WT/DS379/R 
Page B-1 
 
 
  ANNEX B 
 
 
THIRD PARTY SUBMISSIONS  
  
Contents Page 
Annex B-1 Executive Summary of the Third Party Submission of Argentina   B-2 
Annex B-2 Executive Summary of the Third Party Submission of Australia B-7 
Annex B-3 Executive Summary of the Third Party Submission of Brazil B-13 
Annex B-4 Executive Summary of the Third Party Submission of Canada B-17 
Annex B-5 Executive Summary of the Thir d Party Submission of the European  
Communities  B-21 
Annex B-6 Executive Summary of the Third Party Submission of Japan B-26 
Annex B-7 Executive Summary of the Third Party Submission of Mexico B-31 
Annex B-8 Executive Summary of the Third Party Submission of Norway B-35 
Annex B-9 Executive Summary of the Third Party Submission of Saudi Arabia  B-40 
Annex B-10 Executive Summary of the Third Party Submission of Turkey B-45 
Annex B-11 Third Party Oral Statement of Argentina   B-47 
Annex B-12 Executive Summary of the Third Party Oral Statement of Australia B-49 
Annex B-13 Third Party Oral Statement of Brazil B-52 
Annex B-14 Third Party Oral Statement of Canada B-54 
Annex B-15 Third Party Oral Statement of the European Communities  B-58 
Annex B-16 Third Party Oral Statement of India  B-61 
Annex B-17 Third Party Oral Statement of Japan B-65 
Annex B-18 Third Party Oral Statement of Mexico B-67 
Annex B-19 Third Party Oral Statement of Saudi Arabia B-71 
Annex B-20 Third Party Oral Statement of Turkey B-74 
 WT/DS379/R 
Page B-2  
 
  ANNEX B-1 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
SUBMISSION OF ARGENTINA 
 
 
(15 June 2009) 
 
Page   
I.
 INTRODUCTION ................................................................................................................... .3 
II. THE WTO RULES DO NOT CONTAIN ANY RESTRICTIONS ON THE 
SIMULTANEOUS APPLICATION OF ANTI-DUMPING DUTIES 
DETERMINED USING THE SURR OGATE COUNTRY METHODOLOGY 
AND COUNTERVAILING DUTIES .....................................................................................3  
A. ARTICLE VI.5  OF GATT  1994  DEALS SPECIFICALLY WITH THE SIMULTANEOUS 
APPLICATION OF ANTI -DUMPING DUTIES AND COUNTER VAILING DUTIES AND DOES 
NOT PROHIBIT SIMULTANEOUS APPLICAT ION IN THE TERMS SET OUT BY CHINA .......................3  
B. ABSENCE OF AN EXPLICIT PROHIBI TION ON THE SIMULTANEOUS USE OF 
ANTI -DUMPING DUTIES AND COUNTERVAILING DUT IES IN THE CASE IN QUESTION ....................3  
C. ARTICLE 19.3  AND 19.4  OF THE SCM  AGREEMENT ARE NOT IN ANY WAY CONNECTED 
WITH THE ISSUE OF SIMULTANEOUS APPLICATION OF ANTI -DUMPING DUTIES 
DETERMINED USING THE SURROGA TE COUNTRY METHODOLOGY AND 
COUNTERVAILING DUTIES ...........................................................................................................4  
D. THE SURROGATE COUNTRY METHODOLOGY IS  NOT A METHODOLOGY RELEVANT TO 
COUNTERVAILING DUTIES AND CONSEQUENTLY DOES NOT YIELD A NORMAL VALUE FOR THE PURPOSES OF THE 
AD A GREEMENT , ADJUSTED FOR THE EFFECTS OF 
SUBSIDIZATION ............................................................................................................................4  
III. INTERPRETATION OF THE TERM "PUBLIC BODY" IN THE 
SCM AGREEMENT ................................................................................................................4  
IV. PROCEDURAL ASPECTS OF THE SCM AGREEMENT ................................................5  
A. FAILURE TO HOLD THE CONSULTATIONS PRESCRIBED IN ARTICLE 13.1  OF THE 
AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES (SCM  AGREEMENT ) ..............5  
B. FAILURE TO GIVE INTERESTED PARTIES THE PERIOD OF 30 DAYS PRESCRIBED IN 
ARTICLE  12.1.1  OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING 
MEASURES (SCM A GREEMENT ).................................................................................................5  
V. CONCLUSION ..................................................................................................................... ....6 
 WT/DS379/R 
Page B-3 
 
 
 I. INTRODUCTION 
1. In this third-party submission, Argentina is se tting out its views on some of the issues that 
form part of this dispute, in accordance with the written submissions to this Panel by China and the 
United States. 
II. THE WTO RULES DO NOT CONTAIN ANY RESTRICTIONS ON THE 
SIMULTANEOUS APPLICATION OF ANTI-DUMPING DUTIES DETERMINED 
USING THE SURROGATE COUNTRY METHODOLOGY AND COUNTERVAILING DUTIES 
2. China claims that the application of anti-dumping duties determined using the methodology 
corresponding to a non-market economy country conc urrently with countervailing duties on the same 
product is contrary to Articles 10, 19.3, 19.4 an d 32.1 of the SCM Agreement and Article VI of 
GATT 1994.  In Argentina's opinion, China's claim is based on an incorrect interpretation of the rules. 
A. A
RTICLE VI.5  OF GATT  1994  DEALS SPECIFICALLY WITH THE SIMULTANEOUS APPLICATION 
OF ANTI -DUMPING DUTIES AND COUNTERVAILING DUTIES AND DOES NOT PROHIBIT 
SIMULTANEOUS APPLICATION IN THE TERMS SET OUT BY CHINA  
3. GATT 1994 regulates combined application of anti-dumping duties and countervailing duties 
specifically in Article VI.5.  The ordinary meaning of the wording in Article VI.5 shows that this 
provision prohibits the simultaneous application of anti-dumping duties (regardless of whether these 
have been determined according to Article 2 of  the AD Agreement or using the surrogate country 
methodology provided in the second explanatory note to  paragraph 1 of Article VI of the GATT) and 
countervailing duties that offset export subsidization to the extent that both duties are intended to 
remedy the "the same situation".  This situation only occurs when the e xport price is lower in 
comparison with the normal value because of a subsid y in the same amount granted for the export of 
the goods. 
4. It is therefore Argentina's opinion that the simultaneous application of anti-dumping duties 
and countervailing duties is consiste nt with the WTO rules provided that the countervailing duties in 
question are intended to offset domestic subsidies and not export subsidies. 
5. In addition, the chapeau of Article 15 of China's Protocol of Accession introduces, as far as 
imports of Chinese origin are concerned, a series of rules in addition to those laid down in Article VI, 
the AD Agreement and the SCM Agreement.  Argentin a considers that if, when negotiating the terms 
of its accession to the WTO, China had obtaine d from Members the concession that imports of 
Chinese origin could not be subject to the simultane ous application of anti-du mping duties determined 
using the surrogate country methodology and counter vailing duties, Article 15 of the Protocol would 
have explicitly included such a provision. 
B. ABSENCE OF AN EXPLICIT PROHIBITION ON THE SIMULTANEOUS USE OF ANTI -DUMPING 
DUTIES AND COUNTERVAILING DUTIES IN THE CASE IN QUESTION  
6. The WTO rules include a series of provisions which, in different contexts, prohibit the 
simultaneous application of certain measures.1  It is thus clear that, when Members agree to prohibit 
the simultaneous application of certain measures, su ch a prohibition is explicitly incorporated in the 
WTO rules.  In fact, the principle expressio unius est exclusio alterius suggests that, as the WTO rules 
contain a specific prohibition on simultaneous a pplication of certain measures but no specific 
prohibition on simultaneous application of anti- dumping duties determined using the surrogate 
                                                      
1 See for example the footnote to Article 35 of the SCM Agreement;  Articles 8.2 and 13 of the 
Agreement on Agriculture;  and Article 6.1 of the Agreem ent on Textiles and Clothing (in force up until 2004). WT/DS379/R 
Page B-4  
 
  country methodology and counterva iling duties, simultaneous application in this latter case is 
consistent with the WTO rules 
C. A
RTICLE 19.3  AND 19.4  OF THE SCM  AGREEMENT ARE NOT IN ANY WAY CONNECTED WITH 
THE ISSUE OF SIMULTANEOUS APPLICATION OF ANTI -DUMPING DUTIES DETERMINED USING 
THE SURROGATE COUNTRY METHODOLOGY AND COUNTERVAILING DUTIES  
7. China's claim is mainly founded on the claim of violation of Article 19.3 and 19.4 of the 
SCM Agreement.  Neither Article 19.4 nor Article  19.3 deal with the question of simultaneous 
application of anti-dumping and counter vailing duties and, therefore, there is no textual basis at all for 
China's claim that the simultaneous application of anti-dumping duties determined using the surrogate 
country methodology and countervailing duties violates these two provisions. 
8. In Argentina's view, an assessment of whether Article 19.3 and 19.4 regulate the question of 
the simultaneous application of anti-dumping du ties determined using the surrogate country 
methodology and countervailing duties must necessar ily take into account both Article VI.5 of 
GATT 1994 and Article 15 of the Protocol, which, as explained above, deal with the simultaneous 
application of anti-dumping duties and counterva iling duties in general and the simultaneous 
application of anti-dumping duties determined acco rding to the surrogate country methodology and 
countervailing duties in particular, respectively. 
9. This approach would be consiste nt with the principle, well established in WTO case law, that 
one of the corollaries of the "general rule of inte rpretation" in the Vienna Convention is that the 
interpretation must have meaning and affect all the te rms of the treaty.  An interpreter is not free to 
adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or 
inutility.2 
D. THE SURROGATE COUNTRY M ETHODOLOGY IS NOT A M ETHODOLOGY RELEVANT TO 
COUNTERVAILING DUTIES AND CONSEQUENTLY DOES NOT YIELD A NORMAL VALUE FOR THE PURPOSES OF THE 
AD A GREEMENT , ADJUSTED FOR THE EFFECTS OF SUBSIDIZATION  
10. China asserts that the surrogate country me thodology applied in anti-dumping proceedings 
yields a market economy normal value already adjusted for the effects of subsidization on the prices 
and costs of the exporting non-market economy country. 
11. Argentina does not share China's view that application of the surrogate country methodology 
yields not only a market economy normal value but al so a normal value that is "subsidization free".  
There is no basis whatsoever, either conceptually or legally, for upholding  this claim.  Prices and costs 
in countries where subsidies are granted are distorte d by the latters' effects, and obtaining prices and 
costs that reflect market economy conditions by applying the surrogate country methodology in no 
way implies that such prices and costs have already b een adjusted by the distorting effects inherent in 
the subsidies. 
III. INTERPRETATION OF THE TERM "PUBLIC BODY" IN THE SCM AGREEMENT 
12. Argentina does not see why it should be co nsidered that, in the context of the 
SCM Agreement, either the "welfare" or the "best interests" as objectives for action by an entity are 
more relevant than the effective control of a body by  the State or government in order to be termed a 
"public body" in the context of the SCM Agreement. 
                                                      
2 United States – Standards for Reformulated and Conventional Gasoline  (WT/DS2/R), Report of the 
Appellate Body, adopted on 20 May 1996, page 21, second paragraph (in the English text). WT/DS379/R 
Page B-5 
 
 
 13. In fact, Argentina considers that the distin ction between public and private relevant to 
Article 1.1 of the SCM Agreement concerns the corporate form in which the control of entities 
capable of providing such goods and services is orga nized, regardless of their final destination.  In 
broad terms, therefore, there are private bodies that produce public goods, and public bodies that 
produce private goods.  Characterization as one or th e other entity depends on the control over the 
actor carrying out the activity and not on the destina tion of the goods or services produced.  This issue 
had to be addressed by the Panel in Korea – Measures Affecting Trade in Commercial Vessels , and 
Argentina agrees with the Panel's ev aluation of the issue in this case.3 
14. For the foregoing reasons, Argentina consider s that ownership of a public body by the 
government is sufficient to define it as such, in terms of its control, and for the purposes of Article 1.1 
of the SCM Agreement. 
IV. PROCEDURAL ASPECTS OF THE SCM AGREEMENT 
A. FAILURE TO HOLD THE CONSULTATIONS PRESCRIBED IN ARTICLE 13.1  OF THE AGREEMENT 
ON SUBSIDIES AND COUNTERVAILING MEASURES (SCM  AGREEMENT ) 
15. The Argentine Republic endorses most of the po ints expressed by China in its submission 
regarding the "broad interpretation" of  Article 13.1 of the SCM Agreement. 
16. Argentina considers, in general terms, that fa ilure to hold these consultations or their delayed 
holding nullifies the objective for which they were created, which is none other than to allow the countries involved to reach a mutu ally agreed and satisfactory so lution, through the exchange of 
information, and so avoid the initiation of an investigation. 
17. One argument that upholds the view expressed above can be found in a proper interpretation 
of footnote 44 to Article 13.2, which in  the relevant part provides that:  " It is particularly important, 
[…], that no affirmative determination wheth er preliminary or final be made without reasonable 
opportunity  for consultations having been given ." 
18. In this respect, Argentina deems it essential to  express its disagreement regarding the 20-day 
deadline allowed by the Department of Commerce for determining whether or not to initiate an 
investigation as this period in no way suffices to en able a country under investigation to collect and 
transmit the information needed to defend its position. 
B. FAILURE TO GIVE INTERESTED PARTIES THE PERIOD OF 30 DAYS PRESCRIBED IN 
ARTICLE  12.1.1  OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES 
(SCM A GREEMENT ) 
19. The Argentine Republic also endorses China's interpretation of Article 12.1.1 of the 
SCM Agreement regarding the investigating authority 's obligation to allow a period of 30 days for 
each one of the "questionnaires". 
20. In this connection, Argentina wishes to emphasize that a balanced and appropriate 
interpretation of the WTO rules should above all ob serve the "due process principle" codified in 
Article 12.1.1 in the part which states:  " … ample opportunity  to present in writing all evidence 
which they consider relevant in resp ect of the investigation in question". 
                                                      
3 Panel report, Korea – Measures Affecting Trade in Commercial Vessels (WT/DS273/R), especially 
paragraphs 7.45 to 7.50. WT/DS379/R 
Page B-6  
 
  21. For the foregoing reasons, Argentina is of the view that it is an obligation inherent in 
Article 12.1.1 that every Member should allow a mini mum period of 30 days in which to reply to all 
questionnaires sent out during the investigation procedure. 
V. CONCLUSION 
22. In accordance with the analysis set out in this  submission, Argentina is of the view that: 
• The simultaneous application of anti-dumpi ng duties determined using the surrogate 
country methodology and countervailing duties is consistent with the WTO rules; 
 
• government ownership of an entity is a suffici ent factor to determine the existence of 
a public body in relation to the SCM Agreement; 
 
• failure to hold the consultations or their delayed holding nullifies the objective laid 
down in Article 13.1 of the SCM Agreement;  and 
 
• the 30-day period allowed in which to reply to all questionnaires is consistent with a 
balanced interpretation of the SCM Agreement. 
  WT/DS379/R 
 Page B-7 
 
 
 ANNEX B-2 
 
 
EXECUTIVE SUMMARY OF THE THIRD  
PARTY SUBMISSION OF AUSTRALIA 
 
(15 June 2009) 
 
 A. I
NTRODUCTION  
 1. In its written submission Australia focuses on a select few topics which raise significant 
systemic issues and important questi ons of legal interpretation.   
 
B. P
UBLIC BODY 
 2. Australia submits that the Panel should be mindf ul not to conflate the test for entrustment or 
direction under Article 1.1(a)(1)(iv) with the definition of a public body for the purposes of 
Article 1.1(a)(1)(i)-(iii).  In Australia's view, the te rm 'public body' is treated as an equivalent of 
government in Article 1.1(a)(1) because public bodies, by their nature, are an extension of 
government for the purposes of implementing government po licy.  This is consistent with the fact that 
Article 1.1(a)(1) provides that both governments and public bodies are referred to as "government" in 
the SCM Agreement.  Conversely, Article 1.1(a)(1)(iv) recognises that private bodies can be used indirectly by governments to provide a financial contribution.  Article 1.1(a)(1)(iv) imposes an 
additional test to attribute the actions of a private body to the government – that of entrustment or 
direction.    3. Australia considers that, consistent  with the Appellate Body findings in US - DRAMs , a clear 
distinction needs to be maintained between the test  required in subparagraphs (i)-(iii) which relate to 
the identity of the actor  (public body) on the one hand, and subparagraph (iv) which relates to the 
nature of the action  (including entrustment or direction), on the other.  The Panel in Korea - 
Commercial Vessels  highlighted the difficulty in defining an entity as public or private depending on 
the functions it was exercising at the time.  It found that ultimately an entity can exercise dual 
government and non-government functions interm ittently and that a body's activities are not 
conclusive of that body's character at any given time.   
 4. Australia submits that the t est for identifying whether an en tity is a public body should relate 
to evidence of government control over the entity and not the daily functions or actions of the entity 
as determined by the Panel in Korea - Commercial Vessels .  Government ownership of an entity is 
strong evidence of government control but should be  considered among other factors and evidence of 
control.  In Korea - Commercial Vessels  the Panel also looked at other indicia of government control, 
including:     - management of the entity (in that case th e company was presided over by a president 
and executive directors who were appointed and dismissed by the Government of 
Korea);   
  - government ministerial approval of the ope rations and programmes of the entity;  and 
  - the ability of the government to issue instructions to the entity.    WT/DS379/R 
Page B-8  
 
 C. E
NTRUSTMENT OR DIRECTION OF A PRIVATE BODY 
 5. Article 1.1(a)(1)(iv) recognises that private bodies can also be an indirect channel through 
which governments can provide a financial contribution by "entrusting or directing" a private body to 
act in a particular way.  An important issue that arises is the appropriate evidentiary standard to be 
applied to determine the existence of entrustment or direction.   
 6. In Australia's view, the text of Article 1.1(a)(1)(iv) relates to the government action
 of 
entrusting or directing a private body to carry out one or more of the type of functions illustrated in 
subparagraphs (i) to (iii).  The Appellate Body in US - DRAMs  articulated the test for "entrustment 
and direction" in terms of "entrustment" requiring a government to "give responsibility  to a private 
body", and "direction" requiring a govern ment to "exercise its authority over  a private body".   
 7. In Australia's view, entrustment or direction w ill not necessarily arise only in terms of a direct 
instruction to act or through the creation of a law by government.  The Panel in EC - DRAMs  noted 
that entrustment or direction "does not necessarily need to be 'explicit'".  It elaborated that 
Article 1.1(a)(1)(iv) is to ensure that indirect government action is also captured by the SCM Agreement.  If the scope of Article 1.1(a)(1)(i v) were limited to only explicit government acts, 
governments would be able to circumvent their commitments under this provision.  The Appellate 
Body in US - DRAMs  recalled that this provision is in effect an anti-circumvention provision.   
 
8. The Panel in Japan - DRAMs  stated that "since entrustment or direction of a private body will 
rarely be formal or explicit … a llegations of government entrustmen t or direction are likely to be 
based on pieces of circumstantial evidence".  This is consistent with the earlier Appellate Body 
statement in US - DRAMs  that "entrustment or direction need  not be determined on the basis of 
explicit acts".  Instead, the Appellate Body determin ed in that case that a Panel's assessment requires 
"a consideration of the inferences that might reasonably have been drawn … on the basis of the 
totality  of the evidence".   
 9. Article 1.1(a)(1)(iv) does not require that th ere be an explicit command or instruction to a 
private body in terms which satisfy the requisite el ements of a subsidy under the SCM Agreement.  
Rather, a complaining party must provide evidence sufficient in its totality to justify a finding of 
entrustment or direction to carry out one or more of the type of functions illustrated in 
subparagraphs (i) to (iii).    D. S
UBSIDIZED INPUTS PURCHASED FROM TRADING COMPANIES  
 
10. In Australia's view, and as the Appellate Body noted in US - Softwood Lumber IV , Article 10 
of the SCM Agreement and Article VI:3 of GA TT 1994 are relevant provisions when examining 
subsidization of inputs to produce the imported produc t.  The Appellate Body in that case found that a 
"pass through analysis" is not necessary in every situation in which a s ubsidy is provided on the 
production of an input product.    
11. Australia notes that the Panel in Mexico - Olive Oil , in recalling the Appellate Body's analysis 
in US - Softwood Lumber IV , summarised the principles for when a pass-through analysis would be 
necessary stating that "a pass through analys is is required in circumstances in which both of the 
following conditions are present:    
 1. A subsidy is provided in respect of a product that is an input into the processed, 
imported product that is the subject of  the countervail investigation;  and 
  2. The producer of the input product and the producer of the imported product subject to 
the countervail investigation are unrelated."  WT/DS379/R 
 Page B-9 
 
 
  
12. This approach is consistent w ith the Appellate Body's findings in US - Countervailing 
Measures  that there may be a direct or indirect recipient of the benefit of the financial contribution.  
Therefore, the direct recipient of the benefit may be  the input producer and the indirect recipient may 
be the producer of the imported product.   
 
13. Notwithstanding the issue of whether or not a pass-through analysis must be made, Australia 
is of the view that the Panel could also examine what could constitute a pass-through analysis.  Such 
an analysis could include examination:  (i) establishi ng the existence of a subsidy provided to an input 
product;  and (ii) of the price paid by the producer  of the imported product subject to the countervail 
investigation compared with an appropriate benchmar k price, to reveal the benefit conferred to that 
producer.  In Australia's view, this would reflect  the understanding of "count ervailing duty" as defined 
in footnote 36 of Article 10 of the SCM Agre ement and Article VI:3 of GATT 1994, that 
countervailing duties are intended to offset subs idies bestowed directly or indirectly.   
 
E. P OLICY LENDING  
 14. In Australia's view, "policy le nding" is a term that has been applied to describe a certain type 
of subsidy programme whereby a government makes a policy decision to provide loans to certain 
industries on preferential terms.  Australia consid ers that a subsidy provided through a policy lending 
programme is subject to the same
 fundamental requirements under Articles 1 and 2 of the 
SCM Agreement as all other subsidies.  In particul ar, the test for the existence of a subsidy under 
Article 1 of the SCM Agreement and for specificity  under Article 2 of the Agreement, are separate 
tests.  Consequently, where a financial contribut ion pursuant to a policy lending programme is not 
provided by the government or a public body, it must be demonstrated that the relevant private body 
was entrusted and directed according to Article 1.1(a)(1)(iv). 
 
15. Statements of government policies, plans and in tentions are highly relevant considerations in 
determining the existence of a subsidy and that th e subsidies are targeted to certain industries or 
enterprises.  In terms of de jure  specificity under a policy lending programme, Australia considers that 
the policy statement that forms the basis of the programme must "explicitly limit access to a subsidy 
to certain enterprises".  Australia finds no basis for the assertion that it must explicitly  be "to the 
exclusion of other certain enterprises".  Australia  submits that if a programme is explicitly only 
available to certain enterprises or where eligibility is explicitly limited to certain enterprises, it is 
implicit that this will be to the exclusion of other certain enterprises.  Thus a policy statement will be 
de jure  specific if it explicitly refers to supplying loans only with respect to 'particular forms or 
branches of productive labour;  a trade;  a manufac ture' as opposed to being "broadly available2 
throughout the economy.  Furthermore, de jure  specificity does not require that there be legislation 
that identifies the elements of a subsidy.    16. China states that the policy banks have an  express mandate from the central government to 
provide loans to targeted industries and 'state-s upported' projects.  In Australia's view, while 
commercial banks may take account of government policies when evaluating risks associated with 
loans, it is an entirely different matter for a commerc ial bank to be given, to take into account, and to 
act on a government direction in determin ing or evaluating lending decisions.   
 17. Once the existence of a subsidy is estab lished in accordance with Article 1 of the 
SCM Agreement and specificity is established in accordance with Article 2 of the SCM Agreement, 
there is no need to impose an additional third re quirement on instances of policy lending in terms of 
the "transaction" being "made pursuant to" the legisl ation.  The issue of the connection between the 
policy statement and the provision of the financial contribution is addressed through the analysis of 'entrustment or direction' under an Article 1 analysis.    WT/DS379/R 
Page B-10  
 
 F. R
EGIONAL SPECIFICITY  
 18. Regional specificity under Article 2.2 of th e SCM Agreement provides that a "subsidy which 
is limited to certain enterprises
 located within  a designated geographical region within  the jurisdiction 
of the granting authority shall be specific" (empha sis added).  The test for regional specificity in 
Article 2.2 sits separately from the tests for specificity  provided in Article 2.1(a)-(c).  Article 2.2 can 
be distinguished from the tests in Article 2.1(a)-(c ), because it specifically establishes regional locality 
as the limiting factor that renders a subsidy specific.    19. Australia does not accept that Article 2.2 invol ves an additional element so that the subsidy 
must be limited to certain enterprises
 within a limited designated geographic region  within the 
jurisdiction of the granting authority.  Australia notes  that if this interpretation of regional specificity 
were to be adopted, it would be difficult to envisag e a situation covered by Article 2.2 that would not 
already be covered by Article 2.1(a)-(c).  Artic le 2.2 establishes an alternative basis upon which a 
subsidy might be specific.  To require an additional test of limitation to certain enterprises within the 
regional specificity test already contained in Artic le 2.2, would render Article 2.2 meaningless.   
 20. Australia agrees with the United States that Article 8.1(b) and Artic le 8.2(b) may provide 
relevant context in determining regional specificity  under Article 2.2.  Article 2.1 provides that "an 
enterprise or industry or group of enterprises or indus tries" be referred to in the SCM Agreement as 
"certain enterprises".  In Australia's view, "certain  enterprises" in the Agreement should be read as "an 
enterprise or industry or group of enterprises or industr ies".  Australia submits that this interpretation, 
in particular with respect to "certain enterprises" in Article 2.2, would be relevant to the Panel's 
examination.  The Panel could also usefully clarify whether the use of the term "certain enterprises" in 
Article 2.2 is descriptive to distinguish between enterprises that are located within the designated 
geographical region and those that are outside.   
 
G. B
ENCHMARK FOR THE DETERMINATION OF BENEFIT  
 21. Another important issue that arises in this case is the appropriate market benchmark to be applied to determine the existence of "benefit" under Article 1.1(b) of the SCM Agreement with 
respect to a "loan by a government
" under Article 14(b)  of the SCM Agreement.   
 
22. As the Appellate Body stated in Canada - Aircraft , "Article 14, which we have said is 
relevant context in interpreting Article 1.1(b), suppor ts our view that the marketplace is an appropriate 
basis for comparison".  The question then becom es, which "marketplace";  how to determine the 
boundaries of the relevant market place;  and whet her the firm could actually obtain a comparable 
commercial loan on the market.  Article 14 clearly distinguishes between the appropriate market 
comparisons for government loans  (subparagraph (b)) and those for "equity capital" 
(subparagraph (a)), "loan guarantees"  (subparagraph (c)) and "goods a nd services2 (subparagraph (d)).   
 23. Article 14(b) states that the comparison should be with a "comparable commercial loan" 
actually obtainable on "the market
".  It does not refer to "prevailing market conditions … in the 
country of provision or purchase ", as subparagraph (d) does.  This distinction is due to the fact that 
subparagraph (b) relates to "loans" and not to "goods and services" as in  subparagraph (d).  
Consequently, Australia submits that Article 14(b)  does not also require the market benchmark to 
"relate or refer to, or be connected with the condi tions prevailing in the market of the country of 
provision".  Article 14(b) simply does not have the same explicit connection to the "country of 
provision or purchase".  This is because "loans" are available on an international  financial market that 
is subject to international influences.    24. Furthermore, Australia considers that there is no basis in the text of Article 14(b) of the SCM Agreement to limit consideration of a comp arable market benchmark to loans in the same  WT/DS379/R 
 Page B-11 
 
 
 currency as the RMB-denominated government loans under investigation.  Loans obtained in one 
currency can be used to purchase any particular currenc y at rates determined by international markets.  
Again, Australia considers there is no basis to impose an Article 14(d) market comparison that relates or refers to, or is connected with the conditions prevailing in the market of the country of provision.    
H. C
ONCURRENT APPLICATION OF ANTI-DUMPING AND COUNTERVAILING MEASURES  
 25. In Australia's view, anti-dumping and counterva iling measures are trade remedies that address 
two distinct trade practices and have different purposes and effects.  Anti-dumping measures address 
dumped products that cause injury to the domestic  industry in the importing country.  Countervailing 
measures on the other hand address subsidized imports that cause injury to the domestic industry.   
 26. As provided in Article VI:1 of GATT 1994 and Article 2.1 of the Agreement on 
Implementation of Article  VI of the General Agreement on Tariffs and Trade 1994 (the 
AD Agreement), an anti-dumping investigation enta ils a price comparison between the normal value 
of the product in the home market of the exporting country and the export price in the export market.  
Article VI:2 of GATT 1994 provides that an anti-dum ping duty may be levied to offset or prevent 
dumping (that is, the difference between the normal value and the export price).  Article VI:3 of 
GATT 1994 provides that a countervailing investiga tion will determine the existence, degree and 
effect of alleged subsidies which are provided by governments or public bodies.  Article VI:3 of 
GATT 1994 further provides that a countervailing duty ma y be imposed to the amount of the subsidy, 
granted directly or indirectly on the manuf acture, production or export of the product.   
 27. The SCM Agreement and the AD Agreement provide, respectively, that the imposition of the full amount of the subsidy as a countervailing duty or the full margin of dumping as an anti-dumping duty is a decision to be made by the investigating authorities.
1  However, neither Agreement addresses 
concurrent or parallel anti-dumpi ng and countervail investigations.  They do not specify that 
consideration of the imposition of the full dumping ma rgin or the full amount of the subsidy must take 
into account other trade remedy actions which may be underway in the importing country.  Nor does 
anything in GATT Article VI or elsewhere in the WTO Agreements prevent concurrent or parallel 
anti-dumping and countervailing duty investigations into the same product.  Indeed, the text of 
Article VI:5 reinforces the right of Members to do both.   
 
28. The Panel could usefully examine the following aspects of Article VI:5 of 1994:     (a) Whether the meaning of "situation" refers to the existence of dumping or 
subsidisation or to the injurious effects of those actions;   
 (b) Whether the meaning of "compensate" re lates to the level of the dumping and subsidy 
margins;   
 (c) Whether "export subsidization" has a di fferent meaning to "manufacture, production 
or export" of a product under Article VI:3 of GATT 1994; 
 (d) Whether the meaning and use of "export s ubsidization" is distinct from determining 
whether a subsidy is an export subsidy or  a subsidy provided for the manufacture or 
production of a product;   
 (e) Whether the meaning and use of 'export subs idization' limits its application to export 
subsidies;  and 
 (f) Whether the meaning and use of "export subsidization" may also capture subsidies 
provided for the manufacture or producti on of a product which is nevertheless 
exported.   
 
                                                     
 
1 Article 19.2 of the SCM Agreement and Article 9.1 of the AD Agreement.   WT/DS379/R 
Page B-12  
 
 29. Australia fails to see that there is a "double remedy" of the effect of any subsidy where there 
are concurrent investigations.  It could be entirel y consistent for investigating authorities to make 
determinations of subsid ization by an exporting Member and at the same time, determine that there 
are no sales in the ordinary course of trade in the domestic market of the exporting country due to a 
particular market situation where, for example, gove rnment influences prices.  If a "surrogate" market 
is used to establish a normal value in an anti-dum ping investigation because there are no sales in the 
ordinary course of trade, Australia is of the vi ew that such sales do not reflect the subsidized 
production in the home market.  Indeed, it could be ar gued that such prices are used to ensure that 
there is no perversion of prices in determining the normal value.    
I. C
ONCLUSION  
 
30. For the reasons set out in its Submission, Au stralia submits that the Panel in this dispute 
should:    
 (a) Take into account Australia's observations  on the appropriate definition of "public 
body" under Article 1.1(a)(1) of the SCM Agreement;   
 (b) Draw on guidance provided by the highlighted WTO cases on the appropriate test for 
entrustment or direction under Article 1.1(a)(1)(iv) of the SCM Agreement;   
 (c) Consider what elements of an examin ation would constitute a pass-through analysis 
in determining whether a subsidy is provid ed on production of an input product;   
 (d) Note that China has conflated the elemen ts of Article 2.1(a) and Article 1 of the 
SCM Agreement for determining de jure  specificity when considering "policy loans";   
 (e) When interpreting Article 2.2 of the SC M Agreement, be mindful of its relationship 
with Article 2.1(a) of the SCM Agreement;   
 (f) Take into account Australia's observa tions on the proper market benchmark for a 
"loan by a government" when determin ing the existence of benefit under 
Article 14(b) of the SCM Agreement;  and  
 (g) Note Australia's obser vations when interpreting Article VI:5 of GATT 1994 when 
considering China's claims about the c oncurrent application of anti-dumping and 
countervailing duties.   
  WT/DS379/R 
 Page B-13 
 
 
  
ANNEX B-3 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
SUBMISSION OF BRAZIL 
 
(15 June 2009) 
 
 
I. ARGUMENTS 
 
A. THE  CONCEPT  OF "PUBLIC  BODY"  IN ART.  1.1(A)(1)  OF THE  SCM  AGREEMENT 
 
1. Brazil is of the view that the ordinary  meaning of the expression "public body" in 
Article 1.1(a)(1), interpreted in its context, and in light of the object and purpose of the SCM 
Agreement, indicates that shareholding control or ownership by a Government does not warrant, in 
and of itself, a presumption that a company is  a "public body" for purposes of establishing the 
existence of a financial contribution.  This view is supported by both WTO jurisprudence and general 
international public law, which confirm that corpor ate entities that are legally separate from the State, 
even if wholly or partly owned by that State, ar e presumed to be private entities, and therefore their 
actions are to be considered prima facie of a private nature.1 
 2. Brazil believes that nothing in Article 1.1(a)(1 ) supports an interpreta tion of the term "public" 
in "public body" as referring to "public property".  On the contrary, the immediate context of the 
expression "public body" indicates that it refers to  an entity closely assimilated to the government 
itself.  The use of the term "government" throughout  the SCM Agreement to refer indistinctly to "a 
government or any public body" underscores the closeness of the nexus between the two concepts. 
This same approach was adopted by the Appellate Body in US - CVD DRAMs .
2 
 3. In order to be closely assimilated to the gove rnment, the link of an entity with the government 
must go beyond mere ownership.  It must perform fu nctions and exercise attributions that are typical 
of the government.  It must, for a ll purposes, be considered part of the government itself.  That is 
certainly not the case of companies that operate in the market, under the rule of private law, 
conducting businesses that are typical of privatel y-owned companies, regardless of whether the 
government owns a majority stake in it or not.  This understanding is corroborated by the ILC Draft 
Articles
3 and by Appellate Body precedents.  
 4. In US - CVD DRAMs the Appellate Body noted that "the conduct of private bodies is 
presumptively not attributable to the State" and, to support such view, quoted approvingly to the 
following extract of the Commentari es to the ILC Draft Articles: "[s]ince corporate entities, although 
owned by and in that sense subject to the contro l of the State, are considered to be separate, prima 
facie  their conduct in carrying out their activities is not attributable to the State unless they are 
                                                     
 
1 Commentaries to the ILC Draft Articles on State Responsibility of Internationally Wrongful Acts  (ILC 
Draft Articles), Article  8, Commentary (6), as referred to in Appellate Body Report, United States – 
Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMs) From Korea , WT/DS296/AB/R, adopted 20 July 2005 ( US – CVD DRAMs ). 
2 US – CVD DRAMs , footnote 166. 
3 The ILC Draft Articles have been frequently relied on by the Appellate Body, panels, and also 
arbitrators acting under Artic le 22.6 of the DSU in interpreting WTO law.  The ILC Articles  have been cited as 
"rules of general international law", and as re flective of "customary international law".   WT/DS379/R 
Page B-14  
 
 exercising elements of governmental authority".  By  connecting its interpretation of private bodies to 
a commentary that specifically affirms that the c onduct of corporate entities owned or controlled by 
the State is prima facie  not attributable to the State, the A ppellate Body has made it clear its opinion 
on two interconnected issues: first, that shareholding control or owners hip is not sufficient to define a 
public body; and second , that control or ownership can be a rele vant factor in the analysis of whether 
the company (or corporate entity) is exercising elements of governmental authority.  Or, under the 
terms of 1.1(a)(1)(iv) of the SCM Agreement, of wh ether the company is being entrusted or directed 
by the government.  5. In this connection, it is important to differ entiate between the enquiries undertaken in order to 
ascertain if a state-owned company is (a) a "public body" under Article 1.1(a)(1) of the 
SCM Agreement; or (b) a "private body" entrusted or directed by the government to effectuate one of 
the types of financial contributions listed in paragraphs (i) through (iii)  thereof.  In Brazil's view, the 
first enquiry must be directed at the nature of th e entity in question, whereas the second enquiry refers 
to specific instances in which the actions of the entit y reveal governmental involvement in the form of 
entrustment or direction.  The issue of ownership is not, in itself, dete rminative of the status of a state-
owned entity in either enquiry.  Conversely, state ownership may be a relevant  element, among others, 
in assessing both if an entity has the nature of a "public  body" or if it is a "private body" entrusted or 
directed to act as a proxy of the governme nt in specific instances.        
 6. It is worthy noting, in this regard, that in the investigation at issue in US – CVD DRAMs  the 
investigating authorities seem to have understood th at control or ownership by the government does 
not suffice to characterize a company as a "public bod y".  In that investigation several companies 
owned or controlled by the government were not f ound by the investigating authorities to be public 
bodies.
4 
 
7. Brazil agrees with the view that SCM provi sions were constructed with the intent of 
preventing as much as possible circumvention of its disciplines.5  Nevertheless, Brazil believes that 
the mechanism built into the SCM Agre ement to fulfil this goal is the 'entrustment or direction' clause 
in Article 1.1(a)(1)(iv), whereby the possibility of targeting operations disguised as private in nature 
but actually resulting from the exercise of governmental authority is provided for.  Brazil does not consider that this objective was meant to be achie ved by a broad, "fast track" interpretation of the 
"public body" definition, one which would actually allow the circumvention of the steps set out in 
Article 1.1(a) for a financial contribution to be found.  8. It follows from the above that, when unde rtaking a countervailing duty investigation, the 
investigating authorities bear the burden of pr oof regarding the identification of a possible 
'entrustment or direction' situation involving companies that, albeit owned or controlled by the 
government, are prima facie  private entities.  As explained before, whereas government shareholding 
control may be relevant evidence, it cannot be determinative in itself.  Furthermore, Brazil 
understands that a finding of entrustment or dir ection of an entity by the government should be 
restricted to the specific action under consideration by the investigating authorities, and should not be 
automatically extended to any other actions attributable to such entity.  
 
9. However, if the investigating authority believ es that the company in question has the nature of 
a public body and not of a private entity, it must establish that such company is fundamentally and 
permanently devoted to the promotion of public goals determined by the government, performing 
functions and exercising attributions that are typi cal of the government itself.  In this case, Brazil 
contends that the burden faced by the investigating authority is s ubstantially heavier, since it is 
required not simply to demonstrate the government's entrustment or direction in respect of specific 
                                                     
 
4 See US – CVD DRAMs , para. 131.  
5 United States' First Written Submission, para. 117  WT/DS379/R 
 Page B-15 
 
 
 actions, but it must demonstrate that the entity in que stion is, by its very nature, and in relation to all 
its actions, public and not private.   B. THE
 SIMULTANEOUS  APPLICATION  OF AD AND  CVD  MEASURES 
 
10. Article VI.2 of the GATT 1994 and Article 9. 1 of the AD Agreement authorize Members to 
impose antidumping duties up to the amount of the dumping margin determined according to the 
requirements and criteria set out in Article VI of the GATT 1994 and in the provisions of the AD 
Agreement.  Concurrently, Article VI.3 of the GATT and Article 19.4 of the SCM Agreement allow 
Members to levy countervailing duties up to the amount  of the subsidy found to exist pursuant to 
Article VI of the GATT 1994 and the disciplines of the SCM Agreement.  
 
11. In Brazil's view, provided that the requis ite legal requirements for the imposition of each 
remedy are properly observed, there is nothing in  the AD Agreement or in the SCM Agreement to 
suggest that parallel AD measures and CVD me asures cannot be imposed on the same product 
exported by the same Member.  Not surprisingl y, no cross-references can be found in the AD 
Agreement or in the SCM Agreement conditioning th e imposition of one remedy on the satisfaction of 
requirements established in relation to the other remedy.  It is clear, therefore, that AD measures and CVD measures have been conceived as autonomous re medies, which should stand or fall on their own 
respective merits or faults.   12. This understanding is supporte d by Article VI:5 of the GATT 1994 which contains  the only 
limitation on the concurrent application of AD a nd CVD measures that can be found in the covered 
agreements.  Article VI:5 establishes certain cons traints on the parallel application of AD and CVD 
remedies in specific circumstances of export subs idization.  Apart from the limitation explicitly set 
out in Article VI:5, which is circ umscribed to export subsidies, no ot her limitation in this regard is 
provided for anywhere in the GATT 1994, in the AD Ag reement or in the SCM Agreement.  The text 
of Article VI:5 shows that Members were well aware that if they intended to impose any restrictions 
or conditions on the parallel applica tion of AD and CVD measures, they had to so explicitly.  In this 
context, it does not seem credible to argue that, decades after the entry into force of the GATT 1947, 
the drafters of the AD and SCM Agreements inte nded to limit the parallel application of the two 
remedies but decided to do so implicitly.  
13. The GATT 1994 treats remedies adopted to offs et export subsidies more stringently than 
those aimed at subsidies "granted on the manufacture or the production" of a product due to the direct link between export subsidies and pricing practices adopted by their recipients.  The economic 
operation of an export subsidy typi cally allows greater returns on fo reign sales than on domestic sales. 
In principle, this type of governmental interventio n induces recipients to lower the prices of their 
foreign sales while keeping their domestic prices stab le; i.e., they are induced to dump in the amount 
of the export subsidy received.  Conversely, the potential effects of manufacture or production 
subsidies on pricing practices are normally much less di rect.  It is therefore inappropriate to apply the 
logic behind the limitation of Article VI:5 of the GATT to subsidies that are not contingent on export 
performance. 
 
14. Brazil also holds the view that the legal perm issibility for the parallel application of AD and 
CVD measures, and its underlying logic, apply indistin ctly to investigations conducted in relation to 
"market economy" Members and "non-market econom y" Members.  Accepting the argument that 
methodological challenges arising from price comp arability difficulties in "non-market economy" 
Members somehow constrain the parallel applica tion of AD and CVD measures in relation to them 
would result in discrimination against "market economy"  Members.  This result is not supported by 
the letter or the spirit of the GATT 1994, the AD Ag reement or the SCM Agreement.  In fact, WTO WT/DS379/R 
Page B-16  
 
 rules do not establish any provision that create excepti ons to the possibility of parallel application of 
the two remedies based on the characteristics of the economy of the Member concerned. 
   WT/DS379/R 
 Page B-17 
 
 
 ANNEX B-4 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
SUBMISSION OF CANADA 
 
 
(15 June 2009) 
 
 I. INTRODUCTION 
 
1. Canada is participating in these proceedings  because it has a systemic interest in the 
interpretation of WTO subsidy rules and the important  consequences the findings of the Panel in this 
dispute will have for the future application of t hose disciplines, both in ge neral and to cases involving 
China.    2. The Protocol on the Accession of the People's Republic of China, the Report of the Working 
Party on the Accession of China , and the transitional nature of China's economy inform Canada's 
views on many of the issues in this dispute and should likewise guide the Panel.    
II. CHINESE STATE-OWNED ENTERPRISES AS PUBLIC BODIES  
 3. Canada submits that entities controlled by  the government are public bodies within the 
meaning of Article 1.1(a)(1) of the SCM Agreement .  A government may exercise such control 
through whole or majority ownership.    4. Canada's position is consistent  with the Panel's decision in Korea – Commercial Vessels .  The 
Panel in that case found that "an entity will constitu te a 'public body' if it is controlled by the 
government (or other public bodies)".  The Panel f ound that government control over a Korean entity 
was "evidenced primarily by the fact that [the entity] is 100 per cent owned" by the government or 
other public bodies.  Evidence suggesting government control over the entity also included the fact 
that the operations were presided over by direct ors who were appointed and dismissed by the 
government, and the fact that governmental approv al of the operations programme was required.  
These factors are consistent with the means that a majority owner would ordinarily have to control a 
company.    5. Upon its accession, China conceded that its  state-owned enterprises ("SOEs") constitute 
public bodies.  Indeed, in light of the special  characteristics of China's economy (including the 
prevalence of SOEs), members of the Working Part y sought to clarify that when Chinese SOEs make 
financial contributions they do so as government ac tors for the purposes of Article 1.1(a)(1).  The 
representative of China did not challenge this clarification.    6. China's position is not consistent with the context of Article 1.1(a)(1).  Under China's 
interpretation, an SOE is a private body when it is  not exercising governmental authority conferred to 
it by the law of the state.  It is only when it ex ercises governmental authority that it would become a 
"public body".  Where the SOE does exercise gove rnmental authority and sells goods, its actions 
would constitute a financial contributio n under Article 1.1(a)(1)(iv) of the SCM Agreement .  In that 
case, the Chinese Government could be said to have entrusted or directed the putative private body 
(the SOE) to sell goods.  Consequently, there would be no need for the SOE to be characterized as a 
public body for its action to be characterized as a fi nancial contribution (under Article 1.1(a)(1)(iii) of WT/DS379/R 
Page B-18  
 
 the SCM Agreement ).  As such, China's interpretation of the term "public body" would essentially 
make the term inutile.    
III. COMMERCE'S USE OF BENCHMARKS OUTSIDE CHINA TO MEASURE THE 
BENEFIT CONFERRED BY THE PROVISION OF GOODS BY STATE-OWNED 
ENTERPRISES 
 
7. Canada submits that the United States' re ading of the Appellate Body's decision in US – 
Softwood Lumber IV  in the context of this dispute is erroneous .  Nevertheless, in the investigations at 
issue, Commerce's actions were consistent with the United States' WTO obligations by virtue of 
subparagraph 15(b) of China's Accession Protocol .   
 8. In US – Softwood Lumber IV , the Appellate Body indicated that, under Article 14(d) of the 
SCM Agreement , an importing WTO Member may only reject private prices in the market of the 
country of provision if it can demonstrate on the b asis of facts that the go vernment's status as a 
significant supplier of goods actually distorts the private prices for the goods in that country.   
 9. In Circular Welded Carbon Quality Steel Pipe from the People's Republic of China and 
Light-Walled Rectangular Pipe and Tube from the People's Republic of China , Commerce considered 
that Chinese prices were significantly distorte d due to the Chinese Government's status as a 
substantial provider of goods.   
 
10. Such an approach did not satisfy th e requirement of Article 14(d) of the SCM Agreement , as 
interpreted by the Appellate Body in US – Softwood Lumber IV .   
 11. However, the Working Party Report  and China's Accession Protocol  provide an exception to 
this requirement for imports of Chinese origin.   
 12. At paragraph 150 of the Working Party Report , members noted that the transitional nature of 
China's economy could make it difficult to apply Article 14 of the SCM Agreement .   
 13. Accordingly, subparagraph 15(b) of China's Accession Protocol  provides that an importing 
WTO Member may calculate a Chinese subsidy benefit on the basis of costs or prices outside China if 
there are "special difficulties" in the application of Article 14 of the SCM Agreement .  
 14. The dominance of Chinese SOEs – a legacy of  China's history as a centrally planned economy 
– and the potential resulting distortion on private pri ces for the products they sell are precisely the sort 
of "special difficulties" in the application of Article 14 of the SCM Agreement  that are contemplated 
in subparagraph 15(b) of China's Accession Protocol .   
 15. Such special difficulties ari se when Chinese SOEs are the predominant providers of goods in 
China. Chinese private prices may be distorted a nd may not constitute appropr iate benchmarks as a 
result of the role of the SOEs in the market.   
 
16. Under such circumstances, Canada s ubmits that subparagraph 15(b) of China's Accession 
Protocol  allows an importing WTO Member to rely on prices outside China without having to 
demonstrate in accordance with Article 14(d) of the SCM Agreement  that Chinese private prices are 
distorted.   
  WT/DS379/R 
 Page B-19 
 
 
 IV. THE CONCURRENT APPLICATION OF ANTI-DUMPING AND 
COUNTERVAILING DUTIES WHERE NORMAL VALUE IS CALCULATED USING COSTS OR PRICES OUTSIDE CHINA 
 
17. The WTO Agreement  treats dumping and subsidization as two different causes of injury to 
domestic industries, and provides distinct sets of ru les for each, giving rise to separate remedies:  an 
anti-dumping duty to remedy injurious dumping and a countervailing duty to remedy injurious subsidization.    18. When an imported product happens to be bot h dumped and subsidized, and causes injury, an 
importing Member may impose both an anti-dumping duty equal to the margin of dumping and a 
countervailing duty equal to the amount of the subsidy.   
 19. Article VI:5 of GATT 1994  confirms the ability of WTO Members, as reflected in practice, to 
impose concurrent anti-dumping and countervailing duties except to the extent that they both remedy 
dumping or export  subsidization.   
 20. Nothing in the WTO Agreement  prevents the concurrent application of duties determined on 
the basis of prices or costs found outside the market of the exporting Member whose products are under investigation.    
21. Article 15 of the GATT Subsidies Code  prohibited importing countries from applying both 
anti-dumping duties determined on this basis and c ountervailing duties.  However, this prohibition 
was not carried over during the Uruguay Round.    22. If WTO Members intended to prohibit the c oncurrent application of anti-dumping duties 
calculated on the basis of subparagraph 15(a)(ii) of China's Accession Protocol  and countervailing 
duties, they could have stated that intention in China's Accession Protocol  as they had done earlier in 
the GATT Subsidies Code .  Instead, taken together subparagra phs 15(a)(ii) and 15(b) of China's 
Accession Protocol  enable an importing WTO Member to impose both anti-dumping duty calculated 
on the basis of costs or prices outside China and countervailing duty at the same time.    
23. A countervailing duty on a Chin ese product will be in "the amount of the subsidy found to 
exist" under Article 19.4 of the SCM Agreement  if it is calculated in accordance with Article 14 of the 
SCM Agreement  or subparagraph 15(b) of China's Accession Protocol .   
 24. As long as the importing WTO Member does not  impose countervailing duty in excess of "the 
amount of the subsidy found to exist", the duty w ill be in the "appropriate amount", as required by 
Article 19.3 of the SCM Agreement .   
 25. The Panel in EC – Salmon (Norway)  interpreted the phrase "appropriate amounts" in largely 
the same way under the analogous provision of the Anti-dumping Agreement.  The Panel in Argentina 
– Poultry Anti-Dumping Duties  reached essentially the same conclusion.   
 
V. REGIONAL SPECIFICITY 
 
26. Article 2.2 of the SCM Agreement  simply covers subsidies that are limited to a designated 
geographical region.   
 
27. Pursuant to Article 2.1 of the SCM Agreement , where access to a subsidy is limited to certain 
enterprises, that subsidy shall be specific.  Read ing this requirement into Article 2.2 as well would 
render Article 2.2 redu ndant and inutile.   
 WT/DS379/R 
Page B-20  
 
 28. Reading Article 2.2 as including both require ments would allow subsidies provided to all 
enterprises located in a designated geographi cal region to escape the disciplines of the 
SCM Agreement  even though these potentially trade-distorting subsidies are not broadly available in 
the country.   
 
VI. QUESTIONNAIRES  
29. The 30-day requirement in Article 12.1.1 of the SCM Agreement  only applies to the initial 
questionnaire that the investigating authority sends to respondents.    
30. The Panel in Egypt – Steel Rebar  addressed this issue in the co ntext of Article 6.1.1 of the 
Anti-dumping Agreement , which is analogous to Article 12.1.1 of the SCM Agreement .  The panel 
found that "the term 'questionnaires' in Article 6.1. 1 [refers] only to the original questionnaires sent to 
interested parties at the outset of an investigation".    
31. While the requirement in Article 12.1 of the SCM Agreement  that parties receive "ample 
opportunity" to present evidence in writing applies throughout the course of an investigation, 
Article 12.1.1 deals only with a particular instance during an investigation – the issuance of the initial 
questionnaire – where what is "ample" is defined by the drafters of the SCM Agreement  as at least 
30 days.    
32. If an investigating authority had to extend a new 30-day response period to a respondent 
every time it had a new or follow-up question aris ing from its obligation under Article 12.5 of the 
SCM Agreement , it would be very difficult for it to complete the investigation in accordance with 
Articles 11.11 and 12.12 of the SCM Agreement .   
 
33. This could have troubling implications for res pondents:  pressed to complete an investigation 
within the timeframes stipulated in Articles 11.11 a nd 12.12, the investigating authority might refrain 
from asking follow-up questions or pursuing new lines  of questioning arising from the information it 
has gathered, and rely instead on the facts available.    
  WT/DS379/R 
 Page B-21 
 
 
 ANNEX B-5 
 
 
EXECUTIVE SUMMARY OF TH E THIRD PARTY SUBMISSION  
OF THE EUROPEAN COMMUNITIES 
 
(15 June 2009) 
  I. INTRODUCTION 
 
1. Whilst not taking a final pos ition on the specific facts of this case, the European Communities 
will provide its views on (i) the claims relating to  the provision of goods by State-Owned Enterprise 
("SOEs"), (ii) some issues relating to the policy loans and the provision of land-use rights (iii) the 
simultaneous application of anti- dumping and countervailing measures (iv) due process requirements, 
in particular those mentioned in Articles 13.1 and 12.1.1 of the SCM Agreement .   
 
II. PROVISION OF GOODS BY SOEs 
 
A. F
INANCIAL CONTRIBUTION  
 2. The key question on this point appears to be  whether the USDOC's application of majority 
ownership as the only factor to establish that SO Es are "public bodies" is consistent with the 
SCM Agreement .  Whilst not entering into the specific fact s of this case, the European Communities 
agrees with the United States that the Working Party Report on China's accession is a relevant 
document that the Panel should examine in its assessme nt.  To the extent that China might reasonably 
be considered to be under an obligation to respond to the specific clarification requested, and China's 
silence a reasonable basis on which to construe consen t, this would be a relevant factor, to be taken 
into consideration with all the relevant facts and evidence, in the determination by the United States 
that the SOEs in this case were "public bodi es" providing financial contributions under 
Article 1.1(a)(1) of the SCM Agreement .   
 3. Leaving aside the particularities of the Wo rking Party Report, the European Communities 
considers that a high level of govern ment ownership is a very relevant  factor in determining whether 
an entity is a "public body" in th e sense of Article 1.1(a)(1) of the SCM Agreement .  This factor 
should be examined in the light of the specific ci rcumstances of the case in order to establish whether 
actions by SOEs can be attributed to the government .  In the EC view, a fundamental element in the 
financial contribution determinati on is the participation of the government, either directly (as a 
government or public body) or indirectly (through priv ate parties).  In other words, the action of the 
entity at hand must be somehow attributable to the government.  In this respect, the 
European Communities observes that majority ownershi p has been considered a very relevant factor 
(although not the only one) when establishing that ac tions of private bodies were attributed to the 
government.  Consequently, in order to determine whether the actions of  an entity can be attributed to 
the government directly or indirectly, the degree of ownership  is a highly relevant factor.   
 
4. The European Communities further notes that a test such as the "five-factor" test is not 
expressly referred to in the SCM Agreement  as a basis on which to determine whether or not an entity 
is a public body within the meaning of Article 1(1)(a) of the SCM Agreement .  In some cases such a 
test may be appropriate.  In other cases, depending on the totality of the facts and evidence, and the 
particular procedural circumstances, the extent of ownership may have a preponderant role to play in 
determining that an entity is a "public  body" under Article 1.1(a)(1) of the SCM Agreement .  If no 
other facts or evidence are available, and the appropria te procedural steps have been followed, or if all WT/DS379/R 
Page B-22  
 
 other available facts and evidence confirm the systema tic role of the State, then State ownership could 
be determinative.    5. As regards the provision of goods by private trading companies, whilst not taking a position on the facts of this case, the European Communities w ould like to highlight that, in general terms, the 
provision of the goods by a trading company can be understood as a mere intermediate act  which does 
not change the nature of the financial contribution ( i.e., the fact that SOEs are the suppliers of the 
inputs which are then incorporated into the subsidised products).    B. B
ENEFIT  
 1. Selection of Market Benchmarks 
 
6. The European Communities considers that pri ces set by public bodies may not be considered 
as a relevant market benchmark in cases where those bodies are also involved as players in the market 
concerned. Furthermore, the European Communities considers that the Appella te Body's observations 
in US - Softwood Lumber IV  would be pertinent to this case.  Th ey indicate that the fact that the 
government is the predominant supplier of certain goods  in the market is likely to be a determining 
factor when examining all the relevant facts and ev idence in order to ascertain whether market prices 
established by private parties can be used as the benc hmark for the benefit determination, or whether, 
exceptionally, another benchmark should be used.  If it is demonstrated that domestic prices are 
almost fully determined by SOEs representing pub lic bodies and are highly distorted, then an 
investigating authority would have a sufficient ground to depart from the general rule of prices in the 
country of provision also in light of the above ju risprudence interpreting and applying Article 14 of 
the SCM Agreement .  Finally, the European Communities c onsiders that China's Protocol of 
Accession does not weaken the relevance of the observations made by the Appellate Body in US - 
Softwood Lumber IV .   
 
2. Private Trading Companies:  Pass-Through 
 
7. Whilst not taking a position on the facts of th is case, the European Communities considers 
that insofar as trading companies act as mere interm ediaries in the transaction, without resulting in 
any transformation of the product concerned, it would be unnecessary for the U.S. authorities to show 
pass-through.  Furthermore, as the European Co mmunities understands that USDOC has calculated 
the subsidy benefit at the level of the exporters c oncerned, no adjustment at the level of the trading 
companies would appear necessary.    3. Denial of Offsets of Benefits Found Wh en Calculating the Amount of Subsidisation 
("Zeroing") 
 
8. The European Communities considers that inju rious subsidisation is not investigated on an 
individual transaction basis; rather, Article VI:3 of the GATT 1994  and Articles 10, 11.2(ii), 12.9, 
12.10, 13.1, 13.2, 13.4, 15.3, 15.5, 16.1, 16.3, 18.6, 19.3, 19.4, 20.1, 20.6, 22 and footnote 36 and 46 
of the SCM Agreement  refer to "merchandise", "product" or "product under investigation".  Since the 
purpose of imposing countervailing duties is to offset any subsidy or subsidies given to a product, the 
calculation of the total amount of subsidisation granted to a particular product allows for the 
aggregation of all subsidies found to have been granted to that product during a particular period of 
time ( i.e., the period of investigation or "POI").  Thus , it is undisputed that aggregation of all 
subsidies is necessary to offset the total bene fits obtained by the subsidised product.   
 9. However, an issue that arises in the present dispute seems to be whether a similar aggregation 
can be done when calculating the amount of subsidi sation in a particular subsidy scheme.  In this 
respect, the European Communities observes th at, although investigating authorities have  WT/DS379/R 
 Page B-23 
 
 
 considerable leeway in calculating bene fits in accordance to Article 14 of the SCM Agreement , any 
methodology used to calculate the amount of subsidisation must be reasonable .  In the EC view, when 
calculating the amount of subsidisation in a give n case the question is what amount of benefit has 
been given to a particular product through the sp ecific subsidy scheme during a defined period of time 
(i.e., period of investigation).  Thus, when calculating the amount of injurious subsidisation in a given 
case investigating authorities must identify the various subsidy schemes from which a particular 
product has benefited from during an established pe riod of time.  In doing this exercise, great 
importance should be given to how investigating au thorities define the relevant subsidy scheme, the 
specific terms and conditions to obtain the subsidy by the recipient as well as the POI.  Once the 
subsidy scheme has been defined a nd the POI has been selected, investigating authorities must be 
coherent  with their own selection throughout the investigation when calculating the overall  benefit 
granted to the product concerned through that subsidy practice in the selected period.   
 10. In comparing a particular price with a benchmark under the SCM Agreement , in order for the 
result of the comparison to be meaningful, the guiding principle is that like must be compared with 
like, due adjustment being made where necessary, unl ess there is a justification for doing otherwise.  
Accordingly, the terms and conditions and timing of the price should in principle be comparable to 
those of the benchmark.  Thus, for example, if the price, amount and normal delivery date are fixed 
(ex ante ) in the contract, then the market benchmark must also be that prevailing ( ex ante ) on the date 
of the contract, on the same terms and conditions.  On the other hand, if the price, amount and normal 
delivery date are only fixed subsequent to  the contract at the time of order ( ex post ), then the market 
benchmark must be that prevailing ( ex post ) on the date of the order.  Similarly, if the market 
benchmark is a monthly average of spot prices, then one would expect that to be compared with a monthly average of transaction spot prices.  Of course, the ideal objective of ensuring comparability 
may depend in practice on the facts and evidence that are reasonably available during the municipal 
administrative proceedings, which depends on the facts of each case.   
 
III. POLICY LOANS 
 
A. F
INANCIAL CONTRIBUTION  
 11. The European Communities understands that, in the financial contribution determination, the 
USDOC found that SOCBs were "public bodies" in  the sense of Article 1.1(a)(1) of the 
SCM Agreement , by relying inter alia  on the state-ownership of the banking sector, China's legal 
framework limiting the SOCB's independence from the government and the continued government 
influence in the bank sector and bank lending decisi ons.  However, China argues that the SOCBs are 
"commercial banks" and not state-policy banks with  the express purpose of providing financing for 
state-supported projects.  As mentioned before, in the case of SOCBs ( i.e., banks more than 50 per 
cent owned by the government), it may be easier for the government to influence them to act in a 
certain manner.  Other factors may also be relevant.    B. B
ENEFIT  
 
12. As regards the calculation of the benef it, the European Communities notes that, the 
interpretation followed by the Appellate Body in US – Softwood Lumber IV  (although in the context 
of Article 14(d) of the SCM Agreement ) may be relevant for clarifying the meaning of Article 14(b).  
The Appellate Body based its interpretation on the objective of Article 14 of the SCM Agreement , 
which is the "Calculation of the Amount of a Subsidy in Terms of the Benefit to the Recipient".  In 
view of this objective, if the relevant market c onditions are distorted, the comparison contemplated by 
Article 14 would become useless.  In the case of commercial loans, if it can be shown that the 
"comparable commercial loan which the firm could actually obtain on the market" is also distorted 
because of the government intervention, then it  would follow that having recourse to other 
benchmarks could be possible on a reasonable basis.   WT/DS379/R 
Page B-24  
 
 C. S
PECIFICITY  
 13. The European Communities would like to add that  if a subsidy in the form of a loan can be 
obtained by companies of all sizes (as long as they  are sufficiently credit-worthy) with respect to 
projects across all sectors of the economy, it is unlikely that those loans could be specific under 
Article 2.1(a) or Article 2.1(c) of the SCM Agreement .  Thus, the fact that a subsidy reaches a wide 
number of beneficiaries and industries may call in to question the specificity of the measure.  
Furthermore, the European Communities is of the view that the analysis of the specificity of a subsidy 
should focus on the characteristics of the measure at issue rather than merely on the disbursements 
made thereunder.  In other words, it is the subsidy itself which de jure  or de facto  limits access to an 
"enterprise or industry or group of enterprises or industries".   
 
IV. PROVISION OF LAND-USE RIGHTS FOR LESS THAN ADEQUATE 
REMUNERATION 
 14. On the issue of specificity, the European Communities would like to point out that regional 
subsidies are not per se specific under the SCM Agreement .  Indeed, Article 2.2 of the 
SCM Agreement  addresses the specificity of subsidies limited to certain enterprises  located within a 
designated geographical region within the jurisdic tion of the granting authority.  By contrast, 
subsidies destined to all enterprises in a geographical region are not considered specific under 
Article 2.2 of the SCM Agreement .  In this respect, the European Communities notes that the text of 
Article 2.2 of the SCM Agreement  was changed with respect to the Dunkel Draft  which would have 
rendered all regional subsidies specific.  Thus, such  a change should have a meaning. Whether such 
regional subsidies are specific under Article 2 of the SCM Agreement has to be established by an 
integrated reading  of Article 2.   
 
15. As regards the calculation of the benefit,  the European Communiti es considers that the 
Appellate Body's observations in US – Softwood Lumber IV  are relevant to the present dispute.  
Indeed, if it is found that prices are distorted in the relevant market, it would be necessary to have recourse to an alternative market benchmark to establish the existence and amount of the benefit 
granted.  In this respect, the European Communitie s also notes that the fact that a piece of land is 
located 3,000 kilometres away is not sufficient re ason alone to conclude that the market benchmark 
used is unreasonable.   
 
V. SIMULTANEOUS IMPOSITION OF ANTI-DUMPING AND COUNTERVAILING 
MEASURES 
 16. On this issue, the European  Communities understands that sever al arguments can be made in 
relation to the simultaneous imposition of anti-du mping duties and countervailing duties in cases 
involving NME countries.  The European Communities invites the Panel to interpret the relevant provisions of the covere d agreements involved ( i.e., the GATT 1994 , the Anti-Dumping Agreement  
and the SCM Agreement ) in an harmonious manner, applying the customary rules of interpretation of 
public international law as required by Article 3.2 of the DSU .   
 
VI. DUE PROCESS 
 
A. U.S.
 FAILURE TO REQUEST CONSULTATIONS UNDER ARTICLE 13.1  OF THE SCM  AGREEMENT  
 
17. The European Communities considers that Article 13.1 of the SCM Agreement  establishes a 
temporal moment where the invitation for consulta tions must occur:  after an application under 
Article 11 is accepted and before the initiation of the investigati on.  The specific reference to 
Article 11 (entitled "Initiation and Su bsequent Investigation") of the SCM Agreement  would seem to 
indicate that Article 13.1 deals with the situatio n where the investigating authority has not yet  WT/DS379/R 
 Page B-25 
 
 
 complied with the substantive requirements mentioned in Article 11 that must be satisfied before an 
importing Member may initiate a count ervailing duty investigation.  By  contrast, Article 13.2 of the 
SCM Agreement  (which should serve as immediate context ) contains the obligation throughout the 
period of investigation to affo rd "a reasonable opportunity to continue  consultations, with a view to 
clarifying the factual situation and to arriving at a mutually agreed solution" ( emphasis added ).  This 
would seem to indicate that, if investigating aut horities find new subsidy schemes in the course of an 
investigation, they may continue the investigation including the new s ubsidy allegations provided that 
due process rights are not disregarded.  In this resp ect, the obligation for cont inued consultations with 
the country concerned throughout the investigations  would seem to have an identical objective as the 
obligation to invite that country for consultations before the initiation of the investigation pursuant to 
Article 11:  to preserve the Member's due process ri ghts by allowing both parties to clarify the factual 
situation and try to reach a solution.    B. U.S.
 FAILURE TO ISSUE NEW QUESTIONNAIRES  
 
18. The European Communities considers that the interpretation of Article 12.1.1 of the 
SCM Agreement  should be read in light of the chapeau provided by Article 12.1.  The 
European Communities considers that Article 12.1 of the SCM Agreement  calls for an adequate 
balance  between the rights given to interested partie s (which should be given ample opportunities to 
provide the necessary evidence) on the one hand, an d the obligation for the authorities to conclude 
investigations in a timely manner, on the other ha nd. Such analysis should be made on a case by case 
basis and on reasonable grounds .   
 WT/DS379/R 
Page B-26  
 
 ANNEX B-6 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
SUBMISSION OF JAPAN 
 
(15 June 2009) 
 
  
I. INTRODUCTION 
 
1. In this third party submission, Japan would like to present its views on systemic aspects of the 
following issues:  (a) the underlying concept of th e double remedy in Article VI:5 of the General 
Agreement on Tariffs and Trade 1994(" GATT 1994 "), and the consistency of the simultaneous 
imposition of anti-dumping and counter vailing duties with Articles 19.3 and 19.4 of the Agreement on 
Subsidies and Countervailing Measures (" SCM Agreement ");  (b) the definition of "public body" 
under Article 1.1(a) of the SCM Agreement ;  (c) the consistency of the calculation of benefit with the 
SCM Agreement ; and (d) the application of the non-zeroing principle in the context of the 
SCM Agreement . 
 
II. DISCUSSION 
 
A. THE
 SIMULTANEOUS  IMPOSITION  OF ANTI-DUMPING  AND  COUNTERVAILING  
DUTIES 
 
1. Article VI:5 of the GATT 1994 Expresses the Underlying Concept that Members Are 
Not Allowed to Impose the Double Remedy  with Respect to the Same Subsidy 
 2. Article VI:3 of the GATT 1994 , which allows an importing Member to impose a 
countervailing duty up to the amount of  the subsidy at issue, predicates that the export price would be 
lowered by the per-unit amount of the export subsid y.  If an exporting Member grants a subsidy only 
on a product for export, only the export price of the product would be lowered due to the effects of the 
export subsidy while the normal value remains unaffect ed.  In such a case, if the importing Member 
calculates the margin of dumping of such product to impose an anti-dumping duty, the resulting 
margin would consist of two parts:  (i) the diffe rence between the normal value (which is unaffected 
by the export subsidy) and the export price without the effects of the export subsidy;  and (ii) the difference between the export price without the effect s of export subsidy and the actual export price, 
which was lowered by the export subsidy.  In such a situation, if the importing Member also imposes 
a countervailing duty for the amount of the subsidy,  the countervailing duty also would remedy the 
effect of export subsidization, which already ha d been captured and remedied by the anti-dumping 
duty.  Article VI:5, therefore, explicitly proh ibits the simultaneous imposition of anti-dumping and 
countervailing duties where export subsidization is involved.  
 3. Article VI:5 of the GATT 1994 , however, provides no explicit requirement on the prohibition 
of the double remedy in other situations.  For ex ample, when a subsidy was conferred on inputs for 
the production of a product, and when the product is sold in the home market and for export, both the home market price and the export price would be lowe red by the same amount due to the effects of 
the subsidy.  In such a case, if the dumping marg in is based on the difference between the actual home 
market price and the actual export price, the resultin g margin would not be affected by the subsidy.  
Accordingly, a double remedy would not occur in su ch an instance even when the importing Member 
also imposes a countervailing duty to account for the per-unit amount of the subsidy at the same time.   WT/DS379/R 
 Page B-27 
 
 
 In the same situation, however, a double remedy may occur if the margin of dumping is calculated by 
adjusting the home market price upward for the per-u nit amount of the subsidy without an adjustment 
of the actual export price.   4. Whether the potential double remedy exists in the situation of dumping and subsidization 
other than export subsidization depends on how the investigating authority calculates the margin of 
dumping.  The underlying concept of the prohibition on double remedies may not be disregarded when an authority imposes the anti-dumping duty and the countervailing duty on the same product from the same exporting Member at the same time.  2. The Imposition of a Countervailing Duty Must  Be Consistent with Articles 19.3 and 19.4 
of the SCM Agreement   
 
5. According to China, the countervailing duties on the four products in question are 
inconsistent with Article 19.4 of the SCM Agreement  because anti-dumping duties on the same 
product would already include the amount of subsidies.   Article 19.4 concerns the amount of subsidies 
found to exist through the countervailing dut y investigation.  Article 19.1 of the SCM Agreement 
clarifies that the amount of subsidy is based on evidence collected through the countervailing duty 
investigation.  The provisions of Article 19.4 set  forth no further limitation on the maximum amount 
of the countervailing duty.  This Article is i rrelevant to how an anti-dumping duty would be 
determined by the separate anti-dumping investiga tion in accordance with the provisions of the AD 
Agreement .   
 6. China also argues that the imposition of th e countervailing duties in this dispute was not 
necessary and thus inconsistent with Article 19.3 of the SCM Agreement .  In the context of this 
Article, Article 19.2 of the SCM Agreement  provides, "the decision whether the amount of the 
countervailing duty to be imposed shall be the full am ount of the subsidy or less, are decisions to be 
made by the authorities of the importing Member."  Article 19.2 clarifies that the investigating 
authority of the importing Member has discretion to  set the amount of the countervailing duty up to 
the full amount of the subsidy found in the counter vailing duty investigation.  Article 19.4 confirms 
this discipline, setting forth that the maximum amount of the countervailing duty shall be the amount of the subsidy found to exist dur ing the period of the countervailing duty investigation.  In this 
context, Article 19.3 accords the importing Member the discretion to impose a countervailing duty 
deemed as appropriate to the extent that the duty  does not exceed the amount of the subsidy found to 
exist.  No further obligations are placed on the authority's decision of the "appropriate amount".  
 B. THE
 DEFINITION  OF "PUBLIC  BODY"  UNDER  ARTICLE  1.1(A)(1)  OF THE  
SCM AGREEMENT   
 
7. China argues that a public body in Article 1.1(a)(1) of the SCM Agreement  should be defined 
as an entity which "has been empowered by the law of the State to exercise functions of a 
governmental or public character", based on Article 5 of the Responsibility of States for 
Internationally Wrongful Acts  adopted by the International Law Commission  ("ILC Articles "). 
 
8. Although the ILC Articles  might be referred to when interpreting the WTO agreements in 
some cases, Article 5 of the ILC Articles  is not a "relevant" rule of international law in terms of 
Article 31(3)(c) of the Vienna Convention on the La w of Treaties. While the issue in the present case 
is the meaning of the term "public body", Article 5 of the ILC Articles  neither defines nor uses the 
term in any way.  
 9. As the Vienna Convention clarifies, the meaning of the terms of the SCM Agreement  must be 
considered in their ordinary me anings in the context of the SCM Agreement  and other relevant WTO 
Agreements .  In this connection, Japan notes that the term of "public body" is undefined in the WT/DS379/R 
Page B-28  
 
 SCM Agreement .  Japan also notes that the panel in Korea - Commercial Vessels  found that an entity 
will be recognized as a "public body" in light  of the government control over it under the SCM 
Agreement .   
 10. At minimum, no provision of the WTO Agreements suggests that a "public body" under 
Article 1.1(a)(1) of the SCM Agreement  would be limited to entities wh ich have been empowered by 
"the law of the State".  A public body under the Artic le may include an entity that is empowered by 
other means to exercise an element of the government.   11. The analysis of the term "public body", as discussed above, indicates that the consistency of 
the USDOC's finding of public bodies should be ex amined based on the totality of facts of the 
respective cases in dispute.  On th is aspect, China correctly argues that the mere fact of government 
ownership of an entity would not conclusively establi sh that the entity is a public body.  It appears 
that the United States also takes a similar view by arguing that the USDOC's findings were not solely 
based on the mere ownership of the Chinese government.   
 
12. In sum, the consistency of the investi ng authority's finding of public bodies should be 
examined in accordance with th e particular facts of the underlying investigations.   
 C. THE CONSISTENCY OF THE USDOC'S BENEFIT DETERMINATION WITH 
ARTICLES 14(B) AND (D) OF THE SCM AGREEMENT  
 
1. Article 14(d) of the SCM Agreement  
 
13. If the state-owned enterprises ("SOEs") are f ound to be public bodies, their sales of hot-rolled 
steel ("HRS") or petrochemical products, on which China argues that sales prices by SOEs were not 
controlled by the Chinese government, would be fina ncial contributions under Ar ticle 1.1(a)(1) of the 
SCM Agreement .  The sales price of a financial contribution by a public body itself cannot be a 
benchmark to measure the benefit.  14. The question under Article 14(d) in this dis pute would be whether transaction prices other 
than sales by SOEs in China can be a benchmark, or more specifically, whether private prices in the 
Chinese market were distorted by the transaction pr ices of financial contributions.  The Appellate 
Body in US - Softwood Lumber IV  stated, "[w]henever the government  is the predominant provider of 
certain goods, … it is likely that it can affect … the prices of private providers for those goods, inducing the latter to align their prices to the point  where there may be little difference, if any, 
between the government price and the private pri ces."  "Thus, while requiring investigating authorities 
to calculate benefit "in relation to" prevailing condi tions in the market of the country of provision, 
Article 14(d) permits investigating authorities to u se a benchmark other than private prices in that 
market."   15. As the Appellate Body clarified, the questi on presented to this Panel is whether the USDOC 
had sufficient evidence and facts found in their totality , including adverse inferences, to arrive at its 
conclusions that private prices of HRS or petroche mical products in China were distorted and thus 
unusable as a benchmark under Article 14(d).    16. Where the evidence on the record shows that th e private prices were distorted by financial 
contributions by the government, an investigating au thority has certain discretion to find a reasonable 
methodology.  This discretion, however, is not un limited.  As the Appellate Body has stated in US – 
Softwood Lumber IV , the terms "shall" and "guidelines" in the last sentence of the chapeau of 
Article 14 "establish mandatory parameters within  which the benefit must be calculated".  The 
USDOC was required to find benchmarks "related or referred to, or were c onnected with, prevailing  WT/DS379/R 
 Page B-29 
 
 
 market conditions in Canada, (including price, quality, availability, marketability, transportation and 
other conditions of purchase or sale)" under Article 14(d).  
2. Article 14(b) of the SCM Agreement  
 17. Should this Panel find that RMB-denominate d loans by the government-owned banks are 
financial contributions by the government, such loan s cannot serve as a benchmark.  Furthermore, if 
such government loans are found to be predominant in the financial market of China, an investigating 
authority could disregard the remaining loans by  private banks in China as the benchmark.   
 
18. Where the government loan dominates the relevant financial mark et, there would be no 
commercial loans "which the firm could actually obt ain on the market," as provided in Article 14(b).
   
In such a case, as the Appellate Body has stated in  Japan - DRAMs (Korea) , the authority would have 
"some latitude as to the method it chooses to calculate  the amount of benefit."  Even in such a case, 
however, the requirement to identify "a comp arable commercial loan" as a benchmark under 
Article 14(b) still remains.  As clarified by the Appellate Body in  Japan - DRAMs (Korea) , 
"informational constraints do not alter the basic fra mework from which the analysis should proceed."  
An investigating authority must find a benchmark, which is "comparable" to the government loan in 
question and is "commercial", even where private loans undistorted by government loans are not 
available in the domestic market of the exporting Member.   
19. In conclusion, the question presented to this Pa nel, therefore, is whether sufficient evidence 
and intermediate findings support the USDOC's conclu sion that there were no private loans or private 
prices of inputs, which were not distorted by the financial contributions of the government.  Should 
the Panel find that there were no such benchmarks , the Panel then should further review the USDOC's 
adopted benchmark to determine whether they are consistent with the framework of Articles 14 (b) 
and (d).  
 D. THE BENEFIT SHOULD BE EXAMINED ON A SUBSIDY-SPECIFIC BASIS WITHOUT 
ZEROING 
 20. China argues, "[m]ultiple provisions of th e SCM Agreement, including Articles 10, 19.3 and 
19.4, likewise make clear that a countervaili ng duty is to be imposed in respect of ' product' under 
investigation."   21. A countervailing duty may be imposed to offset  the amount of a subsidy if the amount exists 
at the time of its imposition, as provided for in footnote 36 and Articles 19.2 and 19.4 of the SCM 
Agreement .  The question before the investigating authorit y, and accordingly, before this Panel is to 
define the scope of "a subsidy".    22. Article 1.1(a)(1) of the SCM Agreement  provides that " a subsidy  shall be deemed to exit if 
there is a financial contribution ".  Subparagraph (i) then provides that there is a financial contribution 
where " a direct transfer of funds" is involved.  The paragraph (c) of Article 2.1 of the SCM Agreement  
then provides that " a subsidy ... is specific" where it will be granted upon "use of a subsidy program".  
These provisions indicate the premise of the SCM Agreement that "a subsidy" may be granted by "a 
financial contribution" from the government, such as  a direct transfer of funds, under one subsidy 
programme.    
23. Article 14 of the SCM Agreement does not define what would constitute a subsidy.  
Investigating authorities are required to first determ ine the financial contribution, which consist of a 
subsidy.  The determination of a benefit conferre d on the recipient, including identification of an 
appropriate benchmark, follows the determ ination of the financial contribution.  
 WT/DS379/R 
Page B-30  
 
 24. What constitutes a specific financial contribut ion under a subsidy programme is an issue of 
fact.  For example, a government might agree to sell input materials under certain terms and conditions for a certain period of time through multiple shipments.  In such a case, the entire series of 
shipments as a whole may be considered to be a fi nancial contribution.  Accordingly, the calculation 
of the amount of the subsidy from such a financial contribution should be based on the total value of 
all shipments covered by the agreement, rather th an the assessment of the benefit for an individual 
shipment based on the value of its shipment.   25. The issue of the amount of a subsidy from the input transactions in question, therefore, must 
be based on the finding of one financial contributi on upon an examination of underlying facts of these 
transactions. 
 
III. CONCLUSION 
 
26. Japan respectfully requests the Panel to examin e 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 
SCM Agreement  and the GATT 1994 . 
   WT/DS379/R 
 Page B-31 
 
 
 ANNEX B-7 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
SUBMISSION OF MEXICO 
 
 
(15 June 2009) 
  1. Mexico is setting out its views on the interpre tation of certain provisions of the GATT 1994, 
the Protocol of Accession of the People's Repub lic of China (the "Protocol"), the Anti-dumping 
Agreement ("AD Agreement") and the Agreement on Subsidies and Countervailing Measures ("SCM 
Agreement"), given the systemic importa nce the Panel's conclusions will have. 
2. As regards the simultaneous application of an ti-dumping and countervailing duties, we note 
that neither the AD Agreement nor the SCM Agreem ent contain any provisions in this respect.  On 
the other hand, Article VI:5 of the GATT 1994 does explicitly address this point.  Indeed, it prohibits such simultaneous application when both duties are intended to compensate the "same situation".  It 
does not explain when dumping and export subsidization result in the "same situation", but this can be 
deduced from the negotiating history of Article VI:5. 
3. According to the negotiating history, the prohibition in Article VI:5 of the GATT 1994 does 
not apply to countervailing duties that offset domestic subsidies because these do not result in dumping.  Consequently, Mexico takes the view that when countervailing duties target domestic 
subsidies (and not export subsidies), the simulta neous application of an ti-dumping and countervailing 
duties is consistent with the rules of the WTO. 
4. In our view, the Protocol permits such simultane ous application.  We note that there is no 
basis for assuming that Article VI:5 applies only to  Members with market economies.  Article 15 of 
the Protocol contains specific provisions in add ition to those of GATT Article VI, the AD Agreement 
and the SCM Agreement for imports of Chinese origin (normal value, measuring benefit, etc.).  With 
respect to the AD Agreement, Article 15 re cognizes the surrogate country methodology and 
acknowledges that the imports may form the subject of  a countervailing duty investigation.  If China, 
in negotiating its accession, had succeeded in ne gotiating a prohibition on applying simultaneous 
duties to its products, this would have been specified in the Protocol.  As there is no such provision, it 
can only be concluded that Article 15 of the Protocol does
 allow the combined application of 
anti-dumping and countervailing duties. 
5. Moreover, exempting China from the para llel imposition of anti-dumping duties and 
countervailing duties would lead to China's being gi ven preferential treatment relative to all other 
Members, to which they can be applied simultane ously under Article VI of the GATT 1994.  For us, 
China's claim looks like an attempt to obtain from th e dispute settlement system a result that it should 
have tried to obtain when negotiating its accession to the WTO. 
6. The fact is, that when the negotiators of the WTO agreements considered it necessary to 
prohibit the simultaneous application of different mech anisms, they said so expressly, so that there is 
no basis whatsoever for assuming that the WTO Ag reements establish such a restriction.  Thus, 
according to the principle expressio unius est exclusio alterius , as the simultaneous imposition of 
countervailing duties and anti-dumping duties calcu lated under the surrogate country methodology 
has not been expressly prohibited, it cannot be held that it is contrary to WTO rules. WT/DS379/R 
Page B-32  
 
 7. If Members had wanted to prohibit the simu ltaneous imposition of countervailing duties and 
anti-dumping duties calculated under surrogate count ry methodology, the SCM Agreement, or failing 
that the Protocol, would have included a provision to that effect.  In Mexico's opinion, the fact that such a provision was not incorporated either in th e AD Agreement, in the SCM Agreement or in the 
Protocol reinforces the conclusion that such "simu ltaneous imposition" is permitted under the rules of 
the WTO. 
8. Nor is it acceptable, in Mexico's view, to seek  to give the articles of the SCM Agreement a 
meaning that they do not have.  China claims th at simultaneous imposition violates articles 19.3 and 
19.4 of the SCM Agreement.  However, as neither of  these provisions concerns the matter at issue, we 
consider that China's claim has no basis at all.  Consequently, we consider that China has not proved 
prima facie  violation by the United States of these provisions of the SCM Agreement. 
9. At the same time, China omits to mention that  Article VI:5 of the GATT 1994 deals expressly
 
with the simultaneous imposition of anti-dumping duties and countervailing duties, and that the 
Protocol regulates aspects of the Anti-Dumping Ag reement and the SCM Agreement with regard to 
imports of Chinese origin that relate to simultaneous imposition. 
10. Article VI:5 of the GATT does not prohibit, nor does the Protocol limit, simultaneous 
application as China contends.  In fact, what Chin a claims is tantamount to negating Article VI:5 of 
the GATT 1994 and Article 15 of the Protocol, which w ould be totally contrary to the principle of 
effectiveness recognized in WTO precedent ( United States – Gasoline ). 
11. With regard to the surrogate country met hodology in anti-dumping investigations, China 
argues that application of this methodology yields  a normal value free from distortions (including 
distortions caused by subsidies granted in non-market economy countries). 
12. There is no basis for this at all.  Application of the surrogate country methodology does not  
enable prices and costs adjusted for the distorting eff ects of the subsidy to be obtained.  Consequently, 
Mexico sees no reason whatsoever to consider th at the simultaneous imposition of countervailing 
duties and anti-dumping duties calculated under the su rrogate country methodology is inconsistent 
with the WTO agreements.  Thus, we consider that China has not proved prima facie  violation by the 
United States on the grounds that the surrogate country methodology implies determination of 
market-economy normal value adjusted  for the effects of subsidies. 
13. Basing itself on United States – DRAMs , China claims that for a company owned by the State 
to be termed a "public body", the requirements in the Draft Articles1 of the United Nations 
International Law Commission must be met, namely  (1) the enterprise must be empowered by the 
State to exercise functions of a public character normally exercised by the State, and (2) the conduct 
of the entity must concern governmental activity and not other private or commercial activity in which the entity may engage. 
14. Mexico considers China's approach to be errone ous.  The definition of the term "public body" 
was not addressed in United States – DRAMs.  In that case, the Appellate Body examined whether an 
act by a private entity could be considered as bei ng instructed by a government to make a financial 
contribution and based itself on the Draft Articles .  At no time did it say anything about whether the 
public character of a body depended on the form in which the body acted. 
15. In our view, the function performed by the entity is  irrelevant in determ ining its "public body" 
status.  That status must be determined on the basis of government shareholdings in the entity in 
question, and not on the basis of the intended pur pose of the goods or services it produces or provides 
                                                     
 
1 Draft Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries.   WT/DS379/R 
 Page B-33 
 
 
 (see Korea – Commercial Vessels ).  In other words, we take the view that government shareholding in 
a body is sufficient to consider it public. 
16. Moreover, the Draft Articles refer to the concept of "public entity" in the context of "wrongful 
acts".  The granting of subsidies is not a wrongful act , so that the concept of "public entity" in the 
Draft Articles does not apply to this dispute. 
17. At the same time, the standard proposed by China is unacceptable.  Since State enterprises 
which sell goods and services are not established by "t he law of the State to exercise functions of a 
public character normally exercised by State orga ns", and their sales of goods and services would not 
qualify as "functions relating exclusively to their go vernmental activity and unconnected with private 
or commercial activity", State enterprises that sell goods and services would neve r be considered to be 
"public bodies", despite the fact that Article 1. 1(a)(1)(iii) of the SCM Agreement clearly includes 
them. 
18. As regards the analysis of pass-through of the benefit, China argues that the analysis was 
necessary in cases where the inves tigated enterprises bought inputs  from private trading companies 
which, in their turn, had purchased  them from State enterprises.  Chin a claims that by failing to carry 
out this analysis, the United States acted inconsistently with the WTO agreements. 
19. Mexico does not agree with China.  As can be seen from several precedents in both the GATT 
and the WTO ( United States – Pork;  United States – Softwood Lumber IV;   and Mexico – Olive Oil ), 
it is clear that this analysis is only needed when  the subsidies are given for the production of a good 
that is an input for the product under investigation.   As in this case the subsidies were granted for the 
production of the goods investigated themselves,  the pass-through analysis was not required, 
regardless of whether the State ente rprises sold to private trading co mpanies which then sold to the 
companies under investigation. 
20. Regarding the determination of the existence of benefit for the trading companies, it should be 
pointed out that the Appellate Body determined (United States – Countervailing Measures on Certain 
EC Products ) that a financial contribution may be grante d to a company indirectly.  In this case, 
because the private trading compan ies were only the vehicle through which the contribution reached 
the companies under investigation, they received th e contribution indirectly, so that there was no 
reason whatsoever to determine whether these trading companies had obtained a benefit. 
21. Concerning the benchmark used by the United St ates, Mexico considers that the standard 
applicable is that indicated by the Appellate Body in United States – Softwood Lumber IV , according 
to which an investigating authority may indeed use a reference point other than prices in the country 
under investigation provided that it is determined that  the prices are distorted by the role played by the 
government. 
22. China claims that the United States failed to  establish its benchmark properly and points out 
that in the Laminated Woven Sacks  investigation, there was no single or uniform government-set 
price, that there was no Chinese government agency that set prices for inputs, and that significant 
private investment existed in the petrochemical industry in China, so that their internal data had to be 
used. 
23. In Mexico's view, the points raised by China have nothing to do with the key element for 
determining whether the U.S. benchmark was prop er or not, namely whether or not there was 
distortion due to the role played by the Chinese government. 
24. Thus, Mexico considers that if the U.S. had sufficient evidence of th e existence of such 
distortion, the Panel should find that the U.S. acted in conformity with the WTO agreements.  WT/DS379/R 
Page B-34  
 
 Obviously, since we do not know whether that evidence existed, our opinion is not intended to 
prejudge whether the U.S. could, indeed, use the benchmark or whether that benchmark was properly 
determined. 
25. Mexico is grateful to the Panel for th e opportunity to comment on these questions of 
interpretation with systemic implications. 
  WT/DS379/R 
 Page B-35 
 
 
 ANNEX B-8 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
SUBMISSION OF NORWAY 
 
 
(15 June 2009) 
   
TABLE OF CONTENTS 
 
 
  Page
 
 
I. INTRODUCTION ................................................................................................................ .36 
 
II. WHETHER STATE OWNED ENTERPRISES ("SOE") AND STATE- 
 OWNED COMMERCIAL BANKS ("SO CB") MUST BE CONSIDERED  
 "PUBLIC BODIES".............................................................................................................. 3 6 
 
A.  INTRODUCTION ............................................................................................................... .... 36 
B.  INTERPRETATION OF THE TERM "PUBLIC BODY"...................................................... 36 
 
III. EXCLUSION OF TRANSACTIONS AT PRICES BELOW THE EXTERNAL  
 BENCH-MARK IN THE CALCULATI ON OF OVERALL BENEFIT.......................... 37 
 
A. INTRODUCTION ................................................................................................................ ...37 
B.  ANALYSIS................................................................................................................... ........... 37 
 
IV. "DOUBLE REMEDY" ......................................................................................................... 38 
 
A. INTRODUCTION ................................................................................................................ ...38 
B. ANALYSIS.................................................................................................................... .......... 38 
   WT/DS379/R 
Page B-36  
 
 I. INTRODUCTION  
 
1. As a third party to this Norway would like  to address the following interpretative issues: 
 
 • The criteria for defining a "public body" under the Agreement on Subsidies and 
Countervailing Measures ("SCM Agreement ") (chapter II);  
 
 • The use of a "zeroing" methodology when calculating "benefit" received from inputs 
provided by State Owned Enterprises (SOEs) (chapter III); and 
 
 • "Double Remedy" (chapter IV). 
 II. WHETHER STATE OWNED ENTERPRISES ("SOE") AND STATE OWNED 
COMMERCIAL BANKS ("SOCB") MUST BE CONSIDERED "PUBLIC BODIES" 
 
A.  INTRODUCTION  
2. For a measure to constitute a subs idy according to Article 1 of the SCM Agreement :  (i) it 
must entail a financial contribution or income or price support by a government or a public body; and (ii) it must confer a benefit.  3. As regards State Owned Enterprises ("SOE") and State Owned Commercial Banks ("SOCB"), a key issue in the dispute is whether these enterp rises can be considered "public bodies" within the 
meaning of Article 1.1(a)1 of the SCM Agreement.  Were the Panel to consider that these enterprises 
are not
 public bodies, then the United States would ha ve had to show that a non-public body was 
nevertheless "entrusted or directed" by the State to  provide a financial contribution to the exporter or 
producer under investigation.  Such anal ysis was not performed by the United States.1   
 
B.  INTERPRETATION OF THE TERM "PUBLIC BODY" 
 4. The question at issue is whethe r majority state ownership alone is sufficient to conclude that 
an enterprise is a "public body" w ithin the meaning of article 1.1 of the SCM Agreement, or whether 
"public body" requires a functional relationship to  the exercise of some form of governmental 
authority when providing the financial benefit. 
 
5. Norway believes that it is important to read the reference to "government or any public body" 
also in light of Article 1.1(a)(1)(iv) and its refere nce to situations where the government "entrusts or 
directs a private body to carry out one or more of  the type of functions ... which would normally be 
vested in the government ..." (emphasis added).   
 
6. By focussing on situations where a private bod y has been "entrusted or directed" to perform 
functions that would normally be vested in the government,  Article 1.1(a)(1)(iv) gives a clear 
indication that the dividing line between the "public  bodies" and the "private bodies" is based on a 
functional delimitation  where the key element is whether the body in question performs governmental 
functions or not.  If the body in question does not perform governmental functions, any financial 
contribution it provides is only attributable to the State if the government has entrusted or directed  it 
to provide such contribution.  7. In EC – DRAMS,  the Panel noted that "...it should be clear that, in our view, government 
ownership, in and of itself , is not suffici ent to establish entrustment or direction under 
                                                     
 
1 United States, First Written Submission ("US FWS"),  para. 65.  WT/DS379/R 
 Page B-37 
 
 
 Article 1.1(a)(1) of the SCM Agreement."2.  The Panel went on to state that "In the case of a 100 per 
cent government-owned bank, such as Woori Bank, it thus needs to be demonstrated that the 
government actually exercised its shareholder power to direct the bank to support to Hynix."3  When 
government ownership is not sufficient to establish "e ntrustment or direction", Norway submits that it 
is even less suited to establish that such co mpanies shall be considered as "public bodies". 
 
8. The same Panel stated, more as an obiter  in footnote 129, that "We do not wish to imply that 
it would not be possible or justified to treat a 100 per cent government owned entity as a public body, 
depending on the circumstances. [...]".  Norway submits  that the particular circumstance that could 
lead to a conclusion that a 100 per cent government  owned entity was a public body, would only be 
present where the government owned company exercises governmental functions. 
 9. The Panel in Korea - Commercial Vessels took the opposite view that government 100 per 
cent ownership and control could be sufficient to consider that the Korean Export Credit Guarantee 
Institute (KEXIM) was a public body.
4  The Panel, however, noted that it also relied on such factors 
as government appointment of officers, governme nt approval of budget and operations programme 
and Koreas own description of KEXIM as a "special governmental financing institution" and as an "export credit agency".
5 
 10. Although the Panel reports are differently wo rded, Norway considers that both reports lend 
support to the position that government ownership is no t sufficient in and of itself to determine that a 
company is a "public body".  Other elements must be present, of which Norway suggests that a key 
element would be the exercise of governmental functions.  11. Based on the above, Norway submits  that Article 1.1(a)(1) of the SCM Agreement  cannot be 
interpreted to mean that all companies with more than 50 per cent government ownership are 
automatically to be considered "public bodies".  Where the body, after a factual analysis of its 
functions, is found not to perform governmental functions, it is not a "public body" within the 
meaning of Article 1.1(a)(1) – but may well be a private body covered by the SCM Agreement by 
virtue of Article 1.1(a)(1)(iv).  
III. EXCLUSION OF TRANSACTIONS AT PRICES BELOW THE EXTERNAL BENCH-
MARK IN THE CALCULATION OF OVERALL BENEFIT 
 
A. INTRODUCTION  12. China claims that the United States ac ted inconsistently with Article 14 of the 
SCM Agreement  and Article VI:3 of the GATT in the calculation of benefit in the OTR CVD 
investigation.  China argues that the United States would have concluded that there was no benefit, if 
it had conducted an aggregate analysis over the whol e period of investigation, without the use of 
"zeroing" of certain transactions.
6 
 B.  ANALYSIS 
 
13. The issue before this Panel is whether the r easoning that led Panels and the Appellate Body to 
conclude that "zeroing" is prohibited under the Anti-Dumping Agreement and Article VI:1 and VI:2 of 
                                                     
 
2 Panel Report, EC – DRAMS, para. 7.119. 
3 Id., para. 7.120. 
4 Panel Report, Korea – Commercial Vessels,  para. 7.50.  Similar statements were made in respect of 
four other Korean government agencies. 
5 Id, paras. 7.50 – 7.52. 
6 China FWS, paras. 142 – 143. WT/DS379/R 
Page B-38  
 
 the GATT, applies equally to the benefit calculations under Article 14 of the SCM Agreement  and 
Article VI:3 of the GATT.  Norway will point to  two elements that support the claim that the 
"zeroing" methodology employed by the United States in  this case is inconsistent with Article VI:3 of 
the GATT.  
14. Article VI:3 of the GATT provides that a countervailing duty is levied on a product, and that 
any such countervailing duty shall not be in excess of the benefit (bounty) granted on the 
manufacture, production or export of such product.  The use of the singular form of the noun makes 
clear that the calculation of benefit from inputs received from SOEs must be for all input transactions during the period of investigation.  The reasoning th at led the Appellate Body to find that similar 
words in Article VI:2 of the GATT precluded a finding of dumping for individual transactions applies 
with equal force to the calculation of benefits  derived from single input transactions viewed 
separately.  15. Furthermore, as Norway understands the case,  the United States created monthly external 
benchmark prices to measure benefit from subsidizati on.  Using monthly benchmark prices in such a 
situation, and "zeroing" monthly results wh ich showed no "benefit", made a finding of a 
countervailable subsidy almost certain from the outset.  The application of a methodology that is almost certain to lead to a conclusion of "benefit"  and countervailable subsidization in all cases, based 
on single transactions compared to a benchmark set by  the investigating authorities, cannot be said to 
comply with the requirements of Article 14(d) of the SCM Agreement and Article VI:3 of the GATT. 
 
IV. "DOUBLE REMEDY" 
 
A. INTRODUCTION  
16. Norway in this part only addresses certain inte rpretative issues related to China's claim that 
the U.S. Department of Commerce's use of its  Non-Market Economy methodology to determine 
normal value in the anti-dumping de terminations, concurrently with a determination of subsidization 
and the imposition of countervailing duties on the sa me products, was inconsistent with Articles 10, 
19.3, 19.4, and 32.1 of the SCM Agreement  and with Article VI of the GATT. 
7 
 
B. ANALYSIS 
 17. Norway does not exclude that it may be perm issible in certain situations to apply anti-
dumping duties and countervailing duties simultaneous ly to the same imports, notwithstanding the 
provision of Article VI:5 of the GATT, but to wishes to draw the Panel's attention to certain elements 
that may be pertinent to its analysis of the legal issues surrounding simultaneous application of the 
two instruments.  18. An investigating authority under the anti-dumpi ng agreement, in its determination of normal 
value for the product under consideration, ma y apply a Normal Value based on different 
methodologies provided for in Article 2.2 of the Anti-dumping Agreement and in the ad note  to 
Article VI:1 of the GATT.  The choice of metho dology and the cost elements that go into the 
calculation of Normal Value can have an impor tant bearing on the issue of subsidization. 
 19. Where the Normal Value is based on the prod ucer's sales price in his home market in the 
ordinary course of trade, that price may have been lowered due to e.g. subsidization of inputs into the 
production.   In such cases, a dumping duty only o ffsets the dumping itself (the "price differentiation" 
between home market price and export price), not  the subsidization of his "cost of production". 
 
                                                     
 
7 China FWS , para. 468(h) and Section VI(E).  WT/DS379/R 
 Page B-39 
 
 
 20. Where the Normal Value is based on cons tructed normal value (CNV), the question is 
whether CNV is based on the producers actual data fo r the inputs (i.e. subsidized inputs are included 
with the subsidized price), or constructed pri ces for the inputs.  If CNV is calculated using the 
subsidized input prices in its calculation, the CNV will be lower than for non-subsidized production.  
In such cases AD + CVD may be applied.  If the CN V is not calculated with subsidized prices for the 
inputs – but with "non-distorted" or "benchmark" pr ices for the (otherwise subsidized) inputs, then the 
effect of any subsidy is "extinguished" in the CNV calculation and applying an anti-dumping duty up 
to the maximum permitted under the Anti-dumping Agreement  will provide a remedy for the 
subsidization at the same time.  In such cases, applying a CVD will neither be appropriate under the 
SCM Agreement  Article 19.3 of nor permissible under Article 19.4 . 
 
21. Where the Normal Value is based on a Third Country Market as benchmark, the same issues 
relating to how the benchmark is calculated appli es.  China argues, and the United States does not 
appear to dispute, that in calculating the constr ucted normal value based on a Third Country Market 
benchmark, US DOC avoids the use of any su rrogate value that may itself be subsidized.8  It would 
thus appear that the Chinese producer's export price to the United States is compared to a market 
economy cost of production free from any dumping or subsidy distortion.  By applying the full anti-dumping duty up to this Third Country Market benchm ark, all effects of subsidization is extinguished 
at the same time.  Applying a CVD in such cases will  neither be appropriate under Article 19.3 of the 
SCM Agreement  nor permissible under Article 19.4 of the SCM Agreement.  
 
                                                     
 
8 China FWS,  para. 371 and corresponding footnote 315. WT/DS379/R 
Page B-40  
 
 ANNEX B-9 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
SUBMISSION OF SAUDI ARABIA 
 
 
(15 June 2009) 
  
TABLE OF CONTENTS 
 
 
I. INTRODUCTION ............................................................................................................... 4 1 
 II. STATE OWNERSHIP IS INSUFFICIENT FOR AN ENTITY TO BE   CONSIDERED AS A "PUBLIC BODY" UNDER ARTICLE 1 OF THE SCM  
 AGREEMENT ..................................................................................................................... 41 
 III. THE USE OF ALTERNATIVE BENCHMARKS FOR THE DETERMINATION   OF BENEFIT IS PERMISSIBLE ONLY IN EXCEPTIONAL CIRCUMSTANCES,   AND IS SUBJECT TO STRICT DISCIPLINES .............................................................. 42 
 
IV. AN INVESTIGATING AUTHORITY MUST BASE LOAN BENCHMARKS ON   THE ACTUAL COMMERCIAL BORROW ING EXPERIENCE OF A FIRM........... 43 
 V. IN CASES OF ALLEGED SUBSIDIZED INPUTS, THE INVESTIGATING   AUTHORITY MUST CONDUCT A "PASS-THROUGH" ANALYSIS TO  
 DETERMINE IF THE DOWNSTREAM  PRODUCER HAS RECEIVED A  
 BENEFIT....................................................................................................................... ....... 44 
 VI: CONCLUSIONS ................................................................................................................ .. 44  WT/DS379/R 
 Page B-41 
 
 
 I. INTRODUCTION  
 
1.  The Kingdom of Saudi Arabia has joined as a third party in this dispute to provide its views on a number of fundamental issues relating to the interpretation of the Agreement on Subsidies and 
Countervailing Measures (the SCM Agreement).  Th e Kingdom takes no position on the merits of the 
claims that are based on the particular facts of this case.   
 
II. STATE OWNERSHIP IS INSUFFICIENT FOR AN ENTITY TO BE CONSIDERED 
AS A "PUBLIC BODY" UNDER ARTICLE 1 OF THE SCM AGREEMENT  
 2.  For an entity to be considered a "public body" under Article 1.1(a)(1), it must: (i) be vested 
with governmental authority, thus allowing the gover nment to control its activities; and (ii) function 
as a governmental entity that serves a public policy objective rather than a commercial objective.  
 3. The ordinary meaning of the term "public body" denotes a governmental  function, not State 
ownership.  The Kingdom notes that the Spanish versi on uses the term "organismo público" to refer to 
both "public body" as well as to "government agency ."  The same is true  for the French term 
"organisme public" in the French version of the text.  In Canada – Dairy  the Appellate Body 
interpreted these terms to mean an entity which exercises powers vested in it by a government to 
perform functions of a governmental character, i.e., to regulate, restrain, supervise or control the 
conduct of private citizens.  The fact of State owne rship by no means plays a dispositive role in this 
interpretation.  The Panel should therefore consid er "public body" as synonymous with a government 
agency.   4. The context in which the term "public body" appears in Article 1.1 of the SCM Agreement supports a narrow reading of the term as a government agency.  Article 1.1(a)(1) refers to a "financial 
contribution by a government or any public body within the territory of a Member ( referred to in this 
Agreement as ‘government' )….".  Thus, the drafters of the SCM Agreement made clear that a 
"public body" is to be regarded as a subset of "government."  
 
5. The SCM Agreement relates to the actions of WTO Members, i.e., to the behaviour of 
governments.  Indeed, this point is reinforced by the inclusion of the "entrustment or direction" 
disciplines set out in Article 1.1(a)(1)(iv).  On ly entities possessing some type of governmental 
authority are able to "entrust or direct" private bodies to act in a particular manner.  Furthermore, even 
in the context of "entrustment or direction", St ate ownership plays a relatively limited role.  Since 
complete government ownership does not suffice to conclude that an entity acts under the entrustment or direction of the government, then, a fortiori , such government ownership is not sufficient to 
consider the entity to be a "public body" ( i.e., the government itself), as such a finding would obviate 
the need to determine the existence of entrustment or direction.   6.  In US – Countervailing Duty Investigation on DRAMS , the Appellate Body accepted the 
International Law Commission conclusion that where corporate entities are owned by the State, their 
conduct is not attributable to the State "unless they are exercising elements of governmental 
authority."
1  It is important to stress that the Appellate  Body's comment was ma de in the context of 
Article 1 of the SCM Agreement, and so is highly relevant in the present dispute.  A state-owned 
enterprise (SOE) that is not "exercising elements of governmental authority" is not a "public body" 
under Article 1.   
7. The GATS definition of the closely-related term "public entity" reinforces the governmental 
nature of a "public body" under Article 1.1(a)(1) of the SCM Agreement.  The GATS definition of a 
                                                     
 
1 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS , para. 112, footnote 179. WT/DS379/R 
Page B-42  
 
 "public entity" requires more than simple governme nt ownership or control - the entity's primary 
functions must be "governmental."   8. In terms of relevant context, the Kingdom would respectfully caution the Panel against the 
use of China's Working Party Repor t as the basis for the interpreta tion of a term as important as 
"public body" in the SCM Agreement.  China's WPR may contain commitments specific to China.  It 
cannot, however, serve as the basis for interpreting provisions of the WTO agreements that apply to 
all WTO Members, such as Article 1 of the SCM Agreement.    9. The object and purpose of the SCM Agreement further support a narrow interpretation of the 
term "public body." The Appellate Body has stated that the object and purpose of the SCM 
Agreement is "to strengthen and improve GATT disc iplines relating to the use of both subsidies and 
countervailing measures, while, recognizing at the sa me time, the right of Members to impose such 
measures under certain conditions."
2 The interpretation of "public body" cannot be so broad as to 
allow Members to apply countervailing measures to any sales made by certain entities simply because 
they are partially or wholly owned by the State.  
 10. Finally, the Kingdom is of the view that the Panel Report on Korea – Commercial Vessels  
supports a reading of the term "public body" as an en tity that is controlled by government such that it 
is acting in a governmental capacity.  The Panel in Korea – Commercial Vessels  found that an entity 
will constitute a "public body" if it is "controlled" by the government, such that its actions may be 
attributed to the government.  The criterion used by the Panel was "control", not "ownership." 
Ownership was simply part of the evidence of such control.  The Panel also attached great 
importance to the "public policy" objective of an en tity, and the fact that it acted in an "official 
capacity." According to the Panel, an entity that is  vested with governmental authority and acts in an 
"official capacity" is a public body, even if it makes its financial contribution based on commercial 
principles.
3 
 11. In sum, the Kingdom is of the view that the term "public body" in Article 1.1(a)(1) of the 
SCM Agreement, based on its ordinary meaning, its  context and the Agreement's object and purpose, 
refers to an entity vested with governmental aut hority that exercises a governmental function.  To 
interpret this term to include an entity on the sole  ground of State ownership would be an error in 
treaty interpretation.  
 
III. THE USE OF ALTERNATIVE BENCHMARKS FOR THE DETERMINATION OF 
BENEFIT IS PERMISSIBLE ONLY IN EXCEPTIONAL CIRCUMSTANCES, AND IS SUBJECT TO STRICT DISCIPLINES  
 
12. The principal benchmark for calculating a bene fit under Article 14(d) of the SCM Agreement 
is the domestic market price in the country of pr ovision.  The use of an alternative benchmark is 
permissible only in exceptional circumstances.  If exceptional circumstances necessitating the use of 
an alternative benchmark have been established, th en the cost of production of the goods in the 
country of provision serves as the most appropriate  alternative to domestic market prices.   
 
13. Article 14(d) of the SCM Agreement establis hes domestic market price as the principal 
standard for determining whether and to what extent  a benefit is conferred by the provision of a good 
for the purpose of Part V of the Agreement.  Price is foremost among the "prevailing market 
conditions" enumerated in Article 14(d) and it should thus be the first reference point used by an 
investigating authority to determine benefit.  
 
                                                     
 
2 Appellate Body Report, US – Softwood Lumber IV , para. 64. 
3 Panel Report, Korea – Commercial Vessels , para. 7.48.  WT/DS379/R 
 Page B-43 
 
 
 14. In US – Softwood Lumber IV , the Appellate Body made clear that alternative benchmarks may 
be used only in exceptional circumstances, and em phasized that the possibility under Article 14(d) for 
investigating authorities to use a benchmark other th an private prices in the country of provision is 
"very limited."4  The Appellate Body has interpreted Article 14(d) to allow for the use of alternative 
benchmarks only as an exception of last resort, wh en it has been established that private prices are 
distorted, such that "private suppliers will ali gn their prices with those of the government-provided 
goods."5  As stated by the Appellate Body, distortion cannot be presumed to exist simply because the 
government is a significant supplier or has a major presence in the market of the goods in question. 
Instead, investigating authorities are obliged to est ablish that the prices are actually distorted "on a 
case-by-case basis, according to the particular facts underlying each countervailing duty 
investigation."6 
 
 15. Furthermore, as is clear from the Appellate Body's reasoning in US – Softwood Lumber IV , if 
such distortion is established, any alternative benchm ark employed by the investigating authority must 
properly reflect domestic market conditions in the country in question.  
 
16. In the Kingdom's view, external benchmar ks are an inappropriate alternative for the 
calculation of a benefit under Article 14(d) of the SCM Agreement.  The nature and extent of the 
adjustments that would be required for external ma rket prices to reflect in-country market conditions 
make meeting these requirements practically impossi ble in virtually all cases.  The Appellate Body 
has warned that countervailing measures cannot be  used to "offset differences in comparative 
advantages between countries."
7 
Moreover, the use of external benchmarks is demonstrably 
inappropriate with respect to financial contributi ons in the form of the provision of land.   
 17.  The Kingdom submits that benchmarks based on the domestic cost of production of the goods 
or services in question are the most appropriate a nd WTO-consistent alternative to domestic market 
prices when an investigating authority has made a de termination that such prices are distorted.  The 
cost of production benchmark is not only the most reliable possible alternative, but it has also been 
supported and endorsed in previous Appellate Body jurisprudence.  
 
IV. AN INVESTIGATING AUTHORITY MUST BASE LOAN BENCHMARKS ON THE 
ACTUAL COMMERCIAL BORROWING EXPERIENCE OF A FIRM    
 
18. An investigating authority, in determin ing a benchmark under Article 14(b) of the SCM 
Agreement, is required to inquire into the actua l commercial borrowing experience of the recipient 
firm in order to determine what comparable comme rcial loans the firm could "actually obtain."    
 
19. The use of the term "comparable" in Article 14(b) strongly suggests that the benchmark loan 
should be a loan that is expressed in the same curre ncy, and subject to the same generally applicable 
financial regulations of the country providing the gove rnment loan.  The word "commercial" refers to 
any transaction that is made in the ordinary course of commerce.  Finally, the phrase "which the firm 
could actually obtain on the market" imposes a requirement that the benchmark be based on the actual borrowing experience of the recipient firm.  
 
20. Contrary to what the United States is ar guing, the Appellate Body's interpretation of 
Article 14(d) in US - Softwood Lumber IV  is not "equally applicable" to  the determination of benefit 
under Article 14(b) SCM Agreement.  The Appellate Body Report in US - Softwood Lumber IV  was 
demonstrably not "based on the entirety of Article 14", as the United States argues, but rather was 
                                                     
 
4 Appellate Body Report, US - Softwood Lumber IV , para. 102.  Emphasis added. 
5 Appellate Body Report, US - Softwood Lumber IV , para. 115. 
6 Appellate Body Report,  US - Softwood Lumber IV , para. 102 . 
7 Appellate Body Report,  US - Softwood Lumber IV , para. 109. WT/DS379/R 
Page B-44  
 
 based on the specific terms of Article 14(d).  Moreover, assuming arguendo  that the Appellate Body's 
reasoning in US - Softwood Lumber IV  did apply to Article 14(b), then the Appellate Body's clear 
admonitions on the use of outside benchmarks would apply as well.    
V. IN CASES OF ALLEGED SUBSIDIZED INPUTS, THE INVESTIGATING 
AUTHORITY MUST CONDUCT A "PASS-THROUGH" ANALYSIS TO 
DETERMINE IF THE DOWNSTREAM PR ODUCER HAS RECEIVED A BENEFIT  
 
21. The issue of "pass-through" relates to a basic principle of WTO disciplines with respect to the 
use of countervailing measures: a countervailing du ty can only be levied on a product where an 
investigating authority determines that a subsidy has been granted, directly or indirectly, on the 
product subject to the duty.    22.  The basic principle of GATT Article VI:3 is that an authority may only impose a countervailing duty on a product to off set a subsidy granted either dir ectly or indirectly to that 
product.  In case of "arm's length" sales between unrel ated parties, an investigating authority may not 
presume that all or part of the benefit was passed through.   23. There is no basis to use a different approach  simply because the subsidy has had an alleged 
"effect" on the market price for the product sold by the direct recipient of the subsidy.  A contrary 
approach would render the need for a "pass-through" analysis meaningless, as any subsidy granted to 
the upstream producer could have some effect  on the market price for its products.   
 24. The problem caused by an expansive approach  to the application of the pass-through concept 
would be exacerbated by the use of out-of-country be nchmarks.  Investigating authorities could use a 
broad pass-through approach to ignore domestic market prices for upstream products which are 
allegedly "distorted" by the original subsidy on  those products.  Instead, the authority would use 
market prices in a third country as a benchmark for determining the benefit that upstream inputs 
confer on unrelated downstream exporters purchasing th e inputs in arm's length transactions at market 
prices.  This would lead to a finding of subsidiza tion where in fact no subsidies were granted to the 
producers of the product subject to the investigation.   VI.  CONCLUSIONS  
 
25.  The Kingdom respectfully urges the Panel to r esolve this dispute in a manner that maintains 
the balance that was clearly intended by the drafters of the Agreement.     WT/DS379/R 
 Page B-45 
 
 
 ANNEX B-10 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY 
SUBMISSION OF TURKEY 
 
(16 June 2009) 
 
  
I. INTRODUCTION 
 
1. Turkey thanks the Panel for this opportunity to  present its views in this proceeding.  Although 
the dispute between the U.S. and China covers many  issues, Turkey will focus on three major subjects 
namely "public body determination", use of out -of country benchmark" and "pass through of a 
benefit" arise from this dispute.  
II. DETERMINATION OF PUBLIC BODY 
 
2. Article 1.1(a)(1) of the Agreement on Subsidies and Countervailing Measures (SCM 
Agreement) contains two separate terms "government " and "public body".  Therefore in order to 
accept that a subsidy is granted, a financial contribut ion must be provided either by "government" or a 
"public body".   
3. Since the SCM Agreement used two terms, in  Turkey's view, the meanings of these terms 
should be construed differently.  However, SMC Agreement does not provide any definition with 
regard to these two terms.  Therefore, what constitutes "government" or "public body" under the 
article in question needs to be interpreted.  This interpretation should be made in accordance with the 
ordinary meanings taken into account in the cont ext, object and the purpose of the SCM Agreement 
pursuant to Article 31.1 of the Vienna Convention.  
 4. China argued that in order to accept an entity as a public body, both an entity should perform 
governmental functions and the powers to perform these functions should be vested by the state. 
However China's claim to take governmental charact er as a prerequisite to determine an entity as a 
public body narrows the actual meaning of the "public body" and equates it to "government".  Such an 
interpretation would annul the di stinction between the two term s and render the "public body" 
meaningless.   5. In Turkey's views, Paragraph 5(c)(i) of th e Annex on Financial Services to the GATS is not 
the relevant legal basis to interpret the term public  body used in the SCM Agreement.  Firstly, while 
the SCM Agreement states "public body", the refe rred paragraph of the Annex in question provides 
the definition of "public entity", so it is clear that  these two terms are not the same.  Secondly, it is 
clear from the "For the purpose of this Annex … " expression mentioned in the same paragraph that, 
the "public entity" definition is only for the scope of the Annex in question.  
6. On the other hand Turkey also considers ILC Articles as an irrelevant legal basis for 
interpreting the term "public body" for several re asons.  First of all ILC Articles are not among the 
annexes of the Marrakesh Agreements .  In addition, the scope and the application of the ILC Articles 
are totally distinct from the SCM Agreement.  Furthermore due to the lex specialis  clause contained in 
the Article 55 of the ILC Articles, it is not possible to apply the ILC Articles to this dispute.   WT/DS379/R 
Page B-46  
 
 7. Turkey is of the view that  "government control" criterion
1 set forth by the Korea - 
Commercial Vessels Panel is the most proper criteri a for determining whether an entity is a public 
body and Turkey also considers that the ownership is the main indicator of the control of an entity.  
III. USE OF EXTERNAL BENCHMARK 
 
8. During its accession to the WTO China acknowledge d the fact that it had a centrally-planned 
economy and undertook some commitments in its Accession Protocol including commitments on the 
application of trade remedies by other Members.   
9. Specifically, in the Article 15(b) of the Acce ssion Protocol, China accepted to be subject to 
special rules with regard to subsidi es.  It is clear from this article that, the Members are allowed to use 
appropriate ways to ensure applicabilit y of the rules against subsidies.  
 10. Besides, Turkey is of the view that the A ccession Protocol is not the only source which allows 
using external benchmark.  Pursuant to Article 14 of the SCM Agreement external benchmarks may 
be used in some cases.  11. Similarly, the Appellate Body also ruled that, even for market economies the primary benchmarks provided in the Article 14(d) of the SCM Agreement may not work.  If the investigating 
authority determines that private prices in that co untry are distorted because of the predominant role 
of the government, it may use another benchmark.
2 Turkey considers that in cases where the 
prevailing market conditions in a Member do not pr ovide an appropriate base to make a meaningful 
comparison to determine whether a benefit has b een conferred due to the predominance of the 
government in the economy, the rules of th e SCM Agreement will still be applicable. 
 
12. In the Accession Protocol, China has al ready accepted that the prevailing terms and 
conditions in China may not always be available as appropriate benchmarks.  If the investigating 
authority uses the private prices as the benchmark wh ile the predominance of the government is a fact, 
benefit will probably be artificially low or even zero.  As a result, the full extent of the subsidy would 
not be captured and the rights of Members to "fully  offset, by applying countervailing duties, the 
effect of the subsidy as permitted by the SCM Agreement" 3 would be injured. 
 
IV. PASS THROUGH OF A BENEFIT 
 
13. In Turkey's view, the SCM Agreement does not require that the recipients of a benefit and a 
financial contribution should be the same.  This approach is also in line with the reasoning stated in 
Mexico - Olive Oil Panel Report.4  Acceptance of the opposite would lead to the circumvention of the 
disciplines on subsidization by includ ing a private party to the chain. 
 
V. CONCLUSION 
 
14. For the reasons stated above, Turkey requests th e Panel, in deciding the dispute, to take into 
account observations and comments stated in this submission. 
                                                      
1 Panel Report, Korea – Measures Affecting Trade in Commercial Vessels , WT/DS273/R, adopted 
11 April 2005, DSR 2005:VII, 2749, para 7.50 
2 Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to 
Certain Softwood Lumber from Canada , WT/DS257/AB/R, adopted 17 February 2004, para. 90 
3 US - Softwood Lumber CVD  Final (AB), Para.95. 
4 Panel Report, Mexico - Definitive Countervailing Measures  on Olive Oil from the European 
Communities , WT/DS341/R, adopted 21 October 2008, para 7.152  WT/DS379/R 
 Page B-47 
 
 
 ANNEX B-11 
 
 
THIRD PARTY ORAL STATEMENT OF 
ARGENTINA 
 
 
(7 July 2009) 
  1. Argentina thanks the Panel and the parties to th is dispute for the opportunity of attending the 
hearing today, as a third party, and putting forward its points of view on certain issues that are of 
systemic interest. 
2. Argentina has already referred to the question of simultaneous application of anti dumping 
and countervailing measures on exports from China by the United States Depart ment of Commerce.  
In this statement, Argentina will not reiterate the elements already set forth in its written submission, 
but will instead refer to complementary elements. 
3. Argentina considers that, when deciding whethe r or not determination of an anti-dumping 
duty using the surrogate country methodology  simultaneously with determination of a countervailing 
duty is consistent with the WTO rules, it must be  established whether there is any provision in these 
rules prohibiting a Member from such simultaneous a pplication.  China has not pointed to any express 
provision establishing this, nor has Argentina been able to find one in the Articles of the GATT 1994 
(GATT), or in the Anti-dumping Agreement (AD Agre ement), or in the Agreement on Subsidies and 
Countervailing Measures (SCM Agreement).  Moreover,  neither Article 19.3 nor Article 19.4 of the 
SCM Agreement, on which China implicitly bases its  argument, regulate the question of "double 
remedy" or duplication in the terms claimed by China. 
4. In its first written submission, the United States brings into the discussion Article 15.1 of the 
Subsidies and Countervailing Measures Code of the Tokyo Round (SCMC)
1, which expressly  
contains a prohibition on the simultaneous determ ination of anti-dumping and countervailing duties in 
the cases covered by paragraph 1.2 of the Note Ad Ar ticle VI of the GATT 1994.  This provision was 
not retained in the SCM Agreement, which lacks a si milar prohibition.  The relevance of Article 15 of 
the SCMC is twofold:  on the one hand, why shoul d particular significance be attached to the absence 
of a similar rule in the SCM Agreement?  On th e other, why should this provision, or rather its 
absence, be relevant when interpreting Artic le 19.3 and 19.4 of the SCM Agreement? 
5. The wording of Article 19.4 of the SCM Agreement is identical to Article 4.2 of the SCMC of 
the Tokyo Round, whereas the first sentence of Article  19.3 of the SCM Agreement, which is the part 
put forward by China to substantiate its claim, is  reasonably similar to Article 4.3 of the Tokyo Round 
SCMC.2  Presumably, if both rules had the scope claime d by China in its assertions to the effect that 
in themselves they establish a prohibition on th e simultaneous applicati on of the two measures, 
Article 15.1 of the Tokyo Round SCMC would be devoid of meaning and this redundancy cannot be 
                                                      
1 Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General 
Agreement on Tariffs and Trade. 
2 The difference between the two texts is limited to use of the singular "appropriate amount" in the 
Tokyo Round SCMC and "appropriate amounts" in the current SCM Agreement. WT/DS379/R 
Page B-48  
 
 inferred on the basis of the principle of interpre tation which the Appellate Body indicated as a 
corollary to the general rule of in terpretation of the Vienna Convention.
3 
6. In the absence of any express legal prohibition substantiating the argument relating to the 
alleged prohibition on the use of both measures simult aneously, China turns to  reasoning that equates 
the concepts of distortion and subsidization.4  Following this line of reasoning, China concludes that 
"[h]aving made this determination and calculate d anti-dumping duties on this basis, Commerce has 
necessarily addressed any allocation of productiv e resources within that economy that was not 
determined by market forces, including the provisi on of subsidized resources.  A double remedy will 
therefore arise in all cases in which Commer ce applies the two remedies simultaneously".5 
7. Argentina does not agree.  Argentina considers th at not every measure involving price or cost 
distortion in an economy can be classified a subsidy in the terms of Article 1 of the SCM Agreement.  
The Panel adopted this line of reasoning in United States – Measures Treating Export Restraints as 
Subsidies , in which it found that the SCM Agreement "was drafted with the express purpose of 
ensuring that not every government intervention in the market would fall within the coverage of the 
Agreement".6 
8. The goal of the surrogate country methodology is  to provide an alternative for transparent 
prices in situations where there are distortions in the economy, and not to offset any subsidies that might exist.  Even if we could agree with Chin a that subsidies are the quintessence of distortions
7, 
they are not the only category of distortions that can affect variables in a market and, in any event, 
offsetting them must be done according to the terms of the relevant Agreement. 
9. Accordingly, the application of the two me asures – anti-dumping according to the surrogate 
country methodology, and countervailing duties – simultaneously, does not in itself imply the 
situation of duplication that China claims, and is th erefore not inconsistent with the rules of the WTO. 
10. Argentina thus concludes its oral submission at  this hearing, once again expresses its thanks 
for the opportunity given and is ready to answer an y questions or expand on the elements it has set out 
should the Panel so require. 
                                                      
3 United States – Standards for Reformulated and Conventional Gasoline  (WT/DS2/AB/R), report of 
the Appellate Body, section IV, page 21 of the English text. 
4 First written submission of China (FWS), paragraph 37 3, which states:  "Indeed, seen at one level, 
one might say that a non-market economy is an economy in which all resources are s ubsidized, i.e., none  of the 
productive resources within that economy are allocated according to market fo rces.  Thus, the rationale for using 
an NME methodology in an antidumping investigation, necessarily subsumes the rationale for imposing 
countervailing duties, i.e., that a government has provided a 'trade distorting' financial contribution that leaves 
the recipient of the subsidy 'better-off' than it would have been had it obtained th e same resource on market 
determined terms" (emphasis in the original text). 
5 FWS of China, paragraph 374. 
6 Report of the Panel, WT/DS/194/R, paragraph 8.63. 
7 FWS of China, paragraph 373, which states:  "A subsidy is the quintessential example of a 
government intervention that disrupts the normal allocation of resources".  WT/DS379/R 
 Page B-49 
 
 
  
ANNEX B-12 
 
 
EXECUTIVE SUMMARY OF THE THIRD PARTY  
ORAL STATEMENT OF AUSTRALIA 
 
 
(17 July 2009) 
  A. 'PUBLIC BODY' UNDER ARTICLE 1.1(A)(1)  
1. Australia is concerned that a definition of ' public body' that would require a body to:  (i) be 
vested with governmental authority, and (ii) ca rry out governmental functions for governmental 
purposes
1, has no basis in the text of the Agreement on Subsidies and Countervailing Measures 
(Subsidies Agreement).  It instead appears to be created by conflating the test for entrustment or 
direction under Article 1.1(a)(1)(iv) and by using external sources of international law2 which are not 
relevant in this instance. 
 
The necessary distinction between 'public body ' and the test for entrustment or direction  
 
2. In Australia's view, it is necessary to maintain  a distinction between the definition of 'public 
body' and the test for entrustment or direction.  Fundamentally, the test for entrustment or direction 
serves a different purpose; that is, to capture th ose incidents when priv ate bodies are used by 
governments to provide a financial contribution.  Th is should not be conflated with the definition of 
'public body,' which goes to the nature of  the body in question. 
 3. The interpretive context that Article 1.1(a )(1)(iv) provides is a point of contrast and 
distinction, not one from which pa rallels or analogies can be drawn.
3  Australia is concerned that 
attempts to artificially introduce the concepts  of government authority and the exercise of 
governmental functions into a definition of 'public  body' would undermine the distinction between the 
meaning of 'public body' and the test for entrustment or direction.  Recourse to other international texts for interpretative context 
 
4. China has advocated recourse to Articles 5 and 8 of the United Nations International Law 
Commission Draft Articles on State Responsib ility for Internationally Wrongful Acts  as relevant 
context for the interpretation of Ar ticle 1 of the Subsidies Agreement.
4  Australia considers that the 
Articles offer no interpretive assistance in this case.   
 
5. Articles 5 and 8 of the ILC Draft Articl es address the 'conduct of persons or entities 
exercising elements of government authority' an d 'conduct directed or controlled by a State', 
                                                      
1 See First Written Submission of China paras. 65 and 68; Third Party Submission of the Kingdom of 
Saudi Arabia para. 5; Third Party Submission of Norway, paras. 12-13. 
2 First Written Submission of China, para. 72. 
3 Third Party Written Submissi on of Norway, para. 12. 
4 Article 31(3)(c) of the Vienna Convention on the Law of Treaties:  First Written Submission of China, 
paras. 72, 77, and 83. WT/DS379/R 
Page B-50  
 
 respectively.
5  They do not address the definition of pub lic body.  Instead they would appear to 
address the situation where an otherwise private or non-state actor's actions can be attributed to a 
government - a situation that would more closel y mirror entrustment or direction, if any. 
 6. Similar arguments apply in relation to the atte mpt to use the definition of 'public entity' in 
paragraph 5(c) of the GATS Annex on Financial Services.
6  The GATS Annex specifically prefaces 
its definition of 'public entity' with the phrase ' For the purpose of this Annex …'.  The scope and 
purpose of the Annex as stated in paragraph 1(a) is  for 'measures affecting the supply of financial 
services.'  This points to the specialised role of th e definition of a 'public entity' within the GATS. 
 
7. More fundamentally, Australia does not agree that an apparent recourse to 'context' for the 
purposes of interpretation can be used to transform the scope of a provision in a way that is not 
otherwise available from the text.  Nor can interpretati ve context be used to in clude an additional test 
of exercising government authority that is not apparent from the text, particularly when to include such a test would undermine a clear distinction betw een the definition of public body and the test for 
entrustment or direction. 
 B. PRIVATE TRADING COMPANIES AND PASS-THROUGH  8. Further to Australia's statements in secti on D of its written submission, Australia considers 
that where trading companies act as mere interm ediaries in a transaction, it may be unnecessary to 
conduct a full pass-through analysis, particularly where the trading companies appear to have 
constituted an indirect route for providing a subsidy to exporters.  This approach is consistent with the 
Appellate Body statement in US – Softwood Lumber that a 'pass through analysis' is not necessary in 
every situation in which a subsidy is provided on the production of an input product.
7 
 
9. Furthermore, Australia considers that in the case of an indirect subsidy, where an intermediate 
act does not change the nature of the input, the benef it is most accurately calculated at the level of the 
exporters concerned.  This approach is cons istent with the Appellate Body's findings in US − 
Countervailing Measures  that there may be a direct or indirect recipient of the benefit of a financial 
contribution.8 
 
C. ARTICLE 14(D) AND THE USE OF BENCHMARKS OTHER THAN PRIVATE PRICES 
IN THE HOME MARKET 
 10. Australia considers that Article 14(d) perm its investigating authorities to use a benchmark 
other than private prices in that market so l ong as 'investigating authorities calculate benefit "in 
relation to" prevailing conditions in the market of the country of provision.'
9   
 11. Australia further considers that there is nothing in the Subsidies Agreement to support the 
argument that the provision of land should be treat ed differently to the provision of other goods under 
Article 14(d).  On the contrary, the term 'goods' has been given a broad meaning under 
                                                     
 
5 Articles 5 and 8 of the Draft Articles on Responsibility of States for Internationally Wrongful Acts , 
United Nations International Law Commission, Report on the Work of its Fifty Third Session (10 August 2001). 
6 China First Written Submission, para. 62; Third Part y Submission of Saudi Arabia, para. 42-43; Third 
Party Submission of Norway, para. 22-23. 
7 Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to 
Certain Softwood Lumber from Canada , WT/DS257/AB/R, 17 February 2004, para. 141. 
8 Appellate Body Report, United States – Countervailing Measures on Certain EC Products , 
WT/DS212/AB/R, 9 Decem ber 2002, para. 143. 
9 Appellate Body Report, United States − Softwood Lumber , Ibid, para. 101.  WT/DS379/R 
 Page B-51 
 
 
 Article 1.1(a)(1)(iii) of the Subsidies Agreement to include immovable property.10  As the Appellate 
Body stated in US - Softwood Lumber , a broad interpretation, as reflect ed in the French and Spanish 
language texts, suggests that land is indeed a 'good' for the purposes of the Subsidies Agreement.11 
 D. POLICY LENDING AND SO CALLED 'DOUBLE REMEDIES'  
 
12. In relation to policy lending, Australia would lik e to reiterate the key point that 'statements of 
government policies, plans and intentions are highl y relevant considerati ons in determining the 
existence of a subsidy and whether the subsidies ar e targeted to certain industries or enterprises.'
12 
 
13. In terms of the issue of so-called 'double reme dies', Australia would lik e to reiterate that anti-
dumping and countervailing duties are two separate re medies under two distinct WTO Agreements.  
Nothing in GATT Article VI or elsewhere in the WTO Agreements prevents concurrent or parallel 
anti-dumping and countervailing duty investigations with respect to the same product.   
 
                                                      
10 Appellate Body Report, United States − Softwood Lumber , Ibid, at paras. 59 and 65. 
11 Appellate Body Report, United States − Softwood Lumber , Ibid, at paras. 59 and 65. 
12 See Third Party Written Submission of Australia, para. 30. WT/DS379/R 
Page B-52  
 
 ANNEX B-13 
 
 
THIRD PARTY ORAL ST ATEMENT OF BRAZIL 
 
 
(7 July 2009) 
 
  
Mr. Chairman, distinguished Members of the Panel, 
 1. Brazil appreciates the opportunity to present this  oral statement as a Third Party in the current 
proceedings.  The present dispute raises several questions of systemic interest to many WTO 
Members, as the number of Third Party Submissions makes evident.  Brazil would like to contribute 
to this debate by furthering additional elements to  some specific issues discus sed in its submission.  
The first issue Brazil wishes to address is the definition of the expression "public body" in Article 1 of the SCM Agreement.  Clarification of the meaning and scope of this expressi on will contribute to the 
proper application of CVD measures.  2. As indicated in its Third Party Submission, Brazil does not opine on the specific factual 
context of this dispute and takes no position on whether the Chinese companies involved in the 
present case are encompassed by a proper definition of "public body".  This assessment will depend 
on the examination of the totality of facts before  the panel, which may well include, for instance, 
issues related to determinations made in light  of non-cooperation on the part of investigated 
companies.  Such assessment is beyond  the remit of this intervention. 
 
3. As regards the legal interpretation of the e xpression "public bodies" in Article 1 of the SCM 
Agreement, Brazil does not consider appropriate the classification of enterprises totally or partially-
owned by the State as "public bodies" in CVD investigations based solely on majority state 
shareholding.  This automatic classification could le ad to regular market transactions involving non-
public state-owned companies being regarded as fi nancial contributions un der the SCM Agreement, 
potentially burdening these entities unfairly.  It is  not infrequent to find state-owned companies 
operating in the market with autonomy, indistinguishably from any other private company, despite an ownership link to the government.  4. For this reason, Brazil advocates the necess ity of a two-tiered evaluation: firstly, the 
investigating authority should delve into the eviden ce provided in order to ascertain if the underlying 
nature of the entity in question is that of a "public body"; if a negative answer is found, the 
examination should instead search for specific inst ances where governmental entrustment or direction 
was present.  
5. Article 1.1(a)(1)(iv) of the SCM Agreement e xpressly refers to private bodies that carry out 
functions "which would normally be vested in the government".  This is the more immediate 
"context" under which the expression "public body" in  the SCM Agreement should be interpreted, as 
per the guidelines of treaty interpretation found in th e Vienna Convention.  It can be directly inferred 
from Art 1.1(a)(1)(iv) that the main dividing line be tween actions determined by public or by private 
motivations should be the presence of public interest – be it incidental , as in the case of entrusted or 
directed private bodies, or more permanent , as is characteristic in public bodies. 
  WT/DS379/R 
 Page B-53 
 
 
 6. Moreover, the Panel in EC-DRAMS1 assumed that even when actions involve entities wholly 
owned by the State, it must be demonstrated that the government actually exercised its power over that entity and directed it to take actions against ma rket logic.  As previously stated, non-public state-
owned companies typically enjoy a significant degree of autonomous decision-making in pursuing its objectives in the marketplace.  For obvious reasons, such  an analysis is even more important in regard 
of partially state-owned enterprises, where private ag ents may be directly affected and therefore exert 
an opposing force to a hypothetical governmental intervention.  7. For these reasons, Brazil respectfully submits th at an overly broad definition of the expression 
"public body" would disturb the balance of the disciplines of the SCM Agreement. 
 
8. Regarding the alleged "double remedy" i ssue, Brazil contends that, the SCM and AD 
Agreements should be treated as independent sets of disciplines, to the extent that there is no provision establishing cross-references between th em.  The only linkage between anti-dumping and 
countervailing duty disciplines found in the Covere d Agreements is GATT Article VI.5, which 
expressly refers to export subsidies. 
 9. The possibility of simultaneous application of anti-dumping and countervailing duties on the 
same imported product is evident from at least two diff erent perspectives.  Firstly, the existence of an 
explicit ban in the legal text regardin g export subsidies can be easily read, contrario sensu , to allow 
for the concomitant application of both duties in a ll other situations.  This is synthesized in the 
expressio unius est exclusio alterius  general legal principle.  Secondl y, this argument is reinforced by 
the existence of a specific discipline with in SCM Agreement's predecessor, the GATT Subsidies 
Code , which prohibited the simultaneous application of both duties on imports from a certain set of 
countries.  The fact that this prohibition was not replicated in the current SCM Agreement 
underscores the intention of its drafters not to pr ohibit the combined imposition of AD and CV duties 
on imports from Members, irrespective of thei r status as Market or Non-Market Economies.  
 
10. This concludes Brazil's Oral Statement.  
 
                                                     
 
1 Panel Report, EC – DRAMS, para. 7.120. WT/DS379/R 
Page B-54  
 
 ANNEX B-14 
 
 
THIRD PARTY ORAL ST ATEMENT OF CANADA 
 
 
(7 July 2009) 
 
INTRODUCTION 
 1. Mr. Chairman, distinguished members of the Panel, Canada would first like to express its 
appreciation to the Panel and the Secretar iat for their work in this dispute. 
 2.  This dispute concerns the imposition of anti-dumping and countervailing duties on Chinese 
products.  In this connection, Ca nada would like to emphasize the status and importance of China's 
Accession Protocol and the commitments made by China that are noted in the Working Party Report 
on its accession.  Both documents are integral parts of  the WTO Agreement.  They relate specifically 
to China and are central to a finding of WTO-cons istency or inconsistency with respect to certain 
issues in this dispute.  3.  In this oral statement, I will discuss two i ssues not addressed in Canada's written submission: 
pass-through and the offsetting of benefit.  I will then make some additional comments on one issue 
addressed in Canada's written submission:  th e concurrent imposition of anti-dumping and 
countervailing duties.  
I.  PASS-THROUGH 
 
4.  I will first deal with issues arising in the context of the successive sales of input goods by state-owned enterprises to trading companies and by  the trading companies to respondent producers. 
 5.  In three of the investigations at issue, th e U.S. Department of Co mmerce found that the sales 
by state-owned enterprises constituted financial cont ributions that conferred a countervailable benefit 
to respondent producers. 
 6.  China argues that Commerce violated the SCM Agreement by failing to find that the trading 
companies themselves provided a financial contribution when they sold the inputs and by failing to find that the trading companies had received a be nefit from the sale of inputs by the state-owned 
enterprises.  For its part, the United States alleges that there was no obligation on Commerce to make 
these findings.  7.  Under Article 1.1 of the SCM Agreement , a subsidy shall be deemed to exist if there is a 
financial contribution and a be nefit is thereby conferred. 
 
8.  To impose a valid countervailing duty on a produc t as a result of the successive sales at issue, 
Commerce had to determine that the sales of inputs  by the state-owned enterprises to the trading 
companies constituted a financial contribution that c onferred a benefit both directly upon the trading 
companies and indirectly upon the respondent producers.  
9.  The possibility that a single financial contribution could confer both a direct and indirect 
benefit is confirmed by the Appellate Body's decision in United States – Softwood Lumber IV .  
Indeed, the Appellate Body found that the requireme nt for a financial contribution could be fulfilled WT/DS379/R 
Page B-55 
 
 
 where the government made a financial contribution to an input producer who in turn sold the input to 
a respondent producer.  10.  The Appellate Body did not require that  the input producer make a separate financial 
contribution to a respondent producer for the purposes of determining whether the respondent 
producer is subsidized under Article 1.1 of the SCM Agreement . 
 11.  Similarly, in the current matter, there was no requirement for Commerce to find that the 
trading companies made financial contributions to the respondent producers.  Finding that the sale of inputs by state-owned enterprises constituted a financial contribution was sufficient. 
 
12.  However, to countervail a subsidy, Comme rce had to demonstrate that the financial 
contribution made by the state-owned enterprises ultimately conferred a benefit upon the respondent 
producers.  
13.  China argues that, without a valid finding that  the trading companies had received a benefit, 
there was no legitimate basis for Co mmerce to conclude that all or some portion of the benefit was 
conferred on the respondent producers who purchased the inputs from the trading companies.  China 
adds that Commerce undertook no examination of the price the trading companies paid for the inputs 
they purchased.  
14.  The United States answers that it was not  necessary for Commerce to measure any benefit 
that the trading companies may have received.  15.  Canada submits that a direct recipient of a benefit cannot pass through to an indirect recipient 
a higher amount of benefit than what it received.   The amount of benefit conferred on the direct 
recipient is the maximum amount of benefit that can pass through to the indirect recipient and be 
countervailed.  16.  Therefore, in most cases, a precise calcula tion of the amount of bene fit conferred on a direct 
recipient is necessary to determine the amount of the benefit that passes through to an indirect 
recipient. 
 
17.  However, such a precise calculation may no t be necessary if the direct recipient purchases 
goods from a government or public body, does not furt her process them, and simply resells them for 
at least as much as it purchased them.  In that case, the difference between the resale price paid by the 
indirect recipient and the benchmark price reflects the extent to which the direct recipient passed the 
benefit received from the financial contribu tion through to the indirect recipient. 
 
II.  OFFSETTING OF BENEFIT 
 
18.  I now turn to the issue of the proper calcula tion of benefit provided by way of the provision of 
goods by a government or public body in a situation where some transactions are made above a 
relevant benchmark price. 
 19.  China argues that Commerce should have ta ken such transactions into account.  The United 
States responds that Commerce was entitled to ignore them.   
20.  I will make a few general observations on this issue. 
 21.  Article 14(d) of the SCM Agreement is the key provision with respect to the calculation of the 
amount of benefit conferred on a recipient throug h the provision of goods.  It provides that the 
provision of goods by a government or public body must not be considered as conferring a benefit WT/DS379/R 
Page B-56  
 
 unless the provision is made for less than adequate remuneration.  The adequacy of remuneration will 
generally be assessed by comparison with a benchmark price.  22.  There is no provision in the SCM Agreement that specifically requires that a benefit conferred 
on a recipient through one or more transactions be offset where other transactions between the 
recipient and the government or public body are on  terms that are less favourable than prevailing 
market terms.  23.  However, under certain circum stances, the examination of whether the provision of a good 
through one or more transactions is made for adequate remuneration ma y require that other 
transactions be examined.  For example, where ther e is an on-going contract ual relationship between a 
government supplier and a purchaser, it may be a ppropriate to take into account a range of 
transactions between the same parties concerning th e same goods in order to determine whether one 
or more transactions were ma de for adequate remuneration. 
 III.  CONCURRENT IMPOSITION OF COUNTERVAILING AND ANTIDUMPING 
DUTIES 
 
24.  Finally, I wish to address the WTO-c onsistency of the conc urrent imposition of 
countervailing and anti-dumping duties determined on the basis of prices or costs outside China; that 
is, using the so-called "non -market economy methodology". 
 
25.  China argues that such concurrent impos ition gives rise to a "double remedy" and is 
inconsistent with Articles 19.3 and 19.4 of the SCM Agreement and Article I:1 of GATT 1994 .  The 
United States replies that the c oncurrent imposition of duties is not inconsistent with the WTO 
Agreement. 
 
26.  Canada demonstrates in its written submission that, in the case of products of Chinese origin, 
the concurrent imposition of duties is consis tent with Articles 19.3 and 19.4 of the SCM Agreement . 
 27.  It is also Canada's position that neither  the use of the "non-market economy methodology" 
nor the concurrent imposition of duties on Chinese pr oducts using that metho dology is inconsistent 
with Article I:1 of GATT 1994 . 
 28.  Article VI:1 of GATT 1994 and Article 2 of the Anti-dumping Agreement require a strict 
comparison with domestic prices or costs to establish the normal value of products from "market economy" Members.  However, subparagraph 15(a)(ii) of China's Accession Protocol specifically 
allows an importing Member to calculate the norma l value of Chinese products using the "non-market 
economy methodology".  Thus, the application of that methodology to Chinese products does not 
amount to an importing Member according an "advant age, favour, privilege or immunity" to "market 
economy" Members in breach of Article I:1 of GATT 1994 . 
 29.  Nor is Article I:1 breached when an an ti-dumping duty based on the "non-market economy 
methodology" is imposed on a Chinese product concurrently with a countervailing duty. 
Notwithstanding China's allegation that the concurrent imposition gives rise to a "double remedy", Section 15 of the Accession Protocol , Article VI of GATT 1994, and the provisions of the SCM 
Agreement and the Anti-dumping Agreement permit such concurrent imposition. 
 
30.  Moreover, as discussed in Canada's writte n submission, a subsidized and dumped product 
from a "market economy" Member is also s ubject to both countervailing and anti-dumping 
disciplines.  Therefore, the concurrent impos ition on Chinese products of countervailing and anti-
dumping duties, however calculated, is  consistent with Article I:1 of GATT 1994 . 
 WT/DS379/R 
Page B-57 
 
 
 CONCLUSION 
 
31.  Mr. Chairman, distinguished members of the Pa nel, this concludes Canada's oral statement.  
 WT/DS379/R 
Page B-58  
 
 ANNEX B-15 
 
 
THIRD PARTY ORAL ST ATEMENT OF THE  
EUROPEAN COMMUNITIES  
  
(7 July 2009) 
  Mr. Chairman, distinguished Members of the Panel,  1. In this oral statement the European Comm unities will further comment on one issue: the 
concurrent application of anti- dumping and countervailing duties to the "same situation", responding 
in particular to certain observations contai ned in the third party written submissions. 
2. We agree with the United States that China has not pursued a claim under Article VI:5 of the 
GATT 1994 , which is the only provision in the covere d agreements that expressly addresses the 
concurrent application of an ti-dumping and countervailing duties.
1  China's silence implies that it does 
not challenge the interpretation of that provision ad vanced by the United Stat es.  We note that China 
does make a claim under the "appropriate" sta ndard referenced in Article 19.3 of the SCM 
Agreement2, but we do not see why, as the pleadings sta nd, the Panel need reach the question of the 
interpretation of Article VI:5 of the GATT 1994 .  Accordingly, given that Article VI:5 of GATT 1994 
has not been invoked and that the United States appe ars not to have exceeded the amount of subsidy 
when imposing countervailing duties, we would inv ite the Panel to reject China's claims under both 
Article 19.3 and Article 19.4 of the SCM Agreement .  
3. In any event, the European Communities agrees with the Un ited States' interpretation of 
Article VI:5 of the GATT 1994 . 
4. We have carefully noted the observations of a number of third parties with respect to the 
interpretation of Article VI:5.3 We agree with the United States4 that the term "export subsidization" is 
synonymous with various other terms as used in  the covered agreements, such as, notably: "export 
subsidization";5  "subsidy … on the … export";6  "subsidy … upon … the export";7  "export subsidy" 
or "export subsidies";8  "subsidy to exports";9  "subsidies contingent, in law or in fact, … upon export 
performance";10  and "subsidy … in fact tied-t o … exportation or export earnings"11 (as evidence of a 
subsidy contingent upon export performance).12 
                                                      
1 Request for Consultations, para. (6); Panel Requ est, paras B.1.(f) and B.2; China's First Written 
Submission, Section VI; United States First Written Submission, Section VIII. 
2 China's First Written Submission, Section VI. 
3 For example, Australia's Third Party Written Submission, para. 49; Japan's Third Party Written 
Submission, para. 7; Norway's Third Part y Written Submission, paras. 41 to 47.  
4 For example, United States First Written Submission, paras. 397 and 399. 
5 For example, Agriculture Agreement , Article 9(3). 
6 For example, GATT 1994 , Article VI:3, first sentence and Article XVI, paras. 2, 3 and 4. 
7 For example, GATT 1994 , Article VI:3, second sentence. 
8 For example, GATT 1994 , Article XVI, Section B, title; SCM Agreement , footnote 5 and Annex I; 
Agriculture Agreement , Article 1(e) (defining "export subsidies" as subsidies contingent upon export 
performance). 
9 For example, GATT 1994 , ad note to Article VI, paragraphs 2 and 3, second paragraph. 
10 For example, SCM Agreement , Article 3.1(a). WT/DS379/R 
Page B-59 
 
 
 5. We also agree with the United States that this contingency or tie between the subsidy and the 
export is confirmed by the ordinary meaning  of the term "export subsidization".13  The juxtaposition 
of these terms, and particularly the choice of the term export as opposed to any other term, implies 
such a contingency or tie.  In our view, the ordina ry meaning of the term "export subsidisation" does 
not extend to the situation in which there is no such  contingency or tie – and in particular does not 
extend to the situation in which there is a mere a llocation of part of a neutral subsidy to exports. 
6. We further agree with the United States that this view is well-supported by the context , 
including, but not only, the provisions we have refe rred to above, in particular Article VI:3 of the 
GATT 1994 .14  In particular, we find that the context s uggests that the term "export subsidization" in 
Article VI:5 refers back to the term "subsidy … on  the … export" in Article VI:3.  We believe that 
this view is supported by the French and Spanis h versions.  Further, we note that the terms 
"manufacture" and "production" may overlap; that the se terms, together with the term "transportation" 
may overlap with the term "export"; and that th ese terms may not describe all possible types of 
countervailable subsidies – that being something assure d in any event by the term "indirectly".  In 
these circumstances, we agree with the United States th at it is significant that the term "export" is 
specifically picked out in Article VI:3, suggesting that it refers to a particular ty pe of subsidy – that is, 
an export subsidy.  Taken together with the other context we have referred to, we find that this 
confirms that the term "export subsidization" in Article VI:5 does not include a situation in which a 
neutral subsidy (for example, on the "manufacture" or "production" of a product) is partially allocated 
to exports.  Contrary to what is suggested by some  of the other Third Party submissions, this is not 
contradicted by the term "indirectly" in Article VI:3 , which rather ensures that all types of subsidy are 
captured, and does not suggest that the relations hip between the subsidy and the export for the 
purposes of Article VI:5 of the GATT 1994  could be "indirect".  Furthermore, contextually, we find it 
significant that, whilst Section V of the SCM Agreement , Section A of Article XVI of the GATT 1994  
and Section III of the SCM Agreement  all contemplate the possibility of neutral subsides having an 
effect on exports, none of them use in this context the specific term "export subsidy" or one of its 
synonyms. 
7. Consequently, we agree with the United States that the mere fact that a countervailing duty 
has been imposed does not necessarily  mean that a determination has been made that there is "export 
subsidization" within the meaning of Article VI:5 of the GATT 1994 .  A countervailing duty may be 
imposed not only to counter a subsidy contingent upon export (which is what Article VI:5 of the 
GATT 1994  refers to), but also a neutral subsidy, allocated in part to exports, which does not fall 
within the scope of the term "expor t subsidization" in Article VI:5. 
8. Turning to object and purpose , we agree with the United States15 that the limited scope of 
Article VI:5 of the GATT 1994  is explained by the fact that, wh ere normal value is based on sales, a 
neutral subsidy may reasonably be considered to press down equally on both sides of the dumping 
calculation.  The dumping calculation therefore remain s unaffected by the subsidy analysis.  On the 
other hand, a subsidy contingent upon export may reasonably be assumed to have a direct impact on 
the price or quantity of exports – and exports alone.  It follows that, since the export contingent subsidy affects prices or quantities, the anti-dum ping and countervailing dut ies would indeed be 
imposed to compensate for the "same situation" (tha t is, a situation in which the subsidy, by reducing 
only the export price, or increasing only the export volume, would increase the amount of dumping). This is what justifies, for example, an adju stment in the rate of anti-dumping duty applied. 
                                                                                                                                                                    
 
11 For example, SCM Agreement , footnote 4. 
12 Appellate Body Report, EC - Export Subsidies on Sugar , paras. 279 to 282. 
13 For example, United States First Written Submission, para. 397. 
14 For example, United States First Written Submission, para. 398. 
15 For example, United States First Written Submission, para. 397. WT/DS379/R 
Page B-60  
 
 9. We have carefully considered China's argument that, if the normal value is constructed or 
derived from an analogue country, and therefore not depressed by that part of the neutral subsidy 
allocated to the domestic market of the exporting Me mber, there is no difference, in economic terms, 
between an export contingent subsidy of 5 (where an  adjustment is required) and a neutral subsidy of 
10, of which 5 has been allocated to exports in the countervailing duty determination (where no 
adjustment is made).
16  However, as well as failing from the point of view of ordinary meaning17 and 
context,18 we think this argument also fails from the point of view of object and purpose.  It appears to 
us to assume that the countervailing determination must be taken to mean that a neutral subsidy 
allocated in part to exports has necessarily decreased the price or incr eased the quantity of the exports, 
thus falling foul of the "same situation" pa rameter.  However, under the terms of the SCM Agreement , 
it is only necessary to show a subsidy, injury, and th at the subsidised imports, through the effects of 
the subsidies (based particularly on evidence about the volume of subsidised imports and their effect 
on prices in the importing Member), cause the injury.  It is not necessary to demonstrate any causal link between the subsidy and the export.
19  Nor is it necessary to demonstrate that the subsidy has 
caused the price of the export to decrease – the enquiry  is rather what effect the subsidised imports 
have had on prices in the importing country.  Thus, a neutral subsidy might be used, for example, to 
pay for advertising, benefiting both domestic sa les and exports.  This might not increase the volume 
or decrease the price of exports.  But it could force producers in the importing country to reduce their prices in order to compensate for the unfairly subsidi sed advertising campaign.  In such a situation, 
we agree with the United States th at the legal conditions for the application of a countervailing duty 
would be satisfied; and yet, at the same time, it could not be said that an anti-dumping and 
countervailing duty would be imposed  to compensate for the "same situation" of dumping or export 
subsidization. 
10. For these reasons we respectfully invite the Pane l to agree with the United States, and reject 
China's claims with respect to this matter. 
                                                     
 
16 China's First Written Submission, Section VI. 
17 See para. V.4 of this Oral Statement. 
18 See para. V.5 of this Oral Statement. 
19 Appellate Body Report, Japan - DRAMs , paras. 257 to 278. WT/DS379/R 
Page B-61 
 
 
 ANNEX B-16 
 
 
THIRD PARTY ORAL ST ATEMENT OF INDIA  
 
 
(7 July 2009) 
  Mr. Chairman, 
 
 India thanks the Panel for this opportunity to present its views in these panel proceedings 
concerning a disagreement between China and the Unite d States as to the conformity with the covered 
agreements of four sets of anti-dumping duty and countervailing duty determinations made by the 
United States.  India intervenes in this case as a thir d party because of its systemic interest in the 
correct interpretation and application of the Ge neral Agreement on Tariffs  and Trade 1994 (GATT 
1994), the Agreement on Subsidies and Counter vailing Measures (SCM Agreement) and the 
Understanding on Rules and Procedures Govern ing the Settlement of Disputes (DSU). 
  While not taking any final position on the fact s of the case, India wishes to express its views 
on some of the issues raised in this dispute. 
 
A. THE CONCEPT OF "PUBLIC BODY" IN ARTICLE 1.1(A)(1) OF THE SCM 
AGREEMENT 
 
 One of the issues in this dispute is the concep t of 'Public Body' under Article 1.1(a)(1) of the 
SCM agreement and the extent to which Government  shareholding control is determinative for the 
characterization of a company as a 'public body'.    In India's view the ordinary meaning of the term 'Public body' in Article 1.1(a) (1) does not warrant a presumption that the shareholding control or ownership by the Government in itself may lead to a determination that a company is a 'public  body' for the purpose of establishing the existence 
of a financial contribution.  
  India respectfully submits that a high leve l of government ownership may indeed be a 
pertinent factor in determining whether an  entity is a 'public body' as understood under 
Article 1.1(a)(1)of the SCM Agreement.  At the sa me time, however, India disagrees that the degree 
of government ownership shall in itself be the ne cessary and sufficient condition for considering an 
entity as a 'public body'.  In previous cases where the Panel has treated an entity as a 'public body' or a 
'private body' entrusted with gove rnmental functions on the basis of the extent of government 
ownership, it has also looked at other relevant factors.   
 The Panel in the EC - DRAMS  case, while addressing the issue of whether wholly or partially 
owned government banks could be c onsidered to have been entrusted with the function of providing 
financial contribution, observed that, " government ownership, in and of itself, is not sufficient to 
establish entrustment or direction under Ar ticle 1.1(a)(1) of the SCM Agreement ."  It further stated 
that, " in case of a 100 percent government owned bank, such as Woori Bank, it thus needs to be 
demonstrated that the government actually exerci sed its shareholder power to direct the bank to 
support to Hynix ." 
 WT/DS379/R 
Page B-62  
 
  In India's view in order to be closely assimila ted to the government, the link of an entity with 
the government must go beyond mere ownership and it mu st perform functions or attributions that are 
typical of the government.   In US - CVD DRAMs  the Appellate Body noted that 'the conduct of private bodies is 
presumptively not attributable to the State' and to support this view the AB quoted that 'since 
corporate entities, although owned by and in that sense subject to the control of the State, are 
considered to be separate, prima-facie  their conduct in carrying out their activities is not attributable 
to the State unless they are exercising elements of governmental authority'.  
 India considers and submits that when govern ment ownership in th e Panel's own opinion 
could not be considered to be sufficient to gua rantee entrustment of governmental functions as under 
Article 1.1(a) (1) (iv) of the SCM Agreement, it is even more implausible to argue that ownership shall in itself lend to the conclusion that an entity is a 'public body'.  
B.   USE OF OUT OF COUNTRY BENCHMARKS TO CALCULATE THE AMOUNT OF 
SUBSIDIY IN TERMS OF THE BENEFIT TO THE RECIPIENT UNDER ARTICLE 14(D) OF THE SCM AGREEMENT  
  On the question of use of out of country benchm arks to calculate the amount of subsidy, U.S. 
maintains that the use of alternative market  benchmarks outside China is permitted by 
paragraph 15(b) of China's Protocol of Accession wh ich allows for use of out of country benchmarks 
with reference to China in case of special difficulties in applying provisions contained in 
Articles 14(a), 14(b), 14(c) and 14(d) of the SCM Agreement .  Further the United States contends that 
the fact that government of China was the predom inant owner of production of the inputs concerned 
was the only factor which was taken into account.  Ho wever, the USDOC also contends that they have 
examined other evidence, including prices of inputs established by private parties in China and import 
data, in order to arrive the conclusion that the pr ices in China were distorted because of government 
of China's predominant role as supplier of the input s concerned.  However, China argues that sale 
prices by SOEs were not controlled by the Chinese government, and therefore did not distort the market price.   
 In India's view the Panel may have to exam ine the contentions of the Parties taking the 
existing jurisprudence on Article 1.1(a)(1) of th e SCM Agreement including the facts of the case on 
hand to ascertain whether  China's SOEs are au thorities or 'public bodies' for the purpose of 
Article 1.1(a)(1) of the SCM Agreement.     
 
 With respect to the U.S.'s assertion that use of out of country benchmarks is also permissible 
as per the SCM Agreement [Article 14(d)] and the AB decision in US - Softwood Lumber IV 
concerned , India  believes that the Panel may also have to consider the Appellate Body's decision in 
the light of the limitations that the AB itself had expressed while giving its decision.  The AB had 
inter alia  opined that the circumstances in which a Member may use benchmarks other than the 
private prices in the country of provision are 'very limited'.  It had further stated that:  
 
"The determination of whether private prices are distorted because of the 
government's predominant role in the market, as a provider of certain goods, must be 
made on a case-by-case basis, according to the facts underlying each countervailing 
duty investigation." 
 In India's view the Panel should consider U.S. 's use of out of country benchmarks in the 
present case in light of the specific limitations th at the Appellate Body had prescribed for using it 
while determining the quantum of benefit unde r Article 14(d) of the SCM Agreement.  
 WT/DS379/R 
Page B-63 
 
 
 C.   CONCURRENT IMPOSITION OF ANTIDUMPING AND COUNTERVAILING DUTY IN 
CASES WHERE NORMAL VALUE IS DETE RMINED USING PRICES OR COSTS 
OUTSIDE THE NON MARKET ECONOMY COUNTRY ('NME') 
 
 India believes that the issue of "double reme dy" has not been dealt with in the past and 
therefore requires careful consideration by the Pa nel.  China has argued that the United States has 
imposed double remedy, in the form of AD as well as CVD, in contravention of Article 19.3 and 19.4 
of the SCM Agreement .  According to China the United States by using NME methodology in 
calculating anti-dumping duties will offset any alleged subsidies through two duties.   
 Article VI:3 of GATT 1994 allows Members to  apply CVD "equal to the estimated bounty or 
subsidy determined to have been granted".  The SCM Agreement  contains detailed provisions relating 
to what constitutes a subsidy, calculation of benefi t and the amount of duty that may be imposed.  
Articles 19.3 and 19.4 provide that the CVD shall be in appropriate amoun t and no duty shall be 
levied in excess of the amount of subsidy found to ex ist.  Further Article VI:5 permits the application 
of both AD and CVD on product except
 when the two duties compensate for the same situation of 
dumping or export subsidization.    India notes that whilst it is true that the Appellate Body has confirmed that the WTO Agreement constitutes a single undertaking, the cont ext of the relevant agreements is potentially 
relevant to the process of interpretation of any particular provision.  An ti-dumping and Countervailing 
duties are two separate remedies to counter two differen t types of situations of trade distortion.  The 
relevan t provision which expressly limits the right of WTO Members to impose both types of duty is 
Article VI:5 of GATT 1994.    India accordingly holds the view that the lega l permissibility for the parallel application of 
AD and CVD measures, and its underlying logic apply to investigations conducted both in relation to 
'market economy' Members and 'non-market economy' Members.  D. THE USE OF A 'ZEROING' METHODOLOGY WHEN CALCULATING 'BENEFIT' 
RECEIVED FROM INPUTS PROVIDED BY STATE OWNED ENTERPRISES ('SOES') 
 
 Mr. Chairman, India's position against the use of "zeroing" methodology is well documented.  
India was the original complainant in EC-Bed Linen case where the practice of zeroing was the first 
time held to be against the provisions of the AD Agreement  and believes that the existence and use of 
"zeroing" under SCM Agreement  too needs to be reviewed.   
 
 In the case of OTR  investigation China alleges th at the United States unlawfully created  a 
benefit where none existed by including only those tr ansactions that produced a positive benefit, while 
excluding those transactions, which did not confer an y benefit.  According to China this methodology 
cannot be reconciled with Article VI:3 of GATT 1994 as well as multiple provisions of the SCM 
Agreement  such as Articles 10, 19.3 and 19.4 which suggest that a CVD may be imposed only with 
reference to a " product" .  According to China in order to determine if goods provided for less than 
adequate  remuneration provided a subsidy to the production or manufacture of the product as a 
whole, Commerce was obliged to conduct an aggregate analysis  of all the transactions during the 
period of investigation .  
  The SCM Agreement  does not define a period of investig ation.  The length of the period of 
investigation is upon the discretion of the inv estigating authority.  During the said period on 
investigation numerous export transaction of the product  may be undertaken.  According to 
Article VI:3 of GATT 1994 the CVD may be "equal to  the estimated bounty or subsidy determined to 
have been granted".  Further as per Article 19.2 of the SCM Agreement  the CVD can be up to the full WT/DS379/R 
Page B-64  
 
 amount of the subsidy or less.  Thus the CVD im posed should be equal or less than the amount of 
subsidy found to exist during the period of investigation.   According to Article 19.2 and 19.4 of the SCM Agreement  the investigating authority is 
required to calculate " a subsidy ".  Further according to the Appellate Body's decision in Canada – 
Aircraft  a subsidy provided is when a government makes a financial contribution, which subsequently 
confers a benefit.  In India's view the task of the investigating authority is to  determine if a financial 
contribution has been made, and if so the benef it should be calculated for all transactions over the 
period of investigation and not with  reference to isolated transactions, disregarding other transactions.  
India believes that an aggregate analysis of all transactions during the period of investigation must be 
conducted to determine the "benefit", and not merely of those transactions which confer  benefit.   
  India appreciates this opportunity to present its views to the Panel and we are confident that 
the Panel will apply an appropriate interpretative me thodology and add to its analysis in this very 
important dispute, in accordance with the principles set out under Article 3.2 of the DSU.   
 
 WT/DS379/R 
Page B-65 
 
 
 ANNEX B-17 
 
 
THIRD PARTY ORAL ST ATEMENT OF JAPAN 
 
 
(7 July 2009) 
  
I. INTRODUCTION 
 1. Mr. Chairman, and distinguished Members of th e Panel, on behalf of the Government of 
Japan, I thank you for your attention to this dispute, which involves important systemic issues on the disciplines of Article VI of the GATT 1994  and the SCM Agreement .  Because time is limited, 
however, Japan would like to focus on two issues today. 
II. DISCUSSION 
 
A. SIMULTANEOUS IMPOSITION OF ANTI-DUMPING AND COUNTERVAILING 
DUTIES 
 2. The first issue is the discipline of the avoi dance of the double remedies when a Member 
imposes anti-dumping and countervailing duties simultane ously.  In our third party submission, Japan 
explained that Article VI:5 of the GATT 1994 is the expression of the underlying concept of the 
prohibition on double remedies. 
3. Article VI of GATT 1994  provides for two types of trade remedy measures.  One is anti-
dumping duties, which an importing Member is permitted to impose in an amount not exceeding the 
margin of dumping.  The other is countervailing duties, which the importing Member may impose up 
to the amount of subsidies.  These two trade remedy  measures are aimed to counteract different types 
of practices in the exporting Member.  As the Appellate Body correctly found, "the concept of 
dumping relates to the pricing behaviou r of exporters or foreign producers".
1  On the other hand, the 
countervailing duties relate to the actions by the g overnment of the exporting Member.  So far as each 
measure captures their object and does not go beyond  its scope, no overlap of the two measures would 
occur, and accordingly, no double remedies would occur.   
4. In certain situations, however, as the matte r of dumping margin calculation methodology set 
forth in Article VI:1 of the GATT 1994 , the dumping margin captures not only the dumping behaviour 
of exporters, but also the effects of financial contribu tions by the government.  In such a situation, if 
the importing Member also imposes a countervailing duty, the Member would counteract the effects 
of the financial contribution by the government tw ice.  Such a double remedy unavoidably occurs in 
the case of export subsidies.  Article VI:5 of the GATT 1994 therefore explicitly prohibits the 
simultaneous imposition of antidumping and c ountervailing duties on export subsidies.  
5. Although Article VI:5 of the GATT 1994  does not prohibit the simultaneous application of 
antidumping and countervailing duties in any other s ituations in which a double remedy may occur, 
Japan believes that Members should give due re gards to the underlying concept to avoid the 
imposition of double remedies. 
                                                      
1  The Appellate Body report, US – Zeroing (Japan)  (WT/DS322/AB/R), para. 156. WT/DS379/R 
Page B-66  
 
 B. SELECTION OF BENCHMARKS UNDER ARTICLE 14 OF THE SCM AGREEMENT 
 6. The second issue is the requirements that the SCM Agreement  imposes on investigating 
authorities in their selecting benchmarks to calculate the amount of subsidy.  
7. Article 14 of the SCM Agreement  sets forth "guidelines", which provide "the 'framework 
within which this calculation is to performed'."
2  The Appellate Body found that "calculating benefit 
consistently with the guidelines is mandatory".3  It also found that "the use of the term 'guidelines' in 
Article 14 suggests that paragraphs (a) through (d) should not be interpreted as 'rigid rules that purport 
to contemplate every conceivable factual circumstances'". 4  In a case of the provision of goods by a 
government, for example, investigating authorities ar e required to find benchmarks, which "related or 
referred to, or were connected with, prevaili ng market conditions" in an exporting country,5 as the 
Appellate Body has stated, "any comparative adva ntage would … have to be taken into account and 
reflected in the adjustments made to any met hod used for the determination of adequacy of 
remuneration." 6  The reference to "any" method in the chapeau of Article 14, on the other hand, 
"provides a WTO Member with some latitude as to the method it chooses to calculate the amount of 
benefit." 7  
8. The interpretation of Article 14 must also be ma de "in the light of its object and purpose" as 
Article 31.1 of the Vienna Convention provides.  In this connection, the Appellate Body has correctly 
stated that Part V of the SCM Agreement is "aimed at striking a balance between the right to impose 
countervailing duties to offset subsidization that is  causing injury, and the obligations that Members 
must respect in order to do so."8  The guidelines as provided in paragraph (a) though (d) must be 
interpreted in a manner that does not upset this deli cate balance.  For example, an interpretation of 
Article 14(d)  that it requires an investigating author ity to replicate market conditions prevailing in the 
exporting country at a level practically  too high to  comply, would ignore this delicate balance.   
9. Japan does not take any specific position on whether the USDOC's choices of benchmarks in 
the specific factual settings in the disputed inves tigations are consistent with the provisions of 
Article 14.  Japan respectfully requests this Pa nel to review whether the USDOC's choices were 
reasonable in light of the latitude given to  investigating authorities under Article 14. 
III. CONCLUSION 
 
10. In conclusion, Japan respectfully  requests the Panel to examin e carefully the facts presented 
by the parties in this dispute in light of the ar guments presented in Japan's submission and this oral 
statement.  Japan is happy to answer any questions  that the Panel or parties in dispute may have. 
                                                      
2  Appellate Body Report, US – Softwood Lumber IV , para. 92. 
3  Appellate Body Report, US – Softwood Lumber IV , para. 92. 
4  Appellate Body Report, US – Softwood Lumber IV , para. 92. 
5  Appellate Body Report, US – Softwood Lumber IV , para. 116. 
6  Appellate Body Report, US – Softwood Lumber IV , para. 109.  
7  Appellate Body Report, Japan – DRAMs (Korea) , para. 191. Also see, Appellate Body Report, US – 
Softwood Lumber IV , paras. 91 and 92. 
8  Appellate Body Report, US – Carbon Steel, para. 74. WT/DS379/R 
Page B-67 
 
 
 ANNEX B-18 
 
 
THIRD PARTY ORAL STAT EMENT OF MEXICO  
 
 
(7 July 2009) 
  1. In its submission as a third party, Mexico set out its views on the interpretation of certain 
provisions of the GATT 1994, the Protocol of A ccession of the People's Republic of China (the 
"Protocol"), the Anti-dumping Agreement ("AD Ag reement") and the Agreement on Subsidies and 
Countervailing Measures ("SCM Agreement"), given th e systemic importance the Panel's conclusions 
will have. 
2. As regards the simultaneous application of anti-dumping and countervailing duties , 
Article VI.5 of the GATT 1994 prohibits the simu ltaneous application of anti-dumping duties and 
countervailing duties to offset export subsidies
 insofar as both duties are intended to remedy the 
"same situation".  In Mexico's view, this prohibitio n does not apply to countervailing duties that offset 
domestic subsidies because these do not result in du mping.  Consequently, when countervailing duties 
offset domestic subsidies , simultaneous appli cation is consistent  with the rules of the WTO. 
3. In this dispute, we are not faced with a case of  double remedies for the same situation.  On the 
contrary, in this case anti-dumping duties were imposed  in order to offset the effect of dumping by 
Chinese exporters, and countervailing duties to offset the effect of the domestic subsidies granted by 
China, which artificially lower prices both within Chin a and for export.  We are, therefore, not facing 
a single situation, affected by two types of remedy, but rather two prejudicial situations offset through 
the remedy applicable to each of them. 
4. Moreover, we consider that if China had succeed ed in negotiating a prohi bition on applying 
simultaneous duties to its products, this would have been  specified in the Protocol.  As this is not the 
case, the Protocol does allow the combined application of anti-dumping and countervailing duties.  In addition, when the negotiators of the WTO Ag reements considered it necessary to prohibit the 
simultaneous application of different mechanisms, th ey said so expressly.  As there is no prohibition 
on simultaneous application of duties, we must thus c onclude that such applica tion is consistent with 
WTO rules. 
5. As regards the provisions of Article 19.3 and 19.4 of the SCM Agreement, Mexico considers 
that they do not regulate the simultaneous application of duties, therefore China' s claim in this respect 
has no basis at all.  We consider that China has not proved prima facie  violation of these provisions 
by the United States.  Claiming that Article 19.3 a nd Article 19.4 regulate simu ltaneous application is 
tantamount to negating Article VI.5 of the GATT 1994 and Article 15 of the Protocol, which would 
be contrary to the principle of effectiveness recognized in United States – Gasoline . 
6. With regard to the surrogate country methodology  in anti-dumping investigations, contrary 
to what China and Norway
1 assert, Mexico considers that this methodology does not  enable prices and 
costs adjusted for the distorting effects of the subsid y to be obtained.  We do not therefore agree with 
their claim that the simultaneous applicati on of countervailing duties and anti-dumping duties 
determined using this methodology is  inconsistent with the WTO rules.  Once again, we consider that 
China has not proved prima facie  violation by the United States in this respect. 
                                                      
1 Submission by Norway as third party, paragraph 46. WT/DS379/R 
Page B-68  
 
 7. In an anti-dumping investigation, the authority has no way of knowing – precisely because it 
is an anti-dumping investigation – whether the pr ices or costs for a surrogate country do or do not 
reflect the effects of the subsidization that may have been granted in this surrogate country.  
Consequently, when calculating the normal valu e in accordance with the surrogate country 
methodology, the authority takes the prices or cost s in that country just as they are and does not
 adjust 
them to take into account these subsidies because, as we have stated, it does not know whether these 
prices and cost reflect the subsidies. 
8. Let us suppose that the authority is certain that  the surrogate country does not grant subsidies 
and, therefore, its prices and costs have not been "c ontaminated" by this concep t.  Even in this case, 
the prices and costs of the surrogate country woul d be "subsidy free" only as far as the surrogate 
country itself is concerned, but would not reflect the prices or costs of the exporting country, already 
free of the subsidies granted by the exporting country .  In other words, the surrogate country 
methodology would yield the prices and costs which the exporting country would have if it had a market economy and did not grant subsidies, but doe s not reflect the prices and costs of the exporting 
country already adjusted upwards in order to offset  the subsidies granted by this exporting country. 
9. Regarding the question of " public body ", China bases itself on United States – DRAMs  to 
claim that for a company owned by the State to be  termed a "public body", the requirements in the 
Draft Articles
2 of the United Nations International Law Commission must be met, namely (1) the 
enterprise must be authorized by th e State to exercise functions normally exercised by the State, and 
(2) the conduct of the entity must concern governmental activities. 
10. Mexico does not agree.  The definition of  the term "public body" was not addressed  in United 
States – DRAMs .  In this case, the Appellate Body examin ed whether an act by a private entity could 
be considered as being instructed by a government to make a financial contribution and based itself on 
the Draft Articles .  At no time did it determine whether the public character of a body depended on 
the form in which the body acted .  For Mexico, the action of the entity is not relevant  for the purpose 
of determining whether this entity is a public body.  In any event, ascertaining whether or not it acted 
consistently with market principles could be im portant when concluding whether a benefit was 
granted, but this is irrespective of  the public character of the body. 
11. Mexico shares the view of Argentina, Au stralia, Canada and Japan that, as found in Korea – 
Commercial Vessels , an entity is a public body when it is controlled by the government  or by another 
public entity.  The fact that the government has c ontrol of a company is sufficient justification to 
consider it to be a "public body", provided that there is proof3 that the government has in practice 
exercised control over the enterprise rather th an playing the role of a passive investor. 
12. Obviously, the degree of control is not always directly in proportion to the degree of 
ownership.  This depends on the way in  which the shares have been organized.4  Nevertheless, China 
does not question  the United States determination that the Chinese Government controls  certain 
companies because it holds the majority .  What China questions is that the determination that the 
Chinese Government controls these companies has led to a subsequent determination that these 
companies are "public bodies" within the meaning of  the SCM Agreement.  To put it another way, 
China agrees that these companies are controlled by  its Government, but claims that this does not 
                                                      
2 Draft Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries.  
3 For example, the government has appointed the members of the Board of  Directors, the chief 
executives, the enterprise's activities and/or budget are subject to government approval, or the State enterprises 
must follow industrial development plans that set growth targets.  Any of these fact ors by itself suffices to 
determine this status. 
4 In some schemes, majority ownership may result in minority control, or vice versa  (as in the case of 
the so-called " golden shares "). WT/DS379/R 
Page B-69 
 
 
 make them "public bodies".  So the key point is whether the fact that the Government controls a 
company suffices to consider th e company to be a "public body " according to the SCM Agreement.  
We recall that, in Korea – Commercial Vessels , control by the government was indeed sufficient to 
consider a company to be a "public body". 
13. The purpose of Article 1.1(a)(1)(iii) of the SCM Agreement is to prevent the granting of 
financial contributions in the form of goods or  services – through entities that are not "government" 
entities – remaining outside the scope of the SCM Agreement.  Consequently, in our view the 
definition to be adopted by this Panel in relation to  the term "public body" must be sufficiently broad 
to enable Article 1.1(a)(1)(iii) of the SCM Agreem ent to be applied to State enterprises which produce 
goods and/or services. 
14. The standard proposed by China, Brazil,  Norway and Saudi Arabia would prevent 
Article 1.1(a)(1)(iii) of the SCM Agreement from being applied to State enterprises which produce 
goods or services, which is contrary to the purpose of this Article.  In effect, such enterprises would 
be unable to meet the criteria of being established by  "the law of the State to exercise functions of a 
public character normally exercised by State organs";  to "perform functions and exercise powers of a 
governmental character";  to "exercise powers vested  in it by the government to … regulate, restrain, 
supervise or control the conduct of individuals";  or that their sales of goods should not be 
governmental activities "unconnected with private or  commercial activity".  Because it cannot fulfil 
these criteria according to the standard proposed by these countries, Article 1.1(a)(1)(iii) of the 
SCM Agreement could not apply to State enterp rises which produce goods or services, which is 
unacceptable. 
15. We note that Saudi Arabia holds that in Canada – Dairy , the Appellate Body interpreted 
"public body" in accordance with Article 9.1(a) of the Agreement on Agriculture and that this is the 
line of reasoning that the Panel should follow in interpreting the term "public body" under the 
SCM Agreement.  Mexico does not agree.  Th e fact that an expression appears in several 
WTO Agreements does not imply that its meaning is the same in all the Agreements.  According to 
the rules of interpretation adopted by the WTO, if the ordinary meaning of a term is not conclusive, 
the context  and purpose  of the rule in which it appears must be taken into account.  For example, the 
words "like product" have different meanings in Articles 2.1, 3.1 and 5.8 of the AD Agreement.  
Similarly, "like product" has other meanings in Ar ticles I, III, IX and XIII of the GATT 1994.  If we 
accept Saudi Arabia's approach, the term "like product"  would have to be interpreted in the same way 
in all these provisions, irrespective of the context and purpose of each provision. 
16. To summarize, in Mexico's view an en tity is a "public body" according to the 
SCM Agreement if:  (1) the government controls the entity (because it holds the majority);  and 
(2) there is evidence that the government has not played  the role of passive investor but has in practice 
exercised control.  Likewise, we consider that an y definition of "public body" adopted by this Panel 
should be sufficiently broad to enable Article 1.1( a)(1)(iii) of the SCM Agreement to apply to State 
enterprises supplying goods and services. 
17. As regards the analysis of pass-through of the benefit , Mexico does not agree with China.  
As can be seen from several precedents in both the GATT and the WTO5, it is clear that this analysis 
is only needed when the subsidies are given for the production of a good that is an input for the 
product under investigation (in other words, upstream).  As in this case the subsidies were granted for 
the production of the goods investigated themsel ves (the industries which produced the exported 
goods received subsidies in the form of inputs at pr ices lower than the market price), the pass-through 
analysis was not required. 
                                                      
5 United States – Pork;  United States – Softwood Lumber IV;   and Mexico – Olive Oil . WT/DS379/R 
Page B-70  
 
 18. Regarding the determination of the existence of benefit for the trading companies , it should 
be pointed out that the Appellate Body determined
6 that a financial contribution may be granted to a 
company indirectly.  In this case, because the priv ate trading companies were only the vehicle through 
which the contribution reached the companies under investigation, they received the contribution 
indirectly.  It was thus not necessary to undertake a pass-through analysis. 
19. Concerning the benchmark used by the United States , Mexico considers that the standard 
applicable is that indicated by the Appellate Body in United States – Softwood Lumber IV , according 
to which an investigating authority may indeed use a reference point other than prices in the country 
under investigation provided that it is determined that  the prices are distorted by the role played by the 
government.  Consequently, in order to determin e whether the benchmark is contrary to the 
WTO rules, the essential factor to be analysed is the presence or absence of distortions caused by the 
role of the Chinese Government.  Th e points raised by China in order to claim that the benchmark was 
contrary to the WTO rules, however, are in no way  related to this essential factor. 
20. Mexico considers that, if the United States had sufficient evidence that the Government 
played a predominant role  in Chinese markets, then the intern al prices of suppliers in China could 
be rejected as a point of reference when determining the existence of the benefit.  As we do not know 
whether this evidence existed, Mexico cannot e xpress an opinion on whether in this case the 
United States could use this benchmark or whether it was properly determined. 
21. Mexico thanks the Panel for this opportu nity to express the foregoing comments. 
                                                      
6 United States – Countervailing Measures on certain EC Products . WT/DS379/R 
Page B-71 
 
 
 ANNEX B-19 
 
 
THIRD PARTY ORAL STATEM ENT OF SAUDI ARABIA  
 
 
(7 July 2009) 
  
 
Mr. Chairman, members of the Panel, 
 1.  The Kingdom of Saudi Arabia welcomes this opportunity to express our  views on some of the 
key systemic issues raised in this dispute.  We a ffirm all of the positions that were set out in our 
written Third Party submission, althoug h we need not repeat them today.   Instead, we wish to reiterate 
some of the essential points that the Panel shoul d keep in mind when interpreting the relevant 
provisions of the SCM Agreement. 
 
I.  A PUBLIC BODY IS AN ENTITY THAT IS VESTED WITH GOVERNMENTAL 
AUTHORITY AND FUNCTIONS LIKE A GOVERNMENTAL ENTITY 
 
2.  We begin with the "public body" issue.  For the reasons explained in our Third Party 
submission, the Kingdom considers that for an en tity to be considered a "public body", it must: 
 
• be vested with governmental authority, thus allowing the government to control its activities; 
and  
 
• function as a governmental entity that serves a public policy objective rather than a 
commercial objective. 
 3.  It follows from this basic proposition that the mere fact of State ownership – even majority 
ownership – cannot determine whethe r an enterprise is a public body. 
 
4.  In its ordinary meaning, "public body" denotes a governmental function , not merely State 
ownership.  The Spanish version of the SCM Agreem ent, which is equally authentic, is instructive on 
the ordinary meaning of "public body." The Span ish version uses the term "organismo público" to 
refer a "public body" in Article 1.1.  The Appellate Bo dy has interpreted this term in the context of the 
Agreement on Agriculture to mean an entity that ex ercises powers vested in it by a "government" for 
the purpose of performing functions of a "governmental" character.  The Appellate Body has made 
clear that there is a very close relationship betw een the subsidies disciplines of the Agreement on 
Agriculture and the SCM Agreement.  5.  The relevant question is whether there is an ything in the context of the SCM Agreement that 
would argue in favour of a different, broader interp retation to be given to the same terms based on 
mere State ownership.  The answer is demonstrably no. 
 6.  Article 1.1 of the SCM Agreement equa tes "public body" with "government" when it 
expressly references both by the use of the term "government."  This common reference is consistent 
with an understanding that both terms (govern ment and public body) share the same essential 
characteristics of entities that possess or act under governmental authority and perform governmental 
functions.  It is consistent with the conclusion that the drafters considered the terms to be equivalent − 
the two terms refer to different aspects of governmental authority. WT/DS379/R 
Page B-72  
 
  
7.  The SCM Agreement provides that public bodies can entrust or direct private bodies to provide a financial contribution.  That means that public bodies, by definition, are vested with governmental authority.  A private body cannot be "e ntrusted or directed" by any entity that does not 
have governmental authority itself. 
 
8.  There is no support in the SCM Agreement or in the other WTO Agreements for an interpretation of the term "public body" based on mere government ownership.  Those who claim 
otherwise have essentially advanced a single argumen t to support their position: that this Panel should 
follow the approach supposedly taken by the Panel in Korea – Commercial Vessels .  As this is the 
only Panel ruling on the "public body" issue in the SCM context, it is of critical importance to be clear 
about what the Korea – Commercial Vessels Panel did – and did not – decide. 
 9.  First, the criterion actually applied by the Korea – Commercial Vessels Panel was "control", 
not ownership.  The Panel did not find that an entity owned by the government was necessarily a 
public body.  None of the Korean entities were consid ered by that Panel to be public bodies merely by 
virtue of governmental ownership.   10.  Second, in applying the test of government "control", the Korea – Commercial Vessels Panel 
considered a range of factors, including – but by no  means limited to – government ownership.  Other 
equally relevant factors taken into consideration by the Panel included the extent of government 
involvement in the operational policy of the entities,  in their day-to-day operations, and in the 
direction of their investments.  All of this the Pa nel considered relevant under the test of "control." 
 11.  Third, it is not correct to say that the Panel rejected the relevance of the public policy 
objective when examining an entity's "public body" na ture.  The Panel did not accept the argument of 
Korea that where a specific transaction was comme rcially reasonable and not motivated by a public 
policy objective, the providing entity was not a "p ublic body." The Panel correctly noted that the 
question of whether an entity was a "public body" went to the nature of the entity, and was not 
determined on a case-by-case basis, or whether the pa rticular financial contribution was commercially 
reasonable.  
12.  Indeed, the Panel was right to point out that  a public policy objective alone does not suffice.  
It is the combination of a governmental authority with the governmental function and public policy 
objective of the entity that determines the entity's natu re as a "public body." This  is consistent with the 
two-part test that the Kingdom has offered for the identification of a public body and is in line with the Appellate Body's definition of this term.  
 
13.  Mr. Chairman, the determination of whet her an entity is a public body is of crucial 
importance to the first part of the definition of a subsidy - whether a financial contribution has been 
provided by the government.  The next issue of systemic importance that the Kingdom wishes to highlight today concerns the second part of the s ubsidy definition – the determination of benefit. 
 II.  THE USE OF ALTERNATIVE BENCHMARKS FOR THE DETERMINATION OF 
BENEFIT IS PERMISSIBLE ONLY IN EXCEPTIONAL CIRCUMSTANCES, AND IS SUBJECT TO STRICT DISCIPLINES 
 
14.  Article 14(d) of the SCM Agreement is quite clear in establishing that the principal 
benchmark for calculating a benefit is  the domestic market price in the country of provision.  The use 
of an alternative benchmark is permissible onl y in very exceptional circumstances and only after 
actual distortion of the domestic market is found.  Presumptions based on indirect evidence or on 
theoretical economic deductions are insufficient to meet this requirement.  This includes any WT/DS379/R 
Page B-73 
 
 
 presumption of distortion based on the mere fact that  the government is a significant supplier or has a 
major presence in the market in question.  15.  If exceptional circumstances necessitating the use of an alternative benchmark have been established, then the cost of production of the g oods in the country of provision serves as the most 
appropriate alternative to domestic market prices.  Fi rst, the cost of production is a direct result of the 
"prevailing market conditions… in the country of provision", consistent with the language of 
Article 14(d).  Second, cost of production avoids th e inevitable practical pitfalls of an out-of-country 
benchmark.  The cost of production benchmark is not only the most relia ble possible alternative, but it 
has also been supported and endorsed in pr evious Appellate Body jurisprudence. 
 III.  AN INVESTIGATING AUTHORITY MUST BASE LOAN BENCHMARKS ON THE 
ACTUAL COMMERCIAL BORROWING EXPERIENCE OF A FIRM 
 
16.  With respect to the loan benchmark under Article 14(b), the Kingdom is of the view that a "comparable commercial loan that the firm could actua lly obtain" should be a loan that is expressed in 
the same currency, and subject to the same generally-applicable fina ncial regulations of the country 
providing the government loan.  By this exp licit standard, constructed out-of-country loan 
benchmarks that are only theoretically available ar e not a permissible benchmark under Article 14(b). 
 
IV.  IN CASES OF ALLEGED SUBSIDIZED INPUTS, THE INVESTIGATING 
AUTHORITY MUST CONDUCT A "PASS-THROUGH" ANALYSIS TO 
DETERMINE IF THE DOWNSTREAM PR ODUCER HAS RECEIVED A BENEFIT 
 
17.  Finally, we would like to comment briefly on  the issue of "pass-through."  This issue relates 
to a basic principle of WTO disciplines with r espect to the use of countervailing measures.  A 
countervailing duty may be levied on a product only wh ere an investigating authority determines that 
a subsidy has been granted, directly or indirectly, on the product subject to the duty.  18.  The Kingdom wishes to underline the fundamental rule that in case of "arm's length" sales between unrelated parties, the Agreement do es not permit an investigating authority to presume that 
all or part of the benefit has been passed through. 
 
*** 
 
19.  Mr. Chairman, this concludes the Kingdom's in tervention at today's meeting.  We would be 
pleased to respond to any questions the Panel or any of the parties may have for us.  Thank you. 
 WT/DS379/R 
Page B-74  
 
 ANNEX B-20 
 
 
THIRD PARTY ORAL ST ATEMENT OF TURKEY 
 
 
(7 June 2009) 
  Esteemed Panelists,  
Distinguished Representatives of the Pa rties to the Present Panel Hearing, 
 
1. I am glad to present you with the views of Turkey at this stage of the panel proceedings 
regarding the complaint launched by People's Repub lic of China.  I will summarize Turkish position 
on the subject, to the extent possible, by refraini ng from repetition of details presented in our written 
submission.  2. Although the dispute covers many issues, I will focus on three major subjects namely "public 
body determination", use of out-of country benchmark"  and "pass through of a benefit" arise from this 
dispute. 
 
3. Article 1.1(a)(1) of the Agreement on Subsidies and Countervailing Measures (SCM 
Agreement) contains two separate terms "government " and "public body".  Therefore in order to 
accept that a subsidy is granted, it is clear that a financial contribution must  be provided either by 
"government" or a "public body".  
 
4. Since the SCM Agreement used two terms, in  Turkey's view, the meanings of these terms 
should be construed differently.  However, SCM Agreement does not provide any definition with 
regard to these two terms.  Therefore, what constitutes "government" or "public body" under the 
article in question needs to be interpreted.  This interpretation should be made in accordance with the 
ordinary meanings taken into account in the cont ext, object and the purpose of the SCM Agreement 
pursuant to Article 31.1 of the Vienna Convention.  
 5. China argued that in order to accept an entity as a public body, both an entity should perform 
governmental functions and the powers to perform these functions should be vested by the state. 
However China's claim to take governmental charact er as a prerequisite to determine an entity as a 
public body narrows the actual meaning of the "public body" and equates it to "government".  Such an 
interpretation would annul the di stinction between the two term s and render the "public body" 
meaningless.   6. In Turkey's views, Paragraph 5(c)(i) of th e Annex on Financial Services to the GATS is not 
the relevant legal basis to interpret the term public  body used in the SCM Agreement.  Firstly, while 
the SCM Agreement states "public body", the refe rred paragraph of the Annex in question provides 
the definition of "public entity", so it is clear that  these two terms are not the same.  Secondly, it is 
clear from the "For the purpose of this Annex…" expression mentioned in the same paragraph that, the "public entity" definition is only for the scope of the Annex in question.  
7. On the other hand Turkey also considers ILC Articles as an irrelevant legal basis for 
interpreting the term "public body" for several re asons.  First of all ILC Articles are not among the 
annexes of the Marrakesh Agreements .  In addition, the scope and the application of the ILC Articles WT/DS379/R 
Page B-75 
 
 
 are totally distinct from the SCM Agreement.  Furthermore due to the lex specialis  clause contained in 
the Article 55 of the ILC Articles, it is not possible to apply the ILC Articles to this dispute.   8. Consequently, Turkey is of the view that "government control" criterion set forth by the Korea-Commercial Vessels Panel is the most proper criteria for determining whether an entity is a 
public body and Turkey also considers that the owne rship is the main indicator of the control of an 
entity.  9. During its accession to the WTO China acknowledge d the fact that it had a centrally-planned 
economy and undertook some commitments in its Accession Protocol including commitments on the 
application of trade remedies by other Members.  
 10. Specifically, in the Article 15(b) of the Acce ssion Protocol, China accepted to be subject to 
special rules with regard to subsidi es.  It is clear from this article that, the Members are allowed to use 
appropriate ways to ensure applicabilit y of the rules against subsidies.  
 
11. Besides, Turkey is of the view that the A ccession Protocol is not the only source which allows 
using external benchmark.  Pursuant to Article 14 of the SCM Agreement external benchmarks may 
be used in some cases.  12. Similarly, the Appellate Body also ruled that, even for market economies the primary 
benchmarks provided in the Article 14(d) of the SCM Agreement may not work.  If the investigating 
authority determines that private prices in that co untry are distorted because of the predominant role 
of the government, it may use another benchmar k.  Turkey considers that in cases where the 
prevailing market conditions in a Member do not pr ovide an appropriate base to make a meaningful 
comparison to determine whether a benefit has b een conferred due to the predominance of the 
government in the economy, the rules of th e SCM Agreement will still be applicable. 
 13. In the Accession Protocol, China has al ready accepted that the prevailing terms and 
conditions in China may not always be available as appropriate benchmarks.  If the investigating 
authority uses the private prices as the benchmark wh ile the predominance of the government is a fact, 
benefit will probably be artificially low or even zero.  As a result, the full extent of the subsidy would 
not be captured and the rights of Members to "fully  offset, by applying countervailing duties, the 
effect of the subsidy as permitted by the SCM Agreement"  would be injured. 
 14. In Turkey's view, the SCM Agreement does not require that the recipients of a benefit and a 
financial contribution should be the same.  This approach is also in line with the reasoning stated in 
Mexico - Olive Oil  Panel Report.  Acceptance of the opposite would lead to the circumvention of the 
disciplines on subsidization by includ ing a private party to the chain. 
 15. Turkey wishes to thank the Panel for the opportunity to submit its views during this hearing.  
_______________