in any commercial transaction.  It also 
provided no information about these contracts or records.   Both the Russian and U.S. parties argued to 
MOFCOM that their prices were not in fact lower than the prices charged by the domestic producers.  
MOFCOM rejected these arguments at the end of its  pricing discussion, in language almost identical 
to its "low price strategy" finding quoted above, providing no greater detail as to the nature or 
application of the policy.  
 
30. While the Injury Disclosure Document provided no comparisons of prices of domestic and 
imported products, there was one such comparison in  the Final Determination.  MOFCOM revealed 
for the first time, in its response to the disclosure comments, that "the Investigating Authority did not 
conclude that the price of the imported subject me rchandise was lower than the price of the domestic 
like product in Q1 of 2009."  The Final Determina tion, however, contained no specific comparisons of 
prices of the imported and domestically pro duced product during the remaining period of 
investigation – calendar years 2006 through 2008.  
 
31. As previously stated, notwithstanding the foregoing, MOFCOM found that the imports under 
investigation had price-depressing effects.  In pa rticular, it found that domestic producers had to  WT/DS414/R/Add.1 
 Page A-7 
 
 
  "lower their prices to keep market share" in r esponse to the "pricing strategy" of the imports under 
investigation.  32. MOFCOM also found that the imports under i nvestigation had price-suppressing effects.  It 
found that, because of the imports under investigati on, domestic producers were not able to recover 
rising costs in the first quarter of 2009.  MOFCOM first found that, during 2008 and the first quarter 
of 2009, imports increased more quickly than do mestic demand.  MOFCOM then found that the 
increased market penetration of the imports under investigation caused declines in the domestic 
industry's capacity utilization and increases in its inve ntories in 2008 and the first quarter of 2009. 
 
33. MOFCOM next repeated the price effects fi ndings from the injury disclosure, and concluded 
that the subject imports, because of their purporte d underselling and purportedly significant price-
depressing and -suppressing effects, "result[ed] in sharp decline[s] in the profitability of the domestic 
industry."  MOFCOM cited as other adverse effects declines in sales revenues, profits, return on 
investments, and employment-related factors during the first quarter of 2009. 
 
34. MOFCOM further purportedly examined whethe r other factors caused injury to the domestic 
industry.  In every instance, it found that the other factors caused no injury.  Thus it found that GOES imports from countries other than Russia and the United States were not a cause of injury.  This discussion, which was the sole discussion in the Fi nal Determination concer ning imports from sources 
other than the United States and Russia, provided no empirical data concerning imports from 
nonsubject countries.  Nor did MOFCOM include any information about imports from nonsubject 
countries in its Injury Disclosure Document.  35. Finally, MOFCOM responded to the U.S. co mments that the Chinese industry's decisions to 
expand capacity and production were a likely altern ative cause of injury.  The United States argued 
before MOFCOM that the sharp increase in i nventories caused by the domestic industry's 
overexpansion was an alternative cause of inju ry.  MOFCOM rejected these arguments and  
concluded that the domestic industry's sharp increas es in capacity, production, and inventories were 
not a cause of any injury to the domestic industry.  
 
III. LEGAL ARGUMENT  
 A. THE INITIATION OF THE COUNTERVAILING DUTY INVESTIGATION FOR 
SEVERAL PROGRAMMES BREACHED ARTICLE 11 OF THE SCM AGREEMENT 
 36. MOFCOM's initiation of the countervailing duty investigation was inconsistent with 
Article 11 of the SCM Agreement.  An applicati on to initiate a CVD investigation must include 
sufficient evidence of financial contribution, benefi t, and specificity to satisfy the requirements of 
Article 11.2.  For several allegations contained in the petition, the programmes established under the 
laws and alleged to provide counter vailable subsidies either were no longer in effect and could no 
longer provide benefits to the U.S. companies; or the petitioners did not offer evidence of specificity; 
or the petitioners did not offer evidence of a financia l contribution.   Therefore, the petition failed to 
meet the requirements of Article 11.2.   
 37. In addition, to satisfy the requirements of Article 11.3, an investigating authority must 
objectively assess the accuracy and adequacy of the evidence contained in the petition before 
initiating an investigation.  MOFC OM, however, failed to examine the accuracy and adequacy of the 
evidence with respect to several alleged subsidies.   Regarding several of the supposed subsidies at 
issue, an objective investigating authority would not have initiated an investigation based on the 
petition's unsupported allegations.  
 WT/DS414/R/Add.1 
Page A-8  
 
  B. MOFCOM FAILED TO REQUIRE ADEQUATE NON-CONFIDENTIAL SUMMARIES, 
BREACHING ARTICLE 12.4.1 OF THE SCM AGREEMENT AND ARTICLE 6.5.1 OF THE AD AGREEMENT 
 
38. China breached Article 12.4.1 of the SCM Agre ement and Article 6.5.1 of the AD Agreement 
because it failed to require non-confidential summaries of allegedly confidential information.  The 
only purported non-confidential summaries are containe d in the petition; no summaries of confidential 
information are contained in the preliminary determination, disclosur e documents, nor final 
determination.  Further, the purported non-conf idential summaries in the petition are not in fact 
summaries.  Instead, the petition only provides re quests for confidential treatment of data and 
information.  It does not summarize the in formation in a manner permitting a reasonable 
understanding of the substance of the data  and information treated as confidential. 
 C. CHINA BREACHED ARTICLE 12.7 OF THE SCM AGREEMENT BECAUSE ITS USE 
OF FACTS AVAILABLE WAS IMPROPER 
 
39. China breached Article 12.7 of the SCM Agre ement because its use of facts available was 
improper.  MOFCOM ignored necessary information provided by the U.S. companies.  The U.S. 
companies provided this necessary information within  a reasonable period of time, and they did not 
impede the investigation.  MOFCOM's use of  facts available was unjustified and punitive.  
 
D. MOFCOM FAILED TO MAKE AVAILABLE THE CALCULATIONS IT PERFORMED 
TO ARRIVE AT THE DUMPING MARGINS, INCONSISTENT WITH ARTICLE 12.2.2 OF THE AD AGREEMENT 
 
40. China breached Article 12.2.2 of the AD Agreem ent because it failed to make available to AK 
Steel and ATI the calculations used to determin e these companies' final dumping margins.  The 
dumping calculations are "relevant information on the matters of fact" that led to the imposition of 
definitive measures.  Accordingly, MOFCOM was requi red to make them available, but it did not do 
so.  
 
E. MOFCOM'S FAILURE TO PROVIDE SUFFICIENT INFORMATION ON THE 
FINDINGS AND CONCLUSIONS OF LAW IT CONSIDERED MATERIAL 
CONSTITUTES A BREACH OF ARTICLE 22.3 OF THE SCM AGREEMENT 
 
41. MOFCOM failed to adequately explain its findings and conc lusions supporting its 
determinations that the competitive bidding process under the U.S. government procurement statutes 
at issue does not result in prices that reflect mark et conditions.  These finding s and conclusions were 
material to its finding of benefit in its subsidy i nvestigation.  MOFCOM failed to explain its novel 
benefit theory in the preliminary and final determina tions.  Therefore, China acted inconsistently with 
Article 22.3 of the SCM Agreement.  
 
F. MOFCOM'S DETERMINATION OF THE "ALL OTHERS" CVD RATE WAS 
INCONSISTENT WITH ARTICLES 12.7,  12.8, 22.3, AND 22.5 OF THE SCM 
AGREEMENT 
 
42. MOFCOM, without explanati on, applied countervailing duties based on facts available to 
other U.S. exporters/producers of GOES that were  not named in the petition and were never sent a 
questionnaire.  MOFCOM never notified a single pr oducer other than those identified in the petition 
of the existence of the investigation, the info rmation that would be required of them, or the 
consequences of not fully complying with MOFC OM's requests.  MOFCOM compounded the impact 
of its application of facts available by providi ng no detail in its Final Determination and final 
disclosure documents with regard to the findings that led to its application of facts available.  As a  WT/DS414/R/Add.1 
 Page A-9 
 
 
  result of this lack of disclosure, the United Stat es and other U.S. companies were deprived of any 
opportunity to defend their interests with respect to th is issue.  Thus, China act ed inconsistently with 
Articles 12.7, 12.8, 22.3, and 22.5 of the SCM Agreement.  G. MOFCOM'S DETERMINATION OF THE ALL OTHERS RATE IN THE FINAL 
ANTI-DUMPING DUTY DETERMINATION IS INCONSISTENT WITH ARTICLE 6.8, 
6.9, 12.2, AND 12.2.2 OF THE ANTI-DUMPING AGREEMENT 
 
43. As with the application of countervailing du ties to other U.S. exporters/producers of GOES 
that were not named in the petiti on and were never sent a questionna ire, MOFCOM appears to have 
applied a facts available dumping margin to othe r U.S. producers/exporters of GOES despite never 
notifying a single producer other than those identified in the petition of the existence of the investigation, the information that would be re quired of them, or the consequences of not fully 
complying with MOFCOM's requests.  In so doing, MOFCOM did not disclose the essential facts and conclusions of law that led it to this result.  MO FCOM provided no detail in  its Final Determination 
and final disclosure documents with regard to the findings  that led to its application of facts available.  
As a result of this lack of disclosure, the United St ates and other U.S. companies were deprived of any 
opportunity to defend their interests with respec t to this issue.  Consequently, China acted 
inconsistently with Articles 6.8, 6.9, 12.2, and 12.2.2 of the AD Agreement. 
 H. CHINA'S CONDUCT OF THE GOES INVESTIGATION BREACHED ARTICLE 1 OF 
THE AD AGREEMENT 
 
44. Because China's conduct of the GOES investig ation breached numerous other provisions of 
the AD Agreement, China also breached Article 1.  
 
I. CHINA BREACHED ARTICLE VI:2 OF  GATT 1994 BY LEVYING AN ANTI-DUMPING 
DUTY GREATER THAN THE MARGIN OF DUMPING 
 
45. China impermissibly assigned an adverse facts available margin to other U.S. 
producers/exporters that China did not examine in th is investigation.  As a result of the adverse 
assumptions made in assigning that margin to those companies, the anti-dumping duty levied on their 
products was "greater in amount than the margin of dumping in respect of such products", which 
could permissibly have been calculated in accord ance with the provisions of the AD Agreement.  
Because the duties China levied on these "all others" companies were, and continue to be, greater in 
amount than the appropriate margin of dumping,  China violated Article VI:2 of GATT 1994. 
 
J. THE PRICE EFFECTS ANALYSIS IN MOFCOM'S FINAL DETERMINATION WAS 
INCONSISTENT WITH CHINA'S WTO OBLIGATIONS 
 46. MOFCOM's price effects analysis in its inju ry determination was fundamentally flawed in 
many respects.  MOFCOM failed to disclose essen tial facts supporting is price effects analysis.  
MOFCOM's price effects analysis was also not b ased on positive evidence.  In conducting its price 
effects analysis, MOFCOM did not engage in an  objective examination of the evidence, nor did 
MOFCOM offer an adequate explanation for its price effects findings.  China therefore acted 
inconsistently with Articles 3.1, 3.2 , 6.9, and 12 .2.2 of the AD Agreement, and Articles 12.8, 15.1, 
15.2, and 22.5 of the SCM Agreement  
 
K. THE CAUSATION ANALYSIS IN MOFCOM'S FINAL DETERMINATION IS 
INCONSISTENT WITH CHINA'S WTO OBLIGATIONS 
 
47. MOFCOM's causation analysis in its injury de termination was similarly deficient.  MOFCOM 
failed to disclose facts supporting its causation analys is.  The causation analysis was not supported by WT/DS414/R/Add.1 
Page A-10  
 
  positive evidence and was not based on an objectiv e examination of the evidence.  MOFCOM also 
failed to communicate an adequate explanation for its causation findings.  Therefore, China acted 
inconsistently with Articles 3.1, 3.5, 6.9, and 12.2.2 of the AD Agreement, and Articles 12.8, 15.1, 
15.5, and 22.5 of the SCM Agreement.  
 
L. CHINA'S CONDUCT OF THE GOES INVESTIGATION BREACHED ARTICLE 10 OF 
THE SCM AGREEMENT 
 48. Because China's conduct of the GOES investig ation breached numerous other provisions of 
the SCM Agreement, China also breached Article 10. 
 
 WT/DS414/R/Add.1 
Page A-11 
 
 
  ANNEX A-2 
 
 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN 
SUBMISSION OF CHINA 
 
 A. THE PETITION AND INITIATION THEREOF WERE CONSISTENT WITH 
ARTICLES 11.2 AND 11.3 OF THE SCM AGREEMENT 
 
1. In the underlying anti-subsidy proceeding, th e applicants presented hundreds of pages of 
factual information relating to fi nancial contribution, benefit, a nd specificity in support of their 
subsidy allegations.  The inform ation provided was that informa tion reasonably available to the 
applicants.  MOFCOM examined the allegations  and accompanying factual information, and 
determined that although certain alle gations did not warrant initiation of  an investigation, there was a 
sufficient evidentiary basis to initiate on sever al other allegations.  MOFCOM conducted an 
investigation of the allegations at issue.  (Ultimate ly, none of the allegations at issue under this U.S. 
claim were determined to have provided countervailable benefits  to the respondents.)     
 
2. The U.S. claims merely reflect disapproval of the allegations found in the applications rather 
than a critique of the factual information supporting the allegations.  Indeed, the United States is far 
too quick to assert without any evaluation that "the petition did not contain any evidence" of one or 
more elements of an actionable subsidy, when in f act such evidence existed, leaving in doubt whether 
the United States has advanced a prima facie  case under Article 11 
 3. What the United States seeks is a different standard for applications than that found in 
Article 11 of the SCM Agreement, requiring a level of information, analysis, and disclosure simply 
not required by that provision.  The consistent theme of prior panels in addressing this requirement is 
that applicants need only submit enough evidence to jus tify an investigation, and need not analyse that 
evidence or justify the ultimate conclusion.  First,  WTO dispute settlement panels have found that the 
initiation standard presents a relatively low threshol d for applicants.  Second, an application is 
sufficient if limited to providing relevant informat ion; analysis is not a prerequisite.  Third, an 
applicant is not required to provide within its app lication an exhaustive compendium of all relevant 
information reasonably available to it.  The real  question is whether the application contained 
sufficient information on the matters specified in Arti cle 11, and by that standard whether initiation of 
the allegations at issue was proper.  The evid ence on the record of the proceeding, largely 
unaddressed by the United States in its claim, demons trates that both the contents of the petition and 
initiation were proper. 
 4. China submits that the United States has faile d to engage in a serious evaluation of the 
evidence that accompanied the application at issue.   Because of that failure, the United States has 
failed to establish a prima facie  case that the application was inconsis tent with Article 11.2.  Its entire 
case with respect to 11 separate allegations is conf ined to 11 perfunctory paragraphs that, to one 
extent or another, simply assert that "the petiti on did not contain any evidence" of one or more 
elements of an actionable subsidy.  The United Stat es made absolutely no refe rence to the information 
that accompanied the application with respect to ma ny of the challenged allegations, when in fact 
each allegation was accompanied by specific documentary information beyond the assertions contained in the allegation itself.  For the pr ogrammes where the United States actually mentioned 
accompanying evidence, it was only in passing w ith no serious critique of the information. 
 WT/DS414/R/Add.1 
Page A-12  
 
  B. MOFCOM'S TREATMENT OF CONFIDENTIAL INFORMATION WAS FULLY 
CONSISTENT WITH THE REQUIREMENTS OF ARTICLE 6.5.1 OF THE AD AGREEMENT AND ARTICLE 12.4.1 OF THE SCM AGREEMENT 
 5. Article 6.5.1 and Article 12.4.1 do not require  complete or perfect disclosure.  They require 
only that a non-confidential summary – the public version of a document – be in "sufficient detail" to 
permit a "reasonable understanding" of the "substance"  of the information.  These provisions seek to 
strike a balance between the interests of the inte rested parties submitting confidential information and 
the interests of the other interested parties to be  reasonably informed.  Nonetheless, the text of the 
provisions recognizes that the balance must favour the submitter of confidential information, where 
summaries cannot   adequately protect confidentia l information. The non-confidential summaries in 
the public version of the petition more than met this standard.    6. The U.S. argument focuses entirely on the st atements made in part II of the petition, but 
completely ignores the non-confidential summaries provided in part I of the petition.  Given the 
United States failure even to address the non- confidential summaries actually provided, China 
believes the United States has not made out a prima facie  case of its claim.  The fact that the 
Appendices do not repeat non-confidential summaries provided in the narrative of the public version 
of the petition does not create a violation of Artic le 6.5.1 or Article 12.4.1.  One can have a 
"reasonable understanding" of the key issues and fact s by reading the entire public version of the 
petition and there is no obligation on the authorities to require interested parties to repeat a non-
confidential summary that has already been provided. 
 7. To the extent the Panel finds that adequa te non-confidential summaries on any particular 
issues were not provided in the underlying proceeding, China believes that the cen tral issue shifts to 
whether or not China dealt with the exceptional circ umstances of this investigation properly in view 
of Article 6.5 and 6.5.1 and the so-called "due process" rights of the interested parties.  The 
exceptional circumstance of having only two respond ent companies in China permitted the authorities 
to invoke the "exceptional circumstance" provision of Articles 6.5.1 and 12.4.1 of the AD and SCM 
Agreements respectively in order to protect the c onfidentiality of the information submitted.  Because 
the information was limited to two companies, the information provided was not susceptible to a more 
traditional confidential summary which aggregates th e information from multiple  companies, thereby 
protecting the confidentiality of individual company information. 
 C. MOFCOM'S APPLICATION OF FACTS AVAILABLE IN DETERMINING THE 
SUBSIDY MARGIN FOR THE GOVERNMENT PURCHASE OF GOODS PROGRAM WAS CONSISTENT WITH ARTICLE 12.7 
 
8. In the underlying investigation MOFCOM made  direct requests to the company respondents 
regarding information on all steel sales in the c ontext of the government purchase of goods program.  
The respondents refused to respond to MOFCOM's re quests in their initial questionnaire responses.  
After consulting and providing written guidance to both AK Steel and ATI on the matter, MOFCOM 
gave both companies ample opportunity to correct thei r responses.   The compan ies again refused.  In 
response, China declined to veri fy the deficient, untimely and unusable information provided, and 
instead applied "facts available" to both companies, finding that 100 per cent of sales took place under the programme.  On the basis of these facts, th e United States now argues that China improperly 
applied "facts available" in consideration of th e government purchase of goods program.  Looking to 
the language of Article 12.7 and guidance derived from parallel language under Article 6 of the AD 
Agreement, the United States claims that MOFCOM  impermissibly ignored "necessary information" 
provided by the company respondents in the case.    9. China notes that the U.S. "facts available" clai ms appear rooted in a substantive disagreement 
over China's analysis of subsidy issues, but any substantive disag reement the United States has over  WT/DS414/R/Add.1 
 Page A-13 
 
 
  China's theory of subsidization and methodological  choices with respect to the government purchase 
of goods program is not before this Panel.  The Pane l must evaluate the U.S. claim in light of China's 
approach to what it deemed to be necessary informa tion, not in light of U.S. arguments about what 
should have been sufficient information.  Properly framed, it is evident that MOFCOM's application 
of "facts available" was consistent with Artic le 12.7.  The companies did not provide timely 
responses, did not cooperate to the best of their ability, and seriously impeded the investigation even 
when they knew as of the preliminary determina tion that MOFCOM was considering a 100 per cent 
utilization option.  10. MOFCOM knew the correct utilization of th e programme was more than zero.  MOFCOM 
also had a reasonable basis to believe the correct utilization was more than the 29 per cent alternative 
offered by AK Steel, since AK Steel had refused to  provide requested inform ation.  Indeed, this 
alternative was filed on the same day – 30 Decemb er 2010 as the final AK Steel effort belatedly to 
respond to the MOFCOM request for information.  Ye t even at this late date, AK Steel still did not 
respond properly, and provided transaction data only for a subset of the customers that had been 
previously identified.  Indeed, AK Steel did no more  than submit data that it had readily available for 
months.  So instead of making a good faith effort finally to respond to the request, AK Steel yet again decided it could pick and choose how and whether to respond.  On the other hand, MOFCOM had no 
information with which it could determine some alte rnative more than the AK alternative but less than 
100 per cent utilization, again in large part due to the refusal of ATI and AK Steel to provide 
complete information.  MOFCOM's effort to e licit more complete coopera tion had failed, and the 
facts to determine the actual level of utilization had still been withheld by the U.S. respondents.  Thus, 
MOFCOM reasonably relied on the 100 per cent figur e, consistent with Article 12.7 of the SCM 
Agreement.  11. Respondents who wilfully and strategically create a factual void during the course of an 
investigation should not be allowed to benefit fro m that non-cooperation under Article 12.7 of the 
SCM Agreement.  To allow such an outcome woul d undermine the entire purpose of the investigation 
and allow respondents to manipulate the process by withholding unfavourable information in a 
calculated manner.   D. MOFCOM'S DISCLOSURE OF ITS DETERMINATION OF THE MARGINS OF 
DUMPING WAS CONSISTENT WITH THE REQUIREMENTS OF ARTICLE 12.2.2 
 12. There is no language in Article 12.2.2 that s upports the U.S. contention that this provision 
requires authorities to provide respondents with th e actual calculation of the margins of dumping.  
Article 12 is focused on providing an "explanation" of  determinations; sufficient detail in this context 
would indicate that the disclosure be sufficient to c onstitute an adequate explanation of the authority's 
findings and conclusions, and what facts and law we re relied upon in reaching such conclusions and 
findings.  This is not a mandate to require full disclos ure of all facts used to calculate the margins of 
dumping, but rather a more limited requirement to ensure an understanding of the methodology, facts 
used, and the results obtained with respect to the ma rgins of dumping.  All that is necessary is to 
provide interested parties to an investigation or  review notice of determinations made by the 
authorities and an explanation of the determinations. 
 13. It is questionable whether the United States complaint regarding the disclosure of the actual 
numbers used and the actual calculations performed in the determination of the margins of dumping 
properly even lies under Article 12.2.2, which addr esses final determinations, or Article 6.9 which 
addresses the disclosure of the essential facts formi ng the basis of the decision to apply definitive 
measures.  Nevertheless, even if the United Stat es were basing its complaint on Article 6.9, the 
language of the Article makes clear that its object and purposes is to provide the "essential facts" to 
enable interested parties "to defend their interests, " not to provide the detailed facts demonstrating the WT/DS414/R/Add.1 
Page A-14  
 
  calculation of the margin of dumping.  Moreover, even  if Article 6.9 were properly before the Panel, 
the disclosure provided in Article 6.9 does not add to that required under Article 12. 
 14. Notwithstanding the absence of any requirement  that the details of the calculation of the 
margins of dumping be disclosed, the disclosure by Ch ina in the instant investigation was sufficient to 
allow respondents to replicate the authority's calculation.  China provides in Exhibits CHN -25 and 
CHN -26 tables listing each element of the calculation of  normal value and export price or constructed 
export price used to calculate the margins of dum ping for each of the two U.S. respondents, drawn 
from the source documents of the proceeding.  E ach respondent could go to the source information 
and reconstruct the exact calculation performed by  MOFCOM to determine the margins of dumping.  
Thus, the respondents were in a position to check th e accuracy of the MOFCOM calculation, and it is 
evident from comments filed by ATI during th e proceeding that it clearly understood what 
information MOFCOM was using.  Thus , the U.S. claim is without merit. 
 E. MOFCOM PROVIDED SUFFICIENT DETAIL ON ITS FINDINGS OF THE LACK OF A 
COMPETITIVE BIDDING PROCESS UNDER THE GOVERNMENT PURCHASE OF 
GOODS PROGRAM 
 15. Using record facts, MOFCOM's preliminary and final determinations plainly set forth why 
participation restrictions on foreign steel and price pr eferences afforded to U.S.  steel resulted in prices 
that did not reflect competitive, market conditions  under the government purchase of goods program.   
 
16. Article 22.3 of the SCM Agre ement establishes notification requirements at the preliminary 
and final stages of investigation with respect to tho se issues of fact and law considered material by the 
investigating authorities.  Notifications, in "suffici ent detail," should be provided in the preliminary 
and final determinations, or through a separate repor t.  The object and purpose of the provision is to 
provide transparency and afford affected parties a reasonable understanding of the facts and analysis 
underlying an authority's determinations.  Both th e preliminary and final determinations issued by 
MOFCOM accomplished exactly this objective, contrary to U.S. claims.    17. In the preliminary determination, MOFCOM explained all the elements that led to its 
conclusion that bidding under th e government purchases of goods program did not reflect market 
pricing.  Contrary to U.S. claims, it also direc tly addressed arguments made by the United States that 
no benefits were conferred on any manufacturers of goods.  Specifically, the preliminary 
determination noted:  (1) bids by U.S. producers are afforded a 25 per cent price cushion over competing foreign prices, thus "competitive bidding" is really closed bidding among U.S. producers at 
artificial start prices; (2) to the extent forei gn suppliers are exempted from the 25 per cent price 
preference for U.S. products under the Government Procurement Agreements, others remain subject 
to that restriction, with certain states prohibiti ng  any foreign participation and expressly limiting 
competition to U.S.-made steel; and (3) because of th ese features, the price obtained through this so-
called "competitive bidding does not reflect true market conditions."  18. In the final determination, MOFCOM's e xplanation expanded upon that offered in the 
preliminary determination.  MOFCOM not only qu antified the amount of foreign steel excluded from 
Buy American projects as part of U.S. consumption,  but also quantified the price difference between 
North American prices and non-North American prices based on the submissions of AK Steel.  As discussed in the final determination, what that f actual information showed is that the prices of 
excluded products were lower than the North Amer ican price.  Finally, MOFCOM presented evidence 
from verification noting the extremel y limited use of foreign products within Buy American projects.  
Combined with what was already explained about  price preferences and general exclusions, this 
information confirmed the lack of a competitive ma rket, and a market that was otherwise weighted 
toward higher priced U.S. steel.   WT/DS414/R/Add.1 
 Page A-15 
 
 
  F. MOFCOM'S DETERMINATION OF THE "ALL OTHERS" CVD RATE WAS 
CONSISTENT WITH ARTICLES 12.7 AND 12.8 OF THE SCM AGREEMENT 
 19. In the underlying investigation, MOFCOM provided direct notice to the participating 
respondents, including the U.S. Government, AK Steel, and ATI.  It also placed a copy of the received 
petition in its public reading room and publishe d public notices of initiation.  To MOFCOM's 
knowledge, notice was thereby given to each known inte rested party as defined by Article 12.9 of the 
SCM Agreement of the implications of initiation an d the consequences for failing to cooperate with 
the investigation.    
20. In terms of the facts selected by MOFCOM  in calculating the "all others" CVD rate, as 
indicated in the final determination, MOFCOM reli ed upon information provided by the petitioner.  
Notice and thereby disclosure was given to all known producers/exporters.  With respect to disclosure 
of the facts upon which the all others rate was ba sed, the final determination disclosed that it was 
based upon information provided by the petitioners.  Specifically, the final determination stated:  
"{f}or other U.S. companies who did not regi ster nor submit the questionnaire responses, the 
Investigating Authority made a determination on ad  valorem subsidy rate based on the information 
submitted by the petitioner pursuant to Article 21 of  the Regulations on Countervailing Measures."  
There was little mystery to which information this st atement referred, and the United States appears to 
have readily identified the source from the record ba sed on that statement.  The information provided 
the facts and calculations upon which the all others rate based. 
 
G. MOFCOM'S DETERMINATION OF THE "ALL OTHERS" AD RATE  21. In the underlying GOES investigation, MOFC OM followed the genera l rule set forth in 
Article 6.10 of the AD Agreement which establishes th at authorities "shall, as a rule, determine an 
individual margin of dumping for each known export er or producer concerned of the product under 
investigation."  Since MOFCOM conducted an indi vidual examination of the margins of dumping of 
each known exporter/producer, the rule for determ ining the margin of dumping for non-individually 
examined exporters/producers in Article 9.4 of th e AD Agreement does not apply in determining an 
"all others" rate.  Neither Article 6.10 nor any ot her provision of the AD Agreement addresses the 
issue of the treatment of exporters/producers that are not "known" to the authority and cannot, 
therefore, be individually examined.   
 22. Pursuant to MOFCOM's notification to all pr oducers/exporters consistent  with Article 6.1 of 
the AD Agreement, China determined that the mo st relevant provision of the AD Agreement to 
address the issue of the antidumping rate for unknown and unresponsive exporters/producers was 
Article 6.8 of the AD Agreement which addresses the treatment of interested parties who do not 
provide the "necessary information" required by the aut hority.  In applying Article 6.8, the authority 
based its margin of dumping on paragraph 7 of Anne x II.  This was done since an "all others" rate 
based on the rate applied to one or both of the cooperating respondents, w ould provide no incentive 
for unknown companies to make themselves known and participate in the investigation.  Thus, the 
application of Article 6.8 and the last sentence of paragraph 7 of Annex II we re intended to encourage 
realization of the objectives of Article 6.10, namely to enable China to follow the general rule of 
determining margins of dumping for each individual producer/exporter.  
 23. In the preliminary determination, the margin s of dumping used for the "all others" rate was 
based on the margins alleged and contained in the petition.  However, because the information on 
which the final determination of the "all others" rate  was based was confidential information of one of 
the responding companies, the actual information used  to determine this rate could not be disclosed 
without breaching the confidentiality of the informat ion used.  Thus, the explanation was necessarily 
general in nature.  The failure to disclose the deta ils of the calculation of the "all others" rate had no 
effect on the ability of parties to defend their inter ests.  So long as the "all others" rate is based on WT/DS414/R/Add.1 
Page A-16  
 
  record evidence, it is not clear that  in the situation where parties do not cooperate that the authority's 
discretion is limited.  H. MOFCOM'S INVESTIGATION DID NOT BREACH ARTICLE 1 OF THE AD 
AGREEMENT 
 
24. In the sections above, China has addressed in  full each of the United States' substantive 
claims concerning China's alleged breaches of the AD Agreement.  To the extent China has addressed 
all of the substantive claims raised by the United States and acted consistently with its obligations 
under the AD Agreement, the United States' Article  1 claim lacks merit and should be set aside. 
 
I. CHINA'S AD MEASURE DID NOT BREACH ARTICLE VI:2 OF GATT 1994  25. The United States claims that the circumstan ces surrounding China's assignment of the "all 
others" rate in the underlying proceeding breached Article VI:2 of GATT 1994.  China has addressed 
the United States substantive arguments with respec t to the "all others" AD margin.  We refer the 
Panel to the discussion above in Section G.  J. MOFCOM PROPERLY ANALYSED THE ADVERSE PRICE EFFECTS FROM THE 
SUBJECT IMPORTS  
 
26. At the outset, it is important to note the MOFCOM findings not being challenged by the 
United States.  The United States has made no cha llenge to the MOFCOM fi ndings of adverse volume 
effects.  The United States has also made no challenge to the MOFCOM findings regarding 
cumulation, which means that subject imports from both the United States and Russia must be considered together and the behaviour of the U.S.  producers themselves (individually or together) is 
not legally relevant to the analysis.  Finally,  the United States has made no challenge to the 
MOFCOM findings of material injury.  The U.S. ch allenges are limited to the price effects, and the 
causal link.  27. The U.S. arguments focus heavily on price undercutting findings that MOFCOM did not make, and largely misstate and mischaracterize th e price suppression and price depression analysis 
that MOFCOM did make.  MOFCOM  properly found that in the face of an increasing volume of 
subject imports that gained significant market shar e, domestic prices began to show the effects of 
price suppression and depression during 2008, and tho se effects continued and worsened in early 
2009.  The record provides strong positive eviden ce for the MOFCOM findings of price suppression 
and depression during 2008 and 2009, evidence that was not challenged at all during the 
administrative proceedings before MOFCOM and ev idence that the United States has not effectively 
challenged in its submissi on to this Panel.   
 28. MOFCOM did not make specific price underc utting findings, nor was it under any legal 
obligation to do so, contrary to U.S. arguments .  The texts of Article 3.2 and Article 15.2 -- through 
the key term "or" -- make clear that price undercutting is simply one alternative methodology that the 
authorities may consider as part of evaluating price e ffects.  This interpretation is reinforced by the 
term "otherwise" that the United States left out of  its quote from these texts – "whether the effect of 
such imports is otherwise to depress prices to a significant degree or prevent price increases." 
(emphasis added)  Both the use of "or" and the u se of "otherwise" confirm that price undercutting is 
optional, not mandatory.  This interpretati on has been adopted by other panels.   
 
29. MOFCOM also disclosed all of the "essen tial facts" as required by Article 6.9 and 
Article 12.8.  This disclosure occurred in tw o key documents.  First, MOFCOM presented a 
Preliminary Determination on 10 December 2009, which included extensive discussion of injury 
issues in general, and pricing issues in particular .  Second, MOFCOM also presented a Final Injury  WT/DS414/R/Add.1 
 Page A-17 
 
 
  Disclosures on 7 March 2010, which presented th e essential facts and provided initial responses to 
those arguments that had been made so far during the administrative proceedings.  These two 
documents contained all of the "essential facts"  on which China ultimately relied in its Final 
Determination.  
30. In making its disclosure argument, the United States has completely ignored the authority's 
obligation to protect the confidentiality of informa tion.  The United States cites to the procedural 
requirement to disclose, but conveniently overlooks th e fact that this obligation occurs in the context 
of the parallel requirement to protect the confidentialit y of proprietary information.   This requirement 
can be seen in Article 6.5 and Article 12.4, whic h discuss the obligation to protect confidentiality.  
This requirement can also been seen in Article 12. 2.2 and Article 22.5, which discuss the obligation of 
disclosure, but with "… due regard being paid to the requirements for protection of confidential 
information."  On balance, the United States has not  identified any specific piece of information that 
was both an "essential fact" and could be disclosed while maintaining confidentiality.  Such a failure 
has often been the basis for dismissing such claims as not stating a prima facie  case. 
 
31. Beyond complaining about the disclosure of "essential facts," the United States also 
complains about the "reasons" provided by MOFCOM.  Contrary to the U.S. argument, MOFCOM has provided the "relevant information" and "reasons " required by Article 12.2.2 and Article 22.5.  
The authority's obligation is not to address every deta il of every argument raised by the parties, in the 
specific terms provided by those parties.  MOFCOM  developed its response that the growing volume 
of subject imports in 2008 and early 2009 caused  price suppression and price depression in those 
years.  That complete explanation of its "reas ons" satisfies the obligations of Article 12.2.2 and 
Article 22.5.  32. Overall, China believes that its analysis of  adverse price effects fully complied with the 
substantive and procedural requirements of the rele vant Agreements.  If the Panel were to disagree, 
China asks the Panel to confirm MOFCOM's overa ll finding of causation was still proper.  Since 
MOFCOM based its analysis of causation on both volume effects and price effects, those price effects can support an overall finding of causation, even if they might not have been sufficient to justify finding a causal link on their own.  U.S. arguments to the contrary are without merit, resting on an incorrect assumption that the WTO agreements "re quire an authority to undertake a price effects 
analysis."  Article 3.1 and Article 15.1 requi re only two findings:  an initial finding about 
volume/price effects, and then a finding about the "consequent impact" of those effects. An authority can thus "examine" both the volume and price effect s, but ultimately decide to base its decision on 
whatever balance of volume effects and price effects appropriate in a specific case, and the "consequent impact" of those subject imports.  The United States has not challenged the MOFCOM 
findings of volume effects, nor has the United St ates challenged the MOFCOM  findings of material 
injury.  If the Panel agrees that MOFCOM has pr operly established a causal link between that subject 
imports and the condition of the domestic industry, th at should be sufficient even if the price effects 
analysis alone would not have supported a finding of causal link.  K. MOFCOM PROPERLY ANALYSED THE WAYS IN WHICH SUBJECT IMPORTS 
CAUSED THE MATERIAL INJURY SU FFERED BY THE DOMESTIC INDUSTRY 
 33. On causal link, the United States presents only a single paragraph discussing causal link more 
generally, and that paragraph simply refers back to the U.S. arguments about price effects.  The 
United States seems to believe that the absence of pr ice effects automatically established the lack of a 
WTO consistent causal link.  Legally, the United Stat es is wrong.  Adverse price effects alone are not 
a "necessary element" of the causal link.  The U.S.  argument also conveniently ignores the extent to 
which MOFCOM based its analysis on both the volume effects and the price effects.  MOFCOM 
never considered the price effects in isolation; th ey were part of any overall analysis that the 
increasing volumes of low priced subject imports were causing material injury to the Chinese WT/DS414/R/Add.1 
Page A-18  
 
  industry.  The United States has thus failed to demonstrate any inconsis tency between MOFCOM's 
analysis and the requirements of Article 3.1 and Article 15.1 to find a causal relationship between 
subject imports and the conditi on of the domestic industry. 
 34. With respect to non-attribution, the primar y U.S. argument is a challenge based on a single 
"other cause" of injury -- the expansion of Chinese capacity -- that the United States believes was not 
adequately addressed, and somehow severed by itsel f the causal link that MOFCOM had found.  In 
making its argument, China notes that the United States ignores the degree of discretion authorities 
have to address alternative causes.  Article 3.5 and Article 15.5 do not specify any particular 
methodology, and thus leave authoriti es with discretion as to how best to ensure a genuine causal link, 
even given the effects of other causes.  The United St ates also mischaracterizes the nature of the legal 
obligation.  The issue is not whether increases in cap acity "could not have contributed" to the injury.  
MOFCOM need not disprove any possible effect of any other known factor that might also be 
affecting the domestic industry.  Rather, the issue is whether subject imports contributed sufficiently 
to the adverse condition of the domestic industry, a nd whether the effect of the other factor was so 
dramatic as to nullify that contribution by subj ect imports, and thus sever the causal link.   
 35. The burden is on the United States as the complaining party to establish a prima facie  case 
that the effects of increased domestic capacity were so dramatic that they severed any possible causal 
link between the subject imports and the condition of the domestic industry.  The United States has 
failed to meet that burden.  It reduces to a single othe r factor and a series of failed efforts to attack the 
reasons given by MOFCOM for finding that capacity expansion did not sever the causal link.  But the 
respondents below provided no evidence for the U.S. theory, and the logic presented ultimately failed.  The record before MOFCOM demonstrated that:  
 Production capacity increased, but never exceeded total Chinese consumption. 
 
 Even though the domestic industry added capac ity, it did not actually use all of that new 
capacity and instead capacity utilization rates fell.   
 Subject imports increased sharply in 2008 (up 61 per cent) and early 2009 (up 24 per cent), 
were growing faster than the overall market, and were gaining market share.  
 The large and increasing volume of subject imports suppressed domestic shipments, and this 
subject import volume (which also happened to  be at low prices) prevented the domestic 
industry from taking advantage of its new capacity. 
 
Based on these facts, MOFCOM properly dismissed the possibility that the expansion of domestic 
capacity severed the causal link that MOFCOM had found.  36. Finally with respect to the issue of non-subj ect imports, China disclosed the "essential facts" 
of the case.  The Preliminary Determination identif ied "products imported from other countries" as an 
"other factor" being analysed, and noted that subject  imports were capturing a larger share of the total 
imports.  This provided both notice that China w as addressing non-subject imports, and that subject 
imports were gaining share of total imports.  Other parts of the notice also addressed non-subject imports.   
 
37. Having made this basic point in the Preliminar y Determination, the interested parties made no 
further arguments on this issue.  They could have developed information publicly – as the 
United States concedes in fn. 295 of its submission – but did not do so.  Having provided the "essential facts," and having received no arguments on this point, China did not need to develop this 
issue further in the absence of  arguments from the parties.  WT/DS414/R/Add.1 
 Page A-19 
 
 
   
38. Finally, the U.S. argument that MOFCOM did not provide any "factual substantiation" for its 
conclusions, is just wrong.  The demonstration th at non-subject imports gained only 0.09 percentage 
points of market share is factual substantiation.  Moreover, MOFCOM provided more than adequate 
discussion of this issue in light of the failure by th e parties to use the publicly  available information to 
develop any arguments on this point. 
 L. CHINA'S OBLIGATIONS UNDER ARTICLE 10 OF THE SCM AGREEMENT  39. The United States claims that China breached  its obligations under Article 10 of the SCM 
Agreement based on its substantive arguments under various other provisions of the Agreement and 
GATT 1994.  To the extent China's has demonstrat ed that its actions are consistent with the 
provisions of Article VI of GATT 1994 and the terms of the SCM Agreement as raised by the 
United States, this U.S. Article 10 claim should be rejected.  
 
_______________ 
 
 WT/DS414/R/Add.1 
Page B-1 
 
 
   
 
ANNEX B 
 
 
WRITTEN SUBMISSIONS, OR EXECUTIVE SUMMARIES THEREOF, 
OF THE THIRD PARTIES 
  
Contents Page 
Annex B-1 Executive Summary of the Third Party Written Submission of 
Argentina B-2 
Annex B-2 Executive Summary of the Third Party Written Submission of the 
European Union B-4 
Annex B-3 Third Party Written Submission of Honduras B-8 
Annex B-4 Executive Summary of the Third Party Written Submission of 
Japan B-11 
Annex B-5 Executive Summary of the Third Party Written Submission of the 
Kingdom of Saudi Arabia B-17 
Annex B-6 Executive Summary of the Third Party Written Submission of 
Korea B-21 
 
 WT/DS414/R/Add.1 
Page B-2  
 
  ANNEX B-1 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
WRITTEN SUBMISSION OF ARGENTINA
* 
 
 
I. INTRODUCTION 
 
1. In this third-party submission, Argentina is setting out its views on some of the issues that 
form part of this dispute, in accordance with the wr itten submissions to this Panel by the United States 
and China.  
II. UNDER ARTICLE 6.5 OF THE AGREEMENT ON IMPLEMENTATION OF 
ARTICLE VI OF THE GENERAL AGRE EMENT ON TARIFFS AND TRADE 1994 
("AD AGREEMENT") AND ARTICLE 12.4 OF THE AGREEMENT ON SUBSIDIES 
AND COUNTERVAILING MEASURES ("SCM AGREEMENT"), GOOD CAUSE MUST BE SHOWN FOR THE CONFIDENTIALITY OF INFORMATION AND A NON-CONFIDENTIAL SUMMARY MUST BE FURNISHED TO THE INTERESTED PARTIES 
 2. Articles 6.5 and 6.5.1 of the AD Agreement and Article 12.4.1 of the SCM Agreement require 
the submission of non-confidential summaries, so as to  enable the interested parties or Members to 
gain "a reasonable understanding of the substance of  the information submitted in confidence".  The 
aim, ultimately, is to guarantee the right of defence to the interested parties, who otherwise would lack 
sufficient information to understand the gr ounds of the accusation that they face. 
 
3. The WTO has had the opportunity to give its opinion on this subject in " United States - 
Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina " 
(WT/DS268/RW).  The Panel in that case held that " [a]s we noted above, Article 6.5.1 protects the 
right of the interested parties generally to be  reasonably informed about the substance of the 
confidential information that may be submitted by  any other interested party.  What matters for 
purposes of Article 6.5.1 is whether the intere sted parties themselves receive non-confidential 
summaries of the confidential  information submitted to the investigating authorities ".
1 
 4. Argentina therefore agrees with the view e xpressed by the United States in point B of its 
written submission to the effect that the Chin ese Ministry of Commerce (MOFCOM), in accordance 
with the above-mentioned Articles 6.5.1 of the AD Agreement and 12.4.1 of the SCM Agreement, 
should have required the interested parties submitting confidential information in the investigation to 
furnish non-confidential summaries thereof, espec ially in cases where the submitting parties had 
shown no cause for the impossibility of summarization.  
III. NON-ATTRIBUTION ANALYSIS WITH RESPECT TO OTHER FACTORS IN THE 
DETERMINATION OF INJURY 
 
5. Article 3.5 of the AD Agreement and Article 15.5 of the SCM Agreement show that, prior to 
its determination as to whether imports at dumped or  subsidized prices are th e cause of the difficulties 
experienced by the domestic industry, an inves tigating authority should carry out the so-called 
non-attribution analysis, whereby consideration has to be given to factors other than known factors 
                                                      
* This written statement was originally made in Spanish. 
1 United States - Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from 
Argentina  (WT/DS/268/RW), paragraph 7.137.  WT/DS414/R/Add.1 
 Page B-3 
 
 
  and a determination made as to whether they c ontribute to the injury suffered by the domestic 
industry.  6. In this connection, Argentina is of the opinion  that it is also clear from the above-mentioned 
rules that the Agreements under interpretation requi re no evidence that imports from other countries 
considered as "known factors" within the meaning of Article 3.5 of the AD Agreement and 
Article 15.5 of the SCM Agreement are dumped or subs idized imports.  In our view, therefore, even 
in the absence of dumping or subsidization or wher e the prices and/or quantity of those commercial 
operations are such as to cause injury to the domestic industry, it might be necessary for the 
investigating authority to examine whether, in the light of their volume and/or prices, imports from 
sources other than the one under investigation are substantial enough to break the causal link between 
the dumped imports and the injury determined.  In that examination, it might also be necessary to 
consider qualitative issues relating to the form s of competition in each of the markets. 
 
IV. CONCLUSION 
 
7. In the light of the analysis contained in  this submission, Argentina considers that: 
 
 The "confidential" classification of informati on submitted by any party in the dumping or 
subsidy investigation must be ju stified by good cause;  in that event, it is of the utmost 
importance that, except in duly attested exce ptional circumstances, non-confidential 
summaries are to be furnished, so as to guarantee th e right of defence to the interested parties. 
 
 In the determination of injury, the investigating authority shall effect a non -attribution 
analysis relating to "other known factors" which may be a contributing cause of the difficulties faced by the domestic industry. 
 WT/DS414/R/Add.1 
Page B-4  
 
  ANNEX B-2 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
WRITTEN SUBMISSION OF THE 
EUROPEAN UNION 
  
I. INTRODUCTION 
 1. The European Union (EU) intervenes in this dispute because of its interest in the correct 
interpretation of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"), the Agreement 
on Subsidies and Countervailing Measures ("SCM ") and the Agreement on Implementation of 
Article VI of the General Agreement on Tariffs and Trade ("Anti-Dumping Agreement" or "ADA"). 
 II. CONCERNING THE ALLEGATION THAT MOFCOM FAILED TO REQUIRE 
ADEQUATE NON-CONFIDENTIAL SUMMARIES CONTRARY TO ARTICLE 12.4.1 SCM AND ARTICLE 6.5.1 ADA 
 
2. In its First Written Submission the U.S. subm its that China breached Article 12.4.1 SCM and 
Article 6.5.1 ADA because it failed to require non- confidential summaries of allegedly confidential 
information.  
 3. Prior WTO panels clarified the importance a nd the outer boundaries of the obligation imposed 
by Article 6.5.1 ADA  and its parallel provision in the SCM Article 12.4.1.  The EU is of the view that 
not even the minimum transparency requirements of Article 6.5.1 ADA or Article 12.4.1 SCM can be 
considered to have been met in cases where non- confidential summaries were not provided to nor 
requested by the investigating authority and no  statement of reasons stating the exceptional 
circumstances that render the confidential info rmation unsusceptible to summarisation in non-
confidential format has been provided  to the investigating authorities.  
 
III. CONCERNING THE ALLEGATION THAT MOFCOM FAILED TO MAKE 
AVAILABLE THE CALCULATIONS IT PERFOMED TO ARRIVE AT THE 
DUMPING MARGINS CONTRARY TO ARTICLE 12.2.2 ADA 
 
4. In its First Written Submission the U.S. argues that China breached Article 12.2.2 ADA 
because it failed to make available to AK Steel a nd ATI the calculations and data used to determine 
these companies' final dumping margins.  Whilst not taking a position on the facts of this case, the EU 
agrees with the U.S. that under Article 12.2.2 ADA, th e investigating authority is required to include, 
or make available through a separat e report, all relevant informati on on the matters of fact and law 
and reasons which have led to the imposition of fi nal measures in the public notice of conclusion of 
an investigation in the case of an affirmative de termination providing for th e imposition of a definitive 
duty. 
 
5. The EU further notes that in order to provide interested parties with the opportunity to review 
the essential facts and provide meaningful comments,  the ADA requires the investigating authority to 
disclose essential facts already under consideration be fore the final determination is made.  According 
to the U.S., MOFCOM did not make the calculati ons, and the data underlying those calculations, 
available in its Final Disclosure.  In general terms, even where cal culations, and the data underlying 
those calculations, have already been made availa ble at the stage of disclosure, any revision or 
modification of the calculations, and the data underl ying those calculations, after the final disclosure 
would, in accordance with Article 12.2.2 ADA, have to  be set out and explained in the public notice 
or through a separate report.  WT/DS414/R/Add.1 
 Page B-5 
 
 
   
IV. CONCERNING THE ALLEGATION THAT MOFCOM APPEARS TO HAVE 
APPLIED A RATE THAT INCORPORATES PROGRAMS SPECIFICALLY FOUND NOT TO BE COUNTERVAILABLE 
 6. In its First Written Submission the U.S. alleg es that China based the All Others' Rate on rates 
from the petition, which included rates for subs idies which were subsequently found to be non-
countervailable.  7. The inclusion in the calculation of the All Ot hers' Rate of programmes alleged in the petition, 
which were during the investigation found not to be  countervailable by the investigating authority 
itself, would in the view of the EU amount to a busive use of facts availa ble incompatible with 
Article 12.7 SCM interpreted w ith its relevant context.  
 
V. CONCERNING THE ALLEGATION TH AT CHINA ACTED INCONSISTENTLY 
WITH ARTICLE 12.8 OF THE SCM BY FA ILING TO DISCLOSE THE ESSENTIAL 
FACTS UNDER CONSIDERATION REGARDING ITS CALCULATION OF THE "ALL OTHERS" SUBSIDY RATE 
 
8. In its First Written Submission the U.S. a lleges that China breached Article 12.8 SCM by 
failing to disclose the essential facts under considera tion forming the basis of the All Others Subsidy 
Rate. 
 9. The EU agrees with the U.S. th at: (i) facts that led the investig ating authority to conclude that 
resorting to the use of the facts available was appropr iate; (ii) facts that led the investigating authority 
to conclude that the subsidy rate  as determined was an appropriate  rate applicable to all other 
companies; (iii) facts underpinning the calculation of the subsidy rate as determ ined, and the details of 
the calculation itself; in general terms constitute ess ential facts forming the basis of the All Others 
Subsidy Rate within the meaning of Article 12.8 SC M and should as such be disclosed before a final 
determination is made.  
VI. CONCERNING THE ALLEGATION TH AT CHINA ACTED INCONSISTENTLY 
WITH ARTICLE 6.9 ADA BY FAILING TO DISCLOSE THE ESSENTIAL FACTS 
UNDER CONSIDERATION REGARDING ITS CALCULATION OF THE "ALL OTHERS" DUMPING RATE 
 
10. The U.S. alleges that
 MOFCOM did not identify the essential facts that formed the basis for 
its imposition of a 64.8 per cent All Others Dump ing Rate contrary to China's obligation under 
Article 6.9 ADA.  11. The EU agrees with the U.S. th at: (i) facts that led the investig ating authority to conclude that 
the All Others Dumping Rate as determined was an a ppropriate rate applicable to all other companies, 
especially considering that the dumping rates for the two companies identified in the notice of 
investigation were substantially lo wer than the determined all othe rs dumping rate; (ii) particular 
"transaction information" from the two respondents th at formed the basis for the All Others Dumping 
Rate as determined; (iii) facts underpinning the cal culation of the All Others Dumping Rate, and the 
details of the calculation itself; in general terms constitute essential facts form ing the basis of the All 
Others Dumping Rate within the meaning of Artic le 6.9 ADA and should as such be disclosed before 
a final determination is made. 
 WT/DS414/R/Add.1 
Page B-6  
 
  VII. CONCERNING THE ALLEGATION THAT THE PRICE EFFECTS ANALYSIS IN 
MOFCOM'S FINAL DETERMINATION WAS INCONSISTENT WITH CHINA'S 
WTO OBLIGATIONS 
 
12. The United States alleges
1 that MOFCOM did not (1) disclose several pieces of information 
critical to its price effects analysis, which is cont rary to Article 6.9 ADA and Article 12.8 SCM; (2) in 
either the Final Determination or the injury discl osure document, provide any factual information or 
indeed reasoning to support its conclusion that im port prices were lower than domestic producers' 
prices, thus infringing Article 12.2.2 ADA and Ar ticle 22.5 SCM; and (3) disclose evidence of 
significant price effects, which is in breach of Articles 3.1 and 3.2 ADA and Articles 15.1 and 15.2 
SCM. 
 13. Concerning the alleged breach of Article 6.9 ADA and Article 12.8 SCM on the basis of the 
information available to the Europ ean Union it seems that disclosure
2 did not include any information 
about price levels for the domestically produced pr oducts.  The information provided on page 8 of 
Exhibit US-27 indicates only the relative increase of the price of the products without indicating any 
price levels.  Therefore, should the United States ' allegations be confirmed, the European Union 
agrees with the United States' submission that MOFC OM's failure to disclose numerous facts central 
to its price effects analysis is inconsiste nt with Article 6.9 ADA and Article 12.8 SCM. 
 14. Concerning the alleged breach of Articl e 12.2.2 ADA and Article 22.5 SCM, if the 
United States' allegations are confirmed, the Eu ropean Union agrees with  the United States' 
submission that MOFCOM's failure to provide (1) a meaningful description of numerous facts critical 
to the price effects analysis; and (2) a substan tiated response to the parties' arguments, breach 
Article 12.2.2 ADA and Article 22.5 SCM.  
15. Concerning the alleged breach of Articles 3.1 and 3.2 ADA; and Articles 15.1 and 15.2 SCM 
were the Panel to establish that MOFCOM's respon se in the Final Measure to exporters' arguments 
submitted during the administrative procedure is insu fficient and/or not based on sufficient evidence, 
the European Union agrees with the United States' submission that MOFCOM's failure to provide (1) 
a meaningful description of numerous facts criti cal to the price effects analysis; and (2) a 
substantiated response to the par ties' arguments breach of Article  12.2.2 ADA and Article 22.5 SCM. 
 
VIII. CONCERNING THE ALLEGATION THAT THE CAUSATION ANALYSIS IN 
MOFCOM'S FINAL DETERMINATION WAS INCONSISTENT WITH CHINA'S 
WTO OBLIGATIONS  
 16. Given the flawed price effects analysis MOFCOM could not possibly accomplish a correct 
causal link analysis.  Indeed, unless imports have pr oven significant price effects, the investigating 
authorities cannot find such imports to be causing inju ry within the meaning of Article 3.1 ADA, first 
sentence; and Article 15.1 SCM.  17. Therefore, on the basis of the information pr esently before it, the Eur opean Union agrees with 
the United States' submission that MOFCOM has not  complied with Article 6.9 ADA and Article 12.8 
SCM in that it has provided no information whatsoev er on imports from sources other than Russia and 
the United States.  
                                                      
1 Ibid, paras. 186 et seq. 
2 See Exhibit US-27.   WT/DS414/R/Add.1 
 Page B-7 
 
 
  IX. CONCLUSIONS 
 
18. The EU considers that this case raises im portant questions on the interpretation of 
Articles 15.1, 15.2, 12.4.1, 12.7 and 22.5 of the Agreement on Subsidies and Countervailing Measures 
and Articles 3.1, 3.2, 6.5.1, 6.8, 6.9 and 12.2.2 of the Anti-Dumping Agreement.  While not taking a 
final position on the merits of the case, the EU request s this Panel to carefully review the scope of the 
claims in light of the observations made in this submission.   19. The EU reserves its right to make further comments at the third party session of the first 
substantive meeting with the Panel. 
 
 
 WT/DS414/R/Add.1 
Page B-8  
 
  ANNEX B-3 
 
 
THIRD PARTY WRITTEN SUBMISSION  
OF HONDURAS
* 
 
 
I. INTRODUCTION 
 
1. Honduras is participating in this dispute fo r reasons of systemic interest and because it 
considers that there is a need fo r proper interpretation of specific provisions of the WTO Agreements 
at issue.  2. In this third-party submission, therefor e, Honduras is setting out its views on the legal 
interpretation of two of the issues that are the subject  of this dispute, namely:  (i) the requirements for 
initiation of an investigation on countervailing meas ures, pursuant to Articles 11.2 and 11.3 of the 
Agreement on Subsidies and Countervailing Measur es (the "SCM Agreement");  and (ii) the 
requirements for the submission of confidential in formation, pursuant to Article 12.4.1 of the 
SCM Agreement and Article 6.5.1 of the Agreement on Implementation of Artic le VI of the General 
Agreement on Tariffs and Trade 1994 (the "AD Agreement").  
3. Honduras wishes to state that it reserves the right subsequently to submit its views on other 
issues or to elaborate on the comments concerning the two matters addressed in this submission, 
either at the oral statements stage or when  the members of the Panel deem appropriate. 
 
II. INITIATION OF INVESTIGATION BASED ON SUFFICIENT AND RELEVANT 
EVIDENCE UNDER ARTICLES 11.2 AND 11.3 OF THE SCM AGREEMENT 
 
4. Article 11.2 of the SCM Agreement states that an application for initiation of an investigation 
in a proceeding on countervailing measures must contain:  
sufficient evidence of the exis tence of (a) a subsidy and, if possible, its amount;  
(b) injury within the meaning of Article VI of GATT 1994 as interpreted by this 
Agreement;  and (c) a causal link between the subsidized imports and the alleged injury. 
5. In addition, Article 11. 2 of the SCM Agreement speci fies that "simple assertion, 
unsubstantiated by relevant evidence", is not suffi cient to meet the requirements of "sufficient 
evidence". 
 6. Furthermore, Article 11.3 of the SCM Agreement provides that:  
the authorities shall review the accuracy and adequacy of the evidence provided in the 
application to determine whether the eviden ce is sufficient to justify the initiation of 
an investigation. 
7. The above-mentioned provisions lay down two obligations for the initiation of the 
investigation, both designed to obtain sufficient evidence.  The first obligation pertains to the 
application and, in particular, the nature of the attached evidence.  The second obligation falls on the 
investigating authority.  The requirement that the evidence should be sufficient means, in part, that it 
should be relevant, adequate or appropriate - otherwise the inves tigating authority would have to 
                                                      
* This written statement was originally made in Spanish.  WT/DS414/R/Add.1 
 Page B-9 
 
 
  request the applicant to complete the application so that it complies with this provision.  Without 
verifying such compliance, the investigating aut hority would not even be able to initiate the 
investigation procedure by reason of the a fortiori  interpretation of Article 5.8 of the AD Agreement 
and Article 11.9 of the SCM Agreement.  
8. The Panel in US - Hot-Rolled Steel  stated that the expression "sufficient evidence" under 
Article 5.3 requires an examination as to "whether  the evidence before the authority at the time it 
made its determination was such that an unbiased a nd objective investigating authority evaluating that 
evidence could properly have made the determination".
1  Therefore, the assessment criterion must 
pertain to the accuracy and relevance of the respect ive evidence in the light of the mandate to carry 
out an impartial and objective examination. 
 9. In the report of the Panel on US - Softwood Lumber , it was stated that the term "sufficient 
evidence" could not be taken to mean just "any evid ence", since there has to be a factual basis to the 
decision of the investigating author ity which is susceptible to review.
2 
 
10. It is clear from the foregoing that the evidence must contain a factual basis.  In other words, 
the evidence submitted must be concrete evidence rela ting to the required elements of subsidization, 
injury and a causal link between subsid ized imports and the alleged injury. 
 
III. NON-CONFIDENTIAL SUMMARIES UNDER ARTICLE 12.4.1 OF THE 
SCM AGREEMENT AND ARTICLE 6.5.1 OF THE AD AGREEMENT 
 
11. Article 12.4.1 of the SCM Agreement stipulates that the authorities shall require "interested parties providing confidential information to furnis h non-confidential summaries thereof".  It adds 
that: 
 
"[t]hese summaries shall be in sufficien t detail to permit a reasonable understanding 
of the substance of the information submitted in confidence.  In exceptional circumstances, such Members or parties ma y indicate that such information is not 
susceptible of summary.  In such excepti onal circumstances, a statement of the 
reasons why summarization is not possible must be provided". 
12. Article 6.5.1 of the AD Agreement sets out th e same obligations with respect to the handling 
of non-confidential summaries in the context of anti-dumping investigation proceedings.  13. The above-mentioned provisions are unequivo cal.  In both cases they require that the 
investigating authorities should in turn require th e interested parties to furnish non-confidential 
summaries when submitting information which they c onsider to be confidential.  If a non-confidential 
summary of such information is not provided, it is not possible to gain an understanding of the substance of the information that has been re moved or deleted from the document or documents 
containing confidential information.  Failure to fulf il this obligation adversely affects compliance with 
the principle of defence and due process in an inv estigation procedure, and may affect the impartiality 
and neutrality of the investigating authority. 
 
IV. CONCLUSION 
 
14. In the light of the foregoing, we cons ider that the Panel should assess whether the 
investigating authority verified that sufficient ev idence was provided on the elements required for the 
initiation of the investigation and whether the same  authority satisfied itself that the evidence in 
                                                      
1 Panel Report, US - Hot-Rolled Steel , paragraph 7.153. 
2 Panel Report, US - Softwood Lumber , paragraph 7.55. WT/DS414/R/Add.1 
Page B-10  
 
  question met the requirement of adequacy and a ccuracy as justification for the initiation of the 
investigation.  15. We likewise consider that the Panel should c onfirm the compulsory nature of the requirement 
that non-confidential summaries must be provided when an interested party submits confidential 
information, with a view to guaranteeing respect for due process and the impartiality and neutrality of 
the investigation.  
  WT/DS414/R/Add.1 
 Page B-11 
 
 
  ANNEX B-4 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
WRITTEN SUBMISSION OF JAPAN 
 
 
I. INTRODUCTION 
 
1. In this third party submission, Japan would lik e to present its views on systemic aspects of the 
following issues:  (a) disclosure of essential facts before the final determin ation under Article 6.9 of 
the AD Agreement  and Article 12.8 of the SCM Agreement ;  (b) final determinations under 
Article 12.2.2 of the AD Agreement  and Articles 22.3 and 22.5 of the SCM Agreement ; and (c) the 
determination of the all others rates base d on facts available under Article 6.8 of the AD Agreement  
and Article 12.7 of the  SCM Agreement .  
 II. DISCUSSION 
 
A. DISCLOSURE OF ESSENTIAL FACTS BEFORE THE FINAL DETERMINATION 
UNDER ARTICLE 6.9 OF THE AD AGREEMENT AND ARTICLE 12.8 OF THE SCM 
AGREEMENT  
 
1. The Investigating Authority's Obligation to Disclose the Essential Facts before the Final 
Determination 
 
2
. The respective first sentences of Article 6.9 of the AD Agreement  and Article 12.8 of the SCM 
Agreement provide that the authorities must disclose th e "essential facts under consideration which 
form the basis for the decision wh ether to apply definitive measure."  This obligation must be 
distinguished from providing interested parties the oppor tunity to see all information under Article 6.4 
of the AD Agreement  and Article 12.3 of the SCM Agreement .  The authorities must identify the 
particular "essential facts" among all relevant information in the anti-dumping or countervailing 
investigation.  
3
. Japan recalls that essential facts "form the basi s for the decision whether to apply definitive 
measure."  In this respect, Japan agrees with the panel in Mexico – Olive Oil , which correctly 
described them to be "the specific facts that under lie the investigating authority's final findings and 
conclusions in respect of the three essential el ements – subsidization, injury and causation".1  T h e  
same rationale should apply to the essential facts for the decision whether to apply definitive anti-
dumping measures because the provision of Article 6.9 of the AD Agreement is substantively identical 
to the provision of Article 12.8 of the SCM Agreement .  Further, Article VI:1 of GATT 1994 provides 
that, in the case of an anti-dumping investigation,  essential elements would be the existence of 
dumping, injury to the domestic industry, and causation.    
2. Disclosure of Information on Price Effects in Connection with the Finding on Causation 
 
4. The United States argues that MOFCOM disclosed "no data on levels of prices for the 
domestically produced product" and did not "disclo se the results of any pricing comparisons between 
the domestically produced product and the imports"2 and that non-disclosure of these facts is 
inconsistent with Article 6.9 of the AD Agreement and Article 12.8 of the SCM Agreement . 
                                                      
1 Panel Report, Mexico – Olive Oil , para. 7.110.  (WT/DS341/R) 
2 US FWS, para. 195. WT/DS414/R/Add.1 
Page B-12  
 
   
5. Article 3.5 of the AD Agreement and Article 15.5 of the SCM Agreement provide that the 
causation must be demonstrated through the effect s of dumping and subsidies as set forth in 
paragraphs 2 and 4 of these Articles.  The factual finding by the investigating authorities of the price 
effects is "the specific facts that underlie the inv estigating authority's final findings conclusions in 
respect of … causation".3   
 
6. In the final determination, MOFCOM appears to make certain price comparisons.4  Such price 
comparisons appear to have resulted in the fact fi nding by the MOFCOM on the effects of the price of 
imports to the price of the domestically-produced product.    
7. The authorities' choice of prices among raw price data, and its choice of the method to 
compare these prices would be a part of the process of the fact finding of the price effects.  For 
exporters/producers and the exporting Member, th e disclosure of such comparisons would be 
indispensable to argue effectively whether and how  the authorities accurately and correctly found the 
effects of the price of imports to the price of the domestically-produced product.  The results of pricing comparisons, therefore, are the type of "facts" that Article 6.9 of the AD Agreement and 
Article 12.8 of the SCM Agreement  envisage to require disclosure to the interested parties.  Japan 
notes that raw price data, however, is different from the price comparisons between the domestically-
produced product and the imports.  Such data would have to be ma de available under Article 6.4 of 
the AD Agreement  and Article 12.3 of the SCM Agreement.   Finally, it should be noted that certain 
price information might not be disclosed to inte rested parties because of its confidentiality.   
 
3. Information Concerning Non-Subject Imports 
 
8. The United States argues "MOFCOM disclosed no information concerning the volume or 
prices of imports from sources other than Russia and the United States"5 in making the determination 
that there is no evidence suggesting that GOES imported from other countries or regions caused 
material injury to China's domestic industry6 in both the preliminary determination and the final 
determination. 
 
9. Article 3.5 of the AD Agreement and Article 15.5 of the SCM Agreement provide that 
authorities must examine any known factors and may not attribute the effect of the other factor to the 
dumped or subsidized imports.  The non-attribution an alysis is an essential part of the authority's final 
finding and conclusion on causation.  As discusse d above, however, raw data as such do not fall 
within the scope of the term "facts" that must be di sclosed to interested parties under Article 6.9 of the 
AD Agreement  and Article 12.8 of the SCM Agreement .  The results of the analysis of raw data would 
be a part of the non-attribution finding that "the  proportion of the volume of GOES imported from 
other countries and regions in total imports continued to drop".  Such analytical information would be 
a "specific fact that underlie[s] MOFCOM's final finding of the causation."   
                                                      
3 Panel Report, Mexico – Olive Oil , para. 7.110.  (WT/DS341/R) 
4 First Written Submission of the People's Republic of China ("China FWS"), para. 282, citing Final 
Determination (English version) at 58; See also  Preliminary Determination, (English version), 
(10 December 2009, at 56 , Exhibit CHN-16).  See also China FWS, para. 312. 
5 US FWS, para. 260. 
6 US FWS, para. 58.  See also US FWS footnote 116 to para. 58 and footnote 294 to para. 260.  WT/DS414/R/Add.1 
 Page B-13 
 
 
  4. Information to Determine the Anti-Dumpi ng Duty Rate Applicable to Unexamined 
Exporters 
 
10. The United States argues that MOFCOM failed to disclose the information of the transactions 
that led MOFCOM to calculate an all others ra te of 64.8 per cent rate in the anti-dumping duty 
investigation and the calculation of the all others rate.7 
 11.
 The Appellate Body has clarified that the ex istence of dumping must be determined on an 
exporter/producer-specific basis in  accordance with the margin of dumping calculated on that basis.8  
The calculated individual margin is, therefore, one of the "facts" found by the authority to determine 
the existence of dumping, and accordingly, must be disclosed to all interest ed parties in accordance 
with Article 6.9 of the AD Agreement.  Further Japan recalls the panel's finding that "the normal value 
and export price data ultimately used in the fina l determination are essential facts which form the 
basis for the decision whether to apply definitive measures."9 Therefore it is clear that investigating 
authorities must disclose facts, including the normal value, the export price, and the calculation of 
dumping margins.  A failure to disclose these facts would be inconsistent with Article 6.9 of the AD 
Agreement.    
5. Information to Determine the Countervailin g Duty Rate Applicable to Unexamined 
Exporters 
 12.
 The United States argues that MOFCOM faile d to disclose the information that led 
MOFCOM to use the facts available to unexamined exporters in determini ng countervailing duty rate 
applicable to them, the information that led MO FCOM calculated 44.6 per cent of subsidy with 
respect to thereto, and calculation of the amount of  subsidy applicable to these exporters or per-unit 
subsidy rate in the counter vailing duty investigation.10  
 
13. Article 19.4 of the SCM Agreement provides that the amount of subsidy must be calculated 
"in terms of subsidization per unit of the subsidized and exported product".  The SCM Agreement  
requires "immediate termination in cases where the amount of a subsidy in de minimis ".11  As such, 
the amount of subsidy as indicated in the ad valorem  rate constitutes a fact on which the authority 
makes the determination of the subsidization.  Authorities therefore must disclose the government 
actions, which the authorities find as the s ubsidy, and also calculation of per-unit ad valorem  subsidy 
rate.  A failure to disclose these facts is  inconsistent with Article 12.8 of the SCM Agreement . 
 B. FINAL DETERMINATIONS UNDER ARTICLE 12.2.2 OF THE AD AGREEMENT A ND 
ARTICLES 22.3 AND 22.5 OF THE SCM AGREEMENT  
 
1. The Investigating Authority's Obligation to Provide a Sufficiently Detailed Explanation 
in Its Public Notice of the Final Determination 
 
14.  Article 12.2 of the AD Agreement  and Articles 22.3 of the SCM Agreement  require the 
issuance of a public notice or separate report of  the final determination, setting forth "in sufficient 
                                                      
7 US FWS, para. 173. 
8 See Appellate Body Report, US - Zeroing (Japan) , para. 111. WT/DS322/AB/R ("the Anti-Dumping 
Agreement  prescribes that dumping determinations be made in respect of each exporter or foreign producer  
examined.  …  Margins of dumping are established accordingly for each ex porter or foreign producer on the 
basis of a comparison between normal value and export prices."). 
9 Panel Report, Argentina - Poultry Anti-Dumping Duties , para. 7.223 (emphasis in original). 
10 US FWS, para. 148. 
11 In case of developing countries, the  de minimis  level is 2 per cent.  See Article 27.10(a) of the SCM 
Agreement . WT/DS414/R/Add.1 
Page B-14  
 
  detail  the findings and conclusion reached on all issues  of fact and law considered material by the 
investigating authorities."
12  Further, Article 12.2.2 of the AD Agreement and A rticle 22.5 of the SCM 
Agreement  require that the public notice of su ch final determination must contain  "all relevant 
information  on the matters of fact and law and reasons "13 as well as "the reasons for the acceptance 
or rejection of relevant arguments" made by exporters  or by interested Members.  Therefore, in case 
of an affirmative determination, the authorities are required to provide explanation "in sufficient 
detail" and the reasons on all factua l and legal issues related to the authorities' final determination or 
to arguments by interested parties and it must be published.    
2. MOFCOM's Alleged Failure to Make Available the Calculations of the Dumping 
Margins and Data Used to  Calculate the Margins 
 
15.
 The United States alleges that MOFCOM's failure to make available the calculations and data 
it used to calculate the margins for two U.S. GOES producers was inconsistent with Article 12.2.2 of 
the AD Agreement .14     
 
16. With respect to the determination of dumping,  Article 12.2.2 requires that the public notice 
contain "all relevant information on the matters of fact"15  The authorities, therefore, are obliged to 
provide a sufficiently detailed explanation on how  they established the margin of dumping on an 
exporter/producer-specific basis, incl uding the matters of facts.  It must include the factual findings of 
the export price and the normal value, their comp arison, and calculation of dumping and must be 
discernable in the public notice or separate report of the final determination.  It should be noted that 
the actual data need not be stated in the public notice beca use of the r equirement for the protection of 
confidential information under Article 12.2.2 of the AD Agreement.   Article 12.2.2 does not oblige the 
authorities to prepare a report of confidentia l version separately from the public notice.  
 3. MOFCOM's Alleged Failure to Provide An y Rationale on Its Rejection of a Price 
Derived from the Competitive Bidding Process 
 
17. The United States argues that " Article 22.3 [of the SCM Agreement ] requires MOFCOM to 
explain how the evidence supported its conclusion, and why MOFCOM chose to disregard arguments 
from the United States"
16 and that MOFCOM's explanation "does not qualify as adequate, and 
therefore China breached its obligation under Article 22.3."17  
 18. Article 12.2 of the SCM Agreement sets forth that any decision of the authorities must be 
"based on … the written record".  Article 22.3 of the SCM Agreement then requires that the public 
notice or report of the preliminary or final determination "set forth … in sufficient detail the findings 
and conclusions reached on all issues of fact and law considered material by the investigating 
authorities."      19. According to the allegation by the United St ates, MOFCOM rejected the competitive bidding 
price in the U.S. government procurements as the market price.  The adoption or rejection of the market price information in the country of purchase is  an issue that must nece ssarily be resolved by 
the investigating authorities to reach the final dete rmination.  MOFCOM, thus , would be required to 
provide explanation in sufficie nt detail on how MOFCOM found that the competitive bidding price 
                                                      
12 Emphasis added. 
13 Emphasis added. 
14 US FWS, para. 110. 
15 Article 12.2.1(iii) of the AD Agreement (incorporated by reference into Article 12.2.2). 
16 US FWS, para. 121. 
17 US FWS, para. 121.  WT/DS414/R/Add.1 
 Page B-15 
 
 
  was unable to accept as the market price and was highe r than the market price based on the evidence 
on the record.   
4. MOFCOM's Alleged Failure to Provide Factua l Information of the Price Effects and of 
Imports from Sources Other than Russia and the United States and Alleged Insufficient 
Responses to Parties' Argument on the Price Effects  
 
20.
 The United States argues that MOFCOM's non-attri bution analysis in its final determination 
contained no empirical information concerning th e volume and value of imports from sources other 
than Russia and the United States.18  It further argues that the final determination "does not contain 
any facts that would support a finding that prices for the merchandise under inve stigation were at any 
time lower than prices for the domestically produced product."19  Therefore China acted inconsistently 
with Article 12.2.2 of the AD Agreement  and Article 22.5 of the SCM Agreement .20 
 21. Article 3.1 of the AD Agreement  and Article 15.1 of the SCM Agreement  require the authority 
to make determination "based on positive evidence".  Articles 3.2 and 15.2 provide that the authority 
"shall  consider " whether there has been a significant price-undercutting or otherwise a depression or 
suppression of the price of the domestically produced products.  Articles 3.5 and 15.5 require that "the 
authorities shall  examine  all other factors … and the injuries caused by these other factors must not 
be attributed to the dumped [subsidized] imports."  Article 12.2.2 of the AD Agreement and 
Article 22.5 of the SCM Agreement  require that the notice contain information explaining 
"consideration relevant to the injury dete rmination as set out in Article 3 of the AD Agreement  or 
Article 15 of the SCM Agreement ".
21 
 22.
 The authorities must provide explanation in sufficient detail as to how the authorities 
considered positive evidence to make fact findings rele vant to the injury determination as set forth in 
of Articles 3 and 15 because the analyses on both price effects and non-attribution are "consideration 
relevant to the injury determination"   C. THE DETERMINATION OF THE ALL OTHERS RATES BASED ON FACTS 
AVAILABLE 
 1. Consistency of the Determination of the A ll Others Rates Based on Facts Available with 
Article 6.8 of the AD Agreement   
 
23. The United States alleges that "[b]y applying facts available to the unexamined firms when it 
never sent them copies of the anti-dumping questionnaire  or took any other steps to ensure that they 
had received the notice that the AD Agreement re quires, China breached Article 6.8 of the AD 
Agreement and paragraph 1 of Annex II."
22 
 24. Article 6.1 of the AD Agreement provides that "[a]ll interested parties shall be given notice of 
the information which the authorities require".  Pa ragraph 1 of Annex II further provides, "[a]s soon 
as possible after the initiation of the investigation, th e investigating authorities should specify in detail 
the information required from any interested party".  Article 6.8 of the AD Agreement  then sets forth 
that facts available may be applied to an interest ed party which "refuses access to, or otherwise does 
to provide, necessary information … or significantly  impedes the investigation".  Paragraph 1 of 
                                                      
18 US FWS, para. 262. 
19 US FWS, para. 201 
20 US FWS, paras. 204 and 265. 
21 Article 12.2.1(iv) of the AD Agreement and Article 22.4(iv) of the SCM Agreement (incorporated by 
reference into Article 12.2.2 and 22.5 respectively).   
22 US FWS, para. 166. WT/DS414/R/Add.1 
Page B-16  
 
  Annex II further provides that the authorities should inform the interested party that the authorities 
will apply facts available if the interested party do es not supply the requested information.  Therefore 
a dumping determination based on facts available with  respect to exporters/producers that were not 
given any notice or unknown is inconsistent with Ar ticles 6.1 and 6.8 and Para graph 1 of Annex II of 
the AD Agreement . 
 
2. Consistency of the Determination of the A ll Others Rates Based on Facts Available with 
Article 12.7 of the SCM Agreement  
 
25. The United States argues that "China's applica tion of facts available to calculate an adverse 
subsidy rate with respect to  unexamined exporters/producers of GOES failed to satisfy the 
requirements of Article 12.7 of the SCM Agreement."
23   
 26. The SCM Agreement  envisages that certain exporters would be left unexamined during the 
original investigation, by providing in Article 19. 3 that such exporters are "entitled to an expedited 
review in order that the investigating authorities promptly establish an individual countervailing duty 
rate for that exporter."  The SCM Agreement , however, does not set forth any rules on whether or not 
to determine the existence of subs idization on an individual exporter basis.  The authorities thus have 
the substantial discretion to make such determinations. 
 27. The authorities' discretion, however, is not unlimited.  Article 12.1 of the SCM Agreement  set 
forth the due process requirement that "all interest ed parties in a countervailing duty investigation 
shall be given notice of the information which the au thorities require."  This provision is substantially 
identical to Article 6.1 of the AD Agreement.   Also as is the case of Article 6.8 of the AD Agreement , 
Article 12.7 permits authorities to rely on facts available only when an interested party does not 
provide "necessary" information.   
 
28. The authorities must first notify an interested party of the information that they require, i.e. 
necessary information;  the authorities may apply a pplication of facts available with respect to 
"necessary" information, which the interested party did not provide;  accordingly,  the authorities may 
not apply facts available with respect to inform ation that the authorities have not requested the 
interested party to submit.  Therefore, a mere re quest in the public notice of the initiation to make 
themselves known to the authorities within 20 days from the date of initiation cannot be the basis to 
apply facts available to determine the amount of s ubsidy conferred upon such interested party.    
 
III. CONCLUSION 
 29.
 As a third party, Japan does not comment on factual aspects on the issues above, and thus, 
does not take any specific position whether the m easures at issue are inconsistent with the AD 
Agreement and the SCM Agreement .  Japan respectfully requests the Panel to examine carefully the 
facts presented by the parties to this dispute in light  of Japan's arguments above to ensure the fair and 
objective application of the provisions of the AD Agreement and the SCM Agreement . 
 
 
                                                      
23 US FWS, para. 141.  WT/DS414/R/Add.1 
 Page B-17 
 
 
  ANNEX B-5 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
WRITTEN SUBMISSION OF THE KINGDOM 
OF SAUDI ARABIA 
 
  
I. INTRODUCTION 
 
1. Saudi Arabia's participation in this dispute re lates to the interpretive issues discussed below, 
which are of strong systemic impor tance to all WTO Members.  Sa udi Arabia takes no position on the 
merits of the claims that are based on the particular facts of this case.  II. THE SCM AGREEMENT IMPOSES STRICT  DISCIPLINES ON THE INITIATION 
OF A COUNTERVAILING DUTY INVESTIGATION 
 
2. The negotiating history of the SCM Agreement demonstrates the intent of the drafters to strengthen the disciplines on initiation. Article 2.1 of the Tokyo Round Subsidies Code – the 
predecessor provision to Article 11.2 of the SCM Agreement – was incorporated essentially 
unchanged into the SCM Agreement,  though with three important a dditions.  First, the Uruguay 
Round negotiators added a new sentence to establis h that "[s]imple assertion, unsubstantiated by 
relevant evidence, cannot be considered sufficien t to meet the requirements of this paragraph". 
Second, they specified that the application mu st contain the detailed information set out in 
paragraphs (i) through (iv) of Article 11.2, provided  such information is re asonably available to the 
applicant. Third, and most importantly, they added Article 11.3, imposing a new, affirmative 
obligation on the investigating authority to "rev iew the accuracy and adeq uacy of the evidence 
provided in the application to determine whether the evidence is sufficient to justify the initiation of 
an investigation."  The additions incorporated into  the SCM Agreement demonstrate the intent of the 
drafters to "impose more disciplines on the application of countervailing measures".   
3. There must be "sufficient evid ence" before an investigating authority of subsidization, injury 
and causation to justify initiation.  It is important  to distinguish between the information requirements 
relevant to the applicant  under Article 11.2 and the obligations of the investigating authority  to 
review the accuracy and adequacy of that evid ence under Article 11.3.  The "reasonably available" 
language does not condone acceptance by the investiga ting authority of a complaint that is inaccurate 
or inadequate.  Article 11.3 imposes a positive obligation on investigating authorities which goes 
beyond a determination that the requirements of Ar ticle 11.2 have been satisfied; authorities "must 
verify that the evidence presented constitutes 'reasonable indications'" of all subsidy and injury 
elements.
1   
 
III. AUTHORITIES MAY ONLY RESORT TO FACTS AVAILABLE IN LIMITED 
CIRCUMSTANCES AND CANNOT APPLY THEM IN A PUNITIVE MANNER 
 
4. Under Article 12.7 of the SCM Agreement and Article 6.8 of the AD Agreement, an 
investigating authority may resort to facts availabl e only in limited circumstances: when an interested 
party (i) refuses access to, or (ii) otherw ise does not provide, necessary information2 within a 
reasonable period, or (iii) significantly impedes the investigation.  Information received from a 
respondent must be used if the respondent acted to  the best of its ability, even if the information 
                                                      
1 Panel Report, Mexico – Steel Pipes and Tubes , para. 7.22. 
2 See Panel Report, US – Steel Plate , para. 7.53; Panel Report, EC – Salmon (Norway) , para. 7.343. WT/DS414/R/Add.1 
Page B-18  
 
  provided is in a form different from that which was requested.
3  Paragraph 3 of Annex II "obliges an 
investigating authority to 'take[] into account' th e information supplied by a respondent, even if other 
information requested has not been provided by th e respondent and will need to be supplemented by 
facts available."4  This is the case even if that informati on is submitted after a deadline, but within a 
reasonable period of time.5   
 
5. Furthermore, the application of facts ava ilable must be non-punitive. The use of facts 
available "permits the use of facts on record solely for the purpose of replacing information that may 
be missing ",6 and authorities "should not arrive at a 'less favourable' outcome simply because an 
interested party fails to furnish requested informati on if, in fact, the interested party has 'cooperated'".7 
Thus, where an exporter fails to provide some  information, or if the information provided does not fit 
perfectly the request to which it responds,  authorities are not permitted to reject all information. Facts 
available may be employed only "to fi ll in gaps in the information [as]  necessary to arrive at a [final] 
conclusion".8 
 IV. INVESTIGATING AUTHORITIES MUST DISCLOSE ESSENTIAL FACTS IN A 
MANNER WHICH ALLOWS PARTIES TO DEFEND THEIR INTERESTS 
 
6. Under Article 12.8 of the SCM Agreement and Ar ticle 6.9 of the AD Agreement, an authority 
must (i) disclose all "essential facts" which form the basis for its determinations; and (ii) ensure that 
an interested party has adequate time to review those facts and correct them, where necessary, in a 
manner that permits interested parties to defend their interests. "Essential facts" encompasses "not 
only those [facts] that support  the decision ultimately reached" but also the "body of facts" necessary 
to "the process of analysis and decision-making by the investigating authority" in reaching that 
ultimate decision.
9  This includes "new" essentia l facts which bring about a change in the authority's 
findings after the issuance of the preliminary determ ination. Where the factual basis of the definitive 
measure is "significantly different" from that of  the provisional measure, the "essential facts" 
disclosure must include the specific facts that brought about this change.10   
 
7. "Essential facts" must be explic itly identified and disclosed as such,11 so that parties can then 
"comment on the completeness and correctness of th e facts being considered by the investigating 
authority, provide additional information or co rrect perceived errors, and comment on or make 
arguments as to the proper interpretation of those facts."12  Authorities must take into account the 
information or arguments an interested party submits.13  
 
V. THE DETERMINATION OF INJURY REQUIRES A CAUSAL ANALYSIS BASED 
ON AN OBJECTIVE EXAMINATION OF POSITIVE EVIDENCE  
 
8. Article 15 of the SCM Agreement and Article  3 of the Anti-Dumping Agreement impose an 
affirmative obligation on an authority to demonstr ate that it has determined, through an "objective 
                                                      
3 Appellate Body Report, Mexico – AD Measures on Rice , para. 288; Panel Report, US – Steel Plate , 
para. 7.72. 
4 Appellate Body Report, Mexico – AD Measures on Rice , para. 287 (emphasis original). 
5 See Appellate Body Report, US – Hot-Rolled Steel , paras. 83-86. 
6 Appellate Body Report, Mexico – AD Measures on Rice , para. 293 (emphasis added). 
7 Appellate Body Report, US – Hot-Rolled Steel , para. 99-100. 
8 Appellate Body Report, Mexico – AD Measures on Rice , para. 291. 
9 Panel Report, EC – Salmon (Norway) , paras. 7.807, 7.796 (emphasis added). 
10 Panel Report, Mexico – Olive Oil , para. 7.110; Panel Report, Guatemala – Cement II , para. 8.228. 
11 Panel Report, Guatemala – Cement II , paras. 8.229-8.230. 
12 Panel Report, EC – Salmon (Norway) , para. 7.805.  See also  Panel Report, Argentina – Ceramic 
Tiles , para. 6.125. 
13 Panel Report, EC – Salmon  (Norway) , para. 7.799.  WT/DS414/R/Add.1 
 Page B-19 
 
 
  examination" based on "positive evidence", (i) the s ubject imports' volume effects and price effects; 
(ii) injury to the domestic industry; and (iii) a cau sal link between the imports and that injury.  The 
analytical and evidentiary standards of SCM Article  15.1 and AD Article 3.1 apply to all elements of 
an authority's injury determination.  
9. The Appellate Body has found that the term "positive evidence" relates to "the quality  of the 
evidence that authorities may rely upon in making a determination" and "focuses on the facts underpinning and justifying the injury determination".
14  Positive evidence must be distinguished from 
and preferred over unverified statem ents made by interested parties.15  
 
10. Each element of the aut hority's injury analysis must  involve an objective examination of the 
positive evidence collected.  The Appellate Body has clarified that the word "objective" means that 
the examination "must conform to the dictates of the basic principles of good faith and fundamental fairness".
16  In keeping with this aim, the investigating authority is obligated to conduct its 
examination of the factors relating to injury in  an unbiased, even-handed manner without favouring 
the interests of any interested party to make a finding of injury more likely.17   
 11. In accordance with SCM Article 15.5 and AD Artic le 3.5, an affirmative injury determination 
may only be made where the authority has demonstrated  that the subsidized/dumped imports have 
caused injury to the domestic industry.
18  The Agreements impose a rigorous requirement to 
"demonstrate" causation.  An investigating authorit y must ensure that injury caused by other "known 
factors" is not wrongly attributed to the subs idized/dumped imports in the causation analysis.19  Only 
by separating and distinguishing the injurious effects can an authority make a reasoned judgment as to 
the degree of injury suffered which should be attributed (or not) to such other factors. 
 
VI. SUFFICIENT DETAIL AND RELEVANT INFORMATION MUST BE PROVIDED IN 
THE PUBLIC NOTICE ON ALL MATERIAL ISSUES    
 
12. Investigating authorities must provide "su fficient detail" on "material issues" in both 
preliminary and final determinations.  An issue will be  considered "material" where it has arisen in the 
course of the investigation and must necessarily be re solved in order for the investigating authority to 
be able to reach its determination.20  The discipline imposed on an inv estigating authority to set forth 
its findings and conclusions in "sufficient detail" re quires it to provide explanations for all material 
elements of the determination.21 
 13. Interested parties must be able to understand fully the reasons for the imposition of measures.  
As the Appellate Body has stressed, the inves tigating authority must provide a "reasoned and 
adequate explanation as to: (i) how the evidence on th e record supported its factual findings; and (ii) 
how those factual findings supported the overall…de termination", and this should be directly 
"discernible from the published determination itself."
22  The degree of detail required in the public 
                                                      
14 Appellate Body Report, US – Hot-Rolled Steel , paras. 192-193 (emphasis added). 
15 Panel Report, EC – Countervailing Measures on DRAM Chips , para. 7.368. 
16 Appellate Body Report, US – Hot-Rolled Steel , para. 193. 
17 Appellate Body Report, US – Hot-Rolled Steel, paras. 193, 196; Appellate Body Report, Mexico – 
Anti-Dumping Measures on Rice , para. 180. 
18 See Appellate Body Report, Japan – DRAMs (Korea) , paras. 262-263, 268; Appellate Body Report, 
EC – Tube or Pipe Fittings , para. 175. 
19 Appellate Body Report, US – Hot-Rolled Steel , paras. 226-228; Appellate Body Report, EC – Tube 
or Pipe Fittings , paras. 175, 188. 
20 Panel Report, EC – Tube or Pipe Fittings , para. 7.424. 
21 Panel Report, Mexico – Corn Syrup , para. 7.103. 
22 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS , para. 186; Panel 
Report, EC – Tube or Pipe Fittings , para. 7.435. WT/DS414/R/Add.1 
Page B-20  
 
  notice is therefore one that permits interested partie s to discern directly either the significance or lack 
of significance of factors the investigating authority was obligated to address.
23   
 14. "All relevant information" includes all information connected to the decision to impose duties. Article 22.5 of the SCM Agreement and Article 12.2.2 of the Anti-Dumping Agreement 
require the investigating authority to issue a public notice or report which contains (i) "all relevant 
information on the matters of fact and law", and (ii)  the "reasons which have led to the imposition of 
final measures". The use of the wo rds "have led to" means that aut horities have a duty to identify in 
the notice "those matters on which a factual or le gal determination must necessarily be made in 
connection with the decision" to impose measures.
24  The significance or lack of significance of 
factors the investigating authority was obligated to address must be directly discernable from the 
notice.25  It would necessarily include information on the facts underlying the price effects analysis, 
upon which a legal determination of injury must necessarily be made in order to impose measures. 
 
VII. CONCLUSION 
 
15. Saudi Arabia respectfully urges the Pane l to consider the Kingdom's positions on the 
interpretive issues set out above.   
 
 
                                                      
23 Panel Report, EC – Tube or Pipe Fittings , paras. 7.432, 7.435. 
24 Panel Report, EC – Tube or Pipe Fittings , para. 7.424.   
25 Panel Report, EC – Tube or Pipe Fittings , paras. 7.432, 7.735.    WT/DS414/R/Add.1 
 Page B-21 
 
 
  ANNEX B-6 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
WRITTEN SUBMISSION OF KOREA 
 
 
I. INTRODUCTION 
 
1. Korea appreciates this opportunity to present its  views to the Panel.  Korea fully shares the 
view that the issues presented in this dispute app ear to have "wider, perhaps systemic, implications" 
for all the WTO Members since the claims presented in this disput e touch upon some of the core 
procedural elements of AD and CVD inves tigations of investigating authorities.   
 2. Korea is of the view that clarification of key factual situations would be critical for the Panel's 
proper analyses of the claims and the final dispositio n of the present dispute.  In evaluating conflicting 
factual information, Korea respectfully requests th e Panel to discharge its obligation under Article 11 
of the DSU.  
II. LEGAL ARGUMENTS 
 A. INITIATION OF A COUNTERVAILING DUTY INVESTIGATION SHOULD BE BASED 
ON ADEQUATE AND SUFFICIENT EVIDENCE 
 
3. A CVD investigation entails mobilization of  a great deal of resources on the part of a 
responding government and companies.  A CVD inves tigation is also a serious undertaking laden with 
political sensitivities in that one Member investigat es another Member's governmental programs on a 
bilateral basis.  In Korea's view, these unique aspect s of a CVD investigation explain the inclusion of 
bilateral consultations requiremen t in Article 13 of the SCM Agreement which do not appear in the 
AD Agreement.   4. In this spirit, the SCM Agreement clearly guards against initiation of a CVD investigation 
without adequate and sufficient evidence that can not justify a lengthy investigation of another 
government.  Although the information to be presen ted at the initiation stage is not the type of 
evidence that establishes the existence of subsid ization or material injury, which can only be 
confirmed as a result of the full investigation
1, the investigating authority should nonetheless examine 
and confirm that at least a minimal amount of in formation reasonably indi cating subsidization and 
injury has been submitted by a domestic applicant.  
 5. In fact, Article 11.2 of the SCM Agreement set s forth a detailed threshold for the initiation of 
a CVD investigation: in order for there to be initiatio n, "evidence that substantiates" the existence of a 
subsidy and injury that is reasonably available to th e applicant must be presented in the application.  
                                                      
1 See Panel Report, Mexico – Anti-Dumping Investig ation of High Fructose Corn Syrup (HFCS) from 
the United States , WT/DS132/R, Adopted 24 February 2000, and Corr.1, DSR 2000:III, 1345, at paras. 7.74, 
7.76; Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel 
and H-Beams from Poland, WT/DS122/R, 5 Adopted April 2001, DSR 2001:VII, 2741, at para. 7.77; Panel 
Report, United States – Final Dumping Determination on Softwood Lumber from Canada , WT/DS264/R, 
Adopted 31 August 2004, DSR 2004:V, 1875, at para. 7.56. WT/DS414/R/Add.1 
Page B-22  
 
  As the panel in U.S. - Byrd Amendment opined, this provision is to "ensure that investigations are not 
initiated on the basis of frivolous or unfounded suits."
2 
 6. Article 11.3 of the SCM Agreement in turn re quires the investigating authority to confirm the 
accuracy and adequacy of the eviden ce itself.  Thus, an investigating authority assumes an affirmative 
obligation to examine all the relevant information and materials contained in the application and to 
confirm their veracity before making a decision to initiate a CVD investigation.  It cannot passively 
accept the allegations in the petition as true or app earing to be true and initiate the investigation 
hoping to confirm the veracity down the road.  Artic le 11.9 of the SCM Agreement clearly stipulates 
that the application should be re jected in such an instance. 
 
7. In short, under the current SCM Agreement, initiation of a CVD investigation is not supposed 
to be an automatic rubber-stamp process once a petiti on is filed by a domestic industry.  Rather, it is 
designed and envisioned to be a meaningful step where the investigating authorities carefully look 
into substantive information contained in the pe tition and determine whether the petition is really 
worth the time and resources to be inflicted from th e lengthy investigations.  Unless this filtering 
process operates in a way envisioned in Article 11  of the SCM Agreement, foreign exporters and 
governments would be in a severely dire situati on regardless of the final outcome of a CVD 
investigation.
3   
 B. THE
 "FACTS  AVAILABLE" STANDARD  HAS  ITS OWN  LEGAL  PARAMETERS  AND  
SHOULD  NOT  BE ABUSED  TO PENALIZE  FOREIGN  RESPONDENTS  SIMPLY  
BECAUSE  A REQUEST  FROM  THE  INVESTIGATING  AUTHOROTY  WAS  NOT  
FULLY  RESPECTED 
 8. The SCM Agreement does not provide an unlim ited discretion to an investigating authority 
conducting a CVD investigation whenever it encount ers a less than optimal information from a 
foreign respondent.  Instead, these provisions une quivocally provide conditions that need to be 
satisfied before the investigating authority applies the facts available standard.  Article 12.7 of the 
SCM Agreement, Article 6.8 of the AD Agreemen t, and Annex II of the AD Agreement provide 
detailed guidelines in this respect.  Likewise, the Appellate Body in Mexico-Beef and Rice  also stated 
that even if the request by an investigating authorit y for certain information is not completely adhered 
to by a foreign respondent (for instance, when the respondent submits only some information, not all 
the information requested), the investigating author ity is nonetheless required to consider information 
actually provided by the respondent.
4   
 9. In Korea's view, Article 12.7 of the SCM Agre ement along with other provisions in Article 12 
collectively stands for the proposition that fundamental  due process rights must be ensured at all times 
                                                      
2 Panel Report, United States – Continued Dumping and Subsidy Offset Act of 2000 , WT/DS217/R, 
WT/DS234/R, adopted  27 January 2003, as modified by the Appellate Body Report,  WT/DS217/AB/R, 
WT/DS234, at para. 7.61 
3 For example, due to the so-called "chilling eff ect" flowing from an AD or CVD investigation, a 
foreign exporter defending an AD or CVD investigation "f eels the direct hit" even in the initiation stage of the 
investigation, which is well before any preliminary or final AD/CVD determination.  In other words, importers 
of the foreign exporters named in an AD or CVD petition usually consider reducing or avoiding transactions 
with the foreign exporters due to the "uncertainty" in th e market – the importers are not sure about the ultimate 
AD or CVD margin as a result of a lengthy investigation, or the extra duty imposition’s implication for and 
impact on the market.  So, even if there is no actual duty imposition yet – whether preliminary or final – it may be the case that from the initiation itself, the market alre ady feels the effect of an AD or CVD investigation.  
Therefore, initiation needs to be limited only to the good-f aith allegations with sufficient information within the 
meaning of Article 5 of the AD Agreemen t or Article 11 of the SCM Agreement. 
4 Appellate Body Report, Mexico – Definitive Anti-Dumping Meas ures on Beef and Rice; Complaint 
with Respect to Rice , WT/DS295/AB/R, adopted 20 December 2005, at para. 294.  WT/DS414/R/Add.1 
 Page B-23 
 
 
  in a CVD investigation.5  The Panel should carefully review whether this due process right has been 
adequately respected.  The Panel would have to look into the specific situation of the investigation at 
hand and then determine whether facts availabl e would be warranted in the situation.   
 C. AN INVESTIGATING AUTHORIGY OF A MEMBER DOES NOT ENJOY UNBRIDLED 
DISCRETION REGARDING AN "ALL OTHERS RATE" IN ANTI-DUMPING AND 
COUNTERVAILING DUTY INVESTIGATIONS   
 10. One of the contentious claims in this dis pute is about all others rates in AD and CVD 
investigations by MOFCOM.  In the underlying AD and CVD investigations, the complainant claims, 
the all others rates were set at unreasonably high ma rgins without sufficient explanations or rationale 
other than some cursory statements of policy reasons.
6  The respective all others rates indeed seem 
extraordinarily high when comp ared to the margins assigned to the respondent companies, AK and 
ATI.7  Unreasonably high "all others rates" disassociat ed with calculated margins of the respondents 
participating in the investigations does raise a c oncern of possible inconsis tency with the relevant 
provision of the SCM Agreement and the AD Agreement. 
 11. In Korea's view, to the extent the applica tion of "all others rates" constitutes the virtual 
application of "facts available," as the United States argues, Article 12.7 of the SCM Agreement and 6.8 of the AD Agreement could be implicated in this  context as well.  If the facts available standard 
was imposed on non-participating exporters without satisfying the detailed requirements stipulated by 
Article 12.7 of the SCM Agreement and Article 6.8 of the AD Agreemen t, a violation similar to the 
one discussed in the previous section could be found.  
III. CONCLUSION 
 12. Korea respectfully submits that in reaching its  decision in this important dispute, the Panel 
should ensure that the relevant provisions of the GATT 1994, the AD Agreement and the SCM 
Agreement are construed in their proper context, whic h will give effect to the ordinary meaning of the 
terms consistently with the cont ext, object and purpose of these legal instruments as a whole.  Korea 
appreciates the opportunity to participate in this pr oceeding, and to present its views to the Panel. 
 
 
_______________ 
 
                                                      
5 See, e.g. Appellate Body Report, United States - Sunset Reviews of Anti-Dumping Measures on Oil 
Country Tubular Goods from Argentina , WT/DS268/AB/R, 29 November 2004, at para. 241; Guatemala – 
Cement II , at para. 8.119; United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant 
Carbon Steel Flat Products from Japan , WT/DS244/R, adopted 9 January 2004, at para. 7.255. 
6 See U.S. First Written Submission, at  paras. 134-136, 156, 173-175. 
7 See id.  (With respect to the CVD investigation, the all others rate was set at 44.6 per cent compared to 
11.918 per cent and 11.65 per cent assigned to the two participating respondents.  In the AD investigation, the all others rate was set at 64.8 per cent compared to 7.8 per cent and 19.9 per cent assigned to the two 
participating respondents.). 
 WT/DS414/R/Add.1 
Page C-1 
   
 
ANNEX C 
 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF OF 
THE PARTIES AT THE FIRST SUBSTANTIVE MEETING 
  
Contents Page 
Annex C-1 Executive Summary of the Opening Statement of the United States 
at the First Meeting of the Panel C-2 
Annex C-2 Executive Summary of the Opening Statement of China at the First 
Meeting of the Panel C-10 
Annex C-3 Closing Statement of the United States at the First Meeting of the 
Panel C-15 
Annex C-4 Closing Statement of China at the First Meeting of the Panel C-17 
 
 WT/DS414/R/Add.1 
Page C-2  
 
  ANNEX C-1 
  
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF THE  
UNITED STATES AT THE FIRST MEETING OF THE PANEL 
 
 China’s GOES investigation was conducted in a manner inconsistent with the AD and SCM 
Agreements.  As a result, the ability of the United St ates and interested parties to understand the basis 
for China’s determinations or to defend their in terests was seriously impaired.  Beyond the serious 
problems in how China conducted its investigation,  the resulting determinations contain several 
fundamental flaws of reasoning that render them inc onsistent with other oblig ations in the AD and 
SCM Agreements.  This is particularly so with resp ect to China’s injury dete rmination, which is based 
on the most cursory of analysis and scant evidentiary support.   In examining China’s justifications for 
its measures in this case, it is useful to focu s on what MOFCOM actually found as reflected in its 
determinations and disclosures, not on the post-hoc  rationalizations contained in China’s first written 
submission.  As we discuss below, China’s firs t written submission often ignores MOFCOM’s actual 
findings or tries to rewrite them.  
A. The Initiation of the Countervailing Duty Investigation for Several Programs 
Breached Article 11 of the SCM Agreement  
 
Several of the petitioners’ subsidy a llegations did not offer sufficient, or in some cases any, evidence 
of the existence, amount, and nature of the subs idy, but rather consisted of simple assertion, 
unsubstantiated by relevant evidence.  With respect to these programs, MOFCOM failed to 
sufficiently review the accuracy and adequacy of th e evidence in the application to determine whether 
there was sufficient evidence for the initiation of an investigation, a nd thus acted inconsistently with 
Article 11.3 of the SCM Agreement.  In respon se to the U.S. claims, China has offered pure 
speculation and citations to irrelevant evidence,  and has claimed repeatedly that generalized 
allegations of the existence of subsidies for st eel cured the defects in the various allegations. 
 MOFCOM did not meet its obligation under Article 11. 3 to review the accuracy and adequacy of the 
evidence in the petitioners’ application for sufficiency .  For example, it is not sufficient, as China 
suggests, for the “broader context” provided in an  application to support a specific subsidy allegation 
that is deficient with respect to one of the three subsidy elements.  Rather, the Article 11 standard is 
met when there is accurate and adequate evidence as to each  of the three subsidy elements sufficient 
to justify initiation.  With respect to each of th e subsidy programs described in the U.S. first written 
submission, the evidence was insufficient to initiate. 
 The obligations in Article 11 exist for a reason: so that investigations, involving a significant potential 
burden to both companies and WTO Members, will not be initiated unless certain evidentiary 
requirements are met.
1  An improperly initiated investigati on can cause burden regardless of the 
ultimate finding.  China cannot dodge the requirement s of Article 11 by suggesting that initiating an 
investigation of flawed subsidy allegations is ha rmless because it did not result in the imposition of 
countervailing duties.  China’s arguments shoul d not obscure the fact that MOFCOM acted 
inconsistently with these requirements in initiating inv estigations of several subsidy allegations in this 
case.  
                                                      
1  US – Carbon Steel (AB) , para. 115.  WT/DS414/R/Add.1 
 Page C-3 
 
 
  B. China Failed to Require Adequate Non- confidential Summaries of Confidential 
Information  
 
China failed to meet the requirements of Article 12.4.1 of the SCM Agreement and Article 6.5.1 of 
the AD Agreement, as its investigating authority did not require adequate non-confidential summaries 
of confidential information contained in the petitio n, and there is no explanation on the record from 
the domestic interested parties as to why the in formation was not susceptible to summarization. 
 China contends that the section of the petitio n entitled “non-confidential summaries,” which was 
quoted in full by the United States and discussed in the U.S. first written submission, does not contain 
the “non-confidential summaries,” and that in fact  Part I of the petition c ontains a non-confidential 
summary of confidential information in the petition.   Second, in the altern ative, it asserts that 
“exceptional circumstances” were pr esent that justified the absence of non-confidential summaries.  
With regard to China’s first theory, in suggesting that the Panel rely on Part I in assessing whether 
China complied with its obligations, China ignores th e clear structure of the petition.   Even setting 
this fact aside, Part I of the petition does not  contain adequate non-confidential summaries. 
 As an alternative, China asserts that “exceptional circumstances” exist such that summarization was 
not possible.  Notably, neither the petition nor the documents prepared by MOFCOM during the 
course of the proceeding ever asserted that summarization was not possible or otherwise justified the absence of meaningful non-confiden tial summaries.  China’s argument in this regard is nothing more 
than a post hoc rationalization to justify its failure to co mply with SCM Agreem ent Article 12.4.1 and 
AD Agreement Article 6.5.1.  However, such a a post hoc rationalization cannot satisfy the 
requirement in Articles 12.4.1 and 6.5.1 that “a st atement of the reasons why summarization is not 
possible must be provided.”    
C. China Breached Article 12.7 of the SCM Agreement Because Its Use of Facts 
Available Was Improper  
 
MOFCOM’s use of facts available was unjustifie d and punitive, and MOFCOM ignored necessary 
information provided by the U.S. companies.  Whil e China claims that the U.S. description of the 
facts is in error, a review of the evidence dem onstrates the opposite: China’s response relies on factual 
errors and mis-characterizations of the record.   
 While China repeatedly asserts that the respondent s “refused” to respond to MOFCOM's questions 
and “seriously impeded” the investigation, a cl oser examination of the evidence demonstrates 
otherwise.  First, in Part 3 of its initial qu estionnaire, MOFCOM asked for tables reflecting all 
government procurement “signed” within the POI and those “not performed within the POI.” 
MOFCOM  also asked for sales prices for the “i nvolved” products in transactions with “private” 
purchasers.  In Part 4, MOFCOM asked for tables showing the “[t]he quan tity and {value} of each 
product sold to each client  .”   
 
In response, ATI indicated that it made no direct sal es to the government.   AK Steel pointed out that 
it did not sign any government procurement within the POI, pointed MOFCOM to the sales data submitted in the parallel AD proceed ing, and offered a customer list showing that the government did 
not purchase GOES.  Because AK Steel did not participate in any procurement activity during the POI, there were no “involved” products and thus no sales to private purchasers of the same products 
to report.  In response to Part 4, which only relates to the POI, and which does not contain a proviso 
of “not limited to the subject merchandise,” AK Steel referred MOFCOM to the sales data for subject merchandise provided in the parallel AD proceeding.   WT/DS414/R/Add.1 
Page C-4  
 
  While China now describes this as a “refusal” to cooperate, in fact, MOFCOM invited such a 
response in its own questionnaire.  Specifically, in  Section II Item 3 of the questionnaire, MOFCOM 
states: “if the question does not apply to you, please write down explicitly ‘this question does not apply to my company’ and state the reasons.”   
China further alleges that after issuing its deficien cy letter, the companies still refused to respond “in 
an acceptable form,” and continued to argue that MOFCOM’s questions were irrelevant.  Yet, AK 
Steel did respond.  In the deficiency letter, MO FCOM gave the respondents the opportunity to show 
inapplicability: “If your company was of the view that, regarding the pro duct concerned and your 
company’s other products, there was no purchase fro m the government or public body, or there was 
no transaction bound by the Buy America Act, it wa s your company who shall bear the burden of 
proof.”  In response, AK Steel attached a customer  list to its revised questionnaire response showing 
that the government did not purchase any AK Stee l products during the POI – including products 
unrelated to subject merchandise.  ATI provided a customer list for subject merchandise.  In its 
deficiency letter response, AK Steel explained that  it was impossible to know what its customers did 
with its products. 
 In its preliminary determination, MOFCOM reject ed the customer list because the list does not 
contain transaction data.  However, the preliminar y determination, issued on December 10, 2009, is 
the first instance where MOFCOM indicated that it was requiring transaction data independent of whether government procurement was involved.  In response to MOFCOM's approach in the 
preliminary determination, AK Steel submitted the sales data for subject merchandise as an exhibit to 
its comments on the preliminary determination.     The companies cooperated, responded to MOFCOM’s questionnaires, and to the extent they did not 
provide information it was because MOFCOM’s ow n questionnaires did not require it.  When 
MOFCOM finally decided to require such informatio n at the preliminary determination stage, it did 
not give the companies an opportunity to submit it.  AK Steel provided the data after the preliminary 
determination, but MOFCOM chose not to verify it.  China nonetheless complains that th e companies’ failure to provide transaction data prior to the 
verification denied MOFCOM “the ability to plan e fficiently” for verification.  To the extent that 
MOFCOM may have suffered any prejudice, however, this was simply the result of its own decision 
to allow respondents to opt not to provide the data if not relevant.  
 
Perhaps in recognition of the plainly burdensome nature of MOFCOM’s request, China now appears 
to be attempting to distance itself from MOFCOM’s request for 15 years of sal es data for all products, 
asserting that MOFCOM did not apply facts availabl e because of the failure to provide 15 years of 
sales data.  But China’s assertions are belied by the facts: when it applied facts available, MOFCOM 
simply explained that the U.S. companies ha d failed to provide the requested sales data.  
 MOFCOM could have verified that AK Steel or  ATI did not sell to any government entity at 
verification.  When the course MOFCOM was taking became clear in the preliminary determination, 
AK Steel re-submitted the sales data, which was already in MOFCOM’s possession.    
 Finally, there are no facts available on the reco rd to support MOFCOM’s conclusion that the 
respondents sold all of their output to the government .  As explained in our first written submission, 
the only facts available on the record suggest that , at most, AK Steel could have sold 29% of its 
output to the government, as part of infrastructure and manufacturing sales.  
 The respondents responded to MOFCOM’s requests to  the best of their ability.  The information 
actually submitted was verifiable, timely submitted,  and usable without undue difficulty.  MOFCOM 
appears to have concluded that because a company does not provide some information, or if the  WT/DS414/R/Add.1 
 Page C-5 
 
 
  information provided does not perfectly fit the reque st to which it responds, MOFCOM can reject all 
information provided by the company.   
D. China Acted Inconsistently With Arti cle 12.2.2 of the AD Agreement by Failing 
to Make Available the Final Dumping Calculations  
 
Article 12.2.2 requires an investiga ting authority to “make available” “ all relevant information  on the 
matters of fact” that led to the imposition of final me asures.  If information is relevant, it must be 
made available – as evidenced by the use of the term “all” (of course, with due regard for the 
protection of confidential information).  Few things are more relevant to the imposition of final duties 
than the calculations themselves, wh ich are the means by which an i nvestigating authority arrives at 
the final finding of dumping.  Without calculations that indicate dumping, there would be no affirmative finding.  “Informati on” is “[c]ommunication of the knowledge of some fact or 
occurrence” or “[k]nowledge or facts communicated a bout a particular subject, event, etc.”  Dumping 
calculations certainly are “facts” that should be  “communicated” about the imposition of final 
measures.  In short, the language of Article 12.2.2 requires an investigating authority to release its 
final calculations to the affected interested parties.  China completely ignores the fact that, in addition to  a “public notice,” Article 12.2.2 also mentions a 
“separate report” as the vehicle for making available all relevant information on matters of fact and law.  The “separate report” need not  be public.  These calculations can s till be released to the relevant 
interested party.  China should have fulfilled its  obligation under Article 12.2.2 by releasing its 
calculations of AK Steel’s dumping margin to AK Steel, and its calculations of ATI’s dumping 
margin to ATI.  Release of the final dumping calculations to the inter ested parties is vital to those parties’ ability to 
protect their interests.  Parties should not be forced to guess at or approximate the methodology and 
data used by an investigating authority in its calculations, or piece the calculations together from 
different places in the record.   
E. MOFCOM’s Failure to Provide Suffici ent Information on the Findings and 
Conclusions of Law It Considered Material Constitutes a Breach of Article 22.3 
of the SCM Agreement  
 
MOFCOM failed to explain its be nefit determination because it did not provide in the preliminary 
determination any rationale that competitive bidding  under U.S. procurement laws does not result in 
an acceptable market price.  The final subsidy de termination regarding U.S. procurement laws is 
inconsistent with Article 22.3 because it merely repeats the flawed discussion contained in the 
preliminary determination.  Under Article 14(d) of the SCM Agreement, the aut horities are to use market prices in the country of 
purchase unless they establish that those prices are so  distorted that the market price is unusable.  
Article 22.3 thus requires the investigating aut hority to provide explanation on how it found that 
market prices resulting from the co mpetitive bidding process were dist orted.  Nothing in MOFCOM's 
determination however explains why the admittedl y competitive bidding process distorted the market. 
 
F. MOFCOM’s Determination of the “All Others” AD and CVD Rates were 
Inconsistent with its Obligations under the SCM Agreement  
 
The petition identified two U.S. exporters/producers of GOES:  AK Steel and ATI.  Notwithstanding 
the fact that neither the petitioner nor MOFCOM id entified any other U.S. producers or exporters of 
GOES, China not only established an “all others” s ubsidy rate for the unidentified producers, but 
China established a rate more than two times higher than the highest rate for an investigated company WT/DS414/R/Add.1 
Page C-6  
 
  based on the purported lack of cooperation of the unknown, unidentified companies.  The “all others” 
antidumping rate was more than three times higher than the highest rate calculated for an investigated 
company.   As the Appellate Body has made clear in Mexico – Rice , an exporter must be given the opportunity to 
provide information required by an investigating aut hority before the latter resorts to facts available 
that can be adverse to the exporter’s interests.  An exporter that is unknown to the investigating 
authority is not notified of the information required, a nd thus is denied an opportunity to provide it.   
 China’s mere placement of a petitio n in a reading room and publication of a notice do not constitute a 
meaningful opportunity for a company to provide information.  Accordingly, an unidentified exporter 
cannot be said to have failed to  cooperate by not having located the petition and/or the notice of 
initiation in this case.   
G. China Failed to Disclose the Essential Facts Regarding the Calculation of the 
“All Others” AD and CVD Rates  
 
During the investigation, MOFCOM increased the all others subsidy rate from a preliminary rate of 
12 percent to a final rate of 44.6 percent, justif ying this increase by claiming it relied upon the “facts 
available.”  It did so without disclosing the essentia l facts forming the basis for its decision, contrary 
to Article 12.8 of the SCM Agreement. 
 
MOFCOM increased the “all others” dumping rate from a preliminary rate of 25 percent to a final rate 
of 64.8 percent.  MOFCOM’s lone statement in th e Final Disclosure regarding tis action was that the 
“all others” dumping rate was “based on transacti on information of the respondents pursuant to 
Article 21 of the Antidumping Regulations.”  This di sclosure is insufficient.  Totally absent are any 
facts relating to the U.S. companies’ refusi ng access to necessary information or significantly 
impeding the investigation, any facts relating to th e actual calculation of the 64.8 percent rate or why 
that rate was appropriate given the much lower ra tes of the respondents, and any facts regarding the 
particular transaction information chosen.   China argues that it could not disclose the par ticular transaction information used without 
compromising the confidentiality of information supplied by the two respondent companies, but 
provides no explanation for why MOFCOM could not have publicly summarized the information used or at least identified the calculation methodology it employed.  Disclosure of the essential facts is 
particularly important here, because it is difficu lt to understand how MOFCOM used the information 
of the two respondent companies and arrived at an a ll others dumping margin that is more than three 
times as high as the margin for one such company and eight times as high as the margin for the other 
company.  
H. China’s Injury Determination is Inco nsistent with China’s WTO Obligations 
 
Cumulated imports from Russia and the United States increased throughout the POI.  But during most 
of this period, the Chinese GOES industry was prospering.  The Chinese industry’s output, sales 
quantities, sales revenues, employment, wages, pric es and pre-tax profits all increased during both 
2007 and 2008.     It was only during the first quarter of 2009 that the Chinese industry began to experience some 
difficulties.  In particular, the industry’s profitab ility declined.  The decline in profits, however, was 
not volume-related.  The Chinese GOES industry showed double digit increases in sales quantities 
and revenues from the first quarter of 2008 to the first quarter of 2009.  The market share of the Chinese industry actually increased during this period – by nearly the same amount as that of the  WT/DS414/R/Add.1 
 Page C-7 
 
 
  subject imports.  Instead, the decline in profits occurred because the increased quantity of sales during 
the first quarter of 2009 was being sold at lower prices.  Consequently, MOFCOM’s affirmativ e determination could not have been, and was not, based solely 
or even principally on volume considerations , as China’s first written submission suggests.  
MOFCOM’s conclusion that the imports had significant price effects was essential to its affirmative 
determination.   In examining MOFCOM’s injury determination, it is useful to focus on what MOFCOM actually found, notwithstanding the fact that in its fi rst written submission China variously ignores 
MOFCOM’s findings or tries to rewrite them.  To start, it is useful to explore why MOFCOM found 
price depression.  It was not solely because imports were increasing.  Instead, the final determination 
states that price depression occurred “[b]ecause the sales of the produc t concerned were kept at a low 
price.”  In an attempt to support this finding, MOFCOM cited the petitioners’ assertion that “a pricing 
policy aiming at setting the price down to a level lowe r than the price of the domestic like product was 
adopted by the producers of the product concerned.”  Thus, whether or not MOFCOM expressly 
found significant underselling, underselling w as critical to its price depression finding.  
 This finding is pervasively flawed.  First, it re lies on facts MOFCOM never disclosed.  China now 
asserts that MOFCOM “was considering” an argum ent that price depression began in “late” 2008, 
although it made no express finding to this effect.  The only 2008 pricing information provided in the 
final determination is that domestic prices increased  by 14.53 percent in 2008 – hardly evidence of 
price depression.   Additionally, MOFCOM admitted that during 2009,  the imports under investigation were actually 
priced higher  than the domestically produced product.  Thus there is no positive evidence supporting 
the price depression finding for 2009.  Moreover, the fact that the imports oversold the domestically 
produced product in 2009 indicates that the unspecifi ed, unexplained “pricing strategies” materials on 
which MOFCOM relied for its finding of low impor t prices could not constitute positive evidence of 
actual price levels.   It is true that MOFCOM did not rely solely on price depression.  It also asserted declines in 2008 and 
the first quarter of 2009 in “profits per unit.”  He re again MOFCOM failed to disclose essential facts 
in violation of Articles 6.9 and 12.8.  China clai ms that costs rose faster than revenues.  But 
MOFCOM disclosed no information with respect to  the industry’s costs.  MOFCOM additionally 
could have disclosed nonconfidential in formation about the types of costs that were rising, but instead 
disclosed nothing pertaining to the industry’s cost levels. 
 
MOFCOM also failed to address the pertinent subs tantive question under the Agreements: whether 
the dumped and subsidized imports served to prev ent price increases, which otherwise would have 
occurred, to a significant degree.  MOFCOM did not a ddress this inquiry at all for the 2008 data.  To 
fulfill its obligations under the Agreements, MOFCOM had to show that, because of the imports, 
prices for the domestic product would have increased  even more in 2008 than they already did.  
Instead, MOFCOM assumed that, if imports were increasing, they must have caused the negative 
trends in per unit profits.  An assu mption is not positive evidence.  
 MOFCOM’s findings of price suppression during the firs t quarter of 2009 must also fail.  The price 
suppression findings for 2009 failed to reflect an objective examination, because MOFCOM evaluated 
the 2009 data in isolation from the earlier data.  By contrast, an objective examination taking into 
account the entire POI would have revealed that th ere was not necessarily a correlation between rising 
import quantities and significant price suppression.  WT/DS414/R/Add.1 
Page C-8  
 
  In its first written submission, China counters that the 2009 price suppression findings are justified 
because they reflect a continuation of 2008 trends .  China’s argument appears to follow from a 
passage in the final determination contending that “the  price-cost differential declined continually.”  
MOFCOM states that this was a r esult of the import underselling “strate gy” that we have previously 
explained is contrary to the disclosed evidence.   Thus, this finding is not supported by positive 
evidence.  Moreover, because the 2008 price suppr ession findings are also unsupported by positive 
evidence, they cannot serve as the basis for the 2009 findings.   Because, as we explained, MOFCOM’s price effects findings do not meet the requirements of the Agreements, the causal link required under Article 3.5 of the AD Agreement and Article 15.5 of the 
SCM Agreement is absent. 
 Furthermore, the Agreements required MOFCOM not to attribute to dumped and subsidized imports 
injury caused by other known factors.  There was at least one known factor other than imports under investigation that contributed to the domestic i ndustry’s decline in performance during the first 
quarter of 2009.  This was the industry’s huge increase in capacity.  According to the preliminary 
determination, capacity was 80.13 percent higher in the first quarter of 2009 than in the first quarter of 
2008.  As a result, production skyrocketed during the first quarter of 2009, increasing far faster than 
demand.  In fact, the increase in production was over 42 percentage points higher than the increase in 
demand.  Inventories soared by 978.81 percent as a result.  We explained in our first written 
submission why this inventory increase put pressure on the domestic industry’s prices during the first 
quarter of 2009, why this contributed to the domest ic industry’s financial declines during that period, 
and why MOFCOM’s analysis of the effects of the inventory increase falls short of the requirements 
of the Agreements.  China’s response to this claim is defective legally.  China argues that an author ity need only show that 
the subject imports made a substan tial contribution to the domestic indus try’s material injury and that 
the effect of other factors was not “so dramatic th at they severed any possible causal link between the 
subject imports and the condition of the domestic indus try.”    China further suggests that the party 
opposing the imposition of measures has the obligati on to provide evidence demonstrating that the 
effects of other causes was “dramatic.”  
The text of the Agreements does not support China’ s arguments.  Articles 3.5 of the AD Agreement 
and 15.5 of the SCM Agreement place on the author ity the responsibility to examine all relevant 
evidence concerning causes of injury other than the subject imports.  The only obligation the text 
places on the parties is to identify “known” causes of injury.  It is undisputed that a U.S. exporter 
brought to MOFCOM’s attention that overproduc tion and inventory overhang contributed to the 
difficulties of the Chinese GOES industry.  
 Similarly, neither Article 3.5 nor 15.5 states that  an authority is relieved from the responsibility of 
conducting a non-attribution analysis if other known f actors have effects, but such effects are not 
“dramatic.”  Nor does China poi nt to any Appellate Body or  panel report supporting this 
interpretation.  By contrast, under the principl es articulated in the Appellate Body report in US – Hot-
Rolled Steel , once overproduction and the consequent i nventory overhang was identified as a known 
cause of injury, MOFCOM had the obligation either  to demonstrate that this factor was not 
contributing to the domestic industry’s injury, or to conduct a non-attribution analysis.  MOFCOM 
did not purport to conduct a non-attribution analysis.  
Instead, MOFCOM took the position that production gr owing far more rapidly than demand had no 
appreciable effect on the domestic industry.  This  finding defies common sense, and our first written 
submission extensively discusses the lack of pos itive evidence supporting MOFCOM’s analysis.  For 
the most part, China has not responded to our argume nts, nor has it meaningfully disputed that an 
inventory overhang caused by excessive growth in capacity and production would likely put  WT/DS414/R/Add.1 
 Page C-9 
 
 
  downward pressure on domestic prices.  Instead, China asserts that the expanded capacity of the 
industry was less than domestic consumption.  The a ccuracy of this assertion cannot be verified from 
any information MOFCOM disclosed.  It is also unres ponsive to the U.S. argument.  Instead, it merely 
reflects an assumption that an industry that increases its capacity should be able to displace all imports 
in the market.  The nature of this assumption is  not intuitive, not explained by China, and not 
supported by any evidence disclosed.  It cannot s upport MOFCOM’s patently in adequate analysis of 
the increases in production and inventories.  China also argues in its first written submission that Chinese producers “did not produce more than 
the market could bear.”  Not even MOFCOM made su ch a finding, which is directly contradicted by 
the disclosed evidence.  Far from showing restra int in production, Chinese producers used their 
additional capacity to increase production far beyond what the market demanded, resulting in the large inventory overhang.  Again, China’s argumen t does not justify MOFCOM’s failure to perform a 
nonattribution analysis. 
 
We also note that Article 3.5 of the AD Agre ement and Article 15.5 of the SCM Agreement 
specifically require authorities to examine the volum e and price of imports that are not dumped or 
subsidized in their analysis of causal link.  MOFC OM’s superficial analysis of imports from sources 
other than Russia and the United States, which is devoid of any meaningful data, does not satisfy 
these requirements.    
Consequently MOFCOM did not satisfy its obligat ions under the Agreements to establish a causal 
link between the subject imports and any in jury sustained by the domestic industry. 
 In its consideration of imports from countries other than Russia and the United States, MOFCOM also 
breached its obligations to disclose essential facts.   China attempts to defend MOFCOM’s failure to 
provide facts or analysis by asserting that no interested party made an argument concerning 
nonsubject imports.  China’s argument overlooks that th e purpose of the obligation is to permit parties 
to defend their interests.  Parties cannot be expected  to raise arguments about information an authority 
never disclosed.  And MOFCOM entirely failed to disclose nonsubject import quantity and value 
information.  
Finally, in our first written submission we pointed out several instances where MOFCOM’s findings 
concerning price effects, causal link, and nonsubject im ports failed to satisfy Article 12.2.2 of the AD 
Agreement and Article 22.5 of the SCM Agreemen t.  Rather than attempt to defend MOFCOM’s 
inadequate findings and conclusi ons, China asserts that authoriti es need only provide whatever 
information that they deem material.  China provides no support for this assertion.  It cannot be 
reconciled with the language of these provisions, whic h require disclosure of “all relevant information 
on the matters of fact and law which have led to the imposition of final measures.”  Premising 
disclosure not on an objective basis of relevance, but on the authority’s own concept of what is 
“material,” would reduce this provision to a nullity.  WT/DS414/R/Add.1 
Page C-10  
 
  ANNEX C-2 
  
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF CHINA 
AT THE FIRST MEETING OF THE PANEL 
 
 1. The U.S. challenge in this case is limited in nature.  There is no substantive challenge to 
China’s findings with respect to the existence of  dumping and subsidization.  Rather, the U.S. 
challenge to the results of the antidumping and coun tervailing duty investigations is confined to a 
series of procedural complaints and complaints a bout the magnitude of the margins of dumping and 
subsidization based on facts available.  The so le substantive complaint relates to China’s 
determination of a single element of causation and is apparently grounded on a very limited analysis 
of the facts.    CVD Initiation 
 
2. The record reflects that the information prov ided in the application was that information 
reasonably available to the applicants.  BOFT ex amined the allegations and accompanying factual 
information, and determined that although certa in allegations did not warrant initiation of an 
investigation, there was a sufficien t evidentiary basis to initiate on several other allegations.  This 
included the 11 challenged allegations.  
  
3. The U.S. first submission failed to critique th e factual information s upporting the allegations.  
By failing to even address the evidence, China believes the Un ited States has not established a prima 
facie  case.  What the United States r eally seeks is a different standard for applications than that found 
in Article 11 of the SCM Agreement.  The United St ates wants a level of information, analysis, and 
disclosure simply not required by that provision.  The consistent theme of prior panels in addressing 
Article 11 is that applicants need only submit enoug h evidence to justify an investigation, and need 
not analyze that evidence or justify the ultimate conclusion.       
 
Treatment Of Confidential Information 
4. The U.S. argument focuses entir ely on the statements made in Part II of the application from 
the underlying record, but completely ignores the non-confidential summaries provided in Part I of the application.   Given the failure of the United States even to address the specific non-confidential 
summaries provided, to discuss why each of the summari es is inadequate, or to demonstrate why such 
summaries did not provide respondents sufficient unde rstanding of the confidential information to 
protect its interests, China does not believe that the United States has even established a prima facie 
case in support of its claim.   
5. China also submits that the fact that th e Appendices to the application do not repeat non-
confidential summaries provided in the narrative of the public version of the application does not 
create a violation of Article 6.5.1 or Article 12.4.1.   One can have a “reas onable understanding” of the 
key issues and facts by reading the entire public version of the petition and there is no obligation on 
the authorities to require interested parties to repe at a non-confidential summary that has already been 
provided.    6. To the extent the Panel finds that adequa te non-confidential summaries on any particular 
issues were not provided in the underlying proceeding, China believes that the cen tral issue shifts to 
whether or not China dealt with the exceptional circ umstances of this investigation properly in view 
of Article 6.5 and 6.5.1 and the so-called “due process” rights of the interested parties.  The 
exceptional circumstance of having only two respond ent companies in China permitted the authorities  WT/DS414/R/Add.1 
 Page C-11 
 
 
  to invoke the “exceptional circumstance” provision of Articles 6.5.1 and 12.4.1 of the AD and SCM 
Agreements respectively in order to protect the conf identiality of the information submitted.       
The Government Purchase of Goods Program 
7. In the underlying investigation MOFCOM made  direct requests to the company respondents 
regarding information on all steel sales in the c ontext of the government purchase of goods program.  
The respondents refused to respond.  After consu lting and providing written guidance on the matter, 
MOFCOM gave both companies ample opportunity  to correct their responses and provide the 
information necessary for MOFCOM to investigate the program.  The companies again refused.  In 
response, China declined to veri fy the deficient, untimely and unusable information provided, and 
instead applied “facts available” to both companie s, finding that 100% of sales took place under the 
program.   
8. The Panel must evaluate the U.S. Article 12.7 claim in light of China’s approach to what it 
deemed to be necessary information, not in light of U.S. arguments about what should have been 
sufficient information under its own theory of subs idization.  Properly framed, it is evident that 
MOFCOM’s application of “facts available” was cons istent with Article 12.7.  The companies did not 
provide timely responses, did not cooperate to the best of their ability, and seriously impeded the 
investigation. 
9. The United States has on this issue limited its  arguments to AK Steel.  All examples and 
arguments raised by the United States pertain only to  AK Steel, and do not address ATI at all.   The 
U.S. argument also concedes the point that Chin a may infer some sales by AK Steel fell under the 
government purchase of goods program; the only issue is the extent to which sales by AK Steel fell 
under the program.     
10. MOFCOM knew the correct utilization of the program was more than zero.   MOFCOM also 
had a reasonable basis to believe the correct utiliza tion was more than the 29% alternative offered by 
AK Steel, since AK Steel had refused to provide requ ested information.  But MOFCOM also had no 
information with which it could determine some alte rnative that was more than the AK alternative but 
less than 100% utilization due to the refusal of ATI and AK Steel to provide complete information.  
Thus, MOFCOM reasonably relied on the 100% figure,  consistent with Article 12.7 of the SCM 
Agreement.  Finding MOFCOM obligated to utilize AK Steel’s ratio would have been an invitation 
for respondents to create the same types of factual voids in order to obtain a favorable result.   
MOFCOM’s Disclosure of Its Determination of the Margins of Dumping 
11. The United States is attempting to impose a requirement on Article 12.2.2 that authorities 
disclose the full calculations of all margins of dum ping.  But the U.S. claim does not refer to any 
WTO jurisprudence or reference any standard to be applied in interpreting the requirements of Article 
12.2.2.   The U.S. position is not supported by either the plain meaning of Article 12.2.2 of the AD Agreement or the facts.  
12. Article 12 is focused on providing an “explanati on” of determinations; sufficient detail in this 
context would indicate that the disclosure be suffici ent to constitute an adequate explanation of the 
authority’s findings and conclusions, and what facts and law were relied upon in reaching such 
conclusions and findings.  All that is necessary is to  provide interested parties to an investigation or 
review notice of determinations made by the aut horities and an explanation of the determinations. 
 
13. Notwithstanding the absence of any requirement  that the details of the calculation of 
the margins of dumping be disclosed, as addres sed in China’s first submission the disclosure 
by China in the instant investig ation was sufficient to allow respondents to replicate the WT/DS414/R/Add.1 
Page C-12  
 
  authority’s calculation.  Responde nts were clearly in a position to check the a ccuracy of the 
MOFCOM calculation.  Thus, the U.S. claim is simply without merit. 
“Competitive” Bidding Process Under the Government Purchase of Goods Program 
 
14. The U.S. Article 22.3 claim is focused on tw o issues: (1) MOFCOM’s basic explanation; and 
(2) MOFCOM’s reaction to U.S. arguments.  China a ddressed both within its first written submission.  
Using record facts, MOFCOM’s preliminary a nd final determinations plainly set forth why 
participation restrictions on foreign steel and price pr eferences afforded to U.S.  steel resulted in prices 
that did not reflect competitive, market conditio ns under the government purchase of goods program.  
They also addressed U.S. arguments in the process.   The U.S. claim is simply without merit.  
 
“All Others” CVD Rate 
 
15. In the underlying investigation MOFCOM provided direct notice to the participating 
respondents of its investigation, including the U.S. Government, AK Steel, and ATI.  It also placed a copy of the received petition in its public reading room and published public notices of initiation.  To 
MOFCOM’s knowledge, notice was thereby given to each known interested party as defined by 
Article 12.9 of the SCM Agreement.  In terms of the facts selected by MOFCOM in calculating the 
“all others” CVD rate, as indicated in the fina l determination, MOFCOM  relied upon information 
provided by the petitioner.  With respect to disclos ure of the facts upon which the all others rate was 
based, the final determination disclosed that  it was based upon information provided by the 
petitioners.  The United States appears to have read ily identified the source from the record based on 
that statement.   
“All Others” AD Rate 
 
16. On U.S. claims regarding the all others rate  in the AD investigation, MOFCOM followed the 
general rule set forth in Article 6.10 of the AD Agreement.  Neither Article 6.10 nor any other 
provision of the AD Agreement addresses the issue of  the treatment of exporters/producers that are 
not “known” to the authority and cannot, therefore, be individually examined.   
17. China also determined that the most releva nt provision of the AD Agreement to address the 
issue of the antidumping rate for unknown and unr esponsive exporters/producers was Article 6.8 of 
the AD Agreement which addresses the treatment of interested parties who do not provide the “necessary information” required by the authority.  Th e application of Article 6.8 and the last sentence 
of paragraph 7 of Annex II were intended to encourage realization of the objectives of Article 6.10, 
namely to enable China to follow the general rule of determining margins of dumping for each 
individual producer/exporter.  
18. Because the information on which the final de termination of the “all others” rate was based 
was confidential information of one of the res ponding companies, the actual information used to 
determine this rate could not be disclosed without  breaching the confidentiality of the information 
used.  Thus, the explanation was necessarily general in  nature.  The failure to disclose the details of 
the calculation of the “all others” rate had no effect on the ability of parties to defend their interests.  
So long as the “all others” rate is based on record ev idence, it is not clear that  in the situation where 
parties do not cooperate that the authority’s discretion is limited. 
Injury Investigation 
 
19. The United States has made no challenge to the MOFCOM findings of adverse volume 
effects.  The United States has also made no challenge to the MOFCOM findings regarding  WT/DS414/R/Add.1 
 Page C-13 
 
 
  cumulation.  Finally, the United States has made no challenge to the MOFCOM findings of material 
injury.  The U.S. challenges are limited to  the price effects, and the causal link. 
 20. On price effects, the U.S. arguments fo cus heavily on price undercutting findings that 
MOFCOM did not make, and largely misstate and mischaracterize the price suppression and price 
depression analysis that MOFCOM did make.  Th e record provides strong positive evidence for the 
MOFCOM findings of price suppression and depress ion during 2008 and 2009, evidence that was not 
challenged at all during the administrative pro ceedings before MOFCOM and evidence that the 
United States has not effectively challenged.    
21. MOFCOM did not make specific price underc utting findings, nor was it under any legal 
obligation to do so, contrary to U.S. arguments.  The texts of Article 3.2 and Article 15.2  -- through 
the key term “or” -- make clear that price undercu tting is simply one alternative methodology that the 
authorities may consider as part of evaluating price effects.      
22. MOFCOM also disclosed all of the “essential facts” as required by Article 6.9 and Article 
12.8.  This disclosure occurred in two key docum ents.  First, MOFCOM presented a Preliminary 
Determination on 10 December 2009, which included exte nsive discussion of injury issues in general, 
and pricing issues in particular.  Second, MOFCOM also presented a Final Injury Disclosures on 7 March 2010, which presented the essential facts and provi ded initial responses to those arguments that 
had been made so far during the administrative pr oceedings.  These two docum ents contained all of 
the “essential facts” on which China ultimately relied in its Final Determination.    
 23. MOFCOM also provided the “relevant inform ation” and “reasons” required by Article 12.2.2 
and Article 22.5.  MOFCOM developed its response that the growing volume of subject imports in 
2008 and early 2009 caused price suppression and price depression in those years.  That complete 
explanation of its “reasons” satisfies the oblig ations of Article 12.2.2 and Article 22.5. 
 24. China further believes that its analysis of  adverse price effects fully complied with the 
substantive and procedural requirements of the rele vant Agreements.  If the Panel were to disagree, 
China asks the Panel to confirm MOFCOM’s overa ll finding of causation was still proper.  Since 
MOFCOM based its analysis of causation on both volume effects and price effects, those price effects 
can support an overall finding of causation, even if they might not have been sufficient to justify 
finding a causal link on their own.    25. On causal link, the U.S. first submission pr esented only a single paragraph discussing causal 
link more generally, and that paragraph simply refers back to the U.S. arguments about price effects.  
But MOFCOM never considered the price effects in is olation; they were part of any overall analysis 
that the increasing volumes of low priced subject im ports were causing material injury to the Chinese 
industry.  The United States has thus failed to demonstrate any inconsis tency between MOFCOM’s 
analysis and the requirements of Article 3.1 and Article 15.1.  26. With respect to non-attribution, Article 3.5 and Article 15.5 do not specify any particular 
methodology, and thus leave authoriti es with discretion as to how best to ensure a genuine causal link, 
even given the effects of other causes.  MOFCOM n eed not disprove any possible effect of any other 
known factor that might also be affecting the domestic  industry.  The burden is on the United States as 
the complaining party to establish a prima facie  case that the effects of increased domestic capacity 
were so dramatic that they severed any possibl e causal link between the subject imports and the 
condition of the domestic industry.  The United States has failed to meet that burden.   
 27. With respect to the issue of non-subject impor ts, China disclosed the “essential facts” of the 
case.  The Preliminary Determination identified “pr oducts imported from other countries” as an “other 
factor” being analyzed, and noted that subject imports were capturing a larger share of the total WT/DS414/R/Add.1 
Page C-14  
 
  imports.  Other parts of the notice also addressed non-subject imports.  Having provided the “essential 
facts,” and having received no arguments on this poi nt, China did not need to develop this issue 
further in the absence of arguments.  28. Finally, the U.S. argument that MOFCOM did not provide any “factual substantiation” for its 
conclusions is wrong.  The demonstration that non-su bject imports gained only 0.09 percentage points 
of market share is factual substantiation.  Moreover, MOFCOM provided more than adequate 
discussion of this issue in light of the failure by th e parties to use the publicly  available information to 
develop any arguments on this point.  U.S. Claims Under Article 1 of the AD Agreement, Article VI:2 of GATT 1994, and Article 10 of 
the SCM Agreement 
 
29. U.S. claims under Article 1 of the AD Agre ement, Article VI:2 of GATT 1994, and Article 10 
of the SCM Agreement are subsidiary claims rela ted to the substance of the claims previously 
addressed.  To the extent the Panel finds the U.S. claims to lack merit with respect to these prior 
claims, so to should it dismiss this U.S. claims unde r Article 1 of the AD Agreement, Article VI:2 of 
GATT 1994, and Article 10 of the SCM Agreement. 
  WT/DS414/R/Add.1 
 Page C-15 
 
 
  ANNEX C-3 
  
CLOSING STATEMENT OF THE UNITED STATES 
AT THE FIRST MEETING OF THE PANEL 
 
  Mr. Chairman, Members of the Panel.  The United States would like to begin by thanking you and the Secretariat for your efforts in the preparation for and conduct of this hearing. 
 
 We hope that the discussion held here yesterda y and today has assisted the Panel in enhancing 
its understanding of the issues before it in this case.   If an observer had been listening solely to Chin a’s interventions yesterday, he or she might 
have come away with the impression that the practices of the U.S. Department of Commerce and 
International Trade Commission were the subject of this  dispute.  In that context, we would again note 
that China’s description left out a number of important aspects of U.S. practice that are quite different from what MOFCOM did in this investigation.    To the extent that the Panel found the examina tion of such matters helpful to the task before 
it, we welcome further discussions along these lines.  Nevertheless, we find it telling that China has 
chosen not to focus its attention on the actual Chin ese measures at issue in this dispute, the actual 
record in the underlying investigation, and the a pplication of WTO principles to that record.   
  China also at one point seemed to suggest that it is the responsibility of an interested party to 
piece together information that the investigating authority chose not to disclose or adequately 
summarize.  First, this would be a highly specula tive exercise.  More fundamentally, the skill of a 
party in making educated guesses has no bearing on wh ether a breach of an investigating authority’s 
WTO obligations exists.     We discussed a number of substantive issues on Thursday and will address them more fully in our future submissions.  We also note that many of  the third parties addressed  the issues of initiation 
and the provision of non-confidential summaries, wh ich we found helpful; particularly, the oral 
statements of Argentina, Honduras, and the Eur opean Union.  We also found Japan’s comments on 
the obligations of Article 12.2.2 of the AD agreem ent with regard to the dumping margin calculations 
particularly informative.   
 Before these hearings formally close, th e United States would like to make a few brief 
comments relating to one of the substantive matters  discussed yesterday.  In particular, the United 
States would like to address the discussion before the Panel on Thursday concerning MOFCOM’s 
finding of significant price effects, as this di scussion revealed fundame ntal flaws in China’s 
arguments.    
 First, China variously suggested that the factual support for the price effects findings may be 
found in the public documents prepared by MOFCOM or in other public documents submitted by the 
parties that MOFCOM neither referenced in its es sential facts disclosure nor expressly or implicitly 
adopted in any determination.  In some instances,  both the Panel and the United States are left to 
guess where MOFCOM has stated its factual finding s and what these findings are.  Such lack of 
transparency cannot be reconciled with the require ments of Article 12.2.2 of the AD Agreement and 
Article 22.5 of the SCM Agreement.  Moreover, Chin a cannot simultaneously posit that it satisfied its 
obligations under Article 6.9 of the AD Agreemen t and Article 12.8 of the SCM Agreement through 
the preliminary determination and essential facts discl osure, but that the disclosures made in these 
documents were not intended to be complete. WT/DS414/R/Add.1 
Page C-16  
 
   
 Second, while China argues that a pri ce undercutting analysis was unnecessary, it 
simultaneously repeated MOFCOM’s findings of  “low” import prices as grounds for finding 
significant price depression and price suppression.  A predicate of a finding of “low” prices is that an authority has undertaken an analysis of comparativ e prices.  But China has thus far failed even to 
explain how it undertook any such price comparison  analysis, much less to respond to the United 
States’ detailed arguments about how any such anal ysis did not reflect an objective examination and 
was unsupported by positive evidence.  As Japan stated  today, “[t]he mere statement ... that ‘the sale 
of the product concerned was kept at a low price’ – would not be sufficient to explain the relevant 
information.” 
 
 The United States would like to conclude by ag ain thanking the Panel and Secretariat for their 
efforts.  We look forward to receiving your written questions and continuing this discussion in future 
submissions and at the December substantive hearing.    
  WT/DS414/R/Add.1 
 Page C-17 
 
 
  ANNEX C-4 
  
CLOSING STATEMENT OF CHINA AT 
THE FIRST MEETING OF THE PANEL 
 
 1. We would like initially to take the opportunity  of this closing statement to again thank the 
panelists and the secretariat for their dedication to th is proceeding.  We have made every effort to 
make the first meeting with the Panel as productive as possible and we hope the panel shares our view 
that the meeting has been productive in better defi ning the issues and clarifying the positions of the 
parties on their positions.  We look forward to worki ng with the Panel and the secretariat as the panel 
proceeding moves forward.  2. We would like in this closing statemen t to briefly summarize China’s position on the 
principal issues in this proceeding, beginning with the U.S. claims under Article 11.2 and 11.3 of the 
SCM Agreement and issues related to initiation.  Ch ina believes some initial progress has been made.  
In particular, the United States confirms that th e focus of any inquiry is on the evidence that 
accompanies an application, not th e elegance of the allegation.   
 3. In parting, we would ask the Panel to consider  two points.  First, the initiation standard that 
appears to be offered by the United States is one of definitive evidence.  For example, the United 
States wants definitive evidence of a financial contri bution.  According to the United States, anything 
less is mere speculation.  But wh at purpose does an investigation serve if the initiation standard is 
based on definitive evidence?  Ther e is a well settled principle on th is very point – the quantity and 
quality of the evidence required for initiation is less than that required for a preliminary or final 
determination.   Second, it is the Unite d States’ burden to present both argument and evidence  to the 
panel to make its prima facie  case.  The United States did not move beyond paragraph 78 of its First 
Written Submission, which is limited to assertions of  “no evidence.”  China is left to defend on the 
basis of these simple assertions.  We believe this situation should fu rther reflect on the U.S. argument 
and whether it has met its burden as complainant in this case.       
4. In terms of the adequacy of the non-confidential summaries provided in the petition and 
related to the determination of injury and causation.   The fact that China in the context of this 
proceeding has been able to present to the Panel full argumentation and explanation of the basis of its 
determinations relying solely on the public in formation provided would seem  to render this issue 
moot.  To the extent that the United States provi des specific examples of information which did not 
permit an adequate explanation of a particular as pect of the authority’s determination, we would 
welcome the opportunity to respond by pointing them to the information on the public record which renders their concern moot.  China provided such  examples during the course of the Q&A yesterday 
to the extent that the United States provided specific examples and China is prepared to do this with 
respect to additional examples.  China also reitera tes that the adequacy of  these summaries should be 
viewed in the context of the difficulty of pr otecting confidential information when only two 
petitioners are involved in an investigation.  This problem is not unique to China.   
 5. In summary, the question before the panel is whether the non-confidential summaries 
provided by petitioners with respect to the determin ations of injury and causation provide “sufficient 
detail” to allow a “reasonable understanding” of the substance of the information being provided in 
confidence and the reasoning of the authority in reac hing its determination.  China believes that the 
record in the underlying proceeding satisfies this standard.    6. In terms of the disclosures provided to the respondents on the method of calculation of the dumping margins, there are two very simple points to be made.  First, while not disclosing the specific WT/DS414/R/Add.1 
Page C-18  
 
  numbers used in calculating the margins of dumping,  the Chinese authority did disclose the source of 
the specific numbers used in calculating the margins of dumping and the methodology used.  
Although in China’s view, nothing more is required because this meets the sta ndards of both Article 
12.2 and 6.5 of the Antidumping Agreement, the level of disclosure was such that the actual margins of dumping could be calculated by the respondents to  ensure the accuracy of the calculations by the 
authority, the apparent overriding concern of the United States.  This is evident from the detail of the 
disclosure itself.    7. We will not dwell on the issue of the all othe rs rate, except to say that there is no provision 
governing the all others rate and that there are po licy reasons supporting the use of facts available to 
encourage unknown exporters/producers to come forth a nd cooperate in an investigation in which the 
authority is investigating all e xporters or producers individually. 
 8. On the application of facts available with  respect to the Government Purchase of Goods 
Program, the issue remains whether the respondents coope rated to the best of their ability in providing 
necessary information.  The United States wishes to distract by focusing on irrelevant issues and 
avoiding the question of whether AK Steel or AT I could have done more.  Yesterday the United 
States appeared to advance a new theory not articul ated in its first written submission – that AK Steel 
and ATI fully responded to the questions as posed by MOFCOM on this issu e and were taken by 
complete and utter surprise in December 2009 wh en they first learned this was not MOFCOM’s 
interpretation.  The record simply does not support this new theory, as we will discuss in greater detail 
in subsequent submissions to the Panel.  But suffice it to say that the U.S. theory has trouble at the 
start.  It seems highly unlikely that answers to questi ons that were so clear to AK Steel in terms of the 
their narrow focus, at least accord ing to the United States, were qualified in advance by healthy 
argument from AK Steel about why it believed it was im permissible for China to inquire on a broader 
scale.  I could go on from here, but China will r eserve further discussion to any written responses to 
questions and its second submission.        
 9. With regard to the claims involving injury, we would like to note a few key points.  As we made clear in our first written statement and in our comments yesterday, we are happy to answer any Panel questions regarding proprietary information.  We repeat that offer, with regard to both the U.S. 
claim regarding price effects that we discussed yest erday and the U.S. claim regarding causation that 
we assume will come up in the written questions. 
 10. Yesterday, the United States said in its oral statement that “it is useful to focus on what 
MOFCOM actually found.”  We ag ree.  MOFCOM found that subject  imports increased absolutely, 
captured more than 5 percentage points of market share in 2008, and continued to gain market share 
in early 2009.  MOFCOM also found that the increasing volume of subject imports caused material 
injury.  These findings of adverse volume effects have  not been challenged by the United States.  For 
all the back forth the parties have had and will c ontinue to have about price effects, these volume 
effects alone establish a legally sufficient causal li nk to justify these measures.  The United States 
claims the declining profitability in 2008 and 2009 was “not volume-related,” but this is just not true.  
The domestic industry invested in a growing market, but found itself shipping less than it might 
otherwise have shipped and thus losing market share because of these surging volumes of unfairly 
traded imports.  The price levels of the imports  do not change the fact that increasing volumes of 
unfairly traded imports caused material injury.     Thank you. 
 
 
_______________ WT/DS414/R/Add.1 
Page D-1 
 
 
   
 
ANNEX D 
 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF OF 
THE THIRD PARTIES AT THE FIRST SUBSTANTIVE MEETING 
  
Contents Page 
Annex D-1 Third Party Oral Statement of Argentina  D-2 
Annex D-2 Executive Summary of the Third Party Oral Statement of the 
European Union  D-4 
Annex D-3 Third Party Oral Statement of Honduras  D-7 
Annex D-4 Executive Summary of the Third Party Oral Statement of India D-9 
Annex D-5 Third Party Oral Statement of Japan  D-14 
Annex D-6 Third Party Oral Statement of the Kingdom of Saudi Arabia D-18 
Annex D-7 Third Party Oral Statement of Korea  D-20 
 
 WT/DS414/R/Add.1 
Page D-2  
 
  ANNEX D-1 
  
THIRD PARTY ORAL STATEMENT OF ARGENTINA
*  
 
 
I. INTRODUCTION 
 
Mr Chairman, distinguished members of the Panel  
 1. The Republic of Argentina would like to th ank the Panel for the opportunity to present its 
arguments and considerations relating to this case, in  view of its "systemic" interest in ensuring the 
correct interpretation of the provisions at issue in this dispute.  2. As third party, Argentina maintains an interest  in the correct interpretation of the agreements 
cited in these proceedings, and accordingly, in th is submission, our government wishes to express its 
views on the interpretation of certain provisions of the Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade 1994 ("AD Agreement") and the Agreement on 
Subsidies and Countervailing Measures ("SCM Agreem ent") inasmuch as this Panel's interpretations 
of those provisions will have systemic implications.  
3. To make the best of the short time availabl e, this submission will focus on certain matters 
relating to this case.  The first concerns the inte rpretation of the confiden tiality of the documents 
submitted in an investigation under the AD Agreem ent and the SCM Agreement, and the need for 
non-confidential summaries so as to ensure that th e parties under investigation have the proper right 
of defence.  The second relates to the determination of injury, in particular, in connection with the 
need to consider factors other than  imports as causal agents of injury. 
 
II. UNDER ARTICLE 6.5 OF THE AGREEMENT ON IMPLEMENTATION OF 
ARTICLE VI OF THE GENERAL AGR EEMENT ON TARIFFS AND TRADE 1994 
("AD AGREEMENT") AND ARTICLE 12.4 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES ("SCM AGREEMENT"), GOOD CAUSE 
MUST BE SHOWN FOR THE CONFIDENTIALITY OF INFORMATION AND A 
NON-CONFIDENTIAL SUMMARY MUST BE FURNISHED TO THE INTERESTED PARTIES 
 
4. We note that Articles 6.5 and 6.5.1 of th e AD Agreement and 12.4.1 of the SCM Agreement 
require the submission of non-confid ential summaries, so that interest ed parties or Members are able 
to gain "a reasonable understanding of the substa nce of the information submitted in confidence".  
The aim is to guarantee the right of defence to th e interested parties, who otherwise would lack 
sufficient information to understand the gr ounds of the accusation that they face. 
 5. We recall that in United States - Sunset Reviews of Anti-Dumping Measures on Oil Country 
Tubular Goods from Argentina  (WT/DS268/RW), the Panel held that " Article 6.5.1 protects the right 
of the interested parties generally to be reasonably informed about the substance of the confidential 
information that may be submitte d by any other interested party.  What matters for purposes of 
Article 6.5.1 is whether the interested parties th emselves receive non-confidential summaries of the 
confidential information submitte d to the investigating authorities ".
1 
 
                                                      
* This oral statement was originally made in Spanish. 
1 United States - Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from 
Argentina  (WT/DS268/RW), paragraph 7.137.  WT/DS414/R/Add.1 
 Page D-3 
 
 
  6. In other words, where the existence of a non-confidential summary is not accredited in the 
file, or where there is no explanation in the file  that would justify the inability to summarize the 
confidential information, the right of the interest ed parties to be reasonably informed about the 
substance of the confidential inform ation will not have been respected. 
 
7. This is why Argentina agrees with the arguments  set forth by the United States in point B of 
its written submission to the effect that in accord ance with Article 6.5.1 of the AD Agreement and 
12.4.1 of the SCM Agreement, the Chinese Ministry  of Commerce (MOFCOM) should have required 
the interested parties submitting confidential in formation in the investigation to furnish 
non-confidential summaries thereof, especially in cases where the submitting parties had provided no 
reasons why summarization was not possible. 
 
III. NON-ATTRIBUTION ANALYSIS WITH RESPECT TO OTHER FACTORS IN THE 
DETERMINATION OF INJURY 
 8. Argentina notes that according to Articl es 3.5 of the AD Agreement and 15.5 of the 
SCM Agreement, prior to its determination as to wh ether imports at dumped or subsidized prices are 
the cause of the difficulties experienced by the domestic industry, an investigating authority should carry out the so-called non-attribution analysis , whereby consideration has to be given to factors other 
than known factors and a determination made as to wh ether they contribute to the injuries suffered by 
the domestic industry. 
 
9. In this connection, we take the view that it is also clear from the above-mentioned rules that 
the Agreements under interpretation require no ev idence that imports from other countries considered 
as one of the other "known factors" are dumped or subsidized imports.  
10. In our view, even in the absence of dumping or  subsidization, the prices and/or quantity of 
those commercial operations could be such as to cause injury to the domestic industry.  In that case, 
the investigating authority would have to examine wh ether, in the light of their volume and/or prices, 
imports from sources other than the one under inves tigation are substantial enough to break the causal 
link between the dumped imports and the injury determ ined.  In that examination, it might also be 
necessary to consider qualitative issues relating to th e forms of competition in each of the markets. 
 
IV. CONCLUSION 
 
11. In the light of the analysis contained in this oral submission, Argentina considers that: 
 
 The "confidential" classification of informati on submitted by any party in the dumping or 
subsidy investigation must be ju stified by good cause;  in that event, it is of the utmost 
importance that, except in duly attested ex ceptional circumstances, sufficiently detailed 
non-confidential summaries are furnished, so as to guarantee the information necessary for 
the interested parties to be able to ex ercise their legitimate right of defence. 
 
 In the determination of injury, the investig ating authority shall effect a non-attribution 
analysis relating to "other known factors" which may be a contributing cause of the difficulties faced by the domestic industry.  In  particular, it shall analyse whether imports 
from origins other than those investigated are causing injury to the domestic industry. 
 12. We thank you for your attention and hope that  the above comments prove to be useful in the 
Panel's deliberations and help arrive at an interpre tation that is harmonious and in accordance with the 
aims and objectives of the AD Agreement and the SCM Agreement. WT/DS414/R/Add.1 
Page D-4  
 
  ANNEX D-2 
  
EXECUTIVE SUMMARY OF THE THIRD PARTY ORAL 
STATEMENT OF THE EUROPEAN UNION  
 
 
I. TREATMENT OF CONFIDENTIAL INFORMATION UNDER ARTICLES 6.5.1 ADA 
AND 12.4.1 SCM  
 1. The European Union (EU) is of the view that the reading of Article 6.5 and 6.5.1 ADA (and 
the corresponding provisions in the SCM) advanced by China in Its First Written Submission cannot 
be reconciled with the text of the Agreement and is not supported by the jurisprudence of prior panels 
and the Appellate Body.   
2. Article 6.5 ADA lays down the principle that, upon good cause shown , confidential 
information submitted by interested parties in the c ourse of an anti-dumping investigation is to be kept 
confidential by the authorities. The requirement to show good cause falls on the interested party 
submitting the information at issue, not the investigating authority , and it applies both to 
information that is confidential "by nature" as to the information that is "provided on a confidential 
basis".  
 
3. The Appellate Body in its recently  confirmed that "[i]f information is treated as confidential 
by an authority without such a ‘good cause’ showi ng having been made, the authority would be acting 
inconsistently with its obligati ons under Article 6.5 to grant such treatment only ‘upon good cause 
shown’" (Appellate Body Report in EC – Fasteners , para. 539). The Appellate Body also clarified 
that the type of evidence and the extent of substa ntiation an authority must require will depend on the 
nature of the information at issue a nd the particular "good cause" alleged. 
 4. Provided good cause has been shown, Article 6.5.1 ADA further obliges the investigating 
authority  to require  that parties submitting confidential information also furnish a non-confidential 
summary  thereof. The summary must be in sufficient detail to permit the parties to the investigation 
a reasonable understanding of the substance of th e information submitted in confidence and thereby 
allow them the opportunity to defend their interests.  5. The ADA and SCM allow the possibility for aut horities to waive the obligation to provide a 
non-confidential summary of confidential information, but limit it to "exceptional circumstances" 
where summarization is not possible . In such exceptional circumstances the party seeking 
confidential treatment  of the information submitted is required to provide a "statement of reasons 
why summarization is not possible" .  
 6. The EU also notes that prior panels - and r ecently the Appellate Body - left no doubt as to the 
fact that Article 6.5.1 ADA (as well as its para llel provision in the SCM) should be understood as 
imposing an obligation on the investigating authority to scrutinise the statements  provided by 
parties seeking confidential treatment for informat ion submitted. The aim is to determine whether 
exceptional circumstances have been established,  and whether the reasons provided adequately 
explain why under the circumstances a summarization is not possible.   
7. China refers to jurisprudence on Article 6. 5 and 6.5.1 ADA in noting that these provisions 
aim to strike a balance  between the interests  of parties submitting information (i.e. confidentiality) 
and the interests of all other concerned parties (i.e. due process, transparency). In the view of the EU, 
this very balance would be completely upset if  authorities were to be allowed to protect as  WT/DS414/R/Add.1 
 Page D-5 
 
 
  confidential virtually any piece of information base d on a mere presumption that such protection is 
warranted.   8. The party submitting information is best placed to asses the effects that its disclosure could 
have. All an investigating authority could do, in th e absence of a motivated request, is speculate as to 
the potential risks. It is therefore only logical and appropriate that the ADA put the burden of proof of 
good cause for confidential treatment and the ob ligation to demonstrate insusceptibility of 
summarization in non-confidential format on the part y submitting the information. The authorities are 
charged with the obligation to demand and objectiv ely scrutinise such requests. Anything else would 
create a risk that any "inconvenient facts" woul d become shielded from scrutiny and rebuttal by 
interested parties through an ex officio designation of confidentiality. 
 9. China furthermore argues that the very fact  that there were only two producers amounts to 
"exceptional circumstances" within the meaning of  Article 6.5.1 ADA. While it is undisputable that 
Article 6.5.1 provides for the possibility that there ma y be justified cases in which it is not possible to 
provide a non-confidential summary of confidential in formation, the EU is not persuaded by China's 
arguments that this is always the case where there are only two producers involved. The EU is of the 
view that in cases when there are only two produ cers it is still possible to prepare non-confidential 
summaries (e.g. in the form of indexes).  
II. THE ALLEGATION THAT THE PRICE EFFECTS ANALYSIS IN MOFCOM'S 
FINAL DETERMINATION WAS INCONSISTENT WITH CHINA'S WTO 
OBLIGATIONS 
 
10. The United States (US) alleges that MOFCOM's price effect analysis is inconsistent with Articles 3.1 and 3.2 ADA and with Articles 15.1 and 15.2 SCM. In particular the US alleges that 
MOFCOM made no finding at all regarding price undercutting , while references to "low price" 
policies and strategies are not based on positive ev idence. According to the US, MOFCOM did not, 
either in the Injury Disclosure Document or in the Final Determination, rely on any information about 
actual pricing levels, neither in the price suppr ession nor in the price depression analysis. China 
argues, that it did not make specific findings about price undercutting, since on the basis of ADA it is not required to do so. China acknowledges that it b ased its overall finding about adverse price effects 
on the price suppression and price depression analysis and that these two "did not depend on precise 
pricing information".   11. The EU does not agree with China's positi on that price suppression and price depression 
analysis do not have to "depend on precise pricing in formation". In the EU's view, prices analysis 
necessarily requires information on prices, also con cerning the analysis of price suppression and price 
depression. Otherwise the reliability of the findings cannot be guaranteed.   12. As elaborated in our Written Submission, an investigating authority is obliged under 
Article 3.1. ADA to base the injury examination on " positive evidence " and to conduct an " objective 
examination ". The term "positive", indicates that the evid ence must be of an affirmative, objective 
and verifiable character, and that it must be credible.  
 13. Price depression can be determ ined by considering the trend in prices of the domestic product 
over the period of investigation (POI). It could al so be assessed by evaluating whether domestic price 
declines and prices of imports remain consistently below domestic prices over the POI. Failure to take 
into account concrete pricing data does not allo w - in neither of the above methods - for an 
affirmative, objective and verifiable, and t hus credible result of such an analysis.  
 14. Price suppression analysis, which relies on a counter-factual conclusion that, absent the 
dumped imports, prices of the domestic products w ould have increased, is even more difficult to WT/DS414/R/Add.1 
Page D-6  
 
  undertake in an objective manner. It requires a conclu sion that domestic prices should have increased. 
Any such conclusion may rest on elements as e.g. increased costs, which would be normally passed 
on as price increases.   15. Therefore, any analysis which allows for the assessment of adverse price effects - be it in the 
form of price undercutting, price suppression or pr ice depression - and of their significance must rest 
on precise pricing information to satisfy the requirements set out in Article 3.1 ADA.   16. The EU agrees that, in accordance with Artic le 3.2 ADA, a determination of injury does not 
require a finding of price undercutting, but may also be based on a finding of price depression and/or 
of price suppression. The EU also agrees that  the ADA does not prescribe any precise methodology 
for assessing the level of price undercutting. But this does not mean, contrary to what appears to be 
China's position, that a comparison of the prices of  domestic and imported pr oducts is never required 
by the ADA, so that the investiga tive authorities enjoy complete discretion to decide whether or not to 
make such a comparison. In particular, it may be noted that some form of comparison between the 
prices for domestic and imported products will usually be required in order to establish the requisite 
causal link between the imports and the injurious e ffects. For example, it is obvious that where the 
prices for the imported products have been much higher than the prices for the domestic products 
during the relevant period of reference, price depression or price suppression cannot, absent very 
exceptional circumstances, be attri buted to the imported products. For this reason, a failure to make 
any kind of comparison between the prices for domes tic and imported products may well constitute a 
breach of the obligation to make an "objective exam ination" within the meaning Article of 3.1 ADA.  
 
III. ESTABLISHMENT OF THE REQUIRED CAUSAL LINK 
 
17. In view of the Chinese arguments concerning the alleged failures in establishment of casual 
link, the EU would like to underline that both th e significant adverse price effects and increasing 
volumes of low priced imports are necessary elements of the analysis of the casual link as provided for in Article 3.1 ADA and Article 15.1 SCM. Theref ore, any inadequacies in the establishment of the 
adverse price effects will necessarily have reperc ussions on the finding concerning the casual link. 
   WT/DS414/R/Add.1 
 Page D-7 
 
 
  ANNEX D-3 
  
THIRD PARTY ORAL STATEMENT OF HONDURAS
* 
 
 
Mr Chairman and distinguished members of the Panel,  1. Honduras would like to thank the Panel and the parties for this opportunity to present its 
views on some of the matters at issue in this dispute, and because we have a systemic interest in the 
matter, we would like to discuss the interpretation of some of the provisions of the WTO Agreements 
that are in dispute.  2. In this statement, and without prejudice to what was already stated in the third party submission to the Panel, Honduras will focus on certain  matters relating to the standards of proof for 
the initiation of a countervailing measures investigation. 
 3. There does not appear to Honduras to be any divergence between China and the United States 
on the fact that Article 11.2 of the SCM Agreemen t requires that sufficient evidence be provided of 
the existence of the three elements of an actionabl e subsidy, namely financia l contribution, benefit, 
and specificity of the subsidy.
1 
 
4. However, Honduras does see a divergence on whether sufficient evidence was provided 
regarding the elements of a subsidy in the context of various progr ammes that were under 
investigation during the domestic procedure.  The United States claims that the application did not 
include that evidence2, while China claims the contrary.3 
 
5. In evaluating the arguments of the two parti es, the Panel should bear in mind the following 
points:  6. Article 11.2 of the SCM Agreement requires th e inclusion of sufficient "evidence" of the 
"existence" of a subsidy, among other elements.  Th e term "evidence" is defined as an instrument 
intended to ascertain the truth or falsity of a matter, or  an indication, sign or testimony that is given in 
relation to something.
4  In that respect, it must give clear indications  of what it is seeking to establish.  
These clear indications must be objectively  verifiable, and not simply left to a subjective  appreciation.  
For Honduras, complying with Article 11.2 of the SCM Agreement requires more than simply asserting that there is "implicit" evidence.  Evidence cannot consist of mere conjecture, speculation or 
abstract inferences without any pos itive and objective substantiation. 
 7. At the same time, Honduras notes that there is a certain divergence regarding compliance with the requirement to provide sufficien t evidence of the benefit conferred by a subsidy when that subsidy 
ended prior to the beginning of the investigation pe riod.  In particular, there appears to be the 
suggestion that in the absence of any guidelines in  the SCM Agreement as to the distribution of the 
benefit of a subsidy over time, an application for the initiation of an investigation would not 
necessarily have to contain evidence of the existenc e of the benefit during the period of investigation.
5 
                                                      
* This oral statement was originally made in Spanish. 
1 First Submission of the United States, paragraphs 72-74, and First Submission of China, 
paragraphs 14-18. 
2 For example, First Submission of the United States, paragraph 78. 
3 For example, First Submission of China, paragraphs 34-58. 
4 Real Academia Española, Diccionario de la Lengua Española , 22nd edition, 2011, p.1853. 
5 First Submission of China, paragraph 38. WT/DS414/R/Add.1 
Page D-8  
 
   
8. In our view, Article 11.2 does not contain any repealing clause or provide for any exception with respect to the inclusion of sufficient  evidence of the existence and the various elements of 
a subsidy.  Consequently, we do not think that th e lack of guidelines concerning the distribution of 
a subsidy over time should be considered as an exception to the sufficiency  requirements laid down in 
Article 11.2. 
 9. Finally, Honduras notes that there is a di vergence as to whether sufficient evidence was 
included, showing that a State entity provided a financial contribution.
6  It appears to Honduras that 
the sufficient evidence should be of the "existence" of a subsidy and its constituent elements.  In its 
ordinary meaning, the term "exist ence" refers to a thing that is real and genuine .7  Compliance with 
the Article 11.2 mandate requires the inclusion of evidence showing that the subsidy is real or 
genuine, in other words that it exists and has been  granted.  The mere creation of an entity whose 
apparent function is to conduct studies or analy ses should not, in Honduras's view, be considered 
sufficient evidence of the existence  of a subsidy, and in particular a financial contribution.  Honduras 
is concerned at the idea that State information- gathering activities on behalf of a domestic industry 
should be considered to be an actionable subsidy.   Thank you.   
 
                                                      
6 First Submission of the United States, paragraph 78, and First Submission of China, paragraph 43. 
7 Real Academia Española, Diccionario de la Lengua Española , 22nd edition, 2001, p. 1019.  WT/DS414/R/Add.1 
 Page D-9 
 
 
  ANNEX D-4 
  
EXECUTIVE SUMMARY OF THE THIRD PARTY  
ORAL STATEMENT OF INDIA  
 
 Mr. Chairman and distinguished members of the Panel. India thanks the Panel Members for the 
opportunity provided to it to submit its  statement before this Panel. 
 
Introduction 
 
1.1. This dispute raises several procedural i ssues related to initiation of countervailing duty 
investigations, determination of subsidy rates, treatment of confidential information, injury 
determination etc.  The issues raised are of systemic importance for all the WTO Members and 
therefore India attaches importance to the examinatio n of these issues by the Panel. Most of the claims 
and counterclaims in this dispute are factual.  W ith very limited factual information available, India 
would not wish to support the claims of any par ticular party and would rather urge the Panel to 
objectively look at the facts of this dispute and draw conclusions which w ould provide guidance to 
Members in implementation of the relevant  provisions of ASCM and AD Agreement.  
 
2. On whether China’s initiation of an Anti-subsidy investigation was consistent with 
Articles 11.2 and 11.3 of the SCM Agreement  
China asserts that the US has claimed that China’s initiation was inconsistent with Articles 
11.2 and 11.3 of ASCM : 
 (i)  the application for investigation failed to contain information reasonably available to the 
applicant regarding the existence of a financial contribution, a be nefit, and/or specificity with 
respect to certain of the investigated subsidy programs; and  
 
(ii) by initiating an investigation of the same set of programs the investigating authority failed 
to objectively assess the adequacy and accuracy of  the evidence contained in the application. 
 
2.1. It is submitted that while examining the US  claim under Article 11.2, it may be inherent to 
examine whether the specific programmes included in  the allegation of subsidies fulfilled the criteria 
of definition of a ‘subsidy’ within the meaning of  Article 1.1 of ASCM in order to prove that a 
subsidy existed.  
 
2.2. It is submitted that whether or not the a pplication contained the requirements as mandated 
under Art. 11.2, ASCM is a question of fact. India w ould urge the Panel to evaluate this question of 
fact keeping in view an objective interpretati on of the requirements enunciated under Article 11.2, 
ASCM.   
 
2.3. On the purported challenge of the US that by initiating an investigation of the same set of 
programs, India would wish to submit that this is a question of fact.   
 
2.4. In the Request for Consultations , the US alleges that China’s Countervailing and 
Antidumping measures on GOES from the US appear to be inconsistent , inter alia , with Article 10 
and 19 of the ASCM because China improperly dete rmined that government purchases under the US 
Buy American Laws  
 WT/DS414/R/Add.1 
Page D-10  
 
  conferred a “benefit”
1. At para 122, the US states that MOFCOM initiated an investigation 
with respect to the American Recovery and Reinvestment Act (ARRA), 2009. In the Request 
for the Establishment of the Panel3, the US acknowledges that China has applied CVD as 
countervailing action on severa l alleged subsidy programs4.The US states that the petitioner 
challenged the US State and Federal laws that they claimed provided countervailable 
subsidies to GOES producers5.  The US does not categorically rebut the factum of the 
existence of the subsidy element in several a nd specific US programmes. The US in its First 
Written submissions6 refers to the specific US measures/ sectors alleged to be providing 
subsidies to the US industry such as:  
-Buy America provisions. 
 
-Medicare Prescription Drug, Improvement and M odernization Act of 2003, Economic Recovery Tax 
Act of 1981, Tax Reform Act of 1986, Steel Import Stabilization Act of 1984, State of Indiana Steel 
Industry Advisory Service,  Grace periods for compliance with the Clean Air Act, The American Clean 
Energy Security Act of 2009, 2003 Economic Stimulus Plan of Pennsylvannia.3,-Pennsylvania’s 
Alternative Energy Funding Program. 
 Sectors: Electricity, Natural Gas, Coal   
 
2.5. It is submitted that an underlying issue in th is dispute would be the ex istence of subsidies or 
otherwise in the US State and Federal Programmes and whether these subsidies could be subjected to 
countervailing duty action as per the ASCM.    2.6. At para 229
7, China submitted while addressing U.S. arguments in the underlying proceeding 
(that competitive bidding existed under Buy American  provisions), the MOFCOM stated in full as 
follows: 
The Investigating Authority found that, according to provisions in the Buy 
American Act and other regulations , although there is competitive 
bidding process, using steel and finishe d products produced in the U.S. is 
required unless there is a waiver. The Investigating Authority holds that 
this fact shows that the scope of products allowed for bidding under Buy 
American Act has actually been limited to some extent, and thus the 
bidding is not market competition in the usual sense…..when purchases 
of U.S. iron and steel products do not cost 25% more than foreign 
products, the foregoing so-called competitive bidding is only competition 
among U.S. products. ……Therefore, the Investigating Authority 
considered that the competitive bidding restricted the scope of 
                                                      
1 WT/DS414/1  
G/L/927 
G/SCM/D85/1 G/ADP/D85/1 
Dated 20 September, 2010; Request for Consultations by the US.  
2 US First Written Submissions  (USFWS)dated June 8,2011. 
3 WT/DS414/2 dated 14 February,2011, Request For The Establishment Of A Panel By the US.  
4 At para 1.(a) and (b), Ibid. 
5 USFWS para 13.Details of the said laws are pr ovided elsewhere in the USFWS and China’s FWS. 
6 At page 25, para 78 
7 Ibid.  WT/DS414/R/Add.1 
 Page D-11 
 
 
  participating products, and thus coul d not reflect the full market 
competition. Even if there is competition, it is competition only among the 
U.S. domestic steel products (may in clude part of the foreign products at 
the federal level and in some regions ). Hence the price obtained through 
competitive bidding does not reflect the true market conditions.  
2.7. Further, China states that the United States acknowledged in its questionnaire response in the 
underlying investigation The Buy American Act (the  Act), 41 U.S.C. 10a-10d, is the major domestic 
preference statute governing procurement by the federal government and the program at issue is governed by “Buy American” provisions that pref er U.S. prices and U.S. goods, distorting the 
competitive playing field.   
2.8. As a third party, India submits that questions of facts and evidence would be for the parties to 
prove or to rebut and the Panel should examine careful ly the facts presented by the parties for fair and 
objective application of the provisions of the AD Agreement and the SCM Agreement. 
  
3. On whether MOFCOM’s treatment of confiden tial information was fully consistent with 
the requirements of article 6.5.1 of the AD Agre ement and Article 12.4.1 of the SCM Agreement 
3.1. United States has claimed that MOFCOM  breached these disciplines as the non-confidential 
summaries provided to MOFCOM were inadequate a nd no reasons were provided for the inadequacy 
of the non-confidential summaries, Chin a has rebutted this allegation. This is a question of fact to be 
established by evidence led by the two main Parties in this dispute. 
3.2. As stated hereinbefore, India would urge the Panel to interpret the provisions of the WTO 
Agreements strictly in accordance with the langua ge adopted in the said provisions. The Panel in 
Mexico- Steel Pipes and Tubes  at para 7.380 held that it considered that the conditions set out in 
Article 6.5, chapeau, and 6.5.1 are of critical importance in preserving the balance between the 
interests of confidentiality and the ability of anothe r interested party to defend its rights throughout an 
anti-dumping investigation.  
 3.3. India as a third party would like to assist the Pa nel in the determination of the issues raised in 
the present dispute for the Panel’s balanced consideration. 
 
3.4. China has contended that th e US has claimed that the non-confidential summaries provided to 
MOFCOM were inadequate and that no reasons were provided for the inadequacy of the non 
confidential summaries. China believes that the US  claim ignores important facts related to the 
confidential information: (1) the petitioning par ties provided non-confidential summaries for the 
information for which confidential treatment was requ ested; and (2) most of the information for which 
confidential treatment was requested was info rmation which fits within the “exceptional 
circumstances” waiver of confidential summaries pr ovided in Article 6.5.1 and 12.4.4. Thus, China 
claims that the US does not challenge under Article 6. 5 or Article 12.4 the right of this information to 
be classified as confidential rather it challe nges only the sufficiency of the non confidential 
summaries under Art. 6.5.1 and Art. 12.4.1. 
 3.5. India submits that Art. 6.5.1, ADA lays down the standard of acceptability of a non 
confidential summary in as much as it stat es that “These [non confidential] summaries  shall be in 
sufficient detail to permit a reasonable understanding of the substance of the information submitted in 
confidence.”   
 WT/DS414/R/Add.1 
Page D-12  
 
  3.6. At para 87, China states that in compliance with Art. 6.5.1, the information provided in non-
confidential summaries was more th an sufficient to allow responding parties to have a “reasonable 
understanding of the substance of the information”. In EC - Fasteners (Panel)  it was held that "the 
investigating authority must ensure that an appr opriate non-confidential summary is provided, or in 
exceptional circumstances, if that is not possible, that an appropriate statement of reasons why 
summarization is not possible is given". China also takes the support of the exceptional circumstances 
provision under Article 6.5.1.  3.7 China’s statement that in the case a party in dicates that the confidential information is not 
susceptible to the aforementioned [non confidential] summary, then the provision does not provide a 
significant guidance on the level of analysis and expl anation required (other than a statement of the 
reasons why summarization is not possible) appears to be, prima facie,  supported by a bare reading of 
Art.6.5.1.    3.8. At para 134, China provides explanation that the confidential information at issue is primarily 
the confidential information on which the authority ba sed its injury determinations.  China claims that 
most of this information related to non-public information generally recognized and treated as 
business proprietary by companies throughout the wo rld, namely information on individual company 
operations including sales revenue, sales volume etc.  It is submitted that the Panel would evaluate the 
nature of the information submitted and the reasons for treating the information as confidential.  In 
India’s views, the practices of Investigating Au thorities for treating certain information of the 
domestic industry as confidential may differ.   The cl aims regarding certain information to be treated 
as confidential can also be evaluated with refere nce to the norms of public disclosure of financial 
statements of companies.  The conclusions of the Panel on this matter would provide important 
guidance to Members.    4. On whether MOFCOM’s application of Fa cts Available in determining the subsidy 
margin for the Government Purchase of Good s Program was consistent with Article 12.7 
4.1. China has contended that due to the conti nuing failure of the companies to provide necessary 
information related to government purchase of  goods programme, in its final determination 
MOFCOM continued to apply facts available in the manner imposed in the preliminary determination. 
It stated that what occurred was nothing short of  a conscious decision to withhold information. 
 
4.2. China relies on the observations of the Panel in EC –DRAMs  to state that uncooperative  
behaviour may be taken into account by the auth ority when weighing the evidence and the facts 
before it and the fact that certain information was withheld from the authority may be the element that 
tilts the balance in a certain direction. Further,  China also relies upon the interpretation given in 
Egypt- Steel Rebar  to ‘necessary information’ under Art.6.8, ADA. India submits that this issue is a 
question of fact to be evaluated by the panel.     
5. On whether MOFCOM’s disclosure of its determination of the margins of dumping was 
consistent with its requirements of Art. 12.2.2  
5.1. The US alleges that the failure of the MOFCOM to release the actual calculations while 
determining the margin of dumping violated Art. 12. 2.2, ADA. China, in turn , states that the US does 
not refer to any WTO jurisprudence or reference any st andard to be applied in interpreting Art. 12.2.2.  
 5.2. It is stated that the Panel would interpret Art. 12 as per the language used in the provision and 
would take into account that in the case of a determination, the authorities are required to provide 
explanations that are sufficiently detailed and shall re fer to all matters of facts and law which have led 
to arguments being accepted or rejected.    WT/DS414/R/Add.1 
 Page D-13 
 
 
  5.3. Thus though the authorities have to provide  a sufficiently detailed explanation on how they 
established the margin of dumping on an exporter/produ cer-specific basis, it ma y be considered that 
perhaps the actual data need not be stated in the public notice under the exception under Article 12.2.2 
keeping in view the need for protection of conf idential information under Article 12.2.2 of the AD 
Agreement. 
 
6. On the determination of the All Others Rates based on Facts Available 
6.1. The US alleged that MOFCOM’s application of facts available to determine the anti-dumping 
duty rate and the countervailing duty rate for unexa mined exporters/producers was inconsistent with 
Article 6.8 of the AD Agreement  and Article 12.7 of the SCM Agreement .   
 
6.2. The United States states that the unexamined firms were never sent copies of the antidumping 
questionnaire and that China breached Article 6.8 of the AD Agreement and paragraph 1 of Annex II 
by applying facts available to them.  The said issue is  a question of fact that the panel would examine. 
 
6.3. Article 6.8 of the AD Agreement  states that facts available may be applied to an interested 
party which refuses access to, or otherwise does not  provide, necessary information or significantly 
impedes the investigation.  Paragraph 1 of Anne x II states that the authorities should inform the 
interested party that the authorities will apply facts available if the interested party does not supply the 
requested information.  Interpreting the above, it app ears that facts available may not be applied to an 
interested party who had not been asked to  submit information in the first place.  
 
6.4. Further,  Art. 12.7, ASCM also states th at in cases in which any interested Member or 
interested party refuses access to, or otherwi se does not provide, necessary information or 
significantly impedes the investigation, the determin ations, affirmative or negative, may be made on 
the basis of the facts available. Again, it would ap pear that a natural corollary of the said Article is 
that facts available may not be applied in the case th at the interested party who has not been asked to 
submit information in the first place.  
 
7. On MOFCOM’s alleged failure to provide any rationale on its rejection of a price 
derived from the competitive bidding process 
 
7.1. The US has alleged that MOFCOM reject ed the competitive bidding price in the U.S. 
government procurements as the market price.  It is a question of fact.    Conclusion 
 
India thanks the panel for giving th is opportunity to present its views as third party in this dispute. 
India would be happy to provide answers to  any questions which the Panel may have. 
 
Thank you. 
 WT/DS414/R/Add.1 
Page D-14  
 
  ANNEX D-5 
  
THIRD PARTY ORAL STATEMENT OF JAPAN 
 
 
I. INTRODUCTION 
 
1. Mr. Chairman, and the distinguished Members of the Panel, on behalf of the Government of 
Japan, I thank you for the opportunity you provide us to present our views with respect to this dispute, 
which involves important systemic issues on the disciplines of AD Agreement  and the SCM 
Agreement .  Because time is limited, Japan would like to focus only on three issues today. 
 
II. DISCUSSION 
 
 A. Disclosure of Dumping Margin Calculation and Data Used 
 
2. The first issue is the disclosure of the dumpi ng margin calculation and the data used in the 
calculation.  The United States claims that MOFCOM acted inconsistently with  Article 12.2.2 of the 
AD Agreement  because it failed to disclose or otherwise ma ke available the calculation and data used 
during the investigation.  According to the Unite d States, MOFCOM’s disclosure was limited to the 
weighted averages of export prices, normal values,  and the product-specific margin of dumping and 
did not provide sufficient information for interest ed parties to understand how MOFCOM calculated 
the margin or which data MOFCOM used.    3. In general, the disclosure of the entire actual  calculations for an exporter’s dumping margin is 
critical for the exporter to present an effective defe nse because even a tiny mistake could result in a 
grave distortion of the margin calculation.  For exam ple, an authority might mistakenly treat the unit 
of measurement of data in pounds in the margin calculation, although the data actually were reported 
in kilograms.  Such a mistake would be just a very small part of the entire calculation formulae but could result in the calculated margin being doubled.  This type of mistake cannot be identified from 
the disclosure of the intermediate stage in the calculation process.  As  such, Japan considers that the 
authorities are required to disclose the entire dumpi ng margin calculation under Article 12 of the AD 
Agreement ; including the data of sales, expense and cost, which the authorities chose to use for the 
margin calculation, demonstrating every calculation step to reach the margin of dumping.    4. Article 12.2 of the AD Agreement  sets forth the overarching rule  applicable to a public notice 
or separate report of any preliminary and final determ inations, providing that the notice or report must 
set forth “in sufficient detail  the findings and conclusion reached on all issues of fact and law  
considered material by the investigating authorities.”
1  The panel in EC - Tube or Pipe Fittings 
explained this provision, stating “a ‘material’ issue [i s] an issue that has aris en in the course of the 
investigation that must necessarily be resolved in or der for the investigating authorities to be able to 
reach their determination.”2  It is not within the authorities’ discretion to decide whether a specific 
issue may be classified as “material,” thereby re quiring inclusion in the public notice or a separate 
report.   
 
5. Article 12.2.2 of the AD Agreement  then sets forth special provisions applicable only to 
affirmative final determinations.  This provision expands the depth and width of the content of a 
public notice or a separate report to include “all rele vant information on the matters of fact … and 
reasons” of “the margins of dumping established and a full explanation of the reasons for the 
                                                      
1  Emphasis added. 
2  Panel Report, EC - Tube or Pipe Fittings , para. 7.424.  WT/DS414/R/Add.1 
 Page D-15 
 
 
  methodology used in the establishment and comparison  of the export price and the normal value under 
Article.”3  The content of a public notice or a separate report of the affirmativ e final determination 
must include not only “material” issues but also “all relevant information.”  With respect to the dumping margins, all individual decisions of the authorities, including its decision to choose the data, to assess the comparability of the export price with a specific normal value, and to set forth a specific 
calculation formula, are relevant information to the establishment of the margin of dumping, as 
discussed earlier.  Therefore, the authorities must set  forth such information in the document of the 
final determination.  
 
 B. Disclosure of Factual Findings Related to Injury Determinations  
 
6. The second issue that Japan would like to addr ess is the disclosure of factual findings related 
to injury determinations in the disclosure of essen tial facts before the final determination and the 
public notice or a separate report of the final dete rmination.  In particular, Japan focuses upon the 
disclosure of the price effects to the domestic like pr oducts, and injurious effects of factors other than 
dumped or subsidized imports to the domestic industry.   
 
7. Article 6.9 of the AD Agreement  and Article 12.8 of the SCM Agreement  require the 
investigating authorities to disclose “the essential facts under consideration which form the basis for 
the decision whether to apply definitive measures” before the final determination.  The panel in EC – 
Salmon (Norway)  explained that such disclosure must “provide the interested parties with the 
necessary information to enable them to comment on the completeness and correctness of the facts 
being considered by the investigating authority”.
4  
 8. According to China, MOFCOM found “the sale of the product concerned was kept at a low price” in the final determination.
5  The MOFCOM’s finding of “at a low price” would indicate that 
MOFCOM reached this fact finding based on certain da ta comparisons.  In such case, as explained by 
the panel in EC – Salmon (Norway) , the authorities would have been obliged to disclose information 
on the comparison as a part of “essential facts” to enable interested parties to comment on the 
sufficiency of such facts finding before the final determination.    9. With respect to final determ inations, Article 12.2.2 of the AD Agreement and Article 22.5 of 
the SCM Agreement require that the authorities set forth “all relevant information” on the matter of 
the facts, “which have led to the imposition of fi nal measures”, as discussed earlier.  The information 
on the comparison would have led the authorities to make a finding of the fact of the price effects to the domestic like products, and then to the injury dete rmination.  Accordingly, such information must 
be set forth in the public notice or a separate report of  the final determination.  The mere statement of 
the fact found—that “the sale of the product concerned was kept at a low price”—would not be 
sufficient to explain the relevant information.  10. In addition, the United States argues that  MOFCOM’s disclosure and explanation on the 
volume and prices of imports from non-subject merchandise was insufficient.  China states that MOFCOM analyzed those facts in the preliminary de termination.  China argues that the public notice 
of the preliminary determination was a part of th e disclosure of the essential facts as required under 
Article 6.9 of the AD Agreement and Article 12.8 of the SCM Agreement .
6   
 11. It should be noted, however, that the pr eliminary determination would not always be 
sufficient disclosure of the “essential facts” before th e final determination.  For example, when the 
                                                      
3  Article 12.2.1(iii) of the AD Agreement (incorporated by reference into Article 12.2.2). 
4  Panel Report, EC – Salmon (Norway) , para. 7.805. 
5 China FWS, para. 282. 
6 See China FWS para. 373.  WT/DS414/R/Add.1 
Page D-16  
 
  investigating authorities conduct on-the-spot investig ations after the preliminary determination, the 
essential facts may be changed after on-the-spot inv estigations.  In such case, the exporter should be 
informed of any changes in the “essential fact s” found by the authorities from the time of the 
preliminary determination to allow th em to present an effective defense. 
  C. The Determination of the All Others Rates Based on Facts Available  
 
12. The last issue that Japan would like to addr ess is the determination of the all others rates 
based on facts available.  Article 6.1 and paragraph 1 of Annex II of the AD Agreement require that 
authorities give notice of information to an intere sted party from which the information is required, 
specifying the necessary information in detail.   
 
13. The Appellate Body explained in Mexico – Anti-Dumping Measures on Rice  that “an 
investigating authority that uses  the facts available in the app lication for the initiation of the 
investigation against an exporter that was not gi ven notice of the information the investigating 
authority requires, acts in a manner inconsiste nt with paragraph 1 of Annex II to the AD Agreement  
and, therefore, with Article 6.8 of that Agreement.”
7  As explained by the Appellate Body, facts 
available cannot be applied to an interested party which had not been asked to submit information.  
Japan is of the view that investigating authoriti es are not allowed to treat the notice posted on the 
website as being properly given to exporters.  Ther efore, such notice is insufficient to satisfy the 
requirement under Article 6.8 of the AD Agreement .   
 
14. In addition, the initiation notice of MOFCOM  in this case did not request exporters and 
producers to submit the specific information but re quested them only to register with MOFCOM.  
MOFCOM, nevertheless, declared that it made de termination based on the facts available to the 
exporters that failed to register.  Paragraph 1 of Annex II to the AD Agreement  makes it clear that the 
authorities may apply facts available to an exporte r only when the authorities gave a notice after the 
initiation to the exporter of the specific information which the authorities would like it to submit but it 
did not.  In that sense, a mere request in the public  notice of the initiation to make themselves known 
to the authorities within 20 days from the date of initiation cannot be the basis to apply facts available 
to determine dumping determination.   
 
15. The all others rate, which Ch ina determined in the final de termination of the antidumping 
investigation in question, appears to be based on the facts availabl e, and to apply it to exporters and 
producers that MOFCOM did not ask to submit any in formation during the investigation.  If it is the 
case, the application of such all others rate to such  exporters and producers is also inconsistent with 
Articles 6.1 and 6.8 and para graph 1 of Annex II of the AD Agreement . 
 
16. Finally, Japan recalls that the Appellate Body found in Mexico – Anti-Dumping Measures on 
Rice that “it would be anomalous if Article 12.7 of the SCM Agreement  were to permit the use of 
"facts available" in countervailing duty investigatio ns in a manner markedly different from that in 
anti-dumping investigations”.8  Therefore, Japan considers that an  investigating authority that uses the 
facts available in the application for the initiation of the investigation against an exporter that was not 
given notice of the information the investigating auth ority requires, acts in a manner inconsistent with 
Article 12.7 of the SCM Agreement. 
 
                                                      
7 Appellate Body Report,  Mexico –Anti-Dumping Measures on Rice , para. 259 
8 Appellate Body Report,  Mexico –Anti-Dumping Measures on Rice , para. 295   WT/DS414/R/Add.1 
 Page D-17 
 
 
  III. CONCLUSION 
 
17. In conclusion, Japan respectfully requests the Panel to review carefully the arguments 
presented by the parties in this dispute in light of the comments presented in Japan’s submission and 
this oral statement.  Japan would be pleased to respond any questions that the Panel may have. 
 WT/DS414/R/Add.1 
Page D-18  
 
  ANNEX D-6 
  
THIRD PARTY ORAL STATEMENT OF THE 
KINGDOM OF SAUDI ARABIA  
 
 Mr. Chairman, Members of the Panel,  1. The Kingdom of Saudi Arabia affirms all of the positions set out in its Third Party 
submission, and we need not repeat them today.  Instead, we will highlight two key issues of systemic 
importance.  The first issue concerns the evidentiary  standards that apply to the initiation of subsidy 
investigations.  The second issue relat es to the use of facts available.  
 
I. INITIATION 
 
2. I turn first to the issue of initiation.   3. Article 11 of the SCM Agreement imposes signi ficant evidentiary disci plines on the initiation 
of subsidy investigations.  In recognition of the obligation imposed on all Members not to initiate 
investigations based on unwarranted claims, Article 11 requires that the complaint contain sufficient  
evidence on each of the required elements of subsidi zation.  Applications must contain a “degree of 
actual evidence”
1 as well as evidence of the relevant type.2  The Kingdom explained in its submission 
that there must be sufficient ev idence demonstrating the requisite elements of a countervailable 
subsidy.  
4. This interpretation of “sufficient evidence” is consistent with the jurisprudence on initiation, 
which has established that authorities have an obligati on to ensure that the evidence in an application 
constitutes a “reasonable indication” of the act ual existence of subsidization and injury.
3  This is a 
positive obligation that must be faithfully di scharged by the investigating authority.  
 5. The obligation on the investigating authority is  set forth in Article 11.3, which requires the 
investigating authority to examine both the ac curacy and adequacy of the evidence provided in the 
application  itself.  This imposes a binding obligation on Members not to initiate on the basis of 
deficient claims.    6. The time to verify the accuracy and adequ acy of the complaint is prior to initiation. 
Verification after initiation falls far short of the dut y entrusted to investigating authorities to identify 
and reject inadequate claims.  7. There are strong policy reasons for the initiati on standard advocated here.  The initiation of a 
subsidy investigation imposes a heavy burden on a ll parties, including the government of the 
exporting Member.  Initiation has an immediate adve rse effect on trade, and the chilling effect can 
remain even when initiation results  in a negative finding.  Investig ations launched on the basis of 
insufficient evidence undermine th e credibility of the entire investigatory process, as well as the 
justification for final measures.  
                                                      
1 Panel Report, Mexico – Steel Pipes and Tubes , para. 7.24.  
2 Panel Report, Guatemala – Cement I, para. 7.67; Panel Report, Mexico – Steel Pipes and Tubes , 
paras. 7.56, 7.59. 
3 Panel Report, Guatemala – Cement I , para. 7.49; Panel Report, Mexico – Steel Pipes and Tubes , para. 
7.21; Appellate Body Report, US – Carbon Steel , para. 115.  WT/DS414/R/Add.1 
 Page D-19 
 
 
  8. The Kingdom urges the panel to take this opportunity to reinforce the agreed strong 
evidentiary standards under Article 11 to provide meaningful disciplines on the initiation of subsidy 
investigations.  
II. FACTS AVAILABLE 
 
9. I now turn to the issue of  the use of facts available. 
 10. The Kingdom wishes to highlight that the SC M and Anti-Dumping Agreements limit both the 
opportunities to resort to facts available and the ma nner in which they are used.  The use of facts 
available is disciplined in order to ensure that i nvestigating authorities adopt the best information in 
their determinations.  As the Appellate Body has stat ed, the use of facts available “permits the use of 
facts on record solely for the purpose of replacing information that may be missing ”.
4 
 11. Accordingly, investigating authorities must accept information provided by the respondent 
where the respondent acted to the best of its ability.   This is required under the Agreements even if 
other  information requested has not been provided by the respondent,
5 and even if that information is 
submitted after a deadline, but within a reasonable period of time.6  These standards are intended to 
ensure that determinations are based on objective ev idence, and that “facts available” is not used in a 
punitive manner.      
12. The Kingdom notes the European Union’s acknowle dgement that the right of an authority to 
use facts available depends on whether the authority itself  has “acted in a reasonable, objective and 
impartial manner”.
7  The Kingdom agrees with this statemen t and would add that at least three 
elements are relevant to the Panel’s examination of the investigating authority’s actions: the nature of 
the requests made by the authority, the efforts made  by investigated parties to meet those requests, 
and the degree of any alleged impediment caused by  the investigated party’s failure to cooperate.8   
 13. The EU also emphasizes that resort to fact s available is precluded in situations where the 
parties in question were not properly notified and the information not properly requested.
9  T h e  
Kingdom agrees and considers that the use of facts av ailable is permissible only when the parties have 
been given proper notice both of the information required by the investigating authority, and of the 
possibility of the application of facts available in the case of non-cooperation with the authority.10   
 
III. CONCLUSION  
 
14. Mr. Chairman, the Kingdom urges the Panel, wh en considering the systemic issues raised in 
this dispute, to preserve the SCM Agreement’s car efully negotiated balance of interests between 
exporting and importing Members.  That balance can best be preserved through the strict enforcement 
of a rules-based system for trade remedies investigations.    15. This concludes the Kingdom’s statement.  I do thank you. 
                                                      
4 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 293 (emphasis added). 
5 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 287 (emphasis original). 
6 See Appellate Body Report, US – Hot-Rolled Steel , paras. 83-86.  
7 Third Party Submission of the European Union, para. 12, citing Panel Report, Guatemala – Cement 
II, para. 8.251. 
8 See, for example,  Panel Report, Guatemala – Cement II , paras. 8.249-8.251. 
9 Third Party Submission of the European Union, para. 11. 
10 See generally Article 6.8 and Paragraph 1 of Annex II to the Anti-Dumping Agreement. WT/DS414/R/Add.1 
Page D-20  
 
   
ANNEX D-7 
  
THIRD PARTY ORAL STATEMENT OF KOREA 
 
 1. Korea appreciates this opportunity to presen t its views to the Panel as a third party.   
 2. The issues presented in this dispute appear to  have systemic implications for the Members 
since the claims presented in this dispute touch upo n some of the core procedural elements of AD and 
CVD investigations.  However, with only a limited amount of factual information available, Korea 
does not attempt to support any particular party in  this dispute.  Instead, Korea offers its view 
concerning certain critical issues that may help the Panel reach a proper conclusion in the current 
proceeding. 
 
I. I NITIATION OF A COUNTERVAILING DUTY INVESTIGATION SHOULD BE BASED ON 
ADEQUATE AND SUFFICIENT EVIDENCE  
 
3. A CVD investigation entails mobilization of  a great deal of resources on the part of a 
responding government and companies.  A CVD inves tigation is also a serious undertaking laden with 
political sensitivities in that one Me mber investigates another Member ’s governmental programs.  In 
Korea’s view, these unique aspects of a CVD inves tigation explain the inclusion of bilateral 
consultations requirement in Article 13 of th e SCM Agreement which do not appear in the AD 
Agreement.    4. In this spirit, the SCM Agreement clearly guards against initiation of a CVD investigation 
without adequate and sufficient evidence that can not justify a lengthy investigation of another 
government.  Although the information to be presen ted at the initiation stage is not the type of 
evidence that establishes the existen ce of subsidization or material injury, the investigating authority 
should nonetheless examine and confirm that at le ast a minimal amount of information reasonably 
indicating subsidization and injury has b een submitted by a domestic applicant. 
 5. In fact, Article 11.2 of the SCM Agreement set s forth a detailed threshold for the initiation of 
a CVD investigation: in order for there to be initia tion, “evidence that substan tiates” the existence of a 
subsidy and injury that is reasonably available to th e applicant must be presented in the application.  
As the panel in U.S.-Byrd Amendment opined, this provision is to “ensure that investigations are not 
initiated on the basis of frivolous or unfounded suits.”  6. Article 11.3 of the SCM Agreement in turn re quires the investigating authority to confirm the 
accuracy and adequacy of the eviden ce itself.  Thus, an investigating authority assumes an affirmative 
obligation to examine all the relevant information and materials contained in the application and to 
confirm their veracity before making a decision to initiate a CVD investigation.  It cannot passively 
accept the allegations in the petition as true or app earing to be true and initiate the investigation 
hoping to confirm the veracity down the road.  Artic le 11.9 of the SCM Agreement clearly stipulates 
that the application should be re jected in such an instance. 
 7. In short, under the current SCM Agreement, initiation of a CVD investigation is not supposed 
to be an automatic rubber-stamp process once a petiti on is filed by a domestic industry.  Rather, it is 
designed and envisioned to be a meaningful step where the investigating authorities carefully look 
into substantive information contained in the pe tition and determine whether the petition is really 
worth the time and resources to be inflicted from th e lengthy investigations.  Unless this filtering  WT/DS414/R/Add.1 
 Page D-21 
 
 
  process operates in a way envisioned in Article 11  of the SCM Agreement, foreign exporters and 
governments would be in a severely dire situati on regardless of the final outcome of a CVD 
investigation. 
 
II. T HE “FACTS AVAILABLE ” STANDARD SHOULD NOT BE ABUSED TO PENALIZE FOREIGN 
RESPONDENTS SIMPLY BECAUSE A REQUEST FROM THE INVESTIGATING AUTHORITY 
WAS NOT FULLY RESPECTED  
 
8. The SCM Agreement does not provide an unlim ited discretion to an investigating authority 
conducting a CVD investigation whenever it encount ers a less than optimal information from a 
foreign respondent.  Instead, these provisions une quivocally provide conditions that need to be 
satisfied before the investigating authorit y applies the facts available standard.   
 9. Article 12.7 of the SCM Agreement, Article 6.8 of the AD Agreement, and Annex II of the 
AD Agreement provide detailed guidelines in this  respect.  Likewise, the Appellate Body in Mexico-
Beef and Rice also stated that even if the request by an investigating authority for certain information 
is not completely adhered to by a foreign res pondent, the investigating authority is nonetheless 
required to consider information act ually provided by the respondent.  
 
10. In Korea’s view, Article 12.7 of the SCM Agreement along with other provisions in Article 
12 collectively stands for the proposition that fund amental due process rights must be ensured at all 
times in a CVD investigation.  The Panel should car efully review whether this due process right has 
been adequately respected.  The Panel would ha ve to look into the specific situation of the 
investigation at hand and then dete rmine whether facts available would be warranted in the situation. 
 
III. I NVESTIGATING AUTHORITY DOES NOT ENJOY UNBRIDLED DISCRETION REGARDING 
AN “ALL OTHERS RATE” IN ANTI-DUMPING AND COUNTERVAILING DUTY 
INVESTIGATIONS  
 
11. One of the contentious claims in this dis pute is about all others rates in AD and CVD 
investigations by MOFCOM.  In the underlying inve stigations, the complainant claims, the all others 
rates were set at unreasonably high margins without sufficient explanations or rationale other than 
some cursory statements of policy reasons.  The resp ective all others rates indeed seem extraordinarily 
high when compared to the margins assigned to  the respondent companies, AK and ATI.  
Unreasonably high "all others rates” disassociated  with calculated margins of the respondents 
participating in the investigations does raise a c oncern of possible inconsis tency with the relevant 
provision of the SCM Agreement and the AD Agreement.   12. In Korea’s view, to the extent the applica tion of “all others rates” constitutes the virtual 
application of “facts available,” as the complain ant argues, Article 12.7 of the SCM Agreement and 
6.8 of the AD Agreement could be implicated in this  context as well.  If the facts available standard 
was imposed on non-participating exporters without satisfying the detailed requirements stipulated by 
Article 12.7 of the SCM Agreement and Article 6.8 of the AD Agreemen t, a violation similar to the 
one discussed previously could be found. 
 
13. Korea appreciates this opportunity to participate in this proceeding, and to present its views to 
the Panel. /END/   
_______________ WT/DS414/R/Add.1 
Page E-1 
 
 
   
 
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 the 
United States E-2 
Annex E-2 Executive Summary of the Second Written Submission of China E-11 
 
 WT/DS414/R/Add.1 
Page E-2  
 
  ANNEX E-1 
 
 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN 
SUBMISSION OF THE UNITED STATES 
 
 
I. Introduction  
 
1. China’s responses to the U.S. claims fail to a ddress the substance of the U.S. arguments.  In 
examining China’s justifications for its measures in  this case, it is useful to focus on what MOFCOM 
actually found as reflected in its dete rminations and disclosures, not on the post-hoc  rationalizations 
provided by China for purposes of this dispute.  As we discuss below, China’s first written submission 
often ignores MOFCOM’s actual findings or tries to rewrite them.  In some instances, China seeks to 
justify its measures by referring instead to alleged U. S. practice.  In other instances, China has replied 
with broad assertions that the AD and SCM Agreemen ts create no obligations with respect to the 
issues that the United States has raised, and that Ch ina is free to do whatever it chooses.  China is 
incorrect.  The AD and SCM Agreements do place relevant obligations on China, and China has 
failed to rebut the U.S. prima facie  case that China has br eached these obligations.  
 
II. The Initiation of the Countervailing Duty  Investigation for Several Programs Breached 
Article 11 of the SCM Agreement  
 
 A. China's interpretation of Article 11 of the SCM Agreement is erroneous  
 
2. While there are parallels between SCM Agreem ent Article 11 and AD Agreement Article 5, it 
is important to note the textual differences between Article 5.2 of the AD Agreement and Article 11.2 
of the SCM Agreement.  Thus, China’s reliance in its first written subm ission on panel reports 
interpreting the AD Agreement for its propositions that all that is needed is “the inclusion of raw 
information,” and that information need not be linke d with allegations, is misplaced in the context of 
the SCM Agreement.  In contrast to the low stan dard advocated by China, the text of the SCM 
Agreement makes clear that what is required is sufficient evidence .  
 
 B. The Application Presented Insuffi cient or No Evidence Indicating a 
Countervailable Subsidy for Several Programs  
 
3. As explained in the U.S. first written submissi on, the evidence provided in the application in 
support of applicants’ claims with respect to several programs was nonexistent or otherwise not 
sufficient to support initiation.  While China as serts that initiation of the countervailing duty 
investigation was consistent with Article 11 of the SCM Agreement, for each alleged subsidy, the 
petition contained serious gaps that  would have prevented any reasona ble investigating authority from 
concluding that the evidence provided was sufficient to support initiation.   C. No Unbiased or Objective Investigating Authority Would Have Initiated 
an Investigation under SCM Agreement Ar ticle 11.3 Based on the Conjecture 
Contained in the Application  
 
4. Instead of carefully examining the a pplication and accompanying evidence, MOFCOM 
merely accepted the applicants’ allegations as is , or initiated an investigation based on sheer 
speculation regarding the “possibility” of a subsid y, apparently intending to bolster the otherwise 
deficient application after initiating its investigation.      WT/DS414/R/Add.1 
 Page E-3 
 
 
  5. Regarding the Medicare Prescription Drug, Impr ovement and Moderniza tion Act of 2003, for 
instance, it is clear that MOFCOM made no attempt to  analyze the information provided by applicants 
to determine whether there was a sufficient basi s to support initiation.  Regarding the Economic 
Recovery Tax Act of 1981, Tax Reform Act of 1986, and Clean Air Act allegations, instead of 
carefully reviewing the evidence provided by appli cants to determine whether it was sufficient to 
support the claims made in the application, MOFCOM simply accepted applicants’ assertions that a 
program that was terminated in the 1980s could cont inue to provide benefits during the POI.  With 
respect to the Indiana Steel Industry Advisory Se rvice, and Steel Import Stabilization Act of 1984, 
MOFCOM initiated an investigation on the basis of nothing more than pure speculation.   
 
6. MOFCOM’s decision to initiate an investigati on into the electricity, coal, natural gas, the 
2003 Economic Stimulus Plan of Pennsylvania, and Pennsylvania’s Alternative Energy Funding 
programs serve as particularly egregious examples of MOFCOM’s cavalier a pproach to initiation.  
Despite the clear deficiencies in the petition, and a submission by the United States highlighting the 
inadequacies of these allegations, MOFCOM initiated an  investigation of these programs.  In each of 
the instances, by initiating an inv estigation based on the “simple as sertion, unsubstantiated by relevant 
evidence” contained in the applica tion, China breached Article 11.3. 
 
III. MOFCOM Failed to Require Adequate Non- Confidential Summaries, Breaching Article 
12.4.1 of the SCM Agreement and Article 6.5.1 of the AD Agreement  
 
 A. China’s submissions reflect a fundamental misunderstanding of Article 
12.4.1 of the SCM Agreement and Article 6.5.1 of the AD Agreement   
 
7. China appears to suggest in its submi ssions that it need only require “adequate” non-
confidential summaries if an interested party object s to the manner in which confidential information 
is summarized.  Yet, whether an interested part y objects during the proceeding to the adequacy of a 
summary is irrelevant to the question of whether th e summaries were in fact adequate.  The obligation 
to require adequate non-confidential summaries app lies regardless of whether an interested party 
objects to their adequacy during the proceeding.  Th e obligations contained in SCM Article 12.4.1 and 
AD Agreement Article 6.5.1 rest with China, not interested parties.   
8. China’s response reflects the mi staken view that its obligation to ensure that the interested 
parties furnish adequate non-confidential summaries  during the course of the investigation may be 
excused if it is able to point to some subsequent “non-confidentia l analysis” contained in its own 
determinations that provides some indication of  the confidential information submitted by the 
interested party.  To adequately defend their in terests, parties must have access to adequate non-
confidential summaries during the course of the investigation, not after the investigating authority has 
drawn conclusions based on the submitted information.  Ex post facto  “non-confidential analysis” is 
beside the point.  Once the determination is made, th e parties’ ability to defend their interests has been 
compromised.     9. China’s assertion that the agreements do not  provide sufficiently detailed guidance on the 
requirement to furnish adequate non-confidential su mmaries is belied by the text of the provisions 
themselves, as well as how the provisions have been applied.  In Mexico – Olive Oil , for instance, the 
panel emphasized that a public version of a documen t where confidential inform ation has simply been 
redacted is unlikely to qualify as an adequate non-co nfidential summary.  What is required by Article 
12.4.1 are adequate non-confidential summaries .    
 
10.  Regarding China’s claims of exceptional ci rcumstances, as noted in our oral statement, 
neither the petition nor the documents prepared by MOFCOM during the course of the investigation 
ever asserted that summarization was not possible or  otherwise justified the absence of meaningful WT/DS414/R/Add.1 
Page E-4  
 
  non-confidential summaries.  China’s post-hoc  rationalizations that exceptional circumstances existed 
justifying the inadequate non-confidential summaries should theref ore be rejected.  
 
 B. The Purported Non-confidential Summaries Contained in Part II of the 
Petition are Inadequate  
 
11. The application itself demonstrates that the applicants intended the purported non-confidential 
summaries contained in Part II of the application to be linked with the information redacted.  Yet the 
purported non-confidential summaries were inadequate.  Setting aside the fact that Part II in fact 
contains the purported non-confidential summaries, fo r each category of confidential information, the 
application was inadequate as it contained no summary at all, or contained unlabelled trend lines, or 
year-over-year percentage changes without the n ecessary context of absolute values and without any 
justification from the applicants why there were  exceptional circumstances that precluded more 
detailed summarization.    IV. China Breached Article 12.7 of the SCM Ag reement Because Its Use of Facts Available 
Was Improper  
  A. China’s Portrayal of the Facts Is Misl eading and Contradicted by the Record 
 
12. While China repeatedly asserts that the respondents “refused” to respond to MOFCOM’s 
questions and “seriously impeded” the investiga tion, a closer examination of the evidence 
demonstrates otherwise.  At no point did the U.S. companies refuse to cooperate with the investigation.  The companies cooperated, responde d to MOFCOM’s questionnaires, and to the extent 
they did not provide information it was because MOFCOM’s own questionnaires did not require it.  
When AK Steel provided the data after the preliminary determination (data that were already in the 
hands of the investigators), MOFCOM chose not to ei ther verify it or use the information to develop a 
verification plan.  13. Similarly, China’s assertion that MOFCOM did not request 15 years of sales data for federal-level procurement is misleading.  In its original  questionnaire, MOFCOM requested sales information 
for government procurement “not performed within  the POI,” or according to China’s third re-
translation of MOFCOM’s questions on this topic,  procurement “signed within the POI as well as 
those for which performance has started but remained unfulfilled by the end of the POI.”  On page 17 of the new subsidy allegation ques tionnaire response, MOFCOM asks for sales data for all products 
during the POI and the prior 14 years, for both stat e- and federal-level pr ocurement laws: “Please 
provide, during the POI and the 14 years before the POI, the sales situation of all the products under 
the influence of Pennsylvania Steel Products Procurement Act and purchasing American goods clause 
of other Acts .”  The only other procurement Acts alleged in the questionnaires issued at that time are 
federal procurement laws.   14. It is also important for the Panel to consid er that China has acknowledged in paragraph 154 of 
its first written submission, and in paragraphs 68-72 of its answers to the Panel’s questions, that 14/15 
(93.3 percent) of the sales data MOFCOM request ed for the alleged procurement program was not 
necessary.  While MOFCOM’s desire for the se nsitive competitive information appeared to be 
unlimited, according to the explanation in pa ragraph 67 of China’s Responses to the Panel’s 
questions, its request was motivated by  curiosity, rather than necessity. 
 
15. In addition, there are no facts available on th e record to support MOFCOM’s conclusion that 
the respondents sold all of their output to the government.  As explained in our first written 
submission, the only facts available on the record s uggest that, at most, AK Steel could have sold 29 
percent of its output to the government, as part of infrastructure and manufacturing sales.  The 29  WT/DS414/R/Add.1 
 Page E-5 
 
 
  percent sales figure for infrastructure and manufacturing sales comes from AK Steel’s audited 
financial statements and annual report.    16. Notwithstanding MOFCOM’s appa rent concern that this percen tage may not have held true 
for the entire POI, which did not correspond to a calendar year, the annual report shows that 26 
percent of the company’s U.S. sales fell under the infrastructure and manufacturing segment in 2007.  
These figures demonstrate stability in the sales figur es to this particular market segment over 24 
months.  It defies reason to suggest that the first two months of 2009 would be so drastically different 
from the preceding 24 months that MOFCOM would reject the figures entirely, and a review of AK Steel’s later financial reporting would demonstrate that they were not.  Regarding China’s assertion 
that the proposal to use the 29 percent figure was untimely filed, AK Steel’s annual report was 
actually contained in the Application.  AK Steel proposed the use of the 29 percent figure from that 
report after seeing MOFCOM’s unreasonable course in the preliminary determination.    17. Furthermore, MOFCOM could have verified that AK Steel or ATI did not sell to any 
government entity at verification.  The 29 per cent figure rejected by MOFCOM as the maximum 
possible percentage of AK Steel sales that could have been relevant to the alleged procurement 
programs, which focused on  research and development funds and construction contracts for 
infrastructure, was provided in the Application be fore MOFCOM required AK Steel to translate into 
Chinese and re-submit the same document in the de ficiency letter issued to AK Steel on August 26, 
2009.  Thus, this information was before MOFCOM well before verification began. 
 
18. Notably, MOFCOM does not have standard tim etables or schedules for events in antidumping 
and countervailing duty investiga tions.  Any purported difficulty analyzing the GOES transactional 
data timely provided in comments on the Prelimin ary Determination is a product of MOFCOM’s own 
scheduling, which was not based on any statutory or  regulatory requirements but rather the agency’s 
own assessment of when events should take place.  It was unreasonable to schedule verification on a 
timeline that would allegedly make it difficult for MO FCOM to verify data that was timely submitted 
by AK Steel in response to the Preliminary Determination.    
 B.  China’s Claim that the U.S. Companies Seriously Impeded the 
Investigation Is Not Credible  
 19. Given the various additional means that MOFCOM  had at its disposal to evaluate the U.S. 
companies’ claims with resp ect to utilization of the government procurement programs and  
MOFCOM’s failure to make use of any of them, Ch ina’s claim of that the U.S. companies seriously 
impeded the investigation simply are not credible.   Moreover, China’s argument that MOFOCOM 
could review such summary data to uncover “an omalous transactions” makes no sense.  As outlined 
above, MOFCOM’s questionnaire did not request transaction-specific data in the absence of any 
procurement-related sales; it had only requested a “tabulation of all domestic sales by product  
including quantity, value, and customer.”  Such data would not provide the information necessary to 
perform the analysis China purports it intended to perform.  
 
V. MOFCOM Failed to Make Available the Calc ulations It Performed to Arrive at the 
Dumping Margins, Inconsistent with Article 12.2.2 of the AD Agreement  
 
20. China does not deny that MOFCOM failed to provide to each U.S. company the actual, final 
dumping calculations that it performed for that compan y.  Rather, it claims that there is no obligation 
to do so under Article 12.2.2, and that the U.S. expor ters in this investigation were able to replicate 
MOFCOM’s calculations.  China’s arguments are without merit. 
 WT/DS414/R/Add.1 
Page E-6  
 
  21. Article 12.2.2 requires that if information on ma tters of fact that led to the imposition of final 
measures is relevant, then it must be made availa ble, with due regard paid to the protection of 
confidential information.  China argues that th e language of Article 12.2.2 does not mandate the 
release of the final dumping calculations, but China’s argument is contradicted by the text.  Article 
12.2.2 provides that the investigating authority’s fi nal determination must contain “or otherwise make 
available through a separate report, all relevant inform ation on the matters of fact ... which have led to 
the imposition of final measures ....” As the Un ited States has demonstrated, the calculations 
employed by an investigating authority to dete rmine dumping margins, and the data underlying the 
authority’s calculations, constitute “relevant informat ion on the matters of fact ... which have led to 
the imposition of final measures” within  the meaning of Article 12.2.2. 
 
22. The theme running through China’s arguments is  that Article 12.2 pertains only to “public 
notice” and to “explanation,” but China disregards th e fact that Article 12.2.2 mentions the possibility 
of a “separate report” in addition to a “public noti ce,” and the fact that Article 12.2.2 itself does not 
even use the word “explanation.”  China delves into the particular provisions of Article 12.2; if 
anything, however, these other provisions support th e U.S. position, not China’s.  China’s assertion 
that the two exporters were able to replicate th e dumping calculations on their own is unavailing.  
Even if the exporters were in fact able to replicate the calculations, this would not relieve China of its 
obligation under Article 12.2.2 to make available th e actual dumping calculations that its investigating 
authority performed.  VI. MOFCOM's Failure to Provide Sufficient In formation on the Findings and Conclusions 
of Law It Considered Material Constitutes a Breach of Article 22.3 of the SCM Agreement  
 
23. Under Article 14(d) of the SCM Agreement, th e authorities are to use market prices in the 
country of purchase unless they establish that those prices are so distorted that the market price is 
unusable.   MOFCOM’s flawed logic appears to be based on the assumption that any government 
involvement in a market leads to a distorted mark et with prices that are unusable as a benchmark 
price.  Prior reports of the Appellate Body interp reting Article 14(d) directly contradict MOFCOM in 
this regard.  Regarding MOFCOM’s benefit determination, Article 22.3 thus requires the investigating 
authority to provide explanati on on how it found that market prices resulting from the competitive 
bidding process were distorted.    
 
VII. MOFCOM’s Determination of the “All Others” CVD Rate was Inconsistent with 
Articles 12.7 and 12.8 
 
24. The fact that MOFCOM provided notice to  the U.S. Government, AK Steel, and ATI is 
irrelevant to the question of the WTO-consistenc y of China’s application of facts available to 
companies subject to the 44.6% “all others” subsidy rate.  Likewise, placing a copy of the petition in a 
reading room and publishing notices of initiation is not  sufficient to justify the application of facts 
available.  China now acknowledges that “there are no other U.S. producers” of GOES.  This begs the 
question of what basis China had to apply adverse facts available to nonexistent entities for failure to 
cooperate. 
 25. Without notice of the investigation and the in formation required of interested parties subject 
to the investigation, the unidentified, unknown (i ndeed non-existent) other U.S. producers/exporters 
cannot be said to have refused access to the requi red information, or otherwise failed to provide 
access to the information within a reasonable period  as required under Article 12.7 when read in the 
context of Article 12.1 before resort to facts availa ble.  Neither can such producers/exporters be said 
to have significantly impeded an inves tigation of which they were unaware.  
  WT/DS414/R/Add.1 
 Page E-7 
 
 
  26. China acknowledges that many of the pr ograms were “found by MOFCOM not to confer 
countervailable subsidies on the two known res pondents.”  Nonetheless, China’s “all others” 
calculation appears to include non-countervailabl e programs representing over one-half the 44.6 
percent “all others” rate.  China argues that it disch arged its obligations under Article 12.8 to inform 
the interested parties “of the ess ential facts under consideration” which formed the basis of the “all 
others” calculation in time for the parties to defe nd themselves through a single sentence in final 
determination.  However, absent from this sentence are any facts that led MOFCOM to conclude that 
resorting to facts available was appropriate or an y facts that led MOFCOM to determine that a 44.6 
percent CVD rate was appropriate to apply to the unknown, unidentified companies.   
27. That the United States may have been able to divine some of the essential facts through 
guesswork from the information provi ded is of no consequence here.  The burden is on China to 
disclose the essential facts, not on the United States to guess at them.  Moreover, putting that aside, 
the facts that led China to determine that nonexi stent companies that were not subject to the 
investigation nevertheless could be deemed non-coopera tive for not having registered to participate in 
this investigation remains a mystery to the United States.   China does not even attempt to demonstrate 
that MOFCOM disclosed the essential facts under co nsideration regarding its calculation of the “all 
others” subsidy rate.  
 
VIII. MOFCOM Acted Inconsistently with Ar ticle 6.9 of the AD Agreement by Failing to 
Disclose the Essential Facts Under Considerati on Regarding Its Calculation of the “All 
Others” Dumping Rate  
 
28. As with the U.S. claim regarding the CVD “a ll others” rate, the issue before the Panel is 
whether a single sentence is sufficient disclosure under Article 6.9.  It plainly is not.  China’s defense 
appears to be that MOFCOM could not disclose the essential facts under consideration because doing 
so would have revealed the business confidential info rmation of the responding companies.  However, 
China does not explain why MOFCOM failed to disclo se the facts forming the basis for its decision to 
apply the facts available in the first place.  Th ese facts would not be confidential to the two 
responding companies, and would include the actions by all other U.S. companies that indicated to MOFCOM that these companies refused access to , or otherwise did not provide, necessary 
information within a reasonable period, or that they  significantly impeded the investigation.  Further, 
China provides no explanation for why MOFCOM  could not have publicly summarized the 
information used or at least identified the calculation methodology it employed.   
 
IX. The Price Effects Analysis in MOFCOM’s Final Determination was Inconsistent with 
China’s WTO Obligations 
 
 A. Price Effects and Underselling Findings were Critical to MOFCOM’s Analysis  
29. For the most part China has failed to respond to  the arguments of the United States in its first 
written submission describing how MOFCOM’s pri ce effects analysis fails to satisfy WTO 
requirements.  China variously ignores the U.S. argumen ts, mistakenly claims that they are irrelevant, 
or attempts to defend the MOFCOM analysis by recasting it.  
 30. China improperly mischaracterizes MOFCOM’s price effects analysis (i) by suggesting, 
without citing anything from the final determina tion, that MOFCOM’s price effects findings were 
unnecessary to support its injury determination and by  arguing that MOFCOM did not need to make 
findings on underselling, and did not do so, and (ii)  by arguing that it was not obliged to undertake 
any analysis comparing domestic prices with those of the subject imports. 
 31. The United States explained at length wh y the conclusions that MOFCOM reached 
concerning price comparisons were not supported by  positive evidence, did not reflect an objective WT/DS414/R/Add.1 
Page E-8  
 
  examination, and consequently we re inconsistent with Articles 3. 1 and 3.2 of the AD Agreement and 
Articles 15.1 and 15.2 of the SCM Agreement.  China does not challenge or even respond to this U.S. 
argument, other than mistakenly to contend that  it is irrelevant because MOFCOM made no findings 
whatsoever on comparative prices.  In so doing,  China has essentially conceded that there is no 
positive evidence to support a finding that prices for the imports under investigation were lower than 
prices for the domestically produced product at an y time during the period of investigation.  
 
 B. MOFCOM’s Findings of Price Depression are Inconsistent with AD 
Agreement Articles 3.1 and 3.2 and SCM Agreement Articles 15.1 and 15.2 
 
32. Contrary to China’s current argument, MOFCOM did not rely exclusively on import volume 
to explain the domestic industry’s price declines.  Instead, it stated that the imports caused price 
depression because of their low prices, notwithstandi ng China’s repeated statements that MOFCOM 
did not conduct a “price undercutting” analysis.  We have previously demonstrated that there is no 
positive evidence supporting any finding that the import s were priced below the levels of the domestic 
product, and that any such findings could not have resulted from an objective examination.  China has 
not attempted to rebut these claims.   33. China criticizes the United States for overlooki ng price depression that supposedly occurred 
in “late” 2008.  MOFCOM, however, never made a finding that price depression occurred in 2008.  
Even accepting arguendo China’s contention, any finding of price depression during “late” 2008 
would not reflect an objective examination.  Ch ina now argues that MOFC OM conducted a quarterly 
analysis for domestic price levels during 2008.  MOFCOM’s use of quarterly data for 2008 only for 
the purpose of examining domestic price levels “was selective and provided only a part the picture” of 
what might have caused any pricing declines in the f ourth quarter.  It was not consistent with of an 
objective examination of the data. 
 
 C. MOFCOM’s Findings of Price Suppression Are Inconsistent With 
Articles 3.1 and 3.2 of the AD Agreement and Articles 15.1 and 15.2 of the SCM Agreement 
 
34. China’s arguments defending MOFCOM’s findings of price suppression in 2008 fail to 
address the defects in the analysis MOFCOM conducte d.  Materials China introduced to the Panel in 
connection with the first written submission rais e serious questions about whether MOFCOM’s 
analysis of changes in the “price-co st differential” was objective.   
 35. MOFCOM’s stated reason for finding that the increasing ratio of costs to sales revenues in the 
first quarter of 2009 was the effect of the subject  imports was the purported “low price” strategy 
adopted by the importers under investigation.  As we have explained, there is no positive evidence 
that the imports followed a “low price” policy and Ch ina does not even attempt to defend this finding. 
 
 D. MOFCOM’s Failure to Disclose Facts Critical to Its Price Effects 
Analysis Breaches Article 6.9 of the AD Agreement and Article 15.8 of the SCM 
Agreement 
 
36. China does not dispute that MOFCOM failed to  disclose several pieces of information critical 
to its price effects analysis, as we demonstrated in  our first written submission.  China contends that 
the failure to disclose this information does not vi olate Article 6.9 of the AD Agreement and Article 
15.8 of the SCM Agreement because the facts not disclosed either were not “essential” or were 
confidential.  China’s argu ments are without merit. 
  WT/DS414/R/Add.1 
 Page E-9 
 
 
   E. MOFCOM’s Measures Were Base d on Cursory and Unsupported 
Findings Concerning Price Effects and are Inconsistent with Article 12.2.2 of the AD Agreement and Article 22.5 of the SCM Agreement  
 
37. China’s attempts to justify why the concluso ry assertions in MOFCOM’s Final Determination 
about the “strategies” purportedly used by importers to charge “low prices” for their products satisfy 
the provisions of Article 12.2.2 of the AD Agreem ent and Article 22.5 of the SCM Agreement are 
without merit.  Indeed, China’s inability to iden tify what findings MOFCOM made and where it made 
them underscore how its action are in consistent with the Agreements. 
 X. The Causation Analysis in MOFCOM’S Fi nal Determination is Inconsistent with 
China’s WTO Obligations  
 
 A. MOFCOM’s Examination of Causal Link is Inconsistent With Articles 
3.1 and 3.5 of the AD Agreement a nd Articles 15.1 and 15.5 of the SCM 
Agreement  
 
38. China’s argument that the price effects analysis was unnecessary to MOFCOM’s conclusion 
of causal link cannot withstand even casual scrutiny.  As we explained, the price effects findings were 
an essential element of MOFCOM’s causal link an alysis.  Because MOFCOM’s analysis of price 
effects does not satisfy the requirements of th e AD and SCM Agreements, China has failed to 
demonstrate that dumped or subsidized imports ar e causing injury, as required by Article 3.1 of the 
AD Agreement and Article 15.1 of the SCM Agreement.   39. China raises similarly unpersuasive argumen ts concerning MOFCOM’s examination of the 
Chinese industry’s rapid expansion, the industry’s in creasing production at a rate far greater than the 
increase in domestic demand, and the consequent in ventory overhang that placed downward pressure 
on prices.  China’s response to the U.S. argument that it violated Articles 3.1 and 3.5 of the AD 
Agreement and Articles 15.1 and 15.5 of the SCM Agreement by failing to perform a non-attribution 
analysis evinces a complete misunderstanding of these provisions.  
 B. MOFCOM’s Failure to Disclose Information Concerning Non-Subject 
Imports is Inconsistent with Article 6.9 of the AD Agreement and Article 15.5 of 
the SCM Agreement  
 
40. China does not seriously dispute that neither  MOFCOM’s Preliminary Determination nor its 
Essential Facts Disclosure contained any informat ion about the volume and prices of imports of 
GOES from sources other than Russia and the United St ates.  Nor does China seriously dispute that 
information concerning the volume and prices of imports from such sources is an essential element of the analysis of causation.  Indeed, both Article 3.5 of the AD Agreement and Article 15.5 of the SCM 
Agreement identify the volume and prices of import s that are fairly traded as elements that are 
relevant, and should be examin ed, in the causation analysis. 
 
41. While China does argue that certain informati on about trends in market share for nonsubject 
imports can be inferred from MOFCOM ’s Preliminary Determination, this is neither responsive nor 
relevant to the U.S. claim.  Information about mark et share trends is simply not the information about 
volume or prices that Articles 3.5 and 15.5 direct an authority to examine.  WT/DS414/R/Add.1 
Page E-10  
 
   C. MOFCOM’s Cursory and Fact-Free Analysis of Non-Subject Imports is 
Inconsistent with Article 12.2.2 of the AD Agreement and Article 22.5 of the SCM Agreement 
 
42. China’s sole response to the U.S. claim that MOFCOM’s analysis of nonsubject imports was 
inconsistent with Article 12.2.2 of the AD Ag reement and Article 22.5 of the SCM Agreement 
because it was devoid of information is the statemen t that nonsubject import market share increased 
only modestly in 2008.  MOFCOM made no such finding.  The finding MOFCOM did make, which is that nonsubject imports “continued to drop,” does not appear to be consistent  with China’s current 
contention.  The divergence between China’s proffe red justification for the finding that nonsubject 
imports were not a cause of injury to th e domestic GOES industry and MOFCOM’s stated 
justification indicates that the actual basis for the finding remains unclear.  The Final Determination 
therefore does not contain “all relevant informa tion on the matters of fact and law” which led 
MOFCOM to conclude that nons ubject imports were not causing injury to the Chinese GOES 
industry. 
  WT/DS414/R/Add.1 
 Page E-11 
 
 
  ANNEX E-2 
 
 
EXECUTIVE SUMMARY OF THE SECOND 
WRITTEN SUBMISSION OF CHINA 
 
 I. INTRODUCTION  
1. This submission focuses on clarifying the issues, legal arguments, and facts before the Panel 
at this stage in the proceeding.  In addition, the submission identif ies omissions, mischaracterizations, 
and concessions by the United States in its variou s submissions of the facts and analysis in the 
underlying investigations.  It remains China’s position that the determinations of dumping, 
subsidization, and injury made by the authorities in  the underlying investigation were consistent with 
the relevant obligations of the SCM Agreement  and AD Agreement .  The United States has not 
provided any support for the Panel to find these dete rminations to be inconsistent with China’s 
obligations.  II. ARGUMENT   A. The United States Has Struggled To Reconcile Its Claims About 
Initiation Under Article 11 Of The SCM Agreement  With The Applicable 
Standard, Its Burden Of Proof, And The Facts Of This Case 
 
  1. U.S. efforts to distinguish the standards under Article 5.2 of the 
AD Agreement  from Article 11.2 of the SCM Agreement  are unpersuasive 
 
2. The United States seeks to discredit China’s re liance on panel reports interpreting Article 5.2 
of the AD Agreement  in describing the applicable standard under Article 11.2 of the SCM Agreement .  
The U.S. position appears to be that the standard under Article 11.2 of the SCM Agreement  is 
somehow more stringent than the standard under Article 5.2 of the AD Agreement .  China disagrees 
with this interpretation and finds the textual distin ctions upon which the U.S. posits this argument to 
amount to little practical difference between the two pr ovisions.  Indeed, if there is any difference, it 
is in the particularity of the evidence that must be presented under Article 5.2 of the AD Agreement , 
which provides a much more precise description of th e type of evidence that is required to accompany 
an application.    3. China submits that reliance on panel interpretations of Article 5.2 of the AD Agreement  in 
discussing the appropriate standard under Article 11.2 of the SCM Agreement  is both valid and 
directly on point.  Although the United States wishes to read more into Article 11.2 of the SCM 
Agreement , both the text and context of that provision confirm that the only requirement is that the 
application contain “sufficient evidence” as opposed to any analysis of that evidence.  The application 
in the underlying proceedi ng met this standard.   
 
  2. The United States has largely failed to advance its initiation 
arguments beyond simple assertions of “no evidence” 
 
4. It is the United States’ burden to presen t its case.  Applying well-accepted principles, the 
Appellate Body has confirmed that a complaining party must make out a prima facie  case by 
presenting sufficient evidence to raise a presumption in favor of its claim.   The case must be based on 
“evidence and legal argument” put forward by the complaining party in relation to each of the 
elements of the claim.   It seems axiomatic that if a complaining party “may not simply submit WT/DS414/R/Add.1 
Page E-12  
 
  evidence and expect a panel to divine from it a clai m of WTO-inconsistency,” or “simply allege facts 
without relating them to its legal arguments,” it should not be able to simply assert facts without relating them to the evidence presented.  The Unit ed States, however, has largely failed to move 
beyond simple assertions of “no evidence” containe d at paragraph 78 of its First Written Submission 
for each of the 11 challenged subsidy allegations.  In most instances, it has not even addressed the 
evidence and documentation directly cited in the petition.   
 
  3. The initiation of investigations into the 11 challenged allegations 
was consistent with Articles 11.2 and 11.3 of the SCM Agreement   
 
5. China reiterates that initiation of investig ations into the 11 cha llenged allegations was 
consistent with Articles 11.2 and 11.3 of the SCM Agreement .   For purposes of Article 11.2 they 
adequately met the obligations of that provisio n in terms of providing information reasonably 
available to the applicant that addressed the subject matter of Article 11.2(iii), and namely 
information related to financial c ontribution, benefit, and specificity.    The evidence provided by the 
applicants further comports with the Article 11.3 sta ndard.  The objective at initiation is not to resolve 
all issues of fact and law.  “An . . . investigation is a process where certainty on the existence of all the 
elements necessary in order to adopt a measure is reached gradually as the investigation moves 
forward."   Consistent with that understanding “t he quantity and quality of the information provided 
by the applicant need not be such as would be required in order to make  a preliminary or final 
determination . . . .”  China contends that the app lication met this standard, and that an unbiased and 
objective investigating authority would have fo und that the application contained sufficient 
information to justify initiation.   
 B. MOFCOM’s Treatment of Conf idential Information Was Fully 
Consistent With The Requirements of Article 6.5.1 Of The AD Agreement  And 
Article 12.4.1 Of The SCM Agreement 
   1. The basis of the United States claims about the non-confidential 
summaries remains unclear 
 
6. It remains unclear from the U.S. argument what provisions of Article 6.5 and 6.5.1 of the AD 
Agreement  and 12.4 and 12.4.1 of the SCM Agreement  China has supposedly violated.  The United 
States appears to have changed its focus from the adequacy of the non-confidential information in 
allowing parties “a reasonable understanding” of the confidential information to whether or not there 
was “a link” between the non-confidential information and the redacted confidential information.  In 
addition, the United States claims that even if the methodology used by petitioners to provide an 
adequate non-confidential summary were acceptabl e under the Agreements, “interested parties” 
should not be required “to piece together informati on” in order to understand the “substance of the 
confidential information.”  But the United States has not explained why the non-confidential information actually provided did not allow a reasonable understanding of the confidential 
information in the petition.      2. Articles 12.4.1 of the SCM Agreement  and 6.5.1 of the AD 
Agreement  are focused on whether the no n-confidential summaries allow 
parties a reasonable understanding of the confidential information submitted and not on the form or placement of such summaries 
 
7. Article 12.4 of the SCM Agreement  and Article 6.5 of the AD Agreement  set forth the 
standards to be applied when confidential informati on is submitted as evidence in an investigation.  
The Articles are concerned with ensuring that: (1) confidential information can be used in 
investigations without risk of disclosure adverse to the submitting party; (2) there is a legitimate 
reason for authorities to classify information as c onfidential; and (3) parties other than those  WT/DS414/R/Add.1 
 Page E-13 
 
 
  submitting the confidential information have a reasonable understanding of the confidential 
information submitted by virtue of a non-confiden tial summary.  Contrary to U.S. suggestions, 
nowhere in Articles 12.4, 12.4.1, 6.5 or 6.5.1 do the SCM  and AD Agreements,  respectively, do those 
provisions address the issues of what constitutes an  adequate non-confidential summary, whether and 
how such a non-confidential summary needs to be identified, or what form the non-confidential 
summary should take.  The United States has failed  to address China’s arguments based on the facts 
of this investigation that the non-confidential information provided was sufficient to provide a 
reasonable understanding to other parties of th e confidential information submitted.    
 
  3. The approach used in the proceedings at issue to present 
confidential information in a non-confidential format was adequate to 
permit a reasonable understanding of the confidential information  
 
8. Although it does not appear that the United Stat es is continuing to contest the adequacy of the 
non-confidential summaries, the United States now ap pears to be arguing that it cannot understand the 
non-confidential summaries because they are in the subs tantive portion of the text of the petition (Part 
I) rather than in the portion of the text which describes the categories of information for which 
confidential treatment is sought and which makes the request for confidential tr eatment.  This issue is 
irrelevant to the sufficiency of the actual non-c onfidential summaries and the ability of a party to 
understand the factual support for the allegations in the petition.  The fact that the non-confidential 
information is set forth in the very same porti on of the petition which contains the corresponding 
confidential information would seem to undermine the U. S. claim.  Moreover, neither of the relevant 
Articles from the AD and SCM Agreements  addresses the principal issue raised by the United States, 
namely that the formula or form used to presen t the non-confidential summaries made it difficult to 
link the non-confidential information with the c onfidential information being summarized.  In any 
case, this claim is without factual support.  The appr oach taken by petitioners was really quite simple, 
straight forward, and clear.  Indeed, it is difficult to see how much more obvious the link could be 
between the confidential and non-confidential information.    
 C. MOFCOM’s Disclosure Of How It Calculated The Margins of Dumping 
Met The Standard Under Article 12.2 Of The AD Agreement 
 
  1. Article 12.2 does not require an authority to disclose the specific 
numbers used to calculate the margins of dumping 
 
9. There is no requirement under Article 12.2 th at an authority disclose the details of the 
calculations of the margins of dumping.  Article 12. 2.2 requires disclosure of “all relevant information 
on the matters of fact and law and reasons which ha ve led to the imposition of final measures.”  The 
United States has not provided  the Panel any basis in the AD Agreement  to conclude that China’s 
disclosure of the methodology used to determine the margins of dumping and the specific sources of the information used in the actual calculations  does not constitute disclosure of “all relevant 
information on the matters of fact and law.”  As such, given the absence of any legal or interpretive 
basis for the U.S. claim, China believes that the U. S. claim must fail.  Given that the claim should 
have been properly brought under Article 6.9 and no t Article 12.2, the U.S. claim must also fail. 
 
  2. MOFCOM’s disclosure was sufficient to allow the U.S. 
respondents to both protect thei r interests and to replicate the 
authority’s calculation 
 10. Since the U.S. claim is not supported by any requirement imposed by the relevant Articles of 
the AD Agreement , it relies on an argument that the disclos ure was insufficient to allow the U.S. 
respondents to adequately protect their interests in the investigation.  This claim is wrong as a matter 
of fact.  In its disclosure, China provided the deta ils of its calculation methodology and the source of WT/DS414/R/Add.1 
Page E-14  
 
  all of the data used in making the calculation of th e margins of dumping.  This disclosure enabled the 
respondents to comment on both the methodology used (e.g did the authority use the correct starting 
price) and the underlying data applied to the methodolog y.  It also enabled respondents to challenge as 
being incorrect both the methodology used and th e application of the methodology based on the 
source of the data used for the calculation of each element of the margins of dumping.  The disclosure 
in fact allowed respondents to replicate a nd check the accuracy of the calculation.   
 
 D. MOFCOM Application Of Facts Available With Respect To The 
Government Purchase Of Goods Program Was Consistent With Article 12.7 Of The SCM Agreement 
 
  1. The company respondents failed to provide necessary information  
11. In its initial questionnaire in the undery ling proceeding MOFCOM requested that the 
company respondents provide transaction data for sales of all steel products over the period of 
investigation (“POI”).  The United States cannot contest that ATI provided no transaction data at all, 
and AK Steel only belatedly provided POI data on GOES, a very small subset of all POI sales, 126 
days beyond the final extended deadline for submi ssion for that information and only three business 
days before verification.   Instead, the United States continues to distract and insist that the scope of 
information deemed “necessary” by MOFCOM fo r purposes of the Government Purchase of Goods 
program included 15 years of information.  But the United States has not articulated any purpose 
under Article 12.7 of the SCM Agreement for the fact it is trying to assert – that the application of 
facts available turned on the company respondents’ failure to provide 15 years of data.    12. Although the United States argues about when MOFCOM made known its detailed 
considerations with respect to its subs idy analysis, the only obligation under the SCM Agreement  
relates to ensuring a clear articulation of the info rmation required by the investigating authority to 
render its determination.  In the underlying pr oceeding the company respondents knew exactly what 
MOFCOM was requesting from them.  Even if one assumes that beyond an obligation to adequately 
explain what information is required, an inves tigating authority must articulate a more detailed 
explanation of the types of subsidies it is consid ering in conjunction with its requests, the United 
States has no argument.  The record reflects that MOFCOM made this known as well.  
 
13. The United States has advanced its Article 12.7 claim with respect to the application of facts 
available to the government purchase of goods prog ram without any foundation for explaining why 
MOFCOM’s choice to apply facts available was inappropriate.  MOFCOM made clear in its 
investigation that it was considering indirect s ubsidies as contemplated by GATT Article VI.3 and 
therefore required information on intermediate sal es to government contractors and information on 
sales of non-subject merchandise.  The United States has neither brought a substantive claim under GATT Article VI.3, nor has it offered any contextual an alysis of GATT Article VI.3 to help define its 
Article 12.7 claim.  Under the circumstances, there is  no basis for the Panel to even begin considering 
whether the requested information was "necess ary" in the sense of Article 12.7.   
   2. The company respondents refused to cooperate to the best of 
their ability and thereby seriously impeded the investigation 
 
14. Despite the respondents’ clear  understanding of what MOFCOM sought, they chose to largely 
ignore MOFCOM’s requests for information.  Neither respondent made any specific request for an 
extension of time in which to provide the requested information, indicated that they were preparing 
the information, or that compilation of the requested  information was too difficult.  The United States 
has done very little to address the implications of the underlying record.  In summary, the company 
respondents failed each element of paragraph 3 of Annex II of the AD Agreement , which both parties 
agree is relevant here.  They failed to provide info rmation that was: (1) verifiable; (2) appropriately  WT/DS414/R/Add.1 
 Page E-15 
 
 
  submitted so that it can be used in the investigati on without undue difficulties; (3) supplied in a timely 
fashion, and, where applicable; and (4) supplied in  a medium or computer language requested by the 
authorities.  Where a party fails to satisfy three, and sometimes four, of these elements, an authority is entitled to resort to facts available.         3. MOFCOM’s choice of fact s available was reasonable under the 
circumstances created by the respondents 
    (a) The company respondents were responsible for creating a 
factual void in the record 
 15. The company respondents’ non-c ooperation produced a critical f actual void in the record, not 
by coincidence, but by the calculated choices of  the company respondents.  There is no other 
reasonable interpretation of the record evidence.  ATI did nothing at all and AK Steel provided only a 
partial response extremely late in the investigatio n.  In any case, the AK Steel response was still 
selective.  Having provided a full customer list earli er, but with none of the additional quantity and 
value details that MOFCOM needed to prioritize a nd evaluate that information, this time AK Steel 
provided some detail for GOES (that could have been provided months earlier), but no detail at all for 
other steel sales.  MOFCOM knew from the customer lists that AK Steel had many more customers for steel products other than GOES.  MOFCOM al so knew from the various responses that sales of 
GOES were a small portion of total AK Steel sales of  steel products.  Yet AK Steel still refused to 
provide any meaningful information about the sales other than GOES sales.  The United States has not 
addressed these points to any significant degree in this proceeding.  It has simply maintained that the 
respondents cooperated.  Given the record, MOFCOM  was entitled to a very different conclusion. 
 
   (b) MOFCOM was entitled to infer a less favorable fact than 
those positioned before MOFCOM through the company 
respondents’ calculated non-co-operation 
 
16. Article 12.7 is intended to ensure that the fa ilure of an interested party to provide necessary 
information does not hinder an agency's investiga tion.  It is designed to address circumstances in 
which respondents seek to “game” an investigatio n result by granting the authority the ability to 
incentivize cooperation through the application of certain  facts, even if those facts are “less favorable” 
than other facts that might be available.  Ind eed, authorities may draw certain inferences – plainly 
adverse -- from that failure to cooperate, and the br eadth of inferences available grows commensurate 
with the level of non-cooperation.   Absent this discretion, the investigative process would grind to a 
halt.  The United States has not contested this understanding of Article 12.7. 
 
17. As explained in China’s First Written Submissi on, MOFCOM had four alternatives before it:  
(1) find 0% utilization; (2) find 29% utilizati on based on the AK Steel 10-K report; (3) find some 
other degree of utilization; or (4) find 100% utilizati on, as it did in the preliminary determination.  In 
the final analysis, MOFCOM had to choose among these alternatives and 100% utilization proved to 
the must reasonable under the circumstances of the respondents’ non-cooperation.   
 
18. China reiterates that respondents who willfully  and strategically create a factual void in the 
record should not be allowed to benefit from that non-cooperation under Article 12.7 of the SCM 
Agreement .  To allow such an outcome would undermin e the entire purpose of the investigation and 
allow respondents to manipulate the process by wit hholding unfavorable information in a calculated 
manner.  Indeed, such manipulation is seen on the face of the U.S. argument.  The United States 
effectively argues that because AK Steel chose to provide insufficient and unusable sales data to 
MOFCOM with which to investigate the program at issue, Article 12.7 of the SCM Agreement  
requires MOFCOM to accept that no more than 29% of AK Steel’s sales can be found to be related to 
the program at issue.  In other words, MOFCOM should be forced to use this information because WT/DS414/R/Add.1 
Page E-16  
 
  sales data is unique and no seconda ry source exists.  This could not  have been the intent of the 
Members in drafting Article 12.7 or Annex II of the AD Agreement .   
 
 E. MOFCOM Properly Analyzed The Adverse Price Effects From The 
Subject Imports 
 19. The record from the underling proceeding shows that domestic prices were falling at the end 
of 2008 and early 2009.  Domestic prices were not  covering the increasing costs, and so profitability 
was falling in 2008 and early 2009.  These facts are not  in dispute, so the United States tries to shift 
the focus of its pricing arguments.  But the U.S. em phasis is simply an effort to hide a fundamental 
weakness in its overall case:  MOFCOM did rely heavily on adverse volume effects as part of its 
overall injury findings, and the United States has nothing really to say about these adverse volume 
effects and so has not challenged these findings.  But it is against this context that MOFCOM also 
found the adverse price effects – both price suppression and price depression – that the United States has made the centerpiece of its claims.   
 
  1. MOFCOM properly found price depression and price suppression 
 
20. The key facts are not really in dispute.  Domestic prices began to decline in late 2008 and 
continued to decline sharply in early 2009.  Sim ilarly, average domestic prices over the full year 2008 
did not increase enough to match the rising costs so profitability, and the falling domestic prices in 
early 2009, put even stronger downward pressure on domestic industry profitability.   These facts 
support the MOFCOM findings of price depression and price suppression in 2008 and early 2009. 
 21. Since the United States cannot dispute these key f acts, it has tried to shift the focus to price 
undercutting.  Since the United States has no factual or legal basis to cha llenge MOFCOM’s findings 
of price depression, the United States instead tries to graft price undercutting findings onto the price 
depression findings, and then attack the price undercutti ng findings.  This U.S. argument is flawed on 
many levels, and should be rejected.  22. First, price depression can occur with or w ithout price undercutting.  The two concepts are 
factually and legally distinct.  Price depression occurs whenever domestic industry prices are 
declining.   Price depression does not depend on an y comparison with subject import price levels; it 
focuses exclusively on the trend in domestic prices.  It  is this decline in domestic prices that Article 
3.2 and Article 15.2 recognize as an adverse price effect.  Second, price depression can result from the 
volume of subject imports.  The United States implicitly admits as much, when it argues that the price depression “was not solely because imports were increasing.”   
 23. The U.S. arguments also reflect a misunde rstanding of price suppression analysis.  Price 
depression focuses on domestic industry price trends alone.  Price suppression goes one step further, 
and considers domestic prices trends relative to ch anging costs.  Price suppression analysis recognizes 
that even when prices are going up, there can still be  adverse price effects.  If prices are going up 
because costs are also going up, but prices are being “suppressed” and not allowed to increase enough 
to cover rising costs, Article 5.2 and Article 15. 2 recognize such price suppression as an adverse price 
effect.  The United States now complains that MO FCOM did not disclose any information about the 
changing costs.  But these complaints do not really address the issue of price suppression – the price-cost squeeze that MOFCOM documented for both 2008 and early 2009.    
24. Perhaps recognizing the weakness of its ar guments about both price depression and price 
suppression, the United States tries to slip into its arguments the notion of causation – that even if 
price depression and price suppression was occurring, these adverse price effect s were not caused by 
subject imports.  For purpose of the claims under Ar ticle 3.2 and Article 15.2, however, this approach 
is legally incorrect.  These provisions require only the showing of the existence of the adverse price  WT/DS414/R/Add.1 
 Page E-17 
 
 
  effects – the declining prices (price depression), or the price-cost squeeze and declining profitability 
(price suppression) – and do not require any explan ation as to the causes of these adverse price 
effects.   
 
  2. MOFCOM had no obligation to find price undercutting 
 
25. The United States concedes that an authorit y can find adverse price effects without finding 
price undercutting.  The concession is worded strangely – “we do not disagree” – but the concession has been made nonetheless.  But th e United States selectively quotes from EC – Salmon to suggest 
price undercutting analysis is “necessary.”  A full  reading of the select ed passage stands for 
something very different.  In any event, the MOFC OM determination certainly discussed the issue of 
relative prices – as the United States repeatedly h as pointed out – so there is no issue whether price 
undercutting was “considered” at some level.   Af ter considering all the facts, MOFCOM chose to 
base its determination on price depression and price suppression.  
26. China also disagrees with the panel in EC -- Salmon  that price undercutting must be 
considered.  The text of both Article 3.2 and Article  15.2 use the key term “or.”  In other words, the 
authority “shall consider” either price undercutting or price depression or price suppression.  Nothing 
in the text suggests that all three must each be considered.  Given the interpretative significance of 
this key term “or,” the United States is wrong to assert that analysis of price undercutting is “essential 
to a complete analysis of price effects.”  Such a vi ew is at odds with the text and at odds with the 
absence of any requirement for the authorities to use any particular methodology.  China recognizes 
that an authority could reasonably chose to consider  price undercutting as part of its analysis; but the 
authority has the discretion under Article 3.2 and Ar ticle 15.2 to consider or not consider price 
undercutting.    3. Any concerns about price undercutting do not affect 
MOFCOM’s conclusions about price depression or price suppression 
 
27. As discussed above, price depression and pri ce suppression analysis does not depend on the 
relative prices of domestic product and subject im ports.  Both price depression and price suppression 
can occur regardless of whether subject import pri ces are higher or lower than domestic prices.  To 
this end, U.S. efforts in response to a questi on from the Panel to use its arguments about price 
undercutting to attack the MOFCOM findings on price depression and price suppression fail.  The 
United States is confusing the mention of “low price” with specific findings of price undercutting. 
 28. The U.S. argument is really that MOFCOM did not exercise its discretion to conduct more 
detailed analysis than that required by Article 3.2 and Article 15.2.  The United States appears 
frustrated that MOFCOM did not engage in analysis of “transaction prices.”  Although authorities could certainly choose to do so, they are not required to do so.  MOFCOM did not pursue specific findings on price undercutting in this particular case  because it did not believe such findings were the 
most appropriate analytic tool gi ven the data available in this case.  Moreover, MOFCOM also had to 
take into account the fact that it would be conductin g analysis based on cumulated subject imports, so 
that any transaction specific data would be blurred and obscured with combined on a cumulated basis. 
For both of these reasons, MOFCOM focused the broader measure of average prices as reflected in 
average unit values.  29. Thus, given the data available in this case,  MOFCOM properly exercised its discretion to 
make: 
 WT/DS414/R/Add.1 
Page E-18  
 
    Specific findings of price depression, based on the facts that domestic prices 
(as measured by average unit values) began to fall in Q4 2008 and fell more sharply in Q1 2009. 
 
  Specific findings of price suppression, based on the facts that domestic prices 
did not increase enough in 2008 to cover rising costs, leading to a drop in per unit profits, and domestic prices fell in Q1 2009 exacerbating the drop in per unit profits. 
  The general observation that subject import prices were “low” and were 
“lower than” domestic prices throughout the period. 
 30. All of these findings are fully supported by the evidence on the record before MOFCOM, and 
can be seen in both the MOFCOM determinations and in other public documents on the record of this 
investigation. 
 
 F. MOFCOM Properly Analyzed The Ways In Which Subject Imports 
Caused Material Injury To The Domestic Industry 
 
  1. Causal link 
 
31. Essentially, the United States argues that becau se of its concerns about MOFCOM’s lack of 
any specific findings on price undercutting – analysis that the United States has conceded is not 
required – then the price effects findings fail and th us the overall finding of a causal link also fails.  
This U.S. argument ignores the unchallenged findings about adverse volume effects – the significant 
increase in subject imports and their significant gain of  market share.  This U.S. argument also ignores 
the distinct findings on price depression (domestic prices declined) and price suppression (prices did not cover costs, so per unit profits also fell), bot h of which stand regardless of any price undercutting 
(the relative prices of subject imports and domestic pr oducts).  It is hard to see how issues about an 
optional analysis of price undercutting trump these u ndisputed volume and price effects that establish 
a sufficient causal link. 
 32. Prior panels have deferre d to the authorities when assessing claims that the authorities 
improperly found a causal link.  Given the number of aspects of the causal link analysis that the United States has not challenged at all, it is ha rd to see how one could conclude that MOFCOM 
“could not” reach the conclusion of causal link that  it found here.  Increasing volumes of dumped and 
subsidized imports were taking significant market share away from the domestic industry, and this 
loss of volume was causing undisputed material inju ry to the domestic industry.  Regardless of the 
arguments about certain aspects of price effects, the MOFCOM finding on causal link should stand. 
 
  2. Non-attribution 
 33. MOFCOM fully complied with the obligations  in Article 3.5 and Article 15.5.  First, 
MOFCOM did “examine” the change in domestic i ndustry capacity.  Any implication in the U.S. 
argument that China did not examine this factor  is simply incorrect.  Second, MOFCOM fully 
addressed this issue.  It rejected respondents’ arguments that the expansion of domestic industry 
capacity was causing the injury.  Third, althoug h MOFCOM could have stopped its analysis by 
simply noting the respondents’ factual premise was incorrect, MOFCOM went further and ensured 
that it did not “attribute” any effects of the change  in domestic industry capacity to subject imports.  
MOFCOM ensured non-attribution by comparing th e relative trends to see whether there was any 
correlation in the trends that would suggest some adverse effects being improperly attributed.  This 
analysis thus confirmed what MOFCOM had already found – that increased domestic capacity was 
not the problem, but rather subject imports were the problem. 
  WT/DS414/R/Add.1 
 Page E-19 
 
 
  34. In its arguments on this issue, the United Stat es is confusing two distinct issues.  The first 
issue is what arguments the re spondents made to MOFCOM, and how MOFCOM responded to those 
arguments.  But MOFCOM is properly within its discr etion to evaluate the issu e in light of the facts 
and arguments before the authorities.  The second issu e is what the United States must now present to 
establish a prima facie  case for its claim.  The U.S. argumen t on this issue is little more than to 
disagree with the various statements made by MOFCOM in its determination.  But each of 
MOFCOM’s findings was correct and supported by the record.      35. The U.S. claim on non-attribution also suffers  from other factual and legal defects.  The 
United States has improperly re-characterized the nature  of the alternative cause at issue here.  It has 
shifted its argument to “overproduction,” and “pro duction growing far more rapidly than demand,” 
even though these arguments about excess production had never been presented to MOFCOM during 
the investigation.  MOFCOM addressed the altern ative cause that respondents had raised – excess 
capacity – and it is improper for the United State no w to propose an alternative cause that had never 
been raised before the authorities. 
 
36. The United States has also tried to dism iss China’s argument about domestic capacity 
expanding less than the total domestic consumption,  claiming this fact cannot be “verified from any 
information MOFCOM disclosed.”  Yet this stat ement is incorrect.  MOFCOM made a specific 
finding that there was still a “gap” between domestic industry capacity and total domestic 
consumption.   
 
37. Beyond these factual defects, the U.S. argumen ts also suffer from a fundamental legal defect 
– the United States has at most proposed an a lternative explanation for one aspect of domestic 
industry performance.  As other panels have found, such an alte rnative explanation is not enough, 
finding inadequate non-attribution arguments that do no more than posit an alternative explanation or 
a partial explanation for the condition of the domestic  industry.  This Panel should do the same, and 
reject the U.S. claim under Article 3.5 and Article 15.5. 
 
III. CONCLUSION 
 
38. For the reasons set forth in this submission,  China requests the Panel to issue findings and 
recommendations consistent with the arguments pr esented in China’s First Written Submission and 
those set forth above, and uphold the determinations and measures at issue.     
_______________ 
 
 WT/DS414/R/Add.1 
Page F-1 
 
 
   
 
ANNEX F 
 
 
ORAL STATEMENTS OR EXECUTIVE SUMMARIES THEREOF, OF 
THE PARTIES AT THE SECOND SUBSTANTIVE MEETING 
 
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 Open ing Statement of the United States 
at the Second Meeting of the Panel F-7 
Annex F-3 Closing Statement of China at the Second Meeting of the Panel F-15 
Annex F-4 Closing Statement of the United States at the Second Meeting of 
the Panel F-17 
 
 WT/DS414/R/Add.1 
Page F-2  
 
  ANNEX F-1 
 
 
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF CHINA 
AT THE SECOND MEETING OF THE PANEL 
 
 
I. MOFCOM’s CVD Initiation Was Proper 
 
1. The key issue is whether the application contained “sufficient evidence” under Article 11.2 
and 11.3 of the SCM Agreement for purposes of initia tion.  In its first submission China addressed 
both the factual evidence contained in the applicatio n with respect to the various allegations and the 
relevant legal standard to confirm that initiati on was proper.  We demonstrated that there was 
sufficient evidence to commence an investigation.  In many respects the United States is really 
delving into the ultimate merits of the allegati ons from the standpoint of a preliminary or final 
determination, not whether the allegation was supported by sufficient evidence for the limited 
purposes of initiation.  China also disagrees with U. S. characterizations regarding what constitutes 
evidence of specificity, financial contribution, and benefit.  
II. MOFCOM’s Application Of Facts Available Under The Government Purchase of Goods 
Program Was Justified 
 2. Let me turn to U.S. claims regarding the application of facts available in the CVD 
investigation with respect to the government purch ase of goods program.  There are four fundamental 
issues to address.  First, was MOFCOM’s request for information clearly articulated?    Second, what 
was the scope of “necessary informa tion” for which MOFCOM had to fill gaps with facts available?  
Third, did the respondents seriously impede th e investigation by failing to provide necessary 
information?  Fourth, were the foundations of MOFCOM’s choice of 100 percent utilization rate 
legitimate and contemplated under Article 12.7 of the SCM Agreement? 
 
3. On the first point, China acknowledges that MOFCOM has an obligation to articulate clearly 
its requests for information.  This point is reflect ed in Article 12.1 of the SCM Agreement, but more 
on point with respect to the U.S. claim under Arti cle 12.7 of the SCM Agreement, this point is 
reflected in paragraph 1 of Annex II of the AD Agreem ent, which both parties agree is relevant here.  
In this regard, China explained in great detail in  its responses to the Panel’s questions not only the 
clarity with which MOFCOM requested informati on, but also the respondents’ obvious understanding 
of MOFCOM’s requests as early as their initial ques tionnaire responses.  China reiterates that the 
administering authority has no obligation to articulate to the respondents any detailed theory of 
subsidization it may be considering during the c ourse of the investigation.  MOFCOM clearly 
articulated its request for information, whic h was its only obligation under Article 12.7. 
 4. Moving to the second fundam ental issue– the scope of n ecessary information – the United 
States has not really advanced a coherent argumen t to challenge MOFCOM’s decision.  First, the 
United States protests a request for 15 years of tran saction data, but gets the facts wrong about what 
was requested in the initial questionnaire that ultim ately drove MOFCOM’s facts available decision.  
Moreover, the United States has not articulated any pur pose for the fact it is trying to assert – that the 
application of facts available turned on the responde nts’ failure to provide 15 years of data.  China 
recalls that the legal claim is that China’s applica tion of facts available was inconsistent with Article 
12.7 of the SCM Agreement.  Even assuming that the application of facts available turned on the 
respondents’ failure to provide 15 years of tran saction data, which it did not, what is the legal 
significance the United States it attributing to its assert ed fact?  Ultimately, the record shows that the 
application of facts available did not turn on the respondents’ failure to provide 15 years of 
transaction data in response to the supplemental questionnaire.    WT/DS414/R/Add.1 
 Page F-3 
 
 
   
5. Moving to the third fundamental issue at play – whether the respondents seriously impeded the investigation – there is no question that this  was the case.  There was an undeniable, outright 
refusal to provide information to MOFCOM.  By  attempting to dictate the terms of MOFCOM’s 
investigation and withholding information, the respondents denied MOFCOM any reasonable ability 
to verify utilization or calculate any correspondi ng benefit according to its investigation plan.  
  6. Ultimately, the United States is reduced to arguing that MOFCOM should have conducted its 
investigation in a different manner, effectively asserti ng that respondents have the power to dictate the 
terms of an investigation even to the extent of denying information when th ey have the capacity to 
supply it.  Note, however, that the United States neve r really contends that the information MOFCOM 
sought was not relevant or in fact necessary.  The United States simply contends, with no support, that 
there was an alternative, perhaps more direct, path.  But China believes the most direct and 
comprehensive path was pursued and MOFCOM had discretion to determine that path.  The Panel 
should also note that the United States has not articulated a single objection to MOFCOM’s request 
for data on all sales that is grounded in some subs tantive provision of the SCM Agreement.  Under the 
circumstances, absent some other procedural defect related to MOFCOM’s efforts at articulating its request, providing enough time, or accommodating any other logistical problems experienced by the 
respondents that were associated with the request, th e Panel must set aside the U.S. Article 12.7 claim. 
 7. This leads me to the final fundamental i ssue – whether MOFCOM’s application of a 100 
percent utilization rate as “facts available” was appropriate and permitted under Article 12.7 of the 
SCM Agreement.  The United States has oversimplified the issue by first presenting the question in the context of a cooperating respondent by cl aiming MOFCOM was compelled to apply the 29 
percent figure from AK Steel’s annual report as the only facts available on the record.  In EC – 
DRAMs , however, the panel in interpreting Article 12.7  concluded that authorities may draw certain 
inferences – plainly adverse -- from a failure to c ooperate, and the breadth of inferences available 
grows commensurate with the level of non-cooperation.  Part of the analysis is the fact that limited 
facts are available because the respondents refused to cooperate.  Thus, the fact that a 29% figure for a 
particular grouping of sales appears in an annual report, with no factual basis for concluding it 
constituted the universe of sales under the program, is  not grounds for compelling use of that figure 
where the respondents so completely refused to cooperate as in the case at issue.   
 
III. MOFCOM’s Explanation Of Its Benefit Determination Under the Government 
Purchase of Goods Program Was Proper 
 
8. The United States continues to argue under Article 22.3 of the SCM Agreement that MOFCOM failed to adequately explain its benefit de termination.  In doing so, it focuses on isolated 
words out of context and then mischaracterizes the nature of MOFCOM’s determination.  First, the 
United States continues to point out that MOFCOM  used the term “competitive bidding process” in its 
discussion of the Buy American Act to suggest that MOFCOM has somehow conceded the entire 
benefit issue by using this term.  In fact, the obvious context that the United States ignores is that 
MOFCOM’s discussion of the “competitive bidding  process” under the program was to demonstrate 
that name was a misnomer and a fallacy.   
 9. Second, the United States in its second subm ission latches on to a new argument made by 
Korea to claim that MOFCOM’s benefit determina tion did not comply with Article 22.3 of the SCM 
Agreement because MOFCOM failed to do a proper an alysis of the market to establish that U.S. 
market prices were unusable as benefit benchm arks as required by Article 14(d) of the SCM 
Agreement.  The Panel should view this argument with a great deal of circumspection and caution.  
Not only is the United States trying to impermi ssibly bootstrap a substantive claim through its 
procedural challenge under Article 22.3, it is doing it ve ry late in this process.  China addressed all of 
the U.S. Article 22.3 arguments after the U.S. firs t submission and it seems the United States believes WT/DS414/R/Add.1 
Page F-4  
 
  it needs to shift the focus.  The second submissi on is the first time the United States broaches the 
Article 14 issue in any form.  Nowhere is this issue raised in the U.S. request for consultations or its 
panel request.        
IV. MOFCOM Properly Analyzed The Adverse Price Effects From The Subject Imports 
 10. Let me now turn to the injury issues.  The factual record from the underling proceeding 
demonstrates three key trends.  First, domestic pric es were falling at the end of 2008 and early 2009.  
Second, domestic prices were not successfully covering the increasing costs, and so profitability was 
falling in 2008 and early 2009.  Third, subject import prices remained relatively low throughout the 
period.  These facts are not in dispute.  It is against this factual context that MOFCOM found adverse 
price effects – more specifically, MOFCOM fo und both price suppression and price depression.  
Although the United States has made its attack ag ainst these MOFCOM’s findings a centerpiece of its 
claims, the United States cannot avoid the fundamental problems with its attack.    
11. The key facts regarding price depression are not really in dispute.  Domestic prices began to 
decline in late 2008 and continued to decline sh arply in early 2009, supporting MOFCOM’s findings 
of price depression and price suppression in 2008 and early 2009.  Since the United States cannot 
dispute these key facts, it has tried to shift the focu s, but the U.S. argument is flawed on many levels, 
and should be rejected.  
12. First, contrary to the U.S. argument, pr ice depression can occur with or without price 
undercutting.  The two concepts are factually and le gally distinct.  Second, price depression can result 
from the volume of subject imports.  The text of Artic le 3.2 and Article 15.2 speak only of “the effect 
of the [dumped/subsidized] imports on prices,” and does not limit itself to a focus on the prices of 
those dumped or subsidized imports.   Third, perh aps recognizing the weakness of its arguments about 
price depression, the United States tries to slip into its arguments the notion of causation – that even if 
price depression was occurring, these adverse price e ffects were not caused by subject imports.  For 
purpose of the claims under Article 3.2 and Article 15.2,  however, this approach is legally incorrect.   
 
13. The U.S. arguments also reflect a misunde rstanding of price suppression analysis.  Price 
depression focuses on domestic industry price trends alone.  Price suppression goes one step further, 
and considers domestic prices trends relative to ch anging costs.  Price suppression analysis recognizes 
that even when prices are going up, there can still be  adverse price effects.  If prices are going up 
because costs are also going up, but prices are being “suppressed” and not allowed to increase enough 
to cover rising costs, Article 5.2 and Article 15. 2 recognize such price suppression as an adverse price 
effect. 
 
14. Much of the U.S. argument seems to rest on its dissatisfaction with the manner in which 
MOFCOM wrote up its findings.  MOFCOM noted price depression that began in late 2008, but 
MOFCOM did not discuss the quarterly data in its public discussion.  MOFCOM noted price suppression during 2008, but discussed only per-unit cost s.  These U.S. arguments focusing on either 
2008 or 2009 individually, however, largely ignore the evidence of adverse price effects over the 
combined period late 2008 to early 2009. 
 
15. Given this well supported MOFCOM findings of price depression and price suppression, it is 
hardly surprising the United States focused its ar gument elsewhere, on price undercutting.  As we 
noted in our Second Written Submission, the United States has conceded that an authority can find 
adverse price effects without finding price undercutti ng.  Moreover, the United  States does not even 
attempt to address in its Second Written Submission the extensive body of WTO panel precedent that 
has confirmed this legal interpre tation.  Given that MOFCOM had no legal obligation to find price 
undercutting, and given that MOFCOM in fact found price depression and price suppression, the U.S. arguments about the failure to disclose informati on about price undercutting largely miss the point.  WT/DS414/R/Add.1 
 Page F-5 
 
 
   
16. As we have discussed, price depression and price suppression analysis does not depend on the 
relative prices of domestic products and subject im ports.  Both price depression and price suppression 
can occur regardless of whether subject import prices are higher or lower than domestic prices.  The U.S. argument is really that MOFCOM did not exer cise its discretion to conduct analysis not required 
by Article 3.2 and Article 15.2.  MOFCOM did not make specific findings on price undercutting in 
this particular case because it did not believe such findings were the most appropriate analytic tool 
given the data available in this case, and given the need to consider the cumulative effect of imports 
from both the United States and Russia.  For both  of these reasons, MOFCOM focused the broader 
measure of average prices as reflected in average unit values. 
 
V. MOFCOM Properly Analyzed The Ways In  Which Subject Imports Caused Material 
Injury To The Domestic Industry  
 
17. The U.S. Second Written Submission does not advance any new arguments on the causal link itself, as opposed to its arguments about non-attribu tion.  Once again, the Un ited States has essentially 
said that since the findings of adverse price effects were incorrect, the finding of a causal link is also incorrect.    18. The U.S. arguments really focus more on other causes, and whether MOFCOM met its 
obligations in Article 3.5 and Ar ticle 15.5 not to attribute the effects of other causes to subject 
imports.  MOFCOM examined the change in dom estic industry capacity, and concluded that the 
domestic industry capacity was not injuring the dom estic industry.  Any implication in the U.S. 
argument that China did not examine th is factor is simply incorrect.   
 19. The United States also complains about th e way that MOFCOM handled the issue of non-
subject import, complaining there was insufficien t disclosure and insufficient analysis.  These 
arguments lack any merit.  China would like to  remind the Panel that these arguments are all 
completely new.  Neither the comments by Alleghe ny Ludlum after the preliminary determination, 
nor the comments by the U.S. Government after th e disclosure of basic facts said anything about non-
subject imports.  China finds it rather odd that the United States now presents an argument that was not raised at all by the foreign respondent s during the investigation before MOFCOM.  
Notwithstanding this complete absence of any discu ssion of this issue by the foreign respondents, 
MOFCOM did in fact consider this issue.    
VI. MOFCOM’s Provision Of Non-Confidential Summaries Was Proper 
 20. Turning now to the issue of non-confidential summaries, the United States still has not met its 
burden to establish that non-confidential summaries pr ovided in the application were inadequate.  As 
China has previously noted, neither of the releva nt articles from the AD and SCM Agreements specify 
a form or formula for providing non-confidential su mmaries.  The Agreements are concerned only 
with whether or not the non-confidential summa ries allow a reasonable understanding of the 
confidential information being summarized.  In additi on, neither of the relevant Articles addresses the 
principal issue now being raised by the United States , namely that the formula or form used to present 
the non-confidential summaries made it difficult to “link” the non-confidential information with the 
confidential information being summarized.  Notwiths tanding that this is not a requirement in the 
relevant provisions of either Agreement, th is claim is also without factual support. 
 VII. The United States Has Not Established An y Legal Or Factual Basis For Its Complaint 
Regarding Disclosure of the Dumping Calculations 
 
21. China must agree to disagree with the Unite d States on MOFCOM’s obligations with respect 
to disclosure of the calculations of the margins of dumping.  As addressed extensively and with WT/DS414/R/Add.1 
Page F-6  
 
  specific reference to the texts of the relevant portio n of Article 12.2, there is no requirement that an 
authority disclose the details of the calculations of  the margins of dumping.  Article 12.2.2 requires 
disclosure of “all relevant information on the matter s of fact and law and reasons which have led to 
the imposition of final measures.”  This does not encompass the actual calculations.  There is no 
reference in Article 12.2.2 to the calculation of the margins of dumping.  Rather, the only reference to 
the margins of dumping is in Article 12.2.1(iii) which requires that the margins of dumping 
established be disclosed in the relevant notice or separate report.  The margins of dumping are the 
results of the comparison of export price or constructed export price w ith normal value as specified in 
Article 2.4.2 of the AD Agreement.  That is, the margins of dumping are the results of particular 
calculations done by the authorities pursuant to the rules of Article 2 of the AD Agreement and based 
on the information provided by respondents.  The margins of dumping are not the underlying 
calculations that lead to the margins.  Thus, while Article 12.2.2, by virtue of the incorporation of 
Article 12.2.1(iii), requires authorities to provide notice of the results of its calculations in the form of 
notice as to the margins of dumping for each respondent, it does not impose any specific requirement regarding the calculation of those margins of dumping.  
  WT/DS414/R/Add.1 
 Page F-7 
 
 
  ANNEX F-2 
  
EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF THE 
UNITED STATES AT THE SECOND MEETING OF THE PANEL 
 
 1. The United States appreciates this opportunity to provide further views on the reasons why China’s antidumping (AD) and countervailing duty (CVD)  measures on U.S. grain oriented flat-rolled 
electrical steel (GOES) are inconsistent with WTO rules.  Our previous submissions and statements 
have addressed most of the arguments that China has made in response to our claims.  In this 
statement, we will concentrate on those points that China made for the first time – or chose to re-
emphasize – in its second written submission.   
A. The Initiation of the Countervailing Duty  Investigation for Several Programs Breached 
Article 11 of the SCM Agreement 
 
2. As the United States demonstrated in its prev ious submissions, China’s decision to initiate a 
CVD investigation with respect to 11 programs was inconsistent with Article 11 of the SCM 
Agreement, because the application did not contai n sufficient evidence to justify initiation of an 
investigation – and indeed, in many instances, cont ained no evidence at all for one or more elements 
of the subsidy claim.  China’s response is two fold :  first, relying on panel reports addressing Article 
5.2 of the AD Agreement (not Article 11 of th e SCM Agreement), it asserts that it need not 
demonstrate that evidence was sufficient but rather merely that “raw information” was contained in 
the petition.  Second, it attempts to rewrite the record  in an effort to demons trate that the evidence 
provided therein meets the standard China has invented.  
 
3. Regarding China’s first assertion, as noted in  our previous submissions, China’s reliance on 
panel reports interpreting the AD Agreement for its  proposition that all that is needed is “raw 
information” is misplaced.  First, the text of th e two provisions is different.  Whereas Article 5.2(iii) 
of the AD Agreement requires “information on prices ”, Article 11.2(iii) of the SCM Agreement 
requires “evidence with regard to the existence, amo unt and nature of the subsidy in question.”  This 
difference matters, because the language reflects the f act that the type of evidence that would merit 
initiation of a CVD investigation – evidence with re gard to financial cont ribution, benefit, and 
specificity – is distinct from that required to initiate an AD investigation – e.g., “information on prices.”  The panel reports cited by China are simp ly not informative of the meaning of the SCM 
Agreement obligation at issue.  
 4. China also argues that Article 5.2(iii) of  the AD Agreement specifies a precise type of 
evidence, while suggesting that Article 11.2(iii) of the SCM Agreement does not specify a precise 
type of evidence. Contrary to what China suggests,  Article 11.2 is precise in what it requires.  It 
makes clear that an application must contain “suffi cient ... evidence with regard to the existence, 
amount and nature of the subsidy in question.”  T hus, Article 11.2 requires “sufficient evidence” with 
regard to the existence of a financial contribution and benefit, the amount of the benefit, and whether 
the subsidy is specific.    5. China attempts to distract the panel from the clear language of the SCM Agreement because 
when applied to the facts it leads to only one conc lusion:  The evidence contained in the application 
was insufficient to initiate a C VD investigation for several programs under Article 11 of the SCM 
Agreement.  While China points to various docum ents to assert otherwise, and in its second written 
submission even claims that these documents were the type of information described by the United 
States as sufficient evidence, the facts demons trate that this is simply not the case. WT/DS414/R/Add.1 
Page F-8  
 
   
B. China Failed to Require Adequate Non-confidential Summaries of Confidential 
Information 
 
6. In its second written submission, China sugg ests that the United States has “changed its 
focus” from the adequacy of the non-confidential su mmaries to “whether or not there was ‘a link’ 
between the non-confidential information and the redacted confidential information.”  China 
misrepresents the U.S. position.  The United States has consistently argued that the non-confidential 
summaries provided were labeled as such , but were entirely inadequate.  
 
7. Our second written submission details various instances where China’s theory of what 
constitutes an adequate non-confidential summary w ould require respondents to engage in a fishing 
expedition to surmise an understanding of the confiden tial information.  For instance, China attempts 
to rely on percentage changes provided more than  50 pages later in the petition to argue that the 
redacted information was somehow discoverable from other parts of the petiti on.  Forcing respondents 
to engage in this highly speculative exercise fa ils to satisfy the relevant provisions.     
 8. China also asserts that the AD and SCM Ag reements do not provide enough guidance for 
determining how best to comply with Article 12.4. 1 of the SCM Agreement and Article 6.5.1 of the 
AD Agreement, and that therefore it is free to decide for itself what constitutes an adequate summary.   
In asserting that there is no guidance for applying Articles 12.4.1 and 6.5.1, China ignores the fact that 
previous panels and the Appellate  Body have found sufficient guidance in Article 12.4.1 of the SCM 
Agreement and Article 6.5.1 of the AD Agreement to  resolve questions regarding what qualifies as an 
adequate non-confidential summary and when adequa te non-confidential summaries are not required.  
Insofar as China continues to pursue  its exceptional circumstances argumen t, the fact is the applicants 
provided no explanation as to why there were ex ceptional circumstances that precluded more detailed 
summarization.  The Appellate Body has held that  a statement of reasons why summarization is not 
possible must be provided in the record.  Without a statement on the record of reasons why a more 
detailed summarization was not possible, Chin a cannot excuse the deficient non-confidential 
summaries contained in the application.  For the above reasons, China breached Article 12.4.1 of the 
SCM Agreement and Article 6.5.1 of the AD Agreement.   C. China’s Resort to and Application of Facts Available is Inconsistent with Article 12.7 of 
the SCM Agreement 
 
9. China continues to attempt to obscure the issues at hand in  its second written submission.  
China asserts that the U.S. claim under Article 12. 7 somehow fails because the United States has not 
brought a claim under GATT Article VI:3 or otherwi se provided an Article VI:3 analysis of China’s 
request for data.  There is no GATT Article VI:3 claim within the terms of reference of this Panel.  As 
the United States has made clear, it is challenging Chin a’s decision to resort to facts available and its 
selection of a 100% utilization rate.  China’s exte nsive comments regarding GATT Article VI:3 are 
not germane to that inquiry.   
10. Although China claims that the “record speak s for itself”, throughout the proceeding China 
has sought to back away from the very specific in structions contained in its own questionnaires – 
largely ignoring its own instructions regarding how to  respond to irrelevant or  inapplicable questions 
in general and specifically with respect to th e government procurement program, denying the over-
broad and burdensome nature  of its request (while simultaneously conceding that 93% of their request 
was irrelevant), and re-translating the questions at  issue twice in an apparent attempt to somehow 
prove the clarity of their request.  China claims that the quantity and value data it sought in question 4 
of its questionnaire was the only information that w ould have allowed it to test the U.S. companies’ 
factual assertions and confirm the extent of utilization.   This is a gross exaggeration.  This information 
at best provided a roundabout way of confirming the ex tent of utilization.  China itself notes that there  WT/DS414/R/Add.1 
 Page F-9 
 
 
  was a more direct means of identif ying sales transactions that likely were ultimately destined for use 
in a government project.  Specifically, China states that  it was likely that the customers in an indirect 
transaction would request manufacturer’s certificates certifying compliance with Buy American provisions.  Yet China never asked for any such certificates.     
11. Moreover, we note that China’s purported need  for the requested quantity and value data was 
to prepare for verification.  That is, according to Ch ina, the information was to be mined in order to 
develop a verification strategy.  Given this, th ere was nothing preventing China from using the 
databases filed in the AD proceedings to develop its verification strategy.  Yet China chose not to do 
so.  
 
12. Finally, we note that China also claims th at its selection of a 100% utilization rate was 
reasonable and “best reflected the ‘facts available’ on  the record”, an assertion that strains credulity.  
First, China asserts that the United States conceded that the correct utilization rate was greater than 
zero.  The United States is unaware of such a concession, and China’s only support for such a 
concession appears to be its own assertions in a prev ious submission.  How China arrived at 100% as 
a reasonable rate remains a mystery.  The application itself, the source of the 29% alternative proposed by one of the U.S. companies, did not supp ort anything close to a 100% utilization rate.  All 
other evidence on the record indicates that even th is 29% figure would be adverse.  Selecting a 100% 
utilization rate in light of the customer lists, the petition, the sales databases, and other record 
evidence was inconsistent with Ar ticle 12.7 of the SCM Agreement. 
 
D.   China Acted Inconsistently With Its Obligations Under Article 12.2.2 of the AD 
Agreement 
 
13.  China baldly asserts that the United States h as pointed to no text in Article 12.2.2 obligating 
an investigating authority to make available the sp ecific dumping calculations.  To the contrary, China 
simply has ignored the U.S. arguments on this point.  China continues to argue that if any obligation 
to provide the final dumping calculations exists, it resides in Article 6.9 of the AD Agreement, not 
Article 12.2.2.  Article 6.9, however, pertains to disclosure of the essential facts before  a final 
determination.  The U.S. claim, on the other hand, pertains to the actual final dumping calculations.  
The final dumping calculations performed by an investigating authority cannot be disclosed prior to 
the final determination. 
 14.  Finally, China continues to claim that th e respondents in the investigation were able to 
replicate and check the dumping calculations.  The United States has already explained why China is 
wrong on this point, and China’s claim is undermined by the express request of ATI during the 
investigation that MOFCOM release its calculations  so that ATI would have “the opportunity to 
review those calculations for mathematical erro rs and to provide meaningful comments on the 
methodology MOFCOM used to calculate dumping ma rgins ....”  More fundamentally, the obligation 
of an investigating authority under Article 12.2.2 exis ts even if the respondent companies are able to 
replicate some (or even all) of th e authority’s calculations.  Therefore,  China acted inconsistently with 
Article 12.2.2 of the AD Agreement by failing to ma ke available to the two respondent companies the 
final dumping calculations it performed. 
 
E. The Injury Analysis in MOFCOM’s Final Determination was Inconsistent with China’s 
WTO Obligations 
 15. China’s attempts to rewrite MOFCOM’s injury determination are inconsis tent with the nature 
of this dispute resolution process.  The dispute r esolution process concerns the findings the authority 
actually made, and during Panel proceedings Member s may not offer new rationales or explanations 
to justify their findings.  China’s argument that th e MOFCOM injury determination can be justified 
on the basis of volume effects alone cannot be rec onciled with the determination itself.  MOFCOM’s WT/DS414/R/Add.1 
Page F-10  
 
  injury determination relied heavily on price e ffects findings.  If the price effects findings are 
inconsistent with Articles 3.1 and 3.2 of the AD  Agreement and Articles 15.1 and 15.2 of the SCM 
Agreement, MOFCOM’s injury determination cannot stand. 
 16. Moreover, in an attempt to produce positiv e evidence to support its price effects findings, 
China’s most recent submissions to the Panel re ly heavily on findings nowhere made in the 
MOFCOM determination and evidence never disclosed  to the parties.  China’s actions cannot be 
reconciled with the obligations of Articles 6.9 a nd 12.2.2 of the AD Agreement and Articles 12.8 and 
22.5 of the SCM Agreement which require authorities to explain their findings and disclose pertinent 
non-confidential evidence to the parties.  As we will explain, China repeatedly flouts this obligation. 
 
17. A prime illustration of how China has tried to rewrite MOFCOM’s price effects analysis 
appears in paragraph 93 of its second written submissi on.  There China asserts that “[t]he subject 
imports were gaining market share, and the domest ic industry reacted with lower prices to stop the 
further loss of market share.  These lower prices th en led to the price depression and price suppression 
that MOFCOM found.”  This assertion is incorrect in at least four respects.  
 18. First, it conforms to no finding that MOFCOM actually made.  As we have stated repeatedly 
during these proceedings, MOFCOM’s actual findings were that price depression and price suppression were caused by “low” prices of the imports under investigation.  Thus MOFCOM’s “low price” finding purported to explain price declines during the first quarter of 2009, notwithstanding 
MOFCOM’s admission that the imports under investig ation were priced higher than the domestically 
produced product.  China has consistently dec lined to defend MOFCOM’s “low price” findings, 
which we have contended are in consistent with Articles 3.1 and 3.2 of the AD Agreement and 
Articles 15.1 and 15.2 of the SCM Agreement.   
19. Moreover, according to the argument that Ch ina has made in paragraph 93, the critical point 
at which prices for the domestically produced product began to fall was the fourth quarter of 2008.  In 
paragraph 121 of its answers to the first set of pane l questions, China points to information it asserts is 
in the MOFCOM record supporting this proposition.   However, MOFCOM’s Final Determination 
supplied no data concerning quarterly  pricing or price trends during 2008.  It provided only annual 
average unit value data.  The finding that MOFCOM  actually made was that prices for domestically 
produced products followed the same trends as thos e of the imports under investigation.  The only 
data the determination provided concerning the imports were annual average unit value data.  
MOFCOM’s findings concerning domestic pricing pa tterns cannot be deemed to refer to quarterly 
data that nowhere appear in the decision.  
20. Second, even if MOFCOM had made the finding that China now attributes to it, it is clear that 
quarterly pricing data for 2008 is a critical element of MOFCOM’s analysis of price effects.  But 
MOFCOM provided no quarterly pricing data in its Essential Facts Disclosure.  Indeed, China did not 
provide the 2008 quarterly pricing data MOFCOM purportedly used until it submitted its answers to 
the first set of panel questions.  Th is information, incidentally, indicat es that the trend data can readily 
be disclosed in a non-confidential summary format.  By not disclosing these essential facts to the 
parties during the MOFCOM investigation, China violated Article 6.9 of the AD Agreement and 
Article 12.8 of the SCM Agreement.  21. Third, even if MOFCOM can be deemed to  have made a finding concerning quarterly price 
trends in 2008, it did not conduct the objective examination required by Article 3.1 of the AD 
Agreement and Article 15.1 of the SCM Agreement.  This is because pricing trends would be the only 
indicator on which MOFCOM would have performed a quarterly analysis for 2008.  MOFCOM did 
not conduct a quarterly analysis of any other factor  that would indicate whether price suppression or 
price depression was the effect of the imports under investigation, as required by Article 3.2 of the  WT/DS414/R/Add.1 
 Page F-11 
 
 
  AD Agreement and Article 15.2 of the SCM Agreement.   It did not conduct a quarterly examination 
of import volumes, and it did not conduct a quarterly examination of import prices.  
 22. Fourth, China’s attempted re-framing of MO FCOM’s price effects finding is still not 
supported by positive evidence.  According to China’s re-framing in paragraph 93 of its second 
written submission, increasing subject import market  penetration required dom estic producers to cut 
their prices in an effort to rega in market share.  However, the only time during MOFCOM’s period of 
investigation when the domestic industry lost mark et share was 2008.  And during the bulk of 2008, 
the domestic industry was not cutting prices.  Instea d, the information China provided in paragraph 
121 of its answers to the first set of panel questions  – information, we reiterate, that MOFCOM never 
disclosed during its investigation – indicates that prices for domestically produced GOES increased 
throughout the first three quarters of 2008.  Prices fe ll only in the fourth quarter, when the volume of 
the imports under investigation fell from prior quarterly peaks.   23. Furthermore, contrary to what China s uggests in its second written submission, it is not 
correct that under Articles 3.2 and 15.2 the question is simply whether there is “price suppression” or 
“price depression” in the abstract. The language of those provisions is clear – the question concerns 
“the effect of” the imports. An examination of th e “effect” of imports necessarily involves a causation 
analysis.  The question is then whether imports have the effect of suppressing or depressing prices.  Therefore, an investigating authority’s failure to  establish a causal link between the imports and the 
price effects is relevant evidence of a breach of Articles 3.2 and 15.2.   The cases cited by China for 
its theory that these articles do not have any causati on aspect do not in fact support China’s theory.  
Rather, these cases involved the separate question of a non-attribution analysis.  The causation 
analysis under Articles 3.2 and 15.2 is analytically distinct from a non-attribution analysis, and the EC – DRAMs panel report, cited by China, is fully consistent with the U.S. approach.  
24. The only information in the record concerning quarterly import volumes, which is that in 
CHN-33 which we reformatted in US-41, indicates that the volume of imports under investigation 
increased most rapidly during the second and third quarters of 2008.  These were the same quarters 
that, according to China, average unit values for domestically produced GOES peaked.  By the fourth 
quarter of 2008, the quarterly volumes of imports under  investigation had begun to decline.  Thus, the 
record does not show that the Chinese industry w as forced to cut prices to counter rising import 
volumes.  When quarterly import volumes were reach ing their peak, so were quarterly domestic 
average unit values.   25. Moreover, in attempting to attribute the fa lling average unit value levels during the fourth 
quarter of 2008 to the imports under investigati on, MOFCOM overlooks other data in its record 
indicating why prices fell during this time.  The ATI comments in CHN-31, whose discussion of 
pricing trends China has cited with approval, expl ain that raw materials prices for steel declined 
beginning in October 2008, and the prices for all types of steel – not merely GOES – declined.  
Indeed, the data in US-41 indicate that average unit values for both the imports under investigation 
and nonsubject imports declined in the fourth qua rter of 2008.  By focusing on per-unit profits, 
without any consideration of the cost components,  MOFCOM had no basis to assess whether changes 
in per-unit profits were simply related to  the start-up of Baosteel’s new plant. 
 26. There are additional evidentiary and logical flaw s in the price effects analysis that China has 
presented to the Panel.  MOFCOM’s price suppression analysis assumed that the GOES industry faced the same cost structure in 2007 and 2008.  It  did not, because of the entr y of a new producer in 
2008.  As we explained in our second written subm ission, new steel production facilities frequently 
face high costs.  MOFCOM’s failure to examine whether the entry of a new producer in China 
skewed any comparison of 2007 and 2008 cost data  demonstrates a lack of  objective examination. 
 WT/DS414/R/Add.1 
Page F-12  
 
  27. China’s current arguments on pricing proceed  as if there were a self-evident correlation 
during MOFCOM’s period of inves tigation between the volume of th e imports under investigation, 
the domestic industry’s market share, and the domestic  industry’s price levels.  This is not the case.  
While subject import volumes rose throughout the peri od of investigation, during some periods – such 
as 2007 and the first quarter of 2009 – the domestic i ndustry’s market share rose, and at other times, 
such as 2008, it fell.  Similarly, as the quarterly data for 2008 indicate, during certain periods when 
the imports under investigation were increasing their presence in the market, prices for the 
domestically produced product rose.   28. There is a more fundamental flaw with MOFC OM’s stated reason for fi nding price effects.  
There is no correlation between “low” prices for the imports under investig ation and the domestic 
industry’s market share.  We explained in our first written submission why what MOFCOM presented 
as a comparative analysis of pricing was not an ob jective analysis because it did not measure prices at 
all.  MOFCOM combined data for all grades of GOE S into a single value measure, and combined all 
annual transactions into a single price point.  We also explained why China violated the obligation to 
disclose essential facts by not disclosing the non-confidential data it had collected concerning price 
comparisons.  China has now attempted to rectify this omission far too late through the chart it 
provided on the first page of its November 25 subm ission to the Panel.  (We note, however, that this 
chart does not provide data for the first quarter of 2009.)  Under China’s calculations, the largest 
difference between the value of the imports under investigation and the value of the domestically 
produced product occurred in 2007 – a year that the Chinese industry raised prices, increased profits 
by over 50 percent, and gained market share.  Consequently, the record for the entire period of 
investigation does not indicate that lower values of  the imports under investigation from 2006 to 2008 
required the domestic industry to adjust its pricing to preserve market share.    29. With respect to the issue of causal link, China has repeatedly mi scharacterized the U.S. 
arguments and misrepresented the record.  In pa ragraph 109 of its second written submission, China 
references the “number of aspects of the causal link analysis that the United States has not challenged 
at all.”  This statement does not reflect the U.S. position that MOFCOM’s price effects findings were essential to its causation analysis.  30. Further in paragraph 109, China makes the st atement that “increasi ng volumes of dumped and 
subsidized imports were taking significant market share away from the domestic industry, and this 
loss of volume was causing undisputed material injury  to the domestic industry.”  This statement does 
not reflect any finding that MOFCOM actually made.  It also does not accurately characterize the record.  The only period in which the domestic industr y lost market share was 2008.  During that year, 
multiple important indicators of industry performan ce were positive and many rose by double digit 
percentages.  These included output, sales prices, sales revenues, employment, and wages.  The 
industry’s pre-tax profit also rose in 2008.  This hardly reflects “undisputed material injury.”  
 31. By contrast, during the first quarter of 200 9, numerous indicators of domestic industry 
performance, including operating income, fell.  But this  could not have been due to loss of volume to 
the subject imports.  The domestic industry’s sales  quantities and market share were both higher 
during that period than they were during the first quarter of 2008.  China’s inability to show any 
correlation either between import volume and domest ic industry market share, or between the 
domestic industry’s market share and its performance, confirms why the price effects findings that we 
have challenged are essential to the causation analysis.  The contrasts between 2008, when the 
domestic industry’s market share declined and its performance was strong, and the first quarter of 
2009 when market share increased and performance deteriorated, indicates that the record does not 
support the notion that maintaining market share was critical to the condition of the domestic industry. 
 32. China similarly confuses both the record and th e U.S. argument with respect to the issue of 
non-attribution.  Our argument is straightfo rward: there is no positive evidence supporting  WT/DS414/R/Add.1 
 Page F-13 
 
 
  MOFCOM’s finding that the imports under investiga tion were the cause of the domestic industry’s 
difficulties during the latter portion of the period of investigation.  Specifically, any objective 
examination of the record would have indicated that the domestic industr y’s sharp increases in 
capacity after 2008 resulted in excessive production and inventory overhangs which in turn led to the 
domestic industry’s price and profitability declines.  In light of this, the third sentence of Article 3.5 
of the AD Agreement and Article 15.5 of the SC M Agreement required MOFCOM to engage in a 
non-attribution analysis to ensure it did not attribute to the imports under investigation any injury attributable to other causes.  Chin a’s failure to conduct any such an alysis consequently violated the 
agreements.  
33. China has used a variety of strategies to a void responding to our arguments.  In its first 
written submission and at the first panel meeting,  it contended that MOFC OM was not required to 
engage in a non-attribution analysis because the United States had not established that causes other 
than subject imports had “dramatic” effects.  As we explained in our  second written submission, 
nothing in the agreements provides that a non-attribution analysis is required only when factors other 
than subject imports are having “dramatic” effe cts. Moreover, the agreements place upon the 
authority, not the parties challenging imposition of duties, the responsibility to assess the effects of 
other known causes of injury.  34. In its second written submission, China ch anged its approach and argued that the 
overproduction and resulting invent ory overhang was not a “known” cause of injury because the only 
arguments submitted to it concerned excess capacity.  Th is argument is baseless.  We observe initially 
that, in its comments on the preliminary determinat ion that appear at CHN-31, ATI references “the 
supply-demand relation” several times as an alternate cause of injury.  Thus, the asserted cause of injury was not merely a change in capacity, but a change in the amount supplied – in other words, 
excess production.  The petitioners clearly unde rstood this, because their response to the ATI 
comments in CHN-32 directly, albeit inaccurately, referenced the industry’s production levels.  
Moreover, any possible ambiguity in ATI’s commen ts was rectified by the comments of the U.S. 
Government.  As MOFCOM acknowledge d at page 72 of its Final Determination, the United States 
argued that “the more likely cause of any probl ems experienced by the Chinese producers is the 
enormous increase in inventories due to the domest ic industry’s incorrect assessment of demand.”  
Thus, MOFCOM was well aware that excessive production and inventory overhangs were being 
asserted as an alternative cause of injury.  
 35. In its November 25 response to the Panel, China attempts to provide a factual basis for 
MOFCOM’s findings.  It has not succeeded.  We observe initially that China disclosed critical nonconfidential trend data – most notably concerning capacity utilization levels and the level of the 
increase in capacity – for the firs t time in that response.  While China apparently now believes that 
such data are necessary for an understanding of  the MOFCOM determination, MOFCOM never 
disclosed these data to the parties.  This provides yet another instance of China’s violation of its obligations under Article 6.9 of the AD Agreem ent and Article 12.8 of the SCM Agreement. 
 36. China’s response does not in fact provide  positive evidence to support MOFCOM’s findings 
concerning the effects of causes of injury other th an the imports under investigation.  While we hope 
to provide a complete written res ponse, we can now summarize why.  First, the information China has 
submitted confirms that the capacity increase was far greater than warranted by increases in domestic 
demand.  China states that there was an average consumption growth of 20 percent per year.  Capacity, however, more than doubled between 2006 and 2008. 
 
37. Second, the capacity increase was large not only in  relative terms, but also in absolute terms.  
This can be illustrated by the confidential data China provided comparing the percentage of Chinese 
demand the domestic industry could supply at the conc lusion of the period of investigation with the 
percentage it could supply at the beginning of the period.  Given the magnitude of this increase, the WT/DS414/R/Add.1 
Page F-14  
 
  only way in which the Chinese industry could have obtained full capacity utilization was by 
displacing the overwhelming majority of both subj ect and nonsubject imports from the market.  China 
has not provided – and we cannot discern – any economic basis for the proposition that any capacity increase by a domestic industry is reasonable as long as total domestic industry capacity does not 
exceed national demand. 
 
38. Third, it was not merely capacity, but also production that increased far more quickly than 
demand.  China did not provide the specific confidential data that the Panel requested concerning demand, capacity, production, and inventories.  Neve rtheless, we have been able to estimate some 
data for demand, capacity, and production for 2008 by combining the limited confidential data China 
did provide with the nonsubject import data for 2008 in US-41.  Based on our estimates, the record 
indicates that even if the volume of imports under investigation had not increased by a single ton in 
2008, there still would have been substantial domes tic industry overproduction – and consequently an 
inventory overhang – that year.  
39. Moreover, China’s November 25 submission cons picuously fails to provide any confidential 
data concerning the first quarter of 2009.  Information in MOFCOM’s Essential Facts Disclosure, however, indicates that compared to the first quart er of 2008, production incr eased by 55.23 percent 
while demand only increased by 12.46 percent.  The Chinese industry’s decision to increase 
production by far more than the increase in dema nd during the first quarter of 2009 cannot be 
attributed to the industry losing market share to low-priced imports under investigation, inasmuch as 
the domestic industry gained market share during this  period and the imports under investigation were 
priced higher than the domestically produced prod uct.  The Chinese producers’ flooding the market 
with excess production remains the only plausi ble explanation for the sharp decline. 
 40. Finally, China has not justified its failure eith er to discuss in its determination or disclose to 
the parties during the course of the MOFCOM inv estigation information about the volume and prices 
of nonsubject imports.  We have explained in our written submissions how China’s inactions in this 
regard violate Articles 6.9 and 12.2.2 of the AD Agreement and Articles 12.8 and 22.5 of the SCM 
Agreement.  China asserts that MOFCOM did not need to provide any discussion of nonsubject imports because no party raised an argument concerni ng the issue.  But parties could not defend their 
interests and assert arguments because MOFCOM did not disclose – and indeed, China has continued 
to fail to disclose – the public data on which it relied.  The available data in the record that we have 
provided in US-41 demonstrate that there is no b asis for China’s suggestion that nonsubject imports 
were irrelevant to the injury an alysis.  Instead, during 2008 – the year China has characterized as 
critical to the MOFCOM pricing analysis – nons ubject imports had a greater volume and lower 
average unit values than the imports under investigation. 
 
  WT/DS414/R/Add.1 
 Page F-15 
 
 
  ANNEX F-3 
 
 
CLOSING STATEMENT OF CHINA AT THE  
SECOND MEETING OF THE PANEL 
 
 1. We thank the Panel once again for their dedi cation to this proceeding.  In this closing 
statement China would like to make a few brief point s. We expect to address any other issues through 
the Panel’s written questions.  
 
2. First, in our opening statement we highlighted  China’s concern regarding the U.S. attempt to 
raise substantive claims through its procedural cha llenges where those substan tive claims are not part 
of the terms of reference of the Panel.  This w as in the context of Articles 22.3 and 14 of the SCM 
Agreement and U.S. arguments about pricing be nchmarks.  China appreciates the Panel’s own 
attention to this matter through its questions on th e first day with respect to Articles 6.9 and 12.2.2 of 
the Anti-Dumping Agreement and Articles 12.8, 22.3 and 22.5 of the SCM Agreement.  We believe 
Members should be very concerne d about attempts to use procedural provisions as a means for 
challenging the substantive aspects of a measure.  We intend to address this more fully in our 
responses to the Panel’s questions.  
3. Second, on initiation, we believe the Panel h as raised an interesting point about the textual 
distinction in Article 11.2(iii) with respect to speci ficity, where that provision uses the term “subsidy” 
by which one may refer to the definition of that te rm in Article 1.1, but then uses the term “nature” 
rather than any more specific association with the le gal element of specificity.  China believes this is 
an important point and helps inform the standard to be applied with respect to evidence of specificity 
found in an application under Article 11.  China will  address this issue in mo re detail in response to 
the Panel’s written questions.  4. Let me now turn to what are the more signifi cant issues in this case related to the application 
of facts available and injury.  On facts availabl e China believes the issue has been narrowed to a 
simple question.  Did the respondents adequately respond to MOFCOM’s questionnaire.  The United 
States has taken off the table any issue related to  the substantive relevance of the requests for 
information, the factual relevance, and any ques tion related to burdens placed on the respondents.  
China has discussed the clarity of MOFCOM’s request s as reinforced through its deficiency meetings 
and letter as well as the plain understanding of th e respondents with respect to the nature and 
expectations of MOFCOM’s inquiry.  Any objec tive examination of the record leads to this 
conclusion. 
 5. On the question of how MOFCOM would or could have used the requested data if it had been provided, China believes the burden is really on the Un ited States to definitively demonstrate that this 
data was irrelevant or not useful to the investig ation.  But, in a situ ation when the requested 
information was not even provided, China does no t see how U.S. arguments can gain any traction 
here.  China is forced to engage in hypothetical  responses about how the information could or would 
be used in the investigation.  All of its u ses in this regard will never be known because the 
respondents deliberately withheld the information.  The investigation may have headed down other 
paths had the respondents in fact done something when  they were asked.  The United States seems to 
divine what these paths should or could have been, or what might have been a “better approach.”  
These are not valid arguments.  First, the U.S. is not the investigating authority.  Second, these are 
post hoc arguments offered in the face of the respondents refusal to provide the information – a 
refusal clearly based on their belief regarding the lega l relevance of the information, which is an issue 
the United States does not challenge in this proceedi ng.  Nonetheless, China has explained that, at a 
minimum, the prospect of assembling AUV time series by product and client would allow MOFCOM WT/DS414/R/Add.1 
Page F-16  
 
  to ask further questions about particular sales th at exhibited characteristics indicating utilization – 
including higher than typical price and/or concentr ation of such prices around particular customers.  
 6. On the question of injury, simply stated th e United States is pressing the Panel on a series of 
alternative explanations to explain why MOFCOM’s  explanation does not suffice.  But China would 
remind the United States of the standard of review involved in this proceeding.  The fact that the 
United States can imagine alternative explanati ons to the facts in no way renders MOFCOM’s 
explanation WTO inconsistent.   It is the Panel’ s obligation to determine if MOFCOM’s explanation 
was reasonable, not whether there were other reasona ble explanations or whether a given alternative 
explanation sounds better.  Even if the United Stat es has offered a reasonable alternative explanation 
– or even if the U.S. explanation is better – that is not enough. The U.S. a lternative explanation must 
so much better as to render the MOFCOM explan ation unreasonable.  We submit that the U.S. 
arguments on price effects and causation in this case do not meet that standard.  Even given the U.S. arguments, the MOFCOM explanation stands as a WTO consistent explanation of the factual record 
before MOFCOM. 
 
7. This concludes China’s closing statem ents.  Thank you again for your time. 
   WT/DS414/R/Add.1 
 Page F-17 
 
 
  ANNEX F-4 
 
 
CLOSING STATEMENT OF THE UNITED STATES AT THE 
SECOND MEETING OF THE PANEL 
 
 1. Mr. Chairman, Members of the Panel.  The Un ited States would like to begin by thanking you 
and the Secretariat for your efforts in the preparation for and conduct of this hearing.   
2. We hope that the discussion held here yesterda y and today has assisted the Panel in enhancing 
its understanding of the issues before it in this case.   We look forward to elaborating on our comments 
in further written submissions.    3. Before these hearings formally close, th e United States would like to make a few brief 
comments.  
 4. First, while there was limited discussion of the U.S. disclosure claims at this meeting of the 
Panel, we wish to highlight MOFCOM's repeat ed failure to disclose essential non-confidential 
information to the parties during its investigation and to provide more than skeletal information in its 
Final Determination concerning the facts and reasoning cen tral to its determination.  This is evidenced 
by China's repeated submission to the Panel of  new information and new justifications for 
MOFCOM’s determination.  What China has comp lained are the shifting U.S. arguments simply 
reflect our need to confront a moving target.  Had MOFCOM disclosed its facts and underlying reasoning, as required by the Agreements, these pro ceedings could have been far more focused. 
 
5. With respect to initiation, China in its ope ning statement referred to our claims regarding 
Article 11 of the SCM Agreement as “a distraction to other matters before the panel.”  Contrary to 
China’s assertion, Article 11 of the SCM Agreement is not a distraction – it is an obligation that ensures that CVD investigations are not initiated b ased on frivolous claims.  A party should not have 
to spend time and resources defending unsubstantia ted allegations.  MOFCOM did not meet the 
obligations of Article 11 in this instance. 
 
6. With respect to Facts Available, we would li ke to emphasize that our position is that the U.S. 
Companies were cooperative and responded MOFC OM’s questions on Government Procurement in 
accordance with the instructions in  the questionnaire.  Even if the panel does not ultimately share that 
assessment, the record does not reflect the sort of  egregious non-cooperation that China attempts to 
paint here.  Moreover, the information that China claims should have been provided was in a form 
that, as we explained, could not have done what Ch ina purports it would do.  Thus, this information 
could hardly be critical to MOFOCOM’s inquiry.  7. Given the companies engagement with MOFCOM  on the question of utilization, the limited 
value of the alleged missing information, and the overwhelming facts showing that the utilization rate 
(direct or indirect) was zero, an adverse inference that 100% utilizati on on all sales of all products is 
not appropriate.  At most, the record would suppor t an adverse rate of 29%, which would represent an 
adverse inference of 100% utilization for the infrast urcture/construction sales, the only sector sales for 
which the applicant alleged a subsidy.   
8. With respect to injury, we have had a great deal of discussion on price effects.  We would like 
to highlight two principal points.  First, the Agre ements specifically require that any price depression 
and suppression be significant and be the effect of the subject imports.  The Panel should not permit 
China to read this language out of the Agreem ents.  Second, China's price depression and price WT/DS414/R/Add.1 
Page F-18  
 
  suppression analysis are ultimately dependent on MOFCOM's low price findings.  These findings are 
not supported by positive evidence and do  not reflect an objective examination. 
 9. Finally, we emphasize that even if subj ect import prices were low, they cannot explain 
domestic industry price declines in the first quarter  of 2009 far greater than necessary to meet import 
competition, which led to the industry's decline in  financial performance.  These can be explained 
only by the massive inventory overhangs that  developed due to overproduction. MOFCOM's 
conclusion that the overproduction and inventory ov erhang did not cause injury is not supported by 
positive evidence.   
10. The United States would like to conclude by ag ain thanking the Panel and Secretariat for their 
efforts.  We look forward to receiving your written questions and continuing this discussion in future 
submissions.     
_______________ 
 
  WT/DS414/R/Add.1 
 Page G-1 
 
 
   
 
ANNEX G 
  
REQUEST FOR THE ESTABLISHMENT OF A PANEL 
  
Contents Page 
Annex G-1 Request for the Establishment of a Panel by the United States G-2 
 
 WT/DS414/R/Add.1 
Page G-2  
 
  ANNEX G-1 
  
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY 
THE UNITED STATES 
 
 
WORLD TRADE  
ORGANIZATION   
WT/DS414/2 
14 February 2011  
 
(11-0758) 
 Original:   English 
   
CHINA – COUNTERVAILING AND ANTI-DUMPING DUTIES ON  
GRAIN ORIENTED FLAT-ROLLED ELECTRICAL STEEL  
FROM THE UNITED STATES 
 
Request for the Establishment of a Panel by the United States 
 
 
 The following communication, dated 11 Febr uary 2011, from the delegation of the 
United States to the Chairman of the Dispute Settlement  Body, is circulated pursuant to Article 6.2 of 
the DSU.  
_______________ 
 
  On September 15, 2010, the United States Gove rnment requested consultations with China 
pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes ( "DSU"), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 ("GATT 
1994"), Article 17.3 of the Agreement on Implementation of Article  VI of the General Agreement on 
Tariffs and Trade 1994 ("AD Agreement"), and Article 30 of the Agreement on Subsidies and 
Countervailing Measures ("SCM Agreement").
1  The United States and China held such consultations 
on November 1, 2010.  Unfortunately these consultations did not resolve the dispute.    
 The United States considers that certain measures of the Government of the People's Republic 
of China ("China") are inconsistent with Chin a's commitments and obligations under the GATT 1994, 
the AD Agreement, and the SCM Agreement.  The measures impose countervailing duties and anti-
dumping duties on grain oriented flat-rolled electrical steel ("GOES") from the United States, and are set forth in Ministry of Commerce of the Peopl e's Republic of China ("MOFCOM") Notice No. 21 
[2010], including its annexes.   
  These measures appear to be inconsistent with the following provisions of the AD 
Agreement, SCM Agreement, and GATT 1994:  
                                                      
1 WT/DS414/1.  WT/DS414/R/Add.1 
 Page G-3 
 
 
  Initiation of the Investigation  
 
1. Articles 11.2 and 11.3 of the SCM Agreement, because:  
(a) The application for a countervailing duty i nvestigation failed to contain information 
reasonably available to the applicant re garding the existence of a financial 
contribution, a benefit, or specificity for sev eral of the alleged subsidy programs; and  
(b) There was insufficient eviden ce in the application to justify the initiation of an 
investigation for several of the alleged subsidy programs.  
Subsidy Rate Determinations  
 2. Article 12.7 of the SCM Agreement, because China improperly made its subsidy rate 
determinations based on the facts available.  In particular, China was not entitled to reject necessary 
information submitted by respondent producers.  The respondent producers submitted the necessary 
information in a reasonable period of time, and did not significantly impede the investigation.  In 
addition, China applied facts available in a punitiv e manner, and disregarded its own findings in doing 
so.   
3. Article 12.8 of the SCM Agreement, because China failed to disclose the essential facts 
underlying its final determination with regard to the subsidy rates, thus impairing the respondents' 
ability to defend their interests. 
4. Article 22.3 of the SCM Agreement, because Chin a failed to provide in sufficient detail the 
findings and conclusions it reached on all issues of f act and law it considered material in making its 
preliminary and final determinations, including w ith respect to its use of facts available. 
All Others Subsidy Rate Determination 
 
5. Article 12.7 of the SCM Agreement, because Ch ina improperly applied facts available in 
determining the duty rate applicable to exporters that were not known at  the time of the investigation, 
including potential "new shippers" and exporters that were not given notice of the information 
required by the investigating authority.  In add ition, China applied facts available in a punitive 
manner, and disregarded its own findings in doing so.  
6. Article 12.8 of the SCM Agreement, because China failed to disclose the essential facts 
underlying its determination regarding the all others subsidy rate, thus impairing the interested parties' 
ability to defend their interests. 
7. Article 22.3 of the SCM Agreement, because Chin a failed to provide in sufficient detail the 
findings and conclusions it reached on all issues of fa ct and law it considered material in makings its 
preliminary and final determinations.  China also did not explain why the all others subsidy rate 
increased from the preliminary determination to the final determination.  
Antidumping Margin Determinations  
 
8. Articles 6.9 and 12.2.2 of the AD Agreement,  because China failed to disclose the essential 
facts underlying its determination a nd make available all relevant in formation on the matters of fact 
and law and reasons which led to the imposition of th e final measures, thus impairing the respondents' 
ability to defend their interests.  WT/DS414/R/Add.1 
Page G-4  
 
  All Others Dumping Determination  
 
9. Article 6.8 and paragraph 1 of Annex II of the AD Agreement, because China improperly 
applied facts available in determining the duty rate applicable to exporters that were not known at the 
time of the investigation, including potential "new sh ippers" and exporters that  were not given notice 
of the information required by the investigating authority.    
10. Article 6.9 of the AD Agreement, because Ch ina failed to disclose the "essential facts" 
underlying its determination regarding the all othe rs dumping rate, thus im pairing the respondents' 
ability to defend their interests. 
11. Article 12.2 of the AD Agreement, because Ch ina failed to provide in sufficient detail the 
findings and conclusions it reached on all issues of fact and law it considered in making its 
preliminary or final determination regarding the all others dumping rate.  China also did not explain 
why the all others dumping rate increased from the preliminary determination to the final 
determination.  
12. Article 12.2.2 of the AD Agreement because Chin a failed to make available all relevant 
information on the matters of fact and law and reasons which led to the imposition of the final 
measure. 
Explanation of Final Countervailing Duty Determination 
 
13. Article 22.5 of the SCM Agreement because Chin a failed to make available all relevant 
information on the matters of fact and law and reasons which led to the imposition of the final 
measure. 
Confidential Information 
 
14. Articles 6.4 and 6.5.1 of the AD Agreemen t, and Articles 12.3 and 12.4.1 of the SCM 
Agreement, because China failed to provide, or require the applicant to provide, adequate non-
confidential summaries of allegedly confidential in formation.  China's treatment of confidential 
information did not allow the interested parties to obtain a reasonable unders tanding of the substance 
of the confidential information prior to the prelimin ary and final determinations , such that they could 
prepare presentations on the basis of this informat ion.  China did not give any indication that the 
information could not be summarized and did not  provide the reasons why summarization was not 
practicable.  
Injury Determination: Price Effects Analysis 
 
15. Article VI of the GATT 1994 and Articles 3.1, 3.2 , 6.9, and 12.2.2 of the AD Agreement, and 
Articles 12.8, 15.1, 15.2, and 22.5 of the SCM Agreem ent, because in its analysis of the price effects 
of imports under investigation, China did not dischar ge its obligations to de termine whether there had 
been significant price undercutting by the allege dly dumped imports, whether the effect of such 
imports was to depress prices to a significant de gree, or prevent price increases which would 
otherwise have occurred to a significant degree.  In particular:  
(a) China never disclosed several pieces of in formation critical to its price effects 
analysis; 
(b) China failed to provide in sufficient detail the findings and conclusions reached on all 
issues of fact and law it considered material  and failed to provide the reasons for the  WT/DS414/R/Add.1 
 Page G-5 
 
 
  acceptance or rejection of the relevant argument or evidence by the exporters or 
importers; and 
(c) China's findings that the dumped and subsid ized imports had significant price effects 
failed to reflect an objective examination of  the evidence in the record and/or are 
unsupported by positive evidence.  
Injury Determination: Causation  
 
16. Articles 3.1, 3.5, 6.9, and 12.2.2 of the AD Agreement, and Articles 12.8, 15.1, 15.5, and 22.5 
of the SCM Agreement, in particular:   
(a) China's causal link analysis relied on findings that did not reflect an objective 
examination of the record and/or are un supported by positive evidence.  China failed 
to examine all relevant evidence;   
(b) China never disclosed several pieces of info rmation critical to its causation analysis; 
and 
(c) China failed to provide in sufficient detail the findings and conclusions reached on all 
issues of fact and law it considered material. 
 In view of the claims set forth above, the United States considers that China has also acted 
inconsistently with Article VI of the GATT 1994, Article 1 of the AD Agreement, and Article 10 of 
the SCM Agreement, which only permit anti-dumpi ng or countervailing duty measures to be applied 
under the circumstances provided for in Article VI of the GATT 19994 and conducted in accordance 
with the AD Agreement and the SCM Agreement.  These measures also appear to nullify or impair 
the benefits accruing to the United States directly  or indirectly under the cited agreements.  
  Therefore, the United States respectfully re quests, pursuant to Article 6 of the DSU, 
Article 17.4 of the AD Agreement, and Article 30 of  the SCM Agreement, that the Dispute Settlement 
Body establish a panel to examine this matter, with  the standard terms of reference as set out in 
Article 7.1 of the DSU.    
_______________ 
  WT/DS414/R/Add.1 
 Page H-1 
 
 
  ANNEX H 
  
RELATIONSHIP BETWEEN DOMESTIC PRODUCTION AND SUBJECT IMPORTS 
 
 
Contents Page 
Annex H-1 Relationship between dom estic production and subject imports 
  (BCI redacted) H-2 
 
 WT/DS414/R/Add.1 
Page H-2  
 
   
ANNEX H-1 
  
RELATIONSHIP BETWEEN DOMESTIC PRODUCTION AND SUBJECT IMPORTS 
 
 
[[BUSINESS CONFIDENTIAL INFORMATION]] 
  
 
[[ BCI    
 
     
 
    
 
     
 
    
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