WORLD TRADE  
ORGANIZATION   
WT/DS405/R 
28 October 2011 
 (11-5344) 
 Original:   English 
  
 
     
 
 
 
 
  
EUROPEAN UNION – ANTI- DUMPING MEASURES ON 
CERTAIN FOOTWEAR FROM CHINA  
  
Report of the Panel 
 
  
 
 WT/DS405/R 
Page i 
 
 
  TABLE OF CONTENTS 
Page 
 
 
LIST OF ANNEXES ............................................................................................................... ............. vi  
TABLE OF CASES CITED IN THIS REPORT ............................................................................ viii  
I. INTRODUCTION .................................................................................................................. ....... 1  
A. C OMPLAINT OF CHINA  ................................................................................................................ 1 
B. E STABLISHMENT AND COMPOSITION OF THE PANEL  .................................................................. 1 
II. FACTUAL ASPECTS ............................................................................................................... ... 2 
III. PARTIES' REQUESTS FOR FINDIN GS AND RECOMMENDATIONS ............................. 2  
A. C HINA  .............................................................................................................................. ............ 2 
B. E UROPEAN UNION  ....................................................................................................................... 5 
IV. ARGUMENTS OF THE PARTIES ........................................................................................ 5  
V. ARGUMENTS OF THE THIRD PARTIES .............................................................................. 6  
VI. INTERIM REVIEW ................................................................................................................ . 6 
A. I NTRODUCTION  ............................................................................................................................ 6  
B. G ENERAL COMMENTS  ................................................................................................................. 6 
C. S PECIFIC REQUESTS  .................................................................................................................... 7 
VII. FINDINGS ...................................................................................................................... ......... 36  
A. I NTRODUCTION  .......................................................................................................................... 36 
B. R ELEVANT PRINCIPLES REGARDING STANDARD OF REVIEW , TREATY INTERPRETATION AND 
BURDEN OF PROOF  ..................................................................................................................... 37 
1. Standard of Review ............................................................................................................ ... 37 
2. Rules of Treaty Interpretation ............................................................................................... 39 
3. Burden of Proof ............................................................................................................... ...... 40  
C. R EQUEST FOR A PRELIMINARY RULING BY THE EUROPEAN UNION  .......................................... 41 
1. China's "as such" claims against Article 9(5)  of Council Regulatio n No. 1225/2009 .......... 42  
2. China's claims based on Article 17.6(i) of the AD Agreement .............................................. 45  
(a) Arguments of the parties .................................................................................................. . 46 
(i) China ..................................................................................................................... ........ 46 
(ii) European Union ........................................................................................................... . 47 
(b) Arguments of third parties ................................................................................................  48 
(i) Brazil .................................................................................................................... ......... 48 
(ii) Colombia ................................................................................................................. ...... 48 
(iii) Japan ................................................................................................................... .......... 48 
(iv) United States ............................................................................................................ ..... 48 
(c) Evaluation by the Panel ................................................................................................... .. 49 
3. China's claims against Council Regulati ons Nos. 1294/2009 and 1472/2006 ..................... 54  
(a) Alleged lack of specificity ............................................................................................... . 54 
(b) Alleged lack of  consultations ............................................................................................ 56 
D. C LAIMS REGARDING COUNCIL REGULATION 1225/2009  (THE BASIC AD  REGULATION ) "AS 
SUCH " ............................................................................................................................. ........... 60 
1. Relevant Provisions of the Basic AD Regulation .................................................................. 61  WT/DS405/R 
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  2. Claims I.1, I.2, I.3 and I.4 - Alleged violation of Articles 6.10, 9.2, 9.3 and 9.4 of the 
AD Agreement .................................................................................................................. ..... 63  
(a) Arguments of the parties .................................................................................................. . 63 
(b) Arguments of third parties ................................................................................................  66 
(i) Brazil .................................................................................................................... ......... 66 
(ii) Colombia ................................................................................................................. ...... 67 
(iii) Japan ................................................................................................................... .......... 67 
(iv) Turkey ................................................................................................................... ........ 67 
(v) United States ............................................................................................................. .... 68 
(vi) Viet Nam ................................................................................................................. ...... 69 
(c) Evaluation by the Panel ................................................................................................... .. 69 
3. Claim I.5 - Alleged violation of Article I:1 of the GATT 1994 .............................................. 73  
(a) Arguments of the parties .................................................................................................. . 73 
(i) China ..................................................................................................................... ........ 73 
(ii) European Union ........................................................................................................... . 73 
(b) Arguments of third parties ................................................................................................  74 
(i) Colombia .................................................................................................................. ..... 74 
(ii) Viet Nam ................................................................................................................. ...... 74 
(c) Evaluation by the Panel ................................................................................................... .. 74 
4. Claim I.7 - Alleged violation of Ar ticle X:3(a) of the GATT 1994 ........................................ 78  
(a) Arguments of the parties .................................................................................................. . 78 
(i) China ..................................................................................................................... ........ 78 
(ii) European Union ........................................................................................................... . 78 
(b) Arguments of third parties ................................................................................................  78 
(i) Colombia .................................................................................................................. ..... 78 
(ii) United States ............................................................................................................ ..... 79 
(c) Evaluation by the Panel ................................................................................................... .. 79 
5. Claim I.6 - Alleged violation of Article XVI:4  of the WTO Agreement and Article 18.4 of the 
AD Agreement .................................................................................................................. ..... 79  
E. C
LAIMS REGARDING COUNCIL REGULATION 1294/2009  (THE REVIEW REGULATION ) AND 
COUNCIL REGULATION 1472/2006  (THE DEFINITIVE REGULATION ) ......................................... 80 
1. Introduction .................................................................................................................. ......... 80  
(a) Review Regulation ......................................................................................................... ... 80 
(b) Definitive Regulation ..................................................................................................... ... 82 
2. Claims III.17 and III.18 – Alleged violations of Articles 6.10, 6.10.2, 9.2 and 9.3 of the 
AD Agreement – Application of a count ry-wide duty on sampled Chinese exporting 
producers, and Article 9(5) of the Ba sic AD Regulation as applied ..................................... 84  
(a) Arguments of the parties .................................................................................................. . 84 
(i) China ..................................................................................................................... ........ 84 
(ii) European Union ........................................................................................................... . 85 
(b) Evaluation by the Panel ................................................................................................... .. 86 
3. Claim II.11 – Alleged violation of Ar ticle 11.3 of the AD Agreement .................................. 88  
(a) Arguments of the parties .................................................................................................. . 88 
(i) China ..................................................................................................................... ........ 88 
(ii) European Union ........................................................................................................... . 89 
(b) Evaluation by the Panel ................................................................................................... .. 90 
4. Claims II.1, II.13, III.1, III.2, III.3,  III.4, III.15 and III.20 – Dumping ................................ 92  
(a) Consideration of alleged vi olations of Article 2 of the AD Agreement in the context of 
the Review Regulation ...................................................................................................... 92  
(i) Arguments of the parties ............................................................................................... 92  
(ii) Evaluation by the Panel ................................................................................................. 93 WT/DS405/R 
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  (b) Claims III.1 and III.20 – Alleged violations of Articles 2.4, 6.10.2, and 17.6(i) of the 
AD Agreement, Paragraph 15(a)(ii) of Chin a's Accession Protocol, and paragraphs 
151(e)-(f) of China's Working Party Report – Failure to examine MET applications in the original investigation.........................................................................................................  95 
(i) Arguments of the parties ............................................................................................... 95  
(ii) Evaluation by the Panel ................................................................................................. 98 
(c) Claim III.15 - Alleged violation of Article 6.10 of the AD Agreement in the selection of 
the sample of Chinese exporting producers in the original investigation ....................... 108 
(i) Arguments of the parties ............................................................................................. 108 (ii) Evaluation by the Panel ............................................................................................... 11 1 
(d) Claims II.1, II.3, III.3, and III.20 – Alleged vi olations of Articles 2.1, 2.4 and 17.6(i) of 
the AD Agreement and Article VI:1 of the GATT 1994 – Analogue country ................ 117 
(i) Arguments of the parties ............................................................................................. 117 (ii) Arguments of third parties .......................................................................................... 126 (iii) Evaluation by the Panel ............................................................................................... 1 28 
(e) Claims II.1 and III.3 – Alleged violation of  Articles 2.1 and 2.4 of the AD Agreement and 
Article VI:1 of the GATT 1994 – PCN Methodology .................................................... 134 
(i) Arguments of the Parties ............................................................................................. 134 (ii) Arguments of third parties .......................................................................................... 136 (iii) Evaluation by the Panel ............................................................................................... 1 36 
(f) Claim III.2 – Alleged violation of Article 2.2.2 of the AD Agreement – Amounts for 
SG&A and profit ............................................................................................................. 1 40 
(i) Arguments of the Parties ............................................................................................. 141 (ii) Evaluation by the Panel ............................................................................................... 14 4 
(g) Claim III.4 – Alleged violation of Article 2.6,  together with Articles 3.1 and 4.1, of the 
AD Agreement – Exclusion of Special Technolog y Athletic Footwear (STAF) of not less 
than €7.50 per pair from the product under consideration and/or like product ............... 146 
(i) Arguments of the parties ............................................................................................. 146 (ii) Arguments of third parties .......................................................................................... 148 (iii) Evaluation by the Panel ............................................................................................... 1 48 
5. Claims II.2, II.3, II.4, III. 5, III.7 and III.8 – Injury ............................................................. 152  
(a) Consideration of alleged vi olations of Article 3 of the AD Agreement in the context of 
the Review Re gulation .................................................................................................... 152 
(i) Arguments of the parties ............................................................................................. 152 (ii) Arguments of third parties .......................................................................................... 155 (iii) Evaluation by the Panel ............................................................................................... 1 56 
(b) Claims II.2, II.3 and III.5 – Alleged violati ons of Articles 3.1, 6.10 and 17.6(i) of the 
AD Agreement and Article VI:1 of the GATT 1994 – Sampling in the context of 
examining injury ............................................................................................................. 161 
(i) Arguments of the parties ............................................................................................. 161 (ii) Arguments of third parties .......................................................................................... 163 (iii) Evaluation by the Panel ............................................................................................... 1 64 
(c) Claim III.7 – Alleged violation of Artic le 3.3 of the AD Agreement – Cumulative 
assessment of imports from China and Viet Nam in the original investigation .............. 179 
(i) Arguments of the parties ............................................................................................. 179 (ii) Arguments of third parties .......................................................................................... 181 (iii) Evaluation by the Panel ............................................................................................... 1 81 
(d) Claims II.4, III.5 and III.8 – Alleged violations  of Articles 3.1, 3.2, 3.4, 6.10, and 17.6(i) 
of the AD Agreement and Article VI:1 of the GATT 1994 – Evaluation of injury 
indicators .................................................................................................................... ..... 184 
(i) Arguments of the parties ............................................................................................. 185 (ii) Arguments of third parties .......................................................................................... 187 (iii) Evaluation by the Panel ............................................................................................... 1 87 WT/DS405/R 
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  6. Claims II.5 and III.9 - Alleged violation of  Articles 3.1, 3.5, and 17.6(i) of the 
AD Agreement – Causation ................................................................................................. 207  
(a) Arguments of the parties ................................................................................................. 207 
(i) China ..................................................................................................................... ...... 207 
(ii) European Union .......................................................................................................... 209 
(b) Arguments of third parties .............................................................................................. 2 11 
(i) Brazil .................................................................................................................... ....... 211 
(ii) Colombia ................................................................................................................. .... 211 
(iii) Japan ................................................................................................................... ........ 211 
(iv) United States ............................................................................................................ ... 212 
(c) Evaluation by the Panel ...................................................................................................  212 
(i) Review Re gulation ...................................................................................................... 21 6 
(ii) Definitive Regulation .................................................................................................. 2 26 
7. Claims II.6, II.7, II.8, II.9, II.10, II.12, III.10, III.11, III.12, III.13, III.14 and III.19 – 
Procedural Issues ............................................................................................................. ... 237  
(a) Claim III.13 – Alleged violation of Article 6.1.1 of the AD Agreement and 
Paragraph 15(a)(i) of China's Accession Protocol  – Failure to provide at least 30 days to 
reply to the MET/IT claim forms .................................................................................... 237 
(i) Arguments of the parties ............................................................................................. 237 (ii) Arguments of third parties .......................................................................................... 239 (iii) Evaluation by the Panel ............................................................................................... 2 39 
(b) Claim II.6 – Alleged violation of Article 6.1.2 – Failure to make evidence available 
promptly ...................................................................................................................... .... 244 
(i) Arguments of the parties ............................................................................................. 244 (ii) Evaluation by the Panel ............................................................................................... 24 7 
(c) Claims II.7 and III.10 – Alleged violation of Articles 6.4 and 6.2 of the AD Agreement – 
Failure to provide timely opportu nities to see information ............................................. 252 
(i) Arguments of the parties ............................................................................................. 252 (ii) Arguments of third parties .......................................................................................... 254 (iii) Evaluation by the Panel ............................................................................................... 2 55 
(d) Claims II.8, II.9, III.10, III.11, and III.12 - Alle ged violations of Articles 6.5, 6.5.1, 6.5.2, 
and 6.2 of the AD Agreement – Confidential treatment of information ......................... 276 
(i) Arguments of the parties ............................................................................................. 277 
(ii) Arguments of third parties .......................................................................................... 278 (iii) Evaluation by the Panel ............................................................................................... 2 78 
(e) Claim II.10 – Alleged violation of Articles 3.1 and 6.8 of the AD Agreement – Failure to 
apply facts available ........................................................................................................ 327 
(i) Arguments of the parties ............................................................................................. 327 
(ii) Arguments of th e third parties .................................................................................... 329 
(iii) Evaluation by the Panel ............................................................................................... 3 29 
(f) Claim III.14 – Alleged violation of Article 6. 9 of the AD Agreement – Failure to properly 
disclose the essential facts under consideration .............................................................. 333 
(i) Arguments of the parties ............................................................................................. 333 
(ii) Arguments of third parties .......................................................................................... 334 
(iii) Evaluation by the Panel ............................................................................................... 3 34 
(g) Claims II.12 and III.19 – Alleged violations  of Article 12.2.2 of the AD Agreement – 
Failure to provide sufficiently  detailed explanations ...................................................... 337 
(i) Arguments of the parties ............................................................................................. 337 
(ii) Arguments of third parties .......................................................................................... 339 
(iii) Evaluation by the Panel ............................................................................................... 3 39 
8. Claims III.6 and III.16 – Alleged violations of Articles 3.1, 3.2, 9.1, 9.2 and 17.6(i) of the 
AD Agreement – Imposition an d collection of duties .......................................................... 356  WT/DS405/R 
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  (a) Arguments of the parties ................................................................................................. 357 
(i) China ..................................................................................................................... ...... 357 
(ii) European Union .......................................................................................................... 360 
(b) Arguments of third parties .............................................................................................. 3 62 
(i) Colombia .................................................................................................................. ... 362 
(ii) United States ............................................................................................................ ... 362 
(iii) Viet Nam ................................................................................................................ ..... 362 
(c) Evaluation by the Panel ...................................................................................................  363 
9. Claims II.14 and III.21 – Alleged consequential violations of Articles 1 and 18.1 of the 
AD Agreement .................................................................................................................. ... 368  
VIII.  CONCLUSION AND RECOMMENDATIONS ................................................................ 369  
A. C ONCLUSIONS  ......................................................................................................................... 369 
B. R ECOMMENDATION  ................................................................................................................. 374 WT/DS405/R 
Page vi  
 
   
LIST OF ANNEXES 
 
ANNEX A 
 
EXECUTIVE SUMMARIES OF THE FIRST WRITTEN  
SUBMISSIONS OF THE PARTIES 
 
Contents Page 
Annex A-1 Executive Summary of the First Written Submission of China A-2 
Annex A-2 Executive Summary of the First Written Submission of the 
European Union A-12 
 
 
ANNEX B 
 
WRITTEN SUBMISSIONS, OR EXECUTIVE SUMMARIES THEREOF,  
OF THE THIRD PARTIES 
 
Contents Page 
Annex B-1 Executive Summary of the Third Party Written Submission of 
Brazil  B-2 
Annex B-2 Executive Summary of the Third Party Written Submission of 
Colombia B-5 
Annex B-3 Executive Summary of the Third Party Written Submission of 
Japan B-9 
Annex B-4 Third Party Written Submission of Turkey B-14 
Annex B-5 Executive Summary of the Third Party Written Submission of 
the United States B-20 
Annex B-6 Third Party Written Submission of Viet Nam B-24 
 
 
ANNEX C  
 
ORAL STATEMENTS, OR EXECUTIVE SUMMARIES THEREOF, OF THE PARTIES 
AT THE FIRST SUBSTANTIVE MEETING WITH THE PANEL  
 
Contents Page 
Annex C-1 Executive Summary of the Opening Statement of China C-2 
Annex C-2 Opening Statement of the European Union  C-11 
Annex C-3 Closing Statement of China  C-16 
Annex C-4 Closing Statement of the European Union  C-18 
 WT/DS405/R 
Page vii 
 
 
  ANNEX D 
 
ORAL STATEMENTS, OR EXECUTIVE SUMMARIES THEREOF,  
OF THE THIRD PARTIES  
 
Contents Page 
Annex D-1 Third Party Statement of Brazil D-2 
Annex D-2 Third Party Statement of Colombia D-5 
Annex D-3 Executive Summary of the Third Party Statement of Japan D-8 
Annex D-4 Third Party Statement of Turkey  D-12 
Annex D-5 Executive Summary of the Third Party Statement of the 
United States D-15 
 
 
ANNEX E  
 
EXECUTIVE SUMMARIES OF THE SECOND WRITTEN  
SUBMISSIONS OF THE PARTIES 
 
Contents Page 
Annex E-1 Executive Summary of the Second Written Submission of China E-2 
Annex E-2 Executive Summary of the Second Written Submission of 
the European Union E-12 
 
 
ANNEX F 
 
ORAL STATEMENTS, OR EXECUTIVE SUMMARIES THEREOF, OF THE PARTIES 
AT THE SECOND SUBSTANTIVE MEETING WITH THE PANEL 
 
Contents Page 
Annex F-1 Executive Summary of the Opening Statement of China  F-2 
Annex F-2 Executive Summary of the Opening Statement of the 
European Union  F-12 
Annex F-3 Executive Summary of the Closing Statement of China  F-18 
Annex F-4 Closing Statement of the European Union  F-30 
 
 
ANNEX G 
 
REQUEST FOR CONSULTATIONS AND REQUEST  
FOR THE ESTABLISHMENT OF A PANEL  
 
Contents Page 
Annex G-1 Request for Consultations by China G-2 
Annex G-2 Request for the Establishment of a Panel by China G-9 
 WT/DS405/R 
Page viii  
 
  TABLE OF CASES CITED IN THIS REPORT  
 
Short Title Full Case Title and Citation 
Argentina – Ceramic Tiles Panel Report, Argentina – Definitive Anti-Dumping Measures on Imports of 
Ceramic Floor Tiles from Italy , WT/DS189/R, adopted 5 November 2001, 
DSR 2001:XII, 6241 
Argentina – Poultry Anti-Dumping Duties Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from 
Brazil , WT/DS241/R, adopted 19 May 2003, DSR 2003:V, 1727 
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of 
Salmon , WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327 
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 
Brazil – Aircraft Panel Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/R, adopted 20 August 1999, as modified by Appellate Body Report WT/DS46/AB/R, DSR 1999:III, 1221 
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167 
Canada – Aircraft Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft , 
WT/DS70/R, adopted 20 August 1999, as upheld by Appellate Body Report 
WT/DS70/AB/R, DSR 1999:IV, 1443 
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive 
Industry , WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 
2000:VI, 2985 
China – Auto Parts Panel Reports, China – Measures Affecting Imports of Automobile Parts , 
WT/DS339/R, WT/DS340/R, WT/DS342/R and Add.1 and Add.2, adopted 
12 January 2009, as upheld (WT/DS339/R) and as modified (WT/DS340/R, WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R, 
WT/DS340/AB/R, WT/DS342/AB/R 
China – Publications and 
Audiovisual Products Appellate Body Report, China –  Measures Affecting Trading Rights and 
Distribution Services for Certain Publications and Audiovisual Entertainment Products , WT/DS363/AB/R, adopted 19 January 2010 
Dominican Republic – Import 
and Sale of Cigarettes Panel Report, Dominican Republic – Measures Affecting the Importation and 
Internal Sale of Cigarettes , WT/DS302/R, adopted 19 May 2005, as modified 
by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, 7425 
EC – Asbestos Panel Report, European Communities – Measures Affecting Asbestos and 
Asbestos-Containing Products , WT/DS135/R and Add.1, adopted 
5 April 2001, as modified by Appellate Body Report WT/DS135/AB/R, DSR 
2001:VIII, 3305 
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 
25 September 1997, DSR 1997:II, 591 
EC – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas, Complaint by the United States , WT/DS27/R/USA, 
adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:II, 943 WT/DS405/R 
Page ix 
 
 
  Short Title Full Case Title and Citation 
EC – Bananas III (Article 21.5 
– Ecuador II) / EC – Bananas 
III (Article 21.5 – US) Appellate Body Reports, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Second Recourse to 
Article 21.5 of the DSU by Ecuador , WT/DS27/AB/RW2/ECU, adopted 
11 December 2008, and Corr.1 / European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of 
the DSU by the United States , WT/DS27/AB/RW/USA and Corr.1, adopted 
22 December 2008 
EC – Bed Linen Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from India , WT/DS141/AB/R, adopted 
12 March 2001, DSR 2001:V, 2049 
EC – Bed Linen Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton-Type Bed Linen from India , WT/DS141/R, adopted 12 March 2001, as 
modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, 2077 
EC – Bed Linen (Article 21.5 – India) Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the 
DSU  by India , WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 
965 
EC – Bed Linen 
(Article 21.5 – India) Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU  by 
India , WT/DS141/RW, adopted 24 April 2003, as modified by Appellate 
Body Report WT/DS141/AB/RW, DSR 2003:IV, 1269 
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti-Dumping Measures on 
Certain Iron or Steel Fasteners from China , WT/DS397/R, circulated to WTO 
Members 3 December 2010 [appeal in progress] 
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed 
Salmon from Norway , WT/DS337/R, adopted 15 January 2008, and Corr.1, 
DSR 2008:I, 3 
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting 
of Tariff Preferences to Developing Countries , WT/DS246/AB/R, adopted 
20 April 2004, DSR 2004:III, 925 
EC – Tariff Preferences Panel Report, European Communities – Conditions for the Granting of Tariff 
Preferences to Developing Countries , WT/DS246/R, adopted 20 April 2004, 
as modified by Appellate Body Report WT/DS/246/AB/R, DSR 2004:III, 
1009 
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti-Dumping Duties on 
Malleable Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R, 
adopted 18 August 2003, DSR 2003:VI, 2613 
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti-Dumping Duties on Malleable 
Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/R, adopted 18 
August 2003, as modified by Appellate Body Report WT/DS219/AB/R, DSR 
2003:VII, 2701 
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from 
Turkey , WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, 2667 WT/DS405/R 
Page x  
 
  Short Title Full Case Title and Citation 
Guatemala – Cement II Panel Report, Guatemala – Definitive Anti-Dumping Measures on Grey 
Portland Cement from Mexico , WT/DS156/R, adopted 17 November 2000, 
DSR 2000:XI, 5295 
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile 
Industry , WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 
and 2, adopted 23 July 1998, and Corr. 3 and 4, DSR 1998:VI, 2201 
Japan – Alcoholic  Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97 
Korea – Certain Paper Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from 
Indonesia , WT/DS312/R, adopted 28 November 2005, DSR 2005:XXII, 
10637 
Korea – Certain Paper (Article 21.5 – Indonesia) Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from 
Indonesia – Recourse to Article 21.5 of the DSU by Indonesia , 
WT/DS312/RW, adopted 22 October 2007, DSR 2007:VIII, 3369 
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R, adopted 12 January 2000, DSR 
2000:I, 3 
Mexico – Anti-Dumping Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dump ing Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R, adopted 
20 December 2005, DS R 2005:XXII, 10853  
Mexico – Anti-Dumping 
Measures on Rice Panel Report, Mexico – Definitive Anti-Dumping Me asures on Beef and Rice, 
Complaint with Respect to Rice , WT/DS295/R, adopted 20 December 2005, as 
modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, 
11007 
Mexico – Corn Syrup Panel Report, Mexico – Anti-Dumping Investigatio n of High Fructose Corn 
Syrup (HFCS) from the United States , WT/DS132/R, adopted 
24 February 2000, and Corr.1, DSR 2000:III, 1345 
Mexico – Corn Syrup (Article 21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High 
Fructose Corn Syrup (HFCS) from the United States – Recourse to 
Article 21.5 of the DSU  by the United States , WT/DS132/AB/RW, adopted 
21 November 2001, DSR 2001:XIII, 6675 
Mexico – Olive Oil Panel Report, Mexico – Definitive Countervailing Measures on Olive Oil from 
the European Communities , WT/DS341/R, adopted 21 October 2008, DSR 
2008:IX, 3179 
Mexico – Steel Pipes and Tubes Panel Report, Mexico – Anti-Dumping Duties on  Steel Pipes and Tubes from 
Guatemala , WT/DS331/R, adopted 24 July 2007, DSR 2007:IV, 1207 
Thailand – Cigarettes 
(Philippines) Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the 
Philippines , WT/DS371/R, circulated to WTO Members 15 November 2010 
[appeal in progress] 
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes 
and Sections of Iron or Non-Alloy Steel and H-Beams from Poland , 
WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, 2701 WT/DS405/R 
Page xi 
 
 
  Short Title Full Case Title and Citation 
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and 
Sections of Iron or Non-Alloy Steel and H-Beams from Poland , WT/DS122/R, 
adopted 5 April 2001, as modified by Appellate Body Report 
WT/DS122/AB/R, DSR 2001:VII, 2741 
Turkey – Textiles Panel Report, Turkey – Restrictions on Imports of Textile and Clothing 
Products , WT/DS34/R, adopted 19 November 1999, as modified by Appellate 
Body Report WT/DS34/AB/R, DSR 1999:VI, 2363 
US – Anti-Dumping and 
Countervailing Duties (China) Panel Report, United States – Definitive Anti-Dumping and Countervailing 
Duties on Certain Products from China , WT/DS379/R, adopted 25 March 2011, 
as modified by Appellate Body Report WT/DS379/AB/R 
US – Anti-Dumping Measures on Oil Country Tubular Goods Appellate Body Report, United States – Anti-Dumping Measures on Oil 
Country Tubular Goods (OCTG) from Mexico , WT/DS282/AB/R, adopted 
28 November 2005, DSR 2005:XX, 10127 
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 
3779 
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products 
from the European Communities , WT/DS165/AB/R, adopted 
10 January 2001, DSR 2001:I, 373 
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application 
of Zeroing Methodology , WT/DS350/AB/R, adopted 19 February 2009 
US – Corrosion-Resistant 
Steel Sunset Review Appellate Body Report, United States – Sunset Review of Anti-Dumping 
Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3 
US – Corrosion-Resistant Steel Sunset Review Panel Report, United States – Sunset Review of Anti-Dumping Duties on 
Corrosion-Resistant Carbon Steel Flat Products from Japan , WT/DS244/R, 
adopted 9 January 2004, as modified by Appellate Body Report 
WT/DS244/AB/R, DSR 2004:I, 85 
US – DRAMS Panel Report, United States – Anti-Dumping Duty on Dynamic Random 
Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea , WT/DS99/R, adopted 19 March 1999, DSR 1999:II, 521 
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R, adopted 
20 April 2005, DSR 2005:XII, 5663 (Corr.1, DSR 2006:XII, 5475) 
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 
23 August 2001, DSR 2001:X, 4697 
US – Hot-Rolled Steel Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled 
Steel Products from Japan , WT/DS184/R, adopted 23 August 2001 modified 
by Appellate Body Report WT/DS184/AB/R, DSR 2001:X, 4769  
US – Oil Country Tubular 
Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R, 
adopted 17 December 2004, DSR 2004:VII, 3257  WT/DS405/R 
Page xii  
 
  Short Title Full Case Title and Citation 
US – Oil Country Tubular 
Goods Sunset Reviews Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on 
Oil Country Tubular Goods from Argentina , WT/DS268/R and Corr.1, 
adopted 17 December 2004, as modified by Appellate Body Report 
WT/DS/268/AB/R, DSR 2004:VIII, 3421 
US – Oil Country Tubular Goods Sunset Reviews 
(Article 21.5 – Argentina) Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina – Recourse to 
Article 21.5 of the DSU by Argentina , WT/DS268/AB/RW, adopted 
11 May 2007, DSR 2007:IX, 3523 
US – Oil Country Tubular Goods Sunset Reviews 
(Article 21.5 – Argentina) Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on 
Oil Country Tubular Goods from Argentina – Recourse to Article 21.5 of the 
DSU by Argentina , WT/DS268/RW, adopted 11 May 2007, as modified by 
Appellate Body Report WT/DS268/AB/RW, DSR 2007:IX-X, 3609 
US – Poultry (China) Panel Report, United States – Certain Measures Affecting Imports of Poultry 
from China , WT/DS392/R, adopted 25 October 2010 
US – Softwood Lumber IV 
(Article 21.5 – Canada) Appellate Body Report, United States – Final Countervailing Duty 
Determination with Respect to Certain Softwood Lumber from Canada – 
Recourse by Canada to Article 21.5 of the DSU , WT/DS257/AB/RW, adopted 
20 December 2005, DSR 2005:XXIII, 11357 
US – Softwood Lumber V Panel Report, United States – Final Dumping Determination on Softwood 
Lumber from Canada , WT/DS264/R, adopted 31 August 2004, as modified by 
Appellate Body Report WT/DS264/AB/R, DSR 2004:V, 1937 
US – Softwood Lumber V (Article 21.5 – Canada) Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by 
Canada , WT/DS264/AB/RW, adopted 1 September 2006, DSR 2006:XII, 
5087 
US – Softwood Lumber V 
(Article 21.5 – Canada) Panel Report, United States – Final Dumping Determination on Softwood 
Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada , 
WT/DS264/RW, adopted 1 September 2006, as reversed by Appellate Body Report WT/DS264/AB/RW, DSR 2006:XII, 5147 
 US – Softwood Lumber VI  Panel Report, United States – Investigation of the International Trade 
Commission in Softwood Lumber from Canada , WT/DS277/R, adopted 
26 April 2004, DSR 2004:VI, 2485 
US – Softwood Lumber VI (Article 21.5 – Canada) Appellate Body Report, United States – Investigation of the International 
Trade Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada , WT/DS277/AB/RW, adopted 
9 May 2006, and Corr.1, DSR 2006:XI, 4865 
US – Stainless Steel (Mexico) Panel Report, United States – Final Anti-Dumping Measures on Stainless 
Steel from Mexico , WT/DS344/R, adopted 20 May 2008, as modified by 
Appellate Body Report WT/DS344/AB/R, DSR 2008:II, 599 
US – Steel Plate Panel Report, United States – Anti-Dumping and Countervailing Measures on 
Steel Plate from India , WT/DS206/R and Corr.1, adopted 29 July 2002, DSR 
2002:VI, 2073 
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Certain Steel Products , WT/DS248/AB/R, WT/DS249/AB/R, 
WT/DS251/AB/R, WT/DS252/AB/R, WT /DS253/AB/R, WT/DS254/AB/R, 
WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR 
2003:VII, 3117 WT/DS405/R 
Page xiii 
 
 
  Short Title Full Case Title and Citation 
US – Tyres (China) Panel Report, United States – Measures Affecting Imports of Certain 
Passenger Vehicle and Light Truck Tyres from China , WT/DS399/R, 
circulated to WTO Members 13 Decem ber 2010 [appeal/adoption pending] 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3 
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R, adopted 23 May 1997, 
and Corr.1, DSR 1997:I, 323  
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R, adopted 
9 May 2006, and Corr.1, DSR 2006:II, 417 
US – Zeroing (EC)  (Article 21.5 – EC) Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of 
the DSU by the European Communities , WT/DS294/AB/RW and Corr.1, 
adopted 11 June 2009 
US – Zeroing (Japan) Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/AB/R, adopted 23 January 2007, DSR 2007:I, 3 
US – Zeroing (Japan) Panel Report, United States – Measures Relating to Zeroing and Sunset 
Reviews , WT/DS322/R, adopted 23 January 2007, as modified by Appellate 
Body Report WT/DS322/AB/R, DSR 2007:I, 97 
 
 
GATT PANEL REPORTS 
  
Short Title Full Case Title and Citation 
US – MFN Footwear GATT Panel Report, United States – Denial of Most-Favoured-Nation 
Treatment as to Non-Rubber Footwear from Brazil,  DS18/R, adopted 
19 June 1992, BISD 39S/128 
 
 
   WT/DS405/R 
Page xiv  
 
  TABLE OF ABBREVIATIONS USED IN THIS REPORT  
 
 
Abbreviation Full Reference 
AD Agreement Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade 1994 (Anti-Dumping Agreement) 
Basic AD Regulation Council Regulation (EC) No. 1225/2009 of 30 November 2009 
CEC European Confederation of the Footwear Industry 
China's Accession Protocol Protocol on the Accession  of the People's Republic of China, WT/L/432 
China's Accession Working 
Party Report Report of the Working Party on the Accession of China, WT/ACC/CHN/49 
and Corr.1 
Commission Commission of the European Union, the EU investigating authority 
Definitive Regulation Council Regulation (EC) No. 1472/2006 of 5 October 2006 
EFA European Footwear Alliance 
EUR Euro 
GATT 1994 General Agreement on Tariffs and Trade 1994 
IT Individual Treatment 
MET Market Economy Treatment 
MFN Most Favoured Nation 
NME Non-Market Economy 
PCN Product Control Number 
Provisional Regulation Commission Regulation (EC) No. 553/2006 of 23 March 2006 
Review Regulation Council Implementing Regula tion (EU) No. 1294/200 9 of 22 December 2009 
SCM Agreement Agreement on Subsidies and Countervailing Measures 
Second Ad Note to 
Article VI:1 of the GATT 1994 Second Ad Note to Paragraph 1 of Article VI of the GATT 1994, in Annex 1 
of the GATT 1994 
SPS Agreement Agreement on th e Application of Sanitary and Phytosanitary Measures 
STAF Special Technology  Athletic Footwear  
Vienna Convention Vienna Convention on the Law of Treaties 
WTO Agreement Marrakesh Agreement Esta blishing the World Trade Organization  WT/DS405/R 
  Page 1  
 
 I. INTRODUCTION 
A. C
OMPLAINT OF CHINA  
1.1 On 4 February 2010, China requested consulta tions with the European Union pursuant to 
Article 4 of the Understanding on Rules and Proce dures Governing the Settlement of Disputes (the 
"DSU"), Article XXIII:1 of the General Agreemen t on Tariffs and Trade 1994 (the "GATT 1994"), 
and Article 17 of the Agreement on Implementati on of Article VI of the General Agreement on 
Tariffs and Trade 1994 (the "AD Agreement").1  The consultations concerned: (1) Article 9(5) of 
Council Regulation (EC) No. 384/96 on Protectio n against Dumped Imports from Countries not 
Members of the European Community, as amended; (2) Council Regulation (EC) No. 1472/2006 of 5 October 2006, imposing definitive anti-dumping du ties and collecting definitively the provisional 
anti-dumping duties imposed on imports of certain  footwear with uppers of leather from, inter alia , 
China; and (3) Council Implementing Regulati on (EU) No. 1294/2009 of 22 December 2009, 
imposing definitive anti-dumping duties on imports of  certain footwear with uppers of leather 
originating in, inter alia , China, as extended to imports of certain footwear with uppers of leather 
consigned from the Macao SAR, whether declared as originating in the Macao SAR or not, following 
an expiry review pursuant to Article 11(2)  of Council Regulation (EC) No 384/96.   
1.2 China and the European Union held consu ltations on 31 March 2010.  These consultations 
failed to resolve the dispute. 
1.3 On 8 April 2010, China requested the establishmen t of a panel pursuant to Articles 4 and 6 of 
the DSU, Article XXIII:2 of the GATT 1994, and Articles 17.4 and 17.5 of the AD Agreement.
2 
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL  
1.4 At its meeting on 18 May 2010, the Dispute Settlement Body ("DSB") established this Panel 
pursuant to the request of China in document WT/DS 405/2, in accordance with Article 6 of the DSU.   
1.5 The Panel's terms of reference are the following: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by the parties to the dispute, the matter referred to the DSB by China in document 
WT/DS405/2 and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements." 
1.6 On 23 June 2010 China requested the Director-G eneral to determine the composition of the 
Panel, pursuant to paragraph 7 of Article 8 of th e DSU.  On 5 July 2010, the Director-General 
composed the Panel as follows: 
 Chairperson:  Mr. Jose Antonio Buencamino   
 Members:  Mr. Serge Fréchette  
   Mr. Donald Greenfield   1.7 Australia, Brazil, Colombia, Japan , Turkey, United States and Viet  Nam reserved their rights 
to participate in the Panel proceedings as third parties.
3 
                                                      
1 WT/DS405/1.  
2 WT/DS405/2.  
3 WT/DS405/3.  WT/DS405/R 
Page 2  
 
 1.8 The Panel met with the parties to the dispute on 3-4 November 2010 and 25-26 January 2011, 
and with the third parties on 4 November 2010. 
1.9 The Panel submitted its interim report to the parties on 13 May 2011 a nd submitted its final 
report to the parties on 27 July 2011.  
II. FACTUAL ASPECTS 
2.1 This dispute concerns three measures introduced by the European Union: (1) Article 9(5) of 
Council Regulation (EC) No. 384/96 on Protectio n against Dumped Imports from Countries not 
Members of the European Community, as amende d, codified and replaced by Council Regulation 
(EC) No. 1225/2009 of 30 November 2009; (2) Council Implementing Regulation (EU) No. 
1294/2009 of 22 December 2009, imposing a defin itive anti-dumping duty on imports of certain 
footwear with uppers of leather originating in, inter alia , China, as extended to imports of certain 
footwear with uppers of leather consigned from th e Macao SAR, whether declared as originating in 
the Macao SAR or not, following an expiry review pursuant to Article 11(2) of Council Regulation 
(EC) No 384/96; and (3) Council Regulation (E C) No. 1472/2006 of 5 October 2006, imposing a 
definitive anti-dumping duty and collecting definiti vely the provisional duty imposed on imports of 
certain footwear with uppers of leather originating in, inter alia,  China.   
2.2 China makes "as such" claims with respect  to the Basic AD Regulation concerning 
Article 9(5) thereof, the provision that deals with individual treatment of producers from countries that the European Union classifies as non-market  economy ("NME") countries, including China, in 
anti-dumping investigations.
4  China's claims with respect to the Review and Definitive Regulations 
challenge numerous aspects of those measures and of the underlying proceedings.  China also makes 
"as applied" claims concerning Article 9(5) of the Basic AD Regulation with respect to the Definitive 
Regulation.     
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS  
A. CHINA  
3.1 In its written submissions, China requested the Panel to find that: 
(a) Article 9(5) of the Basic AD Regulation violates Articles 6.10, 9.2, 9.3, 9.4 and 18.4 
of the AD Agreement; Articles I:1 and X:3(a) of the GATT 1994; and Article XVI:4 of the WTO Agreement; 
(b) With respect to the Review Regula tion, the European Union violated: 
(i) Articles 2.1 and 2.4 of the AD Agreement and Article VI:1 of the 
GATT 1994 by precluding a fair comparison between the export price and 
the normal value on account of the analogue country selection procedure and 
the selection of Brazil as the analogue country, and by using the PCN methodology applied in the original investigation and suddenly reclassifying the footwear categories in the middle of the investigation; 
(ii) Articles 3.1 and 17.6(i) of the AD Agreement because it failed to objectively 
examine, based on positive evidence, both the volume of the dumped imports 
and the effect of the dumped imports on prices in the domestic market for 
                                                      
4 China asserts that it is in fact a market economy country.  China, first writte n submission, fn. 207.  
China's status in this regard is not an  issue to be resolved in this dispute, and the Panel expresses no views on it.  WT/DS405/R 
  Page 3  
 
 like products, and the consequent imp act of these imports on domestic 
producers of such products, as the Eur opean Union used different sampling 
procedures for Chinese exporters, EU importers, and non-complaining EU 
producers on the one hand, and complain ant EU producers on the other hand; 
(iii) Articles 3.1 and 17.6(i) of the AD Agreement, and Article VI:1 of the 
GATT 1994 because it failed to objectively examine, based on positive 
evidence, both the volume of the dump ed imports and the effect of the 
dumped imports on prices in the domestic market for like products, and the consequent impact of these imports on domestic producers of such products; 
and Article 6.10 of the AD Agreement, because:  
- the European Union selected the EU producers' sample in the absence of 
requisite data which is normally solicited in a sampling form, is essential for the selection of the sample, and w as requested from non-complainant EU 
producers who made themselves known; 
- the EU producers' sample selected was neither statistically valid nor 
represented the largest percentage of volume that could reasonably be 
investigated and the European Union faile d to cover the largest percentage of 
volume that could be investigated; 
- the EU producers' sample included a producer that outsourced its entire 
production of the product concerned to a third country in the review investigation period; and  
- the European Union used an incorrect product classification methodology and 
suddenly reclassified the footwear categories in the middle of the investigation. 
(iv) Articles 3.1, 3.4 and 17.6(i) of the AD Agreement by failing to make an 
objective examination, on the basis of pos itive evidence, of the factors having 
a bearing on the state of the domestic industry because several key injury 
indicators were analysed on the basis of the data of the whole EU production, as termed by the European Union, that included data pertaining to EU producers not part of the EU industry; 
(v) Articles 3.1, 3.5 and 17.6(i) of the AD Agreement because it failed to make 
an objective examination, on the basi s of positive evidence, that dumped 
imports are, through the effects of dumping, causing injury; and because it 
failed to ensure that injury caused to the EU industry by other factors was not 
attributed to dumped imports; 
(vi) Article 11.3 of the AD Agreement becau se its determination that expiry of 
the measure was likely to lead to a continuation of dumping and injury was 
based on determination of continued dumping and injury in violation of 
Articles 2.1, 2.4, 3.1, 3.4, 3.5, 6.8, 6.10 and 17.6(i) of the AD Agreement; 
(vii) the following procedural obligations, throughout the investigation: - Article 6.1.2 of the AD Agreement by failing to provide other interested 
parties prompt access to the informati on in the non-confidential questionnaire 
responses filed by sampled EU producers; WT/DS405/R 
Page 4  
 
 - Articles 6.2 and 6.4 of the AD Agreement by failing to provide timely 
opportunities for all interested parties to see all non-confidential information relevant to the defence of their interests concerning but not limited to sampling of EU producers, selection of the analogue country, and other procedural issues; 
- Articles 6.5 and 6.5.1 of the AD Agreement because the European Union 
failed to ensure, among others, the disclosure of the names of the complainants; and the provision of summaries of confidential information relating to the EU industry and the sampled EU producers in the expiry 
review request and questionnaire respon ses respectively; and data used for 
selecting the sample of EU producers, or where provided, failed to ensure the 
provision by the EU industry and/or the sampled EU producers, of sufficiently detailed summaries to enable a reasonable understanding of the substance of that information; 
- Articles 6.2 and 6.5.2 of the AD Agreement by failing to determine that the 
request for the confidentiality of th e names of the complainants was not 
warranted; and by failing to reject the confidential information provided by the sampled EU producers, the non-conf idential summaries of which were 
not provided; 
- Articles 3.1 and 6.8 of the AD Agreement by failing to apply facts available 
when faced with incorrect and defici ent information, including but not 
limited to the product classification information provided by sampled EU 
producers in the injury questionnaire responses; 
- Article 12.2.2 of the AD Agreement by failing to provide sufficiently detailed 
explanations in the Review Regulation, regarding matters of fact and law and 
reasons which led to the extension of the measures; and of reasons which led 
to the acceptance or rejection of the ar guments of the interested parties. 
(viii) the European Union violated Article 17.6(i) of the AD Agreement because 
the analogue country selection procedure did not amount to a proper establishment of the facts and an unbia sed and objective evaluation of those 
facts; and 
(ix) in consequence, the European Union violated Articles 1 and 18.1 of the 
AD Agreement because an anti-dumping m easure must be applied only under 
the circumstances provided for in Article VI of the GATT 1994 and in accordance with the provisions of the AD Agreement; and 
(c) With respect to the Definitive Regulation, th e European Union violated Articles 2.2.2, 
2.4, 2.6, 3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 6.1.1, 6.2, 6.4, 6.5, 6.5.1, 6.5.2, 6.9, 6.10, 6.10.2, 
9.2, 9.3, 12.2.2 and 17.6(i) of the AD Agreement; Article VI:1 of the GATT 1994; 
Section 15(a)(ii) of China's Protocol of Accession; and Paragraphs 151(e) and (f) of 
the Report of the Working Party on the Accession of China.   
3.2 China also requests that the Panel reject the Eu ropean Union's request for preliminary rulings 
with respect to any alleged failure on China's part to comply with Article 6.2 of the DSU, as well as 
with respect to the propriety of China's claims under Article 17.6(i) of the AD Agreement.      WT/DS405/R 
  Page 5  
 
 3.3 In addition, concerning its "as such" claims with respect to Article 9(5) of the Basic 
AD Regulation, China requests that the Panel reco mmend that the DSB request the European Union 
to withdraw this measure.
5  With respect to the Review Regulation and Definitive Regulation, China 
requests that the Panel recommend that the DSB re quest the European Uni on to bring these measures 
into conformity with its obligations under th e AD Agreement and the GATT 1994.  Furthermore, 
China requests that the Panel use its discretion under the second sentence of Article 19.1 of the DSU 
by suggesting ways in which the European Union could implement the recommendations and rulings 
of the DSB.  More specifically, given the nature and scope of the numerous violations of the AD Agreement and the GATT 1994, China requests the Panel to suggest that the European Union 
(i) immediately repeal the Review Regulation and (ii) refund the anti-dumping duties that have been 
paid on imports of the product concerned from China. 
B. E
UROPEAN UNION  
3.4 The European Union requests that the Pane l make the following preliminary rulings:  
(a) the Panel's terms of reference with respect to China's "as such" claims are limited to 
those specific aspects of the measure exp licitly identified by China in its Panel 
Request, i.e. the imposition of anti-dumping duties on a country-wide basis or on an 
individual basis in the case of imports fr om non-market economies; and that any other 
issues, such as the individual determination of dumping margins, the calculation of those dumping margins, the level of anti-dumping duties, are outside the Panel's terms of reference; 
(b) China's claims in items II.2, II.3, II.4, II .5, II.13, III.5, III.6 and III.20 in the Panel 
Request that are based on the alleged inc onsistency of the challenged EU measures 
with Article 17.6(i) of the AD Agreement ar e outside the Panel's terms of reference; 
(c) China's claims in items II.12 and III.19 in the Panel Request are outside the Panel's 
terms of reference since they do not satisfy  the requirements of Article 6.2 of the 
DSU; and 
(d) the references to profit margin and (in so fa r as it is implied) to the lesser duty rule, 
and to Article 9.1 of the AD Agreement, in Claim III.6 of the Panel Request are 
outside the Panel's terms of reference. 
3.5 In its written submissions, the European Union re quested that the Panel reject China's claims 
in their entirety, finding instead that, with r espect to each of them, the European Union acted 
consistently with all its obligati ons under the WTO Agreements.   
IV. ARGUMENTS OF THE PARTIES 
4.1 The arguments of the parties, as set forth in  the executive summaries of their submissions 
provided to the Panel, are attached to this Repor t as annexes (see List of Annexes, pages vi-vii). 
                                                      
5 China, first written submission, para. 324.  WT/DS405/R 
Page 6  
 
 V. ARGUMENTS OF TH E THIRD PARTIES 
5.1 The arguments of the third parties, as set forth in the executive summaries of their 
submissions provided to the Panel, are attached to  this Report as annexes (see List of Annexes, 
pages vi-vii).
6 
VI. INTERIM REVIEW 
A. INTRODUCTION  
6.1 On 13 May 2011, the Panel issued its Interim Report to the parties.  On 27 May 2011, China 
and the European Union submitted written requests for review of precise aspects of the Interim 
Report.  On 10 June 2011, China and the European  Union submitted written comments on each other's 
requests for interim review.  Neither party requ ested an additional meeting with the Panel. 
6.2 As a result of the interim review process, th e numbering of footnotes in the Final Report has 
changed from the Interim Report.  The text below re fers to the footnote numbe rs in the Interim Report 
regarding which the parties requested review.  Wh ere we have made changes to a footnote in the 
Interim Report, a reference to the corresponding fo otnote number in the Final Report is included (in 
parentheses) for ease of reference.  The numbering of paragraphs is unchanged.  We have also 
corrected typographical and other non-substantive errors throughout the Report, including errors 
identified by the parties, which are not referred to  specifically below.  However, some "typographical 
error" corrections proposed by China were, in our view, editorial suggestions we considered 
unnecessary, and we have therefore not made them.  
6.3 In order to facilitate the understanding of the interim review comments and changes proposed, 
the following section is structured to follow the orga nization of the Final Report itself, with the review 
requests of the parties, and their comments, addressed sequentially. 
B. GENERAL COMMENTS  
6.4 With respect to claims regarding Council Regulation (EC) No. 1225/2009 (the "Basic 
AD Regulation") as such, the European Union stated th at it considers that the Panel "entirely relied on 
the reasoning of an unadopted panel report wit hout specifically addressing the specific facts and 
additional arguments made in these panel proceedings."7  China did not comm ent on the European 
Union's observation. 
6.5 The European Union's observation is not formul ated as a request for specific changes to the 
Interim Report.  We recall that the claims and argum ents with respect to Article 9(5) of the Basic 
AD Regulation as such in EC – Fasteners (China)  were substantively largely the same as those 
presented by the same parties on the same issue in this  dispute.  Thus, with respect to China's claims 
relating to the Basic AD Regulation "as such", the specif ic measure at issue is exactly the same in this 
case as in EC – Fasteners (China) , China claimed violations of the same provisions of covered 
agreements in both disputes, and the parties' argu ments in both cases are very similar.  Given the 
identity of the measure, the claims and the parties, and the substantial similarity in the arguments, we 
carefully considered the report of the panel in EC – Fasteners (China) .  However, we did not simply 
"entirely rel[y] on the reasoning of an unadopted panel report".  Rather, as noted in the Interim 
Report, we were persuaded by that panel's reasoni ng to reach the same conclusions, and adopted that 
                                                      
6 Brazil, Colombia, Japan, Turkey, the United States and Viet Nam provided written submissions 
and/or made oral statements at the Panel's meeting with  the third parties.  Australia did not provide a written 
submission or make an oral presentation.  
7 European Union request for interim review, p. 1.  WT/DS405/R 
  Page 7  
 
 panel's analysis and conclusions w ith respect to the same issues a nd arguments presented by the same 
parties concerning the same measure.  Thus, our objective assessment of China's claims and the 
parties' arguments was the same as that of the panel in EC – Fasteners (China) .  In these 
circumstances, we see nothing to be gained, and a potential for confusion, were we to state our 
conclusions and analysis, which were the same as those of the panel in EC – Fasteners (China) , in 
different terms in this report.  We have therefore taken the route of adopting that panel's analysis and 
conclusions as our own, with additional reasoning of our own when necessary to address arguments 
not made before that panel.  When the same parties present the same claims and arguments concerning the same measure in two successive di sputes, as here, if it finds the analysis and 
conclusions of the first panel persuasive and corr ect, we see no reason for the second panel to restate 
that analysis and conclusions.  We are aware of no reasons that would preclude a panel from 
following such a course of action.  We considered this approach to be appropriate in the unusual 
circumstances of this case, where the same meas ure was the subject of two successive disputes 
between the same parties within a short period of tim e, based on the same claims and largely the same 
arguments.   
C. S
PECIFIC REQUESTS  
6.6 In addition to the specific requests discussed in  more detail below, China made requests for 
modification of a number of paragraphs of the Interim Report, to more accurately reflect its 
arguments,8 which the European Union did not comment on or oppose.  We have, in each instance, 
considered the requested modification based on our review of China's arguments as presented to the 
Panel, and have modified the following paragraphs as a result, albeit in some instances not in the 
precise terms requested by China:  Paragraphs 7.171 , 7.173 , 7.182 , 7.231 , 7.302 , Footnote 596 (now 
footnote 741) , 7.407 , 7.416 , 7.497 , 7.502 , 7.505 , 7.566 , 7.587 , 7.593 , 7.608 , 7.629 , 7.823  and 7.855 .  
6.7 Paragraph 2.2 :  China requests that the use of th e expression "non-market economy" or 
"NME" to describe, inter alia , China, be qualified or a footnote be a dded in order to clarify that this is 
a classification assigned by the European Union, a nd that the use of this expression should not be 
taken as an indication that the Panel considers Chin a to be a "non-market economy".  China notes that 
this expression is not used in the AD Agreement, Ch ina's Protocol of Accession, or China's Working 
Party Report.  China's request is with respect to pa ragraph 2.2, but China refers to the use of this 
expression "throughout the Interim Report", wit hout proposing any other specific changes.9  T h e  
European Union did not comment on this request.   
6.8 We have made a change to Paragraph 2.2 of the Final Report to address China's request, albeit 
not in the precise terms proposed by China.  
6.9 Paragraph 3.1(c) :  China requests that the Panel include Articles 1, 9.1, and 18.1 of the 
AD Agreement in the list of provisions claimed by Ch ina to be violated with respect to the Definitive 
Regulation.  The European Union did not comment on this request. 
6.10 China previously made the same request in  its comments on the Descriptive Part of the 
Report.  Paragraph 3.1(c) of the Interim (and Fi nal) Report reproduces China's request for findings 
and recommendations as set out in in its written s ubmissions.  In paragraph 1407 of its first written 
submission, China requested the Panel to find th at the European Union violated a number of 
provisions expressly listed in that paragraph.10  Articles 1, 9.1, and 18.1 of the AD Agreement are not 
listed in that paragraph.  In paragraph 1538 of its second written s ubmission, China again requested 
                                                      
8 China, request for interim review, paras. 10-11, 13, 27, 34, 43-44, 49, 51-52, 56-59, 62, 72 and 74. 
9 China, request for interim review, para. 3. 
10 Paragraph 1406 of China's first written submission al so includes, with respect to the AD Agreement, 
the same list of provisions, the violation of which China stated it had demonstrated. WT/DS405/R 
Page 8  
 
 the Panel to find that the European Union violated a number of provisions, and once more, Articles 1, 
9.1 and 18.1 of the AD Agreement are not listed in that  paragraph.  In light of this, we did not make 
the change requested in response to China's comments on the Descrip tive Part of the Report, and for 
the same reasons, have not made the requested changes now.   
6.11 Paragraph 7.36 :  China requests that the Panel amend th e first sentence of this paragraph.  
China asserts that its argument differentiates betwee n "explicit" and "implicit"  obligations allegedly 
contained in Article 17.6(i) of the AD Agreement.
11  China also requests that the Panel amend the 
fifth sentence of this paragraph, asserting that it di d not consider the questi on of "explicit 'obligation 
creation'", but argued that Article 17.6(i) of th e AD Agreement "does impliedly impose obligations" 
on investigating authorities.12  The European Union requests that, should the Panel consider it 
appropriate to accept China's proposed changes, the Panel should rephrase the fourth sentence of this 
paragraph to better reflect the European Union's argument.13 
6.12 Both requests concern statements of the par ties' own arguments regarding the obligations 
contained in Article 17.6(i) of the AD Agreement,  as summarized in the course of our analysis.  
Having reviewed the requested changes, we have deci ded to modify this paragraph, albeit in slightly 
different terms from those proposed, to more accurately reflect the parties' arguments, as we 
understand them.  We also added a sentence to the e nd of paragraph 7.37 to more clearly express our 
conclusion that a provision which establishes no obliga tions on an investigating authority cannot form 
the legal basis of a claim of violation of the AD Agreement.   
6.13 Paragraph 7.66 :  The European Union requests that the Panel modify this paragraph in order 
to more accurately describe the manner in which dumping margins are calculated.14  China did not 
comment on this request. 
6.14 Given that the proposed modification is a de scription of the relevant provisions of the 
European Union's Basic AD Regulation, and re flects the operation of that Regulation as we 
understand it, we have modified  this paragraph accordingly. 
6.15 Paragraphs 7.118 and 7.119 :  The European Union requests that these paragraphs be 
modified in order to more accurately describe the findings in the Review Regulation.15  China did not 
comment on this request. 
6.16 Having reviewed the European Union's proposed  modifications, we agree that they more 
accurately summarize the Review Regulation, and have therefore modified these paragraphs accordingly. 
6.17 Paragraph 7.124 :  China requests that the Panel modify  this paragraph in order to better 
describe the involvement of the Chinese authorities in the discussions regarding the selection of the 
sample for dumping determinations.
16  The European Union did not comment on this request. 
6.18 The Interim Report used the terminology of the Provisional Regulation, recital 57, in 
characterizing the actions of Chinese authorities re garding the selection of the sample of Chinese 
exporting producers.  China's requested modificati on does not reflect the characterization of the 
Chinese authorities' actions set out in the Provisional  Regulation.  In light of this, we consider it 
                                                      
11 China, request for interim review, para. 5. 
12 China, request for interim review, para. 6. 
13 European Union, comments on China's request for interim review, pp. 1-2. 
14 European Union, request for interim review, p. 1. 
15 European Union, request for interim review, p. 2. 
16 China, request for interim review, para. 7.  WT/DS405/R 
  Page 9  
 
 appropriate, and have added a reference to the Pr ovisional Regulation to clarify this in the Final 
Report.  We have made no other changes to this  paragraph in response to China's request.   
6.19 Paragraph 7.125 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments and the factual record.
17  The European Union did not comment on 
this request. 
6.20 As China's proposed changes accu rately summarize the Definitive Regulation and reflect its 
arguments as presented to the Panel, we ha ve modified this pa ragraph accordingly. 
6.21 Paragraph 7.146 :  Both parties requested review with r espect to this paragr aph.  China states 
that it argued that granting at least some of the individual examination requests would not have been 
unduly burdensome and that it had presented prima facie  evidence in that regard, but makes no 
specific request for modification of this paragraph.18  The European Union did not respond to China's 
comment. 
6.22 The European Union requests that the Panel am end this paragraph to reflect the European 
Union's understanding of the basis for the Panel's rej ection of China's argument, which is that China 
failed to make its prima facie  case.19  China commented in respon se that the European Union's 
suggested amendment would render th is paragraph incoherent for tw o reasons.  The Panel would be 
making a summary finding with respect to  China's argument that it has presented a prima facie  case, 
and that the burden of proof shifted to the European Union, without any actual evaluation thereof.  Moreover, the previous sentence in this paragraph, stating that it would inappropriate for the Panel to 
interfere in this manner in an anti-dum ping investigation, would become pure dicta .
20   
6.23 In support of its request, China reiterates the ar guments it made during the proceeding.  As we 
stated in paragraph 7.146 of the Interim Report, to the extent China is asserting that the European 
Union directly violated Article 6.10.2 of the AD Agreement by not examining the four Chinese 
producers who requested individual examination under  Article 17(3) of the Basic AD Regulation, the 
Provisional and Definitive Regulations are clear that the Commission did consider the four individual 
examination requests received, and based on the criteria set forth in Article 6.10.2 of the 
AD Agreement declined to grant indivi dual examinations to these requests.21  Insofar as China is 
arguing that it would not have been unduly burdens ome to examine the individual examinations 
requested, we rejected China's argument, considering th at even if this were true, it would be "entirely 
inappropriate for us to interfere in this manner in  an investigating authority's conduct of anti-dumping 
investigations."  Therefore, as we have addr essed these arguments, we consider it unnecessary to 
make any changes to this paragraph based on China's comments.     
6.24 Turning to the European Union' s request, we recall that paragraph 7.146 of the Interim Report 
states that "[t]o the extent China is arguing that it would not, in fact, have been unduly burdensome, and that the Commission could, and should, have allo cated its available resources so as to enable it to 
undertake the individual examinations requested, we reject China's argument."  Contrary to the 
European Union's view, this statement does not re fer to whether China met its burden of proof in 
presenting a prima facie  case of violation of Article 6.10.2 of the AD Agreement.  As stated later in 
the same paragraph, "[e]ven assuming China is co rrect that the Commission had sufficient resources, 
and/or could have allocated its av ailable resources differently, we c onsider that it would be entirely 
inappropriate for us to interfere in this manner in  an investigating authority's conduct of anti-dumping 
                                                      
17 China, request for interim review, para. 8. 
18 China, request for interim review, para. 9. 
19 European Union, request for interim review, p. 2. 
20 China, comments on the European Union's request for interim review, para. 2. 
21 Provisional Regulation, Exhibit CHN-4, recital 64; Definitive Regulation, Exhibit CHN-3, recital 65. WT/DS405/R 
Page 10  
 
 investigations."  It is thus clear that we do not agree with the European Union's understanding of the 
basis of our rejection of China's arguments, as we did not reject China's argument because China 
failed to present a prima facie  case, but rather because even assuming China did so, it would not 
affect our conclusion.  We therefore have made no change to this paragraph in response to the 
European Union's request.   
6.25 Paragraphs 7.152 and 7.336 :  The European Union requests that the Panel amend these 
paragraphs and footnote 215 (now footnote 356)  to more accurately reflect its arguments.
22  C h i n a  
contends that the addition of the term "automat ic", as suggested by the European Union, is 
unnecessary, considering China's arguments.23 
6.26 Given that this request reflects the Europ ean Union's own arguments as presented to the 
Panel, we have modified these paragraphs and footnote 215 (now footnote 356) accordingly.  
6.27 Paragraph 7.178 :  China requests that the Panel modify this paragraph in order to accurately 
reflect the text of Article 2(7)(b) of the Basic AD Regulation.24  The European Union did not 
comment on this request. 
6.28 Given that the requested modification reflects the actual text of Article 2(7)(b) of the Basic 
AD Regulation, we have modified  this paragraph accordingly. 
6.29 Paragraph 7.206 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments.25  The European Union states that it does not understand what China 
intends by the expression "non-products con cerned" in its proposed amended text.26 
6.30 Given that the requested modification reflects China's own arguments as presented to the 
Panel, we have modified this paragraph, al beit not in the precise terms proposed by China. 
6.31 Paragraph 7.208 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments.27  The European Union considers that China's proposed amendment 
would insert a detailed account of what China asser ted the European Union to have argued in its 
submissions, and states that it cannot see the useful purpose of such amendment, as the Interim Report 
gives an account of what the European Union argued.28 
6.32 The Interim and Final Reports summarize the argu ments of the parties as we understand them, 
reflecting those points we consider most important, but obviously are not a complete statement of the 
sometimes voluminous arguments presented by the parties in their various written and oral 
submissions and answers to Panel questions.  China proposes that we include in our description of its 
argument much of what it argued at paragr aphs 1501-1505 and 1508-1509 of its second written 
submission, although it cites only paragraph 1501 of  that submission in support of its request.  
Nonetheless, given that the requested modifications reflect China's own arguments, we have modified 
this paragraph, albeit not in the precise terms, and not to the extent, proposed by China.   
6.33 Paragraph 7.218 :  China requests that the Panel review  the first and penultimate sentences of 
this paragraph, asserting that they do not correctly  represent China's argument, but does not make any 
                                                      
22 European Union, request for interim review, pp. 2 and 4. 
23 China, comments on the European Union's request for interim review, para. 3. 
24 China, request for interim review, para. 12. 
25 China, request for interim review, para. 14. 
26 European Union, comments on China's request for interim review, p. 2. 
27 China, request for interim review, para. 15. 
28 European Union, comments on China's request for interim review, p. 2.  WT/DS405/R 
  Page 11  
 
 suggestions for modifications.
29  The European Union notes that Ch ina makes a bald statement that 
sections of the Interim Report do not correctly repr esent China's arguments, and states that if China 
seeks amendment of the report, China should indicate what that amendment should be.30 
6.34 We have reviewed this paragra ph, which is part of our analysis, in light of the portions of 
China's submissions cited in China's request for in terim review.  The sentences objected to by China 
accurately reflect our understanding of China's argument s, and nothing in the cited portions of China's 
submissions affects that understanding or our conclusions as set forth in this paragraph.  We note that 
China made no specific proposal for modification, and we are satisfied with, and have therefore made 
no changes to, this paragraph.  
6.35 Paragraph 7.220 :  China requests that the Panel review the first sentence of this paragraph, 
considering that it does not correctly represent Chin a's argument, but does not make any suggestions 
for modifications.31  The European Union did not comment on this request.   
6.36 We have reviewed this paragra ph, which is part of our analysis, in light of the portions of 
China's submissions cited in China's request.  Th e sentences objected to by China accurately reflect 
our understanding of China's arguments, and nothing in the cited portions of China's submissions 
undermines our understanding or our conclusions as set forth in this paragraph.  We note that China 
made no specific proposal for modification, and we  are satisfied with, and have therefore made no 
changes to, this paragraph.  
6.37 Paragraph 7.224 :  China requests that the Panel modify the last sentence of this paragraph in 
order to more accurately reflect its arguments.32  The European Union did not comment on this 
request.  
6.38 The last sentence of paragraph 7.224 states that the conclusion of the panel in Argentina – 
Poultry Anti-Dumping Duties  that a lack of information from a co mpany subject to the investigation, 
whether or not part of a limited examination, does not justify declining to determine an individual 
margin for that company, has no bearing on the ques tion before us in this dispute.  As the last 
sentence of paragraph 7.224 does not describe Chin a's arguments, we fail to understand how it "does 
not correctly represent China's argument".  Howeve r, we note that the text which China proposes be 
amended is actually the last sentence of paragraph 7.223.  Assuming China is actually requesting that 
we modify that sentence, in the terms set out in its request for interim review, we note that China's 
request simply paraphrases language in Argentina – Poultry Anti-Dumping Duties  which is quoted in 
paragraph 7.224.  Moreover, the la nguage China proposes we add to pa ragraph 7.223, which is part of 
our analysis, is already set out in paragraph 7.208,  where China's arguments are described.  The last 
sentence of paragraph 7.223 states th at China relies on the Panel Report in Argentina – Poultry Anti-
Dumping Duties  in support of its position, without descr ibing that position, which is what China 
proposes that we do.  We consider it unnecessary, in the context of our analysis, to repeat the substance of China's position which is described el sewhere in the Final Report, and therefore have 
made no change to this paragraph. 
6.39 Footnote 416 (now footnote 558) :  China requests that the Panel delete the second sentence 
of footnote 416 (now footnote 558), referring in th is regard to paragra phs 15-18 of its opening 
statement at the second meeting.  In particular, Chin a recalls its rejection of the view that compliance 
with Articles 2.1 and 2.4 of the AD Agreement wo uld require something approaching a "distortion 
                                                      
29 China, request for interim review, para. 16. 
30 European Union, comments on China's request for interim review, p. 2. 
31 China, request for interim review, para. 17. 
32 China, request for interim review, para. 18. WT/DS405/R 
Page 12  
 
 analysis".
33  The European Union argues that in the passage China proposes be deleted, the Panel 
states its own view of the practical consequences of China's argument.  In th e European Union's view, 
the point the Panel makes is that "[i]n order not to behave with [] "complete disregard" [of the actual 
value which the proxy is meant to represent] the Memb er must have an estimation of "the actual value 
which the proxy is meant to represent"", a vi ew the European Union considers appropriate.34 
6.40 In this footnote we address China's argument that ""in order to be considered to have 
reasonably exercised its discretion as to the actual mechanics/methodology of the process is, at a bare 
minimum , to not select a proxy value in complete disregard of the actual value which the proxy is 
meant to represent , and … that avoiding that could require  as little as taking into account the level of 
economic development of the analogue country, whic h is quite clearly a goal which can be and is 
meaningfully pursued by many Members."35  We recognize that China did not argue that a "distortion 
analysis" was necessary in order to determine the extent  of distortion.  Nonetheless, we fail to see how 
an investigating authority could attempt to dete rmine a proxy for the normal value in the terms 
proposed by China without actually determining, ev en if only to some extent, what domestic prices 
would have been but for the fact that the country in question is not a market economy.  The sentences 
which China proposes be deleted accurately reflect our  views in this regard, and we have therefore 
made no changes to this footnote in response to China's request. 
6.41 Paragraph 7.265 :  China asserts that there is a "te nuous relationship" between the Panel's 
conclusion that the fair comparison obligation does not "establish[] a general requirement of "fairness" which applies, inter alia, to the selection of an analogue country", and its rejection of the 
possibility that the fair comparison could inform or  otherwise be implicated by any form of analogue 
country selection methodology, no matter how unreasona ble.  China requests that the Panel broaden 
its conclusion to indicate that, apart from not establishing a "general requirement of fairness", the analogue country selection necessarily falls out of the scope of Article 2.4 in such a manner that the 
Panel need not examine the facts of the particular cas e.  In China's view, this would require the Panel 
to clarify whether it considers that no aspect of normal value calculation could preclude a fair 
comparison, or whether, even if that were a possi bility, such preclusion would not be inconsistent 
with Article 2.4.
36  The European Union did not comment on this request. 
6.42 We recall our conclusion that the fair comparison obligation in Article 2.4 of the 
AD Agreement does not establish a general requirement  of ""fairness" which applies to the selection 
of an analogue country".  However, we did not "cat egorical[ly] reject[] the possibility that the fair 
comparison could  inform or otherwise be implicated by any form  of analogue country selection 
methodology, no matter how unreasonable" as asserted by China.37  Consequently, we see no reason 
to broaden our conclusion in paragraph 7.265 as China requests.  We considered and rejected China's 
argument that Article 2.4 establishes a general require ment of "fairness" which applies to the selection 
of an analogue country, and in our view, there is no n eed, in view of the claims and arguments in this 
dispute, to go beyond that conclusion in the manner re quested by China.  We therefore have made no 
changes to this paragraph in response to China's request.  
6.43 Paragraph 7.267 :  China requests that the Panel modify this paragraph to accurately reflect 
China's arguments.38  The European Union did not comment on this request. 
                                                      
33 China, request for interim review, para. 20. 
34 European Union, Comments on China's request for interim review, p. 2. 
35 China, request for interim review, para. 20. 
36 China, request for interim review, para. 21. 
37 China, request for interim review, para. 21 (emphasis in original), citing China, second written 
submission, paras. 254-258. 
38 China, request for interim review, para. 22.  WT/DS405/R 
  Page 13  
 
 6.44 The first requested change reflects in large part  the text of paragraph 409 of China's first 
written submission, and we have modified this para graph, albeit not in the precise terms proposed by 
China.  China also requests that  the phrase "as well as domestic market prices" be deleted from 
paragraph 7.267, without any explanation for this proposed change.  These words appear in 
paragraph 481 and footnote 218 of China's second writte n submission, as reflected in this paragraph.  
We have therefore made no change to this paragr aph in response to this aspect of China's request. 
6.45 Footnote 434 (now footnote 576) :  China asserts that the reference to paragraph 484 of 
China's first written submission in this footnote is incorrect.
39  The European Union did not comment 
on this assertion.  
6.46 We have reviewed the referenc e in question, and concluded th at China is correct, and have 
therefore deleted this reference. 
6.47 Paragraph 7.283 :  China requests that the Panel add the phrase "and the fact that Chinese 
producers did not have the knowledge of the PCNs of the cooperating Brazilian producers" after the 
first comma, and add the word "any" after the word "cla im", in the first sentence of this paragraph, in 
order to accurately reflect its arguments, referring in this regard to para graphs 11 and 22 of its 
opening and closing oral statements at the second meeting with the Panel, respectively.  Second, 
China requests that the Panel review its conclu sions, without making any specific suggestions for 
modification, contending that (i) the adjustments that  were made in the investigation are of a different 
nature and character, and were based on the data of  the Brazilian producers, and the fact that such 
costs were not incurred by Chinese producers applied to  all footwear irrespective of the PCNs; and (ii) 
the adjustments for children's shoes and for transpor t and insurance costs are not comparable to the 
adjustments concerning production processes and costs, time, technology and raw materials which are 
different as regards the divergent kinds of footwear  classified under the same PCN.  Finally, China 
requests that the Panel consider the issue addr essed in China's argument that the Commission 
reclassified sports, sports-like and trekking footw ear from PCN category "E" into PCN category "A", 
leading to the mixing of completely different foot wear types, which automatically prevented a fair 
comparison as required by Article 2.4 of the AD Agreement.40  The European Union contends that the 
page references cited by China in support of the fi rst aspect of its request are not correct, and asserts 
that the Panel has adequately addressed the matters referred to by China, and therefore no amendment 
is necessary.41 
6.48 With respect to the first aspect of China's re quest, as the European Un ion notes, the page 
references cited by China are incorrect.  More im portantly, the paragraph China proposes to modify 
sets forth our conclusions.  In that context, we see no reason to expand the description of and 
reference to China's arguments, which are in an y case set out in the second and third sentences of 
paragraph 7.269 and footnote 435 (now footnote 577) of  the Final Report.  Howe ver, we have inserted 
the word "any" before the word "adjustments" in th e first sentence of footnote 435 (now footnote 577) 
to more accurately reflect China's argument in pa ragraph 28 of its closing statement at the second 
meeting with the Panel.  With respect to the second aspect of China's request, this paragraph sets forth 
our conclusion that the use of a PCN system, even with broad categories, does not alter or shift the 
obligation on parties to demonstrate the need for an adjustment.  The nature of the adjustments 
requested or made does not affect this conclusi on.  Clearly, in some circumstances the quality and 
quantity of evidence available to a party seeking to demonstrate the need for an adjustment may be 
less than in others, but this does not affect the Panel's conclusion.  We therefore have made no 
changes in response to this aspect of China's requ est.  Finally, with respect to the third aspect of 
                                                      
39 China, request for interim review, para. 23. 
40 China, request for interim review, para. 24, referrin g to China,  first written submission, paras. 408 
and 415-417; second written submission, paras. 498-502. 
41 European Union, comments on China's request for interim review, p. 2. WT/DS405/R 
Page 14  
 
 China's request, to the extent that China is ar guing that the Panel failed to address its argument 
regarding the Commission's unilateral reclassificati on of footwear, without seeking the cooperation of 
the Chinese exporting producers, we recall that Chin a made no claim concerning the reclassification 
of certain footwear per se .  Rather, China argued that the reclas sification precluded the possibility of a 
fair comparison, in violation of Article 2.4, becau se it mixed different footwear types within a single 
PCN category.
42  We recall that our analysis of China' s claim addresses China's arguments regarding 
the allegedly overly-broad PCN system used by the European Union.  The fact that one allegedly 
overly-broad PCN category was furt her broadened as a result of the reclassification of certain 
footwear does not affect our analysis or conclusion with respect to China's claim.  We therefore have made no changes in response to th is aspect of China's request.   
6.49 Paragraph 7.289 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments.
43  The European Union consider s that no amendment is necessary.44     
6.50 Given that the requested modification reflects Ch ina's arguments as presented to the Panel, we 
have modified this paragraph accordingly. 
6.51 Paragraphs 7.299 and 7.300 :  The European Union requests that the Panel modify these two 
paragraphs, contending that they unfairly impl y arbitrariness to the Commission's conduct in not 
calculating the cap.45  China argues that the Panel refers to two distinct issues:  (a) the absence of 
calculation of the cap for profits called for in Artic le 2.2.2(iii) of the AD Agreement; and (b) the lack 
of any attempt to do so.  Chin a considers that the report accura tely describes the investigating 
authority's conduct during the investigation.  China al so considers that the failu re to calculate the cap 
for profits called for in Article 2.2.2(iii) in itself is  sufficient to show a violation of that provision, 
such that even without regard to the question of the nature of the European Union's "attempt", the 
undisputed fact that the European Union did not calcu late the cap as called for in Article 2.2.2(iii) is 
sufficient grounds on which to find inconsistency with that provision.46 
6.52 Article 2.2.2(iii) of the AD Agreement provides that the amounts for profits and SG&A may 
be determined on the basis of "any other reasonable method, provided that the amount for profit" 
established pursuant to that method does not exceed the cap defined in that provision.47  Whether or 
not the method used to calculate the profit was reasonable per se  does not affect the requirement that 
the amount for profit so established not exceed the cap , and does not excuse an investigating authority 
from satisfying that aspect of Article 2.2.2(iii).  Gi ven that there is no evidence that the Commission 
ever attempted to calculate the cap, and that th e Commission did not explain why it did not calculate 
the cap, we consider that these pa ragraphs accurately describe our understanding of the facts of the 
investigation and accurately reflect our views, and therefore deny the European Union's request.   
6.53 Paragraphs 7.300 and 7.301, and footnot es 487 (now footnote 629) and 488 (now 
footnote 630):  The European Union requests that the Pa nel modify these paragraphs.  The 
European Union contends that the meaning of th e words "the matter" in the third sentence of 
paragraph 7.300 is unclear, as the Panel could be re ferring to the issue of whether and how to apply 
the "cap", or to the issue of whether non-MET comp any data could be used in calculating the "cap".  
In either event, the European Uni on considers that the Panel's finding is not justifiable, asserting that 
China never argued that the Commi ssion failed to consider the matter of the calculation of the "cap" 
in general, or in respect of the exclusion of non-MET company data.  The European Union maintains 
                                                      
42 China, second written submission, para. 481. 
43 China, request for interim review, para. 25. 
44 European Union, request for interim review, p. 2. 
45 European Union, request for interim review, p. 3. 
46 China, comments on the European Union's request for interim review, paras. 4-5. 
47 Emphasis added.  WT/DS405/R 
  Page 15  
 
 that it indicated or implicitly asserted during th e panel proceedings that the Commission had 
considered both the application of the cap, and the question of excluding non-MET data.
48  T h e  
European Union contends that while panels are fr ee to develop arguments not made by either party 
with respect to the co rrect interpretation of the covered agreements, panels cannot make new 
arguments as to why a measure is WTO inconsistent .  The European Union considers that the Panel 
has not fully addressed the European Union's argum ents with respect to the substantive question 
whether the Commission was justified in concluding that the cap was inapplicable, and requests that 
the Panel address the European Union's arguments as to why it was impossible to apply the cap in the 
circumstance of this case, since the Panel's finding in  based on the consideration of this matter by the 
Commission.  The European Union further asserts  that the Panel cannot base its findings on an 
argument that was never raised by China, and request s that the Panel modify its findings accordingly.  
Finally, the European Union considers that, once it has revised the report as suggested by the 
European Union, the Panel need not address the European Union's argument based on the 
reasonableness of the amounts determined by th e Commission for the SG&A and profit, and may 
exercise judicial economy in this regard.49   
6.54 China understands the Panel to have found that the European Union did not make any attempt 
to calculate the cap provided for in Article 2.2.2( iii) of the AD Agreement at the time it made its 
determination, which, if it had been done, would have included the po ssible use of data pertaining to 
other sampled footwear producers.  China consider s that, in this context, the European Union's 
comment on the meaning of the words "the matter" s eems irrelevant.  China asserts that it approached 
the Article 2.2.2 claim from various angles, arguing, inter alia , that the calculation of the cap itself 
and the sub-requirement that the be nchmark should relate to  "products of the same  general category in 
the domestic market of the country of origin" are non-negotiable conditions precedent to the WTO-
consistent use of the method at issue.  Moreover, China asserts that it argued that the European Union 
failed to consider data from other sampled producers in order to calculate the cap under 
Article 2.2.2(iii), and that the European Union had ample opportunity to set out its arguments in this 
regard.  China considers that the Panel does not accuse  the European Union of "failing to consider the 
matter in general", but rather that it did not ev en attempt to calculate  the cap called for in 
Article 2.2.2(iii).  China understands the Panel to ha ve concluded that a lack of information does not 
excuse the European Union from sa tisfying the requirement to calculate the cap, and thus the 
European Union violated Article 2.2.2(iii).  China observes that, assuming its understanding is incorrect, the Panel's exercise of judicial economy on the "chapeau question" of reasonableness, in 
footnote 489 (now footnote 631), would no longer be jus tifiable to the extent that the resolution of 
that question would be essential to the determ ination that the European Union violated 
Article 2.2.2(iii).
50 
6.55 In our consideration of China's claim concer ning Article 2.2.2 of the AD Agreement, we 
concluded, as a matter of fact, that the Commission did not, and made no attempt to, calculate the cap 
called for in Article 2.2.2(iii).  There is no explanat ion of why it failed to do so in the Definitive 
Regulation, or any indication that it considered calculation of the cap at all.  Nothing in the European Union's request for interim review demons trates otherwise.  The fact that the Commission 
sought to use a "reasonable" method to determine th e profits for Golden Step does not justify this 
failure.  Given our finding concerning failure to calculate the cap, we continue to see no reason to 
address whether the method used by the Commission was otherwise reasonable.  In our view, even if 
it were, this would not affect our conclusion as to th e violation of Article 2.2.2(iii) in the failure to 
calculate the cap.  However, we have amended para graph 7.300 by replacing the word "matter" in the 
third sentence with the phrase "calculation of the cap" in order to clarify our views.   
                                                      
48 European Union, request for interim review, p. 3. 
49 European Union, request for interim review, p. 4. 
50 China, comments on the European Union's request for interim review, para. 6. WT/DS405/R 
Page 16  
 
 6.56 Title (g) and Paragraphs 7.302 to 7.315 :  China requests that the Panel amend the phrasing 
in these sections to more accurately reflect  the facts of the Definitive Regulation.
51  The European 
Union did not comment on this request.  
6.57 China is correct that referring to "STAF above  €7.50" is not the same as referring to "STAF 
of not less than €7.50".  Given that the latter reflec ts the usage in the Defin itive Regulation, we have 
modified these sections of the Final Report accordingly. 
6.58 Paragraph 7.303 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments.52  The European Union notes that it believes that China intended to 
refer to Article 2.6 rather than to Article 6.2.53 
6.59 China has requested the inclus ion of the phrase "based on the ordinary meaning of the word 
"product" and the context of Article 6.2" in this paragraph.  As the European Union has suggested, 
this appears to be an error, and we believe that China intended to refer to Article 2.6, rather than 
Article 6.2.  Assuming this to be the case, the requested modification reflects China's own arguments 
as presented to the Panel, and we have therefore mo dified this paragraph accordingly.  However, to 
the extent that China may indeed have intended to re fer to Article 6.2, we would deny China's request, 
as China has not previously referred to Article 6.2 in this context.    
6.60 Paragraph 7.342 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its claims.54  The European Union contends that China shifted its arguments during 
the course of the proceedings, and suggests that a ny modification to China's arguments should be in 
addition to the summary of China's arguments alr eady in the Report, rather than a replacement 
thereof.  The European Union st ates that, as a general principle, China's arguments should be 
summarised on the basis of China's submissions to the Panel, and not on the basis of how China 
rephrases them in its comments on the Interim Report.55  The European Union states that these 
comments also apply to China's requests with respect  to paragraphs 7.343, 7.359, 7.360, 7.361, 7.367, 
and 7.369 of the Interim Report.  
6.61 The Interim Report summarizes the European Un ion's concerns with respect to the shifting 
focus of China's claims in paragraph 7.363, and sets out our understanding of this matter in 
paragraph 7.371 and footnote 615 (now footnote 760).  Paragraph 7.342 introduces China's claims 
regarding the selection of the sample of EU producer s in the context of the injury examination, and 
refers to both the claims concerning the expiry review, and those concerning the original investigation.  Thus, we have mainta ined the reference in this paragraph to the original investigation.  
Otherwise, given that the requested modifications reflect China's own arguments as presented to the 
Panel, we have modified this pa ragraph to better reflect China's ar guments as made during the panel 
proceeding, albeit not in the precise terms suggested.  In doing so, we have not replaced the existing 
description of China's arguments, but added to it as appropriate.  
6.62 Paragraphs 7.343 and 7.344 :  China requests that the Panel modify these paragraphs in order 
to more accurately reflect China's argu ments concerning claims II.2 and II.3(i).
56  The European 
Union raised concerns with respect to this request , as noted above in paragraph 6.60, which we have 
taken into consideration.  
                                                      
51 China, request for interim review, para. 26. 
52 China, request for interim review, para. 28. 
53 European Union, comments on China's request for interim review, p. 2. 
54 China, request for interim review, para. 29. 
55 European Union, comments on China's request for interim review, p. 3. 
56 China, request for interim review, para. 30.  WT/DS405/R 
  Page 17  
 
 6.63 We understand, as China points out, that its clai ms II.2 and II.3(i) are independent claims.  
However, both claims concern alleged violations in  the procedure to select the sample of the EU 
industry, and we considered it a ppropriate to examine them togeth er to avoid excessive repetition and 
ensure clarity and consistency in our analysis of China's claims.  We have reviewed the references 
China cites in support of its request to include a re ference to "consent", and in our view, they do not 
support China's request.  We note, however, that Chin a's position in this regard is in any case set out 
in the description of China's arguments at paragra ph 7.360, and examined in paragraph 7.370 of the 
Final Report.  With respect to the rest of Chin a's proposed modifications, given that they reflect 
China's own arguments as presented to the Panel, we have modified this paragraph, albeit not in the 
precise terms proposed by China.  In doing so, we have not replaced the existing description of 
China's arguments, but added to it as appropriate. 
6.64 Paragraph 7.349 and footnote 574 (now footnote 719) :  The European Union requests that 
the Panel modify the second sentence of this paragra ph in order to clarify the cross-reference between 
the explanations and arguments in the context of th e expiry review and those referring to the original 
investigation, asserting that the second sentence of this  paragraph and the footnote relate to the expiry 
review, while paragraph 7.349 as a w hole refers to China's claim with  respect to the selection of the 
sample in the original investigation.
57  China does not believe that a re ference to the analysis of the 
second part of claim III.5 is necessary, given that the Panel noted in footnote 562 (now footnote 704) 
that China's claim III.5 is analysed in two different sections of the report.58 
6.65 The European Union is correct that paragra ph 7.349 as a whole refers to the original 
investigation.  However, we recall that we divide d our consideration of China's claim III.5 into two 
parts, and this section of our report addresses the fi rst part, concerning the procedure for the selection 
of the sample of the EU industry.  In this rega rd, footnote 573 (now footnote 718) cites the part of 
European Union's first written subm ission where it refers, in the context of the original investigation, 
to its arguments on this issue with respect to the expiry review.  As we unde rstand it, paragraphs 646 
et seq. of the European Union's first written submissi on, referred to in its request for interim review, 
address the second part of China's claim III.5, whic h we address at paragraphs 7.406-7.463 of the 
Final Report, together with China's claims III.8 and II.4.  As the European Union made no specific suggestions, it is not entirely clear what modificat ions it is seeking.  However, we have amended 
paragraph 7.349 in order to cl arify that we took into account the European Union's arguments 
concerning sample selection in the context of the expiry  review in considering the first part of China's 
claim III.5, concerning the original investigation.   
6.66 Paragraph 7.359 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments.
59  The European Union raised concer ns with respect to this request, 
as noted above in paragraph 6.60, which we have taken into consideration.  
6.67 Paragraph 7.359 is part of our evaluation of China's claims, and sets forth our understanding 
of the arguments and resolution of the claims.  We se e no reason to modify the text of this paragraph, 
which accurately reflects our understanding and views, to refer to China's arguments in different and 
more expansive terms.  We theref ore have made no changes to this paragraph in response to China's 
request. 
6.68 Paragraph 7.360 :  China requests that the Panel modify  this paragraph, asserting that it has 
not claimed that the difference in the amount of information requested from the different groups 
                                                      
57 European Union, request for interim review, p. 4. 
58 China, comments on the European Union's request for interim review, para. 7. 
59 China, request for interim review, para. 31. WT/DS405/R 
Page 18  
 
 demonstrates that the Commission was unfair.
60  The European Union raised concerns with respect to 
this request, as noted above in paragraph 6.60, which we have taken into consideration.  
6.69 Paragraph 7.360 is part of our evaluation of China's claims, and sets forth our understanding 
of the arguments and resolution of the claims.  We se e no reason to modify the text of this paragraph, 
which reflects our understanding and vi ews, to refer to China's arguments in different terms.  We 
therefore have made no changes to this paragraph in response to China's request. 
6.70 Paragraph 7.361 :  China requests that the Panel review the first sentence of this paragraph, 
which, China contends, is an incorrect assessment of  its claim and arguments.  China also asserts that 
the references to China's written submissions in footnote 592 (now footnote 737) do not support the 
interpretation set out in this paragraph, but makes no specific proposals in this regard.  In addition, 
China requests that the Panel modify the fourth and fifth sentences of this paragraph in order to more 
accurately reflect China's arguments.61  The European Union raised concerns with respect to this 
request, as noted above in paragraph 6.60, wh ich we have taken in to consideration.  
6.71 Although China has made no specific proposal for modification of the first sentence of this 
paragraph, as we understand it, China objects to the re ference to "even-handed treatment".  It is true 
that the cited portions of China's submissions do not expressly refer to "even-handed treatment".  
However, in its arguments to the Panel, China repeatedly referred to the notion of "even-handed 
treatment" with respect to the selection of the sample for the purpose of the injury assessment.  
Moreover, as discussed in paragraph 7.371 of the Fi nal Report, China appears to have shifted the 
focus of its claim throughout the Panel proceedings.62  It is surprising that China seems now to 
suggest that this argument was ne ver made and should not be reflected  in the report.  Thus, we deny 
China's request with respect to the first sentenc e, and in order to clarify the basis for our 
understanding of China's argument, we have modifi ed footnote 592 (now footnote 737) to include 
references to China's submissions where it made ar guments regarding "even- handed treatment" with 
respect to this claim.  Regarding the proposed modi fication of the fourth sentence, paragraph 7.361 is 
part of our evaluation of China's claims, and sets  forth our understanding of the arguments.  It 
accurately reflects our understanding a nd conclusions, and we see no reason to modify the text of this 
paragraph to refer to China's arguments in different  terms.  We therefore have made no changes in 
response to this aspect of China's request.  Rega rding China's request that the Panel add a new 
sentence after the fourth sentence, China has not pr ovided any reference to where in its submission 
China presented this argument, and we therefore have  made no changes in response to this aspect of 
China's request.  Finally, concerning the requested m odification to the fifth sentence, we note that the 
point China suggests be included is clearly stated  in the following sentence, and the accompanying 
footnote contains additional details in this regard.  We therefore consider the proposed modification 
unnecessary, and have made no changes in response to this aspect of China's request. 
6.72 Paragraph 7.367 :  With reference to the last sentence of  this paragraph, China states that it 
has not claimed that the same information should be solicited from all groups of interested parties, and 
that the crux is that the relevant information shoul d be sought from all parties subject to sampling in 
an objective and unbiased manner, but makes no specific suggestion for modification.63  T h e  
European Union raised concerns with respect to this comment, as noted above in paragraph 6.60. 
6.73 We understand that China does not argue that th e same information should be solicited from 
all interested parties, as reflected in paragraph 7. 359 of the Final Report, which states that "China 
                                                      
60 China, request for interim review, para. 32. 
61 China, request for interim review, para. 33. 
62 The European Union also raised this point in its comments on China's request for interim review, see 
paragraph 6.60 above.   
63 China, request for interim review, para. 35, c iting China, second written submission, para. 606.  WT/DS405/R 
  Page 19  
 
 recognizes that each group of interested parties is required to provide different types and amounts of 
information for sampling purposes, and does not argue  that 'the same information, or the same 
quantity of information is required to be sought fro m all sets/groups of interested parties'".  In 
paragraph 7.367, however, we set forth our unders tanding of Article 3.1 of the AD Agreement, not 
China's arguments.  In the absence of  any specific request by China with  respect to this paragraph, we 
see no reason to modify this paragraph and have made no changes to it.   
6.74 Paragraph 7.369 :  China requests that the Panel review the third sentence of this paragraph, 
asserting that its arguments are not correctly represent ed, referring in this regard to its response to 
Panel question 40, paragraphs 291-294.  China also  requests that the Panel review the fourth and 
seventh sentences of this paragraph, asserting that it  demonstrated that the European Union did not 
possess the relevant information when the sample was selected.
64  The European Union raised 
concerns with respect to this comment, as noted ab ove in paragraph 6.60, which we have taken into 
consideration.  In addition, the European Union cont ends that China attempts to re-argue its case and 
re-open issues to which the European Union already responded.  The European Union requests that, to 
the extent that the Panel considers it necessary to  grant China's request, the European Union's 
submissions on the issues raised be appropriately considered.65  
6.75 With respect to the third sentence of this para graph, we have reviewed the references cited by 
China.  In Panel question 40(b), we asked China whether "even-handed treatment" would require that 
information be sought even if a sample can be se lected on the basis of "objective examination" of 
"positive evidence" already availabl e to the investigating authority.  In responding to this question, 
China stated that the question is premised on the assumption that "positive evidence" is already 
available to the investigating authority, the scenario  posed by the question, and went on to state that 
the information available to the investigating author ity should form the basis of the sample selection, 
provide the positive evidence necessar y for sampling, and be credible and affirmative, and that the 
investigating authority should have the consent of the producers to be sampled.66  Despite its long 
answer and the statement that even-handedness is "complied with" if positive evidence, as described 
by China, is available to the investigating author ity, China did not specifically answer the Panel's 
question.  Paragraph 7.369 of the Final Report states that China's arguments suggest that, in order to be "even-handed", sampling forms must be sent to ev ery interested party, regardless of whether the 
investigating authority already possesses what it c onsiders to be sufficient information for the 
purposes of selecting a sample.  We fail to see how China's response to Panel question 40(b) shows 
that that paragraph 7.369 does not correctly repr esent China's argument.  In our view, the third 
sentence in paragraph 7.369 accurately reflects China' s arguments that the establishment of the sample 
of all interested parties should be done in an ev en-handed manner, and that the European Union failed 
to do so, at least in part because it did not solic it the information requested in sampling forms from 
one group of interested parties, the complainant EU producers, while all other parties were required to 
complete detailed sampling forms in order to be considered for inclusion in the sample.
67  Finally, we 
recall that paragraph 7.369 is part of our analysis of China's claim,  and thus reflec ts our understanding 
of China's arguments and resolution of the claim.   China has not pointe d to any evidence that 
demonstrates that our understanding is incorrect.  Ther efore, we have not modified the third sentence 
of this paragraph in response to China's request. 
6.76 Concerning the fourth and seventh sentences of th is paragraph, China requests that the Panel 
review these sentences "in the context of the facts of this case" asserting that it demonstrated that the 
                                                      
64 China, request for interim review, para. 36, re ferring to China, answer to Panel question 40, 
paras. 291-294; and second written subm ission, paras. 594-595 and 640-650. 
65 European Union, comments on China's request for interim review, p. 3. 
66 China, answer to Panel question 40, paras. 291-293. 
67 China's opening oral stat ement at the second meeting with the Pa nel, para. 36, read together with, as 
indicated by footnote 39 of China's oral statem ent, China, first written submission, para. 451. WT/DS405/R 
Page 20  
 
 Commission did not possess the relevant information concerning the pool of complainant EU 
producers when the sample was selected, but makes no specific suggestions for changes to the Interim 
Report.  Paragraph 7.369 addresses whether the Artic le 3.1 requirement of "objective examination" 
entails "even-handed treatment" in the collection of information for purposes of selecting a sample, 
and concludes that Article 3.1 does not establish any particular methodology that should be used by 
the investigating authority to collect the inform ation considered by the investigating authority 
necessary for the selection of the sample.  We di d not specifically address whether the Commission 
possessed the information it considered necessary in or der to select the sample as a matter of fact.  
Rather, we addressed whether Article 3.1 would require the Commission to send sampling forms 
when it already possessed the necessa ry information, and concluded that it would not.  China's 
arguments regarding the information allegedly no t possessed by the Commission do not affect this 
finding.  Finally, we recall that paragraph 7.369 is part of our analysis of China's claim, and thus 
reflects our understanding of China's arguments and reso lution of the claim.  Therefore, we have not 
modified the fifth and seventh sentences of th is paragraph in respon se to China's request.  
6.77 Paragraph 7.370 :  China requests that the Panel review this paragraph with respect to 
whether consent to be sampled had been given by EU producers before the sample was selected.
68  
The European Union considers that China attempts  to re-argue its case and re-open issues to which 
the European Union already responded.  The Europ ean Union requests that, to the extent that the 
Panel considers it necessary to grant China's request , the European Union's submissions on the issues 
raised be appropriately considered.69 
6.78 In paragraph 7.370, we concluded that nothing  in Article 3.1 of the AD Agreement requires 
that consent must be given by each company consider ed for selection of the sample, and that even if 
such a requirement could be implied, the very act of participating as complainants in an anti-dumping 
investigation suggests a willingness to be considered fo r inclusion in a sample.  In our view, the most 
that can be concluded based on the facts and China' s arguments is that the consent of the individual 
companies was communicated to the Commission on th e same day the sample was selected, but not 
after the selection.  As we found that individual c onsent by individual producers was not required, we 
consider that it is not necessary to make a fact ual finding as to the communication of individual 
companies' consent.  Therefore, we have not modi fied this paragraph in response to China's request.   
6.79 Paragraph 7.378 :  China requests that the Panel modify  this paragraph to more accurately 
reflect its arguments.70  The European Union did not comment on this request. 
6.80 At paragraph 657 of its second written submission,  cited by China in support of its request, 
China argues that factors other than the volume of production, the main factor, "cannot take 
precedence over the obligation to establish the sample b ased on the 'largest percentage of volume' of 
production".  In our view, this does not support the assertion that the European Union in fact  "gave 
precedence" to criteria not found in Article 6.10, as set out in China's proposed modification.  The assertion that the volume of production was the princi pal basis for the selection of the sample is 
already reflected in the previous sentence of pa ragraph 7.378, and we therefore see no reason to 
include it once more, as proposed by China.  Therefore,  we have not modified this paragraph in this 
regard in response to China's request.    
6.81 Paragraph 7.381 :  China requests that the Panel amend this paragraph to reflect that it 
reiterated that Article 6.10 provides a good contextual  basis for determining the consistency of the 
sample with the general requirements of "positive evidence" and "objective examination" based on the 
                                                      
68 China, request for interim review, para. 37, refe rring to China, first written submission, para. 478; 
and second written submission, para. 610. 
69 European Union, comments on China's request for interim review, p. 3. 
70 China, request for interim review, para. 38.  WT/DS405/R 
  Page 21  
 
 European Union's assertions in two other disputes, EC – Fasteners (China)  and EC – Salmon 
(Norway) .
71  The European Union maintain s that its statements made in other disputes should not be 
taken out of the context in which they were ma de and which was conveniently ignored by China.72 
6.82 In paragraph 7.381, which is part of our anal ysis, we addressed and rejected China's assertion 
that Article 6.10 of the AD Agreement provid es a good contextual basis for determining the 
consistency of the sample with the requirements of  "positive evidence" and "objective examination".  
In this context, we do not consider it necessary or  relevant to consider what the European Union 
argued with respect to this matter in other WTO disp ute settlement proceedings.  Nor is the fact that 
China cited and relied on the European Union's asser tions in other disputes relevant to our analysis 
and conclusion in this regard.  Therefore, we have  not modified this paragraph in response to China's 
request.    
6.83 Paragraph 7.383 :  China requests that the Panel ame nd this paragraph to more accurately 
reflect its arguments, stating that it disagrees with  the Panel's statement that China's arguments 
concerning the violation of Article 3.1 in the contex t of its claim II.3(ii) are consequential and to the 
extent it made an independent claim under Article 3. 1, its only argument was that the sample included 
a company that outsourced production.73  The European Union recalls  that it responded to all 
arguments raised by China.74 
6.84 We note that, contrary to China's statement, we recognized at paragraph 7.383 of the Final 
Report that China made two arguments, one concer ning the inclusion of a company that outsourced 
production during the relevant period, and the second concerning the small volume of production 
represented by the sample, in support of its position concerning the representativeness of the sample 
of the domestic industry, to the extent it made an  independent claim under Artic le 3.1 in this regard.  
We considered and rejected both of these argument s in paragraphs 7.384 to  7.387 of the Interim 
Report.  Second, we consider it clear from China's ar guments to the Panel that its claims of violation 
of Article 3.1 of the AD Agreement and Article VI:1 of the GATT 1994 are consequential to the 
asserted violation of Article 6.10 of the AD Agreement.  We note in this regard that China argued that 
"[i]t follows  [from an inconsistency with Article 6.10] that  the European Union's evaluation of injury 
to the domestic industry … was inconsistent with  Articles 3.1 of the [AD Agreement] as well as 
Article VI:1 of the GATT 1994."75  In our view, China's subm issions clearly identify these as 
consequential claims.76  In addition, the references provided by China do not support its request.  
Paragraphs 506-507 and 5 13-514 of China's first written submission do not address this issue, and 
paragraphs 658-670 of China's second written submi ssion, when referring to the different claims, 
                                                      
71 China, request for interim review, para. 39. 
72 European Union, comments on China's request for interim review, p. 3. 
73 China, request for interim review , para. 40, referring to China, first written submission, paras. 506-
507, and 511-514; and second written submission, para. 658-670. 
74 European Union, comments on China's request for interim review, p. 3. 
75 China, first written submission, para. 468 (em phasis added).  See also China, first written 
submission, para. 514. 
76 China, first written submission, para. 500 ("Thus, the European Union acted inconsistently with 
Article 6.10 of the [AD Agreement].  Moreover, this led to  the selection of a sample … not representative of the 
entire domestic industry … [in violation of] Articles 3.1 and 17.6(i)") (emphasis added), second written 
submission, paras. 633 and 667 ("… it was not consistent with the sampling criteria of Article 6.10 of the 
[AD Agreement].  It follows  that the European Union's evaluation of injury to the domestic industry based on 
the sample … was inconsistent with Article[s] 3.1, [a nd] Article 17.6(i) of the [AD Agreement] as well as 
Article VI:1 of the GATT 1994.") (emphasis added), (" Such a sample is not representative of the domestic 
industry as whole which includes non-complainant producers…Thus the selection of such a sample demonstrates the lack of objective examination in sample selection and an injury determination based on such a 
sample is not consistent with Articles 3. 1 and 17.6(i) of the [AD Agreement]."). WT/DS405/R 
Page 22  
 
 explain that some claims are consequential,
77 or address the producer that outsourced its entire 
production, which we addressed in paragraph 7.384.  We note that China did make a different 
independent claim of violation of Article 3.1,  with respect to sampling for purposes of the 
examination of injury, which we addressed elsewhere  in the Interim Report.  However, this does not 
change the fact that, in the context of its clai ms and arguments concerning the representativeness of 
the sample of the domestic industry, the claim of violation of Article 3.1, as presented by China in its 
submissions to the Panel, is consequential to its cl aim of violation of Article 6.10.  Finally, we note 
that China has made no specific suggestions as to pro posed changes. Therefore, we have not modified 
this paragraph in response to China's request.  
6.85 Paragraph 7.384 :  China requests that the Panel modify  this paragraph to more accurately 
reflect its arguments.78  With respect to this request , and China's requests concerning 
paragraphs 7.386, 7.424, and 7.425, the European Union states that, as a general principle, China's 
arguments should be understood and summarised on the basis of China's submissions made before the 
Panel, and not on the basis of how China rephrases them in its comments on the Interim Report, and 
urges the Panel to carefully review China's requ est and avoid making changes unsupported by China's 
submissions actually made in the course of the proceeding.79  
6.86 Given that the requested modification reflects China's own arguments as presented to the 
Panel, we have modified this paragraph, albeit, taking account of the European Union's comment, not 
in the precise terms suggested by China. 
6.87 Paragraph 7.386 :  China requests that the Panel modify  this paragraph to more accurately 
reflect its arguments.80  As noted in paragraph 6.85 above, the European Union urges the Panel to 
carefully review China's request and avoid ma king changes unsupported by China's submissions 
during the course of the proceeding.81  
6.88 Given that the requested modification reflects China's own arguments as presented to the 
Panel, we have modified this paragraph, albeit, not in the precise terms suggested by China. 
6.89 Paragraph 7.424 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments.82  As noted in paragraph 6.85 above, the European Union urges the 
Panel to carefully review China's request a nd avoid making changes unsupported by China's 
submissions during the course of the proceeding.83  
6.90 Given that the requested modification reflects China's own arguments as presented to the 
Panel, we have modified this paragraph, albeit, taking account of the European Union's comment, not 
in the precise terms suggested by China. 
6.91 Paragraph 7.425 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments.84  As noted in paragraph 6.85 above, the European Union urges the 
Panel to carefully review China's request a nd avoid making changes unsupported by China's 
submissions during the course of the proceeding.85  
                                                      
77 See, e.g., China, second written submission, para. 667. 
78 China, request for interim review, para. 41. 
79 European Union, comments on China's request for interim review, p. 3. 
80 China, request for interim review, para. 42. 
81 European Union, comments on China's request for interim review, p. 3. 
82 China, request for interim review, para. 45. 
83 European Union, comments on China's request for interim review, p. 3. 
84 China, request for interim review, para. 46. 
85 European Union, comments on China's request for interim review, p. 3.  WT/DS405/R 
  Page 23  
 
 6.92 Given that the requested modification reflects China's own arguments as presented to the 
Panel, we have modified this paragraph, albeit, taking account of the European Union's comment, not 
in the precise terms suggested by China. 
6.93 Paragraph 7.428 :  China requests that the Panel modify  this paragraph to more accurately 
reflect the facts, arguing that the Panel did not ta ke into account the facts of the current case, notably 
the particularly unrepresentative and un-objective da ta sources used by the Commission for collecting 
the information regarding the m acroeconomic injury indicators concerning the like product for the 
review investigation period and for cr oss-checking the information collected.
86  The European Union 
considers that China attempts to re-argue its case and re-open issues to which the European Union 
already responded.  To the extent that the Pane l considers it necessary to grant China's request, the 
European Union requests that its submissions on the issues raised be appropriately considered.87  
6.94 China expresses disagreement with the conclusion in this paragraph, based on its own view of 
the facts, but makes no specific suggestions as to modifications.  Nonetheless, we have carefully reviewed the facts referred to by China, and consid er that paragraphs 7.424-7.425 correctly reflect our 
understanding of the facts.  Our findings in para graph 7.428 were obviously made with these facts in 
mind.  China makes much of the alleged impossi bility of verification of estimates and other 
information, and of the sources of information used by the Commission.  However, as stated in this 
paragraph, we consider that it is  normal to have flaws or gaps in  the information obtained by an 
investigating authority in the context of its examin ation of injury.  While imperfect information may 
require additional explanations of the facts f ound and the reasoning underlying the investigating 
authority's determinations, we see nothing in the AD Agreement that might preclude consideration of 
and reliance on such information.  In addition, we  recall that verification of information is not a 
formal requirement under the AD Agreement.  Thus, we have made no changes to this paragraph in 
response to China's request. 
6.95 Paragraph 7.444 :  China asserts that the last sentence of this paragraph is incorrect in light of 
its answer to Panel question 92, in particular pa ragraph 550, but makes no specific request in this 
regard.
88  The European Union considers that th e Interim Report correctly describes China's 
arguments, and asserts that this paragraph merely  observes that the European Union disregarded 
certain factors, but makes no arguments as to why the European Union should have done otherwise, 
and therefore no amendment is necessary.89  
6.96 We have carefully reviewed China's answer to  Panel question 92.  We recall our view that 
Article 3.4 of the AD Agreement does not refer to either sales values or market shares based on 
turnover, and that consideration of these factors is not required.  China's answer to Panel question 92, 
including paragraph 550, discusses sales values and market shares based on turnover, but does not 
argue that the fact that the Commission did not consider these factors undermined the Commission's 
reasoning and conclusions based on the factors it did consider, or the injury determination as a whole, 
as we indicate in the last sentence of paragraph 7.444.  Merely that China presented an argument 
supporting a different conclusion based on factors th e Commission did not consider, i.e., sales value 
and market share based on turnover, does not demons trate that consideration of those factors is 
required, or that a failure to consider them unde rmines the analysis that actually was undertaken.  
Thus, we have made no changes to this pa ragraph in response to China's request.  
                                                      
86 China, request for interim review, para. 47, referring to China, second written submission, 
paras. 755-758. 
87 European Union, comments on China's request for interim review, p. 3. 
88 China, request for interim review, para. 48. 
89 European Union, comments on China's request for interim review, p. 3. WT/DS405/R 
Page 24  
 
 6.97 Paragraph 7.484 :  The European Union requests that the Panel modify this paragraph in 
order to express what it understands  to be the Panel's intention.
90  China did not comment on this 
request.  
6.98 Having considered the European Union's comment, we have modified this paragraph, albeit in 
different terms than proposed by the European  Union, to more clearly express our views. 
6.99 Paragraph 7.501 :  China requests that the Panel revi ew the penultimate sentence of this 
paragraph, asserting that it is incorrect.  China refers  in this regard to para graphs 577-580 of its first 
written submission and evidence it proffered to sh ow that EU producers were being injured by 
structural inefficiency.  In add ition, China asserts that it referred to  specific recitals of the Review 
Regulation which, it asserts, contradicted the Co mmission's finding of no break in causal link on 
account of this factor, and provided additional ev idence in its second written submission.  China 
further requests that the Panel clarify what f acts are referred to as not disputed by China.91  T h e  
European Union understands the Panel to be referri ng to evidence "that was not considered", and 
contends that general remarks about trade comp etition attributed to Commissioner Mandelson cannot 
seriously be regarded as "evidence" regarding th e particular situation of the footwear industry.92 
6.100  We recall that China argued that EU producers were incapable of competing with increasing 
globalisation and were increasingly resorting to out sourcing or changing their business structure, due 
to their structural inefficiency, and presented eviden ce to support its view that such inefficiency is a 
result of the fact that the EU industry is comprised of very small-scale producers, employing a small number of workers, and of the European Union's high labour cost.
93  We concluded that the 
Commission's conclusion in the Review Regulation, that  lack of efficiency and structural problems in 
the industry did not break the link between the dum ping and the injury, was reasonable, based on the 
facts, and a conclusion which could be reached by an  unbiased and objective i nvestigating authority.  
Nothing in China's arguments durin g the proceeding, or in its requ est for review, points to evidence 
that was not considered by the Commission in reachi ng its conclusion, or disagrees with the facts as 
stated by the Commission in the Review Regulation c oncerning this issue.  It is these facts that we 
consider China did not dispute.  We agree w ith the European Union that then-Commissioner 
Mandelson's statement is not directly relevant to this issue, as it does not refer to the footwear 
industry, but merely to "Asia's natural and leg itimate low-cost advantages", which says nothing about 
the alleged structural inefficiency of the EU industry as a factor causing injury to the domestic 
industry.  Based on the foregoing, we are satisfied  that the penultimate sentence of this paragraph 
accurately reflects our views, and we have therefor e made no change to it in response to China's 
request. 
6.101  Paragraph 7.504 :  The European Union suggests that the Panel modify this paragraph in 
order to more accurately reflect  the Panel's apparent intention.94  China did not comment on this 
request.  
6.102  Having considered the European Union's sugges tion, we have modified this paragraph to 
more clearly express our views, albeit not in the precise terms proposed by the European Union. 
                                                      
90 European Union, request for interim review, p. 5. 
91 China, request for interim review, para. 50, citing Exhibits CHN- 23, 34, 44, and 45 and statements 
of then-Commissioner Mandelson in the European Par liament, China, second written submission, paras. 770-
771. 
92 European Union, comments on China's request for interim review, p. 4. 
93 China, first written submission, paras. 577-579,  citing the European Foot wear Alliance submission 
dated February 2009, Exhibit CHN-23; the European Footwear Alliance submission dated 12 November 2008; 
Community interest questionnaire response of Company D dated 16 January 2009; and Community interest questionnaire response of Company F dated 15 January 2009. 
94 European Union, request for interim review, p. 5.  WT/DS405/R 
  Page 25  
 
 6.103  Paragraph 7.510 :  China requests that the Panel review the fourth sentence of this paragraph 
and the accompanying footnote 891 (now footnote 1038), asserting that the references in the footnote 
do not indicate that the Commission assessed the factor  of high labour costs in the Review Regulation 
or otherwise.
95  The European Union considers that th e Panel's reference is to the explicit 
consideration of structural inefficiency in the r ecitals quoted by the Panel at paragraph 7.498, and 
thus, the European Union considers that the existing text is accurate.96 
6.104  We recall our view that "high labour cost" was raised in the context of one party's argument 
concerning the structural inefficiency of the EU pr oduction, and not as an independent "other factor", 
and was considered in the European Union's analysis of the alleged structural inefficiency of the EU 
industry, as set out at paragraphs 7.497-7.501 of the Interim Report.  We consider our statement 
accurate.  Nonetheless, in order to clarify the basis for our views, we have a dded a new footnote 1037, 
referring to recital 271 of the Review Regulation, wh ere the issue of labour costs is addressed in the 
context of the alleged structural inefficiency of the EU industry.  
6.105  Paragraph 7.511 :  The European Union requests that the Panel modify this paragraph in 
order to more accurately reflect its arguments.97  China did not comment on this request.  
6.106  The text as currently drafted more closely follows the phrasing of the European Union's 
argument in paragraph 345 of its first written subm ission, where it stated that "[o]utsourcing was 
detected, analysed, and fully taken into account in th e injury analysis in the context of sampling", than 
does the European Union's proposed modification.  We have therefore made no changes to this 
paragraph in response to the European Union's request.  
6.107  Paragraph 7.544 :  China requests that the Panel modify  this paragraph in order to more 
accurately reflect its arguments.98  The European Union did not comment on this request.  
6.108  Not all of China's proposed modifications are c ited to the submissions where the amendments 
it seeks can be substantiated as having been made  during the proceedings before the Panel.  
Nonetheless, and in the absence of any objection from the European Union, we carefully reviewed the 
references given, and are satisfied that the requ ested modifications reflect China's arguments as 
presented to the Panel.  We have therefore modified  this paragraph, albeit not in the precise terms 
proposed by China.   
6.109  Paragraph 7.563 : China requests that the Panel modify this paragraph to accurately reflect its 
arguments.99  The European Union did not comment on this request. 
6.110  China has not cited the submissions where the amendments it seeks can be substantiated as 
having been made during the proceedings before th e Panel.  Nonetheless, and in the absence of any 
objection from the European Union, we have review ed China's arguments and are satisfied that the 
requested modifications reflect China's arguments as presented to the Panel.  We have therefore 
modified this paragraph, albeit not in  the precise terms proposed by China. 
6.111  Paragraph 7.615 :  China requests that the Panel modify this paragraph to better reflect its 
arguments, referring in this regard to paragraph 76 of its closing st atement at the second meeting with 
the Panel.100  The European Union argues that the submi ssion referred to by China does not contain 
                                                      
95 China, request for interim review, para. 53. 
96 European Union, comments on China's request for interim review, p. 4. 
97 European Union, request for interim review, p. 5. 
98 China, request for interim review, para. 54. 
99 China, request for interim review, para. 55. 
100 China, request for interim review, para. 60. WT/DS405/R 
Page 26  
 
 evidence that the Commission's sample selection w as irrevocable and, in any event, the closing 
statement at the second meeting is not an occasion on which evidence may be presented.
101 
6.112  We note that although China's co mment refers to paragraph 7.615 of the Interim Report, the 
text to which it proposes modifications is actually in paragraph 7.621 of th e Interim Report.  More 
importantly, we agree with the European Union that the submission cited by China contains no 
evidence that would substantiate China's assertion th at the Commission's selection of the sample of 
EU producers was irrevocable.  Indeed, the cited paragraph does not even refer to the alleged 
irrevocability of the Commission's sampling selection.  We therefore continue to consider that while 
China has presented as an uncontested fact that th e Commission's selection of the sample of EU 
producers was irrevocable, it has provided no evidence in support of this assertion, and therefore we 
have made no changes to either paragraph 7.615 or paragraph 7.621 in response to China's request. 
6.113  Paragraph 7.623 :  China requests that the Panel either delete or modify the third sentence of 
this paragraph, asserting that it is not correct, refe rring in this regard to paragraph 957 of its second 
written submission.102  The European Union notes that pa ragraph 957 of China's second written 
submission refers to the names of the selected co mpanies and not to the number in each member 
State, which is the topic addressed by th e Panel in this paragraph of its Report.103 
6.114  We share the European Union's understanding of paragraph 957 of China's second written 
submission.  We therefore continue to consider th at China has not explained how the "number" of the 
sampled companies from each member State was rele vant to or considered by the Commission in its 
selection of the sample, and therefore have made no changes to this paragra ph in response to China's 
request.    
6.115  Paragraph 7.630 :  China requests that the Panel review the third, fourth, and fifth sentences 
of this paragraph, contending that they  misrepresen t the facts and China's arguments, referring in this 
regard to paragraphs 966-967 of its second written submission where,  China asserts, it specifically 
referred to instances in the Review Regulation sh owing that the European Union used the revised 
data.104  The European Union disagrees with China, a nd considers that the Panel's account of the 
situation is correct.105 
6.116  We have carefully reviewed paragraphs 966- 967 of China's second written submission, and 
the parts of the Review Regulation referred to in  these paragraphs, and do not agree that they 
demonstrate, as China asserts, that the Commission used the revised production and sales data of all 
the EU producers, the complainants, and all th e sampled EU producers to determine the total 
production represented by the sample after the disco very that one sampled producer had discontinued 
production during the review investigation period.  We therefore see no basis for China's contention 
that paragraph 7.630 of the Interim Report misrepre sents the facts or the arguments of China, and 
have therefore made no changes to this para graph in response to China's request.    
6.117  Paragraph 7.640 :  China requests that the Panel review or clarify the third sentence of this 
paragraph, asserting that the fundamental aim of the va rious provisions of Article 6 is to ensure that 
all interested parties have a full opportunity for the defense of their interests, and contending that if 
interested parties may not participate in the proceed ing as and when they choose, Article 6.2 would be 
rendered nugatory and irrelevant.  In light of the foregoing, China requests that the Panel review its 
                                                      
101 European Union, comments on China's request for interim review, p. 4. 
102 China, request for interim review, para. 61. 
103 European Union, comments on China's request for interim review, p. 4. 
104 China, request for interim review, para. 63. 
105 European Union, comments on China's request for interim review, p. 4.  WT/DS405/R 
  Page 27  
 
 conclusions as well.
106  The European Union considers that the Panel's position regarding the 
participation of parties in the investigation is cl early established in the report, and gives no grounds 
for China's notion that the right of parties to defend their interests would be rendered nugatory or irrelevant.
107 
6.118  Our statement in the third sentence of this pa ragraph is based on the report of the Appellate 
Body in US – Oil Country Tubular Goods Sunset Review , which states that Article 6.2 does not 
provide an "indefinite" right to parties to defend their interest, and does not extend so far "as to enable respondents to submit relevant evidence, attend hear ings, or participate in the inquiry as and when 
they choose."
108  However, to clarify the basis for our statement, we have included, in footnote 1127 
(now footnote 1277) a cross-referen ce to paragraph 7.604 of the Interim Report, where the Appellate 
Body's report in US – Oil Country Tubular Goods Sunset Review  is quoted and cite d, and have added 
new footnotes 1249, 1269, and 1474 making the same reference.   
6.119  Paragraph 7.647 :  China requests that the Panel review  its conclusion in this paragraph, 
asserting that it is not correct in light of its finding in paragraph 7.806.109  The European Union did 
not comment on this request. 
6.120  We note that while China's request refers to para graph 7.647 of the Interim report, the text to 
which it refers is in paragraph 7.648.  More importantly, we have reviewed our conclusion in 
paragraph 7.648, and conclude that as set forth, it is indeed inconsistent with the conclusion in 
paragraph 7.806.  We have therefore reconsidered th e parties' arguments in this regard.  On the basis 
of that reconsideration, we conclude that Chin a has not demonstrated that the European Union 
violated Articles 6.4 and 6.2 with respect to the PCN information of the producers referred to by 
China, because there is no  evidence that interested parties requ ested to see the information of the 
producers at issue and were denied an opportunity to do so.  We have therefore modified paragraph 7.648 of the Final Report to set out this  different reasoning, rejecting China's claims under 
Articles 6.2 and 6.4, and made a conforming modifica tion to paragraph 7.650 of the Final Report.   
6.121  Paragraph 7.693 :  China requests that the Panel revise the last sentence of this paragraph, 
which it considers to be incorrect in light of th e first sentence of paragraph 7.697 of the Interim 
Report, and presents two alternative proposed modifications.
110  The European Union considers that 
the second alternative proposed by China would radi cally change the Panel's conclusion, and that 
China has presented no basis for justifying such a change, but does not comment on China's first 
proposed modification.111 
6.122  Paragraph 7.693 of the Interim Report reflects  the fact that, in the complaint and the 
accompanying letter, the CEC claimed confidential treatment and demonstrat ed good cause on behalf 
of the complainants and supporters.  China does not dispute that the complaint and accompanying 
letter set forth a request for confidential treatment  and demonstration of good cause by the CEC on 
behalf of the complainants and supporters.  China does dispute that such a request and demonstration 
are a sufficient basis for granting confidential treat ment, arguing that the supporters declared support 
for the complaint, but did not formally authorize the CEC to act on their behalf.  Therefore, China 
asserts, the CEC was in fact acting only on behalf of complainants.  The last sentence of paragraph 7.693 does not make a conclusion as to whether the CEC was empowered to act on behalf 
of supporters, but merely states the fact that the co mplaint and accompanying letter set forth a request 
                                                      
106 China, request for interim review, para. 64. 
107 European Union, comments on China's request for interim review, p. 4. 
108 Appellate Body Report, US - Oil Country Tubular Goods Sunset Reviews , para. 241. 
109 China, request for interim review, para. 65. 
110 China, request for interim review, para. 66. 
111 European Union, Comments on China's request for interim review, p. 4. WT/DS405/R 
Page 28  
 
 for confidential treatment on behalf of, inter alia , the supporters of the complaint.  We therefore 
consider that the last sentence of this paragraph accu rately reflects the facts, and have made no change 
to this paragraph in respon se to China's request.     
6.123  Paragraph 7.694 :  China requests that the Panel revise the first and last sentences of this 
paragraph.  According to China, these sentences ar e based on the factually incorrect premise that the 
CEC filed information on behalf of  supporters, as the 36 declarations  of support were filed by the 
"supporters" themselves in response to a request by th e European Union, referring in this regard, to 
Exhibit CHN-108 and paragraph 773 of the Eu ropean Union's first written submission.
112  T h e  
European Union acknowledges that the 36 declara tions of support referred to by China were 
submitted by the companies concerned to the Co mmission in response to enquiries by the 
Commission, but argues that the companies were  giving their support to the complaint, which 
requested confidentiality for complainants and supporters.113 
6.124  Paragraph 7.694 of the Interim Report addr esses China's argument with respect to the 
confidential treatment granted by the European Union to the names of the "complainants" and 
"sampled producers", not the confidential treat ment accorded to the names of the 36 supporting 
producers.  We thus fail to see the relevance of Ch ina's arguments and therefore have made no change 
to this paragraph in response to  China's request.        
6.125  Footnote 1254 : China disagrees with the footnote 1254 of  the Interim Report, referring in this 
regard to paragraph 1331 of its first written su bmission, where it alleged that no meaningful 
summaries or no summaries at all were provided of the blanked out information in the non-confidential versions of these declarations of s upport, but does not make any specific request for 
modification.
114  The European Union notes that should the Panel address the issue of non-
confidential summaries, the confiden tial information in the support st atements was summarised in the 
Note for the File of 6 July 2005, Exhibits CHN-108 and EU-16.115 
6.126  We have reviewed the arguments referred to by  China, which indicate that China did contest 
the adequacy of the non-confidential versions of  the 229 declarations of support.  Indeed, we 
addressed China's arguments in this regard in paragr aphs 7.722 and 7.732-7.735 of the Interim Report.  
We therefore have deleted footnote 1254, as it was inco rrect.  In order to clarify our findings in this 
regard, we have amended paragra ph 7.735 of the Final Report by adding the following statement:  
"Having found no violation of Article  6.5, we consider that there is no basis for China's claim under 
Article 6.5.1, which we recall a pplies only with respect to confidential information provided by 
interested parties." 
6.127  Footnote 1277 (now footnote 1426) :  China considers it necessary to clarify that what the 
Panel refers to as "what appears to be the first pa ge of these support forms" which "contains no data" 
is found on all ten support forms of the 36 produc ers that supported the complaint, and that what 
China refers to as the "deleted" information in th e example in paragraph 1328 of its first written 
submission refers to the 229 declarations of suppor t of producers on behalf of which the complaint 
was filed.  China further clarifies that it include d one example of these declarations, in Exhibit CHN-
108, because all the other 228 pages are virtually id entical, but remains at the Panel's disposal to 
provide a copy of the remaining 228 declarations of support, if necessary.  However, China makes no 
specific request for modification of the Interim Report.116  The European Union notes that the reason 
given by China for not including all 229 declara tions of support in Exhibit CHN-108 (i.e. because 
                                                      
112 China, request for interim review, para. 67. 
113 European Union, comments on China's request for interim review, p. 4. 
114 China, request for interim review, para. 68. 
115 European Union, comments on China's request for interim review, p. 5. 
116 China, request for interim review, para. 69.  WT/DS405/R 
  Page 29  
 
 they were "virtually identical") is exactly the same as the reason for the Commission not including all 
814 declarations in the non-confidential file.
117 
6.128  Given that China has not requested any modifica tion or amendment of the Report, we see no 
reason to make any changes in response to its comment s.  However, in order to clarify our reference 
to the example provided by China of the 229 declar ations of support in Exhibit CHN-108, we have 
modified paragraph 7.734 and footnote 1277 (now footnote 1426).  
6.129  Paragraph 7.718 :  The European Union requ ests that the Panel modify its finding in the third 
sentence of this paragraph, noting that at paragraphs 7.693 et seq ., the Panel found that the CEC's 
request for confidential treatment for those producer s who filed the complaint, and who presented the 
statements of support, was justified.118  China considers that the Eu ropean Union misunderstands the 
scope of paragraph 7.718,  which it asserts relates to the missing questionnaire response and not the 
missing declarations of support.  In any even t, China notes that the Panel's findings in 
paragraph 7.693 et seq . concern the showing of good cause in re lation to the names of the companies 
and other such information, and do not apply to other information contained in the document the 
confidentiality of which is not necessary "in orde r to maintain the confidentiality of information 
accorded such treatment", and indeed, the document itself.119 
6.130  The third sentence of this paragraph sets out our conclusions with respect to the missing 
questionnaire response of one sampled EU producer, while the European Union's objection appears to 
refer to the declarations of support of the supporting producers.  At paragraphs 7.693 et seq . of the 
Interim Report, we addressed the confidential treat ment granted to the names of the EU producers, 
including the names of the supporting producers, a nd not the confidential treatment granted to the 
information contained in the questionnaire res ponses of the EU producers or the questionnaire 
responses themselves.  Thus, in our view, the latte r findings do not undermine the statement in the 
third sentence of paragraph 7.718 to which the Eur opean Union objects, and we have therefore made 
no change to this paragraph in respon se to the European Union's request.  
6.131  Paragraph 7.761 : China requests that the Panel dele te the phrase "which China does not 
contest" from the last sentence of this paragraph, re ferring in this regard to  paragraphs 1068-1074 of 
its second written submission.120  The European Union asserts that noth ing in the paragraphs cited by 
China contradicts the factual assertion by the CEC in  the passage quoted by the Panel.  Rather, these 
paragraphs address the kind of evidence that  would be relevant to such an assertion.121 
6.132  While it is true that China contended that th e alleged fear of retaliation was unreasonable, 
unfounded and untrue, it did not dispute the CEC' s statement that certain EU producers had been 
"subject to severe pressure to stop cooperating in the investigation and to withdraw their support".  
Nor do the cited paragraphs of its second written subm ission demonstrate that this statement by the 
CEC was untrue or unfounded, or even address it.  We therefore have made no changes to this 
paragraph in response to China's request.   
6.133  Paragraph 7.763 : The European Union requests that the Panel modify this paragraph, 
asserting that although China included a claim under Article 6.5.1 in respect of the names of the 
complainants (and others), its arguments were exclus ively directed at the eligibility of the names for 
confidential treatment, and never addressed the questi on whether, if those names were entitled to such 
treatment, the European Union had failed in its obliga tions under Article 6.5.1.  In the absence of an 
                                                      
117 European Union, comments on China's request for interim review, p. 5. 
118 European Union, request for interim review, p. 5. 
119 China, comments on the European Union's request for interim review, para. 9. 
120 China, request for interim review, para. 70. 
121 European Union, comments on China's request for interim review, p. 5. WT/DS405/R 
Page 30  
 
 accusation by China, the European Union contends that the Panel is not entitled to reach its own 
conclusions on the matter.
122  China does not consider that the Panel's conclusion needs to be 
modified, arguing that the European Union err oneously asserts that China's arguments were 
"exclusively" directed at the eligibility of the names for confidential treatment.  China contends that it 
argued the violation of Article 6.5.1 by the Eur opean Union in the context of the names of the 
complainants, and that the European Union addressed China's arguments in this regard.123 
6.134  It is true that China's arguments focused on wh ether the names of the EU producers could be 
treated as confidential.  However, China clearly made  a claim under Article 6.5.1 with respect to this 
information and presented arguments, alt hough general, in support of its claim.124  We therefore have 
made no change to this paragraph in r esponse to the European Union's request.  
6.135  Paragraph 7.771 :  The European Union requests that the Panel modify its finding regarding 
Article 6.5.1 in the fourth and fifth sentences of th is paragraph.  The European Union asserts that the 
CEC's statement that it "was acting on behalf of the producers of the product concerned representing 38% of the total EU 27 production" was a summary of the table at Annex 1 of the complaint, and also analysed the data, including the countries of origin  and production quantities, that the companies had 
included in their support statements.  Thus, the European Union contends, this statement also 
constitutes a summary of the information regard ing countries of origin and company production 
figures in the confidential versions of the support statements.  The European Union rejects China's 
argument that the summary should have contained "i ndividual data of the complainants" or mention 
of the member States in which the complainants were  located, noting that this is data which the Panel 
concluded were justifiably treated as confidential.
125  China argues that the European Union imports a 
kind of automatism in the application of Article 6.5.1 that is not permitted by the text of that Article.  
China argues that the mere fact that such data we re held to be confidential by the Panel does not 
permit, as the European Union proposes, that it automatically implies that the European Union 
complied with its obliga tion under Article 6.5.1.   China therefore does not consider that the European 
Union's argument merits a reconsideration of the issue by the Panel.126 
6.136  We recall that the information at issue concerns  the answers provided by the applicants, their 
home countries, and a table regarding the standing of CE C, referred to in Annex 1 of the complaint.  
We found that the CEC's statement that "the CEC wa s acting on behalf of the producers of the product 
concerned representing 38% of the total EU 27 production" constituted a summary only of the 
confidential information in the table regarding the st anding of the CEC, but not of the remainder of 
that information.  The European  Union now argues that the CEC's statement was also a summary of 
the information regarding the home countries and pr oduction figures, asserting that the table regarding 
the standing of CEC analysed the data, including  home countries and production quantities, but has 
not pointed out where it made this argument during the proceedings before the Panel.  Paragraph 445 
of its first written submission, referred to by the European Union in this regard, states that the 
individual production volumes of the supporting pr oducers were "effectivel y summarized in the 
Review Request", but does not refer to the answ ers provided by the applicants and their home 
countries, and does not indicate where in the request the summary of the individual production volumes of the supporting producers could be found.   Moreover, while at paragraph 339 of its 
opening oral statement at the second meeting, the European Union stated that summarized information from the answers provided by the applican ts "appears at various points" in the complaint, 
it did not indicate where in the complaint such summarization was provided.  Regarding the home 
                                                      
122 European Union, request for interim review, p. 5. 
123 China, comments on the European Union's request for interim review, para. 8. 
124 For example, China, second written submission, paras. 1027 et seq. (arguments regarding 
Article 6.5.1 with respect to different kinds of info rmation, including the names of the EU producers). 
125 European Union, request for interim review, pp. 5-6. 
126 China, comments on the European Union's request for interim review, para. 10.  WT/DS405/R 
  Page 31  
 
 countries of the applicants, the European Union did not even argue that summarization of this 
information was provided.  Based on the foregoing, we see no basis to revisit our conclusion, and 
therefore have made no changes to  this paragraph in response to the European Union's request.   
6.137  Paragraph 7.785 :  The European Union requests that the Panel revisit the first, second, 
fourth and fifth sentences of this paragraph and m odify its conclusions.  The European Union argues 
first that its assertion that the four companies which completed standing forms were among the 196 
supporters of the expiry review request was not c ontested by China, and the Panel was therefore not 
justified in reaching the conclusion in the first sente nce that it could not "determine whether the four 
companies which completed the standing forms were  among the 196 supporters of the expiry review 
request, as the European Union contends."  The Europ ean Union contends that since this conclusion is 
the basis for the Panel's conclusion in the second sentence concerning the contents of the standing 
forms, that conclusion is also unjustified.  The European Union disagrees with the Panel's finding in 
the fourth sentence that "it is not clear that [the in formation sought in the standing forms] would fall 
within the scope of information for which the n eed to protect their identities would establish good 
cause for confidential treatment, and the European Union has not asserted otherwise", maintains that it 
denied China's accusation that no request for confid entiality was made in respect of the information 
presented by companies in the "standing forms",
127 and therefore argues that the issue of whether this 
information was entitled to confidential treatment is one that the Panel can and should decide.  
Finally, the European Union notes that it gave an e xplanation of the contents of this information, 
which China did not attempt to refute.128  The European Union therefore requests that the Panel 
review its conclusion that the European Union violated Article 6.5.129 
6.138  With respect to the European Union's first and second points, China contends that it is 
incorrect that China did not address the issue wh ether the four companies which completed the 
standing forms were amongst the 196 supporters, refe rring in this regard to  paragraphs 644, 940 and 
1077 of its second written submission,  paragraph 100 of its closing statement at the second meeting 
with the Panel, and its response to Panel question 116, where it noted that interested parties were 
never provided any opportunity to see these standing fo rms and that the European Union provided no 
proof to show that indeed the standing forms were filed by "some" or four producers.  Furthermore, 
referring to paragraph 100 of its closing statem ent at the second meeting with the Panel and its 
response to Panel question 116, China argues that it contested the European Union's assertion by 
stating that "China considers this to be patently  incorrect.  The EU's own Exhibit EU-20 shows that 
the information requested in the standing form wa s far more extensive than that provided in the 
declaration of support (see Exhibit CHN-30)".130  With respect to the Eu ropean Union's third point, 
China contends that it demonstrated that the inform ation requested in the standing form was far more 
extensive than that provided in a declaration of supp ort, and that the European Union did not refute or 
demonstrate that all information provided therein fe ll within the scope of the information for which 
confidential treatment was requested by the four co mpanies in question.  In addition, China argues 
that the references cited by the European Union do not contain any arguments and/or do not refute 
China's claims.  Finally, China obj ects to the European Union's stat ement that China did not attempt 
to refute the European Union's explanation "of the c ontents of th[e] information [at issue]", noting that 
it did not have the opportunity to further comment and/or refute the European Union's comments on China's answers to questions from the Panel's second set  of questions.  In the alternative, China argues 
                                                      
127 The European Union refers to paragraph 19 of its comments on China's response to Panel 
question 116 in this regard.  European Union, request for interim review, p. 6. 
128 The European Union refers to paragraph 22 of its comments on China's response to Panel 
question 116 in this regard.  European Union, request for interim review, p. 6. 
129 European Union, request for interim review, p. 6. 
130 China, comments on the European Union's request for interim review, para. 11. WT/DS405/R 
Page 32  
 
 that if the Panel were to review its conclusion,  it should also review its conclusion not making any 
additional findings as regards the violation of Article 6.5.1 by the European Union.
131  
6.139  With respect to the European Union's first and second points, we recall that a party asserting a 
fact has the burden of providing proof thereof.  In this case, the European Union has provided no 
evidence in support of its assertion that the four companies which completed standing forms were 
among the 196 supporters of the expiry review.  Moreover, since it was for the European Union to 
substantiate its assertion of fact, we fail to see the relevance of the European Unions' contention that 
China allegedly did not contest this assertion.  We therefore have made no change in response to the 
European Union's request regarding the first and sec ond sentences of this paragraph, recalling that its 
request with respect to the second sentence is depende nt on acceptance of its re quest with respect to 
the first sentence.  Regarding the European Union' s requests concerning the fourth and fifth sentences 
of this paragraph, we are of the view that the European Union has not established that confidential 
treatment was requested in respect of the informa tion presented by the four companies in the standing 
forms concerned.  While it is true that in its comments on China's response to Panel question 116, the 
European Union rejected China's claim that no requ est for confidentiality was made in respect of the 
information presented by companies in the "standi ng forms", nothing in these comments demonstrates 
that confidential treatment for this information was in fact requested and/or that this information 
"fall[s] within the scope of information for wh ich the need to protect [the] identities [of these 
companies] would establish good cause for confidential treatment".  We therefore have not made the 
changes to this paragraph requested by the European  Union.  However, we have modified the fourth 
sentence of paragraph 7.785 by replacing the word " asserted" with the word "demonstrated", so as to 
better reflect the basis for our conclusion.   
6.140  Paragraph 7.789 : The European Union requests that th e Panel review its conclusion in the 
second sentence of this paragraph.  The European Un ion contends that the data in the standing forms 
were summarised in a Note for the File issued on 2 October 2008, Exhibit EU-19.132  China argues 
that the European Union's request should be reject ed.  China notes that while the Panel's finding in 
paragraph 7.789 concerns the failure of the Europ ean Union to request a non-confidential summary of 
the information provided in the "declarations of support", the European Union's objection concerns 
the "standing forms".  In addition, China alleges th at paragraph 22 of the European Union's comments 
on China's response to Panel question 116 supports the Panel's findings.  In fact, China argues, in that 
paragraph the European Union clearly stated th at there were several questions, including among 
others concerning "production", that "in accordance with its usual practice, the Commission did not 
regard as capable of individual summarization".  Further, China alleges that Exhibit EU-19 only 
provides aggregates figures and does not contain a non-confidential summary of the 2007 and January 2008 production data of the supporters and the names of their countries, or a statement of 
reasons as to why a non-confidential summary  of this information was not possible.
133  
6.141  We recall that the information at issue is certa in information in the declarations of support, 
regarding the countries and production volume of the supporting producers for the year 2007 and 
2008.  However, the Note for the File dated 2 Oc tober 2008, to which the European Union refers, 
does not contain any summary of the countries and production volume data for the year 2008.  Moreover, with respect to the production volume fo r the year 2007, the Note only provides an overall 
estimation of the total production in the European Union for this year.  Thus, we have made no 
change to this paragraph, which accurately reflect s our views, in response to the European Union's 
request.   
                                                      
131 China, comments on the European Union's request for interim review, para. 12. 
132 European Union, request for interim review, p. 6. 
133 China, comments on the European Union's request for interim review, para. 13.  WT/DS405/R 
  Page 33  
 
 6.142  Paragraph 7.792 :  China requests that the Panel review  its conclusion in this paragraph.  
China alleges that the Panel accepted the European Union's contention, in the absence of any evidence 
or proof, that the questions for which no answers were provided in the non-confidential version of the 
questionnaire responses of the sampled EU produ cers were also unanswered in the confidential 
version.  China contends that the European Un ion made a passing statement in its response to 
question 59 that "in the vast majority of cases the entries in the confidential and non-confidential files 
are identical, or have differences…that are not signifi cant", and considers that this is an insufficient 
basis for the Panel to accept the Eu ropean Union's assertion as fact.  Ch ina also argues that the Panel's 
statement that China had not demonstrated that the information it challenged was treated as confidential, and that there was no factual basis to conclude that the una nswered questions were 
treated as confidential, is not correct.  China asserts in this regard that it provided the entire proof 
available to it on this issue, the non-confiden tial questionnaire responses, the detailed comments made 
by EFA and the Commission's response to EFA s howing that pursuant to EFA's comments the 
complainant producers added additional information to  the questions previously left blank.  In 
addition, China alleges that the very  fact that the European Union argued that "for information that is 
'by nature' confidential, good cause is shown by est ablishing that the information falls into that 
category", makes clear that for all information cons idered confidential by na ture, the European Union 
exempted the EU producers from requesting conf idential treatment and automatically granted 
confidential treatment to such information.  More over, referring to the European Union's response to 
Panel question 59, where the European Union expl ained that a general request for confidential 
treatment was made at the beginning of the non-c onfidential questionnaire response applied to all 
parts of the information considered confidential an d therefore not disclosed in the subsequent non-
confidential versions of the same response of the same company, China takes the view that this 
demonstrates that confidentiality was applied to the unanswered questions.
134  
6.143  The European Union argues that in its response to Panel question 59, it first made a general 
statement about the instances listed in Exhibit CHN- 65, and then examined the particular cases where 
substantive differences existed be tween the confidential and non-conf idential documents.  In addition, 
the European Union alleges that the evidence referred to by China, independently of whether it 
amounts to "the entire proof available to it", does not put in doubt the Panel's conclusion.  With respect to China's second objection, the European Union points out that the development during the 
course of the investigation of the information supplied by parties was part of the normal process by which the Commission verifies and analyses the data  supplied to it and was not, as China pretends, 
specifically the consequence of particular representations made by EFA.
135 
6.144  Footnote 1378 of the Interim Report (now footnot e 1528) to paragraph 7.792 makes clear that 
we considered the European Union's assertion that "i n the majority of instances referred to by China, 
the confidential and non-confidential responses of the sampled EU producers were the same" and had 
no "evidentiary basis that would justify rejecting this assertion as  untrue".  We do not agree with 
China that we did not have a sufficient basis fo r accepting the European Union's assertion in this 
regard.  The absence of any evidence to the contrary suffices, in our view, to accept this assertion.  In 
any event, our conclusion, that there was "no factua l basis on which to conclude that the [questions 
not answered in the questionnaire responses of the sampled EU producers were ] accorded confidential 
treatment inconsistently with Article 6.5 of the AD Agreement", is mainly based on China's failure, as 
the complainant, to demonstrate that the informa tion at issue was actually treated as confidential by 
the Commission.  We therefore have made no cha nge to paragraph 7.792 in response to China's 
request in this regard.  With respect to China's second objection, we note that the arguments presented 
by China do not demonstrate that the information at  issue was treated as confidential or that there was 
a factual basis for a conclusion that the unanswere d questions were granted confidential treatment.  
First, with respect to the non-confidential questionn aire responses, we noted, in paragraph 7.792 of 
                                                      
134 China, request for interim review, para. 71. 
135 European Union, comments on China's request for interim review, p. 5. WT/DS405/R 
Page 34  
 
 the Interim Report, that nothing in these responses i ndicates that confidential treatment of information 
was requested and granted with respect to the bl ank answers at issue.  Moreover, concerning the 
alleged comments made by EFA and the Commission' s response to EFA showing that pursuant to 
EFA's comments the complainants added additional information to the questions previously left 
blank, we note that China has not shown where in  its submissions such arguments were made, nor 
does China indicate where in the record such comments/response can be found.  Similarly, while 
China now argues that certain statements/responses of the European Union show that confidential 
treatment was applied to the unanswered questions, it  made no such arguments previously.  We have 
therefore made no changes to paragraph 7.792 in  response to China's request in this regard. 
6.145  Footnote 1379 (now footnote 1529) :  The European Union requests that the Panel modify its 
finding regarding Article 6.5 in the fourth sentence of  this footnote.  The European Union argues that 
by the very act of presenting a non-confidential su mmary of the data, the producer at issue was 
implicitly invoking confidentiality.  Moreover, th e European Union alleges that, as it stated in 
paragraph 195 of its answer to Pa nel question 59, it had an established practice of regarding sales data 
as by nature entitled to confidentiality, and therefore did not require parties to justify this treatment.
136  
China considers that "implicit invoking of a confid entiality rule by providing non-confidential data" 
cannot replace the explicit requirement to demonstr ate "good cause" in Article 6.5, and therefore the 
European Union's argument that the European Un ion recognizes this information as confidential by 
nature is irrelevant.  In addition, China asserts  that the European Union never argued that its 
legislation or "established practice" pre-defines th e information at issue as information which is 
confidential by nature, but merely claimed that "the  EU regards such data as 'by nature confidential', 
given their character", which statement cannot be equated to "established practice".  Furthermore, 
China alleges that nowhere in EU legislation or th e "Guides for the preparation of questionnaires", is 
it stated that this information is confidential by nature, and the fact that other producers requested 
confidential treatment for this information establishes this point.  China also argues that even if the 
European Union were to indicate that the "Guides"  for the preparation of the questionnaire constitute 
evidence of its practice, the European Union made it cl ear that at least in the review investigation the 
"Guides" were not issued to the EU producers.137 
6.146  We recall that Article 6.5 of the AD Agre ement requires that good cause be shown for 
confidential treatment of information which is by  nature confidential, as well as for confidential 
treatment of information which is su bmitted on a confidential basis.  We therefore fail to see any legal 
basis for or relevance of the European Union's contention that "by the very act of presenting a non-
confidential summary of the data the producer at  issue was implicitly invoking the confidentiality 
rule" in the absence of a showing of good cause, wh ich the European Union does not assert was made.  
Moreover, nothing in paragraph 195 of the European  Union's answer to Panel question 59 indicates 
that the European Union had an established pr actice which defines in advance that certain 
information, and specifically the information at issu e here, will be treated as "by nature confidential" 
by the Commission such that coming within that  category will suffice to satisfy the good cause 
requirement.  This is further confirmed, as China not es, by the fact that at least one other producer, 
referred to in paragraph 195 of the European Un ion's answer to Panel question 59, requested 
confidential treatment for the information concerne d.  We therefore have made no change to our 
finding regarding Article 6.5 in footnote 1379 (now footnote 1529) in response to the European Union's request.   
6.147  Paragraph 7.806 :  The European Union requests that the Panel modify its finding regarding 
Article 6.5 in this paragraph.  The European Union disagrees with the Panel's view that the "European 
Union has not established that its legislation or  practice defines in advance the categories of 
information that the Commission will treat as 'by nature confidential'".  In this regard, the 
                                                      
136 European Union, request for interim review, p. 6. 
137 China, comments on the European Union's request for interim review, para. 14.  WT/DS405/R 
  Page 35  
 
 European Union argues the "Guide for the preparation of the non-confidential version of Union 
Producers Questionnaire", Exhibit CHN-55, and para graph 227 of its answer to Panel question 73 
demonstrate that at the time of the expiry review at issue it had an established set of practices regarding what information would be regarded as by nature confidential.  The European Union notes 
that the topics addressed in the "Guide" include all those considered by the Panel in paragraph 7.806 - 
sales prices, profit/loss/selling and expenses, and PCN in formation - and adds that its answer to Panel 
question 73 makes clear that such practice was not confined to EU producers' information.
138  China 
disagrees with the European Union's contention that  at the time of the expiry review its practice 
mentioned in the "Guide" defined the information at issue to be considered "by nature confidential".  
China contends that the European Union never ar gued in the course of this proceeding that the 
"Guides" were issued to the analogue country pr oducers, provided no evidence with respect to the 
existence of its alleged practice or that it was ma de known to analogue country producers in advance 
that the information at issue would be considered confidential by nature.  In any event, China argues 
that the European Union has made it clear that the "Guides" did not  exist at the time the analogue 
country producers completed the questionnaire responses and the analogue country producers were 
not made known that such information would be tr eated as confidential by nature.  Furthermore, 
China notes that Exhibit CHN-55 states that PCN info rmation is not information that is "confidential 
by nature", and profit and loss information is al so not confidential by nature when the company 
involved is a publicly listed entity.139  
6.148  In our view, nothing in the European Union's answer to Panel question 59, or in Exhibit 
CHN-55, demonstrates that, at the time of the expiry  review at issue, the European Union had in place 
an established practice regarding what information woul d be regarded as by nature confidential and/or 
granted confidential treatment.  On the contrary, in its answer to this ques tion, the European Union 
makes clear that Exhibit CHN-55 (entitled "Guide fo r the preparation of the non-confidential version 
of Union Producers Questionnaire") is a "guide for Commission case-handlers in setting-up the non-confidential file".  Moreover, at  paragraph 317 of its oral statement at the second meeting, the 
European Union clarified that the "very title of the guides ('for the preparation', and not 'for the 
completion', of questionnaires) indicates that they are primarily intended for Commission staff, even if parts are sometimes made available to companies" .  Thus, it is clear to us that this document is 
mainly directed to Commission staff, and does not establish a practice by which parties (as opposed to 
Commission staff) in an anti-dumping investigation would know in advance what information would 
be treated as confidential.  We therefore reject the European Union's argument that this "Guide" 
demonstrates that at the time of the expiry revi ew at issue the European Union had an established 
practice regarding what information would be regarded  as by nature confidential.  In any event, we 
note that this Guide addresses the questionnaire r esponses of EU producers and not the questionnaire 
responses of the analogue country producer res ponses at issue in paragraph 7.806.  The 
European Union argues that it made clear that its alleged practice was not confined to EU producers' 
information.  However, in its answer to Panel question 73 the European Union refers to "parallel 
guides" for "exporters and importe rs" but provides no evidence in this regard.  In addition, the 
European Union itself recognized th at copies of these guides "are sometimes  made available to 
interested parties" and "there is no established procedure in this respect".
140  We therefore have made 
no change to our conclusion in paragraph 7.8 06 in response to the European Union's request. 
6.149  Paragraph 7.829 :  China requests that the Panel modify the first sentence of this paragraph to 
reflect that the Panel Report in EC – Salmon (Norway)  was first referred to by the European Union in 
support of its own position.141  The European Union did not comment on this request.  
                                                      
138 European Union, request for interim review, pp. 6-7. 
139 China, comments on the European Union's request for interim review, para. 15. 
140 European Union, answer to Panel question 73 (emphasis added). 
141 China, request for interim review, para. 73. WT/DS405/R 
Page 36  
 
 6.150  Paragraph 7.829 is part of our analysis of the parties' claims and arguments.  While it is true 
that the European Union first re ferred to the Panel Report in EC – Salmon (Norway)  in support of its 
position in responding to China's arguments, it is also true that China, in addressing the European Union's response, itself re lied on that same report in support of its position.  We do not see 
the relevance of the sequence in which the parties relied on that report, and consider that the first 
sentence of this paragraph is accurate, and therefore have made no change to it  in response to China's 
request. 
6.151  Paragraph 7.891 :  China requests that the Panel revise or delete the phrase "and China makes 
no arguments in this regard" in the second sentence of  this paragraph in order to more accurately 
reflect China's arguments, referring in this regard to paragraph 152 9 of its second written 
submission.
142  The European Union did not comment on this request.  
6.152  Paragraph 7.891 states that China made no ar guments regarding how the number of MET/IT 
responses received could be material to the investiga ting authority or be considered to have led to the 
imposition of the anti-dumping duty.  Nothing in paragraph 1529 of China's second written 
submission refers to how the number of MET qu estionnaires received could be material to the 
investigating authority, or considered to have le d to the imposition of the anti-dumping duty, the point 
as to which this paragraph states that China made no argument.  We have modified this paragraph in 
order to clarify our views, but have not othe rwise changed it in response to China's request. 
6.153  Paragraph 7.924 :  The European Union requests that the Panel modify this paragraph in 
order to more accurately express what it un derstands to be the Panel's intention.143  China did not 
comment on this request. 
6.154  We agree that the European Union's proposed  modification better expresses our view, and 
have modified this paragraph accordingly. 
VII. FINDINGS 
A. INTRODUCTION  
7.1 This dispute concerns three measures introduced by the European Union: (1) Article 9(5) of 
Council Regulation (EC) No. 1225/2009 on Protect ion against Dumped Imports from Countries not 
Members of the European Community (the "B asic AD Regulation"); (2) Council Implementing 
Regulation (EU) No. 1294/2009 of 22 December 20 09 maintaining the definitive anti-dumping duties 
on imports of certain footwear w ith uppers of leather originating inter alia  in China following an 
expiry review (the "Review Regulation"); and (3) Council Regulation (EC) No. 1472/2006 of 
5 October 2006 imposing definitive anti-dumping duties on imports of certain footwear with uppers of 
leather originating inter alia  in China (the "Definitive Regulation").   China's claims with regard to 
Council Regulation No. 1225/2009 cha llenge that measure "as such", while its claims in connection 
with Council Regulations Nos. 1294/2009 and 1472/2006 ch allenge the specifics of those measures, 
and include, with respect to the Definitive Re gulation, aspects of the Basic AD Regulation "as 
applied".  China's claims pertain to vari ous provisions of the Anti-Dumping Agreement 
("AD Agreement"), the GATT 1994 and the Marrak esh Agreement Establishing the World Trade 
Organization (the "WTO Agreement") as well as  the Protocol on the Accession of the People's 
                                                      
142 China, request for interim review, para. 75. 
143 European Union, request for interim review, p. 7.  WT/DS405/R 
  Page 37  
 
 Republic of China
144 ("China's Accession Protocol"), and the Report of the Working Party on the 
Accession of China145 ("China's Accession Working Party Report"). 
7.2 The European Union raised a number of prelim inary issues in its request for a preliminary 
ruling and in its written submissions.  The Europ ean Union contends that many of the claims 
addressed in China's panel request and written subm issions are not within the Panel's terms of 
reference either because they were not subject to c onsultations, because they were not identified at all 
in China's panel request, or because they were not id entified in the panel request consistently with the 
requirements of Article 6.2 of the DSU.  Further, the European Union contends that all claims made 
by China under Article 17.6(i) of the AD Agreemen t are not before the Panel, as this provision does 
not impose a self-standing obligation on Members and therefore it cannot be subject of a claim by a 
party, and that none of China's Article 17.6(i) clai ms satisfy the requirements of Article 6.2 of the 
DSU.  Finally, the European Union co ntends that China fails to make a prima facie  case with regard 
to some claims addressed in its written submissions .  We address the European Union's request for a 
preliminary ruling below, before considering the substantive issues in dispute.   
B. RELEVANT PRINCIPLES REGARDING STANDARD OF REVIEW , TREATY INTERPRETATION AND 
BURDEN OF PROOF  
7.3 While the parties have not raised questions concerning these matters per se , they have each 
referred to them in the course of their submissions .  We set out below the framework that we will 
apply in these proceedings with r espect to the standard of review, treaty interpretation and burden of 
proof. 
1. Standard of Review 
7.4 Article 11 of the DSU provides the standard of re view for WTO panels in general.  Article 11 
imposes upon panels a comprehensive obligation to ma ke an "objective assessment of the matter", an 
obligation which embraces all aspec ts of a panel's examination of  the "matter", both factual and 
legal.146 
7.5 Article 17.6 of the AD Agreement, which sets fort h the special standard of review applicable 
to disputes under the AD Agreement, provides: 
 "(i) in its assessment of the facts of  the matter, the panel shall determine 
whether the authorities' establishment of the facts was proper  and whether their 
evaluation of those facts was unbiased and objective.  If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel 
might have reached a different conclusion, the evaluation shall not be overturned; 
 (ii) the panel shall interpret the re levant provisions of the Agreement in 
accordance with customary rules of interpreta tion of public international law.  Where 
the panel finds that a relevant provision of  the Agreement admits of more than one 
permissible interpretation, the panel sha ll find the authorities' measure to be in 
                                                      
144 WT/L/432. 
145 WT/ACC/CHN/49 and Corr.1. 
146 Article 11 of the DSU provides, in pertinent part: 
"The function of panels is to assist the DSB in discharging its responsibilities under this Understanding and the covered agreements.  Acco rdingly, a panel should make an objective 
assessment of the matter before it, including an  objective assessment of  the facts of the case 
and the applicability of and conformity with th e relevant covered agreements, and make such 
other findings as will assist the DSB in making the recommendations or in giving the rulings 
provided for in the covered agreements."   WT/DS405/R 
Page 38  
 
 conformity with the Agreement if it rests upon one of those permissible 
interpretations."  
Taken together, Article 11 of the DSU and Article 17.6 of the AD Agre ement establish the standard of 
review we must apply with respect to both the f actual and the legal aspects of the present dispute. 
 
7.6 The Appellate Body has clarified a panel's sta ndard of review of the facts pursuant to the 
above provisions in the following terms: 
"It is well established that a panel must neither conduct a de novo review nor simply 
defer to the conclusions of the national au thority.  A panel's examination of those 
conclusions must be critical and searching, and be based on the information contained 
in the record and the explanations given by  the authority in its published report.  A 
panel must examine whether, in the li ght of the evidence on the record, the 
conclusions reached by the investigating au thority are reasoned and adequate.  What 
is 'adequate' will inevitably depend on the f acts and circumstances of the case and the 
particular claims made, but several general lines of inquiry are likely to be relevant.  
The panel's scrutiny should test whether the reasoning of the author ity is coherent and 
internally consistent.  The panel must unde rtake an in-depth examination of whether 
the explanations given disclose how the inv estigating authority treated the facts and 
evidence in the record and whether there was positive ev idence before it to support 
the inferences made and conclusions reached  by it.  The panel must examine whether 
the explanations provided demonstrate that  the investigating authority took proper 
account of the complexities of the data before it, and that it explained why it rejected 
or discounted alternative explanations and in terpretations of the record evidence.  A 
panel must be open to the possibility that th e explanations given by the authority are 
not reasoned or adequate in the light of ot her plausible alternative explanations, and 
must take care not to assume itself the role of initial trier of facts, nor to be passive by 
'simply accept[ing]  the conclusions of the competent authorities.'"
147  
The Appellate Body has also clarified the re lationship between Article 11 of the DSU and 
Article 17.6(i) of the AD Agreement:  
"In considering Article 17.6(i) of the Anti-Dumping Agreement , it is important to bear 
in mind the different roles of panels and investigating authorities.  Investigating 
authorities are charged, under the Anti-Dumping Agreement , with making factual 
determinations relevant to their overall determination of  dumping and injury.  Under 
Article 17.6(i), the task of panels is simp ly to review the investigating authorities' 
"establishment" and "evaluation" of the fact s.  To that end, Article 17.6(i) requires 
panels to make an " assessment  of the facts
 ".  The language of this phrase reflects 
closely the obligation imposed on panels under Article 11 of the DSU to make an 
"objective assessment  of the facts  ".  Thus the text of both provisions requires panels 
to "assess" the facts and this, in our view , clearly necessitates an active review or 
examination of the pertinent facts.  Article 17.6(i) of the Anti-Dumping Agreement  
does not expressly state that panels are oblig ed to make an assessment of the facts 
which is " objective ".  However, it is inconceivable that Article 17.6(i) should require 
anything other than that panels make an objective  "assessment of the facts of the 
                                                      
147 Appellate Body Report, United States – Investigation of the International Trade Commission in 
Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada  ("US – Softwood Lumber VI 
(Article 21.5 – Canada) "), WT/DS277/AB/RW, adopted 9 May 2006, and Corr.1, DSR 2006:XI, 4865, para. 93 
(footnote omitted).  WT/DS405/R 
  Page 39  
 
 matter".  In this respect, we see no "conflict" between Article 17.6(i) of the Anti-
Dumping Agreement  and Article 11 of the DSU."
148 
7.7 Therefore, with respect to the challenged an ti-dumping measures at issue here, that is, the 
Review Regulation and the Definitive Regulation, we may find disputed aspects to be consistent with 
the AD Agreement if we find that the EU investigating authority, the Commission of the 
European Union ("Commission"), established the f acts properly and evaluated them in an unbiased 
and objective manner, and that the determina tions in question were based on a permissible 
interpretation of the relevant treaty provisions.149  Pursuant to Article 17.5(ii) of the AD Agreement, 
in our assessment of the matter, we must base our  examination upon "the facts made available in 
conformity with appropriate domestic procedures to  the authorities of the importing Member."  We 
will not undertake a de novo  review of the evidence before the Commission during the proceedings, 
and if we find that the establishment of the fact s by the Commission was proper and the evaluation 
was unbiased and objective, we will not substitute our own judgement for that of the Commission, even though we might have made a different determination were we examining the evidence that was 
before the investigating authority ourselves. 
2. Rules of Treaty Interpretation 
7.8 Article 3.2 of the DSU provides that the dis pute settlement system serves to clarify the 
provisions of the covered agreements "in accordance with customary rules of interpretation of public 
international law".  It is generally accepted that these customary rules are reflected in Articles 31-32 
of the Vienna Convention on the Law of Treaties  ("Vienna Convention") .  Article 31(1) of the Vienna 
Convention provides: 
"A treaty shall be interpreted in good faith  in accordance with the ordinary meaning 
to be given to the terms of the treaty in their context and in the light of its object and purpose." 
A number of reports address the application of  the Vienna Convention provisions on treaty 
interpretation in dispute settlement in the WTO.  It is clear that interpretati on must be based above all 
on the text of the treaty,
150 but that the context of the treaty also plays a role.  It is also well-
established that these principles of interpretation "n either require nor condone the imputation into a 
treaty of words that are not there or the importa tion into a treaty of concepts that were not 
intended."151  Furthermore, panels "must be guided by th e rules of treaty interpretation set out in the 
Vienna Convention, and must not add to or diminish rights and obligations provided in the WTO 
Agreement ."152  
7.9 As noted above, Article 17.6(ii) of the AD Agreement sets forth a special provision 
concerning the interpretation of the AD Agreement.153  The Appellate Body has addressed the 
relationship between Article 17.6(ii) of th e AD Agreement and the DSU, stating:  
                                                      
148 Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel 
Products from Japan ("US – Hot-Rolled Steel "), WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 
4697, para. 55. 
149 See paragraph 7.9 below.  
150 Appellate Body Report, Japan – Taxes on Alcoholic Beverages ("Japan – Alcoholic Beverages II "), 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97, p. 11. 
151 Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical 
Products ("India – Patents (US)") , WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9, para. 45. 
152 Appellate Body Report, India – Patents (US) , para. 46. 
153 As the Appellate Body has noted: WT/DS405/R 
Page 40  
 
 "The first sentence of Article 17.6(ii), echoing closely Article 3.2 of the DSU, states 
that panels  'shall' interpret the provisions of the AD Agreement  'in accordance with 
customary rules of interpretation of public international law.'  Such customary rules 
are embodied in Articles 31 and 32 of the Vienna  Convention on the Law of Treaties  
('Vienna Convention' ).  Clearly, this aspect of Article 17.6(ii) involves no 'conflict' 
with the DSU but, rather, confirms that th e usual rules of treaty interpretation under 
the DSU also apply to the AD Agreement . … 
The second  sentence of Article 17.6(ii) … presupposes  that application of the rules of 
treaty interpretation in Articles 31 and 32 of the Vienna Convention  could give rise to, 
at least, two interpretations of some provisions of the AD Agreement , which, under 
that Convention, would both be ' permissible  interpretations.'  In that event, a measure 
is deemed to be in conformity with the AD Agreement 'if it rests upon one of those 
permissible interpretations."
 154   
Thus, under the AD Agreement, a panel is to follow the same rules of treaty interpretation as in any 
other dispute when considering the interpretation of  provisions of the AD Agreement.  The difference 
is that Article 17.6(ii) provides explicitly that if  the panel reviewing an anti-dumping measure finds 
more than one permissible interpretation of a pr ovision of the AD Agreement, the panel may uphold a 
measure that rests on one of those interpretations. 
3. Burden of Proof 
7.10 The general principles applicable to burden of proof in WTO dispute settlement require that a 
party claiming a violation of a provision of the WT O Agreement by another Member assert and prove 
its claim.155  China, as the complaining party in this dispute, must therefore make a prima facie case 
of violation of the relevant provisions of the WT O agreements it cites, which the European Union 
must refute.  We note, however, that it is generally for each party asserting a fact, whether complainant or respondent, to provide proof thereof.
156  In this respect, therefore, it is for the 
European Union to provide eviden ce of the facts which it asserts.   
7.11 The amount and type of evidence required to estab lish a presumption that what is asserted is 
true "will necessarily vary from measure to me asure, provision to provision, and case to case."157  
Nevertheless, we also recall that "a prima facie  case is one which, in the absence of effective refutation 
by the defending party, requires a panel, as a matter  of law, to rule in favour of the complaining party 
presenting the prima facie  case."158  In this dispute, European Union has asserted that, with respect to a 
number of its claims, China has failed to make a prima facie  case.  Should we agree, we need not 
analyse such claims further, but will dismiss them.   
                                                                                                                                                                     
"Article 17.6 is divided into two separate sub- paragraphs, each applying to  different aspects of 
the panel's examination of the matter.  The first sub-paragraph covers the panel's  "assessment  
of the facts  of the matter", whereas the second covers its " interpret[ation  of] the relevant 
provisions ". (emphasis added)  The structure of Ar ticle 17.6, therefore,  involves a clear 
distinction between a panel's assessment of the facts and its legal interpretation of the Anti-
Dumping Agreement ."  
Appellate Body Report, US – Hot-Rolled Steel , para. 54 (emphasis in original). 
154 Appellate Body Report, US – Hot-Rolled Steel , paras. 57 and 59 (emphasis in original). 
155 Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses 
from India ("US – Wool Shirts and Blouses "), WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, 
DSR 1997:I, 323, pp. 14-16. 
156 Appellate Body Report, US – Wool Shirts and Blouses , pp. 14-16. 
157 Appellate Body Report, US – Wool Shirts and Blouses , p. 14. 
158 Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones) ("EC – 
Hormones "), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135, para. 104.  WT/DS405/R 
  Page 41  
 
 C. 
REQUEST FOR A PRELIMINARY RULING BY THE EUROPEAN UNION  
7.12 The European Union submitted a request for a preliminary ruling on 22 July 2010, objecting 
to a number of China's claims on various grounds .  Specifically, the European Union asserts that 
China's "as such" claims against Article 9(5) of  the Council Regulation No. 1225/2009 do not meet 
the requirements of, in particular, Article 6.2 of the DSU.  Next, the European Union asserts that 
China's claims based on Article 17.6(i) of the AD Agreement fail to satisfy requirements of 
Article 6.2 of the DSU.  Third, the European Unio n contends that certain of China's claims are not 
within the Panel's terms of reference because the claim was not identified sufficiently clearly in 
China's panel request, as required by Article 6.2 of the DSU.  Finally, the European Union argues that 
certain of China's claims are not within the Panel's terms of reference because there were no 
consultations with respect to them.159  China responds by arguing that all the challenged claims are in 
fact properly before the Panel and within its terms of reference.  Although we did not issue a ruling on 
the European Union's request during the course of the dispute, we consider it ap propriate to dispose of 
the issues raised by that request before turn ing to the substantive claims in dispute. 
7.13 We recall that it is the complaining Member's  panel request that determines the terms of 
reference of a WTO panel.  Article 6.2 of the DSU provides, in relevant part: 
"The request for the establishment of a pane l shall be made in writing.  It shall 
indicate whether consultations were held, identify  the specific measures at issue  and 
provide a brief summary of the legal basis of the complaint sufficient to present 
the problem clearly ." (emphasis added) 
Together, the measures and claims identified in the panel request constitute th e "matter referred to the 
DSB", which forms the basis for a panel's terms of reference under Article 7.1 of the DSU.  It is 
important that the panel request be sufficiently clear  for two reasons.  First, it defines the jurisdiction 
of the panel, since only the claims raised in the pane l request fall within the panel's terms of reference.  
Second, it serves the due process objective of notifying the parties and potential third parties of the 
nature of a complainant's case.160  In order to ensure that these objectives are met, a panel must 
examine the panel request "to ensure its compliance with both the letter and the spirit of Article 6.2 of 
the DSU".161  The Appellate Body has observed that su ch compliance must be demonstrated on the 
basis of the text of the panel request read as a whole.162 
7.14 Thus, with respect to the European Union's argum ent that certain claims raised by China were 
not identified in its panel request consistently with the requirements of Article 6.2 of the DSU, we will 
consider the text of China's panel request with resp ect to each claim objected to, and decide whether it 
is set forth consistently with Article 6.2.  Clear ly, at a minimum, the panel request must cite the 
relevant provision(s) of the AD Agreement or ot her covered agreement in  connection with the 
measure(s) alleged to be in  violation of that provision.163  The more complex question is whether the 
                                                      
159 European Union, request for preliminary ruling, para. 4.   
160 Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut ("Brazil – Desiccated 
Coconut "), WT/DS22/AB/R, adopted 20 March 1997, DSR 1997: I, 167, p. 22; Appellate Body Report, 
United States – Continued Existence and Application of Zeroing Methodology ("US – Continued Zeroing "), 
WT/DS350/AB/R, adopted 19 February 2009, para. 161. 
161 Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution 
of Bananas ("EC – Bananas III "), WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591, para. 142. 
162Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant 
Carbon Steel Flat Products from Germany  ("US – Carbon Steel "), WT/DS213/AB/R and Corr.1, adopted 
19 December 2002, DSR 2002 :IX, 3779, para. 127. 
163 China makes arguments under Article 6.10.2 of th e AD Agreement in connec tion with Article 9(5) 
of the Basic AD Regulation (claim I.1), and under Arti cle 2.1 of the AD Agreemen t in connection with the 
dumping determination in the Definitiv e Regulation (claims III.3 and III.20 ) which are not identified on the face WT/DS405/R 
Page 42  
 
 panel request contains "a  brief summary of the legal basis of th e complaint sufficient to present the 
problem clearly". 
7.15 The Appellate Body report in Korea – Dairy  offers guidance as to how  a panel should address 
the issue of whether a panel request provides "a br ief summary of the legal basis of the complaint 
sufficient to present the problem clearly " in accordance with Article 6.2 of the DSU.  First, the issue is 
to be resolved on a case-by-case basis.
164  Second, the panel must examine the panel request very 
carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.165  
Third, the panel should take into account the na ture of the particular provision at issue –  i.e. where the 
Articles listed establish not one single, distinct oblig ation, but rather multiple obligations, the mere 
listing of treaty Articles may not satisfy the standard of Article 6.2.166  The panel in EC – Fasteners 
(China) observed that this standard required it  
"in each instance, to consider the text of Ch ina's panel request to determine whether it 
identifies the specific measure, and provides a brief summary of the legal basis of the 
complaint, and potentially whether the Eur opean Union has been prejudiced by the 
formulation of the panel request.  Moreover, as stated by the Appellate Body, 
compliance with the requirements of Article 6.2 of the DSU must be demonstrated on 
the basis of the text of the panel request read as a whole, and defects in the panel 
request cannot be cured in the subse quent submissions of the parties."167 
Based on the foregoing, we consider each aspect of  the European Union's request for a preliminary 
ruling in turn below.  1. China's "as such" claims against Article 9(5) of Council Regulation No. 1225/2009 
7.16 The European Union argues that China's "as such" claims regarding Article 9(5) of the Basic 
AD Regulation do not satisfy the requirements of, in particular, Article 6.2 of the DSU.  The 
European Union contends that Article 9(5) of the Basic AD Regulation relates to the imposition of 
anti-dumping duties, and thus, the only issue which results from this provision is the imposition of 
anti-dumping duties on a country-wide basis or on an individual basis if certain criteria are met in the 
case of imports from non-market economy countries.  Fo r the European Union, since the meaning and 
content of the provision are clear on its face, the Panel should assess the consistency of the measure 
"as such" on that basis alone.
168 
7.17 Turning to China's claims, accordi ng to the European Union, China described the matter in its 
panel request in a  
"very specific and narrow manner , (i) by reference to a legal provision 
(i.e. Article 9(5) of Council Regulation No. 1225/2009; and (ii) with respect to a very 
precise aspect contained therein (i.e. the imposition of a single anti-dumping duty for the supplying country concerned and the imposition of an individual anti-dumping 
                                                                                                                                                                     
of the panel request.  However, we do not understand the European Union to have objected to these arguments 
on jurisdictional grounds. 
164 Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy 
Products  ("Korea – Dairy "), WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3, para. 127. 
165 Appellate Body Report, Korea – Dairy , para. 130. 
166 Appellate Body Report, Korea – Dairy , para. 124. 
167 Panel Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel 
Fasteners from China ("EC – Fasteners (China)") , WT/DS397/R, circulated to WTO Members 
3 December 2010 [appeal in pr ogress], para. 7.15, quoti ng Appellate Body Report, US – Carbon Steel , 
para. 127. 
168 European Union, request for preliminary ruling, paras. 4, 11 and 13.  WT/DS405/R 
  Page 43  
 
 duty for suppliers fulfilling certain criteria in case of imports from non-market 
economy countries."
169    
The European Union asserts that, in the absence of any references to other matters or use of broader 
terminology in China's panel request, the measure at issue is strictly limited to the specified provision, 
and the specific aspects, identified by  China.  Therefore, the European  Union asks that the panel find 
that its terms of reference are limited to those asp ects of the measure explicitly identified by China, 
and anything beyond that question is  outside its terms of reference.170  The European Union considers 
that other topics, such as "individual treatment" or the "individual treatment regime or practice" of the 
European Union, or how dumping margins are calcu lated in cases of non-market economy countries, 
or any alleged "EU practice" on that subject, were not identified by China, and are thus outside the 
Panel's terms of reference.171   
7.18 In addition, the European Un ion argues that China's panel request does not satisfy the 
requirements of Article 6.2 of the DSU because it does not present the problem clearly, and therefore its claims under Articles 6.10, 9.3 and 9.4 of the AD Agreement and Article X:3(a) of the GATT 1994 
are not properly before the Panel.
172  According to the European Un ion, China failed to "plainly 
connect" the challenged measure with the provisions of  the covered agreements claimed to have been 
infringed.173  In this regard, the European Union argues th at China conflates issues with respect to the 
imposition of anti-dumping duties, dealt with by the challenged measure, and issues of the 
determination of an individual ma rgin of dumping, addressed in Article 6.10 of the AD Agreement, 
but not, in the European Union's view, by Article 9(5) of the Basic AD Regulation.  Similarly, the European Union asserts that Article 9(5) of the Basic AD Regulation does not address how dumping 
margins are calculated, or the proper level of anti- dumping duties, which is the subject of Article 9.3 
of the AD Agreement.  The European Union notes that Article 9(5) of the Basic AD Regulation 
applies regardless of the use of sampling, while China makes a claim under Article 9.4 of the AD Agreement, which applies in cases where sampling has been used.  Finally, the European Union 
asserts that it fails to see the connection between the measure at issue in the context of an as such 
claim, and Article X:3(a) of the GATT 1994, whic h requires that the administration of a Member's 
laws, regulations, decisions and ru lings be uniform, impartial and re asonable, but does not apply to 
those laws, regulations, decisions and rulings themselves.
174 
7.19 China considers the European Union's "limited" description of the measure to be erroneous.  
China maintains that it is not challenging "the imposition of a single anti-dumping duty for the supplying country concerned and the imposition of an individual duty for suppliers fulfilling certain 
criteria in case of imports from non-market economy countries", as asserted by the European Union.  
Rather, its challenge concerns Article 9(5) of the Basic AD Regulation.  China considers that 
assessing whether a measure is sufficiently identifie d for purposes of Article 6.2 does not require a 
substantive inquiry as to the precise contents of the measure at issue.  China maintains that its panel 
request provides the gist of the measure at issue, and the inconsistency with the provisions of covered 
agreements at issue.   Moreover, China contends that its panel request does, in fact, use broader 
terminology in identifying the nature of the measure  and the alleged inconsiste ncy with provisions of 
the AD Agreement, such that, read as a whole, it is clear that China challenges all aspects of 
                                                      
169 European Union, request for preliminary ruling, para. 29 (italics in original, footnote omitted). 
170 European Union, request for preliminary ruling, para. 31. 
171 European Union, request for preliminary ruling, fn. 15 and para. 29. 
172 European Union, request for preliminary ruling, para. 32. 
173 European Union, request for preliminary ruling, para. 39. 
174 European Union, request for preliminary ruling, paras. 40-61. WT/DS405/R 
Page 44  
 
 Article 9(5), including the determination of indi vidual dumping margins, which China considers an 
aspect of the measure.
175   
7.20 China considers that the European Union' s preliminary ruling request conflates the 
substantive issues in dispute with the procedural re quirements of Article 6.2 of the DSU, based on its 
erroneous understanding of Article 9(5) of the Basic AD Regulation.  For China, the meaning and 
operation of the provisions are matters of substan ce, addressed in China's first written submission.  
Moreover, China considers that th e European Union's preliminary ru ling request conflates claims and 
arguments, noting that while Article 6.2 requires claims to be specified in the panel request, 
arguments, including arguments explaining how the ch allenged measures infringe the provisions of 
the covered agreements invoked, are to be set out in  the complaining party's first written submission.  
Finally, China contends that the European Union h as failed to establish that its ability to defend itself 
in the context of these claims was prejudiced, desp ite that this must be taken into account in 
determining whether a panel request satisfies Article 6.2 of the DSU.176  
7.21 This is not the first time these same questi ons have been considered in WTO dispute 
settlement.  The recent report of the panel in EC – Fasteners  (China) addressed these same questions 
concerning the scope of its terms of reference, ra ised by the European Un ion, objecting to China's 
substantively identical claims against the same me asure, Article 9(5) of the Basic AD Regulation.177  
Nothing in the European Union's arguments in this case leads us to conclude that a different outcome 
from that reached by the panel in EC – Fasteners  (China) is warranted in this case.178   
7.22 The EC – Fasteners (China) panel concluded that these claims were within its terms of 
reference.  That panel noted that the premise fo r the European Union's objection with respect to 
China's claims under Articles 6.10, 9.3 and 9.4 of  the AD Agreement was the allegation that the 
specific measure at issue, Article 9(5) of the Basic AD Regulation, addresses only the imposition  of 
anti-dumping duties whereas the three provisions of  the AD Agreement cited by China concern the 
calculation of dumping margins .  The panel considered that China was correct in asserting that the 
European Union confused the identification of the cl aims in the panel request with the arguments that 
are to be developed in the subseque nt panel proceedings.  In this re gard, the panel found it relevant 
and persuasive that the European Union dedicated  significant portions of its substantive arguments 
regarding these three claims to demonstrating that  Article 9(5) of the Basic AD Regulation does not 
concern the calculation of dumping margins and th erefore does not fall within the scope of the 
obligations set forth under these three pr ovisions.  The panel concluded that:  
                                                      
175 China, first written submission, paras. 19, 23, 25 and 26-29. 
176 China, first written submission, paras. 40-43, 53-61 and 63-68.  
177 Panel Report, EC – Fasteners (China) , paras. 7.43-7.45.  Compare claims set forth in WT/DS397/3, 
page 2 and those set forth in WT/DS405/2, pages 2-3.  We note that there was an additional preliminary issue in 
the EC – Fasteners (China)  dispute, concerning whether Regulation 1225/2009 itself was within the scope of 
the panel's terms of reference.  That issue does not arise in this case.  As the panel in EC – Fasteners (China) 
concluded  that the Regulation 1225/2009 was properly before it, EC – Fasteners (China) , para. 7.39, it is clear 
that the identical measure is at issue in this dispute as was at issue in EC – Fasteners (China) . 
178 We note, however, that unlike in this case, in EC – Fasteners (China) , the European Union raised its 
objections in its first written submission, and not in a request for preliminary ruling.  See Panel Report, EC – 
Fasteners (China) , fns. 222, 277, 459, 582, 789 and 1073.  WT/DS405/R 
  Page 45  
 
 "it is clear to [the panel] that whether Article 9(5) of the Basic AD Regulation is 
limited to the imposition of dumping duties, or also relates to the calculation of dumping margins or the establishment of the level of anti-dumping duties, is a disputed matter that must be resolved as part  of the substance of this case, rather than 
a matter to be assumed in the context of resolving a preliminary objection.
223  
______________________ 
 223 We note that we do not mean to sugges t that we agree with European Union's 
characterization of China's claims  as concerning the calculation of dumping margins, but that 
even assuming this to be the case, the scope of Article 9(5) of the Basic AD Regulation is not 
so clear as to preclude us from considering them."179 
7.23 Both parties have submitted substantially th e same arguments on this preliminary ruling 
request in this case.  Like the panel in EC – Fasteners (China) , we consider that the European Union's 
preliminary objection goes to a question of substan ce, that must be decided on the basis of the 
arguments of the parties.  We do not consider  that the import of Article 9(5) of the Basic 
AD Regulation is so clear on its face as to allow us  to grant the European Union's request for a 
preliminary ruling.  We therefore deny that request  with respect to these three claims, and conclude 
that they are within our terms of reference. 
7.24 With regard to China's claim under Article X: 3(a) of the GATT 1994, the European Union 
made substantially the same objection in EC – Fasteners (China) , asserting that there is no connection 
between the specific measure at issue, i.e. Arti cle 9(5) of the Basic AD Regulation, and the 
obligations set out under Article X:3(a) of the GATT 1994.  The European Union's objections, and China's response, are substantially the same in this case.  According to the Eu ropean Union, "China's 
Panel Request fails to explain how the "provisions" of Article 9(5) of Council Regulation 
No. 1225/2009 are not administered in a uniform, impartial and reasonable manner."
180  Here too, the 
panel in EC – Fasteners  (China) took the view that the European Un ion confused the identification of 
a claim with the arguments presented in support of a claim.  The European Union maintains that the 
obligation set out under Article X:3(a) of the GA TT 1994 cannot apply to laws, regulations, decisions 
and rulings themselves, but only to their administration.  Like the panel in EC – Fasteners (China) , 
we recall that, for purposes of Article 6.2 of the DSU, what is important is whether a claim is 
described sufficiently clearly in the panel request so  that the respondent is informed of the nature of 
the claim and can begin to prepare its defence.  Whether the description of the claim makes legal 
sense is something to be scrutinized by the panel in the course of the dispute settlement proceedings, 
on the basis of the arguments developed by the pa rties and the evidence presented.  We note that 
China's panel request, on page 2, last tiret, clearly identifies a claim under Article X:3(a) of the 
GATT 1994 with respect to Article 9(5) of the Basic AD Regulation.  Therefore, we are of the view 
that China's claim under Article X:3(a) of the GATT 1994 with respect to Article 9(5) of the Basic 
AD Regulation is within our terms of reference,  and deny the European Union's request for a 
preliminary ruling in this regard. 
2. China's claims based on Article 17.6(i) of the AD Agreement 
7.25 China raises eight claims of violation of Article 17.6(i) of the AD Agreement, concerning 
different aspects of the Review Re gulation and the Definitive Regulation.181  China makes separate 
                                                      
179 Panel Report, EC – Fasteners (China) , para. 7.44. 
180 European Union, request for preliminary ruling, pa ra. 57.  Compare with "China's panel request fails 
to explain how the "provisions" of Article 9(5) of Council Regulation No. 384/96 are not administered in a 
uniform, impartial and reasonable manner."  Panel Report, EC – Fasteners (China) , para. 7.45, quoting 
European Union, first written submission,  para. 67. 
181 Claims of violation of Article 17.6(i) of the AD  Agreement are raised by  China under items II.2, 
II.3, II.4, II.5, II.13, III.5, III.6, and III.20 of its panel request. WT/DS405/R 
Page 46  
 
 arguments with respect to each of these claims.  The European Union objects to China's claims under 
Article 17.6(i), arguing that these claims do not comp ly with the requirements of Article 6.2 of the 
DSU, and requests the Panel to rule that these claims are outside the its terms of reference.
182   
(a) Arguments of the parties 
(i) China 
7.26 China argues that Article 17.6(i) of the AD Agreement implicitly imposes an obligation on 
investigating authorities in anti-dumping cases to properl y establish facts, and to evaluate those facts 
in an unbiased and objective manner.183  China asserts that Article 17.6(i) incorporates in the 
AD Agreement broad standards of general applicabilit y with respect to all factual determinations 
made by investigating authorities throughout an ti-dumping investigations.  In China's view, 
Article 17.6(i) is the "sole source of the concepts of 'proper establishment of the facts' and 
'unbiase[d]ness' [and as such] should not only be regarded as imposing an obligation, but imposing 
one of substance beyond that otherwise contained in the Anti-Dumping Agreement ."184  The claims 
China raises under Article 17.6(i) fall into two distinct groups.185  The first group comprises claims 
involving an alleged violation of Article 17.6(i) together with an allege d violation of another 
provision of the AD Agreement that has "some sort of fairness or due process language [] built into 
it."186  With respect to these claims, China contends that  the issue is whether "the concepts of 'bias' 
and 'proper establishment of facts' contain[] an y substance beyond that already contained in, for 
example, the 'positive evidence' and 'objective examin ation' language contained in Article 3.1" of the 
AD Agreement.187 The second group of claims comprises alleged violations of Article 17.6(i) 
independent of any claims of violation of Article 3.1.188  With respect to this group, China argues that 
the issue is the relationship between Article 17.6(i) and "those parts of an investigation not arising 
under a provision [of the AD Agreement] with some sort of fairness or due process language already explicitly built into it, such as the analogue country  selection process or the determination of whether 
an exporter or industry qualifies for 'Market Economy Treatment'".
189  China maintains that the 
"resolution of the second question is one of first impression for the Panel"190.  
7.27 China contends that if the Panel finds that the Commission did not meet the broad standards 
which China posits are established by Article 17. 6(i), the Panel must conclude "that the ' regulations at 
issue ' are 'inconsistent' with [Article 17.6(i)] of the Anti-Dumping Agreement ."  China believes that 
claiming direct violation of Article 17.6(i) is prefer able to either "bootstrapping those claims onto the 
substantive provisions ... or hoping that the panel raises the issue sua sponte ."  China asserts that the 
former would lead to difficulties associated with asp ects of an investigation which are subject to the 
standard established by Article 17.6(i), but do no t have precisely corresponding provisions in the 
AD Agreement, while the latter is undesirable from a practical standpoint.191 
                                                      
182 European Union, request for preliminary ruling, para. 84. 
183 China, first written submission, para. 377; answer to Panel question 1, paras. 13-16. 
184 China, first written submission, para. 103; answer to Panel question 1, paras. 3-4. 
185 China, second written submission, paras. 1-3; opening oral statement at the first meeting with the 
Panel, para. 18.  
186 China, answer to Panel question 3, paras. 36-37; opening oral statement at the first meeting with the 
Panel, para. 18. 
187 China, opening oral statement at the first meeting with the Panel, para. 18. 
188 China, answer to Panel question 3, paras.  36-37; first written submission, para. 113. 
189 China, second written submission, para. 3. 
190 China, first written submission, para. 115; closing or al statement at the first meeting with the Panel, 
para. 2; answer to Panel question 2, para . 23; second written submission, para. 3. 
191 China, first written submission, paras. 99, 104, 122 and 114.  WT/DS405/R 
  Page 47  
 
 (ii) European Union 
7.28 The European Union requests the Panel to rule, as a preliminary matter, that China's claims 
invoking Article 17.6(i) of the AD Agreement are not within its terms of reference, because they do not comply with the requirement of Article 6.2 of the DSU to provide certain information in a manner 
"sufficient to present the problem clearly", for two reasons.   
7.29 First, the European Union argues that Article 17.6(i) of the AD Agreement imposes 
obligations solely upon panels, and does not estab lish any self-standing and separate obligations on 
WTO Members.  The European Union asserts that  Article 17.6(i), like Article 11 of the DSU, 
establishes a standard of review to be applie d by panels, and therefore cannot create additional 
obligations to WTO Members.
192  The European Union contends that because China's panel request 
merely lists Article 17.6(i), its claims under that  Article do not comply with the requirement of 
Article 6.2 of the DSU to provide certain informa tion in a manner "sufficient to present the problem 
clearly", due to the "unequivocal" language of Ar ticle 17.6(i), establishing obligations solely on 
panels and not on WTO Members.  Second, the European Union asserts that even assuming, arguendo , that Article 17.6(i) did impose certain obliga tions on WTO Members, China's claims based 
on Article 17.6(i) would still not comply with the re quirements of Article 6.2 of the DSU.  In this 
context, the European Union contends that taking in to account the text and context of Article 17.6(i), 
obligations arising from this provision would likel y have to be multiple and "in the case of complex 
legal provisions involving multiple obligations, it is  not enough to merely list a legal provision to 
satisfy the requirements of Article 6.2 DSU."  Ther efore, the European Union argues that by merely 
listing the provision in its panel request, without id entifying which of the legal obligations allegedly 
imposed by Article 17.6(i) was allegedly violated by  equally insufficiently identified specific parts of 
certain EU measures, China failed to "provide a br ief summary of the legal basis of the complaint 
sufficient to present the problem clearly".
193  The European Union asserts that China misunderstands 
Article 17.6(i) of the AD Agreement, and that Ch ina attempts to rewrite the AD Agreement.  In 
addition, the European Union argues that China did not rebut the arguments presented by the 
European Union in its request  for a preliminary ruling.194   
7.30 In its written submissions, in addition to refe rring to the arguments in its request for a 
preliminary ruling, the European Union addresses cer tain of China's Article 17.6(i) claims more 
specifically.195  Regarding China's claim of violation of Article 17.6(i) of the AD Agreement in the 
analogue country selection procedure, the European  Union argues that China ignores the distinction 
between the "establishment" and the "evaluation" of facts made by Article 17.6(i).  According to the 
European Union, "the process of soliciting inform ation from potential analogue country producers is 
quite obviously one of establishing the facts, but China unconcernedly accuses the European Union of 'biased' behaviour in this respect [which coul d only be associated to the evaluation of facts]."
196  In 
addition, the European Union suggest s that, with respect to those of China's allegations of violations 
of Article 17.6(i) not associated with claims of vi olation of Article 3.1 of the AD Agreement, it may 
be that China's concern is not provided for in the AD Agreement.  The European Union contends that 
this "does not mean that Article 17.6(i) should be  given the role of a catch-all provision for such 
situations, it merely means that such situations are not regulated by the Anti-Dumping Agreement  and, 
hence, the WTO Members are not bound by any particular disciplines in that respect"197.  The 
European Union concludes that "China is seeking something what the drafters [of the AD Agreement] 
                                                      
192 European Union, request for preliminary ruling, paras. 67 and 71. 
193 European Union, request for preliminary ruling, paras. 75-80. 
194 European Union, first written submission, paras. 10-13; second written submission, paras. 8-9 and 
11. 
195 European Union, first written submission, paras. 10-19.  
196 European Union, first written submission, para. 180. 
197 European Union, answer to Panel question 6, para. 3. WT/DS405/R 
Page 48  
 
 did not provide for."  Finally, the European Union notes that, were the Panel to conclude that 
Article 17.6(i) applies to some, but not necessarily all situations which coul d be considered unfair, 
this would potentially limit any "fairness" oblig ations inherent in other provisions of the 
AD Agreement, an outcome it considers the drafters did not intend.
198  
(b) Arguments of third parties 
(i) Brazil 
7.31 Brazil takes the view that Article 17.6(i) "defin es the level of deference panels should afford 
to WTO Members' determinations  under other provisions of the ADA", and therefore establishes 
obligations "solely upon panels, in the course of their assessment of the conduct of IAs during the 
investigation."  Brazil asserts that the obliga tion to conduct assessments in an unbiased and objective 
manner imposed on investigating authorities is found in other provisions of the AD Agreement, such 
as Article 3.1 of the AD Agreement.  Finally, Brazil not es that Article 17.6(i) is a procedural rule that 
deals with WTO consultations and dispute settlement, and only comes into play after the investigating 
authority's determinations have been taken and the investigation concluded.199   
(ii) Colombia 
7.32 Colombia considers that, based on WTO jurispr udence, Article 17.6(i) of the AD Agreement 
cannot be interpreted to establish additional or in direct obligations on investigating authorities.  
Colombia submits that the only obligations on WT O Members regarding anti-dumping investigations 
are those set out in substantive provisions, such  as Articles 3.1 and 11.3 of the AD Agreement.  
Colombia concludes that Article 17.6(i) is limited to clarifying the standard of review to be applied by 
WTO panels in assessing claims under the AD Agreement.200   
(iii) Japan 
7.33 Japan submits that Article 17.6(i) of the AD Agre ement "primarily sets out rules applicable to 
panels" and "does not impose any obligations directly on the [investigating] authorities."201 
(iv) United States 
7.34 The United States asserts that Article 17. 6(i) of the AD Agreement does not impose 
obligations on WTO Members, and to "interpret Article 17.6(i) as imposing an obligation on [WTO] 
Members is to read into that provision words that are not there, something that may not be done under 
customary rules of interpretation of public international law."202  Accordingly, the United States takes 
the view that it is not possible, through the use of customary rules of treaty interpretation, to interpret 
the AD Agreement as containing a fairness standard of general application,203 nor to interpret 
Article 17.6(i) as imposing "indirect obligations" on investigating authorities.204  The United States 
                                                      
198 European Union, second written submission, paras. 8-9. 
199 Brazil, third party written submission, paras. 7-9. 
200 Colombia, answers to questions 3 and 4, paras. 3-5, 6 and 11, citing Panel Report, Egypt – Definitive 
Anti-Dumping Measures on Steel Rebar from Turkey  ("Egypt – Steel Rebar "), WT/DS211/R, adopted 
1 October 2002, DSR 2002:VII, 2667, para. 7.142, and Appellate Body Report, Thailand – Anti-Dumping 
Duties on Angles, Shapes and Sections of Iron or Non Alloy Steel and H Beams from Poland  ("Thailand – H-
Beams "), WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, 2701, para. 114. 
201 Japan, third party written submission, para. 22. 
202 United States, third party written submission, para. 59 (footnote omitted). 
203 United States, answer to Panel question 2, para. 4. 
204 United States, answer to Panel question 3, para. 5.  WT/DS405/R 
  Page 49  
 
 submits that China seeks to create an additional obligation on investigating authorities through the 
revision of the text of the AD Agreement.   
(c) Evaluation by the Panel 
7.35 Article 17.6 of the AD Agreement provides, in pertinent part: 
"In examining the matter referred to in paragraph 5: 
(i) in its assessment of the facts of the matter, the panel shall determine whether the 
authorities' establishment of the facts w as proper and whether their evaluation of 
those facts was unbiased and objective.  If the establishment of the facts was proper 
and the evaluation was unbiased and objectiv e, even though the panel might have 
reached a different conclusion, the evaluation shall not be overturned;" 
Article 17.6(i) of the AD Agreement is generally unde rstood as an aspect of the "separate" standard of 
review to be applied by panels in disputes ar ising under the AD Agreement, specifically in the 
consideration of the investigating author ity's establishment and evaluation of facts.
205  This provision 
appears in the section of the AD Agreement entitled "Consultation and Dispute Settlement", and thus 
is applicable during panel proceedings.  The standa rd of review in Article 17.6(i) places obligations 
directly, and in our view exclusively, on a panel in the context of its resolution of an anti-dumping 
dispute, providing that if the panel concludes that  the establishment of the facts by the investigating 
authority was proper, and the evaluation of such facts was unbiased and objective, the evaluation of 
the investigating authority shall not be overturned by the panel.206 
 7.36 China asserts that because, in its view, the Appella te Body has held that Article 17.6(i) of the 
AD Agreement explicitly imposes an obligation on pane ls to overturn an establishment or evaluation 
of the facts in certain situations,
207 this provision also necessarily and impliedly imposes certain 
obligations on the investigating authority in the conduct of an anti-dumping investigation, 
specifically, to properly establish facts, and to evaluate those facts in an unbiased and objective 
manner.  In China's view, another Member can direct ly challenge all factual determinations in an anti-
dumping investigation in dispute settlement under Article 17.6(i), independent of any claim of 
violation of any other provision of the AD Agreemen t.   The European Unio n disagrees, and asks the 
Panel to rule, as a preliminary matter, that China's claims alleging violations of Article 17.6(i) are not within its terms of reference.  As we understa nd it, the European Union's objection comprises two 
aspects, a substantive aspect, arguing that Article  17.6(i) does not impose any obligations on WTO 
Members, but only on panels, and that this provision  cannot be interpreted as  an independent legal 
basis of a claim, and a procedural aspect, argui ng that China failed to state its claims under 
                                                      
205 E.g. Panel Report, EC – Fasteners (China) , para. 7.442. 
206 Previous panel reports have clarified that, pursuant to Article 17.6(i) of the AD Agreement, it is not 
the role of a panel to perform a de novo review of the evidence. Panel Report, Guatemala – Definitive 
Anti-Dumping Measures on Grey Portland Cement from Mexico ("Guatemala – Cement II "), WT/DS156/R, 
adopted 17 November 2000, DSR 2000:XI, 5295, para. 8.19; Panel Report, Egypt – Steel Rebar , paras. 7.11-
7.14.  The Appellate Body in Thailand – H-Beams  concluded that Articles 17.5 and 17.6 of the AD Agreement 
"place limiting obligations on a panel, w ith respect to the review of the esta blishment and evaluation of facts by 
the investigating authority", and that the aim of Article 17.6(i) is to "prevent a panel from 'second-guessing' a 
determination of a national authority when the establishm ent of the facts is proper and the evaluation of those 
facts in unbiased and objectiv e."  Appellate Body Report, Thailand – H-Beams , paras. 114 and 117.  See also 
Appellate Body Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen 
from India – Recourse to Article 21.5 of the DSU  by India  ("EC – Bed Linen (Article 21.5 – India) "), 
WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965, para. 162.  
207 China, answer to Panel question 1, para. 8. WT/DS405/R 
Page 50  
 
 Article 17.6(i) with sufficient clarity to satisfy Article 6.2 of the DSU.
208  China asserts that the 
question whether Article 17.6(i) of the AD Ag reement impliedly imposes obligations on WTO 
Members is "an issue of first impression for the Panel"209, at least with respect to the relationship 
between the broad standards allegedly established by Article 17.6(i) and "those parts of investigation 
not arising under a provision with some sort of fair ness or due process language already explicitly 
built into it".210  However, China refers to the Appellate Body Report in US – Hot-Rolled Steel  to 
support its views, seeming to suggest that the issu e has been considered in WTO dispute settlement.211 
7.37 We consider that the text of Article 17.6(i) of the AD Agreement is clear on its face, and only 
creates obligations on panels and not on investigating authorities of WTO Members in the conduct of 
anti-dumping investigations.  As discussed above, the customary rules of public international law we 
are to apply in this dispute establish that treaty provisions shall be interpreted in good faith in 
accordance with the ordinary meaning given to th e terms of the treaty taking into account their 
context, object and purpose.212  The ordinary meaning of the text of Article 17.6(i) – "the panel shall 
determine" – is clear, and is specifically and exclusiv ely directed at the actions of panels.  There is no 
suggestion in the text of this provision that it also applies to the actions of WTO Members in general, 
or to specific aspects of the conduct of anti-dumping i nvestigations by their investigating authorities.  
Moreover, Article 17 of the AD Agreement is en titled "Consultation and Dispute Settlement", and 
establishes special rules for the conduct of dispute settlement in the case of  anti-dumping measures.  
This context further supports our view that the provision is directed solely at the actions of panels.  It 
is in our view noteworthy that, where Article 17 is directed at the actions of WTO Members, this is 
clear from the text itself, as in Articles 17.2, 17.3, and 17.4 of the AD Agreement.213  I n  a d d i t i o n ,  
Article 17.5 of the AD Agreement relates exclusivel y to the actions of the Dispute Settlement Body 
("DSB") in establishing a panel in an anti-dumping dispute.214  Similarly, Article 17.6 refers only to 
the actions of panels in their resolution of an  anti-dumping dispute.  Our understanding of the 
                                                      
208 European Union, request for preliminary ruling, paras. 66-73; second written submission, paras. 5-
11; first oral statement, para. 12. 
209 China, first written submission, para. 115; closing or al statement at the first meeting with the Panel, 
para. 2; answer to Panel question 2, paras. 23 and 27. 
210 China, first written submission, para. 3 (italics in original). 
211 See paragraph 7.41 below.  
212 See paragraphs 7.8 - 7.9 above. 
213 Thus, Article 17.2 of the AD Agreement provides: 
"Each Member shall afford sympathetic consideration to, and shall afford adequate 
opportunity for consultation regarding, representations made by another Member with respect 
to any matter affecting the operation of this Agreement."   
Article 17.3 provides: 
"If any Member considers that any benefit accruing  to it, directly or indirectly, under this 
Agreement is being nullified or impaired, or that the achievement of any objective is being impeded, by another Member or Members, it may, with a view to reaching a mutually 
satisfactory resolution of the matter, request in writing consultations with the Member or 
Members in question.  Each Me mber shall afford sympathetic consideration to any request 
from another Member for consultation."   
Article 17.4 in turn provides:   
"If the Member that requested consultations considers that the consultations pursuant to paragraph 3 have failed to achieve a mutually agreed solution, and if final action has been 
taken by the administering authorities of the importing Member to levy definitive 
anti-dumping duties or to accept price undertakings, it may refer the matter to the Dispute Settlement Body ("DSB").  When a provisional measure has a significant impact and the 
Member that requested consultations considers that the measure was taken contrary to the 
provisions of paragraph 1 of Article 7, that Member may also refer such matter to the DSB." 
214 Article 17.5 of the AD Agreement provides, in pertinent part, "The DSB shall, at the request of the 
complaining party, establish a panel to examine the matter" referred to in Article 17.4.  WT/DS405/R 
  Page 51  
 
 meaning of Article 17.6(i) applies equally to the tw o distinct groups of claims identified by China
215, 
that is, alleged violations of Ar ticle 17.6(i) where there is also an alleged violation of another 
provision of the AD Agreement that already contains some sort of fairness or due process language built into it, and alleged vi olations of Article 17.6(i) alone.  It seems clear to us that a provision of the 
AD Agreement which does not impose obligations on investigating authorities of WTO Members in 
the conduct of anti-dumping investigations  cannot est ablish an independent legal basis for a claim of 
violation of the AD Agreement by the investigating authority.    
7.38 China's position ignores the ordinary meaning of Ar ticle 17.6(i) in its immediate context.  The 
legitimate expectations of WTO Members are refl ected in the text of the covered agreements 
themselves.
216  In our view, to interpret this provision as China argues would impose obligations on 
WTO Members that were not agreed upon during the negotiation of the AD Agreement, inconsistently 
with the well-established view that the principles of treaty interpretation in WTO dispute settlement 
"neither require nor condone the imputation into a tr eaty of words that are not there or the importation 
into a treaty of concepts that were not intended".217  To accept China's interpretation would also be 
inconsistent with Article 3.2 of the DSU, as in ou r view it would "add to or diminish the rights and 
obligations provided in the [AD Agreement]", and would be an improper application of the 
interpretative principles of the Vienna Convention. 
7.39 We note that no previous panel or Appellate Body report has ever found a WTO Member to 
have acted inconsistently with Article 17.6(i)  of the AD Agreement.  WTO reports regarding 
Article 17.6(i) in general address the relationship be tween this provision and the standard of review 
set forth in Article 11 of the DSU, concluding th at there is no conflict between the two provisions.218   
7.40 We recognize that the panel in Egypt – Steel Rebar considered whether a claim of violation of 
Article 17.6(i) of the AD Agreement was properly presented by Turkey.  However, the panel was not required to decide on the admissibility of such a claim, since it dismissed the purported claim of 
violation of Article 17.6(i) as being outside its term s of reference, due to the absence of any explicit 
citation of this provision in Turkey's request for the establishment of a panel.  Nevertheless, the panel 
stated that: 
"Furthermore, while, given our dismissal of this claim on procedural grounds, we 
need not rule on whether a violation of Article  17.6(i) can be the subject of a claim by 
a party in a dispute, we have considerab le doubts in this regard. What is clear 
nevertheless, and in any case, is that Artic le 17.6(i) lays down the standard which a 
panel has to apply in examining the matter re ferred to it in terms of Article 17.5 of the 
                                                      
215 China, second written submission, paras. 1-3; opening oral statement at the first meeting with the 
Panel, para. 18.  See also para. 7.26 above. 
216 Appellate Body Report, India – Patents (US) , para. 45. 
217 Appellate Body Report, India – Patents (US), para. 45. 
218 See, e.g. Appellate Body Report, US – Hot-Rolled Steel , para. 55; Appellate Body Report, European 
Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India ("EC – Bed Linen "), 
WT/DS141/AB/R, adopted 12 March 2001, DSR 2001:V, 2049, para. 164; Appellate Body Report, Mexico – 
Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU  by the United States  ("Mexico – Corn Syrup (Article 21.5 – US) "), WT/DS132/AB/RW, 
adopted 21 November 2001, DSR 2001:XIII, 6675, para. 84; Panel Report, European Communities – 
Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil ("EC – Tube or Pipe Fittings "), 
WT/DS219/R, adopted 18 August 2003, as modified by Appellate Body Report WT/DS219/AB/R, DSR 
2003:VII, 2701, para. 7.34. WT/DS405/R 
Page 52  
 
 AD Agreement. As such, we are of course bound by it in our consideration of the 
claims in this dispute."
219 
In Thailand – H-Beams , the Appellate Body addressed Articles 17.5, 17.6, and 3.1 of the 
AD Agreement, stating: 
"Articles 17.5 and 17.6 clarify the powers of review of a panel  established under the 
Anti-Dumping Agreement.  These provisions place limiting obligations on a panel , 
with respect to the review of the establishment and evaluation of facts by the investigating authority .  Unlike Article 3.1, these provisions do not place 
obligations on WTO Members .  Further, while the obligations in Article 3.1 apply 
to all injury determinations undertaken by Members, those in Articles 17.5 and 17.6 
apply only when an injury determinati on is examined by a WTO panel.  The 
obligations in Articles 17.5 and 17.6 are distinct from those in Article 3.1."
220 
Although it is true, as China argues,221 that the Appellate Body in Thailand – H-Beams  focused on the 
relationship between Articles 3.1, 17.5 and 17.6 of  the AD Agreement, this passage reinforces our 
understanding of the nature of the obligations under Article 17.6(i) of the AD Agreement as affecting 
exclusively the actions of panels, and not those of  investigating authorities of WTO Members in the 
conduct of anti-dumping investigations.    7.41 China cites the Appellate Body Report in US – Hot-Rolled Steel  in support of its assertion that 
Article 17.6(i) of the AD Agreement impos es obligations on investigating authorities.
222  We do not 
agree with China's reading of this report.  In  the passage of the report relied upon by China, the 
Appellate Body stated: 
"In considering Article 17.6(i) of the Anti-Dumping Agreement , it is important to bear 
in mind the different roles of panels and investigating authorities.  Investigating 
authorities are charged, under the Anti-Dumping Agreement , with making factual 
determinations relevant to their overall determination of  dumping and injury.  Under 
Article 17.6(i), the task of panels is simp ly to review the investigating authorities' 
"establishment" and "evaluation" of the fact s.  To that end, Article 17.6(i) requires 
panels to make an " assessment of the facts  ".  The language of this phrase reflects 
closely the obligation imposed on panels under Article 11 of the DSU to make an "objective assessment of the facts
 ". ...  
Although the text of Article 17.6(i) is couched in terms of an obligation on panels  – 
panels "shall" make these dete rminations – the provision, at the same time, in effect 
defines when investigating authorities  can be considered to ha ve acted inconsistently 
with the Anti-Dumping Agreement  in the course of their "establishment" and 
"evaluation" of the relevant facts.  In other words, Article 17.6(i) sets forth the 
appropriate standard to be applied by panels  in examining the WTO-consistency of 
the investigating authorities'  establishment and evaluation of the facts under other 
provisions of the Anti-Dumping Agreement .  Thus, panels must assess if the 
                                                      
219 Panel Report, Egypt – Steel Rebar , para. 7.142 (underlining in original).  That panel also 
"recognize[d] that Article 17.6(i) does not apply directly to investigating authorities, and that instead, it is part of 
the standard of review to be applied by panels in reviewing determinations of investigating authorities."  Panel 
Report, Egypt – Steel Rebar , para. 7.45. 
220 Appellate Body Report, Thailand – H-Beams , para. 114 (italics in original, bold emphasis added). 
221 China refers to the Appellate Body Report in Thailand – H-Beams , but argues that it is irrelevant to 
its claims under Article 17.6(i) of the AD Agreement.  See China, closing oral stat ement at the first meeting 
with the Panel, para. 2; answer to Panel question 2, paras. 27 and 34. 
222 China, first written submission, paras. 100-102; answer to Panel question 2, para. 24.   WT/DS405/R 
  Page 53  
 
 establishment of the facts by th e investigating authorities was proper  and if the 
evaluation of those facts by those authorities was unbiased and objective ."
223 
We understand the Appellate Body in this passag e to be discussing the relationship between the 
standard of review established by Article 17.6(i) and that defined by Article 11 of the DSU.224  This 
understanding is bolstered by the fact that this  section of the Appellate Body Report is under the 
heading "Article 17.6 of the Anti-Dumping Agreement and Article 11 of the DSU:  Standard of 
Review".  In our view, it is clear that the Ap pellate Body made no findings suggesting that 
Article 17.6(i) imposes obligations on investigating authorities.  On the contrary, the Appellate Body 
stressed the different roles of panels and investig ating authorities, and indicated in the quoted passage 
that Article 17.6(i) only contains obligations fo r panels when assessing determinations taken by 
investigating authorities. 
7.42 Finally, China seeks support for its interpretation of Article 17.6(i) of the AD Agreement in 
the Appellate Body Report in Australia – Salmon .225  In that case, the Appellate Body stated that 
although the Agreement on the Application of Sanitary and Phytosanitary Measures ("SPS 
Agreement") does not contain an explicit provi sion obliging WTO Members to determine the 
appropriate level of protection, such an obliga tion is implicit in several provisions of that 
agreement.226  The Appellate Body concluded that "[i]t w ould obviously be wrong to interpret the SPS 
Agreement in a way that would render nugatory en tire Articles or paragraphs of Articles of this 
Agreement and allow Members to escape fro m their obligations under this Agreement."227  C h i n a  
draws a parallel with Australia – Salmon  to read an implied  obligation on investigating authorities 
arising from Article 17.6(i)'s explicit obligations  on panels, arguing that such "implied obligation 
would be necessary to ensure the u tility of the explicit obligation."228   
7.43 We fail to see how the Appellate Body's statement in Australia – Salmon  is relevant to this 
case.  There are numerous factual and legal differences between this dispute and Australia – Salmon .  
Importantly, in Australia – Salmon , the Appellate Body found that certain provisions of the 
SPS Agreement presupposed that a certain action or decision – in that case the determination of the 
appropriate level of protection – would be taken by a Member, otherwise "it would clearly be 
impossible to examine" whether that Member was complying with its obligations under the 
SPS Agreement.229  China has not shown how or why the obligation it asserts Article 17.6(i) of the 
AD Agreement implicitly imposes on investigating authorities  would be necessary to render 
operational the obligation explicitly imposed by this provision on WTO panels .  Nor is any such 
explanation evident to us.  Indeed, in our view, a WTO panel is entirely capable of fulfilling its 
obligations under Article 17.6(i) in the absence of  any implicit obligation on investigating authorities 
such as proposed by China.  
7.44 Based on the foregoing, we conclude that Article 17.6(i) of the AD Agreement does not 
impose any obligations on the investigating authorities of WTO Members in anti-dumping 
                                                      
223 Appellate Body Report, US – Hot-Rolled Steel , paras. 55-56 (italics in original).  China only refers 
to para. 56 of this Report.  See China, first written submission, para. 100. 
224 This is also confirmed by the Appellate Body's position in EC – Bed Linen .  Appellate Body Report, 
EC – Bed Linen , para. 163 (citing Appellate Body Report, US – Hot-Rolled Steel , para. 56). 
225 Appellate Body Report, Australia – Measures Affecting Importation of Salmon  ("Australia – 
Salmon "), WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327, paras. 205-206. 
226 Appellate Body Report, Australia – Salmon , para. 205.  For example, the Appellate Body noted that 
it would be impossible to examine whether alternative SPS measures achieve the approp riate level of protection, 
pursuant to Article 5.6 of the SPS Agreement, if the importing WTO Member were not required to determine its 
appropriate level of protection.  Id. 
227 Appellate Body Report, Australia – Salmon , para. 206. 
228 China, answer to Panel question 2, paras. 11-16. 
229 Appellate Body Report, Australia – Salmon , para. 205. WT/DS405/R 
Page 54  
 
 investigations that could be the subject of a findi ng of violation, and we therefore dismiss all of 
China's claims of violation of Article 17.6(i) of the AD Agreement.
230 
3. China's claims against Council Regulations Nos. 1294/2009 and 1472/2006  
(a) Alleged lack of specificity  
7.45 The European Union also objects to China's claim II.5, with r espect to the determination of 
causation in the Review Regulation, asserting that China's panel request does not present the problem 
clearly as required under Article 6.2 of the DSU.  The European Union notes that in the panel request 
with respect to this claim, China sets out the releva nt text of Article 3.5 of the AD Agreement, and 
asserts that the Review Regulation fails to respect the obligations established by that provision.  The 
European Union considers this insufficiently specifi c to comply with Article 6.2 of the DSU.  The 
European Union contends that the extent to whic h this claim lacks specificity is apparent from a 
comparison with the parallel claim III.9, concerning the determination of causation of injury in the 
Definitive Regulation, where China sets out specifi c grounds, for example, the export performance of 
EU producers, and changes in the pattern of consumption, as the basis of its claim.231    
7.46 The European Union also objects to China's claims II.12 and III.19, alleging violations of 
Article 12.2.2 of the AD Agreement with respect to the adequacy of the explanation of the 
determinations in the expiry revi ew and original determination.  In the panel request, China claims 
that the Commission violated Article 12.2.2 by failing to give reasons for their decisions, including reasons for the acceptance or rejection of arguments made to them.  The European Union asserts that 
China's panel request gives no indication of how or wh ere this failure arises, simply repeating the text 
of the Article.  The European Union notes that th e Regulations at issue in this case are long and 
complex, and a mere reference to one or the othe r of the Regulations as a whole is inadequate to 
satisfy the Article 6.2 requirement to identify th e relevant measure with sufficient specificity.  
Moreover, the European Union asserts that the Articl e 12.2.2 obligations apply to virtually all aspects 
of the findings and determinations  of the EU authorities in the two proceedings at issue.  While 
China's claims thus potentially cover virtually every element of the Regulations, they give no 
indication as to which China intends to pursue in the dispute.  For the European Union, this 
demonstrates a failure to identify the measure "with sufficient particularity to indicate the nature of 
the measure and the gist of what is at issue".
232 
7.47 China argues first that the European Union app ears to be requesting that the Panel exclude 
several of China's key substantive and procedural cl aims on the basis that China did not cite the page 
numbers or paragraphs in the De finitive and Review Regulations, which the European Union itself 
wrote.233  China asserts that the Regulations at issue ar e "quite easily navigable", and that matching 
China's claims with the relevant sections of the Regulations "would take onl y a small fraction of the 
amount of time" the European Union expended in re questing preliminary rulings with respect to these 
claims.234   
7.48 China notes that panels and the Appellate Body  have concluded that the mere listing of 
provisions can be sufficient to provide a brief summary  of the legal basis of a complaint, and asserts 
                                                      
230 Having dismissed China's claims of violation of Article 17.6(i) of the AD Agreement, we do not 
consider it necessary to address the European Union's argument with respect to the alleged failure to comply 
with the requirements of Article 6.2 of the DS U in China's claims regarding Article 17.6(i). 
231 European Union, request for preliminary ruling, paras. 100-102.  By drawing this comparison the 
European Union does not accept that  these claims are justified.  Id. 
232 European Union, request for preliminary ruling, paras. 105 and 109-110, quoting Appellate Body 
Report, US – Continued Zeroing , para. 169 (footnote omitted). 
233 China, first written submission, para. 128. 
234 China, first written submission, para. 129.  WT/DS405/R 
  Page 55  
 
 that with respect to its claim II.5, its panel re quest goes beyond a mere listing to describe how the 
measure violates the provision.  China contends that  the European Union seems  to be suggesting that 
China either phrase the legal basis on which it is att acking a measure in its own words, or else discuss 
its actual arguments with respect to the claim, and as serts that neither is required by Article 6.2 of the 
DSU.  China contends that while this might not alwa ys be the case, in the context of an anti-dumping 
investigation, the gist of what is at issue shoul d be clear – in this case, "the European Union's 
determination of causation, the non-attribution requi rement, and the objectivity of the investigating 
authority with respect to those issues".  To requir e anything further would, in China's view, require 
"an exposition of China's actual ar guments, which ... is certainly not necessary."  Moreover, China 
asserts that a panel request may be clarified by reference to the complaining party's first written 
submission, and that the European Un ion has failed to demonstrate prejudice.
235 
7.49 China states that it considers many sections of th e Regulations at issue to be in violation of 
Article 12.2.2, and that it expects the Panel to co nsider each of them, but asserts that the most 
appropriate place to specify which precise parts of the Regulations violate this provision is in its first 
written submission.  China considers that the permissibility of consulting the complaining party's first 
written submission for the purpose of clarifying claims  made is especially pertinent with respect to 
this sort of claim.  Finally, China notes that w ith respect to these claims, the European Union has 
neither asserted prejudice nor offered supporting particulars.236  
7.50 With respect to these objections, we have caref ully considered the terms of China's panel 
request.  We note that, contrary to China's contenti on, the panel request with respect to Article 3.5 
does not indicate in what respect the Review Regulati on is considered inconsis tent with Article 3.5, 
but merely repeats the text of the provision.  Ch ina asserts that it is "of no consequence" that the 
language in the panel request "happens to be the sa me language found in the text of the provision".  
China concedes that a party cannot cure a defectiv e panel request in a first written submission, but 
asserts that, to the extent that its panel request  may be lacking in specificity, its first written 
submission expands on the claims set  out in the panel request, and sets out the precise arguments to 
which the European Union will have to respond.237  In this respect, China relies on the Appellate 
Body's ruling in US – Carbon Steel , that "in considering the sufficiency of a panel request, 
submissions and statements made during the course of  the panel proceedings, in particular the first 
written submission of the complaining party, may be consulted in order to confirm the meaning of the 
words used in the panel request and as part of th e assessment of whether the ability of the respondent 
to defend itself was prejudiced."238  Similarly, with respect to the claims under Article 12.2.2, there is 
no indication whatsoever as to what aspects of the Re gulations are alleged by Ch ina to be inconsistent 
with the requirements of that Article, as the panel request simply contains an excerpt from the text of 
the Article, and alleges a violation thereof.  We consider that China's panel request is extremely 
cursory, and could have been drafted more explicit ly in this regard.  Nonetheless, when viewed in 
light of China's first written submission, which does set out more specifically the particulars of 
China's claims in the arguments made, we conclude that it nonetheless suffices, albeit barely, to give 
the European Union the gist of what is at stak e in the panel request.  We therefore deny the 
European Union's request for a preliminary ruling with respect to claims II.5, II.12 and III.19 and 
conclude that they are within our terms of reference.   
                                                      
235 China, first written submission, paras. 138-142. 
236 China, first written submission, paras. 145-148. 
237 China, first written submission, para. 135, citing Appellate Body Report, EC – Bananas III , 
para. 143. 
238 Appellate Body Report, US – Carbon Steel , para. 127 (footnote omitted). WT/DS405/R 
Page 56  
 
 (b) Alleged lack of consultations 
7.51 The European Union also raises a preliminary objection based on an alleged lack of 
consultations.  The European Unio n asserts that China's claim III.6, concerning the calculation of the 
profit margin in the context of the lesser duty determin ation, is outside this Pa nel's terms of reference 
because it was not subject to consultations.
239  This claim reads as follows: 
"Articles 3.1, 3.2, 9.1 and 17.6(i) of the Anti-Dumping Agreement  as the EU failed to 
objectively examine, based on positive evidence, the effect of the dumped imports on prices in the domestic market for like produc ts, and the consequent impact of these 
imports on domestic producers of such products because: ... 
the EU inappropriately established the profit margin for the EU industry."
240 
The European Union notes that the request fo r consultations addresses the profit margin in 
paragraphs 2.6 and 2.8, which state, respectively:  
"Articles 3.1, 3.2 and 17.6(i) of the Anti-Dumping Agreement as the EU failed to 
objectively examine, based on positive evidence, the effect of the dumped imports on 
prices in the domestic market for like produc ts, and the consequent impact of these 
imports on domestic producers of such products because the EU's underselling 
calculation was based on a very low quantity of exports of the sampled Chinese exporting producers; the EU wrongly calcula ted the underselling margin by applying 
a volume-based reduction ratio to the original ly calculated price-based margin and by 
allocating the non-injurious import value in relation to import values for a period 
outside the investigation period." 
"Articles 3.1 and 3.4 of the Anti-Dumping Agreement as the EU failed to objectively 
examine, based on positive evidence, the effect of the dumped imports on prices in the domestic market for like products, and th e consequent impact of these imports on 
domestic producers of such products because several key injury indicators were 
analysed on the basis of the data of the whole EU production and not on the data of 
the sampled EU producers or EU industry; and the EU inappropriately established the 
profit margin for the EU industry."
241 
7.52 According to the European Union, by incorpor ating Article 9.1 of the AD Agreement in its 
request for establishment, when that  provision is not mentioned in th e request for consultations, China 
has "radically changed the nature of this claim".242  The European Union argues that paragraph 2.6 of 
the request for consultations relates to the issue of injury, but the refe rence to Article 9.1 coupled with 
the specific mention of the profit margin in the pa nel request suggests that China is attempting to 
include the European Union's implementation of the lesser duty principle, which is an entirely 
different issue, and arises only after the determina tion of injury has been made.  For the European 
Union, merely that an issue, such as price underc utting, may be considered in both the injury and 
                                                      
239 European Union, request for preliminary ruling, para. 113.  The European Union also asserts, in its 
request for a preliminary ruling, that "at least ten" of China's claims were not mentioned in the request for consultations, but stated it would consider them as "merely consequential", reserving the right to challenge them 
later.  European Union, request for preliminary ruling, para. 112.  The European Union did not refer to these 
objections later, and therefore appears to have abandoned them.  We thus make no findings with respect to these 
objections. 
240 European Union, request for preliminary ruling, para. 113, citing Panel request, item III.6. 
241 European Union, request for preliminary ruling, paras. 114-115, citing consultations request, 
paras. 2.6 and 2.8. 
242 European Union, request for preliminary ruling, para. 116.  WT/DS405/R 
  Page 57  
 
 lesser duty contexts does not mean that they are not  different, such that a request for consultations 
with respect to one justifies a request for establis hment with respect to a claim concerning the other.
243  
7.53 China notes that the exclusion of claims from the terms of reference of a panel based on a 
difference between the panel request and the request for consultations is rare in WTO 
jurisprudence.244  China points out that the difference in this  case is the addition of Article 9.1 with the 
injury claims, which it asserts is a "logical extension of the original claim", asserting that "Article 3 
deals with the determination of the extent (if any) of injury, and Article 9.1 calls for a determination 
of the duty on the basis of the injury determination made on the basis of Article 3."245  China points 
out that that all but one of the cases relied on by the European Union deal with the question of 
changing the measures in dispute, and did not resu lt in the exclusion of the challenged measures from 
the terms of reference.  Even in the one case concer ning a change in the claims, the panel did not find 
the change to justify finding the disputed claim outside its terms of reference.246  China contends that 
the additional considerations in its claim III.6 should be determined to have "naturally evolved" from 
the analogous claim in the request for consultations.247  
7.54 This portion of the European Union's terms of reference objections raises the question of the 
relationship between a complaining party's request  for consultations and the panel's terms of 
reference.  We recall that the DSU does not contai n a provision that directly addresses this issue.  
Article 4 of the DSU, entitled "Consulta tions", provides in relevant part: 
"4. Any request for consultations shall be  submitted in writing and shall give the 
reasons for the request, including identification of the measures at issue  and an 
indication of the legal basis  for the complaint. ... 
7. If the consultations fail  to settle a dispute within 60 days after the date of 
receipt of the request for consultations, the complaining party may request the 
establishment of a panel .  The complaining party may request a panel during the 60-
day period if the consulting parties jointly consider that consultations have failed to 
settle the dispute."  (emphasis added)  
Article 17 of the AD Agreement also contains provisions regarding cons ultations between WTO 
Members in disputes under that Agreem ent, providing in relevant part: 
 
"17.1 Except as otherwise provided herein , the Dispute Settlement Understanding 
is applicable to consultatio ns and the settlement of disputes under this Agreement. ... 
17.3 If any Member considers that any benef it accruing to it, directly or indirectly, 
under this Agreement is being nullified or impaired, or that the achievement of any 
objective is being impeded, by another Memb er or Members, it may, with a view to 
reaching a mutually satisfactory resolution of the matter, request in writing 
consultations with the Member or Members in question .  Each Member shall 
afford sympathetic consideration to any request from another Member for 
consultation.   
                                                      
243 European Union, request for preliminary ruling, para. 119. 
244 China, first written submission, para. 157. 
245 China, first written submission, para. 159. 
246 China, first written submission, paras. 161 and 167, referring to Ap pellate Body Report, Mexico – 
Definitive Anti-Dumping Measures on Beef and Rice, Complaint with Respect to Rice  ("Mexico – Anti-Dumping 
Measures on Rice") , WT/DS295/AB/R, adopted 20 Decem ber 2005, DSR 2 005:XXII, 10853. 
247 China, first written submission, para. 168. WT/DS405/R 
Page 58  
 
 17.4 If the Member that requested consulta tions considers that the consultations 
pursuant to paragraph 3 have failed to achiev e a mutually agreed solution, and if final 
action has been taken by the administering authorities of the importing Member to levy definitive anti-dumping duties or to accept price undertakings, it may refer the matter to the Dispute Settlement Body ("DSB")."  (emphasis added) 
7.55 Thus, Article 4.4 of the DSU provides that a request for consultations has to identify the 
measures at issue and indicate the legal basis of the complaint, and Article 4.7 of the DSU, in turn, 
stipulates that if parties fail to settle the dispute w ithin 60 days from the receipt of the consultations 
request, the complaining party may request the establishment of a panel.  Article 17.1 of the AD Agreement states that the DSU applies to the consultations and the settlement of disputes that 
arise under the AD Agreement.  Article 17.3 of the AD Agreement provides that if a Member 
considers that any benefit accruing to it, directly or indirectly, under the AD Agreement is nullified or 
impaired, or that the achievement of any objectiv e is impeded by another Member, it may request 
consultations with the Member concerned.  Article 17.4 states that if parties fail to settle the dispute 
through consultations, the complaining Member may refer the matter to the DSB to seek the 
establishment of a panel.  Finally, Article 17.5 pr ovides that the DSB would, in such a situation, 
establish a panel to resolve the dispute. 
7.56 However, in our view it is clear that none of  these provisions supports the proposition that a 
complaining Member is precluded from identifying in  its panel request claims not identified in its 
request for consultations.  Article 6.2 of the DS U requires that a panel request mention whether 
consultations were held, but it does not say that the scope of the request for consultations also 
determines the scope of the subse quent panel request.  Article 17.4 pr ovides that "the matter" may be 
referred to the DSB, but does not say that the scope  of the consultations defines that "matter".  
7.57 The effect of a complaining Member's request  for consultations on a panel's terms of 
reference has been discussed extensively in prior reports.  In Canada – Aircraft , for instance, the 
respondent argued that certain claims  raised with respect to measures  that were not identified in the 
complaining Member's request for consultations fell outside the panel's terms of reference.  The panel 
rejected this argument.  The panel underlined the fact that a panel's te rms of reference were determined 
by the complaining Member's panel request, adding th at as long as the request for consultations and the 
panel request concerned the same "d ispute", the claims raised in the panel request would fall within its 
terms of reference even if they were not raised in the request for consultations.  In the panel's view, "this approach [sought] to preserve due process while also recognising that the "matter" on which 
consultations are requested [would] not necessarily be  identical to the "matter" identified in the 
request for establishment of a panel."
248  It follows from this reasoning that the scope of a request for 
consultations and that of a panel request do not have to be identica l.  The panel's findings on this 
particular issue were not appealed. 
7.58 A similar issue arose in Brazil – Aircraft .  The respondent in that case argued that certain 
subsidy programmes not identified in the complainant' s request for consultations were not within the 
panel's terms of reference, even t hough they were identified in the pa nel request.  The panel noted that 
under the DSU, the terms of reference of a WT O panel were determined by the complaining 
Member's panel request, not its request for consu ltations.  While acknowledging the importance of the 
consultations in terms of clarifying the situati on between the parties to the dispute, the panel 
nevertheless reasoned that "to limit the scope of the panel proceedings to the identical matter with 
                                                      
248 Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft ("Canada – Aircraft "), 
WT/DS70/R, adopted 20 August 1999, as upheld by Appellate Body Report WT/DS70/AB/R, 
DSR 1999:IV, 1443, para. 9.12.  WT/DS405/R 
  Page 59  
 
 respect to which consultations were held could undermine the effectiveness of the panel process."
249  
According to the panel: 
"[A] panel may consider whether consultati ons have been held with respect to a 
"dispute", and that a preliminary objection may properly be sustained if a party can establish that the required consultations had not  been held with respect to a dispute.  
We do not believe, however, that either Artic le 4.7 of the DSU or Article 4.4 of the 
SCM Agreement requires a precise identity  between the matter with respect to which 
consultations were held and that with r espect to which establishment of a panel was 
requested."
 250 
On appeal, the Appellate Body ag reed with the panel's reasoning: 
 
"We do not believe, however, that Articles 4 and 6 of the DSU, or paragraphs 1 
to 4 of Article 4 of the  SCM Agreement , require a  precise and exact identity   
between the specific measures that were the subject of consultations and the 
specific measures identified in the request for the establishment of a panel .  As 
stated by the Panel, "[o]ne purpose of consultations, as set forth in Article 4.3 of the 
SCM Agreement, is to 'clarify the facts of the situation', and it can be expected that 
information obtained during the course of c onsultations may enable the complainant 
to focus the scope of the matter with r espect to which it seeks establishment of a 
panel."  We are confident that the speci fic measures at issue in this case are the 
Brazilian export subsidies for regional airc raft under PROEX.  Consultations were 
held by the parties on these subsidies, and it is these same subsidies that were referred 
to the DSB for the establishment of a pane l.  We emphasize that the regulatory 
instruments that came into effect in 1997 and 1998 did not change the essence of the export subsidies for regional aircraft under PROEX."
251   
7.59 More recently, the Appellate Body, in  US – Upland Cotton  underlined the importance of not 
inappropriately limiting the scope of the dispute on the basis of the request for consultations, 
observing: 
"As long as the complaining party does not expand the scope of the dispute, we 
hesitate to impose too rigid a standard for the "precise and exact identity" 
between the scope of consultations and the request for the establishment of a 
panel, as this would substitute the request for consultations for the panel 
request .  According to Article 7 of the DSU, it is the request for the establishment of 
a panel that governs its terms of reference, unless the parties agree otherwise."252   
7.60 In Mexico – Anti-Dumping Measures on Rice , the respondent argued that the complainant had 
broadened the scope of the legal basis of the compla int in the panel request compared with the request 
for consultations and asked the pane l to find that the claims associated with the new legal provisions 
cited in the panel request were outside the panel's te rms of reference.  The panel declined the request 
on the following grounds: 
                                                      
249 Panel Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "), WT/DS46/R, 
adopted 20 August 1999, as modified by Appellate Body Report, WT/DS46/AB/R, DSR 1999:III, 1221, para. 7.9. 
250 Panel Report, Brazil – Aircraft , para. 7.10 (emphasis added). 
251 Appellate Body Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "), 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161, para. 132 (footnote omitted, italics in original, 
bold emphasis added). 
252 Appellate Body Report, United States – Subsidies on Upland Cotton  ("US – Upland Cotton "), 
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3,  para. 293 (footnotes omitted, emphasis added). WT/DS405/R 
Page 60  
 
 "In our view, the fact that certain provi sions were added to the list of alleged 
violations in the request for establishment co mpared to the request for consultations is 
a consequence of the consultation process which serves the purpose of clarifying the 
facts of the situation enabling the complain ant to focus the scope of the matter with 
respect to which it seeks the establishment of a panel.  It does not mean that no 
consultations were held on the matter, as the only difference between the request for 
consultations and the request for establishmen t consists of the fact that a number of 
closely related legal provisions alleged to have been violated were added.  The 
measures remained the same and so did the le gal basis for the complaint, as is evident 
from the narrative provided in the request for establishment.  In our view, 
consultations were thus held on the matter  on which the establishment of a Panel was 
requested.  We therefore reject Me xico's request in this respect."
253 
The Appellate Body upheld the panel's findings in  this regard.  The Appe llate Body recalled its 
previous findings on this issue and pointed out that the reasoning of prior reports regarding the 
difference between the scope of the request for consu ltations and the panel request with respect to the 
specific measures at issue equally applied to the difference between these two documents with respect 
to the legal basis of the complaint.  The Appellate Body emphasised that the role of consultations was 
to allow the exchange of information necessary to refine the contours of the dispute, as a result of 
which the complaining Member might reformulate its claims in its panel request.  According to the Appellate Body:  
"[It] is not necessary that the provisions refe rred to in the request for consultations be 
identical to those set out in the panel requ est, provided that the "legal basis" in the 
panel request may reasonably be said to have evolved  from the "legal basis" that 
formed the subject of consultations.  In ot her words, the addition of provisions must 
not have the effect of changing the essence of the complaint."
254   
7.61 Based on the foregoing, we also conclude that  there does not have to be precise identity 
between China's request for consultations and its pa nel request either with regard to the specific 
measures at issue or with regard to the legal b asis of the complaint.  As long as the request for 
consultations and the panel request  concern "the same matter" or, put differently, as long as the legal 
basis of the panel request "may reasonably be said to have evolved from the legal basis identified in 
the request for consultations", a claim, even if  not specifically identified in the request for 
consultations, may be found to have  been properly identified in the panel request and within the scope 
of the request for consultations, and therefore within a panel's terms of reference.   In our view, that is 
the situation in this case.  We therefore deny the European Union's request for a preliminary ruling, 
and conclude that China's claim III.6, concerning the calculation of the profit margin in the context of 
the lesser duty determination, is within our terms of reference. 
D. CLAIMS REGARDING COUNCIL REGULATION 1225/2009  (THE BASIC AD  REGULATION ) "AS 
SUCH "  
7.62 In this section of our report, we address China's claims asserting that Article 9(5) of the Basic 
AD Regulation is inconsistent w ith various provisions of the AD  Agreement, GATT 1994, and the 
WTO Agreement.  Before doing, so, however, we set forth below our understanding with respect to 
the operation of relevant provisions of the Basic AD Regulation. 
                                                      
253 Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef and Rice, Complaint with 
Respect to Rice ("Mexico – Anti-Dumping Measures on Rice "), WT/DS295/R, adopted 20 December 2005, as 
modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, 11007, para. 7.43. 
254 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 138 (emphasis added).  WT/DS405/R 
  Page 61  
 
 1. Relevant Provisions of the Basic AD Regulation 
7.63 Council Regulation 1225/2009, the Basic AD Regul ation, is the currently-in-force EU 
legislative instrument that lays down the substa ntive and procedural requirements pertaining to anti-
dumping investigations in the European Union.  Article 2 of the Basic AD Regulation addresses the 
determination of dumping, including the determinati on of normal value.  The basic rules set out in 
Article 2(1)-(6) for the determination of normal  value essentially replicate the provisions of 
Article 2.2 of the AD Agreement, and apply to investigations of allegedly dumped imports from 
market economy countries, whether or not Members of  the WTO.  Paragraph 7 of Article 2 contains 
specific rules on the determination of normal value in investigations of allegedly dumped imports 
from non-market economies ("NMEs").  It treats NMEs  in two distinct categories, and establishes 
different rules for the determination of no rmal value for these two categories of NME: 
 Paragraph 7(a) provides that, "[i]n the case of imports from non-market economy countries 
[including Albania, Armenia, Azerbaijan, Be larus, Georgia, North Korea, Kyrgyzstan, 
Moldova, Mongolia, Tajikistan, Turkmenistan and Uzbekistan], normal value shall be 
determined on the basis of the price or constr ucted value in a market economy third country, 
or the price from such a third country to other countries, including the Community, or where 
those are not possible, on any other reasonabl e basis, including the price actually paid or 
payable in the Community for the like produc t, duly adjusted if necessary to include a 
reasonable profit margin." 
 
 Paragraph 7(b) provides that, "[i]n anti-dumpi ng investigations concerning imports from the 
People's Republic of China, Vietnam and K azakhstan and any non-market-economy country 
which is a member of the WTO at the date of the initiation of the investigation, normal value 
shall be determined in accordance with paragraphs  1 to 6, if it is shown, on the basis of 
properly substantiated claims by one or more producers subject to the investigation and in 
accordance with the criteria and procedures set out  in subparagraph (c), that market economy 
conditions prevail for this producer or producers in respect of the manufacture and sale of the 
like product concerned. When this is not th e case, the rules set out under subparagraph (a) 
shall apply." 
 Paragraph 7(c) sets out the criteria on the basis of which a foreign producer/exporter in a country 
falling within the category defined by paragraph 7(b), in this case China, may make a claim, in 
writing, providing evidence that it operates under market economy conditions.
255  If successful, such a 
producer/exporter will be treated under the first option in paragraph 7(b).  That is, if successful, the 
determination of normal value for such a producer  will be made in accordance with the rules 
applicable to market economy countries, as set out in Articles 2(1) – 2(6) of the Basic AD Regulation.  There are no claims in this dispute with respect to the market economy test per se , either as such, or as 
applied in the original investigation or the expiry review. 
                                                      
255 The relevant criteria, referred to as the "m arket economy test", require evidence that:  
(a) decisions of firms regarding prices, costs and in puts, including for instan ce raw materials, cost 
of technology and labour, output, sales and investment, are made in response to market signals reflecting supply 
and demand, and without significant State interference in  this regard, and costs of major inputs substantially 
reflect market values, 
(b) firms have one clear set of basic accounting records which are independently audited in line 
with international accounting standards and are applied for all purposes,  
(c) the production costs and financial situation of firms are not subject to significant distortions 
carried over from the former non-market economy system, in particular in relation to depreciation of assets, 
other write-offs, barter trade and pa yment via compensation of debts,  
(d) the firms concerned are subject to bankrupt cy and property laws which guarantee legal 
certainty and stability for the operation of firms, and  
(e) exchange rate conversions are carried out at the market rate. WT/DS405/R 
Page 62  
 
  
7.64 The subject of China's "as such" claims is  paragraph 5 of Article 9 of the Basic 
AD Regulation, which explains the modalities with regard to the imposition of anti-dumping duties.  
It reads, in relevant part: 
"An anti-dumping duty shall be imposed in the appropriate amounts in each case, on 
a non-discriminatory basis on imports of a product from all sources found to be 
dumped and causing injury, except for imports from those sources from which 
undertakings ... have been accepted.  The Regulation imposing the duty shall 
specify the duty for each supplier or, if that is impracticable, and in general 
where Article 2(7)(a) applies, the supplying country concerned ." (emphasis 
added) 
Thus, Article 9(5) sets out two circumstances in which a duty for each supplier will not be specified: 
(1) where it is impracticable to name each supplier,  and (2) in general, wher e Article 2(7)(a) of the 
Basic AD Regulation applies – that is, where normal value is determined "on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other 
countries, including the Community, or where those are not possible, on any other reasonable basis, 
including the price actually paid or payable in th e Community for the like product, duly adjusted if 
necessary to include a reasonable profit margin."  In  these cases, the regulation imposing the duty will 
specify a duty rate for the "supplying country concer ned" rather than for "each supplier".  In other 
words, a single "country-wide" duty rate will be specified, rather than an individual duty rate for "each supplier".  
 
7.65 Nonetheless, pursuant to Article 9(5) of the Basic AD Regulation, the Commission will 
specify an individual duty rate in investigations where Article 2(7)(a) applies for producers/exporters 
who can demonstrate that they satisfy all of the following criteria: 
"(a) in the case of wholly or partly foreign owned firms or joint ventures, exporters 
are free to repatriate capital and profits; 
(b) export prices and quantities, and conditions and terms of sale are freely 
determined; 
(c) the majority of the shares belong to private persons; state officials appearing on 
the board of directors or holding key manage ment positions shall either be in minority 
or it must be demonstrated that the company is nonetheless sufficiently independent 
from State interference; 
(d) exchange rate conversions are ca rried out at the market rate; and 
(e) State interference is not such as to permit circumvention of measures if individual 
exporters are given different rates of duty." 
These criteria are referred to as the "individual treatment" ("IT") test.  If a producer/exporter in an 
investigation where a single country-wide duty rate  is specified under Article 9(5) of the Basic 
AD Regulation demonstrates that it satisfies thes e conditions, the Commission will specify an 
individual duty rate for that producer/exporter.  Produ cers/exporters who do not satisfy the IT test will 
be subject to the country-wide duty rate. 
7.66 In sum, for a Chinese producer/exporter subject  to an anti-dumping investigation in the 
European Union, the following are the possibilities w ith respect to the determination of normal value 
and the imposition of duty:  WT/DS405/R 
  Page 63  
 
  If the producer/exporter fulfils the market econom y conditions, that is, if it can demonstrate 
that it operates under market economy principles,  then under Article 2(7)(b), its normal value 
will be determined on the same basis as  for producers in market economies, under 
paragraphs (1)-(6) of Article 2.  A dumpi ng margin for that producer/exporter will be 
calculated by comparing that normal value to the export prices of that producer/exporter, and 
an individual duty rate will be a pplied to that producer/exporter. 
 If the producer/exporter fails to fulfil the mark et economy conditions, then its normal value 
will be determined, pursuant to Article 2(7)(a ), on the basis of an alternative method 
(typically based on prices in an analogue third country).  Whether an individual duty rate is specified for it, based on a comparison of the producer/exporter's own export sales with the normal value determined, will depend on whet her the producer/exporter requests and is 
granted IT. 
o If the producer/exporter makes a request for IT  and demonstrates that it satisfies the 
five criteria set out in Article 9(5) of the Basic AD Regulation, the producer/exporter 
will have an individual duty rate, calculate d on the basis of its own export prices, 
specified for it. 
o Otherwise, the producer/exporter will be subj ect to a country-wide duty rate based on 
the normal value determined.  The determina tion of the export price used to calculate 
that countrywide duty rate will depend on th e level of cooperation on the part of the 
non-IT exporters altogether. If the level of cooperation is high, i.e. if the cooperating 
non-IT exporters account for close to 100 pe r cent of all exports, the export price will 
be based on a weighted average of the actual price of all export transactions effected by these exporters.  If, however, the level of cooperation is low, i.e. if the non-IT 
exporters account for significantly less than 100 per cent of all exports, the 
Commission will resort to facts available to complete the missing information.  The selection of the facts available will depend on the gravity of non-cooperation and may 
include statistical import data. 
2. Claims I.1, I.2, I.3 and I.4 - Alleged violation of Articles 6.10, 9.2, 9.3 and 9.4 of the 
AD Agreement 
(a) Arguments of the parties 
7.67 China argues that Article 6.10 of the AD Agre ement requires investigating authorities in 
principle to calculate an individual margin of dumping for each exporter/producer of the allegedly 
dumped imports. Exceptionally, it allows the us e of a sample where the number of exporters, 
producers, importers or types of products involved is high.  For China, the text and context of 
Article 6.10 make clear that this is the sole exception to the mandatory rule of calculating an 
individual dumping margin for each known exporter or producer.   China argues that Article 9(5) of the Basic AD Regulation creates an additional ex ception to the general rule of calculating an 
individual dumping margin for each known producer or exporter.  China recognizes that Article 9(5) 
refers to the imposition of anti-dumping duties, but c ontends that, "logically the determination of an 
individual anti-dumping duty presupposes the dete rmination of an individual dumping margin."
256  
Given that the determination of dumping margins and anti-dumping duties are loosely linked, China considers that, effectively, whether an expor ter/producer qualifies for IT under Article 9(5) 
determines whether an individual ma rgin will be calculated for it, since only after the determination of 
such an individual margin can an individual dum ping duty be applied to it.  By providing that 
producers/exporters from NMEs will be subject to a country-wide margin of dumping unless they 
                                                      
256 China, first written submission, paras. 189-191, 196 and 201. WT/DS405/R 
Page 64  
 
 satisfy the criteria in that provision, China asserts that Article 9(5) therefore violates Article 6.10 of 
the AD Agreement as such.
257   
7.68 Assuming this claim is within the Panel's term s of reference, the European Union contends 
that Article 9(5) of the Basic AD Regulation is  not inconsistent with Article 6.10 of the 
AD Agreement.  The European Union begins its  argument by detailing the basic rationale behind 
Article 9(5) of the Basic AD Regulation, which in the European Union's view reflects, in the case of 
NMEs, the concept that "the imposition of anti-dumping measures primarily aim at addressing the actual source of price discrimination".
258  The European Union explains that, in its view, in a NME, 
the State, in view of its control over the means of production and intervention in the economy, can be considered as one supplier w hose dumping behaviour can be identified and addressed under the 
AD Agreement.  For the European Union, in view of  State control over international trade in a NME, 
it would not be relevant to name exporting companie s which do not act independently from the State, 
as they collectively constitute a single supplier, th e State.  Moreover, the European Union contends 
that application of a single duty is necessary to avoid circumvention of anti-dumping measures by channelling exports through the supplier with the low est duty rate.  The European Union next explains 
that it is entitled to treat China as a non-market economy, inter alia  by applying Article 9(5) of the 
Basic AD Regulation.  The European Union conten ds that Article 6.10 of the AD Agreement cannot 
be interpreted to mean that sampling is the only exception to the general principle of calculating an 
individual margin for each producer involved in an investigation.
259  In this regard, the 
European Union asserts that the panel in Korea – Certain Paper  established the principle that 
Article 6.10 permits an investigating authority to treat two or more separate legal entities as a single 
supplier and determine an individual margin of dumping for that supplier.260   
7.69 According to the European Union, Article 9( 5) of the Basic AD Regulation allows the EU 
authorities to identify the source of dumping in investigations involving NMEs, i.e. the State as supplier, or independent suppliers.
261  The European Union considers th at, in the context of a NME, it 
is entitled to presume State control of international tr ade, and therefore the fact that the burden rests 
on NME exporters/producers to demonstrate that they  satisfy the conditions in Article 9(5) of the 
Basic AD Regulation is justified.262  The European Union reiterates its  view that Article 9(5) of the 
Basic AD Regulation does not relate to the determ ination of dumping margins, but merely addresses 
this threshold question.263 
7.70 China argues that Article 9.2 of the AD Agreem ent clearly establishes that an individual anti-
dumping duty has to be established for each producer /exporter, that would be the appropriate duty 
amount for that producer/exporter.264  For China, the requirement to specifically name the suppliers, 
read together with Article 6.10, establishes that the duty must be established on an individual basis for 
each producer/exporter except where it is impractic able to do so because of the large number of 
producers/exporters involved.  Moreover, China consid ers that the context of Article 9.2, referring in 
                                                      
257 China, first written submission, paras. 209 and 211. 
258 European Union, first written submission, para. 58. 
259 European Union, first written submission, paras.  61, 69-75 and 79-86; second written submission, 
paras. 24-29. 
260 European Union, first written submission, paras. 88-90, citing Panel Report, Korea – Anti-Dumping 
Duties on Imports of Certain Paper from Indonesia ("Korea – Certain Paper "), WT/DS312/R, adopted 
28 November 2005, DSR 2005:XXII, 10637, paras. 7.159-7.162 and 7.168. 
261 European Union, first written submission, para. 98. 
262 European Union, second written submission, paras. 33-34.  In this regard, the European Union also 
relies on Paragraph 15(d) of China's Accession Protocol, wh ich it asserts establishes that the European Union is 
entitled to treat China as a non-market economy country until 2016, and provides  for a reversal of the burden of 
proof when determining price comparability.  Id., paras. 34-35. 
263 European Union, first written submission, para. 68. 
264 China, first written submission, para. 215.  WT/DS405/R 
  Page 65  
 
 this regard to Article 9 as a whole, Article 6.10, an d Articles 9.4 and 9.5 in particular, lends support to 
the view that the dumping margin and the anti- dumping duty are each to be established on an 
individual basis.  China contends that Article 9. 2 does not allow for automatic imposition of duty on a 
country-wide basis for producers who fail to satisfy  the criteria of Article 9(5) of the Basic 
AD Regulation, and Article 9(5) of the Basic AD Regul ation is therefore inconsistent with Article 9.2 
of the AD Agreement.
265  China asserts that, by not determining the duty on an individual basis and 
imposing a country-wide duty, the European Union fa ils to collect duties in "appropriate amounts" as 
required by Article 9.2 of the AD Agreement.266   
7.71 The European Union  contends that Article 9.2 of the AD Agreement does not require an anti-
dumping duty to be company-specific, but merely that the suppliers be "named".  Thus, for the 
European Union, Article 9(5) of the Basic AD Regulation does not fall within the scope of that 
Article.  Moreover, the European Union contends  that "appropriate amounts" in the context of 
Article 9.2 refers to the "proper" amount, which ma y be calculated for the State as one supplier in an 
investigation involving a NME.  In the European Un ion's view, Article 9.2 permits the imposition of 
duties on a country-wide basis in the case of imports  from NMEs, so long as the duty does not exceed 
the "appropriate" amount calculated for the "source" or  supplier of the imports, the State.  In any 
event, the European Union reiterates that sampling is  not the only circumstance in which investigating 
authorities can depart from the general principle of Article 6.10, first sentence.  The European Union 
contends that the term "impracticable" in the thir d sentence of Article 9.2 is not a mirror to the 
situation of a large number of s uppliers provided for in Article 6.10, but rather implies that 
investigating authorities can specify  a duty for the supplying country where individual duties would 
be ineffective, not feasible or not suited for bei ng used for a particular purpose, which in the 
European Union's view includes a situation wher e the specification of duties per supplier would 
render those duties ineffective, that is, without effect on the source of the price discrimination.267   
7.72 With respect to its claim under Article 9.3 of  the AD Agreement, Chin a recalls that Chinese 
producers who do not qualify for IT under EU law are assigned a margin of dumping calculated on a 
country-wide basis.  China asserts that this count ry-wide margin, based on a comparison of the normal 
value calculated for the analogue country with a we ighted average of export prices of all cooperating 
Chinese producers, as opposed to those of the individual  producers, is not calculated consistently with 
Article 2 of the AD Agreement.  According to Ch ina, a duty based on such a margin is, in turn, 
inconsistent with Article 9.3, as it will result in the collection of duty from some exporting producers 
which exceeds their proper dumping margin.268   
7.73 As an initial matter, the European Union  contends that China's claim under Article 9.3 of the 
AD Agreement is dependent on a finding that Ar ticle 9(5) of the Basic AD Regulation infringes 
Article 9.2, and to some extent, Article 6.10 of  the AD Agreement as such.   Since the European 
Union considers that these claims must fail, it asser ts that China's Article 9.3 claim should also be 
rejected.  Nonetheless, the European Union asserts th at since non-IT suppliers are part of the single 
entity, the State, and their export prices are used to calculate the dumping margin of the State, the 
manner in which the dumping margin is calculate d for the State does not differ from the manner in 
which the European Union calculates dumping margins for related companies, and both are consistent 
with the AD Agreement.269   
7.74 China asserts that, to the extent that it applies to investigations in which sampling is used, 
Article 9(5) of the Basic AD Regulation is inconsis tent with Article 9.4 of the AD Agreement for two 
                                                      
265 China, first written submission, paras. 220-222. 
266 China, first written submission, para. 234. 
267 European Union, first written submission; paras. 101, 104-105, 109, 111, 122 and 124. 
268 China, first written submission, paras. 242-243. 
269 European Union, first written submission, paras. 131-134. WT/DS405/R 
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 reasons.  First, the duty rate calculated for non-sampled cooperating pro ducers will reflect the 
weighted average of the margins calculated for th e sampled producers which, to the extent those 
sampled producers were not granted IT, will be inc onsistent with Article 2 of the AD Agreement.  
Second, China asserts that the last sentence of Article 9.4 of the AD Agreement establishes an 
unqualified obligation to apply individual duties to  any producer individually examined under 
Article 6.10.2 of the AD Agreement.  However, Article 9(5) subjects the right to an individual duty to 
the fulfilment of additional conditions.  Thus, producers examined individually under the EU 
provision implementing Article 6.10.2 of the AD Ag reement will only be asses sed an individual duty 
if they satisfy Article 9(5) of the Basic AD Regulation.
270  
7.75 As an initial matter, the European Union conte nds that China's claim under Article 9.4 of the 
AD Agreement is entirely dependent on its claims under Articles 6.10 and 9.2 of the AD Agreement.  
The European Union asserts that, since Article 9(5)  of the Basic AD Regulation is not inconsistent 
with the obligations set forth under those two pr ovisions, China's claim under Article 9.4 of the 
AD Agreement should also be rejected.  In any even t, the European Union asserts that China's claim 
is wrong as a matter of fact, since it ignores that the dumping margin is calculated for the supplier, the 
State, and where a sample is involved, the dut y imposed on non-sampled cooperating suppliers does 
not exceed the weighted average dumping margin s for both sampled MET/IT suppliers and the 
intermediate results found for non-IT suppliers.271  
(b) Arguments of third parties  
(i) Brazil 
7.76 Brazil argues that the methodology used to cal culate dumping margins set out in Articles 2 
and 6.10 of the AD Agreement, as well as the ex ceptions to that methodology, only apply where 
prices and costs are established according to market-e conomy rules.  Brazil considers that exceptional 
regimes could apply to the determin ation of normal value and export pr ice in investigations targeting 
NMEs, and that the investigating authority enjoys  a certain degree of discretion in establishing its 
methodology for the calculation of the dumping margin in the case of NME countries, and in 
establishing the criteria that exporters from NME count ries must fulfil in order to be receive market 
economy treatment.  Brazil also considers that WTO Members are not prevented from treating legal 
entities located in NME countries collectively as a single producer/exporter for the purposes of 
dumping determinations.  For Brazil, whether or not a particular company should be classified as a distinct company or as a single producer/exporter in conjunction with other companies under Article 6.10 of the AD Agreement largely depends on the facts in each case.  Brazil asserts that, in 
NMEs, single-exporter treatment is all the more justified.  Brazil asserts that what matters is how the 
European Union's provision is applied in prac tice, and asks the Panel to assess whether the EU 
legislation and relevant administrative practice provide adequate opportunities and clear rules for 
Chinese exporters to show whether they are operati ng independently from the state in respect of a 
finite number of clear criteria, and whether, on this  basis, they may be entitled to obtain an individual 
dumping margin.
272  Brazil also asserts that Article 9 of  the AD Agreement does not establish that 
authorities must impose individual duties on each co mpany, nor does it prevent the authorities from 
considering closely related companies as a si ngle entity for the purposes of dumping margin 
determination.  Brazil considers that a violation of Article 9.2 of the AD Agreement is entirely 
dependent on a violation of Article  9.3, and that an anti-dumping duty that is in conformity with 
Article 9.3 is necessarily "appropriate" within the mean ing of Article 9.2.  Brazil asserts that, since the 
margin of dumping and the appropriate amount of an ti-dumping duty can only be determined after the 
decision on whether or not companies may be regarded as single entities for dumping margin 
                                                      
270 China, first written submission, paras. 267, 269 and 271. 
271 European Union, first written submission, paras. 136-137. 
272 Brazil, third party written submission, paras. 15-19 and 22-24.  WT/DS405/R 
  Page 67  
 
 determination purposes, it would be illogical to c onclude that not establis hing individual duties for 
companies which are found to operate as a single e xporter is incompatible with Article 9 of the 
AD Agreement.
273 
(ii) Colombia 
7.77 Colombia recalls that the Contracting Parti es to the GATT 1947 identified the difficulties of 
imposing anti-dumping duties on products from non-market economy countries arising from the 
difficulty in determining the normal value of goods not produced under market conditions.  Colombia 
notes in this regard the Second Ad Note to Paragraph 1 of Article  VI of the GATT 1994, in Annex 1 
of the GATT 1994 ("Second Ad Note to Article VI:1 of the GATT 1994"), which is reflected in 
Article 2.7 of the AD Agreement.  Colombia thus considers that WTO Members may use 
methodologies such as the reconstruction of the normal value through an analogue country to 
calculate the normal value of goods subject to  a dumping investigation from non-market economy 
countries.274  Colombia invites the Panel to determine if  in the particular circumstances of the case, 
the differential treatment that th e European Union grants to China and other countries, given that 
those countries do not have a market economy, is allowed under Article 2.7 of the AD Agreement and 
the second Ad Note to Article VI:1 of the GATT 1994.   
(iii) Japan 
7.78 Japan takes the view that the only exception to the mandatory rule of individual dumping 
margins established in the first sentence of Articl e 6.10 of the AD Agreement is that set out in the 
second sentence, i.e. where the number of known export ers or producers is so large as not to allow for 
individual calculations.  However, Japan notes that  neither this nor any other provision of the 
AD Agreement sets forth any explicit criteria to iden tify an exporter or a producer.  Japan considers 
that the importing Member has a certain amount of di scretion to define the meaning of these terms.  
Japan notes, in this regard, the report of the panel in Korea – Certain Paper , and asserts that, 
depending on the particular facts of a given case, th e authority may find that a group of multiple legal 
entities constitutes a single exporter.  However, Jap an distinguishes this question from the obligation 
to determine an individual margin of dumping for the exporter.  Once the authority determines what 
constitutes an "exporter", Japan considers that th e obligation to determine individual margins of 
dumping applies with respect to the exporters so identified, and individual margins of dumping for 
such exporters must be calculated unless the exception in the second sentence of Article 6.10 applies.  
Japan notes that Article 9(5) of the Basic AD Regula tion appears to set criteria to identify individual 
exporters in the context of investigations involvi ng non-market economies.  Japan does not take any 
position whether the specific criteria set forth in Article 9(5) of the Basic AD Regulation would be 
consistent with Article 6.10 of the AD Agreement,  and requests that the Panel carefully review how 
the criteria in Article 9(5) of the Basic AD Regula tion function in antidumping investigations in light 
the mandatory rule and exception in Article 6.10.275   
(iv) Turkey 
7.79 Turkey takes the view that, under the first sen tence of Article 6.10 of the AD Agreement, 
individual treatment is a general rule, and the second sentence of Article 6.10 is an exception to the 
general rule allowed where sampling is used.  Turk ey considers that sampling may not be the sole 
exception to the general rule envisaged in Article 6.10 of the AD Agreement.  According to Turkey, 
the AD Agreement contains rules for economies operating under market economy conditions.  Given 
that there are no specific rules or exceptions provi ded in the AD Agreement for economies that are not 
                                                      
273 Brazil, oral statement, paras. 5-6 and 9. 
274 Colombia, third party written submission, paras. 7-9 and 11. 
275 Japan, third party written submission, paras. 6, 8, 9-11 and 14. WT/DS405/R 
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 operating under market economy conditions, Turkey be lieves that it would not be appropriate to look 
for a non-market economy exception in Article 6.10 itsel f.  However, Turkey considers it is expected 
that there will be exceptions to the general rul es on the calculation of normal value and export price 
for NMEs, referring in this regard to the second Ad Note to Article VI:1 of the GATT 1994 and 
China's Accession Protocol.  In Turkey's view, it is acknowledged by WTO Members that China is 
not operating under full market economy conditions ye t, and both domestic and export sales prices are 
not freely determined by market economy forces, and it is therefore reasonable to disregard export 
sales prices as well as domestic sales prices.  More over, Turkey considers that previous panel and 
Appellate Body reports demonstrate that it is not inconsistent with Article 6.10 of the AD Agreement 
to treat distinct legal entities as a single entity if the conditions so require.  Turkey also considers that 
sampling is not the only exception to the general rule in Article 6.10, first sentence, and there could be 
other situations, including circumstances where thre sholds are set for individual treatment, in which 
the investigating authorities may not determine individual margin  of dumping and accordingly, 
individual anti-dumping duties for each known exporter or producer.  Consequently, Turkey considers 
that a Member can legally set out a threshold reflec ting special circumstances in terms of the variables 
affecting production, sales and prices to provide IT under Article 6.10.
276 
(v) United States 
7.80 The United States disagrees with China's claim th at Article 9(5) of the Basic AD Regulation 
is inconsistent as such with Articles 6.10, 9.2, 9. 3, and 9.4 of the AD Agreement, considering China's 
legal arguments to be based on misunderstandings of  the relevant provisions of the AD Agreement.  
The United States considers that the general requireme nt in Article 6.10 for an investigating authority 
to calculate an individual margin of dumping a pplies only in respect of each known "exporter" or 
"producer," and thus, the investigating authority must  first decide whether a particular firm is an 
"exporter" or "producer."  For the United States, since the AD Agreement does not define exporter or 
producer or set out criteria for determining whethe r a particular entity constitutes an exporter or 
producer, an investigating authority is permitted to conclude, based on the facts, which entities 
constitute an individual producer or exporter as a condition precedent to calculating an individual 
dumping margin, including establishing which factors ma y be relevant to making that determination.  
For the United States, consideration of the relatio nship between companies and the reality of their 
respective commercial activities is particularly releva nt in the context of producers and exporters from 
a non-market economy.  The United States does not, how ever, agree with the European Union that the 
economic realities of firms in NMEs provide an  additional exception to the first sentence of 
Article 6.10, but considers this part of the investig ating authority's task in determining the exporters 
and producers for which it must generally determine an individual margin.  The United States submits 
that, to the extent that Article 9(5) of the Basi c AD Regulation is a mechanism for the investigating 
authority to examine the relationship between fi rms, that mechanism would not appear to be 
inconsistent with Article 6.10, but rather would be  critical to assist the investigating authority in 
complying with the general rule in Article 6.10 to calculate a single margin of dumping for every known exporter or producer.  The United States conte nds that, given the influence of the government 
of China in the commercial practices and decisions of  enterprises in China, it would make little sense 
for an investigating authority to assign an indi vidual dumping margin to an exporting company in 
China without first confirming that the compan y functions as an exporter separate from and 
independent of influence by the government, so as  to prevent possible shifting of export activities 
between production facilities and companies that ma y be legally distinct, in order to avoid anti-
dumping duties.  Thus, the United States concludes th at an investigating authority may apply criteria 
to determine whether an individual company is an exporter or producer wit hout acting inconsistently 
with Article 6.10 of the AD Agreement.  The United States also submits that China's interpretation of 
Article 9 is incorrect.  Furthermore, for the Un ited States, the decision as to whether a group of 
companies functions as a single entity is one that an  investigating authority must make before it can 
                                                      
276 Turkey, third party written submission, paras. 3, 5-6, 9-10, 12 and 14-15.  WT/DS405/R 
  Page 69  
 
 know how duties should be applied to those compan ies' imports, and if it concludes that multiple 
companies are closely related and function as a singl e entity, an investigating authority may apply a 
single duty to all of those companies' imports, even under China's reading of Article 9.  In any event, 
the United States considers that China's claims pursu ant to Article 9 of the AD Agreement appear to 
be dependent on its claims under Article 6.10, which it maintains are based on an incorrect 
understanding of that provision, and thus provide no basis for Ch ina's consequential claims under 
Article 9 of the AD Agreement.
277   
(vi) Viet Nam 
7.81 Viet Nam considers that the sole exception to  the rule of Article 6.10 of the AD Agreement 
requiring investigating authorities to determine i ndividual margins of dumping for exporters or 
producers concerned is sampling where the number of exporters, producers a nd /or importers involved 
is so large as to make a determination impracticable.  Viet Nam asserts that Article 9(5) of the Basic AD Regulation requires exporters and producers from non-market economy country to satisfy additional conditions in order to qualify for Individu al Treatment (IT), and is therefore inconsistent 
with Article 6.10 of AD Agreement.  It is Viet Nam's view that Article 9(5) of the Basic 
AD Regulation only provides for individual duties for exporters which satisfy the IT requirements, 
which Viet Nam considers extra and discriminatory c onditions, and is thus in violation of Article 9.2 
of the AD Agreement, which Viet Nam maintains requires individual anti-dumping duties.  Viet Nam 
considers that country-wide anti-dumping duties on  non-IT exporters will necessarily exceed the 
individual dumping margin of some of the exporters/ producers included in the average duty calculation, in violation of Article 9.3 of the AD Agreement.  Viet Nam maintains that, because under 
Article 9(5) of the Basic AD Regulation, the dumping margin for exporter/producers not qualifying 
for IT will not be calculated on basis of individual evidence of exporters or producers, the investigating authorities are unable to calculate a weighted-average dumping margin of all sampled 
exporters or producers as stipulated in Article 9. 4 of the AD Agreement.  In addition, Viet Nam 
asserts that, by establishing additional conditions before  individual duties will be applied, Article 9(5) 
of the Basic AD Regulation is inconsistent with Ar ticle 9.4 of the AD Agreement, which provides that 
the authorities shall apply individual duties to impor ts from any exporter or producer not included in 
the examination who has provided the necessary info rmation during the course of the investigation.
278   
(c) Evaluation by the Panel 
7.82 We begin by noting that these same claims were recently considered by the panel in EC –
Fasteners (China) , a dispute between these same parties, in which the parties made substantially the 
same arguments as those su mmarized above.  The final report of th e panel in that dispute was issued 
to the parties on 29 September 2010, and circulated to WTO Members and the public on 3 December 2010, that is, in sufficient time for the pa rties to consider the findings of that panel in 
formulating and presenting their arguments to us.
279  Indeed, in its second written submission, China 
explicitly relied upon those findings in its arguments concerning these claims.280  That report is 
                                                      
277 United States, third party written submission, paras. 2, 5, 6, 9, 10, 13-14 and 16-17; United States, 
oral statement, paras. 5 and 11. 
278 Viet Nam, third party written submission, paras. 6-7, 9-10, 12 and 13. 
279 The interim report in EC –Fasteners (China) was issued to the parties on 10 August 2010.  First 
written submissions were received from the parties in  this dispute on 20 August 2010 (China) and 
24 September 2010 (European Union).  As noted above, the first meeting of the parties with the Panel was 3-
4 November 2010.  Written rebuttals were received from  the parties on 7 December 2010, the Panel having, 
following a request from the European Union, extended the original deadline.  The Panel's second meeting with 
the parties was held 25-26 January 2011.   
280 China refers to the report of the panel in EC – Fasteners (China) in its second written submission in 
addressing the European Union's preliminary ruling request, as well as in support of its arguments with respect 
to its "as such" and "as applied" claims regarding Artic le 9(5) of the Basic AD Regulation.  China, second WT/DS405/R 
Page 70  
 
 presently before the Appellate Body as the subject of an appeal and cross-appeal by the parties.
281  A 
decision in that appellate proceeding is not expected before we issue our final report in this dispute to 
the parties.  The European Union stated, at our second meeting, that only "a dopted" panel reports are 
binding and create legitimate expe ctations among Members, and sugg ested that we consider waiting 
for any Appellate Body report on this issue, in orde r to take such a report into account before issuing 
our interim report in the present case, asserting that this would not cause an undue delay in this 
Panel's proceedings, and would ensure that our findi ngs effectively contribute to a prompt settlement 
of this dispute.282  Subsequently, after the appeal had been filed, the European Union requested in 
writing that we delay issuance of our interim repor t until after the Appellate Body had ruled in the 
appeal in EC – Fasteners (China) .283  China opposed the Eur opean Union's request.284  We denied the 
European Union's request.285 
7.83 While we recognize that the unadopted report of a panel does not bind the parties, we 
nonetheless consider that we may take it into account in our own deliberations, and, to the extent we 
find the analysis, reasoning, and conclusions of th at report persuasive on the issues before us, may 
follow it.  In our view, this is a more effective a nd efficient course of action than to await a decision 
from the Appellate Body, particularly where, as here , the appeal proceedings have been delayed at the 
joint request of the parties, a nd the complainant objects to delay.286  Thus, we have considered 
carefully the views of the panel in EC – Fasteners (China)  in our deliberations on the dispute before 
us.  As discussed in more detail below, we find th at panel's analysis and reasoning persuasive on the 
issues arising in our consideration of China's "as such " claims with respect to Article 9(5) of the Basic 
AD Regulation, and have therefore largely adopted its reasoning and conclusions as our own in this 
dispute.   
7.84 We begin by noting the disagreement between th e parties as to the scope and operation of 
Article 9(5) of the Basic AD Regulation.  The Euro pean Union asserts that Article 9(5) of the Basic 
AD Regulation deals with the imposition of anti-dum ping duties, and does not concern the calculation 
of dumping margins at all.  China, on the other ha nd, considers that Article 9(5) is not limited to 
determining whether individual NME producers will r eceive individual anti-dumping duties, but also 
governs whether individual dumping margins will be determined.  Looking at the provision as a whole, we agree with China in this respect.  We note that, conceptually, the imposition of an 
individual anti-dumping duty must logically be pr eceded by the calculation of an individual dumping 
margin.  It seems clear to us that no other provision  of EU legislation or regulation governs whether or 
not an individual dumping margin will be determ ined for individual producers/exporters, and the 
European Union has not argued otherwise.  Given the link between the calculation of a dumping 
margin and the imposition of an anti-dumping duty, it seems to us that, normally, an investigating 
authority would calculate a dumping margin and impose an anti-dumping duty on the same basis.  
That is, an individual anti-dumping duty would, and could, only be imposed if an individual dumping 
                                                                                                                                                                     
written submission, paras. 28, 31, 34, 42, 59, 60, 61, 1513 a nd 1514, fns. 20, 23, 34, 40, 41, 45, 61, 88 and 934.  
The European Union referred to China's re liance on the report of the panel in EC – Fasteners (China) in the 
context of its response to the preliminary ruling request co ncerning China's "as such" cl aims, but not otherwise.  
European Union, second written submission, paras. 13-14. 
281 Notification of an Appeal by the European Union, WT/DS397/7, dated 29 March 2011; and 
Notification of an Other Appeal by China, WT/DS397/8, dated 5 April 2011. 
282 European Union, opening oral statement at the second meeting with the Panel, para. 8. 
283 European Union, letter dated 28 March 2011. 
284 China, letter dated 30 March 2011. 
285 Communication from the Panel, dated 6 April 2011. 
286 WT/DS397/6, dated 13 January 2011.  The parties proposed, pursuant to a procedural agreement 
between them, taking into account the workload of the Appellate Body, that the DSB decide to extend to 
25 March 2011 the 60-day time period in Article 16.4 of the DSU, as applicable to DS397.  The DSB adopted the proposed decision in that document at its meeting of 25 January 2011.  WT/DSB/M/291, para. 84, 
8 March 2011.  WT/DS405/R 
  Page 71  
 
 margin were previously calculated.  Thus, we consider that whether or not the Commission will 
calculate individual dumping margins for individual producers/exporters in an investigation involving 
a NME is resolved exclusively through the operation of Article 9(5) of the Basic AD Regulation.  The 
fact that the provision refers specifically only to the imposition of anti-dumping duties does not affect our views in this regard.   
7.85 We note that the same conclusion was reached by the panel in EC – Fasteners (China) .  We 
agree with the reasoning of that panel, and its conclusion:  
"Article 9(5) of the Basic AD Regulation concerns not only the imposition of anti-
dumping duties but also the calculation of margins of dumping. ... in operation, the result of the IT test in Article 9(5) of the Basic AD Regulation determines the nature 
of the margin calculation the EU authoriti es will undertake, either individual or 
country-wide."
287  
7.86  Turning to the substance of China's claims ag ainst Article 9(5) of the Basic AD Regulation, 
we note that China's arguments under Articles 6.10, 9.2, 9.3, and 9.4 of the AD Agreement all rest on the premise that the AD Agreement requires individual treatment for producers/exporters subject to an 
investigation with respect to the determination of dumping, including calculation of an individual 
dumping margin based on each producers'/exporters' ow n export prices, and the imposition of a duty 
rate based on that individually calculated margin.
288   
7.87 Like the panel in EC – Fasteners (China) , we consider it appropriate to consider first the 
provision of the AD Agreement most directly addressing the question of individual treatment, Article 6.10, and then move on, as necessary,  to the other provisions raised by China.
289  Article 6.10 
of the AD Agreement provides, in pertinent part: 
"6.10  The authorities shall, as a rule, determine an individual margin of dumping 
for each known exporter or producer concerne d of the product under investigation.  In 
cases where the number of exporters, producers, importers or types of products involved is so large as to make such a determination impracticable, the authorities 
may limit their examination either to a reasonable number of interested parties or 
products by using samples which are statis tically valid on the basis of information 
available to the authorities at the time of the selection, or to the largest percentage of 
the volume of the exports from the country  in question which can reasonably be 
investigated. ... 
 6.10.2 In cases where the authorities ha ve limited their examination, as 
provided for in this paragraph, they shall nevertheless determine an 
individual margin of dumping for any exporter or producer not initially 
selected who submits the necessary inform ation in time for that information 
to be considered during the course of  the investigation, except where the 
number of exporters or producers is so  large that individual examinations 
would be unduly burdensome to the authorities and prevent the timely 
completion of the investigation.  Voluntary responses shall not be discouraged." 
                                                      
287 Panel Report, EC – Fasteners (China) , para. 7.77. 
288 With the exception, of course, of the possible  imposition of a lesser duty.  However, since the 
imposition of a lesser duty may occur regardless of the basis on which the dumping margin(s) was(were) calculated, this possibility does not affect our resolution of the issues in this dispute. 
289 Panel Report, EC – Fasteners (China) , para. 7.84. WT/DS405/R 
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 7.88 In our view, it is clear, as the panel in EC – Fasteners (China)  concluded, that Article 6.10 
establishes the principle that an investigating aut hority must calculate an individual dumping margin 
for each known exporter or producer of the product under investigation, unless the single exception to that principle, set out in the second sentence, app lies.  We find nothing in the arguments of the 
European Union that would support the conclusion that  Article 6.10 admits of any other exceptions to 
the principle of individual dumping margins than the situation outlined in the second sentence.  We 
also consider it clear that Article 9(5) of the B asic AD Regulation does not, in fact, serve to resolve 
the question whether two legally distinct entities may be treated as a single producer, for which a 
single dumping margin may be calculated, but rather presumes this to be the case, and requires individual exporters to demonstrate otherwise, on the basis of criteria that do not directly relate to the 
relationship between the entities in question.   
7.89 Thus, and for the same reasons as set out in more detail by the panel in EC – Fasteners 
(China) ,
290 we conclude that Article 9(5) of the Basic AD Regulation is inconsis tent with Article 6.10 
of the AD Agreement as such, because it conditions the calculation of individual dumping margins for 
producers/exporters in investigations involving NMEs  on the satisfaction of the IT conditions in the 
provision.   
7.90 Turning to China's claim under Article 9.2 of th e AD Agreement, we note that this provision 
also concerns individual treatment, in the imposition of anti-dumping duties.  Article 9.2 provides, in 
pertinent part: 
"When an anti-dumping duty is imposed in r espect of any product, such anti-dumping 
duty shall be collected in the appropriate amounts in each case, on a 
non-discriminatory basis on imports of such product from all sources found to be 
dumped and causing injury, except as to imports from those sources from which price undertakings under the terms of this Agreem ent have been accepted.  The authorities 
shall name the supplier or suppliers of th e product concerned.  If, however, several 
suppliers from the same country are involved, and it is impracticable to name all these 
suppliers, the authorities may name the s upplying country concerned.  If several 
suppliers from more than one country are involved, the authorities may name either 
all the suppliers involved, or, if this is  impracticable, all the supplying countries 
involved." 
7.91 Article 9.2, which has remained unchanged sin ce it was negotiated in the Kennedy Round, is 
a predecessor to the more detailed rules set out  in Article 6.10, which was added to the 
AD Agreement following the Uruguay Round, and further elaborates on the basic principle of 
individual treatment established in the earlier provision.  While the language is somewhat different, in our view, the similar structure of the two provisions supports the conclusion that they concern the same basic principle, that individual exporters and producers in anti-dumping investigations should be treated individually in the determination and impos ition of anti-dumping duties.  Moreover, we see 
nothing in the text of Article 9.2 of the AD Agreemen t, or in its context, that would suggest that the 
notion of "impracticable" in that provision may re late to the effectiveness of anti-dumping measures 
imposed.   
7.92 Thus, and for the same reasons as set out in more detail by the panel in EC – Fasteners 
(China) ,
291 we consider it clear that Article 9.2 is  properly understood to require investigating 
authorities to name the individual suppliers on whom anti-dumping duties are imposed, except where 
the number of suppliers is so large that it would be  impracticable to do so, in which case the supplying 
country may be named.  We therefore find that Article 9(5) of the Basic AD Regulation, which 
                                                      
290 Panel Report, EC – Fasteners (China) , paras. 7.88-7.98. 
291 Panel Report, EC – Fasteners (China) , paras. 7.103-7.112.  WT/DS405/R 
  Page 73  
 
 requires that a country-wide duty be imposed on pr oducers/exporters in investigations involving 
NMEs unless they satisfy the conditions for individual treatment in that provision, is inconsistent with 
Article 9.2 of the AD Agreement as such.  
7.93 With respect to China's claims under Articles 9. 3 and 9.4 of the AD Agreement, we note that 
that panel in EC – Fasteners (China)  exercised judicial economy with respect to these claims, 
concluding this to be appropriate, as a finding w ould neither contribute to the resolution of the 
dispute, nor aid in any resulting implementation.
292  Nothing in the arguments before us in this 
dispute293 leads us to conclude otherwise, and we th erefore, and for the same reasons, consider it 
appropriate to exercise judicial economy and refrain  from making findings with respect to China's 
claims under Articles 9.3 and 9.4 of the AD Agreement.   
3. Claim I.5 - Alleged violation of Article I:1 of the GATT 1994 
(a) Arguments of the parties 
(i) China 
7.94 China claims that Article 9(5) of the Basic AD Regulation violates Article I of the 
GATT 1994 because this provision only applies to so me WTO Members, including China, and not to 
all WTO Members.  For China, the automatic grant of individual treatment in the case of imports from 
market economy countries constitutes an advantage or  favour not granted in the context of imports 
from China and some other NMEs, in violation of Ar ticle I:1 of the GATT 1994.  China contends that 
while the IT conditions have to be satisfied by i ndividual producers/exporters, it is clear that they 
apply on the basis of the origin of the imports, as the requirements only apply to China and a few other non-market economy countries.  Finally, China asserts that the requirement to fulfil the 
additional criteria of Article 9(5) demonstrat es that the advantage of IT is not accorded 
"unconditionally", as whether an individual margin and individual duty are granted depends on the 
origin of the imports in question.  China maintains that its claim under Article I:1 is independent of its 
claim that Article 9(5) of the Basic AD Regulati on is inconsistent with various provisions of the 
AD Agreement.  In this regard, China contends that there is no conflict between the AD Agreement 
and Article I:1 of the GATT 1994, and thus the Pane l should consider the Article I:1 claim regardless 
of its findings with respect to the AD Agreement.
294 
(ii) European Union 
7.95 The European Union asserts that China's clai m under Article I:1 of the GATT 1994 depends 
on a finding that Article 9(5) of the Basic AD Regul ation is not consistent with the AD Agreement.  
The European Union contends that, if the AD Agre ement permits WTO Members to subject the right 
to an individual margin of dumping to the fulfilmen t of certain conditions in investigations involving 
NMEs, by virtue of the lex specialis  principle and Article II:2(b) of GATT 1994, there can be no 
violation of Article I of the GATT 1994.  The Eur opean Union notes that the General Interpretative 
Note to Annex 1A of the WTO Agreement provid es that, in the event of a conflict between a 
provision of the GATT 1994 and another Agreemen t of Annex 1A, the provision of the other 
Agreement prevails. Independently, the European Union also argues that treating two different 
situations in two different ways would not n ecessarily violate the most-favoured-nation ("MFN") 
principle contained in Article I of the GATT 1994.  In this regard, the Euro pean Union asserts that 
imports from market and non-market economies may be treated differently in anti-dumping 
                                                      
292 Panel Report, EC – Fasteners (China) , paras. 7.116-7.117. 
293 See China, first written submission, paras. 275-278. 
294 China, first written submission, paras. 285, 28 8-289, 291 and 294; China, answer to Panel 
question 9. WT/DS405/R 
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 investigations because they are different in nature .  Finally, the European Union asserts that any 
advantage in the case of IT is based on the nature of  the suppliers involved, rather than linked to the 
product or its origin, and therefore there is no di scrimination between like pr oducts in the sense of 
Article I:1 of the GATT 1994.  The European  Union argues that China assumes that the 
AD Agreement does not allow different treatment of suppliers from NMEs in asserting that there is no 
conflict between the AD Agreement and Article I:1 of the GATT 1994, and argues that this position is 
circular and should be rejected.  In the European  Union's view, a conflict exists where there is 
"incompatibility of contents", which includes situa tions where one Agreement prohibits what another 
permits.  In this case, should the Panel conclude that Article 9(5) does not violate the non-discrimination requirement of Article 9.2 of the AD Ag reement, by definition Ar ticle 9(5) of the Basic 
AD Regulation could not violate the non-discrimina tion provision of Article I:1 of the GATT 1994.
295  
(b) Arguments of third parties 
(i) Colombia 
7.96 Colombia asserts that, if the Panel concludes that Article 9(5) of the Basic AD Regulation is 
consistent with the European Union's obligations under the AD Agreement, it should find that there is 
no breach of Article I:1 of the GATT 1994.  Colombia considers that, in this case, the elements of 
Article I:1 of the GATT 1994 should be read together  with the provisions of the AD Agreement.  
Thus, Colombia invites the Panel to determine if, in the particular circumstances of the case, the 
differential treatment that the European Union gran ts to China and other countries, given that those 
countries do not have a market economy, is allowe d under Article 2.7 of the AD Agreement and the 
second Ad Note to Article VI:1 of the GATT 1994.  Colombia also comments on the parties' 
arguments concerning the term "unconditional" as used  in Article I.1 of the GATT 1994.  Colombia 
notes that the term unconditional does not mean that th e granting of an advantage cannot be subject to 
certain requirements.  For Colombia, what the Pa nel must determine is whether the conditions in 
Article 9(5) of the Basic AD Regulation breach Ar ticle I:1 of the GATT 1994, that is, if those 
requirements are discriminatory based on the origin of  the goods.  Finally, Colombia recalls China's 
commitments upon its accession to the WTO, and WTO Members' obligations towards China, as set 
out in its Protocol of Accession.296 
(ii) Viet Nam 
7.97 Viet Nam recalls that Article I.1 of the GATT 1994 sets out the principle of most-favoured-
nation treatment.  Viet Nam notes that, under Artic le 9(5) of the Basic AD Regulation, a NME 
exporter/producer which fails to satisfy the IT cr iteria would not receive an individual duty, thus 
receiving less favourable treatment than market ec onomy exporters/producers.  For Viet Nam, that a 
WTO Member accepts to be recognized as a non-mark et economy does not mean that it accepts such 
less favourable treatment.297  
(c) Evaluation by the Panel 
7.98 China claims that Article 9(5) of the Basic AD Regulation violates Article I:1 of the 
GATT 1994 because this provision subjects certain  NME WTO Members, including China, to 
additional conditions in order for exporting prod ucers to receive IT, while WTO Members with 
market economies automatically receive IT.  Accordi ng to China, automatically receiving IT is an 
"advantage" not accorded to imports from NMEs, in violation of Article I:1 of the GATT 1994.  
                                                      
295 European Union, first written submission, paras.  140, 142-143; European Union, second written 
submission, paras. 40-41. 
296 Colombia, third party written submission, paras. 16-18, 22 and 25-28. 
297 Viet Nam, third party written submission, paras. 14-15.  WT/DS405/R 
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 7.99 Article I:1 of the GATT 1994 provides: 
"With respect to customs duties and charges of any kind imposed on or in connection 
with importation or exportation or imposed on the international transfer of payments 
for imports or exports, and with respect to the method of levying such duties and 
charges, and with respect to all rules a nd formalities in connection with importation 
and exportation, and with respect to all matte rs referred to in pa ragraphs 2 and 4 of 
Article III, any advantage, favour, privilege or immunity  granted by any 
contracting party to any product  originating in or destined for any other country 
shall be accorded immediately and unconditionally  to the like product  originating 
in or destined for the territories of all other contracting parties."  (emphasis added) 
Article I:1 codifies the MFN principle, which "has l ong been a cornerstone of the GATT and is one of 
the pillars of the WTO trading system."
298  The text of this provision is clear.  WTO Members are 
under the obligation to treat like products equally, irrespective of their origin.299  T h a t  i s ,  
discrimination between like products originating in or destined for different countries is prohibited by 
the MFN principle.300  The language of Article I:1 establis hes that three elements must be 
demonstrated by a complaining party to establish a vi olation of Article I:1: (i) an advantage, favour, 
privilege or immunity of the type covered by Artic le I, (ii) is not immediately and unconditionally 
accorded to (iii) all like products of all WTO Members.301  
7.100  Turning to the facts of this case, it is clear to us that rules and formalities applied in anti-
dumping investigations, including Article 9(5) of the Basic AD Regulation, fall within the scope of 
the "rules and formalities in connection with importation"  referred to in Article I:1.  It is also clear, 
based on our conclusions above,302 that Article 9(5) affects imports from certain countries, 
establishing criteria for the determination whether th e export prices of producers or exporters subject 
to anti-dumping investigations in the European Uni on will be taken into consideration, individual 
margins of dumping calculated, and individual duties imposed upon importation of the relevant 
product to the European Union.  We agree with Chin a that the automatic grant of IT to imports from 
market economy countries is an "advantage" within the meaning of Article I:1.303  In our view, 
                                                      
298 Appellate Body Report, Canada – Certain Measures Affecting the Automotive Industry  ("Canada – 
Autos "), WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 2000:VI, 2985, para. 69; and 
Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences to 
Developing Countries  ("EC – Tariff Preferences "), WT/DS246/AB/R, adopted 20 April 2004, DSR 2004:III, 
925, para. 101. 
299 Appellate Body Report, EC – Bananas III , para. 190; and Appellate Body Report, EC – Tariff 
Preferences , para. 89. 
300 Appellate Body Report, Canada – Autos , para. 84. 
301 Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry ("Indonesia – Autos "), 
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 and 2, adopted 23 July 1998, and Corr. 3 and 4, DSR 1998:VI, 2201, para. 14.138.  
302 See paragraph 7.84 above. 
303 We recall that the scope of Article I:1 of the GATT 1994 has been interpreted broadly by previous 
WTO panels as well as GATT panels.  The panel in EC – Tariff Preferences  concluded that  
"the term 'unconditionally' in Article I:1 has a broader meaning than simply that of not 
requiring compensation.  While the Panel acknowledges the European Communities' argument that conditionality in the context of traditional MFN clauses in bilateral treaties may relate to 
conditions of trade co mpensation for receiving MFN treatment, the Panel does not consider 
this to be the full meaning of 'unconditionally' under Article I.1.  Rather, the Panel sees no reason not to give that term its ordinary meanin g under Article I:1, that is, 'not limited by or 
subject to any conditions'."   
Panel Report, European Communities – Conditi ons for the Granting of Tar iff Preferences to Developing 
Countries ("EC – Tariff Preferences "), WT/DS246/R, adopted 20 April 2004, as modified by Appellate Body 
Report WT/DS/246/AB/R, DSR 2004:III, 1009, para. 7.59.  The GATT panel in US – MFN Footwear WT/DS405/R 
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 individual treatment ensures that producers and exporte rs receiving such treatment will not be subject 
to a duty higher than their own dumping margin, as would be the case for some producers or exporters 
subject to a country-wide duty imposed on the basis of a margin calculated on average export prices.  
Moreover, Article 9(5) of the Basic AD Regulation lists the WTO Members, including China, whose producers are not automatically accorded the right to individual dumping ma rgins and anti-dumping 
duties, but must fulfil the conditions of that provision in order to benefit from that right.  Thus, the 
application of Article 9(5) of the Basic AD Regulation will, in some instances, result in import of the same product from different WTO members being treat ed differently in anti-dumping investigations 
by the European Union.  This to  us establishes that the advantage of automatic IT is conditioned on 
the origin of the products.  We therefore consid er that Article 9(5) of the Basic AD Regulation 
violates the MFN obligation set forth in Article I:1 of the GATT 1994.   
7.101  The European Union asserts that treating supplie rs in NMEs differently from suppliers in 
market economies does not violate Article I:1 of the GATT 1994, because they are in different situations.  In this regard, the European Union asserts th at the availability of an advantage can be 
subject to conditions, without viola ting Article I:1, where those conditio ns relate to the "situation or 
conduct" of the exporting country.
304  The European Union notes that various provisions in the 
AD Agreement explicitly provide for differing treatme nt of products from different Members, and 
that these do not violate Article I:1.  In the Eur opean Union's view, imports from market and NME 
countries may be subject to different treatment in anti-dumping investigations because they are different in nature, and theref ore no discrimination can arise.
305  However, in our view, imports from 
NMEs may be treated differently from imports from market economy countries only to the extent that 
the AD Agreement or another relevant WTO agreem ent allows for such differentiated treatment.306  
The European Union, however, has failed to demons trate that any provision of the AD Agreement, or 
of any other relevant WTO agreement, would allo w the different treatment of imports from NMEs 
provided for in Article 9(5) of the Basic AD Regulation.   
                                                                                                                                                                     
concluded that rules and formalities applicable to countervailing duties were rules and formalities imposed in 
connection with importation, and that "automatic bac kdating of the effect of revocation of a pre-existing 
countervailing duty order, without the necessity of the countr y subject to the order making a request for an 
injury review, is properly considered to be an adva ntage within the meaning of Article I:1."  GATT Panel 
Report, United States – Denial of Most-Favoured-Nation Treatment as to Non-Rubber Footwear from Brazil 
("US – MFN Footwear") , DS18/R, adopted 19 June 1992, BISD 39S/128, para. 6.9.  See also EC – Bananas III 
(US) , where the panel referred to the report of the GATT panel in US – MFN Footwear  in order to support its 
conclusion that "the licensing procedures applied by the EU to traditional ACP banana imports, when compared 
to the licensing procedures imposed on third-countries … can be considered as an 'advantage' which the EC 
does not accord to third-country and non-t raditional ACP imports."  Panel Report, European Communities – 
Regime for the Importation, Sale and Distribution of Bananas, Complaint by the United States ("EC – 
Bananas III (US) "), WT/DS27/R/USA, adopted 25 September 1997, as modified by Appellate Body Report 
WT/DS27/AB/R, DSR 1997:II, 943, para. 7.221.  The Appellate Body in EC – Bananas III  upheld the panel's 
findings, stating that "the activity function rules are an 'advantage' granted to bananas imported from traditional ACP States, and not to bananas imported from other Members," after also referring to the broad definition given 
to the term "advantage" in Article I:1 by the GATT panel in US – MFN Footwear . Appellate Body Report, EC – 
Bananas III , para. 206.   
304 European Union, second written submission, para. 42. 
305 European Union, first written submission, paras. 141-142. 
306 For example, the second Ad Note to Article VI:1 of the GATT 1994, concerning special difficulties 
in determining price compar ability in the case of imports from a country  which has a complete or substantially 
complete monopoly of its trade and where all domestic prices are fixed by the State.  Similarly, Paragraph 15 of 
China's Accession Protocol permits diffe rent treatment with respect to the determination of normal value in anti-
dumping investigations against Chinese imports, provide d certain conditions are met.   We also note Article 15 
of the AD Agreement, which requires "special regard" to be given by developed country Members to the special 
situation of developing country Members when considering the application anti-dumping measures, and that possibilities of constructive remedies provided for by the AD Agreement be explored before applying anti-
dumping duties where they would affect the essential interests of developing country Members.    WT/DS405/R 
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 7.102  Nor has the European Union demonstrated that th ere is any relevant difference in the nature 
of imports from NMEs that justifies different treatme nt.  While the European Union alleges this to be 
the case, in our view it has not established a sufficien t factual basis on which we  could conclude that 
there is a relevant difference in the nature of  imports from NMEs and those from market economy 
countries.  Indeed, we note that Article 9(5) of the Basic AD Regulation itself allows individual 
producers in NMEs to demonstrate that they opera te under market economy principles, and qualify for 
individual treatment.  In our view, this suggests that any difference in the nature of imports from 
NMEs and from market economy countries depends on the specific facts and circumstances of the 
producer and product in question, and not on the fact that the economy of the exporting country is classified by another WTO Member as a NME.
307   
7.103  The European Union considers th at China's Article I:1 claim is dependent on a finding that 
Article 9(5) of the Basic AD Regulation is in viol ation of the AD Agreement.  China, on the other 
hand, maintains that its claim under Article I:1 is independent of its claims of violation of the 
AD Agreement.  We note in this regard that, having concluded, as discussed above, that Article 9(5) is 
inconsistent with Articles 6.10 and 9.2 of the AD Ag reement, it is clear, even assuming the European 
Union's assertion is correct, this condition is sa tisfied.  However, while it is clear that the 
AD Agreement elaborates on the requirements of Ar ticle VI of the GATT 1994 for imposition of an 
anti-dumping measure,308 in our view, this does not mean that a violation of GATT 1994, in particular 
of Article I:1, can only be found after a violation of the AD Agreement has been established.  Not 
only do we consider it possible that a Member might act inconsistently with a provision of Article VI 
of the GATT 1994 itself, and in addition violate Article I:1, but it is also possible that in certain circumstances a Member might act inconsistently with Article I:1 in the application of its anti-
dumping regulations to different Members, without a specific violation of the AD Agreement.   
7.104  The European Union also contends that, if  the AD Agreement permits WTO Members to 
subject the right to an individual margin of dum ping to the fulfilment of certain conditions in 
investigation involving NMEs, there can be no viola tion of Article I:1 of the GATT 1994 by virtue of 
the lex specialis  principle and Article II:2(b) of the GATT 1994.  We do not agree that Article II:2(b) 
of the GATT 1994 limits the scope of Article I:1.  Th e chapeau of Article II:2(b) states:  "Nothing in 
this Article shall prevent any contracting party from imposing at any time on the importation of any 
product … any anti-dumping … duty applied consistently  with the provisions of Article VI".  It is 
thus clear that Article II:2(b) refers only to Ar ticle II of the GATT 1994, establishing a "safe harbour" 
for anti-dumping measures applied consistently with  the provisions of Article VI of the GATT 1994 
from the provisions of Articles II:1(a) and (b) governing the maximum amounts of customs duties.  
Finally, we recall that the General Interpretative Note to Annex 1A of the WTO Agreement provides 
that, in case of a conflict between a provision of the AD Agreement and a provision of the GATT 1994, the former shall prevail to the extent of  the conflict.  The European Union attempts to 
apply this conflict rule to argue that, where so mething is permitted under the AD Agreement, this 
permission prevails over the prohib ition on discrimination set out in  Article I:1 of the GATT 1994.  
We disagree with this proposition.  In our view , there is no conflict between the AD Agreement and 
the GATT 1994 in this case. That is, we see nothing that would prevent a Member from complying 
with both its obligations under the AD Agreement and Article I:1 of the GATT 1994, and therefore 
                                                      
307 We note in this regard that the Basic AD Regula tion explicitly lists the countries, including China, 
the producers of which will be subject to the MET and IT te sts.  Thus, it is clear that Article 9(5) of the Basic 
AD Regulation applies to a pre-determined group of  WTO Members, without reference to the specific 
circumstances in individual cases. 
308 We recall that the AD Agreement is formally title d "Agreement on Implementation of Article VI of 
the GATT 1994". WT/DS405/R 
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 there is no need to resort to either the lex specialis  principle or the General Interpretative Note to 
resolve a conflict between the two.
309 
7.105  On the basis of the foregoing, we conclude th at Article 9(5) of the Basic AD Regulation 
violates the MFN principle contained in Article I:1 of the GATT 1994.310 
4. Claim I.7 - Alleged violation of Article X:3(a) of the GATT 1994 
(a)  Arguments of the parties 
(i) China 
7.106  China argues that the European Union does not  administer Article 9(5) of the Basic 
AD Regulation in a "uniform" manner, because the c ountry-wide duty is not calculated in a uniform 
manner in each case.  Rather, the calculation me thodology varies depending on the degree of 
cooperation on the part of the foreign producers subj ect to an investigation.  Different methodologies 
are used if the level of cooperation is high or low.  Moreover, when the level of cooperation is low, a 
variety of methodologies, different from those used if  the level of cooperation is high, are used.  In 
China's view, such non-uniform application of Article  9(5) of the Basic AD Regulation is inconsistent 
with the obligation contained in Article X:3(a) of  the GATT 1994.  In addition, China argues that the 
European Union does not administer Article 9(5) of the Basic AD Regulation in a "reasonable" 
manner, because the country-wide dumping margin is established in an unreasonable manner, often 
through inappropriate use of facts available.311 
(ii) European Union 
7.107  The European Union asserts that the Basic AD Regulation does not require the EU authorities 
to administer Article 9(5) in a particular manner, but  rather, provides for a particular result.  Thus, the 
European Union contends that Article 9(5) does not come within the scope of Article X:3(a) of the 
GATT 1994.  In any event, the European Union cons iders that the determination of the margin of 
dumping based on the level of cooperation does not, in and of itself, lead to a lack of uniformity.  Finally, the European Union asserts that China's allegation relating to the use of facts available is 
unsupported by legal reasoning or evidence.
312 
(b) Arguments of third parties 
(i) Colombia 
7.108  Colombia considers that China' s claim raises the question whether it is legally acceptable to 
claim that a measure "as such" is inconsistent with  a Member's obligations unde r Article X:3(a) of the 
GATT 1994.  For Colombia, since the scope of a pplication of WTO Members' obligations under 
Article X:3(a) of the GATT 1994 is limited to the administration, that is, the application, of the 
measures at issue, a claim against the measure "as such" is impermissible.  Nonetheless, Colombia 
suggests that the Panel may consider this claim in the circumstances of this case, in view of China's 
                                                      
309 For a strict definition of conflict in WTO law, that is between mutually exclusive obligations, see 
Panel Report, Indonesia – Autos , fn. 649; and Panel Report, Turkey – Restrictions on Imports of Textile and 
Clothing Products ("Turkey – Textiles "), WT/DS34/R, adopted 19 November 1999, as modified by Appellate 
Body Report WT/DS34/AB/R, DSR 1999:VI, 2363, para. 9.92. 
310 We note that the panel in EC – Fasteners (China)  reached the same conclusion, for essentially the 
same reasons.  Panel Report, EC – Fasteners (China) , paras. 7.122-7.126. 
311 China, first written submission, paras. 301 and 308. 
312 European Union, first written submission, paras. 145, 147 and 149.  WT/DS405/R 
  Page 79  
 
 arguments related to the application of the measure , even though the claim is formally against the 
measure "as such".
313 
(ii) United States 
7.109  The United States notes that Article X:3(a) of the GATT 1994 relates to the administration of 
instruments set out in Article X:1.  Such laws and regulations may themse lves be challenged under 
Article X:3(a) where they reflect the administration of  an instrument set out in Article X:1, but are not 
otherwise subject to challenge under Article X:3(a)  of the GATT 1994.  The United States asserts that 
Article 9(5) of the Basic AD Regulation does not a ppear to address the administration of any other 
legal instrument, but rather appears to provide subs tantive rules on how anti-dumping duties are to be 
imposed under certain circumstances.  The United States therefore agrees w ith the European Union 
that, under these circumstances, Article 9(5) itself cannot be found to breach GATT Article X:3(a).314 
(c) Evaluation by the Panel 
7.110  We recall that we have concluded above that  Article 9(5) of the Basic AD Regulation is 
inconsistent "as such" with Articles 6.10 and 9.2 of the AD Agreement.  China's claim under 
Article X:3(a) of the GATT 1994 concerns the manner  in which this measure is administered by the 
Commission.  Having found the measure itself to be inconsistent "as such" with Articles 6.10 and 9.2 
of the AD Agreement, we see no reason to address whether this WTO-inconsistent measure is administered in a uniform and reasonable manner by  the European Union, and therefore exercise 
judicial economy, declining to make a finding on this claim.
315 
5. Claim I.6 - Alleged violation of Article XVI:4 of the WTO Agreement and Article 18.4 of 
the AD Agreement 
7.111  China asserts that since Article 9(5) of the Basic AD Regulation is inconsistent with the 
Articles 6.10, 9.2, 9.3 and 9.4 of the AD Agr eement and Article I:1 of the GATT 1994, and the 
European Union does not administer this provisi on consistently with Article X:3(a) of the 
GATT 1994, it follows as a consequence that the Eur opean Union has violated Article XVI:4 of the 
WTO Agreement and Article 18.4 of the AD Agreement, which both require WTO Members to 
ensure the conformity of their laws, regulati ons and administrative procedures with their WTO 
obligations.316  The European Union, on the other ha nd, asserts that since China has failed to 
demonstrate any of the alleged violations, it follows  that the Panel should reject this consequential 
claim.317 
7.112  Both Article XVI:4 of the WTO Agreement a nd Article 18.4 of the AD Agreement similarly 
provide that each WTO Member shall "ensure" the "conformity of its laws, regulations and 
administrative procedures" with the relevant agreemen ts.  We have concluded th at Article 9(5) of the 
Basic AD Regulation is inconsistent with Articles 6.10 and 9.2 of the AD Agreement.  We therefore 
also conclude that the European  Union has acted inconsistently with Article XVI:4 of the WTO 
Agreement, and Article 18.4 of the AD Agreement.318 
                                                      
313 Colombia, third party written submission, paras. 32-33 and 35-37. 
314 United States, third party written submission, paras. 19-20. 
315 We note that the panel in EC – Fasteners (China)  reached the same conclusion, for the same 
reasons.  Panel Report, EC – Fasteners (China) , para. 7.133. 
316 China, first written submission, para. 313. 
317 European Union, first written submission, para. 152. 
318 We note that the panel in EC – Fasteners (China)  reached the same conclusion, for the same 
reasons.  Panel Report, EC – Fasteners (China) , para. 7.137. WT/DS405/R 
Page 80  
 
 E. 
CLAIMS REGARDING COUNCIL REGULATION 1294/2009  (THE REVIEW REGULATION ) AND 
COUNCIL REGULATION 1472/2006  (THE DEFINITIVE REGULATION ) 
1. Introduction 
7.113  In this section of our report, we address Chin a's claims with respect to the conduct of and 
determinations in the original investigation of allegedly dumped imports of footwear from, inter alia , 
China, and with respect to the conduct of and determ inations in the expiry review of the anti-dumping 
measure imposed following that original investigation.   
7.114  In its submissions, China presented its claims and arguments with respect to the Review 
Regulation and various aspects of the conduct of the expiry review first, followed by its claims and 
arguments with respect to the Definitive Regulation and various aspects of the conduct of the original 
investigation separately.  However, many of China's claims raise similar or identical legal issues with 
respect to the two measures.  In addressing those cl aims below, we have s ought to avoid repetition by 
grouping China's claims according to the subject and legal issues raised.  Thus, our analysis will 
proceed as follows.  After a brief description of th e two measures, we will first address China's claims 
with respect to Article 9(5) of the Basic AD Regul ation as applied in the original investigation, as 
well as China's claim that the European Union wrongly applied a country-wide duty.  We will then 
describe our approach to analysing China's cl aim under Article 11.3 of the AD Agreement with 
respect to the Review Regulation.  Next, we will address China's claims of violation concerning the 
dumping aspects of both the Review and Definitive Re gulations, followed by consideration of China's 
claims of violation concerning the injury aspects of both Regulations.  We will then address China's 
claims concerning procedural aspects of both the expiry  review and the original investigation, before 
resolving those of China's consequential claims not addressed in the previous sections of our report.  
First, however, we briefly describe the measures at issue. 
(a) Review Regulation 
7.115  Council Implementing Regulation (EU) No. 1294/ 2009 of 22 December 2009, i.e. the Review 
Regulation, extended the definitive anti-dumping duty on imports of certain footwear with uppers of 
leather originating in inter alia  the People's Republic of China, impo sed by the Definitive Regulation.  
The Review Regulation sets out the background of th e expiry review, and explains the basis for 
maintaining the definitive anti-dumping duties in  the investigation at issue, including the 
determinations of the Commission on the likelihood of  the continuation or recurrence of dumping and 
injury, as well as on matters such as like product a nd domestic industry, procedural issues, and the 
resolution of arguments raised by the parties.  China raises a number of claims with regard to various 
aspects of the Review Regulation and th e conduct of the expiry review.   
7.116  On 30 June 2008, the Commission received a comp laint from the European Confederation of 
the Footwear Industry ("CEC") for the initiation of an  expiry review on imports of certain footwear 
with uppers of leather originating in inter alia  China.319  Evidence submitted in connection with the 
application was deemed sufficient and an expiry review was initiated on 3 October 2008.  The period 
of investigation for the purpose of the determina tion of likelihood of continuation or recurrence of 
dumping ("review investigation period") was 1 July  2007 to 30 June 2008.  For the assessment of a 
likelihood of a continuation or recurrence of inju ry, the period considered included the period from 
1 January 2006 through the end of the review invest igation period.  Referenc e was also made to the 
                                                      
319 The Commission defined the "product concerned", that is, the product imported from China that was 
the subject of the investigation, in recital 54 of the Re view Regulation, Exhibit CHN-2.  We note that, although 
the European Union uses the term "product concerned" for what the AD Agreement re fers to as the "product 
under consideration", there is no dispute that these terms refer to the same concept, and we have generally used 
the terminology of the AD Agreement in our report.   WT/DS405/R 
  Page 81  
 
 year 2005 and to the period of investigation used in the original investigation (i.e. 1 April 2004 to 
31 March 2005). 
7.117  The Commission used sampling in considering dumping.  A total of 58 Chinese producers 
made themselves known by the relevant deadline, 15 days from initiation, and were considered as 
cooperating parties.  The sample for purpose of  the dumping analysis included seven Chinese 
producers, one of which, Golden Step, had been gr anted MET in the original investigation.  The 
Commission based normal value on information con cerning an analogue third country, Brazil.  The 
data pertaining to three cooperating Brazilian producers of the like product was used in the 
determination of normal value.  In the case of Golden Step, the Commission found that it had not 
made domestic sales during the period of investig ation and therefore normal value for this producer 
could not be established on the basis of its domestic prices.  Thus, the dumping margin for Golden 
Step was calculated on the basis of a constructed normal value.  In respect of the amount for 
administrative, selling and general costs ("SG&A")  and for profits, the Commission relied on data 
used in the original investigation.  It also  considered SG&A and profits from Chinese exporting 
producers that had obtained MET in other recent inv estigations and which had domestic sales in the 
ordinary course of trade, as well as SG&A and pr ofit found in the analogue country.  Export prices 
were calculated under normal rules provided for in Ar ticle 2(8) of the Basic AD Regulation, i.e. on 
the basis of the price actually paid or payable for the product when sold for export from the exporting 
country to the European Union.  Dumping marg ins for the sampled producers were based on a 
comparison of a weighted-average normal value by product type with a weight ed-average export price 
by product type.  Except for Golden Step, one we ighted-average dumping margin was calculated for 
all sampled producers and applied to the non-samp led Chinese producers.  The dumping margin for 
Golden Step was based on a comparison of its export price with the constructed normal value 
described above.   
7.118  With respect to the consideration of inju ry, the Commission found that the footwear 
production sector in the European Union compri sed around 18,000 small and medium enterprises 
("SMEs") mainly situated in sev en member States with a concentration in three major producing 
member States.  In addition to the complainants , a further five EU producers made themselves known 
to the Commission in response to the Notice of Ini tiation.  Out of these, three did not supply the 
sample information, and two prod ucers were found to be related to Chinese producers and to be 
importing significant quantities of the product unde r consideration, including from its related 
exporters in China, and excluded from the notion of the domestic industry.  The Commission found 
that the producers that supported the complain t and cooperated with the Commission represented 
more than 25 per cent of total production of the like product in the European Union.
320   
7.119  Given the number of producers in the domestic industry, the Commission used sampling in 
investigating and assessing injury.  The sample for the purpose of the injury analysis included eight 
EU producers operating in four member States.  With respect to one sampled producer that 
progressively discontinued production in the Euro pean Union during the period considered, the 
Commission found that the weight of this producer was minimal in terms of overall production as well as in relation to the rest of the sample, and t hus, even if this producer were excluded, there would 
have been no change in the overall picture in te rms of standing nor a significant impact on the 
situation of the sampled companies as whole, in cluding their representativeness.  Therefore, this 
producer was neither excluded from the definition of the EU industry  nor excluded from the sample.  
However, only data pertaining to its activity as an EU producer were used.  For the purpose of the 
injury analysis, the Commission examined certain in jury indicators at the macroeconomic level, based 
                                                      
320 The overall production of the like product in the European Union was 366 million pairs during the 
period of investigation. WT/DS405/R 
Page 82  
 
 on data for the whole of EU production,
321 and others at the microeconomic  level, based on data of the 
sampled EU producers. 322  
7.120  Based on its analysis of the information before  it, the Commission determined that there was 
a likelihood of continuation of dumping and injury to the domestic industry.  The Commission's analysis and conclusions are described in more  detail as relevant elsewhere in this report. 
(b) Definitive Regulation 
7.121  Council Implementing Regulation (EC) No. 1472/20 06 of 5 October 2006, i.e. the Definitive 
Regulation, imposed a definitive anti-dumping duty on  imports of certain footwear with uppers of 
leather originating in inter alia  the People's Republic of China.  The Definitive Regulation sets out the 
background of the investigation, and explains the basis for the imposition of the anti-dumping duties 
in the investigation at issue, including the determinations of the Commission on dumping, injury, and 
causal link, as well as underlying determinations such as like product and domestic industry, and the 
resolution of arguments raised by the parties.  China raises a number of claims with regard to various 
aspects of the Definitive Regulation and the c onduct of the original investigation.   
7.122  On 30 May 2005, the Commission received a comp laint from the CEC for the initiation of an 
anti-dumping investigation on imports of certain f ootwear with uppers of leather originating in, inter 
alia, China.
323  Evidence submitted in connection with the application was deemed sufficient and an 
investigation was initiated on 7 July 2005.  The pe riod of investigation for purposes of the dumping 
determination was 1 April 2004 to 31 March 2005, an d the examination of injury included the period 
from 1 January 2001 through the end of the period of investigation.   
7.123  On 23 March 2006, the Commission published Commission Regulation (EC) No. 553/2006 of 
23 March 2006 imposing a provisional anti-dumping duty on imports of certain footwear with uppers 
of leather originating in the People's Republic of China and Vietnam ("Provisional Regulation") 
detailing the preliminary findings in the investig ation and inviting interested parties to make 
comments.  Provisional anti-dumping duties on imports of certain footwear with uppers of leather 
originating in, inter alia , China were imposed.   
7.124  The Commission used sampling in making its dumping determinations.  An estimated 163 
Chinese producers made themselves known by the re levant deadline, 15 days from initiation, and 
were considered as cooperating parties.  The samp le for dumping determinati ons initially included the 
four largest Chinese producers.  However, in the c ourse of the consultation process with the interested 
parties, the Chinese authorities insisted that more co mpanies be added to the list in order to increase 
the representative level of the sample.324  Consequently, the sample was extended to 13 Chinese 
producers, representing around 25 per cent of the Chinese exports to the Community. 
7.125  All sampled producers applied for MET.  Of these, one producer did not submit a 
questionnaire reply subsequent to having had its request for MET examined and therefore its dumping 
margin was established on the basis of facts availa ble, and its request for MET was annulled.  With 
respect to the remaining twelve Chinese producers, th e Commission determined that they did not meet 
                                                      
321 At the macroeconomic level, th e injury indicators included ou tput, production capacity, capacity 
utilization, sales volume, market share, employment, productivity, growth, magnitude of dumping margins and 
recovery from the effects of past dumping or subsidisation.  
322 At the microeconomic level, the injury indi cators included stocks, sales prices, cash flow, 
profitability, return on investments, ability to raise capital, investments and wages.  
323 The Commission defined the "product concerned", that is, the product imported from China that was 
the subject of the investigation, in recitals 7-39 of th e Definitive Regulation, Exhibit CHN-3.  See footnote 319 
above. 
324 Provisional Regulation, Exhibit CHN-4, recital 57.  WT/DS405/R 
  Page 83  
 
 the criteria set out in Article 2(7)(c) of the Basic AD Regulation and therefore their MET requests 
were denied.  All sampled producers also requested  IT, but the Commission concluded that they had 
failed to demonstrate that they met all the requirement s for IT as set forth in Article 9(5) of the Basic 
AD Regulation.  Four additional Chinese producers w ho were not included in the sample requested 
the Commission to calculate individual margins fo r them.  However, the Commission concluded that, 
in view of the unprecedented size of the sample, no individual examination could be granted.  
According to the Commission, this would have been  burdensome and could have prevented the timely 
completion of the investigation.  Following the impo sition of provisional measures, one of the twelve 
sampled producers, Golden Step, pr ovided evidence of a substantia l change that had taken place 
following the original examination of its MET re quest.  The Commission considered the changed 
circumstances and decided to review its original  decision and to grant MET to this producer.  
7.126  The Commission based its normal value determinat ions on an analogue third country, Brazil.  
The data pertaining to three cooperating Brazilian producers of the subject product was used in the 
determination of normal value.  In the case of Go lden Step, normal value could not be established on 
the basis of its domestic prices since it was found th at this producer had not made domestic sales 
during the period of investigation.  Thus, the dumpi ng margin for Golden Step was calculated on the 
basis of a constructed normal value and the amount  for SG&A and for profits was calculated on the 
basis of SG&A and profits from Chinese producers of  products other than footwear that recently 
obtained MET in other investigations  and which had domestic sales in the ordinary course of trade.   
7.127  Export prices were calculated under normal rule s provided for in Article 2(8) of the Basic 
AD Regulation, i.e. on the basis of the price actually  paid or payable for the product when sold for 
export from the exporting country to the European  Union.  Dumping margins for the sampled 
producers were based on a comparison of a weighted -average normal value by product type with a 
weighted-average export price by product type.  Except for Golden Step, one weighted-average 
dumping margin was calculated for all sampled pr oducers and applied to all non-sampled Chinese 
producers.  The dumping margin was determined  on the basis of the weighted average dumping 
margin of the sampled producers whose information regarding export prices was considered reliable.  
Export price data from four of the sampled Chinese producers was deemed unreliable, as they submitted unreliable transaction listings (e.g. they  included products other than the product under 
consideration or did not match with source documentation).  The dumping margin for Golden Step 
was based on a comparison of its export price with  the constructed normal value described above.   
7.128  With respect to the determination of injury , the Commission determined that the producers 
that supported the complaint and cooperated with the Commission (i.e. 814 producers representing 
42 per cent of total production of the subject product in the then-European Communities)
325 
constituted the domestic industry.  Given the numbe r of cooperating producers, the Commission used 
sampling in investigating and assessing injury.  A sample of ten EU producers was selected 
accordingly.  For the purpose of the injury analysis, the Commission examined the injury indicators at 
the macroeconomic level (based on da ta for the whole EU production)326 and at the microeconomic 
level (based on data of the sampled EU producers). 327  
7.129  Based on its analysis of the information before  it, the Commission determined that dumped 
imports from China caused material injury to the do mestic industry.  The Commission's analysis and 
conclusions are described in more detail as relevant elsewhere in this report. 
                                                      
325 The like product was estimated to be produced by more than 8,000 producers. 
326 At the macroeconomic level, the injury indicators included production, production capacity, 
capacity utilization, sales volume, market share, employment, productivity, growth, magnitude of dumping 
margins and recovery from the effects of past dumping of subsidisation.  
327 At the microeconomic level, the injury indi cators included stocks, sales prices, cash flow, 
profitability, return on investments, ability to raise capital, investments and wages.  WT/DS405/R 
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 2. Claims III.17 and III.18 – Alleged violations of  Articles 6.10, 6.10.2,  9.2 and 9.3 of the 
AD Agreement – Application of a country -wide duty on sampled Chinese exporting 
producers, and Article 9(5) of the Basic AD Regulation as applied  
7.130  In this section of our report, we address Chin a's claims that the European Union acted 
inconsistently with Articles 6.10, 6.10.2, 9.2,  and 9.3 of the AD Agreement in the original 
investigation by not calculating individual dumping margins for, and not imposing individual rates of 
duty on, Chinese exporters. 
(a) Arguments of the parties 
(i) China 
7.131  China claims that, by not calculating indivi dual dumping margins for, and not imposing 
individual rates of duty on, Chinese exporters in the original investigation,  the European Union 
violated Articles 6.10, 6.10.2, 9.2, and 9.3 of th e AD Agreement, for the same reasons that China 
asserted that Article 9(5) of the Basic AD Regulation was inconsistent "as such" with the AD Agreement.
328   
7.132  China asserts that although 140 Chinese exporting producers applied for IT, only one of them 
was granted individual treatment.  All other Chin ese producers, including those whose requests for IT 
were denied, were subject to a country-wide duty, which China alleges was in  some cases higher than 
an individually calculated dumping margin would have  been.  China argues that despite Article 6.10 
of the AD Agreement setting the rule that individu al margins of dumping shall be established to each 
known exporter or producer, known Chinese exporters that sought to have individual dumping 
margins were denied this right.  China acknowledg es that Chinese exporters were denied IT on the 
basis of failure to meet the European Union's IT criteria.329   
7.133  In addition, China notes that the Commis sion used sampling in making its dumping 
determination, and thus was subject to Article  6.10.2 of the AD Agreement.  Four companies 
requested individual examination pursuant to Ar ticle 17 of the Basic AD Regulation, but the 
European Union denied those requests.  Thus, Chin a asserts that the European Union failed to provide 
individual examinations as required by Article 6.10.2.  China asserts that it was not the case that "the 
number of exporters and producers [was] so larg e that individual examinations would be unduly 
burdensome", and contends that the European Uni on's explanation, referring to the number of MET 
requests received and the size of the sample, does not justify the conclusion that it would be unduly 
burdensome to examine the four requests for individual  examination.  China contends that most of the 
140 MET requests received were not even looked at .  Furthermore, China asserts that the "supposed 
exhaustion of administrative capabilities with respect to one aspect of the investigation should not 
then entitle the European Union to clai m that it had no capacity to examine any individual 
examination requests – or an extremely small frac tion of MET requests – which constitute completely 
distinct aspects of the investigation."330  In response to the European Union's argument that China did 
not provide any evidence that the Commission had th e capacity to individual ly examine those four 
companies, China asserts that investigating authorities have a certain amount of discretion in 
allocating resources, as long as they ensure that suffi cient resources are "available to complete each 
aspect of the investigation" as required by the AD Agreement.  China asserts that it "provided a prima 
facie  case that the European Union could examine four additional producers in this case", and 
therefore contends that the burden of proof shifted to the European Union to demonstrate otherwise.  
                                                      
328 China, first written submission, paras. 1039-1040, 1051 and 1052. 
329 China, first written submission, paras. 1039 and 1041-1042. 
330 China, first written submission, paras. 1044-1047 and 1049.  WT/DS405/R 
  Page 85  
 
 China argues that given the nature of the informa tion required, China cannot be expected to provide 
such evidence.
331   
7.134  With respect to its "as applied" claims under Articles 9.2 and 9.3 of the AD Agreement, China 
incorporates its arguments with respect to its "as such" claims.  China contends that "appropriate 
amounts" in Article 9.2 could only refer to am ounts determined on the basis of individual 
examination, and that since only one company was granted individual treatment, the European Union 
violated Article 9.2 by not collecting anti-dumping duties in the appropriate amounts from all other companies, which were instead subject to the count ry-wide duty rate.  Furthermore, China contends 
that the European Union violated Article 9.3 by applying an anti-dumping duty based on the country-wide rate, and thus collecting duties in amount exceeding the individual dumping margins.
332 
(ii) European Union  
7.135  With respect to China's claims relating to the denial of individual dumping margins and duties 
as a result of the application of Article 9(5) of th e Basic AD Regulation in the original investigation, 
the European Union considers that it has shown that  Article 9(5) is "as such" consistent with the 
covered agreements, and asserts that the Panel should also reject China's "as applied" claim in this 
respect.333 
7.136  The European Union recalls that the MET/IT  applications of all Chinese companies 
requesting such treatment were denied on the basis that they did not satisfy the criteria set out in 
Articles 2(7) and 9(5) of the Basic AD Regulation.334  As China's claim is based on the assumption 
that the application of Article 9(5) of the Basic AD Regulation is inconsistent with the AD Agreement 
in all cases, the European Union recalls its arguments  with respect to China' s "as such" claims, and 
asserts that the Panel should also reject China's claim in the specific context of the original 
investigation at issue.335 
7.137  The European Union asserts that it fails to un derstand China's claims under Articles 9.2 and 
9.3 of the AD Agreement.336  The European Union notes that th e anti-dumping duty imposed in this 
case was based on the injury margin  found for China, and not on the dumping margin.  Thus, the 
European Union contends that since the country -wide dumping margin was not the basis for the 
imposition of anti-dumping duties, China's claims are irrelevant.337   
7.138  With respect to China's arguments concerning the failure to provide individual examination to 
the four Chinese producers requesting it under Article 17(3) of the Basic AD Regulation, the European Union notes that it explained the reasons why individual examination was not possible.  In this regard, the European Union contends that the "unprecedented" size of the sample, which was 
larger than originally proposed  as a result of discussions with the Chinese authorities, imposed a 
heavy burden on the European Union to complete th e investigation in a timely manner, and in these 
circumstances, individual examination of the four  Chinese producers in question was not possible.  
The European Union maintains that China has not provided any evidence that the Commission had the 
capacity to individually examine these four companies without affecting the completion of the 
                                                      
331 China, second written submission, paras. 1278 and 151 6 (correct cross-reference is to section 4.1.2.6 
and not 4.2.1.6 of China's second written submission). 
332 China, first written submission, paras. 1051-1052.  See paragraphs 7.67-7.75 above. 
333 European Union, opening oral statement at the second meeting with the Panel, para. 443. 
334 European Union, first written submission, para. 846. 
335 European Union, first written submission, para. 851. 
336 European Union, first written submission, para. 852. 
337 European Union, first written submission, para. 852.  The European Union argues that, in any event, 
the country-wide dumping margin was properly established.  Id. WT/DS405/R 
Page 86  
 
 investigation in a timely manner.
338  The European Union contends that, provided the obligations of 
the AD Agreement are respected, investigating author ities are free to allocate resources and efforts as 
they see convenient, particular where the AD Agreem ent itself allows for the possibility of not doing 
something that would be burdensome and prevent the completion of the investigation in a timely 
fashion, as Article 6.10.2 does.  Moreover, the Europ ean Union contends that it is not clear what facts 
support China's view that the Commission had allocated certain resources to reviewing MET/IT 
forms, and that it could have reallocated so as to provide the requested indivi dual examination to the 
four Chinese producers in question.339   
(b) Evaluation by the Panel 
7.139  As explained in our findings above regarding China's "as such" claims, we have concluded 
that Article 9(5) of the Basic AD Regulation is in consistent as such with Articles 6.10 and 9.2 of the 
AD Agreement.340  China also claims that the Europ ean Union's application of the Basic 
AD Regulation in the original investigation violated Articles 6.10, 6.10.2, 9.2 and 9.3 of the AD Agreement. 
7.140  We first note that China makes two claims, III.17 and III.18, the first of which alleges 
violations of Articles 6.10, 6.10.2, 9.2 and 9.3 of  the AD Agreement in the application of a country-
wide duty on sampled Chinese exporting producers, a nd the second of which alleges violations of 
Article 6.10, 6.10.2 and 9.2 of the AD Agreement in the application of additional conditions, that is, 
the Basic AD Regulation Article 9(5) conditions, to  deny individual dumping margins to cooperating 
Chinese exporters.  However, China argues both claims together, without distinction.  Moreover, the European Union makes no argument with respect to China's assertion concerning the application of 
Article 9(5) of the Basic AD Regulation in the orig inal investigation except to assert that since the 
measure is not inconsistent as such, it was not inc onsistent with the AD Agreem ent as applied in this 
case.  This lack of precision has made our task in  evaluating these claims more difficult.  Nonetheless, 
to the extent China's claim is simply that Article  9(5) of the Basic AD Regulation as applied in the 
original footwear investigation was inconsistent with the cited provisions of the AD Agreement, we 
recall that we have found this provision of th e Basic AD Regulation to be inconsistent with 
Articles 6.10 and 9.2 of the AD Agreement as such.  Consequently, it is difficult for us to imagine 
how its application in this, or any, investigation c ould be found to be consiste nt with those provisions.  
We therefore conclude that the application of Article  9(5) of the Basic AD Regulation in the original 
footwear investigation is inconsistent with Articl es 6.10 and 9.2 of the AD Agreement.  We recall that 
we applied judicial economy with respect to Ch ina's claim that Article 9(5) of the Basic 
AD Regulation is inconsistent with Article 9.3 of the AD Agreement as such, and we consider it 
appropriate to do so in the as applied context as well, and therefore make no finding on China's claim 
under Article 9.3.
341  
7.141  We now turn to the remaining aspect of these claims, under Article 6.10.2 of the 
AD Agreement, which provides: 
"In cases where the authorities have limited th eir examination, as provided for in this 
paragraph, they shall nevertheless determin e an individual margin of dumping for any 
exporter or producer not initially selected who submits the necessary information in 
                                                      
338 European Union, first written submission, paras. 572-574, and 853. 
339 European Union, first written submission, paras.  576-577.  The European Union notes that China 
did not make additional arguments with respect to this aspect of its claim in its second written submission.  
European Union, second written submission, fn. 19. 
340 See paragraphs 7.87-7.92 above. 
341 We note that the panel in EC – Fasteners (China)  reached the same conclusions for essentially the 
same reasons.  Panel Report, EC – Fasteners (China) , para. 7.149.  Unlike in that  case, China has not made an 
"as applied" claim under Article 9.4 of the AD Agreement in this dispute.  WT/DS405/R 
  Page 87  
 
 time for that information to be considered  during the course of the investigation, 
except where the number of exporters or producers is so large that individual 
examinations would be unduly burdensome to the authorities and prevent the timely 
completion of the investigation.  Volunt ary responses shall not be discouraged." 
7.142  It is not entirely clear to us whether China is asserting that the application of Article 9(5) of 
the Basic AD Regulation in the original footwear in vestigation is inconsistent  with Article 6.10.2 of 
the AD Agreement, or whether it is asserting that the European Union violated that provision directly.  
To the extent China is making the former claim, we have already concluded, as discussed above, that 
Article 9(5) of the Basic AD Regulation is incons istent as such with Articles 6.10 and 9.2 of the 
AD Agreement.  We fail to see how a finding of vi olation of Article 6.10.2 of the AD Agreement in 
the application of Article 9(5) of the Basic AD Re gulation would contribute to the resolution of this 
dispute or aid in implementation.  We therefore consider it appropriate to refrain from making any 
findings with respect to a claim that the applicati on of Article 9(5) of the Basic AD Regulation in the 
original footwear investigation is inconsistent with Article 6.10.2 of the AD Agreement, to the extent 
China is making such a claim.   
7.143  To the extent China is asserting th at the European Union violated  Article 6.10.2 directly by 
not examining the four Chinese producers who request ed individual examination under Article 17(3) 
of the Basic AD Regulation, we now turn to that clai m.  With respect to the relevant facts, we recall 
that some 140 Chinese exporting producers requested MET and IT.  It is undisputed that the Commission did not examine all of these requests.
342  Rather, the Commission first selected a sample 
of Chinese exporting producers for the purposes of its examination of dumping, and only reviewed the 
MET/IT requests of the thirteen sampled Chinese producers.343  The Definitive Regulation states that 
"[t]here is no reason why the sampling method could not  equally be applied to the situation where the 
high number of companies involved includes a high number of companies requesting MET/IT" and that "[i]n view of the unprecedented number of MET requests received it was not possible to assess each [MET/IT] claim individually."
344  Initially, all requests were rejected, but ultimately, the 
Commission concluded that one Chinese company,  Golden Step, met the conditions necessary to 
receive MET, and an individual dumping margin was determined for Golden Step.345  With the 
exception of Golden Step, the Commission did not calculate individual dumping margins for Chinese 
exporting producers, but rather calculated a singl e country-wide dumping margin.  However, the 
European Union ultimately imposed a lesser duty, rather than a duty equivalent to the dumping 
margin.346 
7.144  In addition to the MET/IT requests, four Ch inese exporting producers requested individual 
examination pursuant to Article 17(3) of the B asic AD Regulation, which is the EU legislative 
provision corresponding to Article 6.10.2 of the AD Agreement.  The Provisional Regulation states 
that "no individual examination of exporting produc ers in the PRC … could be granted because this 
                                                      
342 The European Union does not indicate specifically the number of companies submitting applications 
for MET/IT, but does state that 163 companies "provided the requested information within the given deadline", 
and that 154 of those had exports to the European Union during the relevant period.  European Union, first 
written submission, para. 540.  See also Provisional Regul ation, Exhibit CHN-4, recitals 66-90, and Definitive 
Regulation, Exhibit CHN-3, recitals 60-69.  The European  Union's failure to address all the MET requests is the 
subject of separate claims by China which are addressed in paragraphs 7.167-7.205 of our report. 
343 Definitive Regulation, Exhibit CHN-3, recitals 70-71.  One sampled Chinese exporting producer did 
not reply to the MET questionnaire, and thus only 12  MET claims, those of the remaining sampled Chinese 
exporting producers, were actually analysed by the Commission.  Provisional Regulation, Exhibit CHN-4, 
recital 67.  
344 Definitive Regulation, Exhibit CHN-3, recitals 61 and 64. 
345 Definitive Regulation, Exhibit CHN-3, recital 72. 
346 Definitive Regulation, Exhibit CHN-3, recital 311. WT/DS405/R 
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 would have been unduly burdensome and would have prevented completion of the investigation in 
good time."
347   
7.145  China asserts that the number of MET requests is not relevant with respect to the burden of 
examining the four requests for individual examina tion, and that the exhaustion of its administrative 
capabilities with respect to one aspect  of the investigation did not entitle the European Union to claim 
that it had no capacity to examine any individua l examination requests.  China asserts that the 
European Union should have considered the admi nistrative feasibility of reviewing the individual 
examination requests, and had it done so  would almost surely have review ed all of them in light of the 
small number received.348   
7.146  We are somewhat mystified by China's arguments in this regard.  The Provisional and 
Definitive Regulations are clear that the Commission did, in fact, consider the four individual 
examination requests received, and concluded that  individual examination could not be granted 
because to do so would have been unduly burdensom e and would have prevented completion of the 
investigation in good time.  These are precisely th e criteria set forth in Article 6.10.2 which an 
investigating authority may cite in order to justify declining to grant individual examination requests.  
To the extent China is arguing that it would not, in  fact, have been unduly burdensome, and that the 
Commission could, and should, have allocated its av ailable resources so as to enable it to undertake 
the individual examinations requested, we reject China's argument.  Even assuming China is correct 
that the Commission had sufficient resources, and/or  could have allocated its available resources 
differently, we consider that it would be entirely inappr opriate for us to interfere in this manner in an 
investigating authority's conduct of  anti-dumping investigations.   
7.147  Based on the foregoing, we conclude that the application of Article 9(5) of the Basic 
AD Regulation in the original footwear investiga tion was inconsistent with the European Union's 
obligations under Articles 6.10 and 9.2 of the AD Agreement.  We apply judicial economy with 
respect to China's claim under Article 9.3 of th e AD Agreement and therefore make no finding.  
Finally, we conclude that China has failed to  demonstrate that the European Union acted 
inconsistently with Article 6.10.2 of the AD Agreement. 
3. Claim II.11 – Alleged violation of Article 11.3 of the AD Agreement  
7.148  In this section of our report, we address China's claim that the European Union's 
determinations of likelihood of c ontinuation or recurrence of dumping and injury in the expiry review 
were inconsistent with Article 11.3 of the AD Ag reement, and the European Union's assertion that 
China's claim of violation of Article 11.3 was not properly presented to the Panel.  
(a) Arguments of the parties 
(i) China 
7.149  China argues that the European Union's finding of likelihood of continuation of dumping and 
injury is based on a finding of dumping and injury during the review investigation period, and that 
this finding was inconsistent with Articles 2.1, 2.4,  3.1, 3.4, 3.5, 6.8, 6.10 and 17.6(i) of the 
AD Agreement.  China argues that, as a consequenc e, the European Union's finding of likelihood of 
continuation of dumping and injury is  inconsistent with Article 11.3.  China asserts that Article 11.3 
                                                      
347 Provisional Regulation, Exhibit CHN-4, recita l 64.  The Definitive Regulation states that 
"submissions of non-sampled exporting producers were not examined as, in accordance w ith Article 17(3) of the 
basic Regulation, this would have been unduly burdensome and would have prevented completion of the investigation in good time."  Definitive Regulation, Exhibit CHN-3, recital 65. 
348 China, first written submission, paras. 1046-1048.  WT/DS405/R 
  Page 89  
 
 requires "reasoned and adequate conclusions" based  on a "rigorous examination", and supported by 
"positive evidence" and "sufficient factual basis".
349  China maintains that th e legal basis of its claim 
is Article 11.3, and that the Panel should reject the European Union's characterization of this claim as 
purely consequential.350   
(ii) European Union  
7.150  The European Union contends that China's cl aim under Article 11.3 of the AD Agreement is 
"purely" a consequential claim, resting entirely on the asserted inconsistencies with other provisions 
of the AD Agreement.351  The European Union argues that China only invokes a consequential 
violation of Article 11.3 afte r its claims of independent  violation of Articles 2 and 3 of the 
AD Agreement with respect to the expiry review , and that the only evidence and argument presented 
by China in support of its claim under Article 11.3 is a reference back to its arguments with respect to 
its claims under Articles 2 and 3 of the AD Agreement.352  The European Union reiterates that the 
Review Regulation is a regulation adopted pursuant to Article 11.2 of the AD Agreement, and as such 
is subject to the disciplines, primarily, of Article 11.3, and not Article 3.353   
7.151  The European Union argues that by presenting its claim in such a manner, China "turns 
Article 11.3 on its head".  In the European Union' s view, this manner of presenting China's claims 
reduces Article 11.3 to a nullity, sin ce, in the context of injury, it replaces the substantive disciplines 
of Article 11.3 with the disciplines of Article 3 of  the AD Agreement.  The European Union contends 
that "China effectively forces the Panel to disreg ard Article 11.3 of the Anti-Dumping Agreement in 
the consideration of all the injury -related determinations in the [R eview] Regulation," and considers 
this "erroneous way" of raising claims to be "completely unsatisfactory".  The European Union 
concludes that the Panel should reject China's claim of a consequential breach of Article 11.3.354  
7.152  For the European Union, Article 11.3 is the st arting point of the legal analysis of expiry 
reviews, and not a mere consequence of such an alysis under other provisions of the AD Agreement.355  
Thus, European Union rejects the view that a violation of Article 11.3 of the AD Agreement may be found as an automatic consequence of a violation of Article 3 of the AD Agreement.
356  The European 
Union contends that China's view is that, in or der to comply with Article 11.3, a Member must 
comply with Article 3, and/or Article 2.  However, in the European Union's view, China's claim is based on an erroneous legal presumption that a viol ation of Article 11.3 of the AD Agreement is an 
automatic consequence of a violation of Article 3 of the AD Agreement.
357  For the European Union, 
China's position creates confusion by making little distin ction between the legal basis of its challenge 
to the Review Regulation and to the Definitive Regulation.358 
                                                      
349 China, first written submission, paras. 811-813. 
350 China, second written submission, para. 1207. 
351 European Union, first written submission, para. 495. 
352 European Union, first written submission, paras. 240-244, and 495-496. 
353 European Union, first written submission, para. 240. 
354 European Union, first written submission, paras. 242, 244 and 497-499. 
355 European Union, first written submission, para. 244. 
356 European Union, first written submission, paras. 495-496; answer to Panel question 52, para. 153; 
second written submission, para. 91; answer to Panel qu estion 110, paras. 27, and 29-30.  The European Union 
takes the same view with respect to Article 2 of the AD Agreement, arguing that a violation of Article 11.3 
cannot be found merely as an automatic consequence of a violation of Article 2. 
357 European Union, answer to Panel question 52, paras. 163-164. 
358 European Union, opening oral statement at the first meeting with the Panel, para. 16. WT/DS405/R 
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 (b) Evaluation by the Panel 
7.153  We recall that the measure at issue in this claim is the Review Regulation, which was the 
result of an expiry review conducted by the European Union under its domestic legislation 
implementing Article 11 of the AD Agreement.  There is no dispute between the parties that Article 11.3 of the AD Agreement is specifically con cerned with such reviews.  Given that China's 
claim pertains to alleged violations in the European  Union's analysis and determination in the expiry 
review, as notified in the Review Regulation, we c onsider it appropriate to start our analysis by 
considering the most directly relevant provision of  the AD Agreement, Article 11.3, which provides: 
"Notwithstanding the provisi ons of paragraphs 1 and 2,  any definitive anti-dumping 
duty shall be terminated on a date not la ter than five years from its imposition (or 
from the date of the most recent review under paragraph 2 if that review has covered 
both dumping and injury, or under this pa ragraph), unless the authorities determine, 
in a review initiated before that da te on their own initiative or upon a duly 
substantiated request made by or on be half of the domestic industry within a 
reasonable period of time prior to that date, th at the expiry of the duty would be likely 
to lead to continuation or recurrence of dumping and injury.
22  The duty may remain 
in force pending the outcome of such a review." 
_________________ 
 22  When the amount of the anti-dumping duty is assessed on a retrospective basis, a 
finding in the most recent assessment proceeding  under subparagraph 3.1 of Article 9 that no 
duty is to be levied shall not by itself require the authorities to terminate the definitive duty.  
7.154  In its first written submission, China's argume nt in support of its claim of violation of 
Article 11.3 is set out in its entirety in the following three paragraphs, following a quotation of the text of the provision: 
"China submits that sections 5.2, 5.3 a nd 5.4 of this submission demonstrate the 
violations of Articles 2.1, 2.4, 3.1, 3.4, 3.5, 6.8, 6.10 and 17.6(i) of the Anti-Dumping 
Agreement by the European Union.  Based on these  violations, China considers that 
as a consequence, the extension of the me asures in this case is inconsistent with 
Article 11.3 of the Anti-Dumping Agreement . 
The AB in US-Corrosion-Resistant Steel Sunset Review held that the use of the terms 
"determine" and "review" in the text of Article 11.3 of the Anti-Dumping Agreement 
requires a " reasoned conclusion on the basis of information gathered as part of a 
process of reconsideration and examination " by an investigating authority.
  
Moreover, an expiry review determinati on under Article 11.3 must be made on the 
basis of a "rigorous examination"  leading to "reasoned and adequate conclusions,"  
and be supported by "positive eviden ce" and a "sufficient factual basis."   Furthermore, 
in that case the AB explained that, " should investigating authorities choose to rely 
upon dumping margins in making their likelihood determination, the calculation of 
these margins must conform to the disciplines of Article 2.4 ."  The AB added that, 
"[i]f these margins were legally flawed bec ause they were calculated in a manner 
inconsistent with Article 2. 4, this could give rise to an inconsistency not only with 
Article 2.4, but also with Article 11.3 of the Anti-Dumping Agreement ." In such 
circumstances, " the likelihood [-of-dumping] determination could not constitute a 
proper foundation for the continuation of anti-dumping duties under Article 11.3 ."  WT/DS405/R 
  Page 91  
 
 As elaborated in the context of Claims II.1-II.5 and II.13, the European Union's 
finding of likelihood of continuation of dumping and injury in the absence of the measure within the meaning of Article 11.3 is based on a finding of dumping and 
injury during the RIP. The latter assessment as demonstrated by China is based on a 
violation of Articles 2.1, 2.4, 3.1, 3.4, 3.5, 6.8, 6.10 and 17.6(i) of the Anti-Dumping 
Agreement . Therefore, it follows that the exte nsion of the measure in this case 
violates Article 11.3."
359 
7.155  We consider that China's claim of violation of  Article 11.3 "as a consequence" of the asserted 
violations of Articles 2.1, 2.4, 3.1, 3.4, 3.5, 6. 8, 6.10 and 17.6(i) does suggest that the substantive 
requirements of Article 11.3 are not at issue, a nd it is clear that China has made no independent 
arguments in support of its clai m of violation of Article 11.3.360  Nonetheless, we do not agree with 
the European Union that the formul ation of China's Article 11.3 claim in this manner requires us to 
reject it.   
7.156  It is clear that the expiry review, and the analysis and determination of likelihood of 
continuation or recurrence of dumping and injury, are at the core of China's claim.  Moreover, China 
specifically refers to Appellate Body decisions which establish that  a determination under Article 11.3 
must be made on the basis of a "rigorous examination"  leading to "reasoned and adequate 
conclusions,"  and be supported by "positive evidence" and a "sufficient factual basis."  While China's 
claim under Article 11.3 is premised on a particular  view of the relationship between Articles 3 and 
11.3 of the AD Agreement, we do not consider that  to justify concluding at the outset that its 
Article 11.3 claim should be rejected as not having  been properly presented.  Rather, we consider it 
more appropriate to undertake a s ubstantive consideration of China's claim.  Therefore, despite the 
manner in which China has presented its claim of violation of Article 11.3 of the AD Agreement, as a consequence of alleged violations of other provisions of the AD Agreement, we consider that China 
has presented a claim of violation of Article 11.3, and we will address that claim below.   
7.157  Before doing so, we note that Article 11.3 does not prescribe any specific methodology for an 
investigating authority to use or any particular factors that investigating authorities should consider in 
making a determination of likelihood of continuation or recurrence of dumping and injury in an expiry 
review.
361  Indeed, China does not argue otherwise.  It is also clear that there is no obligation to 
calculate or rely on dumping margins in making a determination of likeli hood of continuation or 
recurrence of dumping.362  And, there is similarly no obligation to make a determination of injury in 
making a determination of likelihood of continuation or recurrence of injury.363  Thus, it is clear to us 
that Articles 2 and 3 of the AD Agreement are not directly applicable to a determination under 
Article 11.3, and thus to a panel's consideration of an alleged violati on of Article 11.3.  Moreover, our 
view in this regard is not changed by the fact that an investigating authority chooses to make a 
determination of dumping or injury in the context of a particular expiry review.  Thus, we will review 
the European Union's determinations in the expiry re view at issue here in order to make a finding as 
                                                      
359 China, first written submission, paras. 811-813 (footnotes omitted, emphasis in original). 
360 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that 
provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision 
further here. 
361 Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on 
Corrosion-Resistant Carbon Steel Flat Products from Japan  ("US – Corrosion-Resistant Steel Sunset Review "), 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3, paras. 124 and 149; and Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina – 
Recourse to Article 21.5 of the DSU by Argentina ("US – Oil Country Tubular Goods Sunset Reviews 
(Article 21.5 – Argentina) "), WT/DS268/AB/RW, adopted 11 May 2007, DSR 2007:IX, 3523, para. 105. 
362 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127. 
363 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 106-107. WT/DS405/R 
Page 92  
 
 to whether China has demonstrated that they are in consistent with Article 11.3 of the AD Agreement, 
and not in order to make findings as to whether thos e determinations are inconsistent with Articles 2 
and/or 3 per se .   
7.158  However, this does not mean that the substa ntive provisions of Articles 2 and 3 of the 
AD Agreement are not relevant to our considera tion of whether there has been a violation of 
Article 11.3.  We recall that a determination unde r Article 11.3 must be based on positive evidence, 
have a sufficient factual basis, involve a rigorous  examination, and be s upported by reasoned and 
adequate conclusions.  In our view, the substa ntive provisions of Articles 2 and 3 may well be 
relevant to an analysis under Article 11.3, in order for an investigating authority to be able to make 
"reasoned conclusions" regarding of  likelihood of continuation or recurrence of dumping and injury.  
We will address this question further in the context of  our consideration of China's claims concerning 
the dumping and injury aspects of the expiry review.
364  
4. Claims II.1, II.13, III.1, III.2, III.3, III.4, III.15 and III.20 – Dumping  
7.159  In this section of our report, we address Chin a's claims concerning the dumping aspects of 
both the Review Regulation a nd the Definitive Regulation. 
(a) Consideration of alleged viola tions of Article 2 of the AD Agreement in the context of the 
Review Regulation 
7.160  Before turning to China's specific dumping-re lated claims, we describe our approach to 
consideration of China's claims of violations of Article 2 of the AD Agreement with respect to the 
Review Regulation and Article 11.3 in the contex t of the dumping aspects of the expiry review. 
(i) Arguments of the parties 
a. China 
7.161  China asserts that the European Union relied upon dumping margins calculated for the review 
investigation period in its determ ination of likelihood of continuation or recurrence of dumping, and 
alleges that those margins were calculated in a manner inconsistent with Article 2 of the 
AD Agreement.  China asserts that dumping margin s relied upon in an expiry review must be 
consistent with the provisions of Article 2 of the AD Agreement, relying in this regard on previous 
panel and Appellate Body rulings.  China claims that  the European Union violated Article 11.3 of the 
AD Agreement, since its determination of likelihoo d of continuation or recurrence of dumping is 
based on a calculation of dumping margins inconsis tent with Article 2 of the AD Agreement.  
Therefore, China argues that the Review Regulatio n in this respect does not contain "reasoned and 
adequate conclusions" b ased on "positive evidence".365 
b. European Union  
7.162  The European Union does not dispute China's assertion that dumping margins were calculated 
for purposes of the expiry review, nor does it disagr ee with China's view that a determination of 
likelihood of continuation or recurrence of dumpi ng which is based on a dumping margin calculated 
inconsistently with Article 2 of the AD Agre ement may be found to be  inconsistent with 
                                                      
364 See paragraphs 7.163-7.166, 7.266, 7.287, 7.329-7.340, 7.391, 7.432 and 7.517 below. 
365 China, second written submission, paras. 1212-1213.  WT/DS405/R 
  Page 93  
 
 Article 11.3.
366  However, the European Union does dispute China's allegations that the calculation of 
the dumping margins in the expiry review was in  violation of Article 2 of the AD Agreement.367   
(ii) Evaluation by the Panel 
7.163  As noted above, Article 11.3 of the AD Agre ement "does not prescribe any particular 
methodology to be used by investigating authorities in making a likelihood determination in a sunset 
review," and in particular, does not require an inv estigating authority to calculate or rely on dumping 
margins in making a determination of likelihoo d of continuation or recurrence of dumping.368  
Nevertheless, investigating authoriti es do not have unrestricted discretion in the determination of a 
likelihood of continuation or recurrence of dumping.   With respect to the Article 11.3 determination 
of likelihood of continuation or recurre nce of dumping, the Appellate Body in US – 
Corrosion-Resistant Steel Sunset Review  observed: 
"The words 'review' and 'determine' in  Article 11.3 suggest that authorities 
conducting a sunset review must act with  an appropriate degree of diligence and 
arrive at a reasoned conclusion on the basis of information gathered as part of a 
process of reconsideration and examination.  In view of the use of the word "likely" 
in Article 11.3, an affirmative likelihood determination may be made only if the 
evidence demonstrates that dumping would be  probable if the duty were terminated—
and not simply if the evidence suggests th at such a result might be possible or 
plausible. …  
Thus, even though the rules applicable to s unset reviews may not be identical in all 
respects to those applicable to original investigations, it is clear that the drafters of the 
Anti-Dumping Agreement intended a sunset review to include both full opportunity 
for all interested parties to defend their inte rests, and the right to receive notice of the 
process and reasons for the determination."369 
In that case, the Appellate Body was considering an  administrative review under U.S. law in which 
the investigating authority had relied on previous ly calculated dumping margins in concluding that 
there was a likelihood of continuation or recurren ce of dumping. The Appellate Body made clear its 
view that there is:  
"no obligation under Article 11.3 for investig ating authorities to calculate or rely on 
dumping margins in determining the likelihood of continuation or recurrence of dumping.  However, should investigating authorities choose to rely upon 
dumping margins in making their likelih ood determination, the calculation of 
these margins must conform to the disciplines of Article 2.4.   We see no other 
provisions in the  Anti-Dumping Agreement  according to which Members may 
calculate dumping margins.  In the CRS sunset review, USDOC chose to base its 
affirmative likelihood dete rmination on positive dumping margins that had been 
previously calculated in two particular administrative reviews.  If these margins were 
legally flawed because they were calculated in  a manner inconsistent with Article 2.4, 
                                                      
366 European Union, answer to Panel question 52, paras. 157-159. 
367 European Union, first written submission, paras. 223 and 238. 
368 Appellate Body Report, US – Continued Zeroing , fn. 418; and Appellate Body Report, US – 
Corrosion-Resistant Steel Sunset Review , para. 149. 
369 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 111-112.  See also 
Appellate Body Report, United States – Sunset Reviews of Anti- Dumping Measures on Oil Country Tubular 
Goods from Argentina ("US – Oil Country Tubular Goods Sunset Reviews "), WT/DS268/AB/R, adopted 
17 December 2004, DSR 2004 :VII, 3257, para. 180. WT/DS405/R 
Page 94  
 
 this could give rise to an inconsistency not only with Article 2.4, but also with 
Article 11.3 of the  Anti-Dumping Agreement ."
370   
The Appellate Body went on to state: 
 
"[i]f a likelihood determination is based on a dumping margin calculated using a 
methodology inconsistent with Article 2.4,  then this defect taints the likelihood 
determination too.  Thus, the consistency with Article 2.4 of the methodology that 
USDOC used to calculate the dumping ma rgins in the administrative reviews 
bears on the consistency with Article 11.3 of USDOC's likelihood determination  
in the CRS sunset review.  ... If these margins were indeed calculated using a methodology that is inconsistent with Article 2.4 ... then USDOC's likelihood 
determination could not c onstitute a proper foundation fo r the continuation of anti-
dumping duties under Article 11.3."
 371  
7.164  Subsequently, in US – Anti-Dumping Measures on Oil Country Tubular Goods , the Appellate 
Body explained that: 
"[T]he Appellate Body Report in US – Corrosion-Resistant Steel Sunset Review  does 
not stand for the proposition that a WTO-inconsistent methodology used for the calculation of a dumping margin will, in and of itself, taint a sunset review determination under Article 11.3.  The only way the use of such a methodology would render a sunset review determination inconsistent w ith Article 11.3 is if the 
investigating authority relied upon  that margin of dumping to support its likelihood-
of-dumping or likelihood of injury determination."
372 
Thus, it is clear that if an investigating authorit y, in an expiry review, relies upon a dumping margin 
calculated in a WTO-inconsistent manner in determin ing that dumping is likely to continue or recur, 
that determination will be in consistent with Article 11.3.373   
 
7.165  There is no dispute in this case that the Commi ssion calculated dumping margins in the expiry 
review, and relied on those margins in making its determination of likelihood of continuation or 
recurrence of dumping.  Should we find that the Co mmission acted inconsistently with Article 2 in 
calculating dumping margins in the expiry review , and relied on such margins in making its 
determination of likelihood of continuation or recu rrence of dumping, we will conclude that China has 
demonstrated a violation of Article 11.3 of the AD in that respect.  However, should we find that the 
Commission acted inconsistently with Article 2 in calculating dumping margins in the original 
investigation, we will find a violation of the provision of Article 2 in question. 
7.166  Therefore, we now turn to consideration of China's claims under Article 2 of the 
AD Agreement with respect to the dumping aspect s of the expiry review and the original 
investigation.   
                                                      
370 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 127 (emphasis added). 
371 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , para. 130 (emphasis added).  
See also Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating Dumping 
Margins ("Zeroing") – Recourse to Article 21.5 of the DSU by the European Communities ("US – Zeroing (EC) 
(Article 21.5 – EC) "), WT/DS294/AB/RW and Corr.1, adopted 11 June 2009, para. 390. 
372 Appellate Body Report, United States – Anti-Dumping Measures on Oil Country Tubular Goods 
(OCTG) from Mexico ("US – Anti-Dumping Me asures on Oil Country Tubular Goods") , WT/DS282/AB/R, 
adopted 28 November 2005, DSR 2005:XX, 10127, para. 181 (emphasis in original). 
373 While the reports on which this view is based concerned dumping margins calculated inconsistently 
with Article 2.4 of the AD Agreement, we see nothing in the reasoning underlying this view that would limit it 
to only inconsistencies with that provision, and ne ither party suggests that it should be so limited.  WT/DS405/R 
  Page 95  
 
 (b) Claims III.1 and III.20 – Alleged violations of  Articles 2.4, 6.10.2, and 17.6(i) of the 
AD Agreement, Paragraph 15(a)(ii) of China' s Accession Protocol, a nd paragraphs 151(e)-(f) 
of China's Working Party Report – Failure to examine MET applications in the original 
investigation  
(i) Arguments of the parties 
a. China 
7.167  China claims that the European Union violat ed Articles 2.4, 6.10.2, and 17.6(i) of the 
AD Agreement, Paragraph 15(a)(ii) of China's Acce ssion Protocol and Paragraphs 151(e) and (f) of 
China's Accession Working Party Report by failing to examine the applications for market economy 
treatment ("MET") of non-sampled cooperating Chinese exporting producers in the original 
investigation.
374  China states that its claims of violation under each of these provisions are 
independent of one another.375 
7.168  China asserts that, at the time of the original investigation,  the Commission's practice with 
respect to MET applications was to individually exam ine each application, and provide an explanation 
to each applicant regarding the decision to grant or deny MET status, even in cases with a large 
number of applicants where sampling was used in making the dumping determination.376  In the 
original investigation at issue here, however, China asserts that, despite having solicited MET applications from all Chinese exporting producers,  and having timely r eceived over 140 such 
applications, the Commission only examined the M ET applications of companies selected for the 
sample of Chinese exporting producers, and never examined the MET applications submitted by non-
sampled cooperating Chinese exporting producers.
377  China notes that only the results with respect to 
the MET applications of the sampled Chinese exporte rs were published in the Provisional Regulation, 
and asserts that non-sampled companies objected to not receiving any disclosure regarding the results 
of their MET applications.378 
7.169  China notes that pursuant to Paragraph 15(a)(ii)  of China's Accession Protocol, an importing 
WTO Member may only use a methodology that is not based on a strict comparison with Chinese 
prices or costs if producers under investigation canno t clearly show that market economy conditions 
prevail in the industry producing the like product.379  China asserts that Paragraph 15(a)(ii), requires 
individual examination of all MET applications th at have been submitted before resorting to an 
alternative methodology that is not based on a strict  comparison with domestic prices or costs in 
China, and that by failing to comply with th is requirement, the European Union violated 
Paragraph 15(a)(ii).380   
                                                      
374 China, first written submission, paras. 839 and 851. 
375 China, answer to Panel question 87, para. 510. 
376 China, first written submission, para. 840.  Chin a cites a case before the European Court of First 
Instance (case T-255/01), and three previous anti-dumping investigations by the Commission (Council 
Regulation Nos. 1487/2005, 1212/2005, and 1095/2005) to demonstrate EU practice in this regard.  China 
describes the so-called "desk check analysis" as includ ing an individual evaluation of the merits of each 
application, but with no on-t he-spot verification, disclosure of the accept ance or rejection of the application, and 
an opportunity to comment.  China, first written submission, para. 840. 
377 China, first written submission, paras. 839, 841 and 844. 
378 China, first written submission, paras. 846-847,  and 849, citing Definitive Regulation, Exhibit 
CHN-3, recital 61-69. 
379 China, first written submission, paras. 854-855. 
380 China, first written submission, para. 857; answer  to Panel question 89, para. 526; second written 
submission, para. 1243. WT/DS405/R 
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 7.170  In addition, China asserts that Paragraphs 151(e) and (f) of China's Accession Working Party 
Report require importing WTO Members to "pro vide Chinese producers and exporters a full 
opportunity for the defence of their interests in a particular case" and to "provide a sufficiently detailed reasoning of its preliminary and fi nal determinations in a particular case."
381  China asserts 
that the European Union violat ed these obligations by not disclosing the examination of MET 
applications of non-sampled cooperation Chinese exporting producers.382  China contends that the use 
of the word "comply" in Paragraph 151 shows that this Paragraph is binding on WTO Members.383  
China maintains that while Paragraph 342 of China' s Accession Working Party Report lists only those 
paragraphs of that Report containing commitments given by China, this does not mean that other 
paragraphs of that Report do not establis h binding obligations on other WTO Members.384  In China's 
view, this is confirmed by the fact that Para graph 14 of China's Accession Working Party Report 
refers to "discussions and commitments … containe d in paragraphs 15-342 below and in the Draft 
Protocol of Accession ('Draft Protocol'), including the annexes."385  Finally, China argues that China's 
Accession Working Party Report also contains other obligations on WTO Members, such as the application of product-specific safeguards in Paragraphs 246-250, which are not included in 
paragraph 342.
386  China notes that Paragraph 246 explicitly provides that "WTO Members would 
comply" with the provisions of China's Accession Protocol and "the following", which it contends 
refers to provisions of China's Accession Work ing Party Report, confirming that WTO Members 
accepted commitments under both China's Accession Pr otocol and China's Accession Working Party 
Report.387 
7.171  China notes that Paragraph 151(e) of China's Accession Working Party Report and Article 6.2 
of the AD Agreement contain similar language, in par ticular the reference to "a full opportunity for 
the defence of their interests".  In response to a question posed by the Panel, China submits that the 
former should be seen as an application of the funda mental due process right contained in the latter in 
the determination under Paragraph 15(a) (ii) of China's Accession Protocol.388  China further contends 
that in Paragraph 151(f) of Ch ina's Accession Working Party Repo rt, WTO Members provided rights 
for China additional to those in Article 12.2.2 and 6.9 of the AD Agreement.389   
7.172  China argues that, notwithstanding the number of  MET applications and the fact that the 
European Union decided to use sampling for purposes of its dumping determination, sampling cannot be used in determining whether the producers under investigation operate under market economy 
conditions.
390  Moreover, China argues that even if sampling could be used, the sample used by the 
Commission was not selected for purposes of the MET determination, but for purposes of the 
dumping determination.  According to China, th e criteria used for selecting the sample for the 
determination of dumping do not guarantee that the sa mple selected is representative for purposes of 
                                                      
381 China, first written submission, para. 858, c iting Paragraph 151(e) and (f) of China's Accession 
Working Party Report. 
382 China, first written submission, paras. 859 and 861-862. 
383 China, second written submission, para. 1255. 
384 China, answer to Panel question 86, paras. 503-505; second written submission, para. 1254. 
385 China, answer to Panel question 86, para. 506.  See also second written submission, paras. 1256-
1257. 
386 China, answer to Panel question 86, para. 508. 
387 China, answer to Panel question 86, para. 509 ; second written submission, paras. 1258-1259. 
388 China, answer to Panel question 88, paras. 516- 517; second written submission, paras. 1260-1261.  
See also first written submission, para. 860, noting the similarities between Paragraph 151(e) of China's 
Accession Working Party Report and Article 6.2 of the AD Agreement. 
389 China, answer to Panel question 88, para. 518. 
390 China, first written submission, para. 867.  See also opening oral statement at the second meeting 
with the Panel, para. 25.  WT/DS405/R 
  Page 97  
 
 the MET determination.
391  China observes that no specific sampling procedure was foreseen by the 
Commission for purposes of the examination of MET applications.392 
7.173  China also claims that the European Union violated the fair comparison requirement of 
Article 2.4 of the AD Agreement by requiring Chinese producers to complete their MET applications within a short period of time, and then  not examining the information submitted.
393  Finally, referring 
to its arguments with respect to alleged violati ons of Article 6.10.2 of the AD Agreement in the 
European Union's failure to indi vidually examine the four Chinese companies that requested such 
examination,394 China claims that since the European Uni on did not examine, and thus did not grant, 
the requests for MET of those four companies, they were by default excluded from individual 
examination, required by Article 6.10.2, insofar as the European Union requires MET to be granted in 
order to qualify for individual treatment.395 
b. European Union 
7.174  The European Union argues that the examinati on of MET applications is not required with 
respect to exporting producers not included in the sa mple selected for the dumping determination and 
which do not qualify for individual examination.396  The European Union submits that the selection of 
the sample for the dumping determination was c onsistent with Article 6.10 and 6.10.1 of the 
AD Agreement.397  The European Union contends that th e MET determination takes place in the 
context of the determination of dumping, and in  cases where sampling is used and individual 
examination is not possible, the MET determinati on is appropriately undertaken based on examining 
the sampled companies.398   
7.175  The European Union contends that Paragraph 15( a)(ii) of China's Accession Protocol does not 
address the issue of sampling, and does not interfere with the possibility of using sampling pursuant to 
Articles 6.10 and 9.4 of the AD Agreement.399  Finally, despite China's assertion that its claims are 
independent of one another, the European Union c onsiders that the Panel need not examine China's 
claims under the AD Agreement if the Panel finds  that Paragraph 15(a)(ii) does not require 
investigating authorities to examine each of the MET applications individually.400 
7.176  The European Union asserts that Paragraph 151 of the Working Party report does not 
establish any commitments on the part of WTO Memb ers.  The European Union notes that China's 
Accession Protocol is an integral part of the WTO Agreements, and that paragraph 342 of China's 
Accession Working Party Report incorporates Chin a's commitments in China's Accession Working 
Party Report into China's Accession Protocol.  However, the European Union points out, 
Paragraph 151 of China's Accession Working Party Re port is not listed in Paragraph 342 of China's 
                                                      
391 China, second written submission, paras. 1241-1242. 
392 China, first written submission, para. 872. 
393 China, first written submission, para. 875.  See also second written submission, paras. 1273-1274. 
394 See paragraphs 7.131-7.134 above. 
395 China, first written submission, paras. 876-877. 
396 European Union, first written submission, para . 551; second written submission, para. 211. 
397 European Union, first written submission, para. 55 2.  The European Union asserts that China does 
not contest that the use of sampling in the original investigation was warranted.  Id.  China asserts that while it 
made no claim in this regard, this does not mean that  it agrees sampling was warranted.  China, second written 
submission, para. 1228. 
398 European Union, first written submission, para. 554.  The European Union notes in this regard that 
the Chinese authorities agreed to the sample selected. 
399 European Union, first written submission, para. 558. 
400 European Union, second written submission, para. 214. WT/DS405/R 
Page 98  
 
 Accession Working Party Report.  Thus, the European  Union maintains that Paragraph 151 cannot be 
interpreted to create obligations on any WTO Member.
401   
7.177  The European Union argues that Article 2.4 of the AD Agreement does not regulate sampling, 
or how normal value should be established in cases of imports from China.  The European Union 
asserts that China has not presented a prima facie  case with respect to this provision.  Finally, the 
European Union understands China to make two ar guments with respect to Article 6.10.2 of the 
AD Agreement.  The first argument relates to the fa ilure to individually examine the four companies 
that requested individual examination under Artic le 17(3) of the Basic AD Regulation.  The 
European Union argues that both the Provisional Re gulation and the Definitive Regulation explained 
the reasons why it was not possible to grant indivi dual examination to these four companies.  The 
second argument relates to the failure to examine questionnaires from and grant MET to non-sampled 
Chinese companies, and asserts that these compan ies were by default excluded from individual 
examination, required by Article 6.10.2.  The Europe an Union states that it fails to understand China's 
claim, but nevertheless argues that it is incorrect to  consider that the lack of examination of the MET 
applications by default excluded those f our companies from individual examination.402 
(ii) Evaluation by the Panel 
7.178  Before addressing China's claims, we consider it useful to set out our understanding of the 
relevant facts.  Pursuant to Article 2(7)(b) of the Basic AD Regulation, the normal value used by the 
Commission in anti-dumping investigations concer ning imports from China is determined on the 
same basis as for producers in market economies, if it is shown, on the basis of properly substantiated 
claims by one or more Chinese exporting producers, "that market economy conditions prevail for this 
producer or producers in respect of the manufacture and sale of the like product".  The Basic 
AD Regulation sets out the criteria that must be sa tisfied for MET to be granted.  The Notice of 
Initiation in the original investigation stated th at Chinese exporting producers seeking to be granted 
MET should submit "duly substantiate d claims" with respect to the MET criteria within 15 days of the 
date of publication of the Notice.403  The Notice also indicated the likelihood that sampling might be 
used in the determination of dumping, and request ed Chinese exporters/producers to make themselves 
known and provide certain information to the Commi ssion within 15 days of the publication of the 
Notice.404  Over 140 companies submitted applications for MET.405  In the Provisional Regulation, the 
Commission set forth its examination with respect  to the MET applications of the 12 Chinese 
exporters selected for the sample, and its conclu sion that none of the companies satisfied the 
conditions for MET.406  Certain interested parties argued to the Commission that the Commission was 
obliged to make individual determinations with r espect to MET applications, regardless of whether 
the particular exporter was selected for the sample or not.  The Commission rejected these arguments.  
The Commission concluded that the provision of the Basic AD Regulation on sampling encompassed the situation of companies claiming MET.  The Commission noted that in any case of sampling, whether concerning market economy countries or others, exporters are by the nature of the sampling 
exercise denied individual assessment and the c onclusions reached for the sample are extended to 
                                                      
401 European Union, first written submission, para . 560; second written submission, para. 213. 
402 European Union, first written submission, paras. 567, 569, 570-572 and 579. 
403 Notice of initiation of an anti-dumping proceeding concerning imports of certain footwear with 
uppers of leather originating in the People's Republic of China and Vietnam ("Notice of Initiation"), OJ C 166, 
7 July 2005, Exhibit CHN-6, recitals 5.1(e) and 6(d). 
404 Notice of Initiation, Exhibit CHN-6,  recitals 5.1(a)(i) and 6(b)(i). 
405 China, first written submission, para. 844.  The European Union does not indicate specifically the 
number of companies submitting appli cations for MET, but does state that 163 companies "provided the 
requested information within the given deadline", and that 154 of those had exports to the European Union 
during the relevant period.  These companies were considered for the sample.  European Union, first written submission, para. 540.   
406 Provisional Regulation, Exhibit CHN-4, recitals 66-90.    WT/DS405/R 
  Page 99  
 
 them.  The Commission considered that there was no reason why sampling could not equally be 
applied to the situation where a high number of co mpanies requested MET.  The Commission stated 
that the number of requests for MET in this case was so substantial that an individual examination of 
the requests, as had sometimes been done in othe r cases, was administratively impossible.  The 
Commission stated that in those other cases, an individual examination of the MET requests was 
found to be still feasible, while this was not the case in this investigation. The Commission also stated 
that subsequent submissions from non-sampled exporting producers were  not examined as this would 
have been unduly burdensome and would have prev ented completion of the investigation in good 
time.
407 
7.179  China asserts independent violations of Articles 2.4, 6.10.2, and 17.6(i) of the AD Agreement, 
Paragraph 15(a)(ii) of China's Accession Protocol , and Paragraphs 151(e) a nd (f) of China's Working 
Party Report against the European Union.408  We will first address China's claim under China's 
Accession Working Party Report.   
7.180  China claims that Paragraphs 151(e) and (f) of China's Accession Working Party Report 
establish that the European Union (and other WTO Members) have committed to "provide Chinese 
producers and exporters a full opportunity for the defen ce of their interests in a particular case" and to 
"provide a sufficiently detailed reasoning of its prel iminary and final determinations in a particular 
case."409  China asserts that the European Union failed to  comply with these obligations in the original 
investigation by not disclosing the examination of MET applications of non-sampled cooperation 
Chinese exporting producers.410  The European Union, on the other hand, contends that Paragraph 151 
of China's Accession Working Party Report does not establish any legal obligations for WTO 
Members, and that China's clai m is therefore without merit.411   
7.181  We agree with the European Union.  Section 1( 2) of China's Accession Protocol provides, in 
relevant part, "[t]his Protocol, which shall include  the commitments referred to in paragraph 342 of 
China's Accession Working Party Report, shall be an integral part of the WTO Agreement."  
Section 1(2) of China's Accession Protocol, which is the only incorporation of commitments from 
China's Accession Working Party Report into the WT O Agreement, is clear on its face, and cannot be 
understood to incorporate commitments from paragr aphs not listed in Para graph 342.  Paragraph 151 
of China's Accession Working Party Report is not among the paragraphs liste d in Paragraph 342 of 
China's Accession Working Party Report.  It is  thus clear Paragraph 151 of China's Accession 
Working Party Report is not a "commitment[] referred  to in Paragraph 342", and consequently, is not 
part of the WTO Agreement.412  Paragraph 151 of China's Accessi on Working Party Report therefore 
                                                      
407 Definitive Regulation, Exhibit CHN-3, recitals 60-69. 
408 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that 
provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision further here. 
409 China, first written submission, para. 858, c iting Paragraph 151(e) and (f) of China's Accession 
Working Party Report. 
410 China, first written submission, paras. 859 and 861-862. 
411 European Union, first written submission, para. 560. 
412 We note that the Panel in China – Auto Parts  found that "[t]he Accession Protocol is an integral part 
of the WTO Agreement pursuant to Part I, Article 1.2 of the Accession Protocol.  In turn, paragraph 342 of 
China's Working Party Report incorporates China's commitments under its Working Party Report, including 
paragraph 93, into the Accession Protocol.  Therefore, China's commitment in paragraph 93 of China's Accession Working Party Report is also an integr al part of the WTO Agreement."  Panel Reports, China – 
Measures Affecting Imports of Automobile Parts ("China – Auto Parts "), WT/DS339/R, WT/DS340/R, 
WT/DS342/R and Add.1 and Add.2, adopted 12 January 2009, as upheld (WT/DS339/R) and as modified (WT/DS340/R, WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R, WT/DS340/AB/R, 
WT/DS342/AB/R, para. 7.740. WT/DS405/R 
Page 100  
 
 cannot be understood to impose a legally binding obligation on any WTO Member, and cannot be the 
basis of a claim in WTO dispute settlement.   
7.182  China, however, argues that the word "comply"  in Paragraph 151 demonstrates that it is a 
legally binding provision, and that since Paragraph 342 only lists the commitments "given by China", a commitment given by other WTO Members would naturally not be included in Paragraph 342.  
China finds support for its assertion that a commitment given by other WTO Members may be 
included in a paragraph of China's Accession Worki ng Party Report, other than Paragraph 342, such 
as Paragraph 151, in the fact that Paragraph 14 of  China's Accession Working Party Report refers to 
the discussions and commitments contai ned in Paragraphs 15 to 342.   
7.183  We disagree.  Even if Paragraph 14 were unders tood to mean that Paragraphs 15 to 342 all 
refer to "commitments", Paragraph 1(2) of Chin a's Accession Protocol refers to Paragraph 342 
specifically, and exclusively, in establishing which of the paragraphs of China's Accession Working 
Party Report contain commitments that are to be incorporated in the Protocol, and consequently 
become legally binding.  Paragraph 14 of China' s Accession Working Party Report, in itself, cannot 
make commitments expressed in China's Accessi on Working Party Report legally binding.   
7.184  China also argues that commitments given by other Members concerning product-specific 
safeguards in Paragraphs 246-250 of China's Acce ssion Working Party Report are legally binding, 
despite not being listed in Paragraph 342.   
7.185  We recall that binding obligations on "transitiona l product-specific safeguard mechanism" are 
set out in Section 16 of China's Accession Protocol.
413  It is clear to us that the legally binding nature 
of WTO Members' commitments in this regard arise from their inclusio n in China's Accession 
Protocol, which is an integral part of the WT O Agreement, and not from China's Accession Working 
Party Report.  Thus, we fail to see how China's ar gument supports its position.  There is nothing in 
China's Accession Protocol that sets out "commitm ents" equivalent to the matters addressed in 
Paragraph 151(e) and (f) of China's Accession Working Party Report.   
7.186  China further submits that Paragraph 151(e)  of China's Accession Working Party Report 
should be seen as an "application" of the fundamental  due process right set out in Article 6.2 of the 
AD Agreement to the determination under Paragraph 15(a)(ii) of China's Accession Protocol.  China 
notes that Article 6.2 of the AD Agreement and Paragraph 151(e) of China's Accession Working Party Report both refer to "a full opportunity for the defence of their interests".
414  China asserts that "the 
reference to Paragraph 151(e) of China's Accession Working Party Report impliedly also constitutes a 
reference to the principles upon which Article 6.2 is based"415  and contends that although 
Paragraph 151(e) does not necessarily provide for an "additional right" beyond Article 6.2, it provides 
for "the same right , though located in another place."416  China further argues that in Paragraph 151(f) 
of China's Accession Working Party Report, WTO Me mbers granted rights to China in addition to 
those set out in Article 12.2.2 of the AD Agreement.  In this regard, China argues that Article 12.2.2 
of the AD Agreement is more limited than Paragra ph 151(f), as it refers to "relevant" information, 
                                                      
413 In US – Tyres (China) , a case involving a product-specific sa feguard, the Panel concentrated its 
examination on Section 16 of China's Accession Protocol, although it referred to China's Accession Working 
Party Report as context for understanding China's Accession Protocol.  See Panel Report, United States – 
Measures Affecting Imports of Certain Passenger Vehicle and Light Truck Tyres from China ("US – Tyres 
(China) "), WT/DS399/R, circulated to WTO Members 13 December 2010 [appeal/adoption pending], 
para. 7.141. 
414 China, answer to Panel question 88, paras. 516- 517; second written submission, paras. 1260-1261.  
See also first written submission, para. 860, noting the si milarities between Paragrap h 151(e) China's Accession 
Working Party Report and Article 6.2 of the AD Agreement. 
415 China, answer to Panel question 88, para. 517 ; second written submission, paras. 1260-1261. 
416 China, opening oral statement at the se cond meeting with the Panel, para. 28.  WT/DS405/R 
  Page 101  
 
 while Paragraph 151(f) refers to "detailed reasoni ng", and a public notice under Article 12.2.2 will not 
contain confidential information, which may not al ways constitute the "sufficient detailed reasoning" 
called for by Paragraph 151(f).  China also asserts that the "sufficient detailed reasoning" with respect 
to the "preliminary and final determinations" ca lled for by in Paragraph 151(f) establishes more 
extensive disclosure requirements than those establis hed by Article 6.9 of the AD Agreement, which 
refers only to "essential facts under consideration" with respect to "the decision whether to apply 
definitive measures".
417  Finally, China argues that the particular facts of this case warranted a more 
detailed disclosure than the General Disclosure Do cument provided by the Commission, which did 
not contain information on why MET applications were not examined on their merits.418  T h e  
European Union contends that China's arguments with  respect to Articles 6.2, 6.9 and 12.2.2 of the 
AD Agreement miss the point, given that China has made no claims under tho se Articles wi th respect 
to the examination of the MET applications, rely ing instead on Paragraphs 151(e) and (f) of China's 
Accession Working Party Report.419  Moreover, the European Union asserts that non-sampled 
cooperating Chinese exporting producers were provided a full opportunity to defend their interests, as 
they were informed of the Commission' s reasoning in making its determinations.420 
7.187  It is clear that China has not made any claims of violation of Articles 6.2, 6.9 and 12.2.2 of 
the AD Agreement with respect to  the examination of the MET applications, and China does not 
contend otherwise.  We have concluded that Para graphs 151 (e) and (f) of China's Accession Working 
Party Report do not establish any legally binding commi tments on WTO Members.  Thus, there is no 
basis for China's assertion that WTO Members gran ted China rights under Paragraph 151 (e) and (f) 
either the same as, or broader than, those se t out in Articles 6.2, 6.9, and 12.2.2 of the 
AD Agreement.421   
7.188  With respect to Article 2.4 of the AD Agreement,  China recalls that Article 2.4 requires that 
"a fair comparison shall be made between the export price and the normal value."422  China asserts 
that the European Union violated this requireme nt "[b]y effectively requiring the producers under 
investigation to undertake a massive amount of work to complete the MET application form within an 
extremely short deadline and then not even consider ing the information submitted", thereby violating 
"the principle of good faith and fundamental fairness. "  The European Union agrees that Article 2.4 of 
the AD Agreement requires a "fair comparison", but asserts that nothing in Article 2.4 regulates sampling, or how normal value should be established in cases of imports from China.
423   
                                                      
417 China, answer to Panel question 88, paras.  518 and 520-521; second written submission, 
paras. 1263-1266. 
418 China, second written submission, paras. 1263 and 1267, referring to Exhibit CHN-78. 
419 European Union, second written submission, para. 215; first written submission, para. 561.  The 
European Union argues that such claims would be outside the Panel's terms of reference, since they were not 
included in China's panel request. 
420 European Union, first written submission, para. 562.  The European Union notes that these 
producers received a copy of the General Disclosure  Document, and were informed that any anti-dumping 
duties on their exports would be calcu lated in accordance with Article 9( 6) of the Basic AD Regulation, the 
provision dealing with the determination of anti-du mping duties in cases where sampling is applied.  Id. 
421 Indeed, we find it difficult to imagine that they would have done so without being far more explicit 
on the matter.  In any event, we see no need to address any alleged differ ences in scope between the text of 
China's Accession Working Party Report an d the AD Agreement in this regard. 
422 China, first written submission, paras. 854 and 875.  See also second written submission, 
paras. 1273-1274. 
423 European Union, first written submission, para. 567.  The European Union contends that China has 
failed to present a prima facie case of violation of Article 2.4.  The European Union asserts in this regard that  
"China makes a bare assertion about the meaning of Article 2.4 ("fair comparison") and 
expects the Panel to develop the argument on its behalf or to shift the burden to the European Union to demonstrate that the relevant facts of the case do not infringe Article 2.4." 
European Union, first written submission, para. 567. WT/DS405/R 
Page 102  
 
 7.189  We agree with the European Union that Article  2.4 does not establish any requirements with 
respect to either sampling, or the establishment of normal value.
424  The first sentence of Article 2.4 
contains a general obligation to make a "fair comparison" between export price and normal value.425  
Despite the fact that this obligation is expressed  in terms of a general and abstract standard,426 China 
has failed to demonstrate how Article 2.4 regulat es MET applications or the use of sampling in 
examining MET applications.  Thus, we consider that  Article 2.4 does not constitute a legal basis for 
China's claims.   
7.190  China argues that Paragraph 15(a)(ii) of its  Protocol of Accession requires individual 
examination of all MET applications that have be en submitted before resorting to an alternative 
methodology that is not based on a strict comparison with domestic prices or costs in China.427  China 
notes that pursuant to Paragraph 15(a)(ii) of its Protocol of Accession, an importing WTO Member 
may only use a methodology that is not based on a strict comparison with Chinese prices or costs if "producers under investigation cannot clearly show  that market economy conditions prevail in the 
industry producing the like product".  China re calls that the dumping margin for non-sampled 
cooperating Chinese exporting producer s, who submitted MET applications, was set at the level of the 
weighted average dumping margins established for sampled cooperating Chinese companies, and that 
normal value for these companies was established on the basis of prices in the analogue country.  
Thus, China contends that normal value for th e non-sampled Chinese c ooperating exporters was 
necessarily also based on prices in the analogue country, despite that  they had each requested MET.  
China asserts that, in order to apply a methodolo gy such as the analogue country method, which "is 
not based on a strict comparison with domestic pric es or costs in China", the importing WTO Member  
"must first determine whether the producer s that have submitted questionnaire 
responses can or cannot clearly show that they operate under market economy conditions.  That is because in case they can clearly show that they operate under 
market economy conditions, the importing Member is not entitled to apply the 
analogue country method per [Paragraph 15(a )(ii)].  This implies that all submitted 
MET questionnaire responses must be assessed on their merits."
428 
7.191  The European Union argues that Paragraph 15(a )(ii) of China's Accession Protocol does not 
address the issue of sampling.  Nor does it interfere with the possibility of using sampling pursuant to 
Articles 6.10 and 9.4 of the AD Agreement.  Th e European Union notes that all but one sampled 
Chinese company did not satisfy the MET criteria, and thus contends that the Commission properly 
established the normal value for these companies based on an analogue country, pursuant to 
Paragraph 15(a).429  In addition, the European Union asserts that according to Paragraph 15(d), WTO 
Members may decide that market economy conditions pr evail in a particular industry or sector, or in 
China as a whole.430  The European Union argues that, pursuant to Paragraph 15(a)(ii),  
                                                      
424 We recall in this regard our findings with re spect to analogue country, where we concluded, inter 
alia, that Article 2.4 did not relate to the establishment of normal value, but only came into play after the 
determination of normal value and export price, in the comparison of the two.  See paragraphs 7.262-7.265 below. 
425 Appellate Body Report, EC – Bed Linen , para. 59. 
426 Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating 
Dumping Margins ("Zeroing") ("US – Zeroing (EC) "), WT/DS294/AB/R, adopted 9 May 2006, and Corr.1, 
DSR 2006:II, 417, para. 146. 
427 China, first written submission, para. 857; answer  to Panel question 89, para. 526; second written 
submission, para. 1243. 
428 China, first written submission, paras. 854-857, citing Definitive Regulation, Exhibit CHN-3, 
recital 146. 
429 European Union, first written submission, para. 558. 
430 European Union, answer to Panel question 89, para. 257.  WT/DS405/R 
  Page 103  
 
 "producers requesting MET must show that market economy conditions prevail in the 
industry (as opposed to individual companies) producing the like product with regard to manufacture, production and sale of that product."
431 
The European Union goes on to state that  
 
"as a unilateral concession vis-à-vis China,  the European Union examines whether an 
individual producer can be considered as a market economy producer (and thus grant MET) even if market economy conditions cannot be shown to prevail in the industry or sector producing the like product."
432 
7.192  China contends that the term "industry" in Paragraph 15(a)(ii) does not imply that the use of 
alternative methodologies is only allowed if it cannot  be established that the "industry", rather than 
individual producers within an industry, operate under market economy conditions.  China considers 
that "the use of NME methodologies is precluded also  with regard to single operators within the 
industry under investigation that can clearly show that they operate on market economy conditions."  
China argues that the reference to "industry" merely indicates that the analysis is limited to the sector 
of the like product, and that investigating author ities may not draw inferences on the basis of other 
sectors.  In support of its arguments, China refers to Paragraph 15(d) of China's Accession Protocol, 
which provides that if it is established under the national law of an importing WTO Member that 
market economy conditions prevail in a partic ular industry or sector, the provisions of 
Paragraph 15(a) shall no longe r apply to that industry or sector.  According to China, the fact that a 
WTO Member may exclude an entire sector or indust ry from the application of Paragraph 15(a)(ii) 
does not mean that for sectors or industries that have  not been excluded pursuant to Paragraph 15(d), 
an importing WTO member could use an altern ative methodology with respect to individual 
producers in an investigation that can show th at they operate under market economy conditions.433  
7.193  Paragraph 15(a) of China's Accession Pr otocol provides, in pertinent part: 
"(a) In determining price comparability under Article VI of the GATT 1994 and 
the Anti-Dumping Agreement, the importing WTO Member shall use either Chinese 
prices or costs for the industry under investig ation or a methodology that is not based 
on a strict comparison with domestic prices or costs in China based on the following rules: 
 (i) If the producers under investigation can clearly show that market 
economy conditions prevail in the indu stry producing the like product with 
regard to the manufacture, production and sale of that product, the importing 
WTO Member shall use Chinese prices or costs for the industry under investigation in determining price comparability; 
 (ii) The importing WTO Member may use a methodology that is not 
based on a strict comparison with domest ic prices or costs in China if the 
producers under investigation cannot clearly show that market economy 
conditions prevail in the industry produ cing the like product with regard to 
manufacture, production and sale of that product." 
                                                      
431 European Union, second written submission, para. 215; answer to Panel question 89, para. 256, 
citing Articles 2(7)(b) and 2(7)(c) of the Basic AD Regulation. 
432 European Union, second written submission, para. 215; answer to Panel question 89, para. 256, 
citing Articles 2(7)(b) and 2(7)(c) of the Basic AD Regulation. 
433 China, answer to Panel question 89, paras. 523-525. WT/DS405/R 
Page 104  
 
 There is nothing in the text of Paragraph 15(a)(ii) that  refers to either the method or the criteria that 
should be used by investigating authorities to determine whether "market economy conditions prevail 
in the industry".   
7.194  In our view, the text of Paragraph 15(a)(ii) is quite clear as to what must be shown, and by 
whom.  Individual producers must "clearly s how" that market conditions prevail in the industry  
producing the like product, in order to avoid the possibility that the importing WTO Member may use 
a methodology that is not based on a strict comparison with domestic prices or costs in China.  On the 
other hand, if producers under investigation cannot  clearly show that "market economy conditions 
prevail in the industry producing the like product" , the importing Member is allowed to use a 
methodology that is not based on a strict comparison with Chinese prices or cost in its determination 
of price comparability.  In our view, nothing in this provision suggests that an importing Member 
must consider whether individual producers can s how that market economy conditions prevail with 
respect to each of the individual producers or any of  them.  We do not agree that Paragraph 15(a)(ii) 
establishes that the importing Member is precluded from using a methodology that is not based on a strict comparison with Chinese prices or cost in its  determination of price comparability with respect 
to an individual Chinese producer if that produ cer can show that it operates under market economy 
conditions, unless it has been "clearly show[n]" that market economy conditions prevail in the 
industry of which that producer is a part.
434  Furthermore, since the showing of whether market 
economy conditions prevail must be made with respect  to the industry producing the like product in 
China, we see no reason why the determination in that regard may not be made by the importing 
Member on the basis of a sample of the industry in question, as is the case with other determinations 
in anti-dumping investigations, includ ing the determination of dumping. 
7.195  China, however, argues that "[s]ampling cannot apply to the determination of whether the 
producers under investigation operate under ma rket economy conditions [since] [t]he MET 
determination is not an aggregate one, based on a coll ective assessment of information, but it is based 
on the information provided by individual producers."435  China asserts that neither 
Paragraph 15(a)(ii) of China's Accession Protocol , nor any other provision, authorizes the use of 
sampling in the examination of MET applications.436  China contends in this regard that Article 6.10 
of the AD Agreement, which generally requires the ca lculation of individual dumping margins, allows 
the use of sampling, and permits the investigati ng authority not to calculate individual dumping 
margins for non-sampled producers in such cases.  However, China submits that other rights of 
exporting producers in such cases, including, China asser ts, the right to have a determination of price 
comparability on the basis of Chinese prices or  costs, are not affected by sampling.437  China contends 
that Article 6.10 is not concerned with the methodology that is to be used for the determination of the 
margin of dumping, which is regulated elsewhere in  the AD Agreement, and in the case of China, also 
in Paragraph 15(a) of China's Accession Protocol.438  Moreover, China argues, in this investigation, 
                                                      
434 We recall that, like other provisions of the WTO Agreement, China's Accession Protocol sets out 
the minimum rights and ob ligations of Members toward each other.   Nothing prevents a Member from 
according greater rights to another Member, as the Europe an Union asserts it does vis-à- vis China in this context 
as a unilateral concession.  
435 China, first written submission, para. 867.  See also opening oral statement at the second meeting 
with the Panel, para. 25. 
436 China, answer to Panel question 89, para. 530; second written submission, para. 1241.   
437 China, answer to Panel question 89, para. 531;  second written submission, paras. 1232 and 1241; 
closing oral statement at the second meeting with th e Panel, para. 103, referring to Article 6.10.2.   
438 China, second written submission, paras. 1230-1231.  China also argues that in other investigations, 
when the Commission used sampling, the Commission's practice was to give non-sampled cooperating 
producers which received MET as a result of a "desk check"  a duty rate based on the weighted average duty of 
sampled companies that received MET.  China, first written submission, para. 874; opening oral statement at the 
second meeting with the Panel, para. 24.  In addition, Ch ina argues that, in a previous case, the European Union 
had stated that the provisions on sampling could not be used for MET determination.  China, first written  WT/DS405/R 
  Page 105  
 
 the Commission incorrectly applied the sampling me thodology, as "the sample was not selected for 
the purpose of the MET determination, but for the pur pose of the calculation of the dumping margins.  
In other words, the European Union did not sample the MET determination."
439  China contends that 
the criteria used for the selection of the sample used  in the determination of  dumping do not guarantee 
that the sample selected will be representative fo r purposes of determining whether "market economy 
conditions prevail in the industr y producing the like product."440   
7.196  The European Union contends that the MET de termination takes place in the context of the 
determination of dumping, and in cases where sampli ng is used for the determination of dumping, and 
individual examination is not po ssible, the MET determination needs to take place based on 
examining the sampled companies.  The European Uni on considers this to be an equivalent situation 
to the determination of dumping in an inves tigation concerning imports from market economy 
countries in which sampling is used, and which w ould include the establishment of normal values and 
export prices.  The European Union considers th at, since the use of sampling implies that the 
investigating authority limits its examination as to  the existence of dumping to a group of exporters, 
the examination of MET applications provided by  non-sampled cooperating exporting producers is 
not required, just as the examination of the indi vidual situation of non-sampl ed cooperating exporters 
would not be required in cases of imports from mark et economy countries provided that the condition 
under Article 6.10.2 is met.441  The European Union maintains th at even if a sampled company was 
granted MET, the Commission was not required to extrapolate that result to other MET applications, since requests for individual treatment were not gr anted in accordance with Article 6.10.2, and thus 
the Commission was not required to examine some MET applications as a result of its finding within 
the sample.
442 
7.197  There is no dispute that Paragraph 15(a)( ii) of China's Accession Protocol does not 
specifically address the question of sampling for purposes of determining whether "market economy 
conditions prevail" in the industry at issue.  We  do not agree with China's assumption that simply 
because Paragraph 15(a)(ii) does not explicitly authorize the use of sampling in making that 
determination means that sampling is prohibited,  and if used, constitutes a violation of this 
Paragraph.443  We recall in this regard the views of the panel in EC – Salmon (Norway) , which 
considered a similar argument with respect to the use of sampling in the context of injury 
determinations under the AD Agreement: 
                                                                                                                                                                     
submission, para. 867, referring to Council Regulation No. 1487/2005.  We do not consider that the actions of 
the Commission in another anti-dumping investigation are relevant to our analysis in this case, particularly 
given that China's claim is with respect  to the Commission's actions in this case, and not its practice or EU law 
as such. 
439 China, first written submission, para. 868. 
440 China, second written submission, para. 1242.  China argues that Article 6.10 of the AD Agreement 
allows for the selection of a sample composed of "the largest percentage of the volume of the exports from the 
country in question which can reasonably be investigated".  China submits that although this criterion is justified 
in the context of the determination of dumping, because it ensures that the result of the dumping calculations of 
the sample be considered representativ e of the entire volume of imports, this criterion should not be used for 
MET determination, due to its "entirely different purpos e".  China argues that "[t]he selection of the biggest 
exporters does not ensure a representativeness of the entire industry, as companies with low or medium levels of 
export sales will necessarily be excl uded from such an examination."  China, second written submission, 
paras. 1242 and 1247. 
441 European Union, first written submission, paras.  554-555; second written submission, para. 218; 
opening oral statement at the second meeting with the Panel, para. 382. 
442 European Union, second written submission, para. 217. 
443 To the extent China has presented this argument, we do not consider it relevant to examine whether 
the so-called "desk-check analysis" is mandatory  under EU law.  See paragraph 7.168 above. WT/DS405/R 
Page 106  
 
 "the mere absence of a specific provision allowing for sampling is not a sufficient 
basis for finding sampling to be prohibited in injury determinations.  In our view, the mere absence of a provision permitting a partic ular investigative or analytical method 
in an anti-dumping investigation cannot mean that it is, for that reason alone, 
prohibited.  The AD Agreement does not specify all the different methodologies of 
investigation and analysis that might be  useful or appropriate in particular 
circumstances, and cannot be expected to do so.  If applied as a general interpretive 
principle, Norway's position would render the AD Agreement potentially null in numerous situations where it simply does not specifically address a question that may arise in an investigation."
444 
In our view, the same reasoning holds true with resp ect to the lack of a specific provision in China's 
Accession Protocol permitting the use of samp ling in determining whether market economy 
conditions prevail in the exporting industry at issue in a particular investigation, and we reach the 
same conclusion here as did the panel in EC – Salmon (Norway) .   
 
7.198  China also takes issue with th e use of a sample selected for the calculation of dumping 
margins, arguing that the criteria used to select th at sample do not guarantee that the sample selected 
is representative for purposes of making the MET determination.  The sample of Chinese exporting 
producers was selected on the basis of the volume of exports, pursuant to the provision of Article 6.10 allowing the investigating authority limit its examinat ion to "the largest percentage of the volume of 
exports from the country in question wh ich can reasonably be investigated."
445  China asserts that 
while the criterion of largest volume of export sales is  justified in the context of the determination of 
dumping, as it will ensure that the result of the dump ing calculations of the sample can be considered 
representative for the entire volume of imports from th e countries concerned, it is not justified in the 
context of the MET determination, which China asserts has the different purpose of determining 
whether market economy conditions prevail in the e xporting industry.  China notes that a sample of 
the biggest exporters does not ensure representativ eness of that industry, as it excludes companies 
with low or medium levels of export sales.446   
7.199  China asserts that the MET determination is "b ased on the information provided by individual 
producers", and argues that, as a consequence, it is not an aggregate determination based on a collective assessment of information, implying that this demonstrates that sampling is not permitted.  
However, in our view, an "aggregate" determina tion is, in fact, based on information provided by 
individual producers, and we thus fa il to see the significance of the distinction China has drawn.  We 
recall that anti-dumping duties may be imposed on non-sampled exporters , consistently with 
Articles 6.10 and 9.4 of the AD Agreement, as a consequence of a finding of dumping based on 
information provided by a limited number of examined producers.  We see no reason why, in a case involving a NME, anti-dumping duties may not be imposed on non-sampled exporters based on a 
finding of dumping involving an MET analysis based on information provided by a limited number of 
examined producers.   
7.200  Moreover, we recall that we have noted elsewhere  in our report that the use of the "largest 
volume" option under Article 6.10 in making a determ ination of dumping does not, in fact, guarantee 
that the companies selected for examination will be  "representative" of the exporting industry as a 
whole.
447  Thus, the premise of China's argument, that th is option is justified for the determination of 
                                                      
444 Panel Report, European Communities – Anti-Dumping Measure on Farmed Salmon from Norway 
("EC – Salmon (Norway)") , WT/DS337/R, adopted 15 January 2008, and Corr.1, DSR 2008:I, 3, para. 7.126. 
445 We recall that we have rejected China's claims with respect to the Commission's actions in this 
regard.  See paragraphs 7.211 and 7.226 below. 
446 China, second written submission, para. 1242. 
447 See paragraph 7.217 below.  WT/DS405/R 
  Page 107  
 
 dumping, but not for the MET determination, is fa lse.  Even assuming China were correct, and that 
companies with low or medium levels of export sal es were excluded from the sample, China has made 
no argument indicating why the inclusion of such companies would make the sample more representative with respect to whether market economy  conditions prevail for the industry in question.  
There is no question that the sample used by th e Commission for the MET determination concerned 
the "industry producing the like product" in this case.   
7.201  Thus, we conclude that China has failed to demonstrate that sampling is prohibited for 
purposes of making the MET determination, and has fa iled to demonstrate that the criteria on which 
the sample in this case was selected were unjustified. 
7.202  We understand China to be making two arguments  with respect to Article 6.10.2 of the 
AD Agreement with respect to the MET applications .  The first argument relates to the Commission's 
failure to examine the four Chinese companies that  requested individual examination pursuant to 
Article 17(3) of the Basic AD Regulation.  China makes no independent argum ents in this regard, 
merely referring to its arguments with respect to  its claims that the European Union violated 
Article 6.10.2 by not individually examining the four companies that requested such examination.  We 
recall that we concluded that China had failed to de monstrate a violation of Article 6.10.2, and do not 
repeat our analysis here, but reach the same conclusion.
448   
7.203  China's second argument is that since the Europ ean Union did not examine, and thus did not 
grant the requests for MET made by those four companies,  
"the European Union violated Article 6.10. 2 insofar as it requires MET to be granted 
in order to qualify for individual examina tion.  Phrased differently, China considers 
that because the European Union wrongl y disregarded the MET questionnaires and 
did not grant MET with respect to the co mpanies requesting individual examination, 
those companies were by default exclude d from individual examination as required 
by Article 6.10.2."449   
The European Union, despite indicating that it fa ils to understand China's claim, argues that it is 
incorrect to consider that the lack of examinati on of the MET applications by default excluded those 
four companies from individual examination.450   
 7.204  Despite acknowledging the European Union's lack of understanding, China did not provide 
any further explanation of its claim and argument.
451  We, too, are at a loss to understand China's 
claim.  In our view, China has not explained how the failure to examine MET applications from and 
grant MET to non-sampled Chinese companies exclude d such companies by default from individual 
examination as required by Article 6.10.2.  We th erefore dismiss this aspect of China's claim. 
7.205  Based on the foregoing, we conclude that China has failed to demonstrate that the 
European Union acted inconsistently with Articl es 2.4, 6.10.2, and 17.6(i) of the AD Agreement, 
                                                      
448 See paragraphs 7.141 and 7.146 above.  Nevertheless, we recall that both the Provisional and 
Definitive Regulation clearly explained the reasons why individual examination of the four requests was 
declined, in accordance w ith the criteria established in Artic le 6.10.2 of the AD Agreement. 
449 China, first written submission, para. 877. 
450 European Union, first written submission, para. 579. 
451 China's only statement concerning this claim after its first written submission was the following:   
"Finally, the European Union has stated that it failed to unders tand China's claim that because 
the European Union wrongly disregarded the MET questionnaires and did not grant MET with 
respect to the companies requesting individual examination, those companies were by default 
excluded from individual examination as required by Article 6.10.2."   
China, second written submission, para. 1287.  No further explanation was provided.   WT/DS405/R 
Page 108  
 
 Paragraph 15(a)(ii) of China's Accession Protocol, and Paragraphs 151(e) and (f) of China's Accession 
Working Party Report in the original investigati on by failing to examine the non-sampled cooperating 
Chinese exporting producers' MET applications. 
(c) Claim III.15 - Alleged violation of Article 6.10 of the AD Agreement in the selection of the 
sample of Chinese exporting producers in the original investigation 
(i) Arguments of the parties 
a. China 
7.206  China claims that the Commission selected th e sample of Chinese producers for purposes of 
the dumping determination in the original investig ation inconsistently with Article 6.10 of the 
AD Agreement.  Specifically, China asserts that th e European Union (1) selected the producers to be 
sampled before the exclusion of certain Special  Technology Athletic Footwear ("STAF") from the 
product under consideration, and (2) selected the samp le in part based on the domestic sales volumes 
of the Chinese producers.  As a consequence, China asserts, the European Union failed to examine the 
largest percentage of the volume of exports fro m China which could reasonably be investigated.
452  
China considers that the inclusion of a produc t not within the scope of the product under 
consideration, that is, STAF priced below €7.50, in  the volume of exports considered in selecting the 
sample invalidated the sample as it affected representativeness.453  According to China, a change in 
the scope of the product under consideration during the course of the investigation means that the 
investigating authority should adapt the sample accordingly.  China notes that the Commission 
selected the sample of Chinese producers before the decision to exclude certain STAF from the investigation was made.  The producers selected for the sample accounted for 25 per cent of the 
volume of exports of cooperating Chinese exporti ng producers.  China asserts that, although the 
Commission stated otherwise, the exclusion of certain STAF from the scope of the product under consideration necessarily reduced th e representativeness of the sample.
454  According to  China, where 
the panel in EC – Salmon (Norway) addressed the question whether non- producing exporters might be 
excluded from being considered for inclusion in th e sample, in this case, the question is whether 
producers of products not under investigation may or ma y not be considered in the pool and thus be 
included in the sample.  More generally, the issue is  whether the phrase "the largest percentage of the 
volume of the exports from the country in ques tion which can reasonably be investigated" may 
include products not under investigation.455  China argues that by incl uding exports of STAF in the 
largest volume of exports of non-STAF from Chin a which the European Union could reasonably 
investigate, the European Union failed to base the sa mple on "the largest percentage of the volume of 
the exports from the country in question which can reasonably be investigated."  Therefore, China 
asserts that the European Union violated Article 6.10 to the extent that the exclusion of STAF resulted 
in a lower percentage of the volume of exports being investigated than could otherwise have 
reasonably been achieved.456 
7.207  Concerning the second aspect of its claim, Ch ina notes that the Commission took into 
consideration, in selecting the sample of Chin ese producers, the volume of domestic sales of the 
                                                      
452 China, first written submission, para. 1017. 
453 China, first written submission, paras. 1021-1024. 
454 China, first written submission, paras. 1020-1021.  Ch ina cites, as an example in support of its view, 
the fact that, following the decision to exclude certai n STAF, the Commission informed one company that had 
been selected for the sample that its data would not be used, since all of its exports were of the excluded product.  According to China, this demonstrates that the sample was no longer representative.  China, first 
written submission, para. 1023.  China underlines that its claim is not against the exclusion of this company 
from the sample.  China, second written submission, para. 1495. 
455 China, second written submission, para. 1497. 
456 China, second written submission, para. 1500.  WT/DS405/R 
  Page 109  
 
 cooperating Chinese producers from which the sample was selected, in order to have available 
information on prices and costs of production and sa les, should some or all of the Chinese producers 
be granted MET.
457  According to China, there is nothing in Article 6.10 that would allow the use of 
any other criterion than the largest volume of exports in the selection of the sample.458  China argues 
that, in selecting the sample for the dumping determ ination, the European Union was not entitled to 
consider whether sampled producers would be able to provide information usable for the purpose of 
calculating the margin of dumping, as this is not addressed by Article 6.10.459  Consequently, China 
asserts, by taking account of the volume of domestic sales,  a variable with no basis in Article 6.10, the 
European Union acted inconsistently with that provision.460   
7.208  China asserts its understanding that the European Union's selection of the sample of Chinese 
exporting producers was not based on the largest pe rcentage of the volume of exports that could 
reasonably be investigated, despite the European Unio n's statement to the contrary.  China asserts that 
Article 6.10 is purely procedural in nature, and does not concern substantive issues relating to the 
determination of individual margins.461  Moreover, contrary to the Eur opean Union's view that what is 
"reasonable" for purposes of Article 6.10 may reflect the preference for use of domestic sales prices in 
the determination of normal value, China asserts th at "reasonable" for purposes of Article 6.10 is what 
is practicable for the investigating authority, in terms of the "number" of exporte rs to be examined.  In 
addition, China asserts that the drafters of the AD Agreement were aware that a company included in 
a sample composed on the basis of the volume of exports might not have a sufficiently high level of domestic sales to allow the use of its domestic prices for the calculation of normal value.  
Nonetheless, the drafters did not include a minimu m amount of domestic sales in the criteria for the 
selection of the sample in Article 6.10.  Moreover, since only domestic sales in the ordinary course of 
trade would be relevant in dete rmining normal value under Articles 2.1 and 2.2, China considers that 
the European Union's sampling method does not ac hieve the purpose of ensuring use of domestic 
sales prices in calculating normal value, assuming that could be considered as an aspect of what is "reasonable" in the sense of Article 6.10.  China notes that, in the case of a NME, a high level of 
domestic sales is not determinative of whether they  will be taken into account, as companies must first 
be granted MET status.  In addition, China argues that in a case where exporters are not sampled, an 
investigating authority cannot control which of th e methods provided in Article 2 will be used in 
determining normal value.  China asserts that the f act that the Chinese authorities were consulted and 
agreed to the list of sampled companies does not est ablish compliance with Article 6.10, since that did 
not encompass agreement with the methodol ogy for the selection of those companies.
462   
b. European Union 
7.209  The European Union argues that the issu e being considered by the panel in EC – Salmon 
(Norway)  was different from the issue before this Pa nel. In that case, the panel addressed the 
exclusion of certain exporters or producers from th e pool of those concerned with the product under 
investigation. The European Union notes that, in the course of the investigation at issue here, the 
Commission redefined the product under investigation,  and as a consequence, concluded that certain 
                                                      
457 China, first written submission, paras. 1028-1030. 
458 China, first written submission, para. 1037. 
459 China, first written submission, para. 1031, citing Panel Report, Argentina – Definitive 
Anti-Dumping Duties on Poultry from Brazil ("Argentina – Poultry Anti-Dumping Duties "), WT/DS241/R, 
adopted 19 May 2003, DSR 2003:V, 1727. 
460 China, first written submission, para. 1038. 
461 China, second written submission, pa ras. 1501-1502, citing Panel Report, Argentina – Poultry Anti-
Dumping Duties , para. 7.215.  In China's view, substantive issues such as the availability of relevant data for the 
determination of dumping are addressed by other provisions of the AD Agreement, such as Article 2. 
462 China, second written submission, paras. 1504-1510.  China notes in this regard that Article 6.10.1 
of the AD Agreement establishes a pr eference for selection of a sample in consultation with and with the 
consent of the exporters, producers or  importers concerned, but not the authorities of the exporting country. WT/DS405/R 
Page 110  
 
 exporters were no longer eligible for consideration since they neither exported nor produced the 
product as defined.  For the European Union, this ac tion was in fact an appr opriate implementation of 
the requirements of Article 6.10.  The European Un ion asserts that whether or not the sample, as it 
stood following the redefinition of the product under  consideration, complied with Article 6.10, 
depended on the firms whose exports were included in the sample and on those other 
producers/exporters who continued to export the pro duct concerned.  The European Union asserts that 
it was appropriate to not take account of the ex ports of the one company whose exports were 
principally of products not within the product under consideration as redefined.  The European Union 
notes that it fully addressed the issue of represen tativeness following the exclusion of certain STAF 
from the product under consideration in the Definitiv e Regulation, and concluded that the sample was 
representative.
463   
7.210  With respect to the second aspect  of China's claim the European Union takes the position that 
a WTO Member which applies the "l argest percentage" option in Artic le 6.10 may take account of the 
level of domestic sales of expor ters when selecting the sample.464  The European Union asserts that 
the situation in Argentina – Poultry Anti-Dumping Duties , relied upon by China, was quite different, 
concerning the obligation in the first sentence of Article 6.10, and the question whether a Member 
could decline to calculate a dumping margins for e ach known exporter or producer merely for lack of 
documentation.  The European Union asserts that in  fact, its method of selecting the sample in this 
case ensured strict adherence to WTO rules.  Acco rding to the European Union, the "the largest 
percentage of the volume of the exports from th e country in question which can reasonably be 
investigated" must take into account other rele vant rules on determining dumping, including the 
preference for use of domestic sales prices.  The Eu ropean Union asserts that it sought to maintain the 
pre-eminent status of domestic sales prices in selecting the sample of Chinese producers, given that at the time, no decision had yet been made with resp ect to market economy tr eatment of any Chinese 
producer.
465  If an MET exporter's domestic sales were low, its domestic prices might have to be 
disregarded under Article 2.2 of the AD Agreement, and an alternative methodology would have to be 
used in determining normal value.  The Europ ean Union notes that obviously, whether sales were 
made in the ordinary course of trade cannot be cons idered when a sample of exporters is considered, 
but the volume of domestic sales can be, and that it was entitled to assume that companies are entitled 
to MET for purposes of selecting the sample.466  The European Union also notes that, as provided for 
in Article 6.10.1, it selected the sample after c onsulting with representatives of the Chinese exporters 
to reach a mutually satisfactory solution regardin g the composition of the sample, and that these 
representatives were informed of and agreed to  the sample as selected, and subsequent 
modifications.467 
                                                      
463 European Union, first written submission, paras. 828-832, referring to Definitive Regulation, 
Exhibit CHN-3, recitals 43-44. 
464 European Union, first written submission, para. 833. 
465 European Union, first written submission, paras. 835-837. 
466 European Union, opening oral statement at the second meeting with the Panel, para. 438. 
467 European Union, first written submission, paras. 838-840, opening oral statement at the second 
meeting with the Panel, paras. 439-440.  Specifically, the China Chamber of Commerce for I/E of Light 
Industrial Products & Arts-Crafts (CCCLA) and the Chin ese Ministry of Commerce were consulted, and the 
originally proposed sample was amended as a result.  European Union, first written submission, para. 840.  Moreover, the European Union asserts, and China does not  dispute, that both Chinese entities were aware of the 
bases on which the sample was selected and agreed with the selection of the sample.  See Email from Mission of 
PR China to DG Trade, 12 August 2005, Exhibit EU-13 (Confidential), and Note Verbale  from DG Trade to 
Mission PR China, 12 August 2005, Exhibit EU-14 (Confi dential).  The European Union "finds it unacceptable 
that China should now purport to disown the agreement that it reach ed about the composition of the sample and 
accuse the EU of infringing its obligations under the AD A," and suggests that the Panel reject China's claim on 
the basis of a theory of estoppel, citing Panel Report, European Communities – Measures Affecting Asbestos 
and Asbestos-Containing Products ("EC – Asbestos "), WT/DS135/R and Add.1, adopted 5 April 2001, as  WT/DS405/R 
  Page 111  
 
 (ii) Evaluation by the Panel 
7.211  Before addressing China's claim, we note th e following facts, which we understand to be 
undisputed.  The Commission indicated, in the Notice of  Initiation of the original investigation, that it 
might base its examination of dumping on a sample of Chinese exporters, and requested that Chinese 
exporters/producers make themselves known and submit certain information in order to enable the 
Commission to decide whether to sample, and if so, to select a sample.
468  The Provisional Regulation 
states that 163 Chinese companies su bmitted the requested information in a timely fashion, and 154 
reported exports to the then-European Communities during the relevant time period.  The Commission originally proposed a sample of the f our largest Chinese producers.  However, in the 
course of consulting with representatives of the in terested parties, including the Chinese authorities 
and the Chinese producers' associati on, the Chinese authorities insisted that more companies be added 
in order to increase the representative level of th e sample.  As a consequence, the sample was 
expanded to include 13 Chinese exporting producers, representing more than 20 per cent of Chinese 
exports to the then-European Communities.  The Chinese authorities agreed to this sample.
469  The 
Provisional Regulation also states that, in accordance with Article 17(1) of the Basic AD Regulation, 
two criteria were taken into account in the selecti on of the sample, the size of the exporting producer 
with regard to export sales to the then-European  Communities, and the size of the exporting producer 
with regard to domestic sales.  The Commission noted in the Provisional Regulation that it was 
considered essential to include in the sample comp anies with domestic sales in order to have as 
representative a sample as possible, and in particular  to have information available in the event that 
some or all exporters would be granted MET.  T hus, only the "major exporting companies which also 
represented a major part of the domestic sales" we re selected.  Finally, the Provisional Regulation 
states that "the exclusion of the STAF products di d not significantly influen ce the representativeness 
of the sample".470   
7.212  The Definitive Regulation notes the arguments of  some parties that the sample as selected 
was not representative, given the exclusion of ST AF and children's shoes from the scope of the 
investigation.471  The Commission, in the Definitive Regul ation, recalls the statement in the 
Provisional Regulation that the exclusion of STAF did not significantly influence the representativeness of the sample.  The Definitive Regul ation states that the companies in the sample 
accounted for more than 12 per cent of exports of the cooperating exporting Chinese producers, and 
concludes that the sample was representative, not ing that the relevant EU regulation established no 
quantitative threshold as to what constitutes a level of "representative volume", other than that the 
volume should be limited to what can "reasonably be investigated within the time available".
472  In the 
Definitive Regulation, the Commission also addresse s arguments that the selection of the sample was 
inconsistent with the AD Agreement "since certain ma jor exporters were chosen at the expense of the 
companies with smaller or non-existent EC sales , but relatively large domestic sales."  The 
Commission rejected these arguments, concludi ng that the AD Agreemen t allowed the use of 
domestic sales as a relevant criterion in selecting th e sample, and recalling that the Chinese authorities 
had consented to the sample selected.473   
                                                                                                                                                                     
modified by Appellate Body Report WT/DS135/AB/R, DSR 2001:VIII, 3305, para. 8.60, in this regard.  
European Union, open ing oral statement at the second meetin g with the Panel, paras. 440-442.   
468 Notice of Initiation, Exhib it CHN-6, recital 5.1(a). 
469 Provisional Regulation, Exhibit CHN-4, recitals 55 and 57. 
470 Provisional Regulation, Exhibit CHN-4, recitals 60-61. 
471 Definitive Regulation, Exhibit CHN-3, recital 42. 
472 Definitive Regulation, Exhibit CHN-3, recitals 44 and 56. 
473 Definitive Regulation, Exhibit CHN-3, recitals 46 and 47. WT/DS405/R 
Page 112  
 
 7.213  Article 6.10 of the AD Agreement provides, in pertinent part: 
"6.10  The authorities shall, as a rule, determine an individual margin of dumping 
for each known exporter or producer concerne d of the product under investigation.  In 
cases where the number of exporters, producers, importers or types of products involved is so large as to make such a determination impracticable, the authorities 
may limit their examination either to a reasonable number of interested parties or 
products by using samples which are statis tically valid on the basis of information 
available to the authorities at the time of the selection, or to the largest percentage of 
the volume of the exports from the country  in question which can reasonably be 
investigated.  
 6.10.1 Any selection of exporters, produ cers, importers or types of products 
made under this paragraph shall preferab ly be chosen in consultation with 
and with the consent of the exporters , producers or importers concerned." 
7.214  China asserts that, by selecting the sample befo re the exclusion of certain STAF from the 
scope of the investigation, and using the domestic sales volume of Chinese producers as a criterion in 
the selection of the sample, the European Union fa iled to examine the largest percentage of the 
volume of exports from China which can reasonably be investigated.  With resp ect to the first aspect 
of its claim China argues that if the scope of the product under consideration changes during the course of an investigation, and this affects the volum e of exports or the largest percentage of exports 
which can reasonably be investigated, the inv estigating authority should adapt the sample 
accordingly.  We do not necessarily disagree that su ch a course of action is advisable, but it is not 
clear to us that it is required.   
7.215  We see nothing in Article 6.10 that would require an investigating authority to reconsider the 
sample selected at the outset of an investigation as a result of a change in the scope of the product 
under consideration in the course of that investigation.   While such a course of action is certainly not 
precluded, as a practical matter, it will not always  be possible to do so, depending on the particular 
circumstances.  To interpret Article 6.10 to require  investigating authorities to, in all cases, adapt the 
sample selected for purposes of the dumping examinati on might well have the effect of delaying the 
investigation so as to prevent the investigating au thority from completing its investigation in a timely 
fashion.  We recall that Article 6.14 of the AD Agreement provides: 
"[t]he procedures set out above are not intended to prevent the authorities of a 
Member from proceeding expeditiously with  regard to initiating an investigation, 
reaching preliminary or final determinations , whether affirmative or negative, or from 
applying provisional or final measures, in acco rdance with relevant provisions of this 
Agreement." 
Article 6.10 is one of the "procedures set out above", and we decline to interpret it as requiring, in all 
cases, that investigating authorities revise the samp le selected for the dumping determination in the 
face of a change in the scope of the product under consideration.  Article 6.14 recognizes the tension 
between the goals of accurate information, due proc ess and transparency in the investigative process, 
furthered by the procedures provided for in Article 6,  and the obligation to complete the investigation 
within the time allowed by Article 5.10 – one y ear, and in special circumstances, no more than 18 
months after initiation.  Finally, in this regard, we not e that to the extent a failure to alter the sample 
as a result of a change in the scope of the product under consideration may result in some inaccuracy 
in the calculation of the dumping margin, the AD Ag reement itself provides remedies for errors in the 
amount of anti-dumping duties imposed and collected.  Article 6.10.2 allows producers to request an 
individual examination even if they were not includ ed in the sample, and Article 9.4 provides for the 
imposition of an individual duty for exporters/producers who provid ed the necessary information as  WT/DS405/R 
  Page 113  
 
 provided for in Article 6.10.2.
474  Articles 9.3.1 and 9.3.2 provide procedures for ensuring that the 
actual amount of dumping duty collected does not exceed the relevant margin of dumping.     7.216  Moreover, while China focuses on the "representa tiveness" of the sample selected after the 
change in the scope of the investigation, we see not hing in Article 6.10 that requires an investigating 
authority to consider whether the sample select ed for the dumping determination pursuant to the 
second option in that provision is "representative" of the exporters according to any measure, 
including the percentage of exports of the produc t under consideration for which they account.  We 
recall that, while the parties refer to the second opt ion in Article 6.10 as a "sampling" provision, the 
text of Article 6.10 authorizes the investigating auth orities to "limit their examination" in one of two 
ways:  (1) "to a reasonable number of interested parties or products by using samples which are 
statistically valid on the basis of information availa ble to the authorities at the time of the selection",  
or (2) "to the largest percentage of the volume of  the exports from the country in question which can 
reasonably be investigated."  While a statis tically valid sample might be presumed to be 
representative of the universe of companies sampled,  there is no indication that an investigating 
authority choosing to limit its exam ination in the second manner, that is , to the "largest percentage of 
the volume … which can reasonably be investigated" must, having satisfied that criterion, in addition 
ensure that the exporters/producers accounting for th at volume are representative of the industry in the 
exporting country, or that the percentage of the volume represented by the producers selected for the 
sample reaches some quantitative threshold.  There is  certainly no suggestion in Article 6.10 that any 
particular threshold percentage will demonstrate that the volume of exports accounted for by the 
selected producers is "representative" of anything.
475 
7.217  Indeed, application of the "largest volume" option might well result in an examination of 
exporters/producers which, while consistent with Ar ticle 6.10, would neither be a statistically valid 
sample, nor necessarily "representative" of the produ cers and exporters in the country in question.  
For instance, in the case of an industry in the ex porting country with hundr eds of exporters, a few 
dozen of which are large companies, exporting significant volumes to the country conducting the 
investigation, while the remainder export only sm all volumes to that country, the investigating 
authority may well conclude that the "largest volume which can reasonably be investigated" is 
accounted for by the six largest exporters.  From the perspective of the industry in the exporting country as a whole, such a sample  may not "representative" of the exporters, but in our view it may 
well be satisfactory under Article 6.10 despite this.
476 
7.218  China does not argue that either the volume of  exports of the product under consideration 
attributable to the exporters selected in the sample originally, or the volume of exports of the revised 
product under consideration attributable to those e xporters, was not "the largest percentage of the 
volume of the exports" from China which could reasona bly be investigated.  Rather, China focuses on 
                                                      
474 This right is not absolute, as Article 6.10.2 of the AD Agreement allows the investigating authority 
to decline to calculate individual margins of dumping for exporters/producers so requesting, where to do so 
would be unduly burdensome and prevent the timely completion of the investigation.  Thus, like Article 6.14 of 
the AD Agreement, this provision recognizes the tension be tween the goals of the procedural rules in Article 6, 
and the obligation to complete the investigation within the time allowed by Article 5.10 of the AD Agreement. 
475 This is by contrast to a statistically valid sample, which conceptually results in a sample that is 
representative of the entire population being sampled, but as a result, presumably re quires good knowledge of 
and data regarding that entire population, in the cas e of Article 6.10 of the AD Agreement, the foreign 
exporters/producers being investigated, in order to ensure that the sample is "statistically valid". 
476 Moreover, we recall that Article 9.3 of the AD Ag reement sets out provisions intended to ensure 
that individual importers are not required to pay dumping duties in excess of the margin of dumping, by 
providing for reimbursement or refund of any excess.  Thus, even assuming that a dumping margin is calculated 
on the basis of information concerning a sample of foreign producers or exporters that is not "representative", the consequences of such a lack of representativeness for individual exporters not examined are, in our view, of 
little significance.  WT/DS405/R 
Page 114  
 
 a change in the "representativeness" of the sample, th at is, the fact that the exporters selected for the 
sample accounted for 25 per cent of exports to  the then-European Communities by cooperating 
exporting producers at the time of the Provisional Regulation, but "a mere 12% at the definitive 
stage."
477  Given that the scope of the product under cons ideration was different at the definitive stage 
than at the provisional stage,478 it is not surprising that the percentage of exports of the product under 
consideration accounted for by the exporters in the sample was also different.  We recall, however, 
that Article 6.10 does not require that any particular  percentage of exports be  included in the sample, 
but rather that the sample include "the largest pe rcentage of the volume of the exports", which we 
understand to be the absolute volume of exports.  China has presented no evidence, or even any 
argument, that would demonstrate that the Commissi on erred in concluding that the investigation of 
thirteen Chinese companies, accounting for 12 per cent of the exports of cooperating Chinese 
producers, represented the "largest percentage of the volume of the exports from the country in question which can reasonably be investigated."  Merely that this percentage was less than the 
percentage of a differently defined volume of total exports does not suffice in this regard. 
7.219  China quotes the following statement by the panel in EC – Salmon (Norway) :  
"the starting point for the application of the limited examination techniques set out in 
the second sentence of Article 6.10 is the pool of interested parties making up all of 
the "known exporter[s] or producer[s] concerned…[which] implies that the 
identification of the pool of "known exporte r[s] or producer[s] concerned" will be 
central to the selection of interested parti es that is envisaged in the second sentence of 
Article 6.10.  It follows that an assessment of whether a selection of interested parties 
has been made consistently with the second sentence of Article 6.10 may involve 
checking whether the starting pool of inter ested parties from which that selection was 
made is permissible.  If there has been an  error in the identification of the starting 
pool of "known exporter[s] or producer[s] concerned", this would, in our view, 
invalidate the selection of interested par ties carried out in terms of the second 
sentence of Article 6.10, at least to the extent  that it resulted in a lower percentage of 
the volume of exports being investigated th an could otherwise have reasonably been 
achieved."
479 
China relies on this statement to argue, as we understa nd it, that the selection of a sample is similarly 
invalidated if the "pool" of the volume of e xports from the exporting country, or the largest 
percentage of exports which can reasonably be inv estigated, includes products that are not within the 
scope of the product under consideration.  We c onsider that China's reliance on this decision is 
inapposite.  First, we note that "largest percentage  of exports from the country in question which can 
reasonably be investigated" is not a starting point  for the application of the limited examination 
techniques in Article 6.10.  Rather, it is the criterion set out in Article 6.10 for whether the selection of exporters/producers for limited ex amination under the second option is appropriate.  Moreover, 
China's argument ignores that the panel in EC – Salmon (Norway)  concluded that the investigating 
authority in that case did not act inconsistently with the second sentence of Article 6.10 by excluding, ab initio , all non-producing exporters from even  being considered for selection.
480  Finally, in this 
                                                      
477 China, first written submission, para. 1021. 
478 We recall that all STAF was excl uded from the product under consid eration at the provisional stage, 
Provisional Regulation, Exhibit CHN- 4, recital 19, while only STAF of a value not less than €7.50 was 
excluded at the definitive stage.  Definitive Regulation, Exhibit CHN-3, recital 19. 
479 Panel Report, EC – Salmon (Norway) , paras. 7.162-7.163. 
480 The question being considered by the panel was whether the exclusion of exporters of the product 
under consideration, farmed salmon, who did not themselves produce that product, from even being considered for inclusion in the sample was permissible in a limited examination under the second option in Article 6.10 of 
the AD Agreement.  Panel Report, EC – Salmon (Norway) , para. 7.164.  WT/DS405/R 
  Page 115  
 
 case, the product under consideration was revised after  the selection of the companies for limited 
examination.  Thus, to the extent the "pool" of the volume of exports might be relevant, at the time of 
the selection, that pool corresponded with the scope  of the product under consideration.  We have 
concluded that an investigating authority is not re quired to revise the selection as a result of a change 
in the scope of the investigation, and as a con sequence, we see no relevance in the fact that the 
revision resulted in the fact that the exports of the companies selected for limited examination under 
Article 6.10 included products that were not subject to the investigation.  7.220  China does not assert that any producers were ex cluded from the initial "pool" from which the 
selection was made, or that producers selected for limited examination did not produce or export the 
product under consideration after the revision, or that the Commission selected Chinese producers 
with a smaller volume of exports of that product, to the exclusion of others with a larger volume of 
exports.  Moreover, we recall that the sample was selected in consultation with, and agreed to by, 
representatives of the Chinese producers.  While this is not determinative, we do consider that the fact 
that the Commission made its selection after consu ltations with the representatives of the Chinese 
producers and the Chinese authorities, taking into acc ount their views, and, ultimately, with their 
agreement, is relevant.  Thus, we  do not consider that the European  Union acted inconsistently with 
Article 6.10 with regard to the selection of compan ies for limited examination despite the subsequent 
exclusion of certain STAF from th e scope of the investigation. 
7.221  We turn next to the second aspect of China's claim, the assertion that the European Union 
acted inconsistently with Article 6.10 by taking in to consideration the domestic sales volume as well 
as the volume of exports of Chinese producers in its selection.  In this regard, China asserts that 
nothing in the text of Article 6.10 provides that th e largest percentage of the volume of exports from 
the country in question should also represent the largest percentage of the volume of domestic sales.
481  
Thus, China asserts that this criterion, which it is un disputed was taken into consideration, and which 
is not found in Article 6.10, was introduced into the selection of the companies for limited 
examination inconsistently with Article 6.10.   
7.222  We do not agree that the specific requirement  of Article 6.10 second sentence to select for 
limited examination producers/exporters accounting for the largest percentage of the volume of the 
exports from the country in question which can reas onably be investigated precludes the consideration 
of other criteria not specified in Article 6.10, so long as doing so does not result in a selection inconsistent with the criterion that is specified .  China has not demonstrated that, by taking the 
additional criterion of domestic sales volume into  account, the European Union failed to select 
producers accounting for the largest percentage of the volume of exports that could reasonably be 
investigated.  
7.223  We note that China does not dispute that the Commission took into account the domestic sales 
volume of Chinese producers for the reasons stated by  the European Union; to  ensure that, in the 
event Chinese producers were granted MET trea tment, the Commission would be able to use 
information from the selected companies for the de termination of normal va lue consistently with 
Article 2 of the AD Agreement.  However, China considers that this does not justify using the 
Article 6.10 selection process, as the receipt of information which is usable for the purpose of the calculation of the margin of dumping pursuant to Artic le 2.1 is an issue addressed by Article 2.2, and 
not Article 6.10.
482  In support of its position, China relies on the report of the panel in Argentina – 
Poultry Anti-Dumping Duties .   
7.224  That panel was considering the assertion by Arge ntina that a condition for the determination 
of an individual margin of dumping for each expor ter under Article 6.10 of the AD Agreement is that 
                                                      
481 China, first written submission, para. 1027. 
482 China, first written submission, para. 1034. WT/DS405/R 
Page 116  
 
 the exporter supply the information needed to enable  the investigating authority to do so.  The panel 
concluded there was no such obligation in the text of  Article 6.10.  The panel stated its view that  
"Article 6.10 is purely proce dural in nature, in the sense that it imposes a procedural 
obligation on the investigating agency to  determine individual margins of dumping 
for each known exporter or producer concer ned of the product under investigation. 
Article 6.10 is not concerned with substantive issu es concerning the determination of 
individual margins, such as the availabilit y of the relevant data. Such issues are 
addressed by provisions such as Articles 2 and 6.8 of the AD Agreement . … 
The fact that an investigating authorit y does not receive any information from an 
exporter, or only receives partial information, or information that is not usable or is 
unreliable, should not prevent the calculation of an individual margin of dumping for 
that exporter, since the substantive provisions in the AD Agreement  referred to 
[above] expressly allow investigating authorities to complete the data with regard to a 
particular exporter in order to determine a dumping margin in case the information provided is unreliable or necessary in formation is simply not provided."
483 
We see nothing in the views of the panel in Argentina – Poultry Anti-Dumping Duties  that supports 
China's view that the consideration of an additio nal criterion renders the selection of companies for 
limited examination inconsistent with Article 6.10.484  The panel in Argentina – Poultry Anti-
Dumping Duties  was not concerned with the selection of producers for limited examination pursuant 
to the second option of Article 6.10, but with the question whether a lack of information from a company subject to the investigation, whether or not part of a limited examination, justifies declining 
to determine an individual margin for that compan y.  The conclusion of the panel that it does not has 
no bearing on the question that is before us in this dispute.    7.225  We can see the practical reasons for an inves tigating authority to seek to ensure that the 
companies selected for limited examination will be able to cooperate effectively, by providing 
information necessary for the determinations that th e investigating authority will, or in this case, 
might, make during the course of the investigation.  So long as the investigating authority does not, in taking such matters into account in the selection of companies for limited examination, end up with a 
selection that does not comport with the stated criterion in Article 6.10, we see nothing in that provision which would preclude the investigating authority from doing so.  We therefore reject 
China's arguments in this regard.  Finally, we reca ll that the criteria used by the European Union were 
known to the Chinese authorities and the representativ es of the Chinese exporters, who agreed to the 
sample as selected by the European Union after consu ltations and taking into account their views.  We 
consider this, while not determinative,  to be relevant to our conclusion. 
7.226  Based on the foregoing, we conclude that China has failed to demonstrate that the 
European Union acted inconsistently with Article 6.10 of the AD Agreement in selecting the sample 
for the dumping determination in the original investigation.  
                                                      
483 Panel Report, Argentina – Poultry Anti-Dumping Duties , paras. 7.215-7.216. 
484 Nor do we see anything in those views which renders invalid the European Union's expressed 
reason for considering the additional criterion of domestic  sales volume in this case.  However, since China's 
claim does not rest on the validity vel non  of the reasons for taking into cons ideration a criterion not set out in 
Article 6.10, we find it unnecessary to make conclusions in this regard.  WT/DS405/R 
  Page 117  
 
 (d) Claims II.1, II.3, III.3, and III.20 – Alleged viola tions of Articles 2.1, 2.4 and 17.6(i) of the 
AD Agreement and Article VI:1 of the GATT 1994 – Analogue country  
7.227  In this section of our report, we address China' s claims challenging the procedures used by the 
European Union in selecting an analogue country  for purposes of determining normal value, as well 
as the selection of Brazil as the analogue country, in both the original investigation and the expiry 
review.   
(i) Arguments of the parties 
a. China 
7.228  With respect to the expiry review, China clai ms that the analogue country selection procedure 
of the European Union, as well as the selection of Br azil, was inconsistent with Articles 2.1, 2.4 and 
17.6(i) of the AD Agreement and Article VI:1 of the GATT 1994.
485  With respect to the analogue 
country selection procedure, China fu rther claims that the European Union acted inconsistently with 
Article 17.6(i) of the AD Agreement.486  With respect to the original i nvestigation, China refers to the 
legal arguments it makes in this context concer ning the analogue country selection in the expiry 
review,487 and specifically claims that the European Union's analogue country selection process was 
inconsistent with Articles 2.4 and 17.6(i) of  the AD Agreement and Article VI:1 of the 
GATT 1994.488   
7.229  China asserts that the analogue country selecti on process falls within the scope of the "fair 
comparison" requirement of Article 2.4 of the AD Ag reement, and the "comparable price" referred to 
in Article 2.1 of the AD Agreement.  China subm its that the "fair comparison" requirement in 
Article 2.4 is an independent a nd overarching obligation, which sta nds alone from the more specific 
obligations in the following sentences, rela ting to the examples of due allowances.489  China contends 
that the Appellate Body has acknowledged the indepe ndent nature of the "fair comparison" obligation 
when it stated that the "scope of this obligati on is not exhausted by the general subject matter 
expressly addressed by paragraph 4", but rather "informs all of Article 2".490  China contends that 
Article 2 addresses the entire determination of dumpi ng, including the establishment of normal value.  
In this respect, China considers that the Article 2.2 provisions governing cons truction of normal value 
when domestic prices cannot be used, and the anal ogue country selection process in cases involving 
non-market economies, are both mechanisms to fi nd a proxy normal value, and that the "fair 
comparison" requirement of Article 2.4 necessarily applies to both.491  In addition, China argues that 
                                                      
485 See generally, China, first written submission, paras. 382 and 402.  China submits that the 
arguments it advances with respect to the relationship between Article 2.1 and the analogue country selection 
process equally applies to its claim under Article VI:1  of the GATT 1994.  China, second written submission, 
fn. 146.   
486 China, first written submission, para. 382.   
487 China, second written submission, para. 1315.   
488 China notes that while it did not cite Article 2.1 of  the AD Agreement in connection with this claim, 
it did cite Article VI:1 of the GATT 1994.  Thus, given the identical "comparable price" language in the two 
provisions, China does not consider that the difference between the claims should have any practical effect on 
the outcome of its claim.  China, second written submission, para. 1316.  
489 China, answer to Panel question 29; second written submission, para. 262.  
490 China, second written submission, para. 262, quoting Appellate Body Reports, United States – Final 
Dumping Determination on Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada  
("US – Softwood Lumber V (Article 21.5 – Canada) "), WT/DS264/AB/RW, adopted 1 September 2006, DSR 
2006:XII, 5087, para. 133, and EC – Bed Linen , para. 59. 
491 China, answers to Panel questions 29 and 33; second written submission, paras. 261-269, citing 
Appellate Body Reports, EC – Bed Linen , para. 59; US – Zeroing , para. 146 [sic]; and US – Softwood Lumber V 
(Article 21.5 – Canada) , para. 133.   WT/DS405/R 
Page 118  
 
 the "comparison" between normal value and export price referred to in the chapeau of Paragraph 15 of 
China's Accession Protocol is the same "comparison"  that Article 2.4, first sentence requires to be 
fair.  For China, this means that where a Member uses an alternate method to derive normal value, in 
making that comparison, then the result, and the proce ss by which that result is derived, must be fair 
as well.
492 Finally, China contends that the "fair comparison" requirement applies to both the 
procedural aspects of selecting an analogue country , and the substance of the selection made.  For 
China, a "comparison" cannot be "fair" if the subs tantive criteria used to derive the normal value are 
fair, but the procedure favours the interests of the domestic producers.493  
7.230  China also argues that the analogue country selection process falls within the scope of 
Article 2.1.  China asserts that the analogue country selected must provide a "comparable price" that 
can constitute normal value.  China recognizes that  Article 2.1 does not contain any due-process 
language, but asserts that it is violated if the pro cess by which the "comparable price" referred to in 
Article 2.1 is determined does not ensure that the pric e is "comparable".  China asserts that the facts in 
this case demonstrate bias in favour of the dom estic producers throughout the selection of the 
analogue country, in violation of the general "good faith" principle of international law that informs 
the provisions of the AD Agreement.494   
7.231  China also contends that, while Article 2.1 is  "definitional", it may nevertheless form the 
basis of a claim.  China disag rees with the European Union's reliance on the statement of the 
Appellate Body in US – Zeroing (Japan)  that "Article 2.1 read in isolation does not impose 
independent obligations", and seeks to  distinguish the Appellate Body's  statement as an explanation of 
why it exercised judicial economy with respect to an alleged violation of Article 2.1 in that case.495  
China asserts, relying on the decisions of  the panel and the Appellate Body in US – Hot-Rolled Steel , 
that while Article 2.1 cannot independently impose an  obligation, a violation of that Article can be 
found if, read in conjunction with other provisions , a violation of Article 2.1 can be established.496  
Thus, China argues, while Article 2.1 does not cr eate independent obligati ons, it may nevertheless 
form the basis of a claim so long as it can be shown that the obligation is also located, or "created", 
elsewhere in the covered agreements.  In this case,  China argues, its "comparable price" claim under 
Article 2.1 looks to various other provisions which evidence the existence of an obligation to secure a 
comparable price.497   
                                                      
492 China, answer to Panel question 29. 
493 This, China notes, is essentially what it is alleging.  China, second written submission, paras. 286-
288. 
494 China, second written submission, paras. 313-314.  
495 Furthermore, China is of the view that had Japan only cited Article 2.1 of the AD Agreement, the 
Appellate Body would have found a violation of that provision in light of the context of the AD Agreement, 
particularly Article 2.4.2.  China, second written s ubmission, paras. 295-297, citing Appellate Body Report, 
United States – Measures Relating to Zeroing and Sunset Reviews ("US – Zeroing (Japan)") , WT/DS322/AB/R, 
adopted 23 January 2007, DSR 2007:I, 3, para. 140. 
496 China, second written submission, paras. 298-300, citing Panel Report, United States – 
Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan ("US – Hot-Rolled Steel") , 
WT/DS184/R, adopted 23 August 2001 modified by Appellate Body Report WT/DS184/AB/R, DSR 2001:X, 
4769, para. 7.112.  China further notes that the Appellate Body did not modify the panel's conclusion that Article 2.1 may form the basis of a claim.  Id., para. 304.  
497 China points, in particular, to (i) Paragraph 15  of China's Accession Pr otocol; (ii) the second Ad 
Note to Article VI:1 of the GATT 1 994; (iii) Paragraph 151 of China's Accession Working Party Report; and 
(iv) Articles 2.2 and 2.5 of the AD Agreement.  China,  second written submission, paras. 306-308; closing oral 
statement at the second meeting with the Panel, para. 9.    WT/DS405/R 
  Page 119  
 
 7.232  China argues that Articles 2.1 and 2.4 inform the boundaries of an investigating authority's 
discretion in selecting an analogue country.
498  China asserts that, although China's Accession 
Protocol is silent as to criteria to be used in selecting an analogue country, the process of selecting an 
analogue country is not immune from review.499  China contends that whatever discretion 
investigating authorities may have in adopting a pr ocedure in connection with the determination of 
dumping, this discretion cannot trump the "obligatio n" to ensure a fair comparison based on export 
prices and "comparable" normal value.500   
7.233  China considers that the selection of an analogue country is to be guided by the fair 
comparison requirement in Article 2.4, as well as the prescription that the normal value be comparable to the export prices and should be based on a fair competition in the domestic market of the analogue 
country.
501  China submits that an appropriate method aimed at securing a comparable price which 
could permit a fair comparison must at least attempt to find a proxy for the normal value that would 
have prevailed but for the distortion resulting from the fact that the country under investigation is not 
a market economy.  China alleges that the purpose of the analogue country selection process, and 
indeed all processes by which proxy normal valu es not based on domestic prices in the domestic 
market of the country under investigation are derive d, is to attempt to approximate the value which 
would have prevailed in the absence of the need to find the proxy.502   
7.234  China asserts that this view is consistent with the object and purpose of the AD Agreement 
and, in particular, the context provided by Article 2.  In this respect, China argues that Article VI:2 of 
the GATT 1994 provides that the purpose of imposing anti-dumping duties is to "offset or prevent dumping" and that in order to achieve that goal the AD Agreement requires a fair and accurate 
measurement of international price discriminati on between the domestic market of the exporting 
country and the domestic market of the importing Member, i.e. dumping.  China maintains that the purpose of Articles 2.1 and 2.4 is to ensure th at investigating authorities seek a value which 
approximates what normal value would have been if  there had been sales of the like product in the 
ordinary course of trade in the exporting country.  For China, it is only by attempting to find such 
values that a determination of dumping within the meaning of Article 2.1 can be achieved.  China 
considers that Paragraph 15(a) of China's Access ion Protocol, like Articles 2.1 and 2.4, establishes 
that the purpose behind any alternate method for de termining normal value must seek to approximate 
the result that would be reached if there were no need  to resort to an alternate method.  In China's 
view, the notion of "comparable price" requir es that a normal value based on analogue country 
producers' data must be "comparable" to the export prices of the exporting producers.
503   
                                                      
498 In China's view, a "fair comparison" between no rmal value and export price cannot be possible 
without securing a "comparable price".  China, second written submission, paras. 326-327. 
499 China argues that silen ce on the part of the drafters with resp ect to the analogue country selection 
process indicates nothing more than that the drafters co uld not agree on specific disciplines in this regard and 
decided to leave the definition of the relationship between relevant obligations (such as fair comparison) and the 
discipline imposed by them on selection process to the DSB,  if necessary.  In any even t, China contends that the 
drafters of the Protocol actually made their intentions cl ear as to what an appropriat e analogue country selection 
process would entail in Paragraph 15 1 of China's Accession Wo rking Party Report.  China, second written 
submission, paras. 334-335.   
500 In China's view, silence as to the contours of one provision cannot be taken to modify or permit 
derogation from another, explicitly defined obligation.  China, second written submission, paras. 326, and 329-
343.   
501 China, first written submission, para. 390.  
502 See, generally, China, second written submission, pa ras. 351-357; answer to Panel questions 31 and 
36; opening oral statement at the second meeting with the Panel, paras. 13 and 16-18.   
503 China, answer to Panel question 31.  China also refers to (i) the second Ad Note to Article VI:1 of 
the GATT 1994; (ii) Article 2.1 of the AD Agre ement; (iii) Article 2.2 of the AD Agreement; 
(iv) Paragraph 15(a) of China's Accession Protocol; (v) Paragraph 151 of China's Accession Working Party WT/DS405/R 
Page 120  
 
 7.235  With respect to the selection of the analogue c ountry in the expiry review, China contends 
that the criteria relied upon by the European Union, and the way in which they were analysed, were 
not aimed at securing a comparable price which could have permitted a fair comparison, and thus the 
selection process as a whole was inconsistent with Artic les 2.1 and 2.4.  China asserts that the criteria 
used, (i) prevailing market conditions, (ii) sales of th e like product, and (iii) a statistically significant 
volume of domestic sales, did not include any factor which would tend to account for labour costs in 
China or the situation of China as a lower-i ncome country with a low per-capita income.
504  In China's 
view, while the three criteria are necessary, they cannot be consid ered sufficient, as none of them 
demonstrate a relationship between the pot ential analogue and the target country.505  China also 
alleges that the importance which the European Unio n attached to the domestic sales volume criterion 
was manifestly unreasonable.  China asserts that Indo nesia was similar to China in terms of economic 
development, produced a broader range of footwear  types, and the Commission itself recognized that 
the Indonesian producers' sales volume constituted a statistically significant sample.  China argues 
that the selection of Brazil as the analogue country, because its sales volume was greater than that of 
Indonesia, demonstrates that the selection process di d not secure a comparable price and secure a fair 
comparison.506  China submits that the European Uni on analysed competition in a meaningless 
manner, as it failed to take into account the protect ed nature of the Brazilian market, in particular 
tariff barriers.507  China also refers to the fact that the Brazilian producers whose data was used did not 
produce children's shoes, and alleges that by disreg arding this fact, the European Union did not act 
                                                                                                                                                                     
Report; and (vi) EU practice, in support of its view that the analogue country selection process must seek to 
approximate the normal value that would have existe d if the producers in the exporting non-market economy 
had operated under market economy conditions.  China also argues that the reasoning of the panel in US – Anti-
dumping and Countervailing Duties (China)  concerning out-of-country benchmarks under Article 14(d) of the 
SCM Agreement supports its view by analogy.  China, answer to Panel question 31; second written submission, 
paras. 358-366, citing Panel Report, United States – Definitive Anti-Dumping and Countervailing Duties on 
Certain Products from China ("US – Anti-dumping and Countervailing Duties (China) "), WT/DS379/R, 
adopted 25 March 2011, as modified by Appellate Body Report WT/DS379/AB/R, para. 10.187. 
504 China argues that while in this  case it was of extreme significance to  take into consideration China's 
comparative advantages, namely low labour costs and econom ies of scale, as well as the fact that footwear is a 
labour intensive product, accounting for around 40 per cent of the price of the product, the European Union 
disregarded these aspects.  China, first written submissi on, paras. 394, and 396-397; second written submission, 
para. 377.  
505 See, generally, China, second written submission, paras. 379-405.  
506 China argues that the European Union wrongly considered the provisions of footnote 2 to 
Article 2.2 of the AD Agreement in sel ecting Brazil.  Footnote 2 provides:  
"Sales of the like product destined for consum ption in the domestic market of the exporting 
country shall normally be considered a sufficient quantity for the determination of the normal value if such sales constitute 5 per cent or more of the sales of the product under consideration 
to the importing Member, provided that a lower ratio should be acceptable where the evidence 
demonstrates that domestic sales at such lower ratio are nonetheless of sufficient magnitude to provide for a proper comparison." 
According to China, the 5 per cent level "was meant to be a rough guideline", and that while reliance on it might 
result in an accurate reflection of normal value in the analogue country, it is not sufficient for finding a proxy for 
the normal value that would have existed but for the distorted prices in the actual target of the investigation.  
China, second written submission, paras. 406-420; closing oral statement at the second meeting with the Panel, 
paras. 14-15. 
507 China argues that the existence of "fair" competition in the analogue country is essential for 
ensuring comparable prices and fair comparison, and a sserts that competition in the Brazilian footwear market 
was not fair.  China disagrees with the European Union that factors such as the number of the producers, 
exports, and the consumption of footwear in Brazil estab lished that there was fair competition in the market.  
China, second written submission, paras. 454 and 458-459.  China also argues that the European Union 
disregarded the effect of Brazil's sy stem of non-automatic import licensing for footwear, and the fact that Brazil 
had imposed an anti-dumping duty of $13.85/pair on Chin ese footwear imports.  China, first written submission, 
para. 392.  WT/DS405/R 
  Page 121  
 
 objectively in selecting Brazil as the analogue country.
508  China contends that these errors 
demonstrate that the European Union failed to secu re a comparable price which could permit a fair 
comparison.  Finally, China argues that in selecti ng an analogue country, investigating authorities are 
under an obligation to comply with Article 17.6(i)  of the AD Agreement.  China asserts that the 
European Union failed to ensure that the analogue  country selection procedure was based on a proper 
establishment of facts as well as an unbiased and objec tive evaluation of those facts.  In particular, 
China contends that the European Union (i) assured the cooperation of the Brazilian producers by establishing different timeframes for sending the questionnaires to the Brazilian, Indian and 
Indonesian producers and by sending the questionn aires to the Indian and Indonesian producers 
during a holiday period; (ii) facilitated the coope ration of the Brazilian producers by giving them 
more time and greater flexibility to respond to the analogue country questionnaire; and (iii) failed to 
investigate the allegation regarding collusion betw een the Italian Footwear Association (ANCI) and 
the Brazilian footwear association (Abicalçados).
509   
7.236  With respect to the original inv estigation, China refers to its le gal arguments in the context of 
its claims concerning the analogue country selection in  the expiry review, and notes the similarity of 
the analogue country selection in both proceedings.510  In particular, China recalls its arguments that 
(i) the European Union places an unreasonable wei ght on domestic sales volume in selecting an 
analogue country511; and (ii) the criteria relied upon, taken as a whole, are manifestly unreasonable 
and cannot accord with the obligations to secure a fair price and make a fair comparison, as the 
European Union does not take into account any criterion which aims at finding a proxy normal value for that which would have existed but for the distortion in the Chinese market.
512  With respect to its 
claim under Article 17.6(i) of the AD Agreement, China argues that the Eu ropean Union (i) made 
more attempts to secure support from Brazilian and Indian producers than it made for Thai producers; 
(ii) granted more time to respond to the questionn aire to several Brazilian producers than it granted 
certain Thai and Indonesian producers; and (iii) di d not objectively evaluate all the information made 
available by interested parties, including informa tion regarding the factors affecting competition in 
Brazil.513  In China's view, this was not only inconsis tent with Article 17.6(i), it precluded a fair 
comparison between normal value and the Chinese e xport prices as required by Article 2.4, and as a 
consequence, the European Union's determination of  dumping is inconsistent with Article 2.1 of the 
AD Agreement and Article VI:1 of the GATT 1994.514 
                                                      
508 China, first written submission, paras. 400-402; second written submission, para. 461.  China 
disagrees with the European Union that  a "fair comparison" can be achieved by making adjustments.  In China's 
view, due allowances are not on their own sufficient to co mply with the "fair comparison" obligation.  In this 
case, China contends that a comparison of a normal valu e based on the price of an adult shoe adjusted by 
33 per cent to compare it to the expo rt price of a children's shoe demonstr ated the lack of fair comparison.  
China, second written submission, para. 463; answer to Panel question 31(c). 
509 See, generally, China, first written submission, paras. 379 and 381-382; second written submission, 
paras. 370, 438, 443-445, and 448-449; closing oral statement at the second meeting with the Panel, paras. 16-23. 
510 With respect to the original investigation, China asserts claims under Article 2.4 of the 
AD Agreement and Article VI:1 of the GATT 1994, but no t Article 2.1 of the AD Agreement.  However, China 
contends that, given the identical "comparable price" language in Article 2.1 and Article VI:I of the 
GATT 1994, the difference between the claims should not have any practical effect on the outcome.  China, 
second written submission, paras. 1315-1316.  
511 In particular, China alleges that while the Definitive Regulation states that "the representativeness of 
the domestic sales is not the sole reason for having chosen Brazil" and that "o ther factors such as the 
competition on the Brazilian market, the difference in the costs of producti on structures including the access to 
raw materials and the know-how of the Brazilian producers  were analyzed", no real evaluation of these other 
factors took place.  China, firs t written submission, para. 937.  
512 China, second written submission, para. 1318.  
513 China, first written submission, para. 930; second written submission, paras. 1328-1329.   
514 China, first written submission, para. 931.   WT/DS405/R 
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 b. European Union  
7.237  The European Union rejects China's argument that Articles 17.6(i), 2.4, and 2.1 of the 
AD Agreement establish rules governing the analogue country selection.  The European Union asserts 
that the only source of rules governing the choice of analogue country is Paragraph 15 of China's 
Accession Protocol
515, and that although these rules are implicit,  their substance can be deduced from 
the context.516   
7.238  The European Union contends that Article 2. 4 of the AD Agreement does not apply to the 
selection of the analogue country.  According to th e European Union, the purpose of the analogue 
country selection is clear:  to find a normal value that can be compared to the export price in an 
investigation involving a non-market economy.  The standard way of determining a normal value is 
set out in Articles 2.1 and 2.2 of the AD Agreement, but in the case of China, Paragraph 15(a) of its 
Protocol of Accession makes clear that instead of using Chinese prices or costs to determine a normal 
value, an "alternative methodology" may be used.  Once a normal value has been  determined, the fair 
comparison obligation of Article 2.4 becomes opera tive, but not before, as the European Union 
contends that the very wording of Article 2.4 assumes that a normal value already exists.517   
7.239  The European Union asserts that the notion of a "comparable" normal value does not involve 
the fairness criterion of Article 2.4.  The European Union refers in this regard to Article 2.2, which 
provides that  
"When there are no sales of the like product in the ordinary course of trade in the 
domestic market of the exporting country or when, because of the particular market situation or the low volume of the sales in the domestic market of the exporting 
country, such sales do not permit a proper comparison, the margin of dumping shall 
be determined by comparison with a comparable price of the like product when exported to an appropriate third country, pr ovided that this price is representative, or 
with the cost of production in the country of origin plus a reasonable amount for administrative, selling and general cost s and for profits." (footnotes omitted) 
The European Union notes that Article 2.2 refers to  a "proper" rather than a "fair" comparison, 
contending that in this context, the two terms ar e not interchangeable, and the choice of terms is 
significant.  The European Union also observes that  nothing in Article 2.2 suggests that the use of 
alternative methods of determining normal value on the basis of "third country price" or "constructed 
price" must lead to a "fair", or even a "proper", comparison, although they must lead to a "comparable 
price", since that is the purpose of identifying a nor mal value.  Finally, the European Union argues 
that the scope of Article 2.4 is limited, as demonstrat ed by the fact that all of the detailed rules its sets 
out for making a fair comparison assume that a comparable normal value already exists.
518  
 7.240  The European Union contends that the authorities China invokes in support of its view do not 
demonstrate that the "fair comparison" obligation applies to the choice of the normal value.  The 
                                                      
515 In this respect, the European Union notes that China's panel request does not include Paragraph 15 
of China's Accession Protocol in connection with its claims regarding the analogue country selection procedure.  
European Union, openin g oral statement at the second m eeting with the Panel, para. 56.  
516 European Union, opening oral stat ement at the second meeting with the Panel, paras. 53-56 and 73.  
The European Union rejects China's reliance on Paragr aph 151 of China's Accession Working Party Report, 
arguing that it does not have the status of a legally binding text.  European Union, first written submission, paras. 165-166; second written submission,  paras. 64-65; opening oral statement at the s econd meetin g with the 
Panel, para. 72. 
517 European Union, first written submission, paras.  169-171, 176 and 191; second written submission, 
para. 82; answer to Panel question 36, citing Panel Report, Egypt – Steel Rebar , para. 7.335. 
518 European Union, first written submission, pa ras. 173-175; answer to Panel question 37.   WT/DS405/R 
  Page 123  
 
 European Union notes that the Appellate Body repor ts referred to by China do not address the choice 
of normal value, but only the comparison of norma l value and export price.  Nor did the Appellate 
Body in any of these cases elaborate on the implicati ons of the fair comparison obligation informing 
all of Article 2 other than in regard to the comparison of the normal value and export price.  
Furthermore, the European Union argues that the Appellate Body has made clear that the 
identification of the comparable price is entirely in terms of Article 2.1, and that once the comparable 
price has been identified, Article 2.4 guides the inves tigating authorities in ensuring that there is a fair 
comparison.
519   
7.241  The European Union argues that Article 2.1 is definitional and therefore cannot be the basis 
of a claim, disagreeing with China's relian ce on the panel and Appellate Body report in US – Hot-
Rolled Steel  in this respect.520  The European Union argues that in that case, the complainant had no 
way of challenging the conduct of the United States ot her than by invoking Article 2.1, since the 
phrase "in the ordinary course of trade" is not elabor ated on elsewhere in th e AD Agreement.  China's 
claim, however, focuses on the term "comparable price", which is addressed by other provisions, 
notably Article 2.2.  The European Union argues that  since Article 2.1 sets out the basic elements of 
dumping, the effect of China's position would be that virtually any aspect of a Member's dumping 
determination could be brought be fore a panel simply by invoking Article 2.1.  The European Union 
considers that this was not the intention of the draf ters of the Agreement, and that Article 2.1 could 
not constitute a "legal basis", in terms of Ar ticle 6.2 of the DSU, for such a challenge.521 
7.242  The European Union rejects China's view that th e purpose of selecting an analogue country is 
to "find a value which would approximate  what normal value would have been  if there were, 
respectively, sales of the like product in the or dinary course of trade in the domestic market , or 
domestic sales made at the same level of trade as export sales ."522  The European Union does not 
consider the "goal of replicating conditions in  a non–market economy country as though it were not a 
non-market economic [sic] country as one that can meaningfully be pursued".523  M o r e o v e r ,  t h e  
European Union contends that China's argument in this regard is supported only by simple 
assertions.524  The European Union argues that the u se of analogue country information is an 
exceptional procedure that is adopted because conditi ons in the country being investigated are found 
to be incapable of providing data that can be us ed to determine normal values.  Therefore, the 
                                                      
519 European Union, second written submission, para s. 58-60, 61-62 and 82, citing Appellate Body 
Reports, EC – Bed Linen , para. 59; US – Softwood Lumber V (Article 21.5 – Canada) , para. 133; and US – 
Zeroing (EC) , para. 146; US – Hot-Rolled Steel , paras. 148 and 164-169; answer to Panel question 38. 
520 European Union, opening oral statement at the second meeting with the Panel, para. 65, citing 
Appellate Body Report, US – Zeroing (Japan) , para. 140.  
521 European Union, opening oral statement at the second meeting with the Panel, paras. 67, citing 
Appellate Body Report, US – Hot-Rolled Steel , para. 158.  
522 European Union, second written submission, para. 68, quoting China, answer to Panel question 31, 
para. 215. 
523 European Union, second written submission, para. 80. 
524 The European Union argues that  (i) China concludes that Article VI of the GATT 1994 (and 
Article 2.1 of the AD Agreement) requi re that the analogue country permit determination of a normal value that 
is comparable to the export price, and then asserts that only its own standard is capable of achieving that result; 
(ii) China annexes the term "appropriate" in Article 2. 2 of the AD Agreement to the choice of the analogue 
country and then asserts that Article 2.2 supports its no tion of producing the situation of sales in a hypothetical 
market-economy domestic market; and (iii) Paragraph 151 of China's Accession Work ing Party Report is not 
binding, and in any event, the criteria actually used by the Commission in selecting the analogue country 
constitute "an appropriate source for the prices or costs to be utilized in light of the nature of the industry under investigation".  The European Union also notes that the panel in US - Anti-Dumping and Countervailing Duties 
(China)  did not address how Paragraph 15(b) of China's Accession Protocol would have had to be applied had it 
been invoked, and the task of establishing a proxy benchmark under Article 14(d) of the SCM Agreement is significantly different from the task of choosing an  analogue country.  European Union, second written 
submission, paras. 74-79; opening oral statement at the second meeting with the Panel, paras. 85-86. WT/DS405/R 
Page 124  
 
 European Union considers that the notion of "wha t the normal value would have been if" cannot be 
applied.
525   
7.243  The European Union maintains that the choice of an analogue country is not governed by 
Article 2.4 of the AD Agreement, but must result in  identifying a comparable normal value.  In this 
regard, the European Union argues that China fix es on the term "appropriate", which appears in the 
second Ad Note to Article VI:1 of the GATT 1994, EU  legislation, and Paragraph 151 of China's 
Accession Working Party Report, as the basis for cr iteria governing the choice of analogue country.  
The European Union considers the notion of  choosing an "appropriate" analogue country 
unobjectionable, but asserts that a Member need not choose the "most appropriate" country in this regard.
526  In support of this view, the European Uni on points to Article 2.2, which establishes rules 
for alternate methods of determining normal valu e where domestic prices are not suitable for this 
purpose, with no preference for either of the tw o options, and a reference to the "appropriate" not 
"most appropriate" third country.  The European Union also points to the working party reports on the accessions of Poland, Romania, and Hungary, whic h envisaged determining a normal value using a 
method that was "appropriate and not unreasonable" , not choosing the "most appropriate" country.
527  
Finally, the European Union notes that both the text of the second Ad Note to Article VI:1 of the 
GATT 1994, and its negotiating history, reveal the reluctance of the GATT Contracting Parties to 
articulate criteria applicable to the selection of norm al value, and to the choice of an analogue country 
which is a step towards that selection.528  Thus, for the European Union, any such criteria are 
necessarily implicit in character.529   
7.244  With respect to the selection of an analogue country in the original investigation, the 
European Union rejects China's contention that, in making the choice of the analogue country, the 
Commission should have considered certain factors, notably the level of development.  The European 
Union submits that in so far as the Commission did c onsider factors, its consideration was proper and 
met any legal obligation that exists, and as regard s other factors proposed by China, it was under no 
obligation to consider them.530  The European Union asserts that competitiveness and 
representativeness were the most significant fact ors taken into account for the selection of the 
analogue country, although the Commission also addressed other factors that were raised by interested parties.
531  Furthermore, the European Union argues that  its emphasis on the existence of a sufficient 
volume of domestic sales in the analogue country was consistent with the AD Agreement which, as 
reflected in the hierarchy of choices set out in Artic les 2.1 and 2.2, indicates that domestic sales prices 
                                                      
525 European Union, second written submission, para. 71.  
526 European Union, first written submission, paras. 193-198.  Indeed, Article 2(7)(a) of the Basic 
AD Regulation refers to "appropriate", but China does not explain how this provides guidance in the interpretation of WTO obligations.  European Union, first written submission, para. 195. 
527 European Union, first written submission, paras. 191-202. 
528 European Union, answer to Panel question 36.  In this respect, the European Union notes that the 
Contracting Parties' refused to modify the second Ad Note to Article VI:1 of th e GATT 1994 as proposed by 
Czechoslovakia.  This, in the European Union's view, furthe r demonstrates that the intention of this provision is 
to give Members broad discretion as how to determine the normal value for non-market economy countries.  Id. 
European Union, first written submission, para. 209. 
529 European Union, answers to Panel questions 34  and 36; opening oral statement at the second 
meeting with the Panel, para. 56; firs t written submission, paras. 197-203.  
 530 See, e.g. European Union, opening oral statement at the second meeti ng with the Panel, paras. 60 
and 122.  With respect to China's contention regarding the level of economic development, the European Union 
further argues that (i) costs in a non- market economy are distorted and theref ore cannot be relied upon; (ii) there 
is no legal basis for such a criterion to apply to the choice of the analogue country; (iii) China's reliance on 
Paragraph 151 of China's Accession Working Party Report to  support this criterion is flawed since this provision 
is not legally binding nor is it within the terms of reference of the Panel.  European Union, first written 
submission, paras. 217-218; opening oral statement at the second meeting with the Panel, paras. 79-80.  
531 European Union, opening oral statement at the second meeting with the Panel, para. 90.  WT/DS405/R 
  Page 125  
 
 are the primary source for determining normal value.
532  The European Union disagrees with China's 
argument that the Commission erred in choosi ng Brazil over Indonesia based on greater 
representativeness of sales.  The Eu ropean Union contends that th e Commission's determination in 
this regard was based on the 5 per cent rule contained in Article 2.2 and that the purpose of this rule is 
to ensure that domestic sales constitute a significant portion of the exporter's business.533  T h e  
European Union also argues that the criterion of competitiveness was amply satisfied by Brazil.534  In 
the European Union's view, the ex istence of nearly 8,000 producers of footwear in Brazil was a 
significant factor indicating a competitive market.  Th e European Union notes that other factors, such 
as Brazil's level of footwear imports, were also  considered by the Commission in reaching its 
conclusion.  As for China's allegations regarding th e lack of production of children's shoes in Brazil, 
the European Union argues this did not prevent the choice of Brazil as the analogue country, as an 
appropriate adjustment was made at the stage of comparison of normal value and export price.  The 
European Union notes that China's cr iticism appears to be directed at the way in which the adjustment 
was made, and maintains that this is not a releva nt issue in the context of the analogue country 
selection.535 
7.245  The European Union reiterates its view that  China's claim under Article 17.6(i) of the 
AD Agreement is outside the Panel's terms of refere nce.  In any event, th e European Union asserts 
that China's arguments in support of th is claim are confused and ineffectual.536  The European Union 
submits that China's accusation of bias is without foundation.537  The European Union maintains that, 
as stated in the Review Regulation, the sending of questionnaires to the Indian and Indonesian 
producers "could only be completed at the end of  December 2008, after the relevant addresses of 
producers were obtained".  Furthermore, the Eur opean Union argues that, apart from its unproven 
contentions regarding the "holiday season", Chin a has not advanced any argument or evidence 
supporting its contention that the dispatching of questionnaires on different dates constituted bias.538  
The European Union asserts that there was no di scrimination in favour of Brazil in granting 
extensions of the deadlines, since companies could ask for extensions, extensions were granted, and 
replies were accepted until mid-February.539  Finally, the European Union asserts that China's 
allegation of collusion between the Italian and Brazilian producer s is unsubstantiated.540   
7.246  With respect to the selection of an analogue count ry in the expiry review, the European Union 
argues that the Commission correctly  considered the factors of competition, labour costs, and the 
representativeness of sales in concluding that Brazil was an appropriate analogue country.  It asserts 
that its preference for making a comparison with a normal value based on domestic sales prices is 
                                                      
532 European Union, first written submission, para. 220; answer to Panel question 37.  
533 European Union, opening oral statement at the second meeting with the Panel, paras. 92-94.  
Furthermore, the European Union notes that while it does not treat the 5 per cent rule as rigid minimum, no 
argument was presented to the Commission as to why it should lower the threshold in this case.  Id., para. 96. 
534 European Union, first written submission, paras. 214-216, referring to Review Regulation, Exhibit 
CHN-2, recitals 80-82 and 89-90; opening oral statemen t at the second meeting with the Panel, para. 122.  
535 European Union, opening oral st atement at the second meeting with the Panel, paras. 124, and 128-
130. 
536 European Union, first written submission, paras. 178-179.   
537 European Union, first written submission, para. 190.  
538 European Union, first written submission, paras. 182-183; opening oral statement at the second 
meeting with the Panel, paras. 99-103.  The European Union asserts that the Indian and Indonesian producers 
actually had more time to respond than did Brazilian pr oducers.  European Union, first written submission, 
para. 188; opening oral statement at the second meeting with the Panel, paras. 107-108. 
539 European Union, opening oral statement at the second meeting with the Panel, paras. 105-106. 
540 The European Union notes that the Commission did not find, nor was it provided with, evidence of 
the collusion alleged by China.  Similarly, the European Union argues that China's hypotheses as to how the Brazilian data might have been distorted by collusion are based on theories and not on facts.  European Union, 
opening oral statement at the second m eeting with the Panel, paras. 110-117. WT/DS405/R 
Page 126  
 
 consistent with Article VI:1 of the GATT 1994 a nd Article 2.1 of the AD Agreement, both of which 
establish that prices are always the first choice in establishing a normal value.  Furthermore, the European Union contends that given the large num ber of different types of shoes involved in the 
investigation, the level of the domest ic sales was particularly relevant.
541  It adds that given the 
significantly larger volume of sales by Brazilian producers willing to cooperate, the likelihood of 
finding comparable models was higher than in the case of Thai, Indonesian and Indian companies.542  
The European Union asserts since the Brazilian mark et was found to be a competitive market, it was 
unnecessary to investigate competition in other countries.   In this regard, the European Union recalls 
its position that there is no obligation to choose the "best" country.  Moreover, the European Union 
notes that, as stated in the Definitive Regulation,  the labour costs of the sampled exporting producers 
in China did not warrant an adjustment in the comparison.543  Finally, the European Union submits 
that China has failed to substantia te its allegations that the Commission's procedures to select an 
analogue country were biased.544   
(ii) Arguments of third parties  
a. Brazil 
7.247  Brazil asserts that there are no specific WT O rules governing the choice of the analogue 
country for the purpose of calculating the normal valu e in anti-dumping investigations.  Brazil notes 
that the second Ad Note to Article VI:1 of the GATT 1994 and Article 2.7 of the AD Agreement 
recognize the inherent difficulties in calculating dumping margins in cases where products are exported from NMEs.  While Article 2.7 allows WTO Members to depart from the rules laid down in 
Article 2 of the AD Agreement in determini ng normal value, neither the GATT 1994 nor the 
AD Agreement indicate which method should be used, and the terms "analogue country" or "surrogate 
country" do not appear in the AD Agreement, Chin a's Accession Protocol or the GATT 1994.  Nor is 
there any provision which would indicate how WTO Members should calculate NME normal value, or implying that Members must select the most appropriate or otherwise "similar" country as the 
analogue/surrogate country.  In Brazil's view, th e sole guidance provided by the GATT 1994 and the 
AD Agreement is that the normal value used should render a fair comparison with the export price 
possible.  Thus, insofar as the investigating author ity selects an analogue country which allows it to 
obtain a comparable, and thus appropriate, normal va lue, it should not be found to be in breach of 
WTO rules.  Brazil considers that the investiga ting authority in selecting an appropriate analogue 
country enjoys certain discretion in creating a lternative methodologies for establishing normal value 
for NME countries and also in establishing criteria that exporters from NME countries must meet in 
order to be subject to the exceptional regime of  market economy.  Finally, Brazil considers that 
Article 2.4 of the AD Agreement does not apply at the stage of selecting an analogue country and therefore the fair comparison rule cannot be interp reted so as to apply to the choice of the analogue 
country as such.
545 
b. Colombia 
7.248  Colombia considers that the use of alte rnative methodologies for establishing the normal 
value of producers from non-market economy countries is justified by the second Ad Note to 
Article VI:1 of the GATT 1994 and Article 2.7 of  the AD Agreement.  Colombia acknowledges that 
                                                      
541 European Union, first written submission, paras. 614-616.  
542 European Union, first written submission, para. 622.   
543 European Union, first written submission, para. 619.   
544 European Union, first written submission, paras. 604-611; opening oral statement at the second 
meeting with the Panel, paras. 392-396.   
545 Brazil, third party written submission, paras. 31, 34 -35, 38-40, and 41; answers to Panel questions 7 
and 8.   WT/DS405/R 
  Page 127  
 
 market conditions of non-market economy countries do not permit a proper comparison between the 
normal value and the export price of products fro m those countries and therefore considers that a 
comparison methodology for that purpose should take into account elements su ch as those described 
in Article 2 of the AD Agreement.  Finally, Colombia is of the view that the "fair comparison" requirement of Article 2.4 does not apply to the selection of an analogue country in the context of a 
non-market economy country investigation.
546 
c. Japan 
7.249  Japan notes that throughout the comparison of normal value and export price, Article 2.4 of 
the AD Agreement establishes a funda mental obligation limiting the discretion of the investigating 
authority in conducting a fair comparison.  This ob ligation, in Japan's view, requires investigating 
authorities to conduct the investigation properly and assess the facts in an unbiased and objective 
manner, observing the principles of good faith and f undamental fairness.  Japan considers that the 
selection of an analogue country in the context of a NME country investigation is  a part of the process 
of establishing the normal value in the investigation and, as a result, to the extent that the general 
obligations of good faith and fundame ntal fairness are applicable throughout the comparison process 
for calculating the dumping margin, it would not be reasonable to conclude that the authorities are 
exempted from securing substantive and procedural fairness in the context of the selection of the 
analogue country.  To this extent, Japan is of the view that the "fair comparison" requirement in Article 2.4 is also applicable to other aspects of  a determination of dumping through the comparison 
process.
547   
d. Turkey 
7.250  Turkey notes that both the second Ad Note to Article VI:1 of the GATT 1994 and 
Paragraph 15(a) of China's Accession Protocol allow Members to use a methodology that is not based 
on a strict comparison with domestic prices or cost s in China if the investigated producers cannot 
clearly show that they are operating in market ec onomy conditions. Turkey considers that selecting an 
analogue country is the most reasonable method for determining the normal value when the 
investigated companies are not operating under market economy conditions and that such selection 
should be guided by an "appropriate country" standard.  In addition, Turkey is of the view that the fair 
comparison requirement in Article 2.4 does not govern the analogue country selection process.  In this regard, Turkey notes that the fair comparison principle does not govern the calculation of normal 
value or export price but only the stage of comparison of these two prices.
548 
e. United States  
7.251  The United States considers that the obligation u nder Article 2.4 to ensure a fair comparison 
between normal value and export price does not apply to the selection of an analogue country. Instead, the focus of Article 2.4 is on how the au thorities are to select specific transactions for 
comparison and make the appropriate adjustments for differences that affect price comparability once 
the normal value has been determined.  The United States is of the view that just  as nothing in the text 
of Articles 2.1, 2.2 or 2.4 indicates that the first sentence of Article 2.4 is relevant to the choice 
between home market, third country market or cost  of production, nothing in Paragraph 15(a)(ii) of 
                                                      
546 Colombia, answers to the Panel questions 7 and 9. 
547 Japan, answer to Panel question 9, citing Appellate Body Reports, EC – Bed Linen , para. 59 and US 
– Hot-Rolled Steel , para. 101; Panel Reports, EC – Tube or Pipe Fittings , para. 7.178; United States – Measures 
Relating to Zeroing and Sunset Reviews , ("US – Zeroing (Japan) "), WT/DS322/R, adopted 23 January 2007, as 
modified by Appellate Body Report WT/DS322/AB/R, DSR 2007:I, 97, para. 4.107.  
548 Turkey, third party written submission, paras. 16-28; oral statement, paras. 2-11; answers to Panel 
questions 2 and 9.  WT/DS405/R 
Page 128  
 
 China's Accession Protocol or Article 2.4 suggests that  the first sentence of Article 2.4 is relevant to 
the selection of the analogue country.  In additio n, the United States argues that the language of 
Article 2.4, which relates solely to the comparison,  should not be taken out of  context and applied to 
other issues related to the calculation of dumping margin s.  Finally, the Unites States considers that to 
the extent a comparison has been ma de in accordance with the rules of Article 2.4, the comparison is 
"fair".
549 
f. Viet Nam 
7.252  Viet Nam considers that Brazil has a higher le vel of socio-economic developments compared 
to China and its footwear industry is one of the wo rld's most protected ones.  In addition, Viet Nam 
notes while Article X:3 of the GATT 1994 states that  measures of general application are to be 
administered in an impartial, objective and uniform manner, it seems that the selection of Brazil as the 
analogue country was not objective or impartial.  Thus, in Viet Nam's view, the analogue-country 
selection is, arguably, inconsistent  with Article X:3 of the GATT 1994.550 
(iii) Evaluation by the Panel 
7.253  Before addressing China's claims, we recall certain  relevant facts of the original investigation 
and the expiry review.   
7.254  The European Union consider ed China to be a non-market economy for purposes of both 
proceedings.551  Pursuant to Article 2(7) of the Basic AD Regulation, in the original investigation, the 
Commission established normal value on the basis of the price or constructed value in an analogue 
country.  In the Notice of Initiation of the orig inal investigation, the Commission indicated its 
intention to use Brazil as an appropriate analogue co untry and invited interested parties to comment.  
Comments were received suggesting Thailand, India, or Indonesia as more suitable than Brazil in this 
regard.  The Commission considered each of these proposed alternatives, and concluded that Brazil 
was an appropriate analogue country at the time of  the Provisional Regulation.  Subsequently, some 
interested parties argued that it was not appropriate  to have chosen Brazil as the analogue country.  
The Commission rejected these arguments and conc luded that Brazil was an appropriate analogue 
country for the purpose of establishing the normal value in the Definitive Regulation.552   
7.255  In the expiry review, pursuant to Article 2(7 )(b) of the Basic AD Regulation, the Commission 
again established normal value "on the basis of the pri ce or constructed value in  an appropriate market 
economy third country."  In the Notice of Initiation of  the expiry review, the Commission indicated its 
intention to use Brazil as analogue country, as it ha d in the original investigation, and invited 
comments.553  Comments were received suggesting that Th ailand, India or Indonesia would be more 
suitable than Brazil.  The Commission considered each of these proposed alternatives, and concluded 
that Brazil was an appropriate analogue  country in the Review Regulation.554   
                                                      
549 United States, oral statement, paras. 15-19; answers to Panel questions 7, 8 and 9.  
550 Viet Nam, third party written submission, paras. 16-19. 
551 With the exception of one company, Golden Step, which the Commission concluded was entitled to 
market economy treatment.  Definitive Regulation, Exhi bit CHN-3, recital 72, Review Regulation, Exhibit 
CHN-2, recitals 111-115. 
552 Definitive Regulation, Exhib it CHN-3, recitals 105-122. 
553 Review Regulation, Exhibit CHN-2, recitals 68-69. 
554 Review Regulation, Exhibit CHN-2, recitals 71-108.  The Commission also checked what the result 
would have been had it selected Indonesia, which it c onsidered the only tenable alternative to Brazil, and 
confirmed that the choice of analog ue country between the two tenable alternatives in this case was not 
determinative of the result of the dumping calculations.  Id., recitals 106-107.  WT/DS405/R 
  Page 129  
 
 7.256   China's claims assert that the analogue count ry selection procedure used by the European 
Union and the selection of Brazil as the analogue c ountry in both the original investigation and the 
expiry review violated Articles 2.1, 2.4, and 17 .6(i) of the AD Agreement and Article VI:1 of the 
GATT 1994.
555  
7.257  Thus, the first question before us is whether Ch ina's premise, that Articles 2.1 and 2.4 apply 
to the analogue country selection procedure and estab lish limits on the procedures and criteria for, and 
the outcome of, the selection of an analogue country, is  correct.  If not, then China's claim is without a 
legal basis in the AD Agreement, or the GATT 1994,556 and we need not consider its contentions 
regarding the facts of either the expiry re view or the original investigation.   
7.258  We note first that the term "analogue count ry" does not appear in the AD Agreement, 
Article VI of the GATT 1994, in China's Accession  Working Party Report, or in China's Accession 
Protocol.557  Nor is there any reference in any of these concerning the procedure or criteria for the 
selection of an analogue country.  Indeed, China does not  argue otherwise.  China asserts that the "fair 
comparison" obligation in Article 2.4 and the term  "comparable price" in Article 2.1 inform the 
boundaries of investigating authorities' discretion in the selection of an analogue country.  In China's 
view, the process of selecting an analogue country  must aim at securing a comparable price which 
could permit a fair comparison, and the country sel ected must be capable of yielding such a price.558  
Thus, China's claims ask us to first conclude th at Articles 2.1 and 2.4 of the AD Agreement establish 
requirements for a methodology for determining norma l value in certain anti-dumping investigations 
which is not even alluded to in any relevant le gal instrument, and second that the European Union 
violated those requirements.   
                                                      
555 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that 
provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision further here.   
Moreover, while China's claim with respect to the original investigation does not allege a violation of 
Article 2.1 of the AD Agreement, its ar guments in support of that claim refe r back to its arguments with respect 
to the expiry review, where a claim un der Article 2.1 is asserted.  As the analysis underlying China's claims is 
essentially the same, we will address these claims together , despite the lack of an Article 2.1 claim with respect 
to the original determination. 
556 To the extent China makes arguments under Article VI:1 of the GATT 1994, these are the same as 
its arguments under Article 2.1 of the AD Agreement, as they concern the term "compa rable price".  Therefore, 
our consideration of China's arguments regarding Article 2.1 also addresses its arguments under Article VI:1 of 
the GATT 1994 in the context of these claims. 
557 Paragraph 15(a)(ii) of China's Accession Protocol does provide that an importing WTO Member 
"may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the 
producer under investigation cannot clearly show that  market economy conditions prevail in the industry 
producing the like product with regard to manufacture, production and sale of that product."  Paragraph 15(c) further provides that "[ t]he importing WTO Member shall notify methodologies used in accordance with 
subparagraph (a) to the Committee on An ti-Dumping Practices", and Paragraph 15 (d) sets out temporal limits on 
the provisions of subparagraph (a).  The "analogue country" methodology is generally understood to be an "alternative methodology" within the meaning of Paragraph 15(a)(ii).  China explains that the European Union 
uses prices or costs prevailing in a market economy country, i.e. an analogue country, as the basis for 
determining the normal value used to calculate the du mping margins for exporting producers that do not receive 
market economy treatment.  China, first written submission, paras. 366 and 369.  
558 Specifically, we recall that China asserts that an appropriate method aimed at securing a comparable 
price which could permit a fair comparison must at least attempt to find a proxy for the normal value that would have prevailed but for the distortion resulting from the fact that the country under investigation is not a market 
economy.  In practical terms, China would have an investigating authority attempt to determine what domestic 
prices would obtain for a product in a non-market economy if it were a market economy.  Like the 
European Union, we consider this to be a goal that cannot meaningfully be pursued, and certainly not one which 
can be derived from the "fair comparison" language of Article 2.4.   WT/DS405/R 
Page 130  
 
 7.259  Article 2.1 of the AD Agreement provides: 
"For the purpose of this Agreement, a produc t is to be considered as being dumped, 
i.e. introduced into the commerce of anothe r country at less than its normal value, if 
the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of  trade, for the like product when destined 
for consumption in the exporting country." 
On its face, it is clear that Article 2.1 is a definiti onal provision that sets fort h the general definition of 
"dumping" for the purposes of the AD Agreement.  The Appellate Body's report in US – Zeroing 
(Japan)  states:  
 
"Article 2.1 of the Anti-Dumping Agreem ent and Article VI:1 of the GATT 1994 are 
definitional provisions. They set out a definition of "dumping" for the purposes of the Anti-Dumping Agreement and the GATT 1994. The definitions in Article 2.1 and Article VI:1 are no doubt central to the inte rpretation of other provisions of the Anti-
Dumping Agreement, such as the obligations relating to, inter alia , the calculation of 
margins of dumping, volume of dumped imports, and levy of anti-dumping duties to 
counteract injurious dumping. But, Article 2. 1 and Article VI:1, read in isolation, do 
not impose independent obligations."
559   
7.260  Thus, it would seem that Article 2.1 does not, in  itself, impose indepe ndent obligations and 
therefore cannot be the basis of a stand-alone claim.   The European Union argues that Article 2.1 is a 
purely definitional provisi on that cannot be used as a basis of  a claim.  China, however, asserts, 
relying on the decision of the panel in US – Hot-Rolled Steel , that although Article 2.1 does not create 
independent obligations, it may nevertheless form th e basis of a claim if it can be shown that the 
obligation is also "located" or "cr eated" elsewhere in the AD Agreement.560  Even assuming this were 
the case, we do not consider that China has demonstrat ed that the obligations it asserts are "located" or 
"created" elsewhere in the AD Agreement.561  Thus, we see no basis in Article 2.1 of the 
AD Agreement for China's claims concerning analogue country.562  We have, as discussed above, 
dismissed China's claims under Article 17.6(i).563  Moreover, we agree with the European Union that, 
under China's approach, all dumping-related claims  could be brought under Article 2.1 alone, 
supported by the assertion that the obligations asserted are "created" elsewhere.564  Articles 2.2 and 
                                                      
559 Appellate Body Report, US – Zeroing (Japan) , para. 140 (footnote omitted).  
560 China, second written submission, paras. 300 and 306-307; closing oral statement at the second 
meeting with the Panel, para. 9. 
561 We see nothing in the conclusions or reasoning of either the panel or the Appellate Body in US – 
Hot-Rolled Steel which supports China's position.  The question at issue in that case was the United States' test 
for determining whether sales between affiliated parties were  "sales in the ordinary course of trade" within the 
meaning of Article 2.1, which defines dumping as occurring where the export price of a product is less than "the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the 
exporting country."  The panel, and later the Appellate Body, noted that the AD Agreement did not define the 
term "ordinary course of trade" and that while Article  2.2.1 established rules for determining whether sales 
below cost may be treated as not in the ordinary course  of trade, it did not address the question raised in the 
dispute.  Panel Report, US – Hot-Rolled Steel , para. 7.108; and Appellate Body Report, US – Hot-Rolled Steel , 
para. 139.  The panel, and later the Appellate Body for somewhat different reasons, found that the test applied by the United States "does not relate to a permissible interpretation of the term "sales in the ordinary course of 
trade"".  Panel Report, US – Hot-Rolled Steel , para. 7.112; and Appellate Body Report, US – Hot-Rolled Steel , 
para. 158.   
562 As noted above, our consideration of China's ar guments regarding Article 2.1 also addresses its 
arguments under Article VI:1 of the GATT 1994 in th e context of these claims, see footnote 556 above, and 
therefore we also see no basis in Article VI:1 of the GATT 1994 for China's claims. 
563 See paragraphs 7.35-7.44 above.   
564 European Union, opening oral statement at the second meeting with the Panel, para. 67.  WT/DS405/R 
  Page 131  
 
 2.3 establish specific rules for alternative methods that may be used in establishing normal value and 
export price in certain circumstances; Article 2. 4 establishes specific rules and methodologies for the 
comparison of normal value and export price; Article 2.5 establishes specific rules for the country in 
which normal value is to be established in cases of  transhipment; Article 2.6 defines like products, 
and Article 2.7 establishes the continued significance of the second Ad Note to Article VI:1 of the 
GATT 1994.  Under China's approach, however, these provisions would simply be subsumed in the 
definition of dumping set out in Article 2.1, and be effectively redundant.  We do not accept that Article 2.1 can be understood in such a fashion.   
7.261  The only other provision relied on by China in this regard is Article 2.4 of the AD Agreement.  
China contends that Article 2.4 applies to the anal ogue country selection procedure, and that the "fair 
comparison" obligation in the first sentence of Ar ticle 2.4 is an "independent" and "overarching" 
obligation which applies to all of Article 2, includ ing all aspects of the establishment of normal value, 
in particular, in this case, the selection of an appropriate analogue country.
565   
7.262  Article 2.4 of the AD Agreement provides: 
"A fair comparison shall be made between the export price and the normal value. This 
comparison shall be made at the same level of trade, normally at the ex-factory level, 
and in respect of sales made at as nearly  as possible the same time. Due allowance 
shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditi ons and terms of sale, taxation, levels 
of trade, quantities, physical characteristi cs, and any other differences which are also 
demonstrated to affect price comparability. In the cases referred to in paragraph 3, 
allowances for costs, including duties a nd taxes, incurred be tween importation and 
resale, and for profits accruing, should also be made. If in these cases price 
comparability has been affect ed, the authorities shall establish the normal value at a 
level of trade equivalent to the level of tr ade of the constructed export price, or shall 
make due allowance as warranted under this  paragraph. The authorities shall indicate 
to the parties in question what information is necessary to ensure a fair comparison 
and shall not impose an unreasonable burden of proof on those parties." (footnote omitted)  
The first sentence of Article 2.4, on its face, addr esses the "comparison" between the export price and 
normal value and explicitly requires that such a co mparison must be "fair".  The remainder of the 
provision, including its subparagraphs, establishes sp ecific rules for ensuring a fair comparison of 
export price and normal value.   
 7.263  Nothing in Article 2.4 suggests that the fair comparison requirement provides guidance with 
respect to the determination of the component elemen ts of the comparison to be made, that is, normal 
value and export price.  Indeed, in our view, it is cl ear that the requirement to make a fair comparison 
in Article 2.4 logically presupposes that normal value and export price, the elements to be compared, 
have already been established.  We note in  this regard the views of the panel in Egypt – Steel Rebar .  
Although the issue before that panel was the diffe rent question of whether Article 2.4 establishes a 
"generally applicable rule" as to burden of proof, the panel considered Article 2. 4 in detail, and stated:  
"Article 2.4, on its face, refers to the comparison of export price and normal value, 
i.e. the calculation of the dumping margin, and in particular, requires that such a 
comparison shall be "fair". A straightforward consideration of the ordinary 
meaning of this provision confirms that it has to do not with the basis for and 
                                                      
565 China, second written submission, paras. 261-266;  opening oral statement at the second meeting 
with the Panel, para. 8.   WT/DS405/R 
Page 132  
 
 basic establishment of the export price and normal value (which are addressed 
in detail in other provisions), but with the nature of the comparison of export 
price and normal value ."
566   
Moreover, there is nothing in the provisions of the AD Agreement that specifically address the 
determination of normal value, most notably Article 2. 2, that refers to the "fair comparison" called for 
by Article 2.4.567   
 7.264  China argues, however, that Article 2.4 establish es a general "fairness" obligation that applies 
to all of Article 2, including all aspects of the establishment of normal value.  As noted above, 
however, the "fairness" requirement in Article 2.4 refers to the "comparison" between the normal 
value and the export price.  In our view, to require  consideration of whether a "fair comparison" will 
result in the process of determining normal value in troduces a circularity into the analysis which is 
untenable.  Indeed, in our view, the provisions of Article 2.4 are intended precisely to deal with problems that arise in the comparison as a result of, inter alia , how normal value was established.  In 
such a circumstance, Article 2.4 requires investiga ting authorities to ensure a fair comparison between 
the normal value and the export price, and provide s explicit guidance on how this is to be done:  
where there are "differences" affecting price co mparability between export price and normal value, 
"[d]ue allowance shall be made" for those differences.
568  These allowances can only be made after 
the normal value and the export price have been established.   
                                                      
566 Panel Report, Egypt – Steel Rebar , para. 7.333 (footnote omitted, bold emphasis  added).  The panel 
went on to observe:  
"First, the emphasis in the first sentence is on the fairness  of the comparison . The next 
sentence, which starts with the words "[t]his co mparison", clearly refers back to the "fair 
comparison" that is the subject of the firs t sentence. The second sentence elaborates on 
considerations pertaining to the "comparison", namely level of trade and timing of sales on 
both the normal value and export price sides of the dumping margin equation. The third 
sentence has to do with allowances for "differences which affect price comparability ", and 
provides an illustrative list of possible such di fferences. The next two sentences have to do 
with ensuring "price comparability" in the partic ular case where a constructed export price has 
been used. The final sentence, where the referen ce to burden of proof at  issue appears, also 
has to do with "ensur[ing] a fair comparison". In particular, the sentence provides that when 
collecting from the parties the particular inform ation necessary to ensure a fair comparison, 
the authorities shall not impose an unreason able burden of proof on the parties.  
 The immediate context of this provision, namely Articles 2.4.1 and 2.4.2 confirms 
that Article 2.4 and in particular its burden of proof requirement, applies to the comparison of 
export price and normal value, that is, the calculation of the dumping margin. Article 2.4.1 
contains the relevant provisions for the situation where "the comparison  under paragraph 4 
requires a conversion of currencies" (emphasis added). Article 2.4.2 specifically refers to 
Article 2.4 as "the provisions comparison is made (i.e. the calculation of dumping margins on 
a weighted-average to weighted average or other basis). 
 In short, Article 2.4 in its entirety, includ ing its burden of proof requirement, has to 
do with ensuring a fair comparison, through various adjustments as appropriate, of export 
price and normal value."  
Id., paras. 7.333-7.335 (italics in original).    
567 Article 2.2 establishes options for determining no rmal value where domestic sales prices are not a 
suitable basis, but establishes no hierarchy between them .  There is nothing in Article 2.2 to suggest that 
consideration of the fair comparison requirement or Article 2.4 is relevant to the choice among these options.  Similarly, Article 2.3 establishes options for determining export price in certain circumstances, but does not 
suggest that consideration of the fair comparison requir ement or Article 2.4 is relevant to the choice among 
these options.   
568 In this regard, we note that Article 2.4 expressl y requires that "due allowance" be made for "any 
other differences which are also demonstrated to af fect price comparability" a nd therefore no difference  WT/DS405/R 
  Page 133  
 
 7.265  China relies on three Appellate Body reports in support of its view that Article 2.4 establishes 
a general requirement of "fairness" that applies to al l of Article 2.  However, the three cases cited by 
China in this regard involved the question of whet her the investigating authority had made a "fair 
comparison" between normal value and export price.
569  In none of them was the establishment of the 
normal value addressed in connection with the "fair comp arison".  It is true the Appellate Body stated, 
in EC – Bed Linen , that the obligation to make a fair comparison between export price and normal 
value in Article 2.4 "is a general obligation" that "informs all of Article 2, but applies, in particular, to Article 2.4.2 which is specifically made 'subject  to the provisions governing fair comparison in 
[Article 2.4]'".  However, the Appellate Body was not, in that case, considering the determination of 
normal value, and we see nothing in its reasoning to  suggest it intended this statement to have the 
breadth ascribed to it by China.  We decline to ascribe to the Appellate Body the views proffered by 
China concerning the relevance of fair comparison to  the determination of nor mal value.  We recall 
that in US – Hot-Rolled Steel , the Appellate Body examined the determination of normal value under 
Article 2.1, and while noting that the use of downs tream sales to determine normal value could affect 
price comparability, it concluded this could be  taken account of by the allowance mechanism 
provided for in Article 2.4.  The Appellate Body certa inly did not conclude that the fair comparison 
requirement of Article 2.4 directly applied to th e determination of the normal value from the outset.
570  
We therefore conclude that China has failed to de monstrate that the fair comparison requirement of 
Article 2.4 of the AD Agreement, either alone, or  together with Article 2.1 of the AD Agreement 
and/or Article VI:1 of the GATT 1994, establishes a general requirement of "fairness" which applies, 
inter alia , to the selection of an analogue country.571   
7.266  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union acted inconsistently with Articles 2.1, 2.4 and 17.6(1) of the AD Agreement, or with Article VI:1 of the GATT 1994 in the original investigation as a result of the analogue country selection procedure and the selection of Brazil as the analogue country.  We also conclude that China 
has failed to demonstrate that the European Unio n acted inconsistently with Article 11.3 of the 
                                                                                                                                                                     
affecting price comparability is precluded from being th e object of an allowance.  Appellate Body Report, US – 
Hot-Rolled Steel , para. 177.  
 569 In US – Zeroing (EC)  and US – Softwood Lumber V (Article 21.5 – Canada) , the issue was whether 
the United States' practice of zeroing was inconsistent w ith Article 2.4 of the AD Agreement.  Appellate Body 
Reports, US – Zeroing (EC) , paras. 136-147; and US – Softwood Lumber V (Article 21.5 – Canada) , paras. 131-
146.  Similarly, in EC – Bed Linen , the issue was whether the European Communities' practice of zeroing was 
consistent with Article 2.4.2 of the AD Agreement.  Appellate Body Report, EC – Bed Linen , paras. 46-66.  In 
US – Zeroing (EC) , the Appellate Body agreed with the panel's findings that the "'fair comparison' language in 
the first sentence of Article 2.4 creates an independent obligation" and that "the scope of this obligation is not exhausted by the general subject matter expressly addressed by paragraph 4 (that is to say, the price 
comparability)."  Appellate Body Report, US – Zeroing (EC) , para. 146.  In US – Softwood Lumber V 
(Article 21.5 – Canada) , the Appellate Body referred to the statem ents made in the cases noted above.  US – 
Softwood Lumber V (Article 21.5 – Canada) , para. 133.  
570 Appellate Body Report, US – Hot-Rolled Steel , paras. 166-168.  
571 We note that the European Union in this case c onsiders that the AD Agreement does require that the 
analogue country selected be "appropr iate", but not necessarily the "most appropriate", and defends the selection 
of Brazil in both the original investigation and the expiry  review as satisfying this standard.  The Definitive and 
Review Regulations make clear that the Commission not only invited the comments of interested parties on the choice of analogue country, but considered the comment s received and addressed them in its determinations.  
Nothing in China's arguments suggests otherwise.  Rather, China disagrees with the weight accorded to certain 
facts by the Commission, and its conclusions.  Given our conclusion that China has failed to demonstrate a legal basis for its claims, we do not consid er it either necessary or appropriat e to address the parties' arguments 
concerning the facts and the Commissi on's consideration of those facts. WT/DS405/R 
Page 134  
 
 AD Agreement in the expiry review as a result of  the analogue country selection procedure and the 
selection of Brazil as the analogue country.
572   
(e) Claims II.1 and III.3 – Alleged violation of Articles 2.1 and 2.4 of the AD Agreement and 
Article VI:1 of the GATT 1994 – PCN Methodology 
(i) Arguments of the Parties  
a. China  
7.267  With respect to both the expiry review and the original investigation, China claims that the 
European Union acted inconsistently with Article  2.4 of the AD Agreement by using a broad Product 
Control Number ("PCN") system for the classifica tion of different product types which in China's 
view led to the classification of extremely different footwear types under a single PCN category and 
thereby precluded a fair comparison between the e xport price and normal value, as well as domestic 
market prices, for the purpose of the dumping margin calculation as required by Article 2.4 of the AD Agreement.  In the context of the expiry review , China also claims that the reclassification of 
certain footwear from one PCN category to anot her during the expiry review precluded a fair 
comparison between the export price and normal va lue, in violation of Article 2.4 of the 
AD Agreement.  China claims that, as a consequence of both the broad PCN system and the 
reclassification of certain footwear, the European Union's determination of dumping in the expiry 
review was inconsistent with Article 2.1 of th e AD Agreement and Article VI:1 of the GATT 1994.
573   
7.268  China notes, as examples, that a single PCN included a broad range of footwear styles and/or 
production processes or included different shoes wi th different production costs and factory prices.574  
China also asserts that the reclassification of spor ts, sports-like and trekki ng footwear into category 
"A: Urban" further increased the breadth of different  types of footwear in a single category, as all 
sports, sports-like and trekking foot wear were grouped with all divergen t types of urban footwear.  In 
China's view, this approach mixed completely diffe rent footwear types and automatically prevented a 
fair comparison.575   
7.269  China argues that if the European Union d ecides to use a PCN system, it is under an 
obligation to adequately reflect all the charac teristics of the product which may affect price 
comparability, and the failure to do so results in  an unfair comparison unless it could be cured by 
appropriate adjustments calculated in a correct manner.576  China alleges that in both the expiry 
review and the original investigation, due to th e overly broad PCN system used by the Commission, 
exactly this situation arose, and allowances for di fferences affecting price comparability could not be 
demonstrated by the exporters.  In particular, China asserts that Chinese producers could not possibly 
quantify these differences for the hundreds of differe nt footwear types categor ized within the same 
PCN in order to request specific adjustments, a nd that under these circumstances, the only possible 
solution for exporters was to request the introduc tion of specific categories within the existing PCN 
system.577  With respect to the original investigation,  China specifically asserts that the PCN system 
                                                      
572 We recall in this regard our views concerning the consideration of alleged violations of Article 2 of 
the AD Agreement in the context of an expiry review, paragraphs 7.163-7.165 above.   
573 China, first written submission, paras. 409-419;  second written submission, paras. 481 and 502. 
574 China, first written submission, para. 410. 
575 China, first written submission, paras. 415-417. 
576 China, first written submission, para. 947; answers to Panel questions 27 and 28.   
577 China, answers to Panel questions 27 and 28; second written submission, paras. 484-486.  China 
argues that, most importantly, Chinese exporters did not know how footwear was classified by the Brazilian 
producers in the various PCNs until the general disclosure, and therefore they could not request any adjustments for the different footwear types classified within th e same PCN by them and the Brazilian producers.  In 
addition, China argues that the European Union's practic e imposes an impossible burden of proof on exporters  WT/DS405/R 
  Page 135  
 
 (i) did not take into account the type or quality of the leather used in the production of the product 
under consideration and (ii) grouped extremely diffe rent footwear categories under a single PCN and 
did not take into consideration the di fferences between the production processes ( e.g. number/types of 
stitching operations which result in  significantly different  production costs and sales prices).  In 
addition, China alleges that the failure to iden tify footwear designed for sporting activities and STAF 
from the beginning of the original investigati on severely affected the price comparisons made.
578   
7.270  China asserts that despite repeated  submissions by interested parties objecting to the specifics 
of the PCN system, the European Union did not make any amendments to that system.  In this regard, 
China disagrees with the Commission's  view that the PCN system allowed for a comparison of up to 
600 different categories or product types and that s ubstantiated reasons for amending the PCN system 
were not presented.  The fact that the PCN syst em allowed for a theoretical comparison of up to 
600 footwear categories, China argues, is irrele vant, as the system did not ensure sufficient 
comparability of the different footwear types classi fied under the same PCN.  Furthermore, China 
submits that the evidence demonstrates that inter ested parties did present substantiated and detailed 
comments opposing the use of the PCN system.579  
7.271  With respect to the original investigation, Ch ina in addition claims that the European Union 
acted inconsistently with Article 2.4 of the AD Ag reement by making an incorrect adjustment to the 
analogue country normal value for differences in th e quality of leather used by Chinese and Brazilian 
producers.  With respect to the leather adjustment, Ch ina also claims that the European Union violated 
Article VI:1 of the GATT 1994.580  China submits that, pursuant to Ar ticle 2.4, it is not enough that 
allowances are made for factors affecting price comparability, but it is also necessary that the 
allowances are calculated in a correct manner in order to ensure a fair comparison.  In this case, China 
argues, the leather adjustment precluded a fair comparison because the Commission, in making the 
adjustment, used the data of Chinese producers that it had not granted MET.581  Specifically, China 
notes that while on the one hand, the Commission did not grant MET to eleven sampled Chinese 
producers, considering that they did not operate under market economy conditions, on the other hand, 
the Commission then used the data of these producer s, which it otherwise disregarded, to make 
significantly high adjustments of 21.6 per cent to the normal value based on the Brazilian producers' 
costs or prices.582 
b. European Union  
7.272  With respect to the expiry review, the Eur opean Union submits that China has failed to 
establish that the PCN system used was in violation of Article 2.4 of the AD Agreement.583  T h e  
European Union notes that China repeats the same  arguments concerning aspects of the PCN system 
that were raised during the review and rejected by the Commission, which found that those arguments 
                                                                                                                                                                     
since adjustments are not accepted unle ss duly verified.  China, opening or al statement at the second meeting 
with the Panel, para. 21.   
578 China argues that the type, quantity, and quality of the leather are elements that affect price 
comparability, but that neither the PCN system nor the adjustment made by the Commission with respect to 
quality of the leather reflected such differences.  See, e. g. China, first written submission, paras. 949, and 951-
953; answers to Panel questions 25 and 27; s econd written submission, paras. 1331 and 1333. 
579 China, first written submission, paras. 412-413; second written submission, paras. 487-488.   
580 China, first written submission, para. 961. 
581 See, generally, China, first written submission, paras. 955-961. 
582 China, first written submission, para. 958.  China further argues that the European Union has a 
practice of not making adjustments for differences in production costs when the normal value is based on the 
prices or constructed values in the analogue country as  the figures presented by Chinese exporters not benefiting 
from MET were considered to be unreliable.  Id., para. 959. 
583 European Union, first written submission, para. 238. WT/DS405/R 
Page 136  
 
 did not warrant any changes to the PCN system.
584  Furthermore, the European Union argues that the 
categories the Commission relied upon reflected im portant market and cost considerations.  
Moreover, the European Union asserts that while th e classification of products into PCN categories 
achieves the major part of ensuring comparability fo r the price comparison, the results can be fine-
tuned by making appropriate adjust ments and allowances, which were not requested in the review at 
issue.  Nor has China provided ev idence to demonstrate that the differences that it points to would 
have made adjustments impossible.585  
7.273  In the European Union's view, nothing in Artic le 2 addresses the use of PCNs and therefore 
Members are free to use a PCN system unless it actually prevents a fair comparison being made.  The European Union therefore rejects China's cont ention that a PCN system must meet certain 
requirements in order to satisfy Artic le 2.4.  Furthermore, the Europ ean Union argues that just as there 
is no obligation in the AD Agreement to use a PCN system, there is no obligation to use one that 
avoids every difficulty of comparison due to di fferences between the products within a given PCN 
category.
586  The European Union argues that China has not established that the PCN categories were 
such as to make requests for adju stments impossible.  In addition,  the European Union asserts that 
China's allegations regarding the European Union's supposed failure to make a correct comparison of 
footwear following the decision not to include STAF in the scope of the original investigation are 
unsubstantiated.587   
7.274  With respect to the adjustment for leather qualit y in the original investigation, the European 
Union asserts that the adjustment was made on the basis of world market prices, and not on some 
internal, non-market economy aspect of the Chinese companies' operations.588 
(ii) Arguments of third parties 
a. United States 
7.275  The Unites States considers that by maki ng due allowance for differences that are 
demonstrated to affect price comparability, an in vestigating authority complies with the obligations 
under Article 2.4 of the AD Agreement.  Moreover,  the United States submits that the basis on which 
the products under investigation are grouped or cat egorized for purposes of comparison generally 
would not implicate the provisions under Article 2.4 per se , but if the different product categorizations 
were demonstrated to affect price comparability, th en making "due allowance"  for such differences 
would satisfy an authority's obligation to account  for differences which affect price comparability.589 
(iii) Evaluation by the Panel  
7.276  China's claims concern the PCN methodolo gy used by the European Union for the 
classification of different types of footwear in both the expiry review and the original investigation, 
and the reclassification of certain footwear in the expiry review.  China argues that the broad PCN 
categories, and the reclassification of certain footw ear from one PCN category to another in the expiry 
review, which China alleges further increased th e divergence of footwear types within a single 
category, precluded a fair comparison between th e export prices and analogue country prices for the 
                                                      
584 European Union, first written submission, para. 229. 
585 European Union, first written submission, paras. 234-235; answer to Panel question 27; second 
written submission, paras. 49 and 53; opening oral statement at the second m eeting with the Panel, paras. 138 
and 141. 
586 European Union, first written submission, paras. 626-627; second written submission, paras. 46-49. 
587 European Union, first written submission, paras. 629 and 631. 
588 European Union, first written submission, para. 633.   
589 United States, answer to Panel question 10.  WT/DS405/R 
  Page 137  
 
 purpose of the dumping margin calculation, and was th erefore inconsistent with Article 2.4 of the 
AD Agreement.
590  
7.277  Article 2.4 of the AD Agreement provides, in pertinent part:  
"A fair comparison shall be made between  the export price and the normal value.  
This comparison shall be made at the same level of trade, normally at the ex-factory 
level, and in respect of sales made at as nearly as possible the same time.  Due 
allowance shall be made in each case, on its merits, for differences which affect price 
comparability, including differences in conditi ons and terms of sale, taxation, levels 
of trade, quantities, physical characteristi cs, and any other differences which are also 
demonstrated to affect price comparability." (footnote omitted) 
Article 2.4 requires, as discussed above, that a "fai r comparison" be made between the normal value 
and the export price.  To this end, the comparison s hould be made at the same level of trade and with 
respect to sales made at as nearly as possible the sa me time.  In addition, Article 2.4 mandates that 
"due allowance" shall be made for "any" differe nce between normal value and export price which is 
"demonstrated" to affect "price comparability".591  However, Article 2.4 does not set out any 
methodological guidance as to how due  allowance for differences aff ecting price comparability is to 
be made.  This, in our view, implies that, subject to the obligation to ensure a "fair comparison", the 
investigating authority may make any necessary "due  allowance" according to whatever methodology 
it considers suitable in this respect.592   
 7.278  Moreover, it is clear to us that while Artic le 2.4 places the obligation to ensure a fair 
comparison on the investigating authority
593, it places an obligation on interested parties to make 
substantiated requests for "due allowance", whethe r in the form of adjustments or otherwise, 
demonstrating that there is a difference affecting price comparability.594  It follows therefore, that in 
order to make a prima facie  case of violation of Article 2.4, a complaining party must demonstrate 
that due allowance should have been made with resp ect to (i) a difference (ii) that was demonstrated 
to affect price comparability between the normal value and the export price and (iii) that the 
investigating authority failed to make the adjustment.595  
                                                      
590 China argues that the PCN system in question also  precluded a fair comparison between the export 
prices and the domestic market prices.  However, we note  that the "fair comparison" obligation in Article 2.4 of 
the AD Agreement only applies to the comparison betw een the "normal value" an d the "export price" for 
purposes of dumping determination.  A comparison between export prices and domestic prices is not relevant to 
the determination of dumping, which is the subject of Ch ina's claim at issue here.  We therefore do not address 
this aspect of China's argument, as we co nsider it unrelated to the claim at hand. 
591 Indeed, Article 2.4 reflects merely an indicative list of differences that may affect price 
comparability, as there are no differen ces affecting price comparability which are precluded from being the 
object of an "allowance".  Appellate Body Report, US – Hot-Rolled Steel , para. 177.   
592 Panel Report, EC – Fasteners (China) , para. 7.297. 
593 Appellate Body Report, US – Hot-Rolled Steel , para. 178. 
594 Panel Reports, EC – Fasteners (China) , para. 7.298; and EC – Tube or Pipe Fittings , para. 7.158.  
Indeed, this seems entirely logical and reasonable to us, as  it is the interested parties who have, at least initially, 
knowledge of the product being investigated, includin g any particular differences  that may affect price 
comparability, which they can bring to the investigating author ity's attention, in order to enable it to ensure that 
a fair comparison is made.  There is certainly no indica tion in Article 2.4 of the AD Agreement that it is the 
investigating authority's responsibility to determine wh ether there exist any differences which affect price 
comparability in a given anti-dumping investigation, particul arly differences not specifically listed in Article 2.4 
itself.   
595 Panel Report, Korea – Certain Paper , para. 7.138; and Panel Report, EC – Fasteners (China) , 
para. 7.298. WT/DS405/R 
Page 138  
 
 7.279  We understand that, in order to comply with the requirement of Article 2.4 to make due 
allowance for differences affecting price comparab ility, investigating authorities may divide products 
into groups or categories of goods sharing common characteristics within the like product, and make 
comparisons of normal value and export price for th ese comparable groups of goods, as part of their 
determination of dumping.  Alternatively, in vestigating authorities may make adjustments for 
differences affecting price comparability with resp ect to each export and normal value price to be 
compared.  Or investigating authorities may use a combination of these two approaches, or some 
entirely different methodology.
596  Any of these methods may satisfy the Article 2.4 requirement that 
"due allowance" be made for differences demonstr ated to affect price comparability, in order to 
ensure a fair comparison.  We see nothing in Article 2.4 that limits the range of methodological 
options for investigating authorities in comparing nor mal value and export price, subject always to the 
requirement that the comparison actually made must satisfy the fundamental requirement of 
Article 2.4 that it be a "fair comparison", in wh ich "due allowance" is made for differences 
demonstrated to affect price comparability. 
7.280  China does not contest the use of a PCN methodology by the Commission in either the expiry 
review or the original investigation per se .  Rather, China argues that the PCN methodology used by 
the Commission was "extremely broad" and unsp ecific – a situation China alleges was further 
aggravated by the Commissions' reclassification of foot wear in the expiry review.  China asserts that 
the "extremely broad" classifications used did not capture all the differences affecting price 
comparability and therefore precluded a "fair comparison" between the export prices and analogue country prices.  For China, an investigating aut hority using a PCN system is under the obligation to 
reflect all the characteristic of the product which may affect price comparability in the categories 
defined.
597 
7.281  We do not agree.  We recall that Article 2.4 does not address how due allowance for 
differences affecting price comparability is to be made .  Thus, in the absence of  any guidance in this 
respect, we consider that Article 2.4 cannot be unde rstood to establish specific obligations with regard 
to the methodologies that investigating authorities may use in order to ensure a fair comparison.  We 
therefore see no legal basis for China's contention th at the Commission was obliged to reflect in its 
PCN methodology all the characteristics of the produc t which may have affected price comparability.   
7.282  Moreover, we recall our view that the fact that  Article 2.4 requires investigating authorities to 
ensure a fair comparison does not mean that intere sted parties have no obligation in this process.  
Indeed, we consider that, consistently with Article  2.4, if an exporter believes that the methodology 
adopted by the investigating authority is inadequate to ensure a fair comparison, it is for the exporter 
to make substantiated requests for due allowance to be  made in order to ensure such comparison.  In 
this case, however, we see nothing in the evidence befo re us that would indicate to us that Chinese 
producers made substantiated requests for adjustment s with respect to the factors which allegedly 
affected price comparability.  Nor has China demonstrated otherwise.598  Simply arguing, as interested 
parties did before the Commission, and China does here, that the PCN categories established by the 
Commission were "too broad" to allow a fair comparison is not sufficient, in our view, to discharge the exporters' obligations in this regard. 
7.283  China argues that due to the "overly broad" PCN categories used by the Commission, it 
became impossible for Chinese exporters to clai m adjustments for differences affecting price 
comparability.  In particular, China asserts that given the hundreds of different footwear types 
classified under the same PCN, exporters could not possibly quantify the differences on account of the 
                                                      
596 This same understanding is  reflected in Panel Report, EC – Fasteners (China) , para. 7.297. 
597 See, e.g. China, answer to Panel question 28; second written submission, para. 484. 
598 China acknowledges that no requests for adjustments were claimed by interested parties during 
either the expiry review or the or iginal investigation.  See, e.g.,  China, answer to Panel question 27.  WT/DS405/R 
  Page 139  
 
 physical and technical characteristics which affected price comparability.
599  In our view, however, 
the mere fact that an investigating authority ch ooses to use a system based on categorizing the product 
under consideration into comparable groups, even if  those groups are broadly defined, does not alter 
or somehow shift the burden with respect to demons trating the need for due allowance from interested 
parties to investigating authorities.600  Moreover, we note that the evidence before us demonstrates 
that adjustments were possible and were in fact  made during the both the expiry review and the 
original investigation.601  We are therefore not convinced by China's argument that because of the 
hundreds of different kinds of types/models of foot wear within a PCN category, exporters could not 
quantify the differences which allegedly affected price comparability.   
7.284  With respect to the original investigation, Ch ina makes an additional specific claim that the 
European Union acted inconsistently with Artic le 2.4 by making an incorrect adjustment for 
differences in quality of leather.   
7.285  China argues that the European Union violat ed Article 2.4 because the adjustment of 
21.6 per cent the Commission made to the analogue count ry normal value for differences in quality of 
leather was incorrect.  China's main argument is that the Commission used cost data of Chinese 
producers that it had not granted MET in calculating th e adjustment.  The European Union asserts that 
the adjustment for leather quality was made on the b asis of the world market prices, and not on the 
non-market economy aspects of the Chinese companies'  operations.  In particular, the European 
Union notes that the leather used by the Chin ese sampled producers was found to be imported from 
market economy countries.   
7.286  As we understand it, China's argu ment is premised on the factual assertion that the adjustment 
in question was made on the basis of distorted production costs data of the Chinese producers to 
which the Commission had denied MET.  We can fi nd no evidence to substantiate this assertion, 
however.  The Definitive Regulation, in pertinent part, states:  
"[I]t was found appropriate to make a correction to the adjustments made on leather 
costs … It was found that the producers in the exporting countries, particularly those 
in China, were selling leather footwear of higher quality than Brazilian producers did 
on their domestic market.  The difference in  the quality of shoes was essentially due 
to a higher quality of the leather used.  The quality difference was also mirrored in the purchase price of the leather used: the leather of the footwear exported from China 
                                                      
599 See, e.g. China, second written submission, para. 486.  
600 We are not persuaded by China's argument that Chinese exporters could not request adjustments for 
differences affecting price comparability  because they did not know the fo otwear classified by the Brazilian 
producers in the various PCNs until the disclosure.  China, opening and closing oral statements at the second 
meeting with the Panel, paras. 21 and 28, respectivel y.  Chinese exporters knew the scope of the PCN 
categories, yet never argued that adjustments might be needed within a category, which would not have required 
specific information as to PCN cla ssifications of Brazilian footwear.  
601 In this regard, we note that the Commission did make adjustments in the expiry review for 
differences in (i) discounts granted to  wholesalers on the Brazilian market; (ii) commissions paid to independent 
agents in Brazil; (iii) R&D and design in order to re flect the costs incurred by the Brazilian producers as 
opposed to Chinese/Vietnamese producers; (iv) for children's' shoes, and (v) for transport and insurance.  Review Regulation, Exhibit CHN-2, recitals 120-124.  In  the original investigation, allowances for differences 
in transport costs, ocean freight and insurance costs, handling, loading and ancillary costs, packing costs, credit 
costs, warranty and guarantee costs and commissions, as well as for the quality of the leather and for R&D and 
design costs, were granted.  Provisional Regulation, E xhibit CHN-4, recital 132.  In the Definitive Regulation, 
the Commission addressed interested parties' comments  with respect to these adjustments, revised the 
adjustment for leather quality, and rejected arguments that the PCN scheme did not allow for a fair comparison.  In particular, parties had argued that the PCN scheme used was too broad and not based on product-specific 
physical characteristics.  Definitive Regula tion, Exhibit CHN-3, recitals 127-145. WT/DS405/R 
Page 140  
 
 and Vietnam was more expensive than that used in Brazil to manufacture 
domestically-sold shoes.  For this purpose, the value of leather inputs of analogue country producers were compared to the corresponding values of leather inputs used by Chinese and Vietnamese producers that were part of the sample.  It was found that 
most of the leather used by Chinese and Vietnamese producers had been 
imported from market economy countri es.  Therefore, an average including 
world market prices was used to determine the adjustment .  … 
Some parties argued that it was not appropr iate to make adjustments on the leather 
quality where it was found that the cost of  production in the export countries was 
distorted due to the fact that all but one of the exporters in those countries had not 
been granted MET. 
This had to be rejected .  It is true that MET was rejected also because state influence 
was found that impacted on costs/prices.  However, as noted above, it was found 
that leather had been imported from market economy countries ."
602   
Thus, the Definitive Regulation clearly indicates that the Commission used the leather cost data of the 
sampled Chinese producers to which MET had been  denied precisely because it found that this 
particular element of that data was not distorte d, because the leather u sed by the Chinese producers 
had been imported from market economy countries, and therefore was a cost reflecting market 
economy conditions.  We therefore see no factual basi s for China's contention that the adjustment for 
leather quality was made on the basis of distorted production cost data of the Chinese producers to 
which the Commission had denied MET, a nd thus precluded a fair comparison.   
 
7.287  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union acted inconsistently with Article 2.4 of  the AD Agreement because of the PCN methodology 
used and the adjustment for leather quality made by the Commission in the original investigation.603  
We also conclude that China has failed to demonstr ate that the European Union acted inconsistently 
with Article 11.3 of the AD Agreement by using the PCN methodology, or by reclassifying certain 
footwear, in the expiry review. 604   
(f) Claim III.2 – Alleged violation of Article 2. 2.2 of the AD Agreement – Amounts for SG&A 
and profit 
7.288  In this section of our report, we address China's claim that, in the original investigation, the 
European Union did not construct normal valu e for the one Chinese producer granted market 
economy treatment consistently with the require ments of Article 2.2.2 of the AD Agreement.605   
                                                      
602 Definitive Regulation, Exhib it CHN-3, recitals 127-129 ( bold emphasis added). 
603 China also claims that the adjustment for leather quality made by the Commission was inconsistent 
with Article VI:1 of the GATT 1994.  China, however, has presented no substantive arguments as to how or 
why the alleged use by the Commission of data from Chinese producers denied MET in calculating this 
adjustment constitutes a violation of that provision.  China merely restates part of the text of Article VI:1 of the 
GATT 1994.  China, first written submission, paras. 409-4 19; second written submission, paras. 481-502.  We 
therefore consider this aspect  of China's claim to have been insufficiently elaborated, and do not make findings 
in this regard. 
604 We recall in this regard our views concerning the consideration of alleged violations of Article 2 of 
the AD Agreement in the context of an expiry review, paragraphs 7.163-7.165 above.   
605 Although China states that th e "European Union's practice in determining SG&A and profit for GS 
constitutes a violation of Article 2.2.2 of the Anti- Dumping Agreement", China, first written submission, 
para. 884, we note that China has made no claim concerning EU practice in this regard as such, and therefore  WT/DS405/R 
  Page 141  
 
 (i) Arguments of the Parties 
a. China 
7.289  China argues that the method applied by the European Union to calculate the amounts for 
administrative, selling and general ("SG&A") costs a nd for profits for Golden Step was inconsistent 
with Article 2.2.2 of the AD Agreement, in partic ular with Article 2.2.2(iii), because the method was 
not reasonable and the European Union failed to cal culate the cap for profits as provided in that 
provision.  China asserts that, if an investigating au thority constructs normal va lue, Article 2.2 of the 
AD Agreement provides that it shall add a "reasonabl e amount" for SG&A and profits.  Article 2.2.2 
in turn establishes, in the chap eau, that the amounts for SG&A shall be based on "actual data 
pertaining to production and sales in the ordinary course of trade of the like product by the exporter or 
producer under investigation", and that where the amounts cannot be determined on this basis, they 
may be determined on one of three alternative bases, including Article 2.2.2(iii) which is at issue here, 
and which provides:  
"any other reasonable method, provided that  the amount for profit so established shall 
not exceed the profit normally realized by other exporters or producers on sales of 
products of the same general category in the domestic market of the country of 
origin." 
Based on the text of Article 2.2.2(iii), China asserts that there are two conditions on the use of "any 
other reasonable method" – first, the method used to  calculate SG&A and prof it must be reasonable, 
and second, the profit established pursuant to th e reasonable method shall not exceed the cap.
606  
China contends that the European Un ion in the original investigation did not respect either of the two 
conditions.607  
 7.290  With respect to the first condition, Ch ina notes the statement of the panel in EC – Salmon 
(Norway)  that "a methodology for calculating SG&A th at inflates SG&A costs above what they 
should have been cannot be "reasonable" w ithin the meaning of Article 2.2.2(iii)".
608  China notes that 
the amounts determined by the Commission are much higher than the SG&A and profit reported by 
Golden Step itself, and the 6 per cent profit figur e calculated for the then-EC footwear industry.  
China contends that the use of data from two comp anies in unrelated industrial sectors, which are not 
necessarily representative of the sector to which they  belong, yields unreasonable results.  Moreover, 
China notes the statement of the panel in Thailand-H-Beams  that:  
"the intention of these provisions is to obt ain results that approximate as closely as 
possible the price of the like product in the ordinary course of trade in the domestic 
market of the exporting country."609  
                                                                                                                                                                     
our analysis and conclusions are limited to the specific facts of the original anti-dumping investigation and the 
Definitive Regulation, the measure before us in this regard. 
606 China, first written submission, paras. 894-897. 
607 China, first written submission, para. 903. 
608 China, first written submission, para. 898, quoting Panel Report, EC – Salmon (Norway) , 
para. 7.605. 
609 China, first written submission, paras. 904-905, quoting Panel Report, Thailand – Anti-Dumping 
Duties on Angles, Shapes and Sections of Iron or Non Alloy Steel and H Beams from Poland , ("Thailand – H-
Beams "), WT/DS122/R, adopted 5 April 2001, as modified by Appellate Body Report WT/DS122/AB/R, DSR 
2001:VII, 2741, para. 7.112.  China asserts that it would have been more reasonable to use the figures reported 
by other Chinese companies producing footwear, and that the denial of MET to these companies did not allow the European Union to disregard their data.  In addition, China asserts that even assuming these data could be 
disregarded, at least two other Chinese companies were  identified during the MET determination as having WT/DS405/R 
Page 142  
 
 China asserts that the Commission's methodology in the original investigation did not ensure that the 
constructed normal value comes as close as possibl e to the normal value that would have been 
obtained on the basis of the domestic prices of Golden Step, and was therefore unreasonable.
610  
7.291  With respect to the second condition, China asserts  that it is clear that the European Union 
failed to calculate the benchmark for the cap established in Article 2.2.2(iii).611  China asserts that 
WTO Members that use the method provided under s ubparagraph (iii) must necessarily calculate the 
cap set out in that subparagraph.612  China contends that the plain wording of the text indicates that 
there is no exception to this requirement.  In China's view, this incl udes a case in which the 
investigating authority cannot calculate the cap, assuming that such a situation were  ever to arise.  In 
any event, China asserts that this  was not the case in the original investigation, as the Commission 
could have used data for exporting producers in the textile sector to calculate the cap, contending that 
the textile sector concerns "products of the same general category" as footwear.613 
b. European Union 
7.292  The European Union considers that, in th e absence of other data, it had to apply 
Article 2.2.2(iii) in the calculati on of Golden Step’s normal value.614  The European Union 
acknowledges that the method adopted had to be  "reasonable", and was subject to the cap.615  The 
European Union contends that the notion of "reasona bleness" must be interpreted in the context in 
which it appears.  The European Uni on notes the statement of the panel in Thailand – H-Beams , with 
respect to Articles 2.2.2(i) and (ii), th at the intention of these provisions was  
"to obtain results that approximate as closely as possible to the price of the like 
product in the ordinary course of trade in the domestic market of the exporting 
country."616   
For the European Union, this rule is also relevant  for interpreting the notion of reasonableness in sub-
paragraph (iii).  However, the European Union cont ends that this does not answer how much weight 
should be given to each of the criteria in this rule in  situations where they cannot be respected equally.  
According to the European Union, in the original investigation at issue, the Commission decided that 
the advantage of matching the criteria of "ordinar y course of trade" and "domestic market of the 
exporting country" outweighed the disadvantage of de parting somewhat from the criterion of "like 
product".  The European Union acknowledges that the products were not like, or even of the "same 
                                                                                                                                                                     
accounting records that were independently audited in lin e with international accoun ting standards, and having 
no significant distortions carried over from the former  non-market economy system.  Moreover, China asserts 
that similar sizes of companies, a factor considered by the Commission, has no relationship with SG&A or profit levels, and the Commission's consideration of only recent data, i.e. published within the preceding 12 
months, was arbitrary. Id., paras. 906-907. 
610 China disputes that the Commission had to act under Article 2.2.2(iii), contending that it could have 
used one of the other provisions of Article 2.2.2. 
611 China, first written submission, para. 908.  China notes the statement of the panel in Thailand – H 
Beams , that "under subparagraph (iii) where no specific metho dology or data source is required, and the use of 
"any other reasonable method" is permitted, the provision itself contains what is in effect a separate 
reasonability test, namely the cap on the profit amount ba sed on the actual experience  of other exporters or 
producers."  China, first written submission, para. 899, quoting Panel Report, Thailand – H Beams , para. 7.125. 
612 China, first written submission, para. 900. 
613 China, answer to Panel question 81. 
614 European Union, first written submission, para. 586.   
615 European Union, first written submission, para. 587. 
616 European Union, first written submissi on, para. 588, quoting Panel Report, Thailand – H-Beams , 
para. 7.112.  For the European Union, this means, in other words, that the result obtained by the alternative method used should be as close as possible to the result that would obtain if the rule in Article 2.2.2 chapeau 
were followed.  European Union, first written submission, para. 588.  WT/DS405/R 
  Page 143  
 
 general category", but contends that the Commis sion found there were importa nt similarities between 
the companies whose data were used and Golden  Step, notably that the data involved Chinese 
companies who were granted market economy treatme nt, were recent, and ca me from companies that 
had representative domestic sales.
617 
 
7.293  The European Union contends that some criteria had to be used to limit the range of data to be 
considered, and asserts that China has not shown that those selected by the Commission, size and 
timing, were unreasonable.  Moreover, the European  Union notes that the Article 2.2.2(iii) obligation 
is not to find the "best" method, but a "reasonable"  one, and notes that there may be more than one 
such method.  The European Union contends th at China has the burden of establishing that the 
European Union's method was unreasonable, which is  not satisfied by demonstrating that China's 
proposed alternative was reasonable, or even that it  was in some way better than that used by the 
European Union.618  The European Union rej ects China's suggestion that the Commission could have 
used the method set out in Article 2.2.2(ii), because all other exporters or producers of the product in 
China had failed to satisfy the MET requirements.  In the European Union’s view, the whole purpose 
of the MET criteria is to determine whether the co mpanies’ data can be used to determine normal 
values, and if it is found that they cannot be so used because the company is not operating like a 
company in a market economy then it must also follo w that their data would be similarly disqualified 
for use in the way envisaged in Article 2.2.2( ii) for determining the normal value of another 
company.619   
7.294  In the European Union's view, Article 2.2.2(iii) , which creates the cap, assumes that there are 
"sales of products of the same general category in th e domestic market of the country of origin", and 
gives no guidance as to what should happen if those conditions do not exist.620  The European Union 
asserts that the logical conclusion is that if the necessary circumstances do not exist the cap cannot be 
applied, and the criterion constraining Memb ers’ action is that of "reasonableness".621  T h e  
European Union contends that the "cap" could not be  applied in the circumstances of this case because 
the data specified in that provision for calculati ng the cap did not exist, as there were no sales of 
products of the same general category by compani es which had been granted MET.  Moreover, the 
European Union considers that the same reasons th at bar the use of data from non-MET companies in 
the context of Article 2.2.2(ii), also bar their use in calculating the cap in Article 2.2.2(iii).622  
However, in the European Union's view, the "reaso nable method" requirement continues to act as a 
constraint.623  Finally, the European Union contends th at to treat the textiles at issue in the 
investigation referred to by China as being of the " same general category" as the footwear at issue in 
                                                      
617 European Union, first written submission, paras. 588-590, citing Exhibit CHN-80. 
618 European Union, first written submission, paras. 594-595.  The European Union rejects China's 
suggestion that the Commission could have used data from two of the companies whose MET applications were 
denied because they were "considered as having accountin g records that were independe ntly audited in line with 
international accounting standards, and they were consid ered as having no significant distortions carried over 
from the former non-market economy system".  The European Union notes that Golden Step did not make such 
a suggestion, and contends that the suggestion is at odds with the whole philosophy on which the exclusion of 
data from non-MET firms is based.  European Union, first written submission, paras. 592-593. 
619 European Union, opening oral statement at the second meeting with the Panel, para. 386. 
620 European Union, first written submission, para. 597.  The European Union likened this to the 
situation under Article 9.4 of the AD  Agreement, which does not provide any guidance when establishing the 
ceiling for non-sampled cooperating suppliers.  Id., footnote 447, citing Appellate Body Report, US – Zeroing 
(EC) (Article 21.5 – EC) , para. 453.  However, in response to a question from the Panel, the European Union 
clarified that "unlike the situation rega rding Article 9.4, in Artic le 2.2.2(iii) there is no "absence of guidance" as 
to the relevant legal rule because the provision contains the requirement of reasonableness."  European Union, 
answer to Panel question 104. 
621 European Union, first written submission, para. 598. 
622 European Union, opening oral statement at the second meeting with the Panel, para. 389. 
623 European Union, answer to Panel question 82. WT/DS405/R 
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 the original investigation would have been contrary  to the AD Agreement, and therefore the data of 
the textile companies could not be used to calculate the cap.
624 
(ii) Evaluation by the Panel 
7.295  Before addressing China's claim, we note th e following facts, which we understand to be 
undisputed.  Golden Step was the only Chinese co mpany granted market economy treatment in the 
original investigation, and was as a result entitled to a normal value calculated according to the rules 
applied for market economy countries.  In calcula ting normal value for Golden Step, the Commission 
first determined that Golden Step made no domestic  sales during the period of investigation, and thus 
its own prices could not be used as the basis for determining normal value.  The Commission concluded that the prices of other sellers or producer s in China could not be used because they had not 
been granted MET.  Therefore, the Commission constructed normal value for Golden Step on the 
basis of Golden Step's own cost of manufacture, plus an amount for SG&A expenses and for profit.  
The Commission did not use the data of Golden Step for the amounts of SG&A and profit.  The Commission stated in this regard:  
"Since the exporting producer with MET did not perform any domestic sales and 
since no other Chinese exporting producer ha d been awarded MET, SG&A and profit 
had to be determined on the basis of  any other reasonable method pursuant to 
Article 2(6)(c) of the basic Regulation. 
Consequently, the Commission used SG&A  and profit rates from Chinese exporting 
producers that recently obtained MET in othe r investigations and which had domestic 
sales in the ordinary course of trade as stipulated by Article 2(2) of the basic 
Regulation.  
The SG&A and profit average rates found in these investigations were compounded 
on the cost of manufacturing incurred by the exporting producer in question with regard to the exported models."
625  
The amounts so determined were disclosed to Golden Step.626   
 
7.296  Golden Step submitted comments following the discl osure, including that the figures used to 
derive the SG&A and profit amounts and product sectors involved were not disclosed to it.627  
                                                      
624 European Union, answer to Panel question 83. 
625 Definitive Regulation, Exhib it CHN-3, recitals 102-104. 
626 China, first written submission, para. 888, quoting Final General Disclosure Document, Exhibit 
CHN-81 (Contains Confidential Information), Annex II: 
"Bearing in mind the above decision NV should be based on your own data of cost of 
manufacturing (COM) plus SGA and profit from a domestic source. This is because it is 
considered that your COM for domestic sales would be the same as for export but it is considered that your own SGA and profit data (w hich are for export sale s) are not reliable for 
a calculation of NV which is for the domestic market.  
 The domestic source used for calculation of SGA and profit was not available from other exporting companies within AD 499 because they have not been granted MET and are 
also therefore deemed unreliable.  It was therefore decided most reasonable to use data from 
companies in recent AD cases which had been  granted MET and which had representative 
domestic sales in the PRC. All examples found to meet these conditions in 2006 were taken 
into account and used to calculate an averag e. The names of the companies used is [sic] 
confidential …. A breakdow n of this is shown in the NV sheet attached." 
627 Comments of Golden Step on General Disclosure Document, dated 18 July 2006, Exhibit CHN-82 
(Contains Confidential Information).  WT/DS405/R 
  Page 145  
 
 Subsequently, the Commission disclosed that the figu res used were averages for Chinese producers in 
the chemical and engineering sectors granted market economy treatment in two recent investigations, and their SG&A and profits rates were similar.  Th e Commission stated that it considered the data 
used were "reasonable" and "comparable in respect of the types of SGA elemen ts to the Golden Step 
export prices".  In this latter respect, the Commission acknowledged that the chemical and 
engineering sectors were different, but noted that th e companies were similar in size to Golden Step, 
and similarly did not have heavy sales costs or significant R&D departments.
628   
7.297  Article 2.2.2, which is at issue in this claim, provides: 
"For the purpose of paragraph 2, the am ounts for administrative, selling and general 
costs and for profits shall be based on actual  data pertaining to pr oduction and sales in 
the ordinary course of trade of the lik e product by the exporter or producer under 
investigation.  When such amounts cannot be determined on this basis, the amounts 
may be determined on the basis of: 
 (i) the actual amounts incurred and realized by the exporter or producer 
in question in respect of production and sales in the domestic market of the 
country of origin of the same ge neral category of products;   
 (ii) the weighted average of the act ual amounts incurred and realized by 
other exporters or producers subject to investigation in respect of production 
and sales of the like product in the domestic market of the country of origin;   
 (iii) any other reasonable method, provided that the amount for profit so 
established shall not exceed the profit normally realized by other exporters or 
producers on sales of products of the same general category in the domestic 
market of the country of origin." 
7.298  There is no dispute in this case as to what th e Commission did in order to determine a normal 
value for Golden Step in the origin al investigation.  There is also no dispute that the "actual data 
pertaining to production and sales in the ordinary cour se of trade of the like product" of Golden Step, 
the Chinese producer under investigation, could not be used as the basis for determining the amounts 
for SG&A and for profits.  What is at issue is, first, whether the method used by the Commission to 
determine the amounts for SG&A and for profits was reasonable, within the meaning of Article 2.2.2(iii), and second, whether the European  Union violated that provision by failing to 
determine the cap on profit set out in  Article 2.2.2(iii), the "profit norm ally realized by other exporters 
or producers on sales of products of the same genera l category in the domestic market of the country 
of origin", therefore failing to ensure that the am ount for profit it had established did not exceed that 
cap. 
7.299  Turning to the second question first, it is undisputed that the Commission not only did not 
calculate the cap established in Article 2.2.2(iii), it made no attempt to do so.  The European Union 
asserts that the necessary data for calculating the cap was not available in this case, and suggests that 
this entitled the Commission to ignore this requireme nt.  In any event, the European Union contends 
that the requirement of a "reasonable method" nonetheless constrained the Commission's decision.   
7.300  Even assuming it to be the case that relevant da ta on the basis of which the cap could be 
calculated was not available to the Commission in this case, we fail to see how this excuses the 
Commission from complying with the requirements of the AD Agreement.  More to the point, 
however, in the case before us, it is undisputed that  the Commission made no attempt to calculate the 
                                                      
628 Letter from the Commission to Golden Step, dated 22 August 2006, Exhibit CHN-80. WT/DS405/R 
Page 146  
 
 cap called for in Article 2.2.2(iii).
629  While we understand the European Union's argument as to why 
it would be inappropriate to use the data of ot her Chinese producers of footwear who had not been 
granted MET as a basis for calculating the cap, there is  no indication, or even any argument, that the 
Commission itself considered the calculation of th e cap at the time it made its determination.  
Moreover, there is no indication that the Commission  ever looked into whether there were producers 
who sold "products of the same general category" w hose data might have been used in this regard.  
We consider this failure particularly troublesome in view of the fact that the Commission considered 
it reasonable to use the data of producers of prod ucts in the chemical and engineering sectors as the 
basis for determining the amounts for SG&A and pr ofits, but apparently never even considered 
whether it might be reasonable to use the data of these companies to calculate the cap.630  Given that it 
is undisputed as a matter of fact that the Commission did not determine "the profit normally realized 
by other exporters or producers on sales of products  of the same general category in the domestic 
market of the country of origin", it is apparent that  the Commission could not, and did not, ensure that 
the amount for profit it established for Golden Step did not exceed this level.   
7.301  Thus, we conclude that China has demonstrated  that, in the original investigation, the 
European Union acted inconsistently with Article 2.2.2(iii) of the AD Agreement in determining the 
amounts for SG&A and profit for Golden Step.  In lig ht of this conclusion, we consider it unnecessary 
for us to also address and make findings with respect to the first aspect of China's claim, whether the 
method used by the European Union in determin ing the amounts for SG&A and profit for Golden 
Step was "reasonable".631 
(g) Claim III.4 – Alleged violation of Article 2.6,  together with Articles 3.1 and 4.1, of the 
AD Agreement – Exclusion of Special Technology Athletic Footwear (STAF) of not less than 
€7.50 per pair from the product under c onsideration and/or like product  
(i) Arguments of the parties 
a. China 
7.302  China claims that the European Union violat ed Article 2.6 of the AD Agreement, read 
together with Articles 3.1 and 4.1, in the original investigation by excluding Special Technology 
Athletic Footwear (STAF) of not less than €7.50 per pair from the scope of the product under 
consideration, and from the like product, while no t excluding STAF priced below that level.  In 
China's view, conceptually and technically, ther e is no difference between STAF below and above 
that price level, and the justifications for excl uding STAF above that price level apply equally to 
STAF below that price level.632  China notes that the definition of the product under consideration in 
an anti-dumping investigation determines the scope of the allegedly dumped product to which injury 
                                                      
629 We note in this regard that the Commission rej ected consideration of the data of other Chinese 
producers of footwear who had not been granted MET as the basis for determining the amounts for SG&A and 
profits for Golden Step.  There is no indication that the Commission ever considered using those data as the 
basis for calculating the cap.  We do not  mean to suggest that the Commission was required to do so, or that this 
would necessarily have been a satisfactory basis for calcu lating the cap for purposes of Article 2.2.2(iii) of the 
AD Agreement.  We note th is because it underscores the fact that th e evidence before us indicates that the 
Commission gave no consideration what soever to calculation of the cap. 
630 We note that we do not mean to suggest that the Commission was required to do so, or that this 
would necessarily have been a satisfactory basis for calcu lating the cap for purposes of Article 2.2.2(iii) of the 
AD Agreement.  Rather, again, this fact underscores that the Commission gave no consideration whatsoever to calculation of the cap. 
631 While we might conclude otherwise were it possible that our views in this regard could be relevant 
in the context of implementation, we note that the measure in question has expired.  Thus, no questions of implementation can arise in which this question could be relevant. 
632 China, first written submission, para. 966.  WT/DS405/R 
  Page 147  
 
 may be attributed, and on which anti-dumping measu res may be imposed, as well as the "benchmark" 
for determining the like product, as define d by Article 2.6 of the AD Agreement.
633  China recognizes 
that previous panels have concluded that there is no specific definition of the term "product under 
consideration" in the AD Agreement.  However, it c onsiders that this case is different, because, China 
asserts that, by applying the criteria for the determinat ion of the "like product" to the determination of 
the product under consideration, the Commission c oncluded that STAF is a different like product 
from other footwear subject to the investigation.634  China asserts that, in determining whether to 
exclude certain STAF from the product under consider ation in this case, the European Union found 
that all products included in the product under consideration are alike.635  For China, the logical 
conclusion is that, when determining that cer tain STAF should be excluded from the product under 
consideration, the European Union applied the like product test.636  Thus, China argues, it is irrelevant 
whether or not the European Union made "any stat ement concerning the "likeness" of the products 
included in the product under consideration".  What  matters for China is that differences between 
STAF and non-STAF footwear found by the European  Union preclude a finding that these products 
could be considered "like".637   
7.303  China points out that the Commission did not exclude all STAF from the product under 
consideration, but only STAF priced not less th an €7.50 per pair.  Thus, China asserts, the 
Commission sub-categorized STAF into lower- and higher-priced categories, and excluded only the 
higher-priced category, which China considers impe rmissible.  For China, based on the ordinary 
meaning of the word "product" and the context of  Article 2.6, the "product" under consideration 
remains a product irrespective of its price, and theref ore, an investigating authority may not define the 
product under consideration with reference to its export price.  China considers that Article 2.6 
requires that investigating authorities "define" the product under consideration, and publish this 
definition, in order to inform interested parties.  China asserts that if the product under consideration 
is determined by reference to its  export price, this would make it difficult for interested parties to 
assess whether they are concerned with the investigation.638  In China's view, by determining that 
STAF is a different like product from other footwear , but nevertheless deciding to exclude only STAF 
of not less than €7.50 per pair, the European Un ion failed to correctly define the product under 
consideration within the meaning of Article 2.6 of the AD Agreement. 
7.304  China also considers that having concluded that STAF is a different product from other 
footwear, STAF below a certain price level cannot be  "like" non-STAF footwear.  Therefore, China 
contends, the European Union violated Article 2.6,  read together with Articles 3.1 and 4.1 of the 
AD Agreement,  by determining that "the product concerne d and all corresponding types of footwear 
with uppers of leather produced and sold in the in the analogue country Brazil, as well as those 
produced and sold by the Community industry on th e Community market are alike."  China asserts 
that this like product conclusion, set out in recital 41 of the Definitive Regulati on, is inconsistent with 
Article 2.6 of the AD Agreement.639   
b. European Union 
7.305  The European Union considers that China's claim proceeds from a false premise.  The 
European Union asserts that the Commission neve r made any finding that STAF and non-STAF 
                                                      
633 China, first written submission, paras. 985-986. 
634 China, first written submission, para. 991. 
635 China second written submission, para. 1345.  China considers that recitals 46-52 of the Provisional 
Regulation, as confirmed by recitals 40-41 of  the Definitive Regulation, confirm this view. 
636 China, second written submission, para. 1346. 
637 China, second written submission, para. 1348. 
638 China, first written submission, paras. 993-994, and 996-999. 
639 China, first written submission, paras. 1001-1003. WT/DS405/R 
Page 148  
 
 footwear were not like products.
640  Rather, the Commission considered the question of whether to 
include STAF, and if so which STAF, in the scope of the product under consideration.  The European 
Union notes that several panel reports establish that  the scope of the product under consideration is 
not limited to "like" products, and that Article 2. 6 does not apply to the definition of the product under 
consideration.641  Moreover, the European Union considers that difficulties that might be caused for 
exporters by the definition of the product under consideration do not create any legal basis to 
challenge the measure in dispute.642  In the European Union's view, neither logic nor any legal 
constraint precludes using price as a criteri on in defining the product under consideration.643  T h e  
European Union considers that Chin a has failed to identify any legal basis for its view that a price 
level cannot be used in defining the product under c onsideration, and that considerations about the 
difficulties for exporters in assessing whether they are concerned by an investigation do not create any 
legal basis for a finding of violation.644   
(ii) Arguments of third parties 
a. Brazil 
7.306  Brazil submits that the decision to exclude certa in STAF and to maintain certain other STAF 
was a decision by the Commission defining the scope  of the product under consideration.  Based on 
its understanding of previous pane l reports, Brazil asserts that there is no discipline in the 
AD Agreement governing how the pr oduct under consideration should be defined. Brazil considers 
that investigating authorities have a large degree of discretion under the WTO in deciding whether to 
exclude a subset of a certain type of goods from the scope of the product under consideration.645 
b. Colombia 
7.307  Colombia considers that this issue, as addressed  by the parties, raises two questions to be 
resolved by the Panel: i) whether investiga ting authorities must define the product under 
consideration; and ii) to what extent is there an  obligation of assessing the injury and identifying the 
domestic industry, with regard to similar produc ts.  Colombia notes that the panel report in EC – 
Salmon (Norway) clarified that national authorities are free to choose the product subject to 
investigation.  Colombia asserts that in view of that decision, there is no legal requirement that WTO 
Members include in the product under considerati on all possible similar products.  Colombia asserts 
that in identifying the domestic industry involved and the injury to that industry, it is necessary to 
assess likeness between the product under considera tion and the like domestic product.  In this 
context, taking into account discussions of likeness in other contexts, Colombia considers such 
elements as, inter alia , physical characteristics, uses or app lications, substituta bility, distribution 
channels, consumer preferences and tast es to be relevant considerations.646 
(iii) Evaluation by the Panel 
7.308  Article 2.6 of the AD Agreement provides: 
"2.6 Throughout this Agreement the term "like product" ("produit similaire") shall 
be interpreted to mean a product which is id entical, i.e. alike in all respects to the 
                                                      
640 European Union, first written submission, para. 638. 
641 European Union, first written submission, para. 638. 
642 European Union, first written submission, para. 642. 
643 European Union, first written submission, para. 639.   
644 European Union, first written submission, para. 642.  The European Union did not address this 
claim in its second written submission. 
645 Brazil, third party written submission, paras. 53-54. 
646 Colombia, third party written submission, paras. 97-99, 101 and 103.  WT/DS405/R 
  Page 149  
 
 product under consideration, or in the absence of such a product, another product 
which, although not alike in all respects, has characteristics closely resembling those of the product under consideration." 
While China asserts that the violation it alleges is of this provision "read together with" Articles 4.1 
and 3.1 of the AD Agreement, it is not clear wh at import these latter two provisions have in the 
context of China's argument.  China quotes th ese two provisions, emphasizing the phrase "like 
products", which appears in both, but makes no s ubstantive arguments base d on either.  China does 
not elucidate how these two provisions should be "read  together" with Article 2.6, nor in what manner 
such a "reading together" informs its claim, leaving us at something of a loss to understand the 
relevance of Articles 3.1 and 4.1 in this rega rd.  China has made no arguments concerning the 
meaning of Article 2.6 based on context or referri ng to Articles 3.1 or 4.1 of the AD Agreement.  
Fundamentally, we understand China to be ma king a claim based on Article 2.6 of the 
AD Agreement, and will proceed on that basis in our analysis.    7.309  We note that, as the European Union asserts, and China acknowledges, a number of panels 
have held that Article 2.6 of the AD Agreement doe s not apply to the determination of the scope of 
the product under consideration.
647  China attempts to distinguish th ese decisions on the basis that, in 
this case, the European Union concluded that STA F was not "like" other footwear, and framing its 
claim, at least in part, as a claim regarding the correctness of this "like product" determination.  However, in our view, China has misapprehended the nature of the Commission's analysis and conclusions in this regard.   
7.310  A brief review of the relevant facts is in or der.  The Notice of Initiation in the original 
investigation defined the product being investigated as: 
"footwear with uppers of leather or composition leather other than : footwear which 
is designed for a sporting activity and has, or has provision for the attachment of, 
spikes, sprigs, stops, clips, bars or the like , skating boots, ski-boots and cross-country 
ski footwear, snowboard boots, wrestling boots, boxing boots and cycling shoes, 
slippers and other indoor footwear, and f ootwear with a protective toecap originating 
in the People's Republic of China and Viet Nam ("the product concerned")".
648 
Various interested parties argued that certain other types of sports footwear should also be excluded 
from the scope of the product being investigated, a nd specifically, that "special technology athletic 
footwear", or "STAF", should be excluded.  The Commission considered these assertions and 
addressed them in the Provisional Regulation, conclu ding that STAF is highly sophisticated footwear 
with distinctive technical features, designed sp ecifically for use in sporting activities.  The 
Commission also concluded that STAF is "different  from the other types of footwear" in various 
respects.  The Commission reviewed these differe nces in sales channels, end-use and consumer 
perception and import trends, and provisionally co ncluded that STAF should be excluded from the 
definition of the product under consideration, and thus from the scope of the investigation.  The 
Commission also considered arguments made by  the domestic industry that STAF should not be 
                                                      
647 Panel Report, United States – Final Dumping Determination on Softwood Lumber from Canada 
("US – Softwood Lumber V "), WT/DS264/R, adopted 31 August 2004, as modified by Appellate Body Report 
WT/DS264/AB/R, DSR 2004:V, 1937; Panel Report, Korea – Certain Paper ; and Panel Report, EC – Salmon 
(Norway) . 
648 Notice of Initiation, Exhibit CHN-6, recital 2 (em phasis added).  The Notice of Initiation sets forth 
the CN codes in which the relevant footwear was normal ly declared, but emphasized th at these were only given 
for information. Id.  We recall, as noted above, footnote 319, that although the European Union uses the term 
"product concerned" for what the AD Agreement refers  to as the "product under consideration", there is no 
dispute that these terms refer to the same concept, and we have generally used the terminology of the 
AD Agreement in our report. WT/DS405/R 
Page 150  
 
 excluded, because fashion trends had brought sports footwear into the same market segment as other 
casual footwear, and further considered arguments th at all sports footwear, not only STAF, should be 
excluded, but rejected these arguments.  The Commission concluded that all types of the product described, with the exception of STAF, should be regarded as forming one single product, comprising 
the "product concerned."
649  The Commission went on to conclude that:  
"all types of footwear with uppers of leather or composition leather produced and sold 
in the countries concerned and in Brazil and those produced and sold by the Community industry on the Community market are alike to those exported from the countries concerned to the Community."
650 
7.311  In the Definitive Regulation, the Commission re visited the decision to exclude STAF, based 
on arguments from the then-EC footwear industry contesting the exclusion of STAF in the Provisional 
Regulation.  The then-EC footwear industry asserte d that STAF had the same sales channels and 
customer perceptions as the product under considerati on, and stressed that, should STAF nevertheless 
be excluded, the minimum value for STAF in the then-current TARIC definition should be 
increased.651  Importers, on the other hand, argued th at the minimum value of STAF should be 
lowered from €9.00 to €7.50.  The Commission accep ted these latter arguments, concluding that a 
"reduction of the STAF threshold of EUR 1,5 is considered reasonable and necessary to reflect" 
changes in production costs, waste, and compe tition affecting price levels for STAF.  The 
Commission rejected arguments of various exporters  to broaden the definition of STAF to include 
footwear with EVA soles and/or direct moulding.  The Commission concluded by confirming "the exclusion of STAF from the definition of the product concerned."
652  The Commission went on to 
conclude that "the minimum value for STAF s hould be lowered from EUR 9,00 to EUR 7,50 ... STAF 
of not less than EUR 7,5 is therefore definitively excluded from the proceeding."653  The Commission 
confirmed the provisional conclusions, as modified , and concluded that "all types of the product 
concerned should be regarded as forming one single pr oduct."  It went on to state that, in the absence 
of any comments, the provisional conclusions regarding like product were confirmed, and definitively 
concluded that "the product concerned and all corre sponding types of footwear with uppers of leather 
produced and sold in the analogue country Braz il, as well as those produced and sold by the 
Community industry on the Community market are alike."654 
7.312  Based on the foregoing, it is clear to us that the Commission determined that STAF of not less 
than €7.50 was excluded from the product under consideration in the original investigation.655  This is 
not, however, a determination of like produc t under Article 2.6 of the AD Agreement.656  We agree 
with the several previous panels which have conc luded that Article 2.6 of the AD Agreement does not 
                                                      
649 Provisional Regulation, Exhibit CHN-4, recitals 10-45. 
650 Provisional Regulation, Exhibit CHN-4, recital 52. 
651 Definitive Regulation, Exhibit CHN-3, recitals 11-13. 
652 Definitive Regulation, Exhibit CHN-3, recitals 15-19. 
653 Definitive Regulation, Exhibit CHN-3, recital 19.  The Commission went on to consider other 
arguments concerning the scope of the product under consideration which are not relevant to China's claim in 
this dispute.  Definitive Regulation,  Exhibit CHN-3, recitals 20-38. 
654 Definitive Regulation, Exhib it CHN-3, recitals 39-41.   
655 We note that, even assuming there were some definition of product under consideration in the 
AD Agreement, we see no basis in e ither law or logic for China's assertion that a price level may not be a 
relevant criterion in that regard.  Certainly, even if such a definition were somehow more difficult for exporters 
to understand, we do not see how this would preclude it.   
656 We note in this regard that, while not determinative, in both the Provisional and Definitive 
Regulations, the exclusion of STAF appears in the section of the Regulation addressing the product concerned, 
and not in the separate section of the Regulations addressing the like product.  WT/DS405/R 
  Page 151  
 
 apply to the determination of the sc ope of the product under consideration.
657  Thus, the 
European Union's determination excluding STAF of not less than €7.50 from the product under consideration is not subject to Article 2.6 of th e AD Agreement, and we therefore conclude that 
China's claim is without legal basis.   
7.313  China seeks to bring the Commission's determina tion with respect to the exclusion of STAF 
from the product under consideration within the purview of Article 2.6 by arguing that the 
Commission "effectively" made a like product determin ation.  Apparently, in China's view, the fact 
that in assessing whether to exclude STAF from the product under consideration, the Commission 
appears to have considered factors similar to t hose it considers in making like product determinations, 
renders the European Union's definition of the produc t under consideration subject to Article 2.6.  We 
reject this effort to transform what is clearly  a consideration and conclusion by the Commission 
concerning the scope of the product under consider ation into a like product determination under 
Article 2.6.  Simply because an investigating authorit y may find certain factors relevant to its analysis 
and definition of product under consideration in a particular case , and publish notice thereof, and that 
those factors are also relevant to assessment of like product, does not mean the former determination 
becomes a like product determination subject to Article 2.6.   
7.314  To the extent that China is arguing that the European Union violated Article 2.6 in 
determining that "all corresponding types of footwear  with uppers of leather produced and sold in the 
in the analogue country Brazil, as well as those pr oduced and sold by the Community industry on the 
Community market" are like the product under consid eration, which included STAF below €7.50, this 
would seem to be an argument that all goods within the scope of the like product must be "like" all 
goods within the scope of the product under considera tion, and that this is not the case here as a 
matter of fact, because the European Union determ ined that STAF and non-STAF footwear are not 
like.  While it is not clear to us th at China has in fact made this argum ent, in this context, we note that 
the same WTO panel reports referred to above also rejected the view that all goods within the like 
product must be "like" all goods within the scope of the product under consideration – the notion of 
"cross-likeness".
658  We agree with this conclusion.  Ev en assuming that China were correct in 
asserting that STAF and non-STAF footwear are not " like" within the meaning of Article 2.6, both 
STAF below €7.50 and non-STAF footwear are within  the scope of the product under consideration 
as defined by the Commission, and as we have conclu ded above, this does not co nstitute a violation of 
Article 2.6.  In our view, an absence of "cross-liken ess" does not establish a violation of Article 2.6 of 
the AD Agreement.  China has not argued that ther e is any inconsistency between the scope of the 
product under consideration as defined by the Commission and the scope of the like product as 
determined by the Commission – the two are clearly co-extensive.   
7.315  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union acted inconsistently with Article 2.6 of the AD Agreement, read together with Articles 3.1 and 
4.1, in the original investigation by excluding Special Technology Athletic Footwear (STAF) of not 
less than €7.50 per pair from the scope of the pr oduct under consideration, or from the like product, 
while not excluding STAF priced below that level.   
                                                      
657 Panel Report, US – Softwood Lumber V ; Panel Report, Korea – Certain Paper ; and Panel Report, 
EC – Salmon (Norway) .  In this context, we reject China's cont ention that Article 2.6 of the AD Agreement 
somehow "requires" an investigating authority to define the product under consideration and publish that 
definition.  While this may, as a matter of logic, be a necessary step for an investigating authority, that is a far cry from finding it to be a requirement of Article 2.6 itself. 
658 Panel Reports, EC – Fasteners (China)  and EC – Salmon (Norway) , paras. 7.43-7.76. WT/DS405/R 
Page 152  
 
 5. Claims II.2, II.3, II.4, III.5, III.7 and III.8 – Injury 
7.316  In this section of our report, we address China' s claims concerning the injury aspects of both 
the Review Regulation and the Definitive Regulation.   Before turning to China's specific injury-
related claims, we address below our approach to  China's claims with respect to the Review 
Regulation and Article 11.3 in the context of the injury aspects of the expiry review. 
(a) Consideration of alleged viola tions of Article 3 of the AD Agreement in the context of the 
Review Regulation 
7.317  China's claims in this dispute raise the qu estion of the relevance of Article 3 of the 
AD Agreement in the context of the determination of likelihood of continuation or recurrence of 
injury.  China asserts that injury determinations in expiry revi ews are subject to the requirements of 
Article 3, and that if an investigating authority reli es on a finding of injury inconsistent with Article 3 
in making its determination of likelihood of co ntinuation or recurrence of injury, the latter 
determination is inconsistent with  Article 11.3.  The European Union, on the other hand, disagrees as 
a matter of law with China's argument, and also disputes, as a matter of fact, that the Commission in this case relied only on its finding of injury in ma king its determination of likelihood of continuation 
or recurrence of injury.  We address this question below. 
(i) Arguments of the parties 
a. China 
7.318  China argues that the Review Regulation is subj ect to the requirements of Article 3 of the 
AD Agreement with respect to the injury determinat ion.  China acknowledges that Article 11.3 of the 
AD Agreement, specifically dealing with expiry re views, does not explicitly mention or incorporate 
the requirements of Article 3.
659  Nevertheless, China presents three arguments to explain its view that 
the Commission in this case was subject to the require ments of Article 3.  First, China asserts that 
panels and the Appellate Body ha ve noted that Article 3 of the AD Agreement may apply to expiry 
reviews.660  According to China, not every provision in  Article 3 applies to expiry reviews, but 
Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement would be applicable to reviews under Article 11.3 
of the AD Agreement where two conditions are fulf illed: (i) the investigating authority makes an 
injury determination in the expiry review; and (ii) the investigating authority relies upon this 
determination in finding a likelihood of continuation or recurrence of injury.661   
7.319  Second, China argues that the particular facts of this case also support the application of 
certain provisions of Article 3 of the AD Agreement to the expiry review.  According to China, the 
European Union conducted a detailed injury exam ination in the expiry review, determining the 
existence of injury to the EU industr y during the review investigation period.662  China asserts that in 
its injury determination, the European Union does not indicate whether it is evaluating the likelihood 
                                                      
659 China, first written submission, paras. 421-422. 
660 China cites Panel Reports, United States – Sunset Review of Anti-Dumping Duties on 
Corrosion-Resistant Carbon Steel Flat Products from Japan ("US – Corrosion-Resistant Steel Sunset Review "), 
WT/DS244/R, adopted 9 January 2004, as modified by Appellate Body Report WTDS244/AB/R, DSR 2004:I, 85, paras. 7.99-7.101; and United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular 
Goods from Argentina ("US – Oil Country Tubular Goods Sunset Reviews "), WT/DS268/R and Corr.1, adopted 
17 December 2004, as modified by Appellate Body  Report W/DS/268/AB/R,  DSR 2004:VIII, 3421, 
paras. 7.273-7.275; and Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 284.  
China, first written submission, paras. 423-428;  second written submission, paras. 523-535. 
661 China, first written submission, paras. 423-428; answer to Panel question 39, para. 278; second 
written submission, para. 518. 
662 China, first written submission, paras. 429-432; second written submission, para. 539.  WT/DS405/R 
  Page 153  
 
 of continuation or recurrence of injury, nor does it conduct an analysis of the "likely" situation of the 
EU industry.
663  In addition, China contends that the Eur opean Union subsequently used this injury 
determination as the basis for its finding of likelihood of continuation of injury within the meaning of 
Article 11.3 of the AD Agreement.664  China argues that (i) the Eu ropean Union simply based the 
likelihood determination on the finding of contin ued injury without undertaking any additional 
analysis, and any prospective considerations complete ly relied on the injury determinations; (ii) the 
examination of likelihood of continuation of inju ry was set out in only five paragraphs, and the 
lengthy likelihood of continuation or recurrence of injury causation analysis was merely the European Union's response to arguments presented by in terested parties, and not part of the likelihood 
of continuation or recurrence of injury analysis it self; and (iii) if the injury determination were 
removed from the picture, there would be no basis fo r a determination of likelihood of continuation or 
recurrence of injury under Article 11.3 of the AD Agreement.
665  China specifically disputes the 
European Union's assertions that: (i) in the analys is of likelihood of continuation or recurrence of 
injury, the greatest emphasis was placed on the exam ination of individual factors relevant to the 
likelihood analysis, and not on a finding of injury; (ii)  a considerable part of the Review Regulation is 
devoted to the examination of likelihood of contin uation or recurrence of injury; and (iii) another 
basis for the determination of likelihood of continua tion or recurrence of injury was found, in addition 
to the finding of injury, making the analysis of th e likelihood of continuation or recurrence of injury 
independent from the de termination of injury.666   
7.320  Third, China asserts that the European Union's position in previous disputes with respect to 
the applicability of Article 3 of the AD Agreement to  expiry reviews supports China's interpretation in 
this case.  China points specifica lly to the summary of the then -European Communities' argument in 
US – Oil Country Tubular Goods Sunset Reviews .667 
7.321  China concludes that the European Union was oblig ed to comply with Articles 3.1, 3.2, 3.4, 
and 3.5 of the AD Agreement in its  injury determination in the context of the expiry review.668  In 
response to the European Union's arguments, China notes that it did not "request the Panel to review 
the determination of the likelihood of injury in th e Review Regulation in light of Article 3 [of the 
AD Agreement]".669  China submits that it has claimed vi olations of Article 3.1, 3.4, 3.5, and 11.3 of 
the AD Agreement in the context of the expiry re view, and therefore Articles 3 and 11.3 form the 
legal bases for China's claims regarding the dete rmination of the likelihood of continuation or 
recurrence of injury in the Review Regulation.670   
                                                      
663 China, second written submission, paras. 546, 548, 550, and 552. 
664 China, first written submission, paras. 433-435. 
665 China, second written submission, paras. 560-561, 570, 572 and 1218. 
666 China, second written submission, paras. 55 8-559.  China specifically refers to the 
European Union's answer  to Panel question 43. 
667 China, first written submission, para. 427.   
In US – Oil Country Tubular Goods Sunset Reviews , the panel summarized the European Union's arguments as 
follows: 
"The European Communities agrees with Argentin a that the provisions of Article 3 of the 
Anti-Dumping Agreement apply mutatis mutandis  in the context of sunset reviews.  
According to the European Communities, given th e introductory wording of Article 3.1, the 
absence of an explicit cross-re ference in Article 11.3 to Article 3 is irrelevant."   
Panel Report, US – Oil Country Tubular Goods Sunset Reviews, paras. 7.266, 7.315 and 7.320. 
668 China, first written submission, para. 435. 
669 China, second written submission, paras. 503 and 578. 
670 China, second written submission, para. 504. WT/DS405/R 
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 b. European Union 
7.322  The European Union submits that China's unde rstanding of Article 11.3 of the AD Agreement 
is erroneous for two reasons.
671  First, the European Union reiterates its view that China committed 
legal error by dividing its claims into:  (i ) independent claims based on Article 3 of the 
AD Agreement, and (ii) consequential claims based on Article 11.3 of the AD Agreement.  According 
to the European Union, with this division, Chin a forces the Panel to disregard Article 11.3 in the 
consideration of all injury-related aspects of the anal ysis and determination, that  is, to consider claims 
related to injury in expiry reviews in light of Article 3, and in isolation from Article 11.3.672 
7.323  Second, the European Union argu es that, separate from, and in a ddition to, the analysis of and 
determination that injury continued during the re view investigation peri od, the Commission also 
independently considered the various injury indicator s in light of its obligations under Article 11.3 of 
the AD Agreement to establish a likelihood of continuation or recurrence of injury.673  T h e  
European Union explains that the focus of the injury  analysis in an expiry review is fundamentally 
prospective, whereas the focus in orig inal investigations is retrospective.674  The European Union 
asserts that several factors, such as volumes of dumped imports, capacities and movements in the 
volumes of exports, levels of dum ping and undercutting, were assessed  in a prospective manner, and 
that a considerable part of the Review Regulati on was devoted to the likelihood of continuation or 
recurrence of injury analysis.675  Therefore, the European Union asserts, the Review Regulation refers 
to particular facts that led to the finding of likeli hood of continuation of injury and to the prospective 
development of these facts, demonstrating that the likelihood of continuation or recurrence of injury 
analysis was not based only on the injury determination.676  The European Union adds that:  
"inconsistencies in the injury finding with Article 3 can lead to a violation of 
Article 11.3 of the Anti-Dumping Agreement  only 'if the investig ating authority bases 
its likelihood of continuation or recurrence of injury determination entirely on the 
injury determination' (as phrased by China), or if 'IA based its likelihood 
determination to a decisive degree  on a defective finding of injury' (the 
European Union) or if 'defects in this ne w present injury finding are critical to the 
expiry review and undercut the factua l basis underlying the determination of 
continuation or recurrence of injury' (the United States)."677 
The European Union maintains that none of these situations is the case in this dispute.678   
 
                                                      
671 As discussed further below, the European Union also contends that China's assertions of violations 
of Article 3 of the AD Agre ement are not justified.  
672 European Union, first written submission, para. 244.  With respect to this matter, see also 
paragraph 7.152 above. 
673 European Union, first written submission, para. 246. 
674 European Union, answer to Panel question 52, para. 148. 
675 European Union, first written submission, para. 24 8; answer to Panel question 43, paras. 94-95. 
676 European Union, first written submission, para. 250. 
677 European Union, second written su bmission, para. 91.  Th e European Union recalls that, pursuant to 
the Panel's working procedures, the first meeting with th e parties represented the last opportunity for China to 
present evidence to support its claims.  The European Union considers that China has not presented a prima 
facie  case, since "[e]ven if Article 3 ADA were applicable to expiry reviews and were  the Panel to find that 
China has established a violation of it, China never explained how or on the basis of which evidence that alleged violation amounted to a violation of Article 11.3."  European Union, second written submission, para. 91.  We 
consider the question before us at this juncture to be one of proper understanding of the requirements of 
Article 11.3.  Whether China presented its evidence in a timely fashion pursuant to the working procedures is not relevant to our resolution of that question. 
678 European Union, closing oral statement at the first meeting with the Panel, para. 3.  WT/DS405/R 
  Page 155  
 
 7.324  The European Union considers the focus of the Panel's analysis should be whether China has 
established that the European Union's determinatio n of likelihood of continuation or recurrence of 
injury was inconsistent with the requirements of Article 11.3 of the AD Agreement, and not whether 
the Commission violated Article 3 of the AD Agreement.
679  The European Union contends that the 
Panel may either (i) consider that China's claims  are vitiated by an err oneous factual understanding – 
that the European Union relied entirely on its finding of  injury in its determination of the likelihood of 
continuation or recurrence of injury – and a fa ilure to discharge China's burden of proof; or 
(ii) conclude that China's claims are vitiated by a legal error arising from the manner in which China 
formulated its claims of violation of Articles 3 and 11.3 of the AD Agreement.680   
(ii) Arguments of third parties 
a. Brazil 
7.325  Brazil asserts that Articles 3 and 11.3 of th e AD Agreement deal with two independent 
determinations: a determin ation of injury or threat thereof unde r Article 3, and a determination of 
likelihood of continuation or recurrence of injury und er Article 11.3.  Brazil adds that no provision in 
the AD Agreement requires an investigating authority to comply with Article 3 provisions in expiry 
reviews.681 
b. Colombia 
7.326  Colombia notes that the only reference in Artic le 11 of the AD Agreement to the application 
of other provisions of that Agreement is Article 11. 4, which requires the application of the "provisions 
of Article 6 regarding evidence and procedure" in an y review under Article 11.  Colombia asserts that, 
in US – DRAMS , the panel concluded that, for the purposes of  injury determinations in administrative 
and expiry reviews, national authorities shoul d follow the framework of Article 3 of the 
AD Agreement.  Colombia goes on to note proposals made by Members in the Doha Negotiations to 
clarify issues regarding reviews, including the elements that should be taken into account in 
determining injury.  Colombia invites the Panel to take these proposals into account as a "non-legally 
binding complement" in interpreting Article 11 of the AD Agreement, considering them especially 
relevant to clarify the role of Article 3 provi sions in the present case in evaluating the Review 
Regulation.682  
c. Japan 
7.327  Japan asserts that "there is no difference in th e applicability and meaning of the terms 'review' 
and 'determine', and 'likely' between the determina tions of dumping and injury in sunset reviews".  
Japan considers that, "although an authority has no sp ecific obligations to comply with the provisions 
of Article 3 [in expiry reviews], it still must obey th e general duty to make its  injury determinations 
based on positive evidence and objective examination."  In Japan's view, previous Appellate Body 
reports suggest that if a likelihood of injury dete rmination is inconsistent  with the "fundamental 
requirements of 'positive evidence' and 'objective ex amination' mandated by Article 3.1, this would 
also demonstrate the inconsistency of the likelihood of injury determination with the requirement in 
Article 11.3 that the authority arrive at a reasoned conclusion."  In addition, Japan considers that, by 
analogy to the Appellate Body findings regarding the relationship between Articles 2 and 11.3 of the 
                                                      
679 European Union, second written submission, para. 103. 
680 European Union, second written submission, paras. 93-99. 
681 Brazil, oral statement, para. 18. 
682 Colombia, third party written submission, paras. 43-44 and 46-49, citing Panel Report, United States 
– Anti-Dumping Duty on Dynamic Random Access Me mory Semiconductors (DRAMS) of One Megabit or 
Above from Korea  ("US – DRAMS "), WT/DS99/R, adopted 19 March 1999, DSR 1999:II, 521, fn. 501, and 
referring to document TN/RL/GEN/10.  WT/DS405/R 
Page 156  
 
 AD Agreement, when an investigating authority con ducts an injury determination and relies upon this 
determination in its likelihood of in jury determination, Article 11.3 is  violated if the investigating 
authority has made its injury determinati on in a manner inconsistent with Article 3.
683   
d. United States 
7.328  The United States asserts that the Appellate Body  has cogently explained that the obligations 
arising from Article 3 of the AD Agreement do not a pply to likelihood of injury determinations in 
expiry reviews conducted under Artic le 11.3 of the AD Agreement.  The United States notes that 
Article 11.3 does not contain any cross-reference to Article 3 that would indicate the applicability of 
Article 3 to expiry reviews, nor does Article 3 provi de that whenever the term "injury" is used in 
another provision of the AD Agreement,  a determination of injury must be made pursuant to Article 3.  
The United States contends that the Appellate Body has never made a finding that if an investigating 
authority conducts a new injury determination in an  expiry review, such injury determination must 
comply with the requirements of Article 3, d espite China's arguments to the contrary.  The 
United States argues that, even assuming arguendo  that a new injury finding by the investigating 
authority in an expiry review context must comply with Article 3, the likelihood of injury finding will 
still be subject to Article 11.3.684 
(iii) Evaluation by the Panel 
7.329  As we have previously noted, it is clear th at Article 11.3 of the AD Agreement "does not 
prescribe any particular methodology to be used by investigating authorities in making a likelihood determination in a sunset review."
685  Article 11.3 of the AD Agreement does not require an 
investigating authority to undertake a new injury dete rmination in the context of an expiry review, and 
it is clear that original investigations and expi ry reviews are distinct processes with different 
purposes.686  The nature of the determinations concer ning injury to be made in each type of 
proceeding is different.  In original anti-dumping investigations, investig ating authorities must 
determine whether the domestic industry of a Member  is materially injured by dumped imports.  At 
this stage, the focus is on the ex istence of "material injury" at the time of the determination.  That 
determination is made under Article 3, based on information concerning the necessary and relevant 
factors for some previous period.687  In contrast, in an expiry review, an anti-dumping measure has 
been in place for some time, and investigating au thorities must, based on a fresh analysis, determine 
whether the expiry of that measure would be likely to lead to continuation or recurrence of injury.688   
                                                      
683 Japan, third party written submission, paras. 26 an d 31; oral statement, para. 8; answer to Panel 
question 12, para. 8. 
684 United States, third party written submission, paras. 22 and 24, citing Appellate Body Reports, US – 
Oil Country Tubular G oods Sunset Reviews , p. 285, and US – Anti-Dumping Measures on Oil Country Tubular 
Goods , paras. 151-152; oral statement, para. 21. 
685 Appellate Body Reports, US – Continued Zeroing , fn. 418; US – Corrosion-Resistant Steel Sunset 
Review , para. 149. 
686 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 106-107. 
687 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 279.  The period of 
time over which factors are examined is not defined in the AD Agreement, and Members have different practices in this regard.  The Committee on Anti-Dump ing Practices adopted a n on-binding "Recommendation 
concerning the Periods of Data Collection for Anti-Dumping Investigations" in 2000.  Document G/ADP/6, 
16 May 2000. 
688 With respect to expiry reviews under Article 21 .3 of the SCM Agreement, the Appellate Body in US 
– Carbon Steel  stated that the "[m]ere reliance by the authorities on the injury determination made in the 
original investigation will not be sufficient."  Appellate Body Report, US – Carbon Steel , para. 88.  The nature 
of expiry reviews under the SCM and AD Agreements is esse ntially the same, and we consider that this view is 
equally applicable in the context of Article 11.3 of the AD Agreement.   WT/DS405/R 
  Page 157  
 
 7.330  Thus, in an expiry review, the analysis is focused on what would happen if an existing anti-
dumping measure were removed.
689  In light of these differences between original investigations and 
sunset reviews, the Appellate Body in US – Oil Country Tubular Goods Sunset Reviews  concluded 
that "[t]he disciplines applicable to original i nvestigations cannot, therefore, be automatically 
imported into review processes."690  Addressing the relationship between Articles 11.3 and 3 of the 
AD Agreement specifically, the Appellate Body stated that: 
"Article 11.3 does not contain any cross-reference to Article 3 to the effect that, in 
making the likelihood of injury determinati on, all the provisions of Article 3—or any 
particular provisions of Article 3— must  be followed by investigating authorities.  Nor 
does any provision of Article 3 indicate that, wherever the term "injury" appears in 
the Anti-Dumping Agreement , a determination of injury must be made following the 
provisions of Article 3. …  Given the absence of textual cross-referenc es, and given the different nature and 
purpose of these two determinations, we are of the view that, for the "review" of a 
determination of injury that has already b een established in accordance with Article 3, 
Article 11.3 does not require that injury again be determined in accordance with 
Article 3.  We therefore conclude that investigating authorities are not 
mandated to follow the provisions of Article 3 when making a likelihood of 
injury determination ."
691 
China acknowledges that "the requirements contained in the various paragraphs  of Article 3 of the 
Anti-Dumping Agreement  pertaining to the establishment of injury are not explicitly mentioned in the 
text of Article 11.3 of the Anti-Dumping Agreement ".692   
 7.331  Although Article 11.3 of the AD Agreement does not  require that injury be determined in 
accordance with Article 3 in expiry reviews, as noted above, Article 11.3 does impose certain 
discipline on investigating authorities in the determ ination of likelihood of continuation or recurrence 
of injury.  As the Appellate Body in US – Corrosion-Resistant Steel Sunset Review  observed: 
"The words 'review' and 'determine' in  Article 11.3 suggest that authorities 
conducting a sunset review must act with  an appropriate degree of diligence and 
arrive at a reasoned conclusion on the basis of information gathered as part of a 
process of reconsideration and examination.  ... Thus, even though the rules applicable 
to sunset reviews may not be identical in a ll respects to those applicable to original 
investigations, it is clear that the drafters of the Anti-Dumping Agreement intended a 
sunset review to include both full opportunity for all interested parties to defend their interests, and the right to receive no tice of the process and reasons for the 
determination."
693   
While this case concerned a determination of likelih ood of continuation or recurrence of dumping, the 
concepts of "review" and "determine" in Article 11. 3 are not limited to that context.  The text of 
Article 11.3 requires investigating authorities to "det ermine" in a "review" that "expiry of the duty 
                                                      
689 Appellate Body Report, US – Carbon Steel, para. 87. 
690 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 359.  See also 
Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 119. 
691 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , paras. 278 and 280 (bold 
emphasis added). 
692 China, first written submission, para. 422. 
693 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review , paras. 111-112.  See also 
Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 180.   WT/DS405/R 
Page 158  
 
 would be likely to lead to continuation or recurrence of dumping and injury" (emphasis added).  In 
our view, it is clear that the views expressed by the Appellate Body in US – Corrosion-Resistant Steel 
Sunset Review  apply equally in the context of a determ ination of likelihood of continuation or 
recurrence of injury.  Therefore, we  consider that Article 11.3 obliges the investigating authority in an 
expiry review to "act with an appropriate degr ee of diligence" in order to arrive at a "reasoned 
conclusion", with respect to the determination of li kelihood of continuation or recurrence of injury.  
 7.332  The Appellate Body in US – Oil Country Tubular Goods Sunset Reviews  clarified how an 
investigating authority in an expiry review could a rrive at a "reasoned conclusion" with respect to a 
determination of likelihood of continua tion or recurrence of injury, stating: 
"Certain of the analyses mandated by Article 3 and necessarily relevant in an original 
investigation may prove to be probative, or possibly even required, in order for an investigating authority in a sunset review to arrive at a 'reasoned conclusion'.  In this 
respect, we are of the view that the fundamental requirement of Article 3.1 that an injury determination be based on 'positive evidence' and an 'objective examination' 
would be equally relevant to  likelihood determinations unde r Article 11.3.  It seems 
to us that factors such as the volume, price effects, and the impact on the domestic industry of dumped imports, taking into account the conditions of competition, may 
be relevant to varying degrees in a given likelihood of injury determination.  An 
investigating authority may also, in its  own judgement, consider other factors 
contained in Article 3 when making a lik elihood of injury determination.  But the 
necessity of conducting such an analysis in a given case results from the requirement imposed by   Article 11.3 —not Article 3—that a likelihood of injury 
determination rest on a 'sufficient factual basis' that allows the agency to draw 
"reasoned and adequate conclusions ".
694 
7.333  Therefore, we consider that in order for Chin a to demonstrate a violation of Article 11.3 of 
the AD Agreement, it must show that the European Union's likelihood of injury determination does 
not rest on sufficient factual basis allowing the Commission to draw a reasoned and adequate conclusion.  In our view, a failure to examine releva nt factors set out in the substantive provisions of 
Article 3 in the determination of likelihood of con tinuation or recurrence of injury could preclude an 
investigating authority from reaching a "reasoned c onclusion", which would result in a violation of 
Article 11.3 of the AD Agreement.  However, we reca ll that a determination of injury under Article 3 
is not required under Article 11.3.  Thus, we do not consider that all factors relevant to an injury 
determination under Article 3 are ne cessarily relevant to a determination of likelihood of continuation 
or recurrence of injury under Article 11.3.   
7.334  It is uncontested in this dispute that the European Union did in fact make a finding of injury 
in the expiry review.
695  China alleges that various aspects of th at injury determination are inconsistent 
with Article 3 of the AD Agreement.  However, Ch ina makes no argument with respect to whether the 
various inconsistencies it alleges c oncern factors that are necessary to the determination of likelihood 
of continuation or recurrence of injury under Article 11.3.  Rather, China argues that the European Union relied exclusively on the determina tion of injury in making its determination of 
likelihood of continuation or recurrence of injury, and that a violation of Article 3 in the injury 
determination in an expiry review establishes a viol ation of Article 11.3.  The European Union, on the 
other hand, contends that it reac hed a "reasoned conclusion" of like lihood of injury on two different 
and independent bases: (i) the finding of injury duri ng the review investigation period, and (ii) an 
examination of individual factors pertaining to both injury and causation that are relevant to the 
                                                      
694 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 284 (bold emphasis 
added). 
695 European Union, answer to Panel question 108, para. 20.  WT/DS405/R 
  Page 159  
 
 determination of likelihood of injury.  The Europ ean Union asserts that "by far the greatest emphasis" 
was on the latter examination.
696 
7.335  We recall that previous panel and Appellate Bo dy reports establish that, if an investigating 
authority relies on a dumping margin calculated in consistently with Article 2 in determining 
likelihood of continuation or recurrence of dumpi ng, the inconsistency with  Article 2 taints the 
likelihood determination.697  This is because, by relying on the inconsistent determ ination of dumping 
the investigating authority fails to make a like lihood determination based on a "sufficient factual 
basis" allowing it to draw "reasoned and ade quate conclusions" concerning the likelihood of 
continuation or recurrence of dumping.    
7.336  China argues that the same conclusion should be reached with respect to determinations of 
injury in the context of expiry re views, and that a determination of violation of Article 3 demonstrates 
a violation of Article 11.3.698  The European Union argues against th e view that an inconsistency with 
Article 3 of the AD Agreement in the context of an expiry review automatically demonstrates a violation of Article 11.3 of the AD Agreement.  First, the European Union observes that the 
calculation of a dumping margin is an essentially math ematical exercise, in which the result follows 
automatically from the data, while a finding of injury is a judgement process, involving the weighing 
up of multiple, possibly contradictory, factors.  The European Union notes that the examination of injury and likelihood will involve consideration of the same factors, but that the findings regarding 
individual injury factors are more important in the context of a determination of likelihood of 
continuation or recurrence of injury than the overall finding of injury based on those factors.  Thus, in 
the European Union's view, there is  "unlikely to be a clear-cut conc lusion that 'there was injury and 
therefore there is a likelihood of future injury'."  Second, the European Uni on notes that the existence 
of an anti-dumping measure has different consequences for dumped imports:  on the one hand, the imposition of the measure encourages exporters to in crease the dumping margin in order to off-set the 
duty, while on the other hand, the effect of the duty is to increase the price of dumped imports, 
reducing the harm to the domestic industry.  Thus, the European Union asserts that "an expiry review 
is more likely to detect dumping, but less likely to detect injury."
699   
7.337  We recognize that dumping and injury are distin ct concepts, and that the findings of dumping 
and injury are different in nature.  Nevertheless, we consider that, a similar result should be reached 
with respect to the effect of reliance on an inconsis tent determination of injury in the context of an 
expiry review with respect to the determination of likelihood of continuation or recurrence of injury as 
has been reached in the dumping context.700  That is, in our view, if in the course of an expiry review, 
                                                      
696 European Union, answer to Panel question 43, para. 93; answer to Panel question 108, para. 20. 
697 See paragraphs 7.163-7.166 above. 
698 China, first written submission, paras. 421 -435; and 810-813; second written submission, 
paras. 504-537; and 1207-1220; answer to Panel question 39, paras. 275-284; answer to Panel question 52, paras. 323-332; answer to Panel question 105, paras. 5- 16; and answer to Panel question 110, paras. 40-53. 
699 European Union, second written submission, paras. 161-162. 
700 We note that one panel has reached a similar conclusion: 
"[T]he obligations set out in Article 3 do not normally apply to sunset reviews. 
If, however, an investigating authority decides to conduct an injury determination in a sunset 
review, or if it uses a past injury determination as part of its sunset determination, it is under the obligation to make sure that its injury determination or the past injury determination it is 
using conforms to the relevant provisions of Article 3.  For instance, Article 11.3 does not 
mention whether an investigating authority is requ ired to calculate the price effect of future 
dumped imports on the prices of the domestic industry.  In our view, this means that an 
investigating authority is not necessarily required to carry out that calculation in a sunset 
review.  However, if the investigating authority  decides to do such a calculation, then it would 
be bound by the relevant provisions of Article 3 of the Agreement.  Similarly, if, in its sunset 
injury determinations, an investigating authority uses a price effect calculation made in the WT/DS405/R 
Page 160  
 
 an investigating authority makes a determination of injury that is inconsistent with Article 3, and 
relies on that injury determination in making its determination of likelihood of continuation or 
recurrence of injury, the inconsistency with Article  3 taints the likelihood determination, because by 
relying upon the inconsis tent determination of injury the inv estigating authority fails to make a 
likelihood determination based on a "sufficient f actual basis" allowing it to draw "reasoned and 
adequate conclusions" concerning th e likelihood of injury.  We see no basis in the text of Article 11.3 
that would support the conclusion that a different c onclusion should be reached in this regard in the 
context of determinations of likelih ood of continuation or recurrence of injury than in the context of 
determinations of con tinuation or recurrence of likelihood of dumping. 
7.338  There is no dispute in this case that the Commission relied upon its determination of injury in 
making its determination of likelihood of  continuation or recurrence of injury.
701  Thus, the question 
for us, in reviewing that determination, is whethe r China has demonstrated that the Commission acted 
inconsistently with the asserted provisions of Artic le 3 in determining injury, so as to taint the 
determination of likelihood of continuation or re currence of injury, and thus failed to make a 
determination based on a "sufficient factual b asis" and "reasoned and ad equate conclusions". 
7.339  We note that the European Union asserts that, in the expiry review, the Commission did not 
rely exclusively on the injury determination in ma king its determinations of likelihood of continuation 
or recurrence of injury.  The Eu ropean Union asserts that the Commission also undertook a separate 
and independent examination of indivi dual factors pertaining to injury relevant to the determination of 
likelihood of continuation or recurrence of injury , and made independent conclusions on that basis 
which support its determination of likelihood of continuation or recurrence of injury.702  China has  
made no claim with respect to these aspects of the Review Regulation, and makes no specific 
arguments challenging the Commission's analysis a nd determination with respect to these factors, 
although it does argue, in general, that they are an insufficient basis for the determination of 
likelihood of injury.  In the absence of any claim by China in this respect, we do not consider, and 
make no findings regarding, the asserted independ ent basis for the determination of likelihood of 
continuation or recurrence of injury.  We also ma ke no finding with respect to whether this asserted 
independent basis would be sufficient, in itself, to demonstrate that the Commission made a "reasoned 
conclusion" based on a "sufficient factual basis" with respect to likelih ood of continuation or 
recurrence of injury.703 
7.340  With the foregoing principles in mind, we now turn to the alleged inconsistencies with 
Article 3 of the AD Agreement in the injury aspects of  the expiry review and the original investigation 
asserted by China. 
                                                                                                                                                                     
original investigation or in the intervening revi ews, it has to assure the consistency of that 
calculation with the existing provisions of Article 3." 
Panel Report, US – Oil Country Tubular Goods Sunset Reviews , para. 7.274. 
701 European Union, answer to Panel question 108, para. 20; Review Regulation, Exhibit CHN-2, 
recitals 225-260. 
702 European Union, answer to Panel questions 43 and 52, paras. 93-104 and 166, respectively.  The 
European Union refers, in this regard, to recitals 286, 326, 389 and 397of the Review Regulation, Exhibit CHN-2.   
703 However, we note that, in principle, we see no reas on why, if an investigating authority does in fact 
have two separate and independent bases for a conclu sion of likelihood of continuation or recurrence of 
dumping or injury, either one of those bases could be cons idered sufficient to demonstrate the consistency of the 
determination with Article 11.3 of the AD Agreement.  WT/DS405/R 
  Page 161  
 
 (b) Claims II.2, II.3 and III.5
704 – Alleged violations of Articles 3.1, 6.10 and 17.6(i) of the 
AD Agreement and Article VI:1 of the GATT 1994 – Sampling in the context of examining 
injury 
7.341  In this section of our report, we address Chin a's claims challenging various aspects of the 
European Union's selection of a sample of EU produ cers in the context of the injury examination in 
both the expiry review and the original investigation.   
(i) Arguments of the parties 
a. China 
7.342  China claims that the European Union acted in  an un-objective manner by failing to apply the 
objective sampling procedure of sending sampling forms and soliciting the necessary data from the 
complainant EU producers which would have prov ided the relevant positive information of the 
selection of the domestic industry's sample, inconsiste ntly with the alleged obligation to accord "even-
handed treatment" to interested parties in its proce dure for selection of a sample in the context of the 
injury assessment in the expiry review, and violat ed Articles 3.1 and 17.6(i) of the AD Agreement.705  
China also claims that the Eu ropean Union violated Articles 3.1, 6.10 and 17.6(i) of the 
AD Agreement, and Article VI:1 of the GATT 1994 in  the original investigation, by selecting a 
sample without objective, credible and verifiable information concerning the pool of complainant EU 
producers from which the sample was selected, n ecessary for an objective examination based on 
positive evidence, which China asserts is normally solicited in a sampling form.706   
7.343  With respect to the expiry review, China asser ts that the European Union did not solicit the 
necessary information from the complainant EU produ cers with respect to sampling for considering 
them for inclusion in the sample, while all other in terested parties were required to complete detailed 
sampling forms in order to be considered for inclusion in the sample.707  China considers the 
difference in the amount of information requested demonstrates that the Commission was unfair, non-
objective, and biased.  China disputes the European Union's contention that relevant information for 
sampling was available in the complaint, sampling forms and CEC submissions.  In addition, China 
considers that credible and verifiable evidence, concerning the criteria assertedly applied in selecting 
the sample,708 were not available to the Commission at the time of the selection of the sample from the 
                                                      
704 China's claim III.5 with respect to sampling in the original investigation has two aspects concerning 
(i) the procedure for sample selection, and (2) the examination of injury and the cross-checking of information in that context.  Despite China's explanation that what "the two sub-parts of the claim [III.5] have in common is 
that both sub-parts constitute violations of the Articles cited in connection with the claim", China, answer to 
Panel question 106, para. 17, we fail to see how arguments concerning alleged violations of the AD Agreement in the procedure for sample selection relate to arguments concerning alleged violations in the injury examination 
and the reliance on certain data and th e cross-checking of information with producer associations.  However, 
China also clarified that the two asp ects are "in no way dependent on one another."  China, answer to Panel 
question 106, para. 17.  Therefore, for clarity, we analys e the first part of claim III.5, relating to the procedure 
for sample selection, in this section of our report.  The second part of claim III.5, re lating to injury examination 
and the reliance on certain data and the cross-checking of information with producer associations, is examined together with claims III.8 and II.4, which also concer n the injury aspects of, re spectively, the original 
investigation and expiry review, in paragraphs 7.406-7.463 below. 
705 China, second written submission, paras. 601-602, 613-614. 
706 China, first written submission, paras. 1065, 1067, 1070, 1074, 1076 and 1086. 
707 China, first written submission, paras. 451, 454; second written submission, paras. 601-602; 640. 
708 China refers in this regard to information concerning production, sales volume, sector segment, and 
geographical location.  China, first written submission, pa ras.  468; 471, 480-482; second written submission, 
paras. 633, 640- 650. WT/DS405/R 
Page 162  
 
 sources mentioned in the Review Regulation,
709 and the European Union failed to accord even-handed 
treatment to interested parties in its procedures for selecting samples.  China asserts that the selection 
of the sample was therefore not based on positiv e evidence and an objective evaluation.     
7.344  In addition, China argues that the sample of EU producers in the expiry review was 
inconsistent with Articles 3.1, 6.10 and 17.6(i) of the AD Agreement, and Article VI:1 of the 
GATT 1994, as it cannot be considered statistically valid, does not represent the largest volume that 
could reasonably be investigated, and included a pr oducer that outsourced its entire production of the 
like product to a third country during the review investigation period.710  Overall, China claims that 
the sample of the EU industry was not based on "c redible and affirmative data" and was selected in 
the absence of "requisite data".  China claims cons equently that the European Union's evaluation of 
injury to the EU industry based on this sample was inconsistent with Article 3.1 of the AD Agreement 
and Article VI:1 of the GATT 1994.711 
7.345  Finally, China claims that the European Union violated Articles 3.1, 6.10 and 17.6(i) of the 
AD Agreement, and Article VI:1 of the GATT 1994 in  the expiry review by using an incorrect and 
overly broad product classification methodology, and reclassifying footwear categories in the middle 
of the investigation.712   
7.346  With respect to the original investigation, Ch ina asserts that the Eur opean Union's procedure 
for selecting the sample for purposes of the determinati on of injury is inconsistent with Articles 3.1, 
6.10, and 17.6(i) of the AD Agreement and Artic le VI:1 of the GATT 1994.  China argues that 
Chinese exporters and complainant EU producers were not subject to the same treatment with respect 
to selection of the sample, as Chinese producers were  required to complete sampling forms within a 
short timeframe, while the EU producers were not re quired to complete sampling forms at all, and 
were automatically eligible to be included in the sample.713   
b. European Union  
7.347  The European Union argues that the Commission 's selection of the sample of EU producers 
was consistent with all relevant requirements of the AD Agreement.  The European Union asserts that 
Article 3.1 of the AD Agreement is the basis for an evaluation of whether an injury analysis based on 
sampling is consistent with the AD Agreement,  and not Article 6.10.  The European Union  argues that 
Article 6.10 of the AD Agreement does not apply to  the selection of a sample of the domestic 
industry, although it may provide some indicatio n as to how sampling may be undertaken for 
purposes of injury analysis. 714   
7.348  With respect to the expiry review, the Eur opean Union asserts that it was not necessary to 
send sampling forms to complainant EU producers,  since these producers had already provided all 
required information, and therefore no EU producer w as automatically eligible to be sampled without 
having provided relevant information.715  The European Union asserts that the Commission had 
                                                      
709 China refers in this regard to information in th e non-confidential files and the Review Regulation.  
China, request for interim review, para. 30, referring to China, first written submission, paras. 443, 451, 454, 
468-469 and 471; second written submission, paras. 633 and 640. 
710 China, first written submission, paras. 488, 514-515 and 524. 
711 China, first written submission, paras. 468, 500 and 515; second written submission, paras. 633 and 
666. 
712 China, first written submission, para. 526; second written submission, para. 693. 
713 China, first written submission, paras. 1065, 1067, 1074 and 1076; Notice of Initiation, Exhibit 
CHN-6; answer to Panel question 40, para. 302. 
714 European Union, first written submission, paras. 268-269. 
715 European Union, first written submission, paras. 255, 257 and 263-264, referring to Review 
Regulation, Exhibit CHN-2, recital 19.  WT/DS405/R 
  Page 163  
 
 sufficient company-specific or aggregate data for production and sales factors in a fully sufficient 
amount for the European Union to discharge its ob ligations under the AD Agreement with respect to 
sampling.
716  In addition, the European Union asserts th at it is not possible to determine a certain 
percentage of production as a minimum thresh old for purposes of sampling for an injury 
determination, since the total production of compan ies included in the sample will vary depending on 
the sector, and on the average size of these compan ies.  With respect to the EU producer which 
outsourced its production activities during the review  investigation period, the European Union  
maintains that only data pertaining to the activity of  this complainant as an EU producer were used.  
Finally, the European Union argues that Ch ina's factual assertions concerning the product 
classification methodology and alleged reclassificati on of footwear categories are incorrect, and 
therefore China's legal arguments are baseless.717   
7.349  With respect to the original investigation, the European Union refers to its explanations and 
arguments in the context of the expiry review,718 where the European Union argued that it was not 
necessary to send sampling forms to complainant EU  producers "[g]iven the detailed and extensive 
information available on file (emanating i.a. from the complaint, standing exercise, and CEC submissions)."
719  With respect to China's reliance on Article 6.10 of the AD Agreement, the 
European Union asserts that this provision does no t apply in the context of sampling in injury 
determinations.720   
(ii) Arguments of third parties 
a. Brazil 
7.350  Brazil notes that Article 6.10 of the AD Agreement sets out criteria and methodological 
guidelines for sampling when used for purposes of a dumping determination, and asserts that such "criteria and methodologies are not applicable for sa mpling in the context of injury determination."  
Brazil also notes that investigating authorities en joy a certain degree of discretion in selecting a 
methodology to guide their injury analysis, as Artic le 3.1 of the AD Agreement does not prescribe any 
particular methodologies that must be followed for purposes of the injury analysis.  Article 3.1 does 
establish that an injury determination should be based on "positive eviden ce" and on an "objective 
examination", and these parameters should also be fo llowed with respect to sampling in the context of 
injury assessment.  Brazil concludes by stating that  
"[w]hile a methodology mirroring the one cont ained in Article 6.10 should be seen as 
complying with the requirements of "positive evidence" and [of] "objective examination" under Article 3.1 of the ADA, th is does not lead to the conclusion that a 
different methodology is a priori  inconsistent with Article 3.1."
721   
b. Japan 
7.351  Japan notes that, although the AD Agreement does not determine any specific methodologies 
for sampling in the context of injury determinati on, investigating authorities do not have unfettered 
discretion.  Japan explains that, in expiry reviews,  investigating authorities are obliged by Article 11.3 
of the AD Agreement to arrive at a reasoned conc lusion with sufficient factual basis regarding the 
                                                      
716 European Union, answer to Panel question 45, paras. 115-116. 
717 European Union, first written submission, para . 283, 286 and 292, citing Review Regulation, 
Exhibit CHN-2, recital 23. 
718 European Union, first written submission, para. 644. 
719 European Union, first written submission, para. 25 5; Review Regulation, Exhibit CHN-2, recital 19. 
720 European Union, first written submission, para. 26 2.  The European Union refers to Panel Report, 
EC – Salmon (Norway) , para. 7.132, fn. 309. 
721 Brazil, third party written submission, paras. 57-58, 60 and 62. WT/DS405/R 
Page 164  
 
 likelihood of continuation or recurrence of injury.  Thus, the requirements contained in Article 3.1 of 
the AD Agreement that an injury determination be  based on "positive evidence" and on an "objective 
examination" would be equally relevant to likelih ood determinations under Article 11.3.  Japan notes 
that the panel in EC – Salmon (Norway)  concluded that sampling is legitimate in the context of injury 
determination to the extent that the investigati ng authority satisfies its ge neral obligations and the 
sampled information was sufficiently representative of  the domestic industry as a whole.  While Japan 
takes no position on the facts of this case, it consider s that these views also apply in the context of a 
likelihood of injury determination.
722 
c. United States 
7.352  The United States takes no position on the merits of China's factual allegations, but asserts 
that an investigating authority would fail to condu ct an "objective examination", in violation of 
Article 3.1 of the AD Agreement, if it limited its injury examination of the domestic industry only to 
complaining producers, particularly when non-compla ining producers have a meaningful presence in 
the industry.  The United States asserts that this approach would be bias, as it would cover only the 
segment of producers most likely to be injured, and the lack of objectivity would permeate many 
aspects of the investigating authorities' analysis of injury, including aspects dealt with under 
Articles 3.2, 3.4 and 3.5 of the AD Agreement.  Th e United States disagrees with China's view that 
Article 6.10 governs how an authority must select a sample in an injury investigation, asserting that this provision concerns only how dumping margins are to be calculated, and noting that the panel in 
EC – Salmon (Norway)  concluded that it saw "no basis to impose the criteria of Article 6.10 on 
sampling in the context of injury."  Thus, the Un ited States concludes that any such selection would 
be governed by the "objective examination" standard  of Article 3.1.  The United States also asserts 
that the AD Agreement contains no provision concerni ng sampling in the context of expiry reviews, 
and thus the decisions of the investigating aut hority are governed by the "objective examination" 
standard applicable to determinati ons of continuation or recurrence of  injury under Article 11.3 of the 
AD Agreement.
723   
(iii) Evaluation by the Panel 
7.353  Before addressing the specific claims and argum ents, we note the following relevant facts 
concerning the sampling of domestic producers in the expiry review and the original investigation. 
7.354  In the expiry review, the Commission decided to  conduct the injury examination on the basis 
of a sample of EU producers.  The CEC, acting on behalf of complainants, confirmed that all 
complaining producers were willing to cooperate a nd participate in the sampling exercise.  The 
Commission noted the extensive information availa ble on file, and considered it unnecessary to send 
sampling forms to individual complaining producers.  However, the Notice of Initiation in the expiry 
review invited any EU producer to make itself know n should it wish to cooperate.  Five EU producers 
responded after initiation, and requested to be included  in the sampling exercise.  All five were sent 
sample forms, but only two of them returned completed forms.  However, these two companies were 
not included in the sample, since they were excl uded from the definition of the EU industry as related 
parties. The Commission noted that EU production of  the product concerned was largely concentrated 
in three EU member States, with around 66 per cent of all production, and the remainder spread over 
the other member States.  The Commission also noted  the different business models of EU producers.  
On the basis of the information obtained, the Commission selected a sample of eight companies 
operating in four EU member States, representing 8.2 per cent of the production of the complainant 
EU producers, and 3.1 per cent of total EU produc tion.  The Commission indicated its selection was 
                                                      
722 Japan, third party written submission, para s. 28-31, 33-34 and 36, citing Panel Report, EC – Salmon 
(Norway) , para. 7.130; answer to Panel question 13, paras. 18-21. 
723 United States, third party written submission, paras.  26-29, and fn. 25; answer to Panel question 13.  WT/DS405/R 
  Page 165  
 
 based on the largest representative volumes of produc tion and sales within the European Union which 
could reasonably be investigated within the availabl e time.  However, the Commission also noted that 
the industry was not homogenous, and therefore took into account producers' geographical spread and 
the segment to which their products belonged, in or der to assess the represen tativeness of the selected 
companies.  The Commission noted that the sel ected companies represented the major business 
models, and included production across all major pr ice segments, gender and age segments, included 
all major levels of distribution, and included companies with full in-house manufacturing and companies which outsourced part of the manufactur ing process.  During the course of the expiry 
review, it became known that one of the sampled EU producers progressively discontinued production 
in the European Union during th e review investigation period, transferring its full manufacturing 
activity outside the European Union.
724 
7.355  Sampling was also used in the injury aspect of the original investigation.  In the original 
investigation, the Commission selected a sample based on information provided by the producers and 
their national associations, based primarily on the size of the producers in terms of production 
volume.  The Commission considered the geographical location of the producers in order to reflect the 
geographical spread of the industry, in addition to the size and importance of the producing 
companies.  Ten producers were selected, representing around 10 per cent of the production of the complaining producers.
725  In the Definitive Regulation, the Commission noted that the industry was 
highly fragmented, and that therefore it was unavoida ble that the companies in the sample accounted 
for a relatively small portion of the total production.   The Commission stated that ten companies was 
the number which could reasonably be investigated within the time available, and that increasing the 
number of sampled companies would not have had a significant impact on the proportion of the 
sample compared to total production.726 
7.356  China's claims concerning sampling in the c ontext of the injury assessment in both the 
original investigation and the expiry review r est on the premise that the AD Agreement establishes 
procedural requirements for the selection of a sample of domestic producers, and substantive 
requirements for the sample selected.  While China's arguments rest on Articles 3.1, 6.10 and 17.6(i) 
of the AD Agreement, as well as Article VI:1 of the GATT 1994, China does not contend that any of 
these provisions specifically addresses these questions.727  Thus, before addressing the specifics of 
China's allegations, we set forth our general unde rstanding of these provisions with respect to the 
issue of sampling in the context of inju ry in anti-dumping investigations.   
7.357  Article 3.1 and footnote 9 of the AD Agreement provide, respectively: 
"Article 3  
Determination of Injury9 
3.1 A determination of injury for purposes of Article VI of GATT 1994 shall be 
based on positive evidence and involve an objective examination of both (a) the 
volume of the dumped imports and the effect of the dumped imports on prices in the 
domestic market for like products, and (b) the consequent impact of these imports on 
domestic producers of such products." 
                                                      
724 Review Regulation, Exhibit CHN-2, recitals 19-23. 
725 Provisional Regulation, Exhibit CHN-4, recital 65. 
726 Definitive Regulation, Exhibit CHN-3, recitals 57-58. 
727 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision 
further here. WT/DS405/R 
Page 166  
 
 _________________ 
 9  Under this Agreement the term "injury" sh all, unless otherwise specified, be taken 
to mean material injury to a domestic industry, threat of material injury to a domestic industry 
or material retardation of the establishment of such an industry and shall be interpreted in 
accordance with the provisi ons of this Article.  
It is clear to us, as a number of previous panels and the Appellate Body have found, that Article 3.1 of 
the AD Agreement does not prescribe a specific methodology that must be followed by an 
investigating authority in the conduct of its injury analysis.728  As a result, investigating authorities 
enjoy a certain degree of discretion in the met hodologies used in making an injury determination.729  
However, investigating authorities do not have  unfettered discretion to pick and choose any 
methodology they see fit, as whatever methodology is u sed by an investigating authority, the resulting 
determination of injury must be  based on "positive evidence" and an "objective examination" of the 
volume and effects of dumped imports.730 
 
7.358  In our view, the same rationale applies to th e use of a sample for purposes of the injury 
determination.  It is clear that Article 3.1 do es not contain any guidance on how an investigating 
authority is to select a sample for purposes of an inju ry determination.  We see nothing in the text of 
that provision which can be read as establishi ng how an investigating authority is to obtain 
information from domestic producers for the purposes of selecting a sample, how a sample is to be 
selected, or criteria for judging the sample selected.   Indeed, China does not argue otherwise.   
a. Procedure to select the sample 
7.359  With respect to both the original investigati on and the expiry review, China argues that the 
requirements of "objective examination" and "positiv e evidence" in Article 3.1 require "even-handed 
treatment" with respect to the process of gatheri ng information used in selecting a sample.  China 
argues that the European Union's procedure fo r selecting samples with respect to Chinese and 
Vietnamese exporters, EU importers and non-co mplaining EU producers, on the one hand was 
objective, but with respect to the complainant EU producers, on the other hand, it was not.731  China 
recognizes that each group of interested parties is required to provide different types and amounts of 
information for sampling purposes, and does not argue  that "the same information, or the same 
quantity of information is required to be sought fro m all sets/groups of interested parties" but does 
argue that within each group, the same quantity  and level of inform ation should be sought.732  
Nonetheless, China continues to refer to the differe nt procedures used with respect to the different 
groups in support of its argument.733   
                                                      
728 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 204; and Panel Report, EC 
– Salmon (Norway) , paras. 7.128-7.129. 
729 Appellate Body Reports, EC – Bed Linen (Article 21.5 – India) , para. 113; and Mexico – 
Anti-Dumping Measures on Rice , para. 204. 
730 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , paras. 111 and 113. 
731 China, answer to Panel question 107, para. 36. 
732 China, answer to Panel question 40, para. 299. 
733 China, second written submission, para. 601.  Chin a explains that its claim is not limited to the 
difference in the treatment between complaining and non-complaining EU producers.  China, opening oral 
statement at the second meeting with the Panel, para. 37 .  See also answer to Panel question 107, para. 38.  
However, China also asserts that th e concept of fundamental fairness requ ires that all companies within the 
same group must be required to provide the same level of information in a sampling form or an anti-dumping 
questionnaire, and that its claim is supported by the difference in treatment with respect to the sampling 
procedure applied for "Chinese (and Vietnamese) exporters; EU importers and non-complaining EU producers on the one hand; and the complainant EU  producers on the other hand."  China, opening oral statement at the 
second meeting with the Panel, para. 37, fn. 44; and answer to Panel question 107, para. 30.    WT/DS405/R 
  Page 167  
 
 7.360  China makes four arguments in support of its assertion that the different groups were treated 
differently:  (i) while complainant EU producers were  not asked to complete sampling forms, Chinese 
exporters, non-complaining EU producers and EU importers were required to do so;
734 (ii) Chinese 
exporters, non-complaining EU producers and EU im porters were considered eligible for sampling 
only if they submitted sampling forms; (iii) eight co mplainant EU producers were selected to be in the 
sample without their consent; and (iv) the aggregat e data in the complaint is not a substitute for 
information that should be provided in a sampling form.735  China considers that the application of 
different sampling procedures by the European Un ion for different groups to the benefit of the 
complainant EU producers, and the failure to seek the requisite information from the EU producers through sampling forms in order to objectivel y select a sample based on positive evidence 
demonstrates that the Commission was unfair, non- objective, and biased.  In addition, China argues 
that the European Union's actions in this case were not consistent with its own practice, asserting that 
since 1995 the European Union required that compla ining EU producers complete sampling forms in 
several anti-dumping investigations.
736  
7.361  China asserts that, as a result of the failure to treat interested parties even-handedly in the 
procedure for selecting a sample in the context of injury assessment, ev idence necessary for the 
selection of the EU industry sample was not availabl e to the European Union and that the sample 
selection was not based on positive evidence and objective evaluation.737  China asserts that the 
sample of the EU industry in the expiry review was selected inconsistently with the criteria of 
Article 6.10 of the AD Agreement.738  China posits that, while Article 6.10 does not so specify, the 
"largest percentage of the volume" referred to in  Article 6.10, in the case of domestic producers, 
relates to the production and sales of the like produc t by the domestic industry, and the fundamental 
basis for the selection of a sample of the domestic  industry should have been the production, as well 
as sales, of the like product during the review investigation period.739  China notes that the 
Commission's baseline for the selection of the samp le was the production volume of the like product 
in the review investigation period, but that othe r factors such as sales, location, sector segment, and 
business models were also taken into account for the selection of the sample.740  China questions how 
the European Union had data regarding these fact ors, as sampling forms were not submitted by the 
complainant EU producers.  China asserts that, de spite the European Union's position that relevant 
information was available in the Commission's files, there is no trace in the non-confidential file that 
                                                      
734 In this regard, China asserts that while Chines e exporters, EU exporters, EU importers, and non-
complaining EU producers had to spend significant time and resources completing sampling forms, the 
complaining EU producers did not. China, first written submission, paras. 434, 451 and 453; answer to Panel 
question 40, para. 302; Notice of Initiation, Exhibit CHN-6.  China contends that "the time and resources spent in completing sampling forms/giving sampling information can provide the factual evidence in support of [] the 
present case."  China, answer to  Panel question 40, para. 301.  
735 China, answer to Panel question 107, para. 33. 
736 China, first written submission, paras. 458-459;  Exhibit CHN-24; answer to Panel question 40, 
para. 304; second written submission, para. 592;  answer to Panel question 107, paras. 19-26. 
737 China, first written submission, paras. 450-451, 468 and 471; answer to Panel question 40, 
paras. 285, 289 and 291-294; second written submission, paras. 588-589 and 633; opening oral statement at the 
second meeting with the Panel, para. 36; answer to Panel question 107, para. 33. 
738 China, first written submission, para. 468; second written submission, para. 633. 
739 China, first written submission, paras. 472-473. 
740 China, first written submission, paras. 475 and 481, referring to Note for the File dated 
9 December 2008, Exhibit CHN-26, No te for the File dated 9 March 20 09, Exhibit CHN-27, and Review 
Regulation, Exhibit CHN-2, recital 21.  See also Chin a, second written submission, paras. 634-635, 639 and 
655. WT/DS405/R 
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 information in this regard was provided by compla inant EU producers in the complaint, the standing 
forms, and CEC submissions.
741 
7.362  The European Union considers that China' s claim, based on a difference between the 
sampling procedures for the determination of dumpi ng and the determination of injury, is "most 
extraordinary", and asserts that Ch ina's interpretation of Article 3.1 of the AD Agreement is not 
viable.  In the European Union's view, Article 3.1 sets an objective standard for the determination of 
injury, which must be complied with, but whether it has been complied with cannot be determined on 
the basis of a comparison with what is done with r espect to sampling for the dumping determination.  
Moreover, the European Union asserts that notw ithstanding China's arguments, the panel in EC – 
Salmon (Norway)  stated it saw "no basis to impose the criteria of Article 6.10 on sampling in the 
context of injury."742 
7.363  The European Union asserts that China has changed its focus throughout the Panel 
proceedings.  First, China argued that the Eu ropean Union acted inconsistently with the 
AD Agreement by using different sampling proce dures for Chinese exporters, EU importers, and non-
complaining EU producers on the one hand, and co mplainant EU producers on the other hand, and 
then shifting the focus to the "alleged differe nce of treatment between non-complaining and 
complaining EU producers", before finally reverting to  its original arguments, stating that "its claim 
was not confined to the difference in the treatme nt between the complainant and non-complainant 
[EU] producers only as claimed by the EU."743  The European Union conte nds that it remains unclear 
exactly what comparison is at issue with respect to whether even-handed treatment was accorded in 
this phase of the anti-dumping investigation.744  In any event, the Eur opean Union disagrees with 
China's proposition that a failure to seek inform ation from interested parties in the same way 
constitutes a violation of Article 3.1 of the AD Agreement.745 
7.364  Turning to the facts, the European Union ar gues that it was not necessary to send sampling 
forms to complainant EU producers, since th ese producers had already provided all required 
                                                      
741 China, first written submission, paras. 476-477; second written submission, paras. 636 and 641.  
Specifically, China argues that (i) the expiry review request/complaint contained only aggregate production data 
of EU producers for 2006 and 2007, and thus did not contain information on production and sales of EU 
producers for 2005 and the full review investigation period, and contained no information regarding sales 
volumes and value of the like product, business models, product types, and relation with Chinese exporting 
producers; (ii) the declarations of support only contained sales volumes and values for 2007 and January 2008, but not data for 2005, 2006 and the review investigation period regarding production, sales, production 
activities, imports, and relations with exporting pr oducers; and (iii) CEC submissions were dated 
10 October 2008 or later, allegedly after the sample wa s selected, and did not provide any information regarding 
individual production a nd sales volume of each complaining EU pr oducer.  China, first written submission, 
para. 480; China, second written submission, paras. 6 41-650.  Based on the CEC fax dated 10 October 2008, 
China also argues that, the CEC letter confirming the consent of complaining producers to be sampled was 
insufficient, as it was faxed to the Commission the morning of the day that the eight complaining EU producers 
were sent the anti-dumping questionnaires, although a Note  for the File dated 9 March 2009 suggests otherwise.  
China, first written submission, para. 478, referring to No te for File date 9 March 2009, Exhibit CHN-27, and to 
the CEC fax dated 10 October 2008, Exhibit CHN-28.   
742 European Union, first written submission, paras. 259-262.   
743 European Union, first written submission, para. 252; second written submission, para. 111; 
Comments on China's answers to Panel question 107, para. 12, citing China, answer to Panel question 107, 
para. 38. 
744 European Union, second written submission, para. 114; Comments on China's answers to Panel 
question 107, para. 12. 
745 European Union, second written submission, para. 117.  WT/DS405/R 
  Page 169  
 
 information.
746  The European Union asserts that no EU producer was automatically eligible to be 
sampled without having provi ded relevant information.747  In addition, the European Union contends 
that China's argument with respect  to the relevance of the amount of time and resources spent in 
answering requests for information from the Commi ssion is self-contradictory, noting that China 
asserts both that it does not consider that "the amount of time and resources necessary to respond to 
the requests for information … is relevant [to] assessing whether the sample selection process … is 
"fair"", and that "this factor can be a basis [f or] assessing the lack of objectivity and fundamental 
fairness in the sampling procedure … in a given case".748  Moreover, the European Union notes that 
the fact that the forms for the selection of expor ting producers and EU producers are both referred to 
as "sampling" forms does not mean they have the same purpose and are governed by the same 
provisions of the AD Agreement or that their content should be compared.749 
7.365  The European Union asserts that  the Commission had company-specific or aggregate data for 
production and sales sufficient for the European Union to discharge its obligations under the 
AD Agreement with respect to sampling.750  The European Union argu es that the complaint, the 
standing forms, and the CEC submissions contained the information necessary for the selection of the 
sample.751  The European Union recalls that the sel ection was based on the largest representative 
volumes of production and sales which could be inves tigated, geographical location of producers, and 
sector segment.  The European Un ion asserts that the questionnaire sent to eight EU producers on 
10 October 2008 was preliminary, without prejudice to the final selection of the sample, which was 
done only in December 2008.752  The European Union asserts th at whether the Commission acted 
inconsistently with the AD Agreement depends on wh ether there was sufficient information before the 
Commission for the selection of the sample, and not on whether the information sought from different 
groups was the same and of the same quantity and level.753  The European Union considers that the 
Commission had sufficient and requisite information,  including company-specific data for the criteria 
considered by the European Union, for th e selection of the sample of EU producers.754 
7.366  China asserts that Article 3.1 of the AD Agreem ent requires "even-handed" treatment in the 
gathering of information used in selecting a sample of the domestic industry for purposes of an injury 
analysis.   
7.367  Article 3.1 establishes the standards for the determination of injury, requiring that a 
determination of injury be "based on positive evid ence and involve an objective examination of" the 
volume of dumped imports, their effect on prices, and the consequent impact on domestic producers.  This provision cannot, in our view, be understood as requiring any particular approach to the 
collection of information for purposes of selecting a samp le.  Nothing in the text refers to sampling, or 
to the collection of information in aid of selecting a sample.  We do not agree that Article 3.1 can be 
understood to establish specific requirements for the pr ocess of selecting a sample in the context of an 
injury determination.  Nor do we consider that Article 3.1 can be understood to require that an 
investigating authority gather the same informa tion from all producers potentially eligible to be 
                                                      
746 European Union, first written submission, paras. 255, 257 and 263.  The European Union did not 
make separate arguments in this regard concerning the or iginal investigation, referring to its arguments in the 
context of the expiry review.  European Union, first written submission, para. 644. 
747 European Union, first written submission, para. 264. 
748 European Union, second written submission, paras. 115-116, quoting China, answer to Panel 
question 40, para. 301. 
749 European Union, second written submission, para. 118. 
750 European Union, answer to Panel question 45, paras. 115-116. 
751 European Union, first written submission, para. 276. 
752 European Union, first written submission, paras. 279-280, referring to Note for the File dated 
29 October 2008, Exhibit CHN-25. 
753 European Union, second written submission, paras. 131-133. 
754 European Union, second written submission, paras. 141 and 143. WT/DS405/R 
Page 170  
 
 selected for such a sample, and in particular cannot be understood to require an  investigating authority 
to seek the same information from exporters, impor ters and domestic producers in order to select 
samples of these groups. 
7.368  Indeed, no specific provision of the AD Agreement provides for sampling in the context of 
the injury aspect of an anti-dumping investigation.
755  However, as the panel in EC – Salmon 
(Norway) , found, this does not mean that there are no limits on an investigating authority in this 
regard.  That panel stated:  
"the AD Agreement establishes some general parameters for the use of sampling in 
the injury context.  Thus, in our view, the obligation in Article 3.1 that a determination of injury be based on "pos itive evidence" and involve an "objective 
examination" of the volume, price effects, and impact of dumped imports, limits an 
investigating authority's discretion both in choosing a sample to be examined in the 
context of injury, and in collecting and evaluating information obtained from the sampled producers.  The Appellate Body stated, in US – Hot-Rolled Steel , that "an 
'objective examination' [under Article 3.1] requires that the domestic industry, and the 
effects of dumped imports, be investigated  in an unbiased manner, without favoring 
the interests of any interested party, or  group of interested parties, in the 
investigation."
756  A sample that is not sufficiently representative of the domestic 
industry as a whole is not likely to allow for such an unbiased investigation, and 
therefore may well result in a determination on the question of injury that is not 
consistent with the requirements of Article 3.1 of the AD Agreement ."757   
Thus, the only obligation that panel found with respect to sampling in the context of injury 
determinations is that the sample selected must  be "sufficiently representative of the domestic 
industry".  We agree.  However, we do not agree with China that this standard for judging a sample in the context of injury determinations has implic ations for the process of gathering information 
preparatory to the selection of a sample of the domestic industry.  
 
7.369  We reject China's view that the Article 3.1 requirement of "objective examination" entails 
"even-handed treatment" in the collection of information for purposes of selecting a sample for the injury determination.  Objective examination pr esumes that information, or positive evidence, is 
available to be examined, but says nothing about the collection of that information.  China's arguments suggest that, in order to be "even-handed" , sampling forms must be sent to every interested 
party, regardless of whether the investigating au thority already possesses, with respect to certain 
parties, what it considers to be sufficient inform ation for purposes of selecting a sample.  We see no 
legal basis in the text of the AD Agreement whic h could establish that any particular methodology 
must be used by investigating authorities in this regard.  In particular, we see no basis to impose a 
methodology which would require an investigating authority to undertake the redundant exercise of 
asking for information it already possesses.  The time and resources spent by some parties in 
completing sampling forms, while other parties are not required to do so, does not affect our view in this regard.  We fail to see why, for purposes of  selecting the sample, the investigating authority 
should be required to seek and collect anew inform ation already in its possession, simply to treat all 
                                                      
755 While Article 6.10 of the AD Agreement speci fically authorizes, and sets out criteria and 
methodological guidelines for, the use of sampling in the context of determinations of dumping, there is no 
similar provision with respect to determinations of injury. 
756 Appellate Body Report, US – Hot-Rolled Steel , para. 193. 
757 Panel Report, EC – Salmon (Norway) , para. 7.130, quoting Appellate Body Report, US – Hot-Rolled 
Steel , para. 193 (footnotes omitted, emphasis added).  WT/DS405/R 
  Page 171  
 
 parties even-handedly.
758  Moreover, even-handed treatment in  the collection of information for 
purposes of selecting a sample is no guarantee that the determination of injury ultimately made will be 
based on an objective examination of positive evidence.   Thus, the requirement China seeks to impose 
would not, in our view, necessarily further the objec tives of Article 3.1, and we see no basis on which 
to impose it on investigating authorities.   
7.370  With respect to China's argument that the pro cedure to select the sample was flawed because 
the complainant EU producers did not give their express consent to be sampled by completing the 
sampling form, we see nothing in Article 3.1 of th e AD Agreement that would require that consent 
must be given by each company considered in the sel ection of the sample.  Even if such a requirement 
were to be implied, we can see no basis for concludi ng that such consent must be obtained through the 
use of sampling forms.  In our view, the very act of participating as complainants in an anti-dumping 
investigation suggests a willingness to be considered fo r inclusion in a sample.  In this case, the CEC, 
acting on behalf of all complainants, explicitly c onfirmed that all complainant EU producers were 
ready to cooperate and partic ipate in the sampling exercise.759  Thus, to the extent any consent were 
considered necessary, it was given in this case. 
7.371  We agree with the European Union that, with r espect to the expiry review, China appears to 
have shifted the focus of its claim of lack of ev en-handed treatment throughout the Panel proceedings, 
sometimes pointing to the different treatment of gr oups of interested parties, and sometimes to the 
different treatment of members of a single group of interested parties.760  As we understand it, China's 
claim is concerned with the alleged advantage or  benefit to complainant EU producers of being 
automatically considered eligible for sampling, b ecause they were not required to complete sampling 
forms, while non-complaining EU producers, Chines e exporters and EU importers were required to 
complete such forms.  We understand China to argue  that this "benefit" is inconsistent with the 
asserted obligation to accord "even-handed treatment " to interested parties China derives from 
Article 3.1 of the AD Agreement.   
7.372  Since we do not agree that Article 3.1 of  the AD Agreement requires such even-handed 
treatment in the selection of a sample, we do not consider relevant the fact that some EU producers 
                                                      
758 Indeed, such an exercise would seem to be a waste of the investigating authorities' time and 
resources.  We recall that Article 5.10 establishes tim e limits on original investigations, and Article 11.4 
similarly provides that reviews, including expiry revi ews, shall be carried out "expeditiously", and normally 
concluded within 12 months of initiation.   
759 Review Regulation, Exhibit CHN-2, recital 19. 
760 Request for consultations, item 3.2 ("as the EU used different sampling procedures for Chinese 
exporters and EU importers, on the one hand, and EU producers on the other hand"); Panel request, item II.2 
("as the EU used different sampling procedures for Ch inese exporters, EU importers, and non-complaining EU 
producers on the one hand, and complainant EU producers on the other hand."); answer to Panel question 40, para. 299 ("China does clarify that within each group, the information sought should be the same and of the 
same quantity and level.  In other words, if sampling information is sought from exporters, the same information 
should be sought from all exporters"); second written su bmission, para. 601 ("comparison of the procedures 
followed with regard to three set of interested parties on the one hand, i.e. Chinese exporters, non-complaining 
European Union producers and European Union importers, and on the other hand the complaining European 
Union producers"); opening oral stat ement at the second meeting with the Panel, para. 37; answer to Panel 
question 107, para. 38 ("China does not admit that claim II.2 is limited to the difference in the treatment 
between complaining and non-complaining EU producers only"); and opening oral statement at the second 
meeting with the Panel, para. 37, fn. 44 ("concept of fundamental fairness equally demands that all companies within the same group or set of interested parties be required to provide the same level of information in a 
sampling form or an anti-dumping questionnaire").   
See also European Union, Comments on China's answer s to Panel question 107, para. 12, citing China, 
answer to Panel question 107, para. 38; first writte n submission, para. 252; second written submission, 
para. 111. WT/DS405/R 
Page 172  
 
 had to submit sampling forms, while complainant EU producers did not.
761  We note, in any event, 
that the European Union did not limit the EU producers who could be considered for inclusion in the sample for the injury analysis.  Non-complaini ng EU producers, about whom the Commission did not 
have information sufficient to consider them for the sample, were eligible to be included in the sample 
for the injury determination, if th ey provided the necessary information.
762  Thus, the procedure for 
the selection of the sample did not a priori  prevent the European Union from obtaining a sample, on 
the basis of which the European Union could r each an injury determination based on "positive 
evidence" and on an "objective examination".763  Had the European Union a priori  excluded non-
complaining EU producers from the sample such a selection process might well have resulted in a sample that is "not sufficiently representative of  the domestic industry."  But this was not the case 
here.  Thus, there is no basis in fact to suppor t the conclusion that the sample selection process 
"favour[ed] the interests of [an] interested party, or  group of interested parties, in the investigation."
764 
7.373  Based on the foregoing, we conclude that Chin a has failed to demonstrate that Article 3.1 
establishes obligations on investigating authorities w ith respect to the procedure for selecting a sample 
for purposes of examining injury.  
b. Representativeness of the sample 
7.374  China asserts that the sample of EU producers in  the expiry review is inconsistent with 
Articles 3.1, 6.10 and 17.6(i)765 of the AD Agreement, and Article VI:1 of the GATT 1994, as it 
cannot be considered statistically valid, does not re present the largest volume that could reasonably be 
investigated, and included a producer that outsourced its entire production of the like product to a third country during the review investigation period.
766   
7.375  We recall that, as discussed above, we  share the view of the panel in EC – Salmon – 
(Norway),  that "a sample that is not sufficiently re presentative of the domestic industry as a whole is 
not likely to allow for such an unbiased investigati on, and therefore may well result in a determination 
on the question of injury that is not consistent  with the requirements of Article 3.1 of the 
                                                      
761 We consider the fact that exporters and importe rs were required to submit sampling forms while 
complainant EU producers were not required to do so is even less relevant.  As we understand it, sampling of exporters and importers is used principally in the cont ext of making a determination of dumping.  Article 6.10 
provides specific guidance for the selection of a sample of exporters or foreign producers for purposes of a 
dumping determination.  Other than to suggest that even-handedness should prevail, China has proffered no 
basis for concluding that all these groups must be treated alike.   
762 Notice of Initiation of an expiry review, Exhi bit CHN-7, recital 5.1( a)(iii), p. 23; Review 
Regulation, Exhibit CHN-2, recital 19; European Union,  first written submission, para. 265; answer to Panel 
question 44, paras. 107-108.  We do not consider that the fact that, in the end, non-complaining EU producers 
were not included in the sample to demonstrate, without more, that the Commission failed to be objective in selecting the sample, or that the sample select ed was not representative of the EU industry. 
763 Whether it did make its injury determination based on "positive evidence" and on an "objective 
examination" is a separate issue not relevant to the resolution of China's claim with respect to the procedure for selecting the sample. 
764 Appellate Body Report, US – Hot-Rolled Steel , para. 193 (footnote omitted)("[t]he word 'objective', 
which qualifies the word 'examination', indicates essentially that the 'examination' process must conform to the dictates of the basic principles of good faith and fundam ental fairness.  In short, an 'objective examination' 
requires that the domestic industry, and the effects of dumped imports, be investigated in an unbiased manner, 
without favouring the interests of any interested party, or group of interested parties, in the investigation.").   
765 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that 
provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision further here. 
766 China, first written submission, paras. 488, 514-515 and 524.  WT/DS405/R 
  Page 173  
 
 AD Agreement".
767  However, we note that this standard does not establish how a panel might judge 
whether a sample is "sufficiently representative" of the domestic industry.   
7.376  Article 6.10 of the AD Agreement, which is in voked by China in this regard, provides in 
pertinent part, 
"The authorities shall, as a rule, determine an individual margin of dumping for each 
known exporter or producer concerned of th e product under investigation.  In cases 
where the number of exporters, producers, im porters or types of products involved is 
so large as to make such a determination impracticable, the authorities may limit their 
examination either to a reasonable number of  interested parties or products by using 
samples which are statistically valid on the basis of information available to the 
authorities at the time of the selection, or to  the largest percentage of the volume of 
the exports from the country in question which can reasonably be investigated." 
7.377  China posits the applicability of Article 6.10 of  the AD Agreement in the context of sampling 
for purposes of an injury determination.768  China refers in this regard to the statement of the panel in 
EC – Salmon (Norway)  that "a sample that is not sufficien tly representative of the domestic industry 
as a whole is not likely to allow for such an unbiased  investigation, and therefore may well result in a 
determination on the question of injury that is not consistent with the requirements of Article 3.1 of 
the AD Agreement."769  China contends that if an investiga ting authority establishes a sample for an 
injury determination, the criteria in Article 6.10 "provide the appropriate guidance and standard for 
sample selection for an injury determination a nd restrict the direction of the investigating 
authority".770   
7.378  China considers that, since it did not select a statistically valid sample, the European Union 
was required to select a sample of the domestic industry representing the "'largest percentage of 
volume' of production, sales of the like product."771  According to China, since the European Union 
based the selection of the sample principally on the volume of production of the domestic producers, "it is obliged to follow the criteria prescribed in Article 6.10 of the Anti-Dumping Agreement  and 
there is no other methodology which would ensure that the domestic industry as whole is represented 
by the sample."
772  China argues that the sampled EU producers did not account for the largest 
percentage of volume of production or sales of th e domestic industry in the review investigation 
period since (i) the European Union included one or more companies that had small production volumes; (ii); the European Union applied "mis cellaneous criteria" not found in the text of 
Article 6.10 of the AD Agreement in selecting the sample, even though the volume of production of 
the complainant EU producers was the principal basi s of sample selection; (iii) the sample selected 
represented an unusually small percentage of tota l EU production compared to other anti-dumping 
proceedings the European Union conducted between  1995 and 2010; and (iv) the sample included a 
producer that outsourced its entire production of the like product during the review investigation 
                                                      
767 Panel Report, EC – Salmon (Norway) , para. 7.130. 
768 China, first written submission, para. 490. 
769 China, second written submission, para. 619, citing Panel Report, EC – Salmon , para. 7.130.  See 
also China, answer to Panel question 53, paras. 339-340. 
770 China, second written submission, para. 622.  In addition, China contends that its position regarding 
the applicability of Article 6.10 criteria is supported by fo otnote 13 of the AD Agreement.  Footnote 13 of the 
AD Agreement provides: "In the case of fragmented indu stries involving an exceptionally large number of 
producers, authorities may determine support and oppos ition by using statistically valid sampling techniques." 
771 China, first written submission, paras. 496 and 498. 
772 China, second written submission, para. 629. WT/DS405/R 
Page 174  
 
 period.
773  China also argues that the European Union could have investigated more than eight EU 
producers.774   
7.379  The European Union  argues that Article 6.10 of the AD Agreement does not establish any 
legal disciplines applicable to sampling with respect to  injury analysis, and that only Article 3.1 of the 
AD Agreement is relevant in this regard.775  Moreover, the European Union asserts that the 
Commission did not select the sample based on the largest volume.  The European Union notes that 
the criteria considered were set out in a Note for the File, which states:   
"The 8 retained Companies were chosen on the basis of production, sales, location 
and sector segment.  The baseline for the selection was founded on a ranking of the producers with the highest production volume in the IP.  In order to ensure the 
representativeness of the sample, companies selling niche products were not retained 
for the sample.  Another factor considered  was the need of ensuring representativity 
in terms of geographical spread of the companies in the sample and the final sample therefore came to include representatives of  the four biggest producing countries in 
the Community."
776 
Thus, while the Commission started with a cons ideration of volume of production, given the 
fragmented state of industry, the other criteria mentioned played an important role in the final selection of the sample to ensure its consistenc y with the requirements of Article 3.1 of the 
AD Agreement.
777  In addition, the European Union asserts  that it is not possible to determine a 
certain minimum percentage of production for purposes of sampling for an injury determination, since 
the total production of companies included in the sample will vary depending on the sector, and on the 
average size of these companies.778  The European Union argues that in this case the domestic 
industry consists of some 18,000 companies, mostly small and medium-sized enterprises.  The European Union considers that China is effectivel y saying that in such ci rcumstances an injury 
investigation cannot take place, since it is not fe asible to select a statistical sample, and China 
considers that a sample that accounts for a small pe rcentage of total production cannot be considered 
representative.
779  The European Union argues that the Pane l need not consider the representativeness 
of the sample per se , since in its view, China relies on the assertion that the sample was not 
representative because it was neither statistically valid, nor did it represent the "largest percentage of 
production as required by Article 6.10 [of the]  Anti-Dumping Agreement."  Since Article 6.10 
                                                      
773 China, first written submission, paras. 500-504 and 512, referring to Note for the File dated 
29 October 2008, Exhibit CHN-25 ("eight large producers"), and Note for File dated 9 March 2009, Exhibit CHN-27 ("ranking of the producers with the highest  production volume in the RIP"), and citing Review 
Regulation, Exhibit CHN-2, recital 22; second written submi ssion, para. 658.  China al so submits that a sample 
representing only 8.2 per cent of the complaining EU production, and 3.1 per cent of the total EU production cannot be representative of this EU industry, and that fi ndings for such a small samp le cannot be transposed to 
the whole EU industry. China, second written submission, para. 629, 657 and 659. 
774 China, first written submission, para. 513.  China notes that the European Union argues that reliance 
on the largest volume in selecting a sample for injury i nvestigations might result in a sample inconsistent with 
the requirements of 3.1 of the AD Agreement, and contends that the European Union has failed to explain why 
this could or would have happened in this particular case, and if so, why the sample selection process began with a ranking of the producers with the highest pr oduction volume.  China, second written submission, 
para. 631. 
775 European Union, first written submission, paras. 268-269. 
776 European Union, second written submission, pa ra. 122, quoting Note for the file dated 
9 March 2009, Exhibit CHN-27. 
777 European Union, second written submission, para. 124. 
778 European Union, first written submission, para. 283. 
779 European Union, second written submission, para. 126.  WT/DS405/R 
  Page 175  
 
 establishes no legal requirements with respect to sa mpling in an injury analysis, the European Union 
considers that the Panel should reject  China's claims as a matter of law.
780 
 7.380  In our view, it is clear from the text of Artic le 6.10 that it does not establish any criteria or 
guidelines for sampling in the context of an injury dete rmination, but rather relates specifically to the 
selection of a sample for the determination of dumping.   Moreover, we agree with the statement of the 
panel in EC – Salmon (Norway) , in that  
"we see no basis to impose the criteria of Article 6.10 on sampling in the context of 
injury.  It is not clear that the "largest  volume that can reasonably be investigated" 
criterion of Article 6.10 would [be] an appr opriate basis for the selection of a sample 
in the context of an injury investigati on.  On the dumping side, ensuring that an 
adequate portion of total exports is inv estigated might be sufficient to justify 
imposition of an anti-dumping duty, particularly given that there is a possibility for subsequent refunds if an individual produ cer is not actual [sic] dumping.  In the 
investigation of injury, factors other than the volume of production would seem at 
least equally, if not more, relevant to ensuring that a sample adequately represents the 
domestic industry as a whole, sufficient to justify a finding of injury to the domestic industry.  Thus, while the volume of producti on covered by a sample may be relevant 
in assessing whether a determination based on information from sampled domestic producers satisfies the requirements of Article  3.1, other considerations may also be 
as relevant, or potentially more relevant."
781  
7.381  China asserts, relying on the report of the panel in  EC – Salmon (Norway) , that Article 6.10 
provides a good contextual basis for determining the consistency of the sample with the requirements 
of "positive evidence" and "objective examination.782  We disagree.  In this case, the facts indicate that 
the European Union started with the volume of pr oduction in selecting the sample for the injury 
examination, but took into account othe r criteria which it considered relevant.783  That an investigating 
authority chooses to consider the volume of production,  which is a criterion in Article 6.10, as part, or 
even a principal part, of its selection of a sample fo r the injury analysis does not, in our view, mean 
that the investigating authority is bound by the prov isions of Article 6.10 in selecting a sample for the 
injury examination.  Such an interpretation woul d create an obligation on WTO Members that is not 
set out in the AD Agreement.784  In addition, we do not accept Chin a's argument that Article 6.10 is "a 
good contextual basis" for understanding the requirements for sampling in the injury context.  
Pursuant to Article 31.1 of the Vienna Convention, a provision of a treaty shall be interpreted in its 
context.  However, Article 31.1 of the Vienna C onvention presupposes that there is a provision of a 
treaty being interpreted.  As discussed above, and as China does not dispute, there is no provision of 
the AD Agreement that specifically addresses sampling in the context of injury determination.  
Therefore, as we understand it, China's argument is that Article 6.10 is relevant context for how an 
investigating authority should undertake sampling in  injury determinations in the absence of any 
specific treaty text in this regard.  While nothing prevents an investigating authority from looking to 
                                                      
780 European Union, second written submission, para. 128. 
781 Panel Report, EC – Salmon (Norway) , fn. 309. 
782 China, first written submission, para. 445. 
783 We note that this comports with the statement of the panel in EC – Salmon (Norway)  that "factors 
other than the volume of production would seem at least equally, if not more, relevant to ensuring that a sample 
adequately represents the domestic industry as a whole, sufficient to justify a finding of injury to the domestic industry".  Panel Report,  EC – Salmon (Norway), fn. 309.  
784 Moreover, we recall that it is China's burden to es tablish a legal and factual basis for its claim.  
Thus, whether or not the European Union explained how, in this case, reliance on the largest volume alone would not result in a sample satisfactory for purposes of Article 3.1 is irrelevant, since we have concluded that 
Article 6.10 does not apply to the selection of a samp le in the injury context.  See footnote 774 above. WT/DS405/R 
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 Article 6.10 for some indications as to how sampling mi ght be undertaken in the context of injury, this 
does not transform Article 6.10 into an obligation on the investigating authority in that exercise.  
7.382  Thus, we consider that Article 6.10 is not app licable to the selection of a sample for purposes 
of an injury determination, either directly, or as "context".  We therefore dismiss China's claims under 
Article 6.10 with respect to sampling in the expiry review as matter of law.
785 
7.383  We agree with the European Union that, havi ng concluded that Article 6.10 establishes no 
legal requirements with respect to sampling in an  injury analysis, we need not consider the 
representativeness of the sample per se .  As we understand it, China claims that, having shown that 
the EU industry's sample was inconsistent w ith the European Union's obligations under the 
AD Agreement, the European Union's evaluation of injury to the EU industry based on this sample 
was consequently inconsistent with Article 3. 1 of the AD Agreement and Article VI:1 of the 
GATT 1994.786  We have found that the European Union's sample of the EU industry was not 
inconsistent with Article 6.10.  Thus, we reject China's consequen tial claims.  Nonetheless, to the 
extent China may be considered to have made an independent claim under Arti cle 3.1 that the sample 
selected is not representative of the domestic indus try, its only arguments in support of this claim 
appear to concern the inclusion of a company that  outsourced production during the relevant period, 
and the small volume of production represented by the sample.   
7.384  With respect to the producer that outsourced  its entire production, China asserts that this 
producer should have been excluded from the sample  because it ceased production in the review 
investigation period and could not thereafter be considered representative of the situation of non-
sampled EU industry producers.787  China contends that business model was not one of the criteria for 
sample selection, and the outsourcing in question w as of the entire production to a country outside the 
European Union.  Therefore the inclusion of th is company in the sample could not enhance its 
representativity.788  China also disputes the European Uni on's assertion that the company's submission 
of its data as EU production was a good faith mistake".789  The European Union notes that 
subcontracting or outsourcing of pr oduction is an important business model in the footwear industry 
in the European Union, and therefore keepi ng this company in the sample improved the 
                                                      
785 We note that China's claim with respect to the procedures for selecting the sample of EU producers 
in the original investigation also invoked Article 6. 10 of the AD Agreement, and Article VI:1 of the 
GATT 1994.  However, China's argument in this rega rd focused on the assertion that by failing to follow 
Article 6.10, the Commission failed to select a represen tative sample.  In light of our conclusion that 
Article 6.10 does not apply, as a matter of law, to samplin g in the context of an injury determination, we do not 
consider it necessary to address th is aspect of China's claim.  
786 China, first written submission, paras. 468 and 500; second written submission, paras. 633 and 666-
667. 
787 China, second written submission, para. 677; firs t written submission, para. 521.  China considers 
that the producer that outsourced its production underwent a permanent change in production location, and 
could not have been injured by the allegedly dumped imports during the review investigation period.  In 
addition, China argues that the business model of this prod ucer does not contribute to any aspect of the injury 
determination regulated by Article 3 of the AD Agreement.  
788 China, second written submission, para. 681.  Responding to the European Union's assertion that 
only the data of this producer pertaining to its activity as a producer in the European Union was taken into 
account, China submits that the injury data for this pr oducer would be negatively a ffected by outsourcing, and 
thus "an injury analysis based on a sample including such a producer cannot be considered objective and based on positive evidence."  China, second written submis sion, para. 683.  See also first written submission, 
para. 522. 
789 China, second written submission, para. 690.  China considers it common knowledge that Bosnia, 
where the production was moved, is not part of the European Union, and asserts that the company would have 
known it was importing footwear from Bosnia.  Id.  WT/DS405/R 
  Page 177  
 
 representativeness of the sample.
790  In any event, the European Union  maintains that only data 
pertaining to its activity in the European Union was used.791   
7.385  We do not agree that the European Union w as required to exclude this company from the 
sample it had originally selected.  We note that th e fact of this company outsourcing its production to 
a country outside the European Union was only discove red at verification, long after the sample had 
been selected.792  We consider that the view that the representativeness of the sample was improved 
by the presence of this company is a reasonable conclu sion in light of the facts that were before the 
Commission.  Moreover, we note that the Commission addressed the concerns raised in this regard by 
interested parties, and concluded that inclusion of  this company in the sample did not affect the 
overall trends with respect to the industry.793  In these circumstances, we cannot conclude that the 
European Union's determination of injury was in consistent with Article 3.1 as being based on a 
sample that was not sufficiently represent ative of the domestic industry as a whole. 
7.386  China asserts that the fact that the EU industr y is fragmented and comprises principally small-
and-medium-sized enterprises does not justify selec ting a small sample.  For China, in such a 
situation, a statistically valid sample would have  ensured that the sample is representative of the 
domestic industry as a whole, but the European Unio n chose to rely on a sample selected on the basis 
of largest volumes of production.794  China considers that the Eu ropean Union did not, however, 
"select a sample that represented the largest volume of production" since the sample selected 
represented at most 8.2 per cent of total production of  the complainants or 3.1 per cent of total EU 
production.795  China asserts that the small volume of production represented by the sample means 
that it "cannot logically be considered representative."796 The European Union asserts that there is no 
minimum percentage of total production which must be  represented in a sample for injury purposes.  
Indeed, the European Union notes that the total pr oduction of companies included in the sample in 
any investigation will vary, depe nding on the number of big, medium and small companies in the 
industry being examined, and that the total percenta ge of production of the companies included in the 
sample is a function of the industry structure. 797   
7.387  We consider that the relatively small percen tage of total production volume of the EU 
industry represented by companies included in the sa mple does not, standing alone, demonstrate that 
the sample selected was not suffi ciently representative of the domestic industry as a whole.  There is 
no minimum number of producers, nor a minimum per centage of volume of production, that must be 
                                                      
790 European Union, first written submission, para . 290; second written submission, para. 290. 
791 European Union, first written submission, para . 286, citing Review Regulation, Exhibit CHN-2, 
recital 23.  In addition, the European Union notes that, although it was not required to do so, the Commission conducted "an alternative second anal ysis based on the assumption that the decreased production of the sample 
[due to the situation of the producer in question] could be extrapolated to the entire domestic industry," and 
concluded that the overall trends in the injury factors relevant for this determination would not be affected.  
European Union, first written submission, para. 289, c iting Review Regulation, Exhibit CHN-2, Table 9; second 
written submission, para. 148. 
792 European Union, answer to Panel question 49, para. 129; Note for the File dated 9 December 2008, 
Exhibit CHN-27; Review Regulati on, Exhibit CHN-2, recital 23. 
793 Review Regulation, Exhibit CHN-2, recital 23. 
794 China, second written submission, para. 661. 
795 China, second written submission, para. 661 (footnote omitted).  China states that even if the Panel 
were to accept that the definition of the EU industry  for the expiry review in cluded complaining and non-
complaining EU producers, China maintains its claims that a sample "representing 3,1% of the domestic 
industry production is not representativ e of the domestic industry as a w hole and also does not account for the 
largest volume of production that can reasonably be investigated."  China, second written submission, para. 666; 
opening oral statement at the first meeting with the Panel, para. 48.   
796 China, answer to Panel question 53, para. 352. 
797 European Union, first written submission, para. 283. WT/DS405/R 
Page 178  
 
 reached before a sample can be considered suffi ciently representative of the domestic industry as a 
whole.  In our view, that judgement can only be  made in light of all the relevant facts and 
circumstances in a given investigation.   
7.388  Based on the foregoing, we conclude that China has failed to demonstrate that the sample of 
EU producers selected by the Commission was not re presentative of the domestic industry in either 
the original investigation or the expiry review.  
c. PCN Methodology 
7.389  China claims, with respect to the expiry re view, that the use of an overly broad PCN 
classification system, and the reclassification of certain footwear in the middle of the expiry review, precluded an objective examination of the volume of dumped Chinese imports, the effect of those 
imports on prices, and their consequent impact on do mestic producers, in violation of Articles 3.1, 
6.10 and 17.6(i) of the AD Agreement, and Article VI:1 of the GATT 1994.
798  China argues that the 
use of this overly broad PCN system precluded a proper comparison between footwear produced by 
sampled EU producers and that produced by the sampled Chinese exporting producers in terms of volume and value, as it resulted in the calculation of an injury margin or undercutting margin based 
on "PCNs comprising extremely divergent and incomparab le footwear types."  China also asserts that 
the European Union "re-classified and shuffled the data of the Chinese exporters and European Union 
producers on its own without the actual input of th ese companies", resulting in unverifiable data.  
China argues that the Euro pean Union's determination of injury based on "the volume and price effect 
of the imports to the extent it involved a PCN-based  analysis including the injury margin calculation 
cannot be considered objective and based on positive evidence" and is therefore inconsistent with 
Articles 3.1 and 17.6(i) of the AD Agreement, and Article VI:1 of the GATT 1994.
799  The European 
Union argues that China's factual assertions concerning the PCN system and alleged reclassification of footwear categories are incorrect, and therefore China's legal arguments are baseless.
800  T h e  
European Union refers to its explanations on this issue provided in its response to China's claim II.1, 
which concerns the PCN methodology with r espect to the determination of dumping.801 
7.390  China premises its argument on the assertion that  it demonstrated that the European Union 
used an "extremely broad and imprecise PCN classification system".802  However, we have concluded, 
in the context of China's claims II.1 and III.3, th at the European Union's use of the PCN methodology 
in the original investigation and expiry review w as not inconsistent with either Article 2.1 of the 
AD Agreement or Article VI:1 of the GATT 1994.803  China has not made any additional substantive 
arguments in this regard in the context of its cl aim concerning injury.  Indeed, there is nothing in 
China's arguments at paragraphs 526-529 of its fi rst written submission, and paragraph 693 of its 
second written submission, that addresses any alleged flaws in the PCN system used by the European Union.  Moreover, China has failed to explain the relevance of its assertions with respect to the PCN 
system to the issue of sampling, which we recall is  the subject of China's claim here.  Nor has China 
explained the connection between the use of the PC N system and the determination of the injury 
margin on the one hand, and the issue of sampling on the other.  Moreover, China's argument is that 
the determination of injury based on "the volume and price effect of the imports to the extent it 
involved a PCN-based analysis including the injury margin calculation cannot be considered objective 
and based on positive evidence" demonstrates a vi olation of Articles 3.1 and 17.6(i) of the 
AD Agreement and Article VI:1 of the GATT 1994.  We fail to see either a legal or factual basis for a 
                                                      
798 China, first written submission, para. 528; second written submission, para. 693. 
799 China, first written submission, paras. 528-529. 
800 European Union, first written submission, para. 292. 
801 See paragraphs 7.272-7.274 above. 
802 China, first written submission, para. 526. 
803 See paragraphs 7.276-7.287 above.    WT/DS405/R 
  Page 179  
 
 claim with respect to sampling in these arguments.
804  We therefore dismiss this aspect of China's 
claim. 
7.391  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union acted inconsistently with Articles 3.1, 6.10  and 17.6(i) of the AD Agreement and Article VI:1 
of the GATT 1994 in the procedures for and selection of a sample of the domestic industry for 
purposes of examining injury in the or iginal investigation.  We also conclude that China has failed to 
demonstrate that the European Union acted inconsis tently with Article 11.3 of the AD Agreement in 
the procedures for and selection of a sample of the domestic industry for purposes of examining injury, or likelihood of injury, in the expiry review.
805 
(c) Claim III.7 – Alleged violation of Article 3.3 of the AD Agreement – Cumulative assessment 
of imports from China and Viet Na m in the original investigation 
7.392  In this section of our report, we address China's claim that the Commission erred in 
undertaking a cumulative assessment of the effects of dumped imports from China and Viet Nam in 
the original investigation.   
(i) Arguments of the parties 
a. China 
7.393  China claims that the European Union viol ated Article 3.3 of the AD Agreement by 
undertaking a cumulative assessment of the effects of imports from China and Viet Nam in the 
original investigation.  China asserts that th e cumulative assessment of imports from China and 
Viet Nam in this case did not satisfy the conditions for such analysis set out in Article 3.3 of the 
AD Agreement.806  Specifically, China contends that cumula tive analysis was inappropriate in this 
case, in light of the conditions of competition betw een the imported products themselves, and between 
imported products and th e like domestic products.807  China claims that the European Union failed to 
properly take into account differenc es between China and Viet Nam, specifically that: (i) trends in 
import volume and prices differed between China and Viet Nam, (ii) Viet Nam is one of the world's poorest countries, and (iii) the product mix between China and Viet Nam was different.
808  
7.394  In addition, China argues that the European Union failed to recognize important differences 
between China and Viet Nam with respect to impor t volumes, market shares, and prices, and did not 
take into account the sudden increase of imports fr om China caused by the lifting of the quota on 
imports of footwear as of January 2005.809  China asserts that the market share of Chinese imports was 
lower than that of Viet Nam during the investiga tion period, and thus the market shares developed 
differently, contrary to the European Union's st atement that the volume of imports "developed in 
parallel".810  China contends that the term "parallel" must be understood in this context as 
"continuously equidistant", and argues that th is was not the case for imports from China and 
                                                      
804 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that 
provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision 
further here.   
805 We recall in this regard our views concerning the consideration of alleged violations of Article 3 of 
the AD Agreement in the context of an expiry review, paragraphs 7.329-7.340 above. 
806 China, answer to Panel question 93, para. 553. 
807 China, first written submission, para. 1154. 
808 China, first written submission, para. 1151. 
809 China, first written submission, para. 1157. 
810 China, first written submission, paras. 1158 and 1165, citing Provisional Regulation, Exhibit CHN-
4, recital 158. WT/DS405/R 
Page 180  
 
 Viet Nam.
811  China also contends that the volume of imports from China was much lower than the 
volume of imports from Viet Nam in 2001, but register ed an important increase towards the end of the 
period of investigation.812  Finally, China argues that imports from China and Viet Nam did not have 
the same tendency, in light of the quota on impor ts from China in force until 2005, which does not 
reflect normal "conditions of competition".813   
7.395  While China maintains that it is pursuing a cl aim under Article 3.3 of the AD Agreement, it 
considers that Article 3.1 applies to the determin ation under Article 3.3(b) of whether cumulation is 
"appropriate in light of the conditions of comp etition between the imported products and the 
conditions of competition between the impor ted products and the like domestic product."814  I n  
response to the European Union's argument that  any claim of failure to make an objective 
examination should be brought under Article 3.1 of the AD Agreement, China argues that Article 3.1 
informs the obligations under Article 3.3 of the AD Agreement. 
b. European Union  
7.396   The European Union contends that the right to undertake a cumulative analysis under 
Article 3.3 of the AD Agreement does not depend on the existence of "normal" conditions of 
competition, and asserts that China has not refuted th e Commission's finding that the market shares of 
China and Viet Nam developed similarly.815  According to the European Union, divergent trends in 
export volumes do not of themselves constitute a barri er to cumulation.  Moreover, the European 
Union contends that China's argument that the volumes of imports must have been "continuously 
equidistant" is without legal basis, and would be  "inherently improbable" in the context of anti-
dumping investigations.816  The European Union considers th at "in describing the movements as 
'similar', the European Union is not assuming that  such a finding is required before the conditions 
specified for cumulation in Article 3.3 are satisfied".817  The European Union asserts that the data with 
respect to China and Viet Nam show that market sh are of imports from each was increasing, and that 
towards the end of the period of investig ation, China's share increased faster. 818 The European Union 
maintains that the Commission, in this case, reached an overall conclusion that the facts justified 
cumulation.819 
7.397  The European Union asserts that China seems to be arguing a violation of Article 3.1 of the 
AD Agreement, and that any claim of "failure to  make an objective examination" should be framed 
under that provision, and not under Article 3.3 of the AD Agreement.820  The European Union submits 
                                                      
811 China, first written submission, paras. 1159-1160.  China notes in this regard that in 2002 imports 
from China dropped by 6 per cent, while imports from Viet Nam increased by 17 per cent. 
812 China, second written submission, para. 1404.  China asserts that "the European Union seems to 
regard a +300% increase imports volumes (for China), against a +100% increase in imports volumes (Vietnam), 
as well as a -39% decrease in prices (China) against a -22% decrease (Vietnam),  as evidence of 'similar 
conditions of competition'." China, second written su bmission, para. 1407.  See also China, Comments on 
European Union, answer to Panel question 111, para. 38. 
813 China, first written submission, paras. 1161-1162; second written submission, para. 1409. 
814 China, first written submission, para. 1156; answer to Panel question 90, para. 532. 
815 European Union, first written submission, paras. 699-700. 
816 European Union, first written submission, para. 697. 
817 European Union, first written submission, para. 700; answer to Panel question 111, para. 32. 
818 European Union, first written submission, paras. 698 and 700. 
819 European Union, first written submission, para. 700, referring to Definitive Regulation, Exhibit 
CHN-3, recital 164. 
820 European Union, first written submission, para. 69 4; answer to Panel question 93, paras. 260-261.  WT/DS405/R 
  Page 181  
 
 that China's claim should be dismissed because Article  3.3 does not contain an obligation to make an 
objective examination.
821   
(ii) Arguments of third parties 
a. Colombia 
7.398  Colombia asserts that Article 3.3 of th e AD Agreement requires an examination of, inter alia , 
whether, considering the conditions of compe tition between imported and like domestic products 
subject to the investigation, there are appropria te conditions for an investigating authority to 
undertake a cumulative assessment in an anti-dumpi ng investigation.  Colombia recalls that 
Article 3.3 is a voluntary option, that is, an investig ating authority can decide whether to cumulate in 
order to facilitate its administrative activities during the investigation.  The requirements for use of 
cumulation are set out in Article 3.3, and Colombia notes that Members may determine criteria to 
establish in which circumstances it would be appropri ate to cumulate.  However, Colombia contends 
that this discretion is not absolute, as those crite ria must be reasonably related to the inquiry in 
question, that is, whether products compete in th e domestic market of the importing Member.  In 
addition, investigating authorities may specify th e conditions of competition, as the AD Agreement 
does not determine such conditions.  Colombia states that in order to involve two or more countries in 
a single anti-dumping investigation, authorities must analyse whether cumulation is appropriate by taking into account the particular facts of the case, es pecially the characteristics of the parties subject 
to investigation.  Finally, with respect to th e relation between imported and like domestic products, 
Colombia states that it is relevant to compare the effects and impact of the dumped imported goods over the like domestic product, in light of the market conditions.
822 
b. United States 
7.399  The United States disagrees with the legal premi se of China's argument that an investigating 
authority must establish that imports from different  countries have similar volume and market share 
trends in order to demonstrate that cumulation is appropriate in light of the conditions of competition 
between imported products.  The United States asser ts that investigating authorities may cumulate 
imports if (i) dumping margins for the individual countries are more than de minimis , (ii) the volumes 
of imports from the individual countries are not negligible, and (iii) a cumulative assessment is appropriate in light of the conditions of comp etition between imported pr oducts, and between the 
imported products and the like domestic product.
823  
(iii) Evaluation by the Panel 
7.400  Before addressing China's claim, we recall the relevant facts concerning the Commission's 
decision to undertake a cumulative analysis of the e ffects of imports from China and Viet Nam. In the 
Provisional Regulation, the Commission  considered whether the effects of dumped imports from the 
countries concerned should be assessed cumulatively,  on the basis of the criteria set out in EU 
legislation, which provides that the effects of imports from two or more countries simultaneously 
subject to anti-dumping investigations shall be asse ssed cumulatively only if it is determined that (a) 
the margin of dumping established in relation to the imports from each country is more than de 
minimis as defined in Article 9(3) of the Basic AD Re gulation and that the volume of imports of each 
country is not negligible and (b) a cumulative assessment  of the effects of the imports is appropriate in 
the light of the conditions of competition be tween imported products and the conditions of 
competition between the imported products and the like Community product.  The Commission found 
                                                      
821 European Union, first written submission, para. 695. 
822 Colombia, third party written submission, paras. 110, 112, 114, 117-118 and 120. 
823 United States, third party written submission, paras. 32-33 and 35. WT/DS405/R 
Page 182  
 
 that the dumping margins for each country were more than de minimis , and the volume of the dumped 
imports from each of those countries was not neglig ible.  The Commission further concluded that the 
conditions of competition both between the dumped imports and between the dumped imports and the 
like Community product were similar, noting in this  respect that irrespective of origin, imported and 
domestically-produced footwear compete against each ot her since they are alike in terms of their basic 
characteristics, interchangeable from the consumer's  point of view and distributed via the same 
distribution channels.  The Commission also noted th at the "volume of imports  developed in parallel", 
noting that imports from both countries increased  by around 40 million pairs between 2001 and the 
investigation period. In addition, the Commission found that import prices followed a similar decreasing trend, falling by 39 per cent for China and by 22 per cent for Viet Nam, and that the prices 
of imports undercut the domestic industry's prices at a comparable level of  trade.  The Commission 
considered and rejected arguments by certain in terested parties that conditions for cumulative 
assessment were not fulfilled because the market  shares of the countries concerned developed 
differently and their price level was not compar able, concluding that the import volumes, market 
shares and average unit prices of both countries developed similarly over the period considered.  The 
Commission noted that
 the sudden increase of Chinese imports during the investigation period was 
likely related to the lifting of the quota on those imports as of January 2005, that Chinese and 
Vietnamese imports clearly followed the same tr ends, and followed its established practice of 
examining trends in import volume and prices over th e period 1 January 2001 to  31 March 2005.  In 
addition, the Commission concluded that the absolute  difference in the level of the prices between the 
two countries, which might be explained by various  factors such as a different product mix, was not 
relevant in the context of the cumulative assessment, while the price trends ove r the period considered 
were relevant, and these trends were comparable  for the two countries. The Commission therefore 
concluded that all conditions of cumulation  are met and that accordingly the effect of the dumped 
imports originating in the countries concerned would be assessed jointly for the purpose of the injury 
analysis.824 
7.401  In the final stage of the investigation, certain  interested parties claimed that the cumulative 
assessment was not warranted, based on differences in the trends in import volume and prices for China and Viet Nam, and the fact that Viet Nam is one of the world's poorest countries, benefiting from the Generalised System of Preferences', and should therefore not be cumulated with China for 
the injury assessment.  The Commi ssion noted that the first argum ent had been addressed in the 
Provisional Regulation, and rejected the second argument, stating that there was no provision in the 
Basic AD Regulation stipulating that one of the countries simultaneously subject to anti-dumping 
investigations should not be cumulated because of its  overall economic situation, and noting that such 
an interpretation would also not be in line w ith the object and purpose of the provisions on 
cumulation, which focus on whether the imports fr om the various sources compete with each other 
and the like Community product. In other words, th e Commission concluded the characteristics of the 
traded products matter but not the situation of th e country from which the imports originate.  One 
interested party also claimed that the cumulation was not warranted on the grounds that the product mix of the two countries concerned is different.  Th e Commission concluded that, even if there were 
differences in product mix, there was still a signi ficant overlap, and thus, overall, imports from China 
and from Viet Nam competed against each other.  Therefore, and on the basis of the provisional 
findings in recitals 156 to 162 of the Provisional Regulation, the Commission definitively concluded 
that all conditions of cumulation were met and that  the effect of the dumped imports originating in 
China and Viet Nam should be assessed jointl y for the purpose of the injury analysis.
825 
                                                      
824 Provisional Regulation, Exhibit CHN-4, recitals 156-162. 
825 Definitive Regulation, Exhib it CHN-3, recitals 163-167.  WT/DS405/R 
  Page 183  
 
 7.402  Article 3.3 of the AD Agreement, which is at issue in this claim, provides: 
"Where imports of a product from more than one country are simultaneously subject 
to anti-dumping investigations, the inves tigating authorities may cumulatively assess 
the effects of such imports only if they determine that (a) the margin of dumping 
established in relation to the imports from each country is more than de minimis  as 
defined in paragraph 8 of Ar ticle 5 and the volume of imports from each country is 
not negligible and (b) a cumulative assessment of the effects of the imports is 
appropriate in light of the conditions of  competition between the imported products 
and the conditions of competition between  the imported products and the like 
domestic product." 
Article 3.3 of the AD Agreement allows, but does not require, investigating authorities to 
"cumulatively assess the effects" of imports of a product from more than one country when those imports are simultaneously subject to investigation.
826  The text of Article 3.3 is clear on its face.  The 
option to undertake a cumulative asse ssment is subject to three conditions, expressly set out in the 
text, namely: (a) the dumping margins from each individual country must be more than de minimis , 
(b) the volume of imports from each individual country must not be negligible, and (c) cumulation 
must be appropriate in light of the conditions of competition (i) between imported products, and 
(ii) between the imported produc ts and the like domestic product.827 
 7.403  Article 3.3 of the AD Agreement does not contai n any further guidance with respect to these 
"conditions of competition".  Unlike Articles 3.2, 3.4 and 3.5 of the AD Agreement, which set out 
indicative lists of factors to be considered in ex amining the volume and price effects and impact of 
imports on the domestic industry, and the question of  causation, in making a determination of injury, 
Article 3.3 does not indicate anything with respect to factors that might be relevant in assessing the 
appropriateness of cumulative analysis in  light of the "conditions of competition".
828  Nevertheless, 
while investigating authorities enjoy a certain de gree of discretion in establishing an analytical 
framework for determining whether a cumulative assessment is appropria te under Article 3.3, 
investigating authorities must take into account the pa rticular circumstances of the case in light of the 
particular conditions of competition in the marketplace.829  While we agree with China that Article 3.1 
informs the obligations under Article 3.3 as a general matter,830 we consider that this obligation 
                                                      
826 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 144.  The rationale for a 
cumulative assessment is that the domes tic industry faces the impact of du mped imports as a group, and may be 
injured by the total impact of such dumped imports, regardless of whether they have the same origin or come 
from the same country.  Appellate Body Report, European Communities – Anti-Dumping Duties on Malleable 
Cast Iron Tube or Pipe Fittings from Brazil  ("EC – Tube or Pipe Fittings "), WT/DS219/AB/R, adopted 
18 August 2003, DSR 2003:VI, 2613, para. 116. 
827 Appellate Body Report,  EC – Tube or Pipe Fittings , para. 109. 
828 We note in this regard that this is among the questions examined by the Working Group on 
Implementation of the Committee on Anti-Dumping Practices.  While a number of proposals regarding this 
matter were presented to and discussed extensively in that Group, no recommendation was ever adopted in this 
regard.  See, e.g. documents G/ADP/W/410, G/ADP/AHG/R7, G/ADP/W/93, and G/ADP/W/121 and revs. 1-4.  In addition, proposals on this question have been made in the negotiations on anti-dumping in the context of the 
Doha Development Agenda.  Document TN/RL/W/143.  These considerations support our view that the current 
text of Article 3.3 does not prescribe any criteria or methodologies for assessing whether cumulation is appropriate in light of the conditions of competition among imports, and between imports and the domestic like 
product. 
829 Panel Report, EC – Tube or Pipe Fittings , para. 7.241. 
830 "[T]he right under Article 3.3 to conduct anti-dumping investigations with respect to 
imports from different exporting countries does not absolve investigating authorities from the 
requirements of paragraphs 1 and 2 of Article 3 to determine the volume of dumped imports on the basis of 'positive evidence' and an 'objective examination'."   
Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 145.   WT/DS405/R 
Page 184  
 
 requires that the investigating authority rely on positive evidence and an objective examination of that 
evidence in exercising its right to undertake a cumu lative assessment.  It do es not, however, establish 
any substantive obligations on the analysis of wh ether a cumulative assessment of the effects of 
imports is appropriate.  In this case, we consider  that the Commission explai ned the evidentiary basis 
and reasoning underlying the decision to undertake a cumulative analysis.
831  China does not dispute 
that the Commission considered relevant facts and explained its conclusions, but disagrees with the 
conclusions reached, and asserts that other facts should have been taken into account as well.  
However, these are questions of the substantive su fficiency of the Commission's decision, which in 
our view can be considered, if at all, only in li ght of the obligations of Article 3.3, and not under 
Article 3.1.  Thus, to the extent China may be asserti ng a violation of Article 3.1, we consider that the 
European Union acted consistently with that provision.   
7.404  Turning to the alleged violation of Article 3.3, we see no basis in the text of Article 3.3 for 
China's view that an investigating authority must  establish that imports from different countries have 
similar volume and market share trends, or that the conditions of competition in the different 
exporting countries were "similar" or "normal", in or der to conclude that a cumulative assessment is 
appropriate in light of the "conditio ns of competition".  As we obser ved above, Article 3.3 contains no 
specific mandatory or indicative factors that shoul d be considered in assessing whether cumulative 
analysis is appropriate in light of the "conditions of competition".  We note in this regard that the 
Appellate Body has rejected arguments that woul d create additional obligations under Article 3.3 of 
the AD Agreement:  
"By seeking to place additional obligations on investigating authorities beyond those 
specified in Article 3.3, namely, that investigating authorities first determine  on a 
country-specific basis  the existence of significant increases in dumped imports, and 
their potential for causing injury to the domestic industry, Brazil ignores the role of cumulation in ensuring that each of the multiple sources of 'dumped imports' that cumulatively contribute to a domestic industry's material injury be subject to anti-
dumping duties."
832 
In the absence of any relevant legal obligations under Article 3.3, we cannot conclude that the 
Commission's determination is inconsistent with that provision.  We certainly see no basis for the 
view that a statement by the investigating authorit y that imports "developed in parallel" requires that 
the imports referred to developed in  lock-step, that is, were "con tinuously equidistant", before a 
cumulative analysis can be undertaken.   
 
7.405  On the basis of the foregoing, we conclude that China has failed to demonstrate that the 
European Union acted inconsistently with Ar ticle 3.3 of the AD Agreement in undertaking a 
cumulative assessment of the effects of imports  from China and Viet Nam in the original 
investigation. 
(d) Claims II.4, III.5 and III.8 – Alleged violations of  Articles 3.1, 3.2, 3.4, 6.10, and 17.6(i) of 
the AD Agreement and Article VI:1 of the GATT 1994 – Evaluation of injury indicators  
7.406  In this section of our report, we address China' s claims concerning the evaluation of certain 
injury indicators by the European Union in both the original investigation and the expiry review, as 
well as the data considered in those evaluations. 
                                                      
831 See Definitive Regulation, Exhibit CHN-3, recita ls 162-167; Provisional Regulation, Exhibit CHN-
4, recitals 158-161. 
832 Appellate Body Report,  EC – Tube or Pipe Fittings , para. 117 (emphasis in original, footnote 
omitted).  WT/DS405/R 
  Page 185  
 
 (i) Arguments of the parties 
a. China 
7.407  With respect to the expiry review, China claims violations of Articles 3.1, 3.4, and 17.6(i) of 
the AD Agreement.  Specifically, China claims (i) that the European Union based its evaluation of 
certain macroeconomic injury indicators on data pe rtaining to producers that were not part of the 
domestic industry; and (ii) that the European Uni on did not conduct its eval uation of macroeconomic 
injury indicators in an objectiv e manner based on positive evidence.
833  China claims that the Prodcom 
data, and data provided by eight national footwear associations, both used by the Commission in its 
injury analysis, included information of producers not part of the EU industry.  China asserts that the 
European Union's definition of the EU industry in  the expiry review included only the complainant 
EU producers and their domestic supporters, with th e exception of those producers who were related 
to exporters of the product under considerati on or who imported the allegedly dumped product.834  
China contends that the European Union asserted for the first time in its first written submission in 
this dispute that the domestic industry for the purposes of the expiry review included both complaining and non-complaining EU producers.
835  In addition, China contends that the Prodcom 
database, and the data provided by eight national footwear association, included information of 
producers regardless of whether they were relate d to Chinese producers, or whether they were 
importers of Chinese or third country footwear.836  Thus, regardless of the definition of domestic 
industry in the expiry review, China asserts that the European Union violated Articles 3.1, 3.4 and 
17.6(i) of the AD Agreement.  China also argues th at, with respect to certain macroeconomic injury 
indicators, specifically, production capacity, capacity utilization, sales volume, employment, 
productivity, and market share, the only source of information used by the European Union in its 
evaluation was the data provided by EU member St ates' national producer ass ociations, and data of 
some individual producers.  However, China asser ts that the data provided by national producer 
associations were on an aggregate basis for 2006, 2 007 and the review investigation period.  China 
contends that not only was it impossible for the Euro pean Union to exclude the data of producers that 
no longer produced or that outsourced their productio n, but this data included information concerning 
products other than the like product, was based on es timates, came from associ ations that supported 
the expiry review, and some producers' associations cl early stated in their responses that they did not 
have the relevant data for the injury indicators.837   
7.408  With respect to the original investigation, Ch ina claims that the European Union violated 
Articles 3.1 and 17.6(i) of the AD Agreement.  Sp ecifically, China asserts th at the European Union 
                                                      
833 China, first written submission, para. 561, second written submission, para. 694.   
834 China, first written submission, paras. 534-535.  China contends that:  
"the European Union defines the European Union industry as constituting the complainants 
(i.e. the complainants plus their supporters or the domestic producers supporting the complaint).  This is evident from standard European Union practice and the fact that 
Article 17(1) of the Basic AD Regulation, whic h provides for sampling explicitly states that 
'[i]n cases where the number of complainants, exporters or importers, types of product or 
transactions is large  …', (emphasis added) sampling can be applied.  It should be noted that 
this provision does not mention the term 'produce rs' in the context of sampling of the domestic 
industry but instead mentions the term 'complainants'."  
China, first written submission, para. 535 (footnotes om itted).  See also second written submission, para. 697. 
835 China, second written submission, para. 695. 
836 China, second written submission, paras. 734 and 735. 
837 China, first written submission, para. 558; second written submission, para. 748; Questionnaire 
response of ANCI dated 19 November 2008, Exhibit CHN-38; Questionnaire response of Polish Chamber of 
Shoe and Leather Industry dated 19 November 2008, Exhibit CHN-39; Questionnaire response of Chaussure de France dated 20 November 2008, Exhi bit CHN-40; Correspondence between  the British Footwear Association 
and the European Commission, Exhibit CHN-41. WT/DS405/R 
Page 186  
 
 relied, in its evaluation of injury, on unverified data allegedly collected from individual producers at 
the complaint stage, that is, th e parties requesting the measures.
838  Furthermore, China claims that the 
European Union violated Articles 3.1, 6.10 and 17.6(i) of the AD Agreement by attempting to "cross-check" some of this data with the informati on provided by national associations, because data 
provided by national associations included producers not  part of the EU industry, companies that were 
neither complainants nor part of the sample.
839  China also claims that the European Union violated 
Articles 3.1, 3.2, and 3.4 of the AD Agreement by failing to objectively examine all of the relevant 
economic factors on the basis of positive evidence.   Specifically, China argues that the European 
Union failed to use verified figures on production capacity and capacity utilization provided by the 
sampled EU producers, instead focussing its examina tion on the level of employment.  In addition, 
China claims that the European Union did not suffici ently consider various injury factors, specifically: 
sales values, market shares based on turnover, and trend in sales prices with respect to domestic 
prices; the large variations in profitability and re turn on investments; magnitude of the margin of 
dumping; the fact that several sampled producers did not show any signs of injury; and the extent to 
which the sudden increase of imports from China was caused by the lifting of the quota on imports of 
footwear as of January 2005.840 
b. European Union  
7.409  With respect to the expiry review, the European Union  argues that the "domestic industry" did 
not comprise only the complainant EU producers, but also included non-complaining EU producers.
841  In addition, the European Union explains that with respect to producers that outsourced 
their production outside the European Union, only th e data pertaining to the production in the EU was 
considered.842  The European Union adds that Prodcom  data contained only genuine EU production.843  
Moreover, the European Union asserts  that the Commission also used other sources of information on 
the macroeconomic indicators, notably the inform ation provided by the industry associations and 
market studies regarding the sector.844  The European Union contends that the Commission verified 
the data provided by national associations by con ducting verification visits to those associations, and 
that the data covered more than 80 per cent of EU industry production.845  In addition, the European 
Union asserts that the verified and non-verified da ta were further cross-checked, where possible, 
against information and data from other sources and the trends emanating from this information were 
also cross-checked against the information from th e sample to determine whether there were any 
divergences.846 
7.410  With respect to the original investigation, the European Union asser ts that the domestic 
industry was defined as the complaining producer s, and that, while the Provisional Regulation 
                                                      
838 China, first written submission, paras. 1078 and 1082. 
839 China, first written submission, para. 1084. 
840 China, first written submission, paras. 1167, 1184-1186 and 1188-1190; second written submission, 
paras. 1420-1423; answer to Panel question 91, para. 539. 
841 European Union, first written submission, para. 29 4; answer to Panel question 50, para. 130.  The 
European Union clarifies that  "[f]rom the outset of the review exercise, the domestic industry for the purposes of 
the review has been defined as the totality of the European Union producers, i.e. as including both the 
complainants and the non-complaints European Union producers." European Union, first written submission, 
para. 294, citing Review Regulation, Exhibit CHN-2, recitals 193-199 and 337. 
842 European Union, first written submission, para. 298.  The European Union clarifies that "companies 
that were found related to exporting producers and importing significant quantities were also excluded … 
(Recital 198 of the Review Regulation (and the last sent ence of Recital 19))."  Eur opean Union, first written 
submission, fn. 252. 
843 European Union, second written submission, para. 153. 
844 European Union, first written submission, para. 302. 
845 European Union, first written submission, para . 303; second written submission, para. 154. 
846 European Union, second written submission, para. 154.  WT/DS405/R 
  Page 187  
 
 included a brief discussion of the entire footwear sector as background, information concerning the 
entire sector was not used as input for the ex amination of macroeconom ic data.  Thus, the 
European Union argues that China is factually incorrect in asserting that the Commission relied on 
data from associations which included compani es not part of the domestic industry.  The 
European Union contends that the Commission based its analysis on information from multiple 
sources, subject to multiple cross-checking.
847  The European Union asserts that the focus on 
employment in considering the issue of capacity was appropriate in the context of the footwear 
industry, and considers that China's interpretation of  the notion of production capacity is too rigid to 
adequately deal with the wide variety of form s that industry may take in modern economies.848  The 
European Union explains that it distinguishes in investigations between macro- and microeconomic 
indicators regarding the state of the domestic i ndustry, and asserts that c onsideration of production 
capacity and capacity utilization on a macroeconomic b asis, rather than on the basis of information 
from the sampled companies, was appropriate.849  The European Union responds to each of China's 
allegations concerning insufficient consideration of  specific injury factors, namely: sales volumes; 
market share analysis based on turnover; factors af fecting domestic prices; th at several sampled EU 
producers did not show signs of injury; variations in  profitability and return on investments; level of 
productivity maintained by the industry; the magnitude  of the margin of dumping; and the effects of 
the lifting of the quota on imports from China.850 
(ii) Arguments of third parties 
a. Colombia 
7.411  Colombia recalls that Article 3.1 of the AD Agreement does not prescribe a methodology that 
must be followed by an investigating authority in conducting an injury analysis.  Reviewing previous 
panels and Appellate Body decisions, Colombia asserts that not only the factors listed in Article 3.4 of 
the AD Agreement are mandatory, but also that, in certain cases, it could be necessary to examine 
economic factors different than those enumerated in this provision.  Thus, Colombia asserts that the 
Panel should analyse whether the European Union examined all the relevant factors listed in 
Article 3.4, and whether this provision would be br eached if the Panel finds that the European Union 
took into consideration data regarding producers not part of the EU industry.851 
(iii) Evaluation by the Panel 
7.412  China claims that the European  Union's evaluation of injury in the expiry review is 
inconsistent with Articles 3.1, 3.4, and 17.6(i) of  the AD Agreement, and its evaluation of injury in 
the original investigation is inconsistent with tho se provisions, and also with Articles 3.2 and 6.10 of 
the AD Agreement.852  Article 3.4 of the AD Agreement, which is most directly relevant to our 
analysis of China's claims, provides: 
                                                      
847 European Union, first written submission, paras. 646-648. 
848 European Union, first written submission, para. 706.   
849 European Union, first written submission, paras. 711-712. 
850 European Union, first written submission, paras. 716-726 and 728. 
851 Colombia, third party written submission, paras. 58, 64-67 and 68. 
852 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that 
provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision further here. 
We note that China makes no independent arguments c oncerning Article 6.10 with respect to the injury 
determination in the original investigation, but asserted, in the context of its arguments concerning sampling, that the cross-checking of information w ith producers' associations is inconsiste nt with Article 6.10.  China, first 
written submission, para. 1084.  We fail to see the relations hip of this assertion to China's claim with respect to WT/DS405/R 
Page 188  
 
 "The examination of the impact of th e dumped imports on the domestic industry 
concerned shall include an evaluation of all relevant economic factors and indices 
having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of the margin of 
dumping; actual and potential negativ e effects on cash flow, inventories, 
employment, wages, growth, ability to raise capital or investments.  This list is not exhaustive, nor can one or several of these factors necessarily give decisive guidance." 
7.413  Article 3.4 expands on the requirement of Artic le 3.1 to undertake an objective examination 
of the "consequent impact" of imports on the domes tic producers of the like product, that is, the 
domestic industry, setting out certain factors to be considered in this regard.  We note that the 
determination of injury is to be made w ith respect to the domestic industry as a whole.
853  I n  t h i s  
regard, while an investigating authority may consider  information pertaining to a sample in making its 
determination, companies who are not included in the sample may nonetheless be included in the 
domestic industry, and thus their informa tion is relevant to the determination.854  While Article 3.4 
lists a number of factors which are deemed to be relevant and must be considered in all cases, it requires investigating authorities to eval uate "all relevant economic factors".
855  It is clear, in our 
view, that all relevant factors may include, in a given case, factors in addition to those listed in 
Article 3.4.856  Moreover, while all listed factors must be considered in every investigation, this does 
not mean that each of those factors will be relevant  to the investigating authority's determination in a 
given case, as the relevance, and significance, of each  factor will vary depending on the nature of the 
product and industry in question.  In addition, we consider it clear that it is not necessary that all 
relevant factors, or even most or a majority of  them, show negative developments in order for an 
investigating authority to make  a determination of injury.857  Finally, as the text of the Article 3.4 
explicitly states, no one or several factors can necessarily give decisive  guidance.  In our view, this 
means that an overall evaluation of the information, in context, is necessary, as well as an explanation 
of how the facts considered by the inves tigating authority support its determination.858  With these 
principles in mind, we turn to China' s specific allegations in this disput e.  With respect to each of the 
measures in dispute, the Review and Definitive Regulations, we will first describe the relevant 
findings of the Commission in the Regulation, and th en examine China's allegations with respect to 
that measure.   
                                                                                                                                                                     
the evaluation of injury factors, and we make no findings with respect to Article 6.10 in this regard.  We recall 
that we have already addressed Article 6.10 with respect to China's claim III.5 regarding sampling in the context 
of an injury examination.  See paragraphs 7.353-7.391 above. 
853 Appellate Body Report, US – Hot-Rolled Steel , para. 190.  
854 Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen 
from India ("EC – Bed Linen "), WT/DS141/R, adopted 12 March 2001, as modified by Appellate Body Report 
WT/DS141/AB/R, DSR 2001:VI, 2077, para. 6.181; Appellate Body Report, EC – Tube or Pipe Fittings , 
para. 112; and Panel Report, EC – Tube or Pipe Fittings , para. 7.326. 
855 Appellate Body Reports, EC – Tube or Pipe Fittings , paras. 146 and 156; US – Hot-Rolled Steel , 
para. 194; and Thailand – H-Beams , paras. 125-128. 
856 Appellate Body Report, US – Hot-Rolled Steel , para. 194. 
857 Panel Report, EC – Tube or Pipe Fittings , para. 7.329; and Panel Report, European Communities – 
Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU  by 
India ("EC – Bed Linen (Article 21.5 – India) "), WT/DS141/RW, adopted 24 April 2003, as modified by 
Appellate Body Report WT/DS141/AB/RW, DSR 2003:IV, 1269, para. 6.163. 
858 See Panel Report, Mexico – Definitive Countervailing Measures  on Olive Oil from the European 
Communities ("Mexico  – Olive Oil") , WT/DS341/R, adopted 21 October 2008, DSR 2008:IX, 3179, 
para. 7.372; Panel Report, EC – Bed Linen , paras. 6.163 and 6.213; and Panel Report, EC – Tube or Pipe 
Fittings , para. 7.329.  WT/DS405/R 
  Page 189  
 
 a. Review Regulation 
7.414  The Commission began its analysis of economic  factors and indices having a bearing on the 
state of the industry by noting that sampling had been used.  The Commission explained that the injury indicators had been established at tw o levels:  (i) macroeconomic elements and 
(ii) microeconomic elements.  The Commission st ated that the macroeconomic elements were 
assessed at the level of the entire industry, that is, all of EU production, on the basis of the 
information collected from national producers associa tions and individual companies.  These factors 
were cross-checked, where possible, with the overa ll information provided by the relevant official 
statistics.  The analysis of the microeconomic el ements was carried out at the level of the EU 
producers in the sample.
859  Concerning macroeconomic indicators, the Commission evaluated 
information regarding output, production capacity, cap acity utilisation, sales volume, market share, 
employment, productivity, growth, magnitude of dum ping margin, and recovery from the effects of 
past dumping or subsidisation.  Concerning mi croeconomic indicators, the Commission evaluated 
information regarding stocks, sales prices, cash flow , profitability, return on investments, ability to 
raise capital, investments, and wages.860   
7.415  The Commission addressed the information with r espect to these factors, and arguments of 
interested parties, and concluded that considering that production tak es place on order and stocks are 
normally either not held or only consist of comp leted orders not yet delivered/invoiced, these factors 
were found to have very little meaning in the injury  analysis.  Similarly, since the sector remained 
labour intensive, the Commission considered that production capacity was not technically limited and 
mainly depended on the number of workers hired by the producers.  EU production as well as sales 
volume decreased at approximately the same rate as consumption, and sales, market share and 
employment of Union producers thus remained stable. Productivity decreased moderately. The Commission found that, while it would have been expected that the move to a new business model 
would have enabled an increase in sales and production, it was clear that the economic free fall of the industry before the imposition of the measure had been  halted, allowing a large part of the industry to 
change business model by way of streamlining production processes through the development of 
specialised clusters, moving up in the product segment as well as changing focus from wholesale 
distribution to direct supply to  retail.  The Commission stated that analysis of the relevant 
microeconomic indicators also supported the view th at the industry had partially recovered, showing 
an increase in sales prices, cash-flow investment, and profit, but had not been able to recover to 
normal profit and investment levels , and still had problems raising cap ital and in salary development, 
showing that the situation was still fragile and that in jury has not been totally removed.  Overall, the 
Commission concluded that the investigation rev ealed that the EU industry continued to suffer 
material injury.
861  
1. alleged change in the defini tion of the domestic industry 
7.416  China observes that, in the original investigati on, the Commission evaluated injury factors at 
two levels, "the level of the entire European Union industry" with respect to macroeconomic 
indicators, and "the level of the sampled European  Union producers" with respect to microeconomic 
indicators.862  China further notes that, in the expiry review, the Commission again evaluated the 
injury factors at two levels, identified as "the level of the ' whole [European] Union production ' " with 
respect to macroeconomic factors, and "the level of the sampled European Union producers" with 
                                                      
859 Review Regulation, Exhibit CHN-2, recitals 225-226. 
860 Review Regulation, Exhibit CHN-2, recitals 227-256. 
861 Review Regulation, Exhibit CHN-2, recitals 257-260. 
862 China, first written submission, para. 542, refe rring to Provisional Regulation, Exhibit CHN-4, 
recital 175. WT/DS405/R 
Page 190  
 
 respect to microeconomic factors.
863  For China, this indicates th at the Commission took into account 
the data of producers not part of the EU  industry in its injury determination,864 or changed the 
definition of the EU industry between the original  investigation and the expiry review.  China notes 
that EU producers importing over 25 per cent of th eir output from China and/or Viet Nam were 
excluded from the domestic industry.  However,  the evaluation of the imports from China and 
Viet Nam of EU producers, and whether or not any producer was related to any Chinese or 
Vietnamese exporter, was done only for the comp lainants, who accounted for around 35 per cent of 
the total EU production.865    As a consequence, China asserts that the European Union analysed the 
macroeconomic factors on the basis of information that included the data of two groups of producers 
not part of the EU industry:  (a) non-complaini ng EU producers, accounting for almost 65 per cent of 
EU production of the like product, and (b) EU pr oducers that ceased production, outsourced the 
majority of their production outside the European Union, or were major importers of the product 
under consideration and/or were related to exporters in China.866  China contends that these two 
groups may have produced the like product in the Eu ropean Union, but they were not in the EU 
industry as defined by the Commission in the expiry review.  Thus, China asserts that consideration of 
information pertaining to them, as part of "whole European Union production", was inconsistent with 
Article 3.4.867 
7.417  China maintains that the Eur opean Union asserted for the first time in its first written 
submission in this dispute that the domestic indus try for purposes of the expiry review included both 
complaining and non-complaining EU producers.868  China asserts that, in th e original investigation, 
the European Union defined the domestic industr y as including only complainant EU producers.869 
China maintains that, contrary to the European Union's position in this dispute, several factors 
confirm that the domestic industry in the expi ry review consisted only of complainants.870  C h i n a  
asserts that the European Union was obliged under EU  law to use the same definition of domestic 
industry in the expiry review as it had in the orig inal investigation, and, if the definition of the 
domestic industry was changed, it was obliged to justify the change.871   
7.418  China contends that, if the "domestic industry"  in the expiry review consisted only of the 
complainants, the European Union violated Articles 3.1, 3.4 and 17.6(i) of the AD Agreement by taking into account in its injury determination data pertaining to non-complainant EU producers and 
producers that either ceased production in the Eu ropean Union, outsourced majority of their 
                                                      
863 China, first written submission, para. 543, refe rring to the Review Regulation, Exhibit CHN-2, 
recital 226. 
864 China, first written submission, paras. 542-543. 
865 China, second written submission, paras. 731- 733.  China provided as evidence the then-
Community interest questionnaires of two EU producers sampled in the original investigation to claim that they imported more than 25 per cent of their output from China/Far East.  China, second written submission, 
para. 739, referring to Community interest questionnaire response of Company D dated 16 January 2009, 
Exhibit CHN-44; and Community interest questionnaire response of Companies E, G and H dated January 2009, Exhibit CHN-49. 
866 China, second written submission, paras. 695 and 728. 
867 China, second written submission, paras. 717 and 743.  China explains that these arguments are not 
affected by the "new" definition of the domestic industry  asserted by the European Union in this dispute. 
868 China, second written submission, para. 695. 
869 China, first written submission, para. 536; se cond written submission, paras. 696 and 709. 
870 See China, second written submission, paras. 698-700, 714, 721 and 724.  In particular, China 
emphasises that the "Review Regulation does not define, in dicate or clarify that the domestic industry consisted 
of complainants and non-complainants."  China, sec ond written submission, para. 714.  In addition, China 
argues that the Commission was under an obligation, purs uant to Article 11(9) of the Basic AD Regulation, to 
follow the same methodology used in the original investigation, and therefore to adopt the same definition of 
domestic industry.  China, second written submission, para. 719. 
871 China, second written submission, paras. 719-724,  citing Article 11(9) of the Basic AD Regulation 
and EU court proceedings.    WT/DS405/R 
  Page 191  
 
 production outside the European Union, were major importers of the product concerned and/or were 
related to exporters in China.
872  China argues that the European Union should have "acted 
consistently" and should have ev aluated the macroeconomic factor s on the basis of data of the 
complainant EU producers, which China contends comp rised the domestic industry, or the data of the 
sampled EU producers, as China asserts the Commission had done in the original investigation, 
because Article 3.4 requires the evaluation of the impact of the dumped imports on the domestic 
industry.873 
7.419  On the other hand, China contends that if th e domestic industry in the expiry review did 
include all EU producers, the European Union nonethel ess violated Articles 3.1, 3.4 and 17.6(i) of the 
AD Agreement.874  China argues first that the data relied on by the Commission included data 
pertaining to producers related to Chinese producers, or major importers of Chinese or third country 
outsourced footwear.875  Second, China asserts that production was evaluated on the basis of 
100 per cent of EU production as repor ted in Prodcom, while the other injury indicators, specifically, 
production capacity, capacity utilization, producti vity, employment, growth, and magnitude of 
dumping margin were evaluated on the basis of the data provided by the national producers' 
associations, which accounted for ar ound 80 per cent of EU production.876 
7.420  The European Union  maintains that the domestic industr y in the expiry review was not 
defined as only the complainant EU producers, but also included non-complaining EU producers.877  
The European Union asserts that documents in the non-confidential file make clear that the 
European Union's analysis was not based on inform ation pertaining to producers outside the domestic 
industry.878  In addition, the European Union explains th at, with respect to producers that outsourced 
their production outside the European Union, only da ta pertaining to their production in the EU was 
considered.879  The European Union contends that, as the domestic industry was defined as the entire 
EU production, it was not difficult to adjust the Pr odcom data to exclude the two companies found to 
be related to Chinese exporting producers, and the one company that discontinued production.880 
7.421  We note at the outset that China has not made  a claim under Article 4.1 of the AD Agreement 
alleging that the European Union wrongly defined th e domestic industry in the expiry review.  Rather, 
                                                      
872 China, first written submission, paras. 550 and 553.  China asserts that the data of these groups of 
producers was included in Prodcom data, and in the aggregate data provided by producers' associations, which was the basis of the European Union's evaluation of the macroeconomic injury indicators.  China, first written 
submission, para. 550. 
873 China, first written submission, para. 551. 
874 China, second written submission, paras. 730 and 741. 
875 China refers in this regard to the Prodcom database and the data from the eight national associations. 
China, second written submission, paras. 734 and 735. 
876 China, second written submission, para. 741. 
877 European Union, first written submission, para. 29 4; answer to Panel question 50, para. 130.  The 
European Union clarifies that "[f]from the outset of the review exercise, the domestic industry for the purposes 
of the review has been defined as the totality of the European Union producers, i.e. as including both the 
complainants and the non-complaints European Union producers." European Union, first written submission, 
para. 294, citing Review Regulation, Exhibit CHN-2, r ecitals 337 and 193-199.  The European Union confirms 
however that the EU industry in the original investiga tion was defined as the complaining producers. European 
Union, first written submission, para. 646. 
878 European Union, first written submission, para. 29 5, quoting Note Verbal of 17 April 2009, Exhibit 
EU-10, and Review Regulation, Exhibit CHN-2, recital 22. 
879 European Union, first written submission, para. 298.  The European Union clarifies that "companies 
that were found related to exporting producers and importing significant quantities were also excluded … 
(Recital 198 of the Review Regulation (and the last sent ence of Recital 19))."  Eur opean Union, first written 
submission, fn. 252. 
880 European Union, first written submission, pa ra. 302; Review Regulation, Exhibit CHN-2, 
recitals 19, 23 and 198. WT/DS405/R 
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 China's claim, as we understand it, is  that the European Union violated Articles 3.1, 3.4 and 17.6(i) of 
the AD Agreement by (i) changing the definition of  the domestic industry from that used in the 
original investigation in the context of the expiry review, and (ii) that it considered data for producers 
not part of the domestic industry as defined in the expiry review in evaluating injury factors.
881  China 
also disputes the European Union's assertion that th e Commission defined the domestic industry in the 
expiry review as the whole of EU production of the like product.   
7.422  Turning to the latter question first, we note that the Review Regulation addresses the question 
of the definition of the EU industry as follows: 
"Overall, the investigation has shown that there continues to be a significant leather 
footwear production in the Union, established in several Member states employing 
around 262 000 people. The footwear production sector is constituted of around 
18000 SME mainly situated in seven European countries with a concentration in three major producing countries.  
The investigation did however reveal that  two companies belonging to the same 
group were found to be relate d to exporting producers in the PRC and the group was 
also itself importing significant quantities of the product concerned, including from 
its related exporters in the PRC. Theref ore, these companies were excluded from the 
notion of Union production in the meaning of Articles 4(1) and 5(4) of the basic 
Regulation.  
Based on the above it was found that overall production of the Union Industry in the 
meaning of Articles 4(1) and 5(4) of the basic Regulation was 366 million pairs 
during the RIP.  
Considering that the Union producers suppor ting the request accounted for more than 
25% of the total production and in the absen ce of opposition equal to or larger than 
that magnitude, it is therefore concluded that the request is supported by a major 
proportion of the Union industry within the m eaning of Article 4(1) and Article 5(4) 
of the basic Regulation."
882  
We recall that, as alleged by China, the Commissi on evaluated production, a "macroeconomic" factor, 
on the basis of total EU production, as reported in Prodc om data.  This is evident later in the Review 
Regulation, at table 9, which reports production in the review investigation period as 365,348,000 
pairs.  In our view, while the Commission could have  been clearer in stating the definition of the EU 
industry, it is apparent that, as a matter of fact, th e EU industry in the expiry review was defined as 
the entirety of EU production of the like product footwear .  Thus, we conclude that there is no factual 
basis for China's claim that the Commission acted inconsistently with Articles 3.1 and 3.4 of the 
AD Agreement by taking into account data for producer s not part of the EU industry with respect to 
macroeconomic factors.  The evidence before us dem onstrates that information referred to by China in 
this regard relates to all, or a significant proportion of, total EU production, that is, to the EU industry 
identified by the Commission.   
 7.423  China asserts that the European Union change d the definition of the domestic industry from 
that used in the original investigation, and conte nds that in doing so, it acted inconsistently with 
                                                      
881 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that 
provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision further here.   
882 Review Regulation, Exhibit CHN-2, recitals 197-200.  WT/DS405/R 
  Page 193  
 
 Articles 3.1 and 3.4 of the AD Agreement.  Even accepting China's assertion to be true, and the 
European Union does not deny that the domestic industry was defined as complainant EU producers 
in the original investigation, we note that China's arguments in this regard appear to be based on EU 
law.  The requirements of EU law in this respect, whatever they may be, are irrelevant to our consideration of whether the European Union has act ed inconsistently with its obligations under the 
AD Agreement.  China has failed to demonstrate any obligation under that Agreement that would 
preclude the European Union from defining the domestic  industry differently in an expiry review than 
it had in the original investigation.   
2. use of the Prodcom database and inform ation provided by national footwear 
associations 
7.424  China asserts that, regardless of the definiti on of the EU industry, the European Union's 
assessment of injury was not based on an " objective examination" of "positive evidence".883  China 
contends that the Prodcom database used by the Eu ropean Union is a non-objective source of data and 
did not provide positive evidence to determine EU pr oduction of the domestic industry in this case, as 
it includes data of producers not part of the domestic  industry, is based on da ta reported on an annual 
basis and not for the review investigation peri od, which comprised six months of 2007 and 2008 
respectively, contains data concerning a broader cat egory of footwear than the like product, includes 
estimates,884 and is generally based on volume sold and not on volume produced.885  Thus, China 
submits that the Commission's evaluation of the EU industry's production and productivity was not based on precise, objective and verifiable data, an d was thus not based on positive evidence.  In 
addition, China notes that the Commission's evaluation of macroeconomic indicators also relied on 
data provided by national footwear  associations with respect to pr oduction volumes.  China asserts 
that the data provided by these associations (i) incl uded data regarding producers not part of the 
domestic industry, as associations provided data concerning all producers in the EU member State 
represented; (ii) was based on non-verifiable est imation and assumptions made by the associations; 
(iii) was partly based on Eurostat-Prodcom data; and (iv) was not specific to the like product but 
pertained to a broader category of footwear than the like product.  Thus, China submits that the 
European Union's evaluation of production was incons istent with Article 3.4, which requires that the 
evaluation be made only for the "domestic industry".
886 
7.425  China also asserts that with respect to pr oduction capacity, capacity utilization, sales volume, 
employment, productivity, and market share, the only source of information was the data provided by 
EU member States' national producer associations, a nd data of some individual producers.  China 
asserts that these data were on an aggregate basis fo r 2006, 2007 and the review  investigation period, 
and contends that it was impossible for the European  Union to exclude the data of producers that no 
longer produced or that outsourced their production.887  In addition, China alleges, referring to 
statements made by the specific national producer asso ciations, that most of the data provided by the 
cooperating national producer associations were est imates or assumptions, and did not pertain to the 
like product but to a broader category of footw ear, and asserts that these cannot constitute "positive 
evidence" within the meaning of Article 3.1 of the AD Agreement.888  China argues that the 
                                                      
883 China, second written submission, para. 743.  China clarifies that its allegations "in this regard are 
not affected by the "new" definition of the domestic industry claimed by the European Union." 
884 China, first written submission, para. 556.  China su bmits that it is not possible to single out data of 
producers that were not part of the EU industry, in order to exclude such information from the Prodcom data 
used in the evaluation of the injury indicators.  Se e also, China, second written submission, para. 746. 
885 China, second written submission, para. 746. 
886 China, first written submission, paras. 556-557; second written submission, para. 746. 
887 China, first written submission, para. 558; China, second written submission, para. 748. 
888 China, first written submission, para. 558; second written submission, para. 749.  China claims that 
five out of the eight national associations, whose data was used by the European Union, supported the expiry WT/DS405/R 
Page 194  
 
 verification of estimations, if possible, does not prove that such data was credible nor that it 
constituted positive evidence.
889   
7.426  The European Union contends that Prodcom  data contained only genuine EU production.890  
The European Union observes that since there is alwa ys a risk that data of related companies may be 
included in general databases such as Prodcom, "if th e possible inclusion of such data invalidates an 
analysis under Article 3.4, China is effectively argu ing that where the domestic industry is very large, 
an analysis of the relevant factors cannot be made c onsistently with Article 3.4 ... since there is always 
the risk that some such companies would be included."891  Moreover, the European Union explains 
that the Commission also used other sources of info rmation on the macroeconomic indicators, notably 
the information provided by the industry associa tion and market studies regarding the sector, and 
verified the data provided by national associations.892  The European Union also contends that the 
Commission cross-checked verified and non-verified  data against informa tion and data from other 
sources, as well as cross-checking the trends against the information from the sample.  The European 
Union considers, in a situation, like this case, wher e the industry is large and fragmented, this process 
is a reasonable and reliable  method of generating data.893  Indeed, the European Union suggests that 
the Commission's approach may have resulted in the most accurate data possible, and rejects China's 
suggestion that the Commission should have extrap olated from the sample as no more, and perhaps 
less, reliable.894  The European Union contends that it is  sometimes necessary to rely on estimates, 
and sees no reason why reasonable estimates, subject to  verification visits to understand how they had 
been made and on which assumptions, should not constitute positive evidence.895 
7.427  We recall our conclusion that the Commission define d the EU industry in the expiry review as 
all EU production of the like product footwear.  Ther efore, to the extent China's arguments assert that 
the data relied on by the Commission may have in cluded information or producers not part of the 
domestic industry, we reject them.  To the extent  China is arguing that the Commission erred with 
respect to the sources of the data it obtained, we r ecall that there is nothing  in Article 3.1 of the 
AD Agreement that prescribes a methodology for the dete rmination of injury.  In our view, there is 
certainly nothing in that provision , or in Article 3.4 of the AD Agreement, that prescribes how the 
investigating authority is to obtain information for the purposes of its injury determination, and still 
less is there any limitation, express or implied, on the sources from which information in that regard 
                                                                                                                                                                     
review, namely the national associations from Portugal, Spain, Italy, France and Poland.  China, second written 
submission, para. 748 and fn. 419. 
889 China notes in this regard that the French footw ear association reported that it had no data for the 
injury indicators, and therefore could not be verified .  China, second written submission, para. 751.  China 
contends that if the European Union defined the domestic industry as 100 per cent of EU producers, it was 
incumbent on it to conduct the injury determination for that industry, and rej ects the European Union's 
arguments concerning the difficulty of obtaining and verifying information for some 18,000 small and medium-
sized enterprises as justification for the Commission's approach.  China, second written submission, para. 758.  
890 European Union, second written submission, para. 153.  The European Union explained the process 
of gathering data for the Prodcom database in its answer to Panel question 49.  It stated that the process involves 
reporting data on production for a period of time to the national statistical authority for the EU member State in 
question, which reviews the information, and then subm its it to EUROSTAT.  The European Union asserts that 
the data reported does not include outs ourced production, as da ta reported to each EU member State statistical 
authority includes only production for that country, in  which the producer reporting the data is operating.  
European Union, answer to Panel question 49.  See also answer to Panel question 48. 
891 European Union, second written submission, para. 153. 
892 The European Union notes that the Commission conducted verification visits to the associations, 
and that these verifications covered more than 80 per cent of EU industry production.  European Union, first written submission, paras. 302-303; second written submission, para. 154. 
893 European Union, second written submission, para. 154. 
894 European Union, first written submission, para. 304.  See also answer to Panel question 48, 
para. 124. 
895 European Union, second written submission, para. 155.  WT/DS405/R 
  Page 195  
 
 may be obtained.  Clearly, the investigating authorit y must "evaluate" all relevant economic factors, 
and to do so, it must have information pertaining to  those factors.  However, we cannot see in this 
obligation anything that would limit the inves tigating authority's actions in seeking necessary 
information.  Moreover, while China has argued th at there are flaws in the data obtained by the 
Commission, it has failed to persuade us that any su ch flaws were sufficiently significant, or of such a 
nature, as to undermine the determination of injury.   
7.428  Indeed, it is not surprising to us that there might  be flaws or gaps in the information obtained 
by an investigating authority in the context of its examination of injury, and we see nothing in Article 3.4, or any other provision of the AD Agr eement, that would preclude consideration of and 
reliance on such data.  Naturally, an investigati ng authority cannot simply ignore that the data on 
which it bases its determination may be lacking in so me respect.  However, in this case, it seems clear 
to us the Commission made reasonable efforts to ob tain as much data as possible, verified the data 
collected to the extent it could, and undertook other methods of checking the data to satisfy itself of 
the accuracy of the data, as required by Article 6.6 of the AD Agreement.  We note  in this regard that, 
while China makes much of the alleged impossi bility of verifying estimates and certain other 
information relied on by the Commission, "verificati on" of information is not, in fact, a requirement 
under the AD Agreement.  Article 6.6 of the AD Agre ement, which is not at issue in this dispute, 
requires investigating authorities, except where they rely on facts available, to "during the course of 
an investigation satisfy themselves as to the accuracy  of the information supplied by interested parties 
upon which their findings are based."  While on-site verification is certainly one method by which an 
investigating authority may satisfy itself as to the accuracy of information, it is by no means the only 
method of doing so, and as noted above, is not requ ired in any case.  In our view, the Commission's 
methodology, taking into consider ation different sources of information, verifying them when 
possible, and cross-checking them against one anothe r, is a reasonable method in this respect.  We 
therefore reject China's argument that the European Union acted inconsistently with Article 3.4 of the 
AD Agreement with respect to the sources of in formation relied upon and the data used in its 
evaluation of injury factors.   
3. specific macroeconomic indicators 
7.429  China contends that the Commission barely eval uated certain factors, specifically recovery 
from the past effects of dumping and the magnitude of dumping.896 
7.430  China questions the length of the explanation gi ven by the Commission of its consideration of 
the magnitude of dumping, but makes no assertions that  it is substantively insufficient or otherwise 
inconsistent with Article 3.4 of the AD Agreement.897  The Review Regulation states in this regard:  
"As concerns the impact on the Union industr y of the magnitude of the actual margin 
of dumping, given the volume and the prices of the imports from the countries concerned, this impact cannot be  considered to be negligible."
898   
While certainly succinct, this statement clearly set s out the Commission's evaluation of this factor – 
the magnitude of the margin had an impact on the dom estic industry that was not negligible.  In our 
view, this is sufficient, particularly in the ab sence of any dispute as to the substance of this 
conclusion, that is, the view that the impact of th e magnitude of margin was not negligible.  Merely 
because the Commission's statement is short does not de monstrate any insufficiency in that statement.  
We therefore reject this aspect of China's claim.    
                                                      
896 China, first written submission, para. 559. 
897 China, first written submission, para. 559. 
898 Review Regulation, Exhibit CHN-2, recital 247. WT/DS405/R 
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 7.431  Similarly, China questions the length of the explanation given by the Commission with 
respect to its consideration of recovery from the effects of past dumping or subsidisation, without 
further argument as to the sufficiency or consistency of this explanation.
899  We note that this is not a 
factor required to be considered under Article  3.4, but one which the Commission apparently 
considered relevant and therefore addr essed.  The Review Regulation states:  
"Anti-dumping measures against imports of cer tain footwear with uppers of leather 
originating in PRC and Viet Nam were impo sed in October 2006. In this period only 
a partial recovery of the situation of  the Union producers has been observed as 
detailed below."900   
Again, while not lengthy, this statement clearly set s out the Commission's evaluation of this factor –
despite the imposition of anti-dumping measures, th e EU industry had only partially recovered from 
the injurious effects of dumped imports.  In our view, this is sufficient, particularly in the absence of 
any dispute as to the substance of this conclusion,  that is, that the industry had only partially 
recovered from the effects of past dumping.  Agai n, merely because the Commission's statement is 
short does not demonstrate any insuffi ciency in that statement.   
 
7.432  Based on the foregoing, we consider that China has failed to demonstrate that the European 
Union acted inconsistently with Article 3.4 of th e AD Agreement in its evaluation of all relevant 
economic factors and indices having a bearing on the state of the industry in the context of its injury determination in the expiry review.  Having found no inconsistency with respect to Article 3. 4, we 
further consider that China has failed to demonstrat e any inconsistency with respect to Article 3.1 of 
the AD Agreement.  We therefore conclude that Ch ina has failed to demonstrate that the European 
Union acted inconsistently with Article 11.3 of the AD Agreement in concluding that there was a 
likelihood of continuation or recurrence of injury based, at least in part, on the determination that 
injury continued during the review investigation period.
901 
b. Definitive Regulation 
7.433  In the Definitive Regulation, the Commission noted that, following its usual practice, injury 
indicators were established either at a macroecono mic level, based on data for the whole Community 
industry, or at a microeconomic level, based on data of the sampled companies, but not at both.902  
Production, production capacity, capacity utilisation,  sales volume, market share, employment, 
productivity, growth, magnitude of dumping margin, a nd recovery from the effects of past dumping or 
subsidisation were considered at the macroeconomic  level.  Sales prices, cash flow, profitability, 
return on investments, and ability to raise capital we re considered at the microeconomic level.  The 
Commission addressed the information with respect to  these factors, and the arguments of interested 
parties.  The Commission concluded by confirming th e conclusion in the Provisional Regulation that 
the Community industry had suffered material injury.903   
                                                      
899 China, first written submission, para. 559. 
900 Review Regulation, Exhibit CHN-2, recital 248. 
901 We recall in this regard our views concerning the consideration of alleged violations of Article 3 of 
the AD Agreement in the context of an expiry review, paragraphs 7.329-7.340 above.   
902 Definitive Regulation, Exhibit CHN-3, recital 186. 
903 Definitive Regulation, Exhibit CHN-3, recital 213 .  In the Provisional Regulation, the Commission 
had addressed certain peculiarities of the footwear sector, concluding that it had been facing serious negative 
developments and was in a critical situation.  The Commi ssion pointed out that not all factors listed in the EU 
Basic AD Regulation were found to have a bearing on the state of the industry for the determination of injury, 
noting in particular that because the industry produced on order, stocks had little meaning, and since the industry was relatively labour intensive, production capacity was not technically limited and depended mainly on the 
number of workers hired.  The Commission stated that, for the injury analysis, injury indicators were established  WT/DS405/R 
  Page 197  
 
 7.434  More specifically, in the Definitive Regulation, the Commission confirmed that at the level of 
the macroeconomic indicators, i.e. at the level of  the overall Community industry, the injury mainly 
materialised in terms of decreased sales volume a nd market shares, and that since footwear is 
manufactured on order, this also had a direct ne gative impact on the production level and employment 
in the Community.  Furthermore, the Commission also confirmed that at the level of the 
microeconomic elements the situation was largely injurious, noting for inst ance, that the sampled 
companies had reached the lowest possible level of pr ofit during 2003, although this could partially be 
explained by their relatively pronounced prior invest ment practice, that is, the effect of depreciation 
on profitability.  However, the Commission found that  their level of profit decreased subsequently 
despite a significant decrease in investment and, was at the lowest level for the period considered 
during the investigation period, with the excepti on of 2003.  The Commission observed that this was 
far from any acceptable level and in the absence of  other explanatory factors, like heavy prior 
investment, clearly materially injurious.  Simila rly, the Commission found that cash flow followed a 
dangerously declining trend and reached the lowest  level during the investigation period, a level 
which could only be considered as materially inju rious.  The Commission stated that the sampled 
producers were no longer in a position, during the in vestigation period, to decrease their price levels 
further without incurring losses.  In the case of relatively small and medium sized companies, the 
Commission found that losses cannot be sustained for a significant period without being forced to close down.  Overall, the Commission concluded th at, although prior to 2004 the situation of the 
Community industry may only have been qualified as injurious, the Community industry since 2004 clearly sustained material injury.
904 
1. reliance on unverified data and cross-check ing of data with general information 
7.435  China asserts that the European  Union relied on unverified data allegedly collected from 
individual producers at the complaint stage.905  In addition, China contends that the "cross-check" of 
                                                                                                                                                                     
at the macroeconomic level for production, sales volu me, market share, employm ent, productivity, growth, 
magnitude of dumping margins and recovery from the effects of past dumping or subsidisation, and assessed at 
the level of the entire Community industry, on the basis of information collected from individual producers at the complaint stage, cross- checked where possible with the overall information provided by the relevant 
associations in the Community.  Injury indicators were established at the microeconomic level for stocks, sales 
prices, cash flow, profitability, return on investments, ability to raise capital, investments, employment and 
wages, and assessed at the level of the sampled producers.   Provisional Regulation, Exhi bit CHN-4, recitals 169-
175.  After considering the information and arguments of interested parties, the Commission concluded that 
analysis of the macro economic indicators revealed that the injury mainly materialised in terms of decreased 
sales volume and market share.  The Commission noted that since footwear is manufactured on order, this also 
had a direct negative impact on the production level and employment in the Community.  During the period considered, the Community industry 's sales volume on the Community market decreased by more than 
30 per cent, market share declined by nine percentage points, production dropped by 34 per cent and 
employment was reduced by 31 per cent, i.e. a loss of 26,000 jobs. In addition, the Commission found that the cost structure of the footwear industry  was such that individual companies were either profitable or had to go 
out of business.  Indeed, with direct expenses, mainly labour and raw materials, representing up to 80 per cent of 
production costs, the Commission found that footwear was made on order only after a direct costing had shown a sufficient level of profit for each order.  The analys is of the microeconomic el ements revealed that the 
individual companies in the sample had reached the lowe st possible level of profit  during the investigation 
period, at around break-even, and cash flow followed a dangerously declining trend.  The sampled companies were no longer in a position to further decrease their price levels without incurring losses during the 
investigation period, which, in the case of small and medium-sized enterprises, could not be sustained for more 
than a few months without their being forced to close down.  The Commission noted, as especially relevant in this context, the information provided by the national federations concerning the more than 1,000 company 
closures between 2001 and the investigation period.  In light of the foregoing, the Commission concluded that 
the Community industry had suffered material injury. Id., recitals 197-201. 
904 Definitive Regulation, Exhib it CHN-3, recitals 214-215. 
905 China, first written submission, paras. 1078 and 1082. WT/DS405/R 
Page 198  
 
 such data against the overall information provided by  national associations did not eliminate the error, 
as it was based on information provided by national associations which included producers that were 
not part of the then-EC industry.
906  China asserts that the Commission had at its disposal the 
information reported by sampled producers on prod uction, production capacity, capacity utilization, 
number of employees, salaries and wages and sales in  the European Union, which had been verified, 
and from which the Commission could have extra polated.  In addition, China objects to the 
consideration of capacity and capacity utilization on the basis of information regarding production and 
allegedly unreliable figures for employment.907  China disputes the European Union's assertion that 
the reference to the entire footwear sector was b ackground, and data concerning the entire sector was 
not used.  China acknowledges that "the Definitive Regulation does not seem to mention the 
information concerning the entire footwear industry", but goes on to argue that "it is nevertheless clear 
that the essence of this information was taken up in the conclusion on injury".908  For example, China 
contends that information provided by national fe derations, who were not co mplainants, concerning 
the number of company closures was considered "especially relevant" by the Commission in its finding that losses by the sampled producers could not be sustained for more than a few months their 
being forced to close down.
909   
7.436  The European Union explains that the domestic industry in the original investigation was 
defined as the complaining producers, and asserts th at information on macroeconomic indicators with 
respect to the then-EC domestic industry was obtai ned from the complaint and the standing forms sent 
to complainants, and not from associations which included companies that were not part of the 
domestic industry.  The European Union acknowle dges that the Provisional Regulation included a 
brief discussion of the entire footwear sector, but contends that this was background information, and 
was moreover not taken up in the Definitive Regulati on, which focused on analysis of the macro- and 
microeconomic indicators pertaining to the then-EC industry and to the sample of that industry, respectively.  The European Union contends that  the Commission based its analysis on information 
from multiple sources, subject to multiple cross- checking.  The European Union rejects China's 
suggestion that the Commission could have, instead, extrapolated information from the sample to the 
entire domestic industry, as this method also has di sadvantages with respect to lack of verification, 
and would cover less of the entire producti on of the domestic industry directly.
910   
7.437  The Definitive Regulation clearly states that information on macroeconomic factors was 
based on data for the whole Community industry.911  China acknowledges that information in this 
regard was obtained from individua l producers at the complaint stage.912  We understand China's 
argument to be that, as this information was not verified, it could not be relied upon, and that cross-
checking this data against information from nati onal producer associations which included companies 
not part of the then-EC domestic industry did not rec tify this problem.  We recall our view that there 
is nothing in Articles 3.1 or 3.4 of the AD Agreement that prescribes how the investigating authority is to obtain information for the purposes of its injury determination.  There is certainly no limitation, 
express or implied, on the sources from which informa tion to be used in making that determination 
may be obtained.  Moreover, we recall our view that nothing in Article 3.4, or any other provision of 
the AD Agreement, precludes consideration of and relia nce on less than perfect or unverified data, so 
                                                      
906 China, first written submission, para. 1084. 
907 China, first written submission, paras. 1082-1083.  With respect to the unreliability of employment 
figures, China refers to its arguments in claim III.8.  See paragraph 7.439 below. 
908 China, second written submission, para. 1353, refe rring to Provisional Regulation, Exhibit CHN-4, 
recital 199. 
909 China, second written submission, para. 1356. 
910 European Union, first written submission, paras.  646-648.  The European Union expresses concern 
that China criticizes its method "withou t offering a credible and feasible a lternative."  European Union, second 
written submission, para. 224. 
911 Definitive Regulation, Exhibit CHN-3, recital 186. 
912 China, first written submission, paras. 1078 and 1082.  WT/DS405/R 
  Page 199  
 
 long as the investigating authority is satisfied as to th e accuracy of the information.  Finally, we recall 
our view that the Commission's methodology, taking into consideration different sources of information, verifying them when possible, and cro ss-checking them, was reasonable in this respect.  
We therefore reject China's argument that the Euro pean Union acted inconsistently with Articles 3.4 
and 3.1 of the AD Agreement with respect to the sources of information relie d upon and the data used 
in its evaluation of injury factors in the original investigation.   
2. consideration of specific injury indicators 
7.438  China asserts that the European  Union failed to objectively examine all relevant economic 
factors on the basis of positive evidence in the original investigation.   
a) production capacity and capacity utilization 
7.439  China argues that the European Union failed to use the available verified data on production 
capacity and capacity utilization and instead focused  on an examination of the level of employment.913  
China argues that employment figures are not "positive evidence" of production capacity, since 
capacity will also depend on other factors of production.914  China notes that the European Union did 
not calculate production capacity on the basis of the employment figures at all, assuming that there 
was a direct correlation between employment and production capacity.915   
7.440  The European Union considers that China's inte rpretation of the notion of production capacity 
is too rigid, when used as an inju ry factor, to adequately deal with  the wide variety of forms that 
industry may take in modern economies.916  The European Union explains that it did not use data from 
the sampled EU producers with respect to plant cap acity and capacity utilization because it considered 
production capacity a macroeconomic indicator, with  respect to which an industry-wide assessment 
was both possible and more appropriate.917  The European Union further explains that the 
Commission focused on employment data, rather than physical plant capacity, because in the 
circumstances of the footwear industry, limitations  on capacity are dependent on employment levels, 
and not physical plant capacity. 
7.441  The Provisional Regulation explains the Commission's focus on the employment data with 
respect to its evaluation of capacity and capacity utilization as follows: 
"Although a factory is theoretically designe d to achieve a certain production level, 
this level will strongly depend on the numbe r of workers hired by this factory. 
Indeed, as explained above, most of th e footwear manufacturing process is labour 
intensive. In those circumstances, for a stab le number of companies, the best way to 
measure capacity is to examine the level of employment of those companies. It is 
therefore referred to the table below showing the Community industry's employment 
level. Alternatively, the development of the number of companies active in the sector 
also adequately reflects the overall pr oduction capacity. This development was 
examined above and it is recalled that dur ing the period considered more than 1000 
companies had to close down."918 
                                                      
913 China, first written submission, paras. 1167 and 1184. 
914 China, first written submission, paras. 1179-1180. 
915 China, first written submission, para. 1184. 
916 European Union, first written submission, para. 706.   The European Union cites, as an example, an 
anti-dumping investigation in which the traditional notion of "production capacity" was adjusted to be applied to 
an industry that was "knowledge or know-how  intensive rather than machine-intensive". 
917 European Union, first written submission, para. 713. 
918 Provisional Regulation, Exhibit CHN-4, recital 177. WT/DS405/R 
Page 200  
 
 The Definitive Regulation repeats this view: 
"Although a factory is theoretically designe d to achieve a certain production level, 
this level will strongly depend on the numbe r of workers hired by this factory. 
Indeed, as explained above, most of th e footwear manufacturing process is labour 
intensive. Under those circumstances, for a stable number of companies, the best way 
to measure capacity is to examine the le vel of employment of those companies. 
Reference is therefore made to the tabl e concerning the development of employment 
below. 
As employment (and hence capacity) decreased broadly in line with production, 
capacity utilisation remained by and large unchanged thr oughout the period."
919 
In our view, the European Union's examination of  "production capacity" and "capacity utilization" 
based on the level of employment was reasonable in light of the circumstances of the footwear industry.  We see no basis to require the Commission to, in addition, analyse data on these factors 
which it deemed less relevant and probative, that  is, the information from the sampled EU producers, 
particularly in view of its consideration of these i ndicators on a macroeconomic le vel.  In addition, we 
find that the European Union clearly evaluated th e capacity and capacity utilization of the then-EC 
industry, and thus we reject China's assertion that  the European Union failed to objectively examine 
these factors as a matter of fact.  China makes no othe r arguments as to the sufficiency or consistency 
of the Commission's examination in this regard, and we  therefore reject this aspect of China's claim.   
b) sales values, market shares based on turnover, and factors affecting 
domestic prices 
7.442  China asserts that the European Union did not ad equately consider sales values, market shares 
based on turnover, and factors affecting domestic prices.920  China contends that the notions of "sales 
values" and "market share based on turnover" are imp lied within the terms "sales" and "market share", 
since nothing in Article 3.4 of the AD Agreement lim its such terms to volumes, and therefore asserts 
that consideration of these factors was required.921  The European Union cont ends that Article 3.4 of 
the AD Agreement refers to "decline in sales", wh ich seems to imply a volume rather than value 
criterion, and sales volumes were evaluated, c onsistent with the Commission's normal practice.922  
The European Union contends that China fails to e xplain why market share anal ysis based on turnover 
should have been examined.923  As for the failure to include an evaluation of the factors affecting 
domestic prices, the European Union argues that a s ubstantial analysis of the factors causing injury 
was made elsewhere in the Regulations, referring in  this regard to recital 200 of the Definitive 
Regulation, and the accompanying table, and r ecital 189 of the Provisional Regulation, and the 
accompanying table.924  Moreover, the European asserts that China appears to interpret the term 
"affecting" as though an analysis of causation were required with respect to factors affecting domestic 
                                                      
919 Definitive Regulation, Exhib it CHN-3, recitals 188-189. 
920 China, first written submission, para. 1185. 
921 China, answer to Panel question 92, para. 544. 
922 European Union, first written submission, para. 716.  The European Union also asserts that nothing 
indicates that examination of sales values would have significantly changed the evaluation made by the Commission, and that value of sales can  be considered by taking into accoun t the information th at is provided 
on unit prices. 
923 European Union, first written submission, para. 71 7; opening oral statement at the second meeting 
with the Panel, para. 407. 
924 European Union, first written submission, para. 718.  WT/DS405/R 
  Page 201  
 
 prices, which the European Union asserts is not th e case even under Article 3.5, and in any event, 
causation is a topic not addressed Article 3.4.
925 
7.443  With respect to these injury factor s, the Definitive Regulation states: 
"Because production takes place on order, the sales volume of the Community 
industry followed a decreasing trend simila r to the production. The number of pairs 
sold on the Community market dropped by more than 60 million between 2001 and 
the IP, i.e. by 33 %. 
In terms of market shares, this corresponds to a loss of almost 9 percentage points. 
The Community industry market shares dropped from 26,5 % in 2001 to 17,7 % during the IP. … 
The average unit sales price continuously declined during the period considered. 
Overall, the decrease was of 7,5 %. The Community industry price depression may 
seem limited, especially as compared to the decrease of 30 % dumped import prices over the period considered. It should however be seen in the context that footwear is 
produced on order, and therefore new orders are normally accepted only if the 
corresponding price level allows for, at least , a break even. In this respect, reference 
is made to the table below showing that, during the IP, the Community industry could not further lower its prices without incurring losses."
926 
The Definitive Regulation also refers to the decr ease in import prices of almost 30%, and calculates 
the percentage by which import prices were lower than the prices of the then-EC domestic industry, 
13.5 per cent for Chinese imports, and 15.9 per cent for Viet Nam.927  
 
7.444  We recall that Article 3.4 does not refer to either sales values or market shares based on 
turnover.  Indeed, China does not argue otherwise,  but asserts that "a well-reasoned and economically 
sound analysis would include more than just sales  volumes" and that, "in the absence of data on 
turnover, a pure volume-based analysis is not sufficiently objective."928  While we do not disagree 
with China that consideration of these elements may well result in a well-reasoned and economically 
sound analysis, this does not demonstrate that th eir consideration is required.  Merely that 
consideration of certain factors might, in general,  make a determination be tter does not demonstrate 
that such consideration is required, despite the fact ors in question not being mentioned in Article 3.4.  
China has made no specific arguments suggesting that the failure to undertake such an analysis in the 
original investigation undermined the Commission' s reasoning and conclusions with respect to the 
factors it did consider, or the injury determination as a whole.   
7.445  China also acknowledges that th e Commission analysed trends in domestic sales prices, but 
asserts that there is no evaluation of the factors affecting those prices.  "Factors affecting domestic prices" is identified in Article 3.4, and therefore must  be evaluated by the investigating authority in all 
cases.  There is, however, nothing in Article 3.4 th at provides any guidance as to the scope of this 
factor, or how an investigating authority is to eval uate it, or on the basis of what information such 
evaluation should proceed.  Nor has China made any arguments in this regard, simply asserting that 
the Commission did not address this factor.  We agr ee with the European Union that consideration of 
"factors affecting domestic prices" does not require an  investigating authority to analyse the causes of 
changes in those prices per se .  We note, moreover, that the Commission did address at least one 
                                                      
925 European Union, opening oral statement at the second meeting with the Panel, para. 407. 
926 Definitive Regulation, Exhibit CHN-3, recitals 190-191 and 200. 
927 Definitive Regulation, Exhibit CHN-3, recitals 170 and 176-182. 
928 China, first written submission, para. 1185. WT/DS405/R 
Page 202  
 
 factor affecting domestic prices, when it conclude d that dumped imports undercut the prices of the 
domestic like product, and that the domestic industry's sales prices we re depressed.  China makes no 
other arguments as to the sufficiency or consistenc y of the Commission's examination in this regard, 
and we therefore reject this aspect of China's claim.  
c) large variations in profitab ility and return on investments 
7.446  China contends that there were large variati ons in profitability and return on investments 
which the European Union did not adequately examine.929  The European Union explains that the 
level of profits was never high, and was deteriorating, so that small changes would produce large 
figures when presented in year-to-year terms, and that , as the industry is labour-intensive, the figures 
for return on investment were prone to vol atility and not treated as of major significance.930   
7.447  The Definitive Regulation, with respect to prof itability and return on investment, sets out the 
following table, and evaluation: 
    
 
The above return indicators confirm the picture described in recital 190 of the 
provisional Regulation and show a clear weak ening of the financial situation of the 
companies during the period considered.  It is recalled that the overall deterioration was especially marked during the IP and indicates significant adverse developments during the first quarter 2005, i.e. the last quarter of the IP. In fact, the already low 
level of profitability at th e beginning of the period considered further decreased 
dramatically. 
In the absence of any new substantiated info rmation or argument in this particular 
respect, recitals 191 to 193 of the provis ional Regulation are hereby confirmed.  
The overall level of profit remained at  a low level during the overall period 
considered and emphasises the financial vul nerability of those SMEs. As detailed 
below, the level of profit achieved duri ng the period considered, and especially 
during the investigation period is far below the normal level of profit that the industry 
could achieve under normal circumstances."
931   
7.448  We note that while Article 3.4 requires an investig ating authority to evaluate "profits", there is 
no explicit requirement that it evaluate variations in profitability, or whether such variations are large 
or small.  We consider it clear that the Commission did address profits.  China does not dispute this, 
or the facts underlying the Commission's evaluation of profits, but asserts that the Commission did not address one aspect of the profit information, the asser ted large variations in profitability.  However, 
we note, as above, that there is nothing in Article 3.4 that provides any guidance as to how an investigating authority is to evaluate profits, or  on the basis of what information such evaluation 
                                                      
929 China, first written submission, para. 1185; second written submission, paras. 1420-1421. 
930 European Union, first written submission, paras. 721-722. 
931 Definitive Regulation, Exhibit CHN-3, recitals 201-203.  See also table based on the verified 
questionnaire replies at those recitals. "Cash flow, profitability and return on investments  
 2001  2002  2003  2004  IP  
Cash-flow (EUR 000)  13 943  10 756  8 575  10 038  4 722  
Index: 
2001  =
  100  100  77  61 72  34  
% Profit on net turnover  1,6 %  1,8 %  0,2 %  1,8 %  0,5 %  
Return on investments  6,1 %  7,3 %  1,0 %  8,2 %  2,3 %  
Source : verified questionnaire replies.   WT/DS405/R 
  Page 203  
 
 should proceed.  Nor has China made any arguments in  this regard, for instance, why, in its view, 
such large variations were significant in the original  investigation.  Nor has China contended that the 
significance or need to consider such variations was argued to the Commission so as to bring to its 
attention a relevant factor not listed in Article 3.4.  China makes no other arguments as to the 
sufficiency or consistency of the Commission's examina tion in this regard, and we therefore reject this 
aspect of China's claim.   
d) productivity 
7.449  China claims that the European Union failed to explain why it concluded that there is injury 
despite the positive and stable productivity.932  The European Union states that production levels are 
directly related to employment, but that the pr oductivity of those who remained employed was 
unaffected, and therefore productivity remained rela tively stable, despite the deterioration of the 
condition of the industry and of employment levels.933   
7.450  With respect to productivity, the Definitive Regulation states: 
"Productivity was established by dividing the production volume with the 
Community industry's workforce, as reported in the above tables. On this basis, the 
Community industry's productivity remained relatively stable during the period 
considered."934 
7.451  Article 3.4 requires an investigating authority to  evaluate "productivity", and it is clear, and 
China does not dispute, that the Commission did address this factor.  However, China argues that the 
Commission failed to explain why, in the face of  "positive productivity", the Commission nonetheless 
found that the domestic then-EC industry was materially injured.  China argues that,  
"[i]f productivity remains stable, it mean s that the industry was able to reduce 
employment if necessary, and therefore this factor does not show injury.  An appropriate explanation as to why in view of this positive factor, the European Union 
nevertheless concluded that the indust ry was suffering injury, has not been 
provided."
935 
7.452  The basis of the Commission's conclusion regarding injury is set out in recitals 214 and 215 
of the Definitive Regulation, as follows: 
"More specifically, it is confirmed that at the level of the macr o-economic indicators, 
i.e. at the level of the overall Community industry, the injury mainly materialised in terms of decrease of sales volume and market shares. Since footwear is manufactured on order, this also had a direct nega tive impact on the production level and 
employment in the Community.   
Furthermore, it is also confirmed that at the level of the micro-economic elements the 
situation is largely injurious. For instan ce, the sampled companies have reached the 
lowest possible level of profit during 2003, which, however can be  partially explained 
by their relatively pronounced prior invest ment practice (effect of depreciation on 
profitability). However, their level of prof it decreased subsequently even despite a 
significant decrease in investment and, in f act, during the IP was at the lowest level 
                                                      
932 China, first written submission, para. 1185; second written submission, para. 1422. 
933 European Union, first written submission, paras. 723-724. 
934 Definitive Regulation, Exhibit CHN-3, recital 193. 
935 China, second written submission, para. 1422. WT/DS405/R 
Page 204  
 
 over the period considered with the excepti on of 2003, i.e. far from any acceptable 
level and in the absence of other explanat ory factors, like heavy prior investment, 
clearly materially injurious. Similarl y, the cash flow followed a dangerously 
declining trend and reached the lowest leve l during the IP, at a level, which can only 
be considered as materially injurious. The sampled companies, during the IP, were no 
longer in a position to decrease their price levels further without incurring losses. In 
the case of relatively small and medium si zed companies, losses cannot be sustained 
for a significant period without being forced to close down. Overall, although prior to 2004 the situation of the Community industry may only be qualified as injurious, the Community industry since 2004 clearly sustained material injury."  
The Provisional Regulation had reached similar conclusions: 
 
"The analysis of the macro-economic indicators, i.e. at the level of the overall Community industry, revealed that the in jury mainly materialised in terms of 
decrease of sales volume and market share.  Since footwear is manufactured on order, 
this also had a direct negative impact on  the production level and employment in the 
Community. During the period considered, the Community industry's sales volume on the Community market decreased by more  than 30 %, market share declined by 
nine percentage points, production droppe d by 34 % and employment was reduced by 
31 %, i.e. a loss of 26 000 jobs. 
The cost structure of the footwear industry is such that individual companies are 
either profitable or have to go out of business. Indeed, with direct expenses, mainly 
labour and raw material, representing up to 80 % of the production cost, footwear is made on order only after a direct costing has shown a sufficient level of profit for 
each order. 
The analysis of the micro-economic elements  revealed that the individual companies 
in the sample have reached the lowest possi ble level of profit during the investigation 
period. Their level of profit during the IP  was around break-even, and the cash flow 
followed a dangerous declining trend. The an alysis of the situation of the sampled 
companies revealed that, during the IP, they were no longer in the position to further decrease their price levels without in curring losses which, in the case of SMEs, 
cannot be sustained for more than a few months without their being forced to close 
down. 
In this context the information provided by the national federations concerning the 
number of company closures is especially relevant. Between 2001 and the investigation period, the federations reporte d more than 1 000 closures of companies. 
In the light of the foregoing it is concluded that the Community industry has suffered 
material injury within the meaning of Article 3(5) of the basic Regulation."
936 
7.453  It is true that neither the Provisional nor th e Definitive Regulation specifically mentions the 
issue of productivity in these conclusions.  However, it is  apparent to us that this is because the level 
of productivity was not considered a significant factor  in the Commission's analysis.  We recall that 
Article 3.4 specifies that no one factor can necessar ily give decisive guidance with respect to the 
examination of the impact of dumped imports on the domestic indus try.  Moreover, as discussed 
above,937 it is not necessary, in order to make a finding of injury, that all factors considered support 
                                                      
936 Provisional Regulation, Exhibit CHN-4, recitals 187-201. 
937 See paragraph 7.413.  WT/DS405/R 
  Page 205  
 
 that finding directly by showing negative developm ents.  Given the labour intensive nature of the 
then-EC footwear industry, it is clear that the Co mmission did not consider the fact that productivity 
was not declining was a significant factor detracting from a conclusion of injury.  We certainly do not 
consider that a more detailed explanation of why a finding of injury was warranted despite stable 
productivity was necessary, although it might have  been preferable had the Commission specifically 
addressed this in the context of its conclusion on inju ry.  However, we cannot conclude that its failure 
to do so in this case demonstrates that its determ ination was not based on an objective evaluation of 
positive evidence, or was not a determination that a reasonable investigating au thority could make, in 
light of the facts, and based on the reasons give n.  The Commission's conclusion notes that labour 
intensive nature of footwear production, and the d eclines in employment in the industry.  This is 
sufficient for us to follow the Commission's reasoni ng and understand its conc lusion that the industry 
was materially injured despite stable productivity, which is not, on its face, a distinctly negative 
development.  Nor has China made specific argu ments suggesting otherwise.  China makes no other 
arguments as to the sufficiency or consistency of the Commission's examination in this regard.  We 
therefore reject this aspect of China's claim.   
e) magnitude of the margin of dumping 
7.454  China also alleges that the European Union di d not present any "persuasive explanation" with 
respect to the factor "magnitude of the margin of dumping".938  The European Union explained that 
the impact of the magnitude of the margin of dumping was found not to be negligible.   
7.455  China asserts that there was "no analysis at a ll" of this factor, although it acknowledges that 
the Provisional Regulation states that "given the volume and the prices of the imports from the 
countries concerned, this impact cannot be considered to be negligible".  According to China, this is 
merely an abstract reference to certain factors, and is no more than a checklist approach, and that 
absent any indication of which volumes and prices were  considered, must lead to the conclusion that 
no assessment took place.939   
7.456  We do not agree.  The Definitive Regulation states in this regard that it confirms recital 184 
of the Provisional Regulation,940 which in turn states:  
"With regard to the impact on the Community industry of the magnitude of the actual 
margin of dumping, given the volume and the prices of the imports from the countries concerned, this impact cannot be  considered to be negligible."
941   
While certainly succinct, this statement clearly set s out the Commission's evaluation of this factor.  
Thus, there is no factual basis for China's asser tion that the Commission failed to consider the 
magnitude for the margin of dumping.  With resp ect to China's assertion that this evaluation was 
insufficient, we note, as above, that there is nothing in Article 3.4 that provides any guidance as to how an investigating authority is to evaluate th e magnitude of the margin of dumping, or what 
information should be taken into account in that ev aluation – beyond, of course, the actual margin of 
dumping in question.  Nor has China made any subs tantive arguments in this regard, for instance, 
why, in its view, the magnitude of the margin of dumping should have been considered significant or 
insignificant.  China makes no other arguments as to the sufficiency or consistency of the 
Commission's examination in this regard, and we th erefore reject this aspect of China's claim.  
 
                                                      
938 China, first written submission, para. 1186; second written submission, para. 1423. 
939 China, second written submission, para. 1423. 
940 Definitive Regulation, Exhibit CHN-3, recital 194. 
941 Provisional Regulation, Exhibit CHN-4, recital 184. WT/DS405/R 
Page 206  
 
 f) several sampled producers did not show any signs of injury 
7.457  China asserts that several sampled producers did not show any signs of injury, which 
necessitated a more in-depth analysis.942  China argues that "the analysis of the impact of the imports 
on domestic producers in case of sampling, should take into account that a large part of the non-
sampled producers is not suffering injury, at least with  respect to the injury factors with regard to 
which the EU has decided to estab lish a sample in the first place."943  The European Union recalls that 
injury findings involve an overall appreciation of diffe rent factors, and should not be determined by 
any single factor.  Moreover, the European Union asserts that there is no requirement that each and 
every individual firm must be found to be injured.944   
7.458  We agree with the European Union.  As discussed  above, the determination of injury must be 
made with respect to the domestic industry as a w hole.  Article 3.4 of the AD Agreement does not 
require that each and every injury factor, considered  individually, must be i ndicative of injury.  We 
see no basis in Article 3.1 or 3.4 for the view th at the situation of individual companies in the 
domestic industry must be examined to determine wh ether they, individually, show signs of injury.  
China asserts that the fact that a large portion of  the sampled companies do not show any signs of 
injury constitutes "positive evidence" that the investigating authority must examine in considering the 
impact of imports on domestic producer s within the meaning of Article 3.1.945  However, this 
presupposes that the situation of individual companies must be evaluated in the first place, a proposition for which China has stated no legal basis.  We note in this regard that this is not a case 
involving a regional industry as provided for in Article 4.1(ii) of the AD Agreement, where it is specifically required that, in order to conclude that  injury exists, it must be found that "the dumped 
imports are causing injury to the producers of all or  almost all of the production within such market."  
In our view, were any similar requirement applic able as a general rule, it would not have been 
necessary to include this specific provision in Article  4.1(ii).  We thus conclude that the Commission 
was not required to consider the situation of indivi dual companies to determine if, individually, they 
showed signs of injury.  As a consequence, we consider that, a fortiori , the Commission did not act 
inconsistently with either Article  3.1 or Article 3.4 by not taking into account whether individual 
producers were suffering injury.  We therefore reject this aspect of China's claim.   
g) lifting of the quota 
7.459  China claims that the European Union failed to  adequately examine the extent to which the 
sudden increase of imports from China was caused by the lifting of the quota on imports of footwear 
as of January 2005, in order to ensure that any injury suffered as a result was not attributed to the 
dumped imports.946  The European Union contends that Article 3.4 of the AD Agreement requires an 
examination of the condition of the industry to determine the impact of dumped imports on such 
industry, and questions of the cause(s) of that in jury are to be examined in the framework of 
Article 3.5 of the AD Agreement.947   
7.460  We agree with the European Union.  We note that China made a claim with respect to the 
alleged failure of the European Union to separate a nd distinguish the effects of the lifting of the quota 
from the injury caused by dumped imports.  We address that claim elsewhere in this report, 
concluding that the Commission did not err in findi ng that the lifting of the quota on Chinese footwear 
                                                      
942 China, answer to Panel question 91, para . 539; first written submission, para. 1185. 
943 China, answer to Panel question 91, para. 542. 
944 European Union, first written submission, para. 720. 
945 China, answer to Panel question 91. 
946 China, first written submission, paras. 1188-1190. 
947 European Union, first written submission, para. 728.  WT/DS405/R 
  Page 207  
 
 was not an "other factor" causing injury to the then-EC domestic industry at the same time as dumped 
imports.
948   
7.461  China does assert that "related" to the violation with respect to causation, the European Union 
failed to adequately examine the volume of imports  under Articles 3.1 and 3.2, because while it noted 
the acceleration of imports due to developments w ith respect to Chinese imports, it failed to conduct 
"an in-depth examination of the volume of imports  in more detail and de termine which volume of 
imports could be considered in line with expecta tions and which volume was due to the lifting of the 
quota."949  However, China has made no argument suggesting that the lifting of the quota was a 
relevant economic factor to be cons idered in the context of Article 3.4 in the original investigation.  
7.462   Article 3.1 requires an objective examina tion of the volume of dumped imports, while 
Article 3.2 specifies that, 
"[w]ith regard to the volume of dumped imports, the investigating authorities shall 
consider whether there has been a signifi cant increase in dumped imports, either in 
absolute terms or relative to production or  consumption in the importing Member." 
Neither provision contains any guidance as to how an investigating authority is to examine the volume 
of dumped imports, or consider whether they have increased.  We certainly see nothing in those 
provisions that would require consideration of whether the lifting of a quota caused dumped imports 
to increase.  In our view, nothing in Articles 3.1 and 3.2 suggests that an "in-depth" analysis, such as 
proposed by China, of the reasons underlying changes in the volume of dumped imports is required.  
Indeed, we fail to see the relevance of the reasons for a significant increase in dumped imports to the 
investigating authority's examination and consid eration under Articles 3.1, 3.2 or 3.4 at all.950  W e  
therefore reject this aspect of China's claim. 
 7.463  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union violated Article 3.4 of the AD Agreement in its evaluation of all relevant economic factors and 
indices having a bearing on the state of the industry in the context of the original investigation.  
Having found no violation of Article 3. 4, we consider that there is also no violation of Articles 3.1 and 
3.2 of the AD Agreement, and we therefore re ject China's claims under those provisions.   
6. Claims II.5 and III.9 - Alleged violation of Articles 3.1, 3.5, and 17.6(i) of the 
AD Agreement – Causation  
7.464  In this section of our report, we address Chin a's claims concerning the European Union's 
causation analysis and conclusions in both the or iginal investigation and the expiry review. 
(a) Arguments of the parties 
(i) China 
7.465  With respect to the Review Regulation, Chin a claims that the European Union violated 
Articles 3.1, 3.5, and 17.6(i) of the AD Agreement, si nce it failed to:  (i) ensure that injury caused by 
other known factors was not attributed to th e imports of the product concerned from China; 
(ii) analyse several other factors identified by inte rested parties as causing injury; and (iii) make an 
objective examination based on positive evidence dem onstrating that imports from China are causing 
                                                      
948 See paragraphs 7.524-7.527 below. 
949 China, first written submission, para. 1189. 
950 The reasons why dumped imports increased may well be relevant in the consideration of causation 
under Article 3.5, but that is not the subject of China's claim here. WT/DS405/R 
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 injury to the European Union's industry, through the effects of dumping.
951  China asserts that if an 
investigating authority in an expiry review d ecides to conduct an injury determination, that 
determination must conform to the provisions of Article 3 of the AD Agreement, including 
Articles 3.1 and 3.5.952  China argues that the finding of a causal link between continued allegedly 
dumped Chinese imports and continued injury to  the EU industry was fundamental for the 
maintenance of the measures and "since the Eur opean Union conducted a causal link analysis and 
evaluated the other factors that may or may not ha ve injured the domestic industry, it was under an 
obligation to conduct this analysis in compliance with Article 3.5".953   
7.466  China asserts that Article 3.5 of the AD Agre ement expressly requires that a causal link be 
established between dumped imports and injury to  the domestic industry, while at the same time 
requiring that injury to the domestic industry caused  by other known factors not be attributed to 
dumped imports.954  China contends that in order to comply  with the obligations in Article 3.5, an 
investigating authority must (i) separate and distinguish the injurious effects of the other known factors from the injurious effects of the dumped imports ; (ii) assess the nature and extent of the injury 
caused by these other factors; and (iii) give a satisfactory explanation of those effects and 
consequently ensure that the injury caused by ot her known factors is not attributed to the dumped 
imports.
955  China asserts that the European Union did not comply with these requirements. 
7.467  Specifically, China argues that the European Union failed to separate and distinguish the 
injurious effects of:  (i) structural inefficiency of  the EU producers; (ii) imports from third countries, 
notably India and Indonesia; and (iii) contraction in demand and changes in consumption patterns.  
China also argues that the European Union did no t even evaluate the impact of certain factors 
identified by interested parties as causes of injury to the EU industry, specifically:  (a) high labour 
costs in the European Union; (b ) increasing outsourcing by EU producers; and (c) fluctuations in the 
Euro-U.S. dollar exchange rate.956  China argues that irrespective of the magnitude of injury caused by 
another known factor, such injury must not be attributed to the allegedly dumped imports.957   
7.468  China contends the European Union's finding that  none of the other known factors in isolation 
or seen together break the causal link between dum ped imports and injury is inconsistent with 
Article 3.5 of the AD Agreement.  In addition, China argues that the Eu ropean Union violated 
Articles 3.1 and 17.6(i) of the AD Agreement by fa iling to make an objective examination of positive 
evidence concerning (i) the injurious effects of othe r known factors available to the European Union, 
and (ii) the injurious effects of allegedly du mped Chinese imports, as China contends that the 
European Union's findings of dumping and injury ar e respectively inconsistent with Articles 2 and 3 
of the AD Agreement.958   
7.469  With respect to the Definitive Regulation, Ch ina claims that the European Union did not 
ensure that injury caused by other known factors w as not attributed to Chinese imports, in violation of 
Article 3.1 and 3.5 of the AD Agreement.959  In addition to recalling its legal arguments in the context 
of the Review Regulation, China asserts that the Eu ropean Union's approach to deem "certain factors 
to be 'not attributable' even when [the European  Union] clearly concedes that a given factor has 
                                                      
951 China, first written submission, paras. 575-621; second written submission, paras. 768-852. 
952 China, first written submission, para. 568.  Ch ina refers in particular to Panel Report, US – Oil 
Country Tubular Goods Sunset Reviews .  
953 China, first written submission, para. 573.  See also second written submission, paras. 359-362. 
954 China, first written submission, paras. 567 and 574. 
955 China, second written submission, para. 763. 
956 China, first written submission, paras. 577, 586, 593, 603, 605-607 and 609; second written 
submission, paras. 768, 809, 825, 827-839 and 841. 
957 China, first written submission, para. 590. 
958 China, first written submission, paras. 614-618 and 621. 
959 China, first written submission, para. 1192.  WT/DS405/R 
  Page 209  
 
 impact" is itself inconsistent with Article 3.5 of the AD Agreement, since the European Union 
effectively considers that the impact of such a factor was zero.
960  In China's view, "the 
European Union first establishes a correlation/co incidence between dumped imports and injury – 
which is of course only a necessary condition to be met for a demonstration of causation – but then 
clearly considers it to be a sufficient condition by which to prove causation, such that nothing could 
change that 'fact' once it is 'established'."961 
7.470  In the Definitive Determination, China asserts that the European Union failed to correctly 
evaluate and address the injurious effects of:  (i ) poor export performance of EU producers; (ii) the 
lifting of the quota on Chinese footwear on 1 January 2005; (iii) changes in patterns of consumption 
and the decline in demand; and (iv) fluctuations in  the Euro-U.S. dollar exchange rate.  China also 
asserts that the European Union failed to analy se non-tariff barriers as an "other known factor" 
causing injury to EU producers. 962  
7.471  China argues that the non-attribution issue in this case is composed of two separate facets.  
One facet is whether the non-attribution requirement is  to be seen as part of the causation analysis.  
China asserts that the European Union's practice in analysing causal link "effectively makes it 
impossible to determine the true 'cause' of the inju ry, thus making compliance with Article 3.5, first 
sentence logically impossible."963  Although China recognizes that the AD Agreement does not 
prescribe any analytical methodology by which the injurious effects of other known factors must be analysed, China contends that the freedom to c hoose an analytical method cannot interfere with 
compliance with the requirements of Article 3.5.
964  China argues that the Eu ropean Union's standard 
of assessing whether individual factors "break th e causal link" necessarily precludes a collective 
assessment of other known factors causing injury, re ndering the non-attribution requirement "a nullity 
except with respect to those factors which on th eir own are so strong as to sever the causal link 
between dumped imports and injury."965  The other facet is that, even  assuming that an investigating 
authority may examine "other factors in a cursory manne r with no real intent to even try to determine 
the true cause of the injury, the European Union has failed to comply  with even that low standard."966 
(ii) European Union 
7.472  With respect to the Review Regulation, the European Union argues that the Panel should 
conclude that a determination of causation in the context of an expiry review need not necessarily 
comply with Article 3 of the AD Agreement.  Th e European Union acknowledges that the Appellate 
Body has established that if a determination of  likelihood of dumping relies on a finding of past 
dumping, that finding must be made in accordance with Article 2 of the AD Agreement, but argues 
that the Panel should not reach a similar conclusion with respect to Article 3.5 of the 
AD Agreement.967  The European Union does consider that a determination of likelihood of injury 
must include some assessment of causation, that is , whether likely dumped imports are likely to cause 
injury.  The European Union suggest s that the precise obligations of Article 3.5 need not apply, but 
the assessment could not completely ignore the likel ihood of other factors having detrimental effects 
                                                      
960 China, first written submission, paras. 1196, 1199 and 1201.  See also answer to Panel question 55, 
para. 353. 
961 China, second written submission, para. 1429. 
962 China, first written submission, paras. 1202, 1216, 1228 and 1245.   See also answer to Panel 
question 94, paras. 626-628, answer to Panel question 95, paras. 619-625. 
963 China, second written submission, para. 1435.  See also answer to Panel's questions 94, paras. 613-
615. 
964 China, answer to Panel question 96, para. 575. 
965 China, answer to Panel question 96, paras. 563-564.  See also answer to Panel question 94, 
paras. 622-623; and second written submission, para. 766. 
966 China, second written submission, para. 1436. 
967 European Union, answer to Panel question 56; second written submission, para. 160. WT/DS405/R 
Page 210  
 
 on the domestic industry.  The European Union conte nds that the Review Regulation makes just such 
an assessment.  However, in the European Union' s view, China has based its argument entirely on the 
inadequacy of the injury finding made in respect of past dumping, and did not address the other basis in the Review Regulation for the determination of  likelihood of injury, and therefore whether the 
question of causation was properly assessed is academic.
968   
7.473  In any event, the European Union asserts that  the AD Agreement does not establish a specific 
methodology for the determination of causation.  According to the European Union, "what is important is that the authority identifies the nature  and extent of the injurious effects of the other 
known factors", so that injury caused by other factors, and injury caused by the dumped imports, are not "'lumped together' and made 'indistinguishable'".
969  The European Union contends that the 
Commission in the two Regulations at issue undertoo k a thorough examination of the causes of injury, 
and went to considerable lengths to ensure that  the effects of the various factors were fully 
distinguished.970  Moreover, the European Union contends that in light of the standards of review set 
out in Article 17.6(i) of the AD Agreement and Artic le 11 of the DSU, the Panel should not undertake 
a de novo  review of the Commission's findings, but should focus on "whether the conclusions of the 
authority are reasonable and reasoned and supported by the facts of the record."971   
7.474  With respect to the substance of China's claim regarding the Review Regulation, the 
European Union asserts that the Commission addressed all known other factors causing injury, and that its conclusion that none of these other fact ors broke the causal link between dumped imports from 
China and Viet Nam and the injury to the EU industry was based on an objective evaluation of 
positive evidence.   
7.475  With respect to the Definitive Regulation,  the European Union contends that the 
Commission's causation analysis was consistent with  the requirements of Article 3.1 and 3.5 of the 
AD Agreement.  Concerning China's specific assertions  with respect to the Definitive Regulation, the 
European Union asserts that the Commission addressed all known other factors causing injury, and that its conclusion that none of these other fact ors broke the causal link between dumped imports from 
China and Viet Nam and the injury to the EU industry was based on an objective evaluation of 
positive evidence.   
7.476  With respect to China's argument that the European Union's methodology does not estimate 
the extent of the contribution of various other factors to the injury suffered by the EU industry, the European Union asserts that  
"estimations of extent are implicit in the methodology that the European Union refers 
to as breaking the causal link.  If the Europ ean Union did not have an appreciation of 
the relative contribution of dumped imports (as manifested in volume and price factors), on the one hand, and the various know n 'other factors' on the other, it would 
not be able to reach the conclusion to whic h it refers in terms of breaking the causal 
link."
972 
The European Union maintains that its methodology does take into account the collective effect of 
other factors, where relevant, "by simply proceedi ng to consider such an effect after it has given 
individual consideration to each of the 'other factor s'."  Therefore, the European Union argues that it 
                                                      
968 European Union, answer to Panel question 56. 
969 European Union, first written submission, paras. 313 and 733-734. 
970 European Union, first written submission, para. 314. 
971 European Union, first written submission, paras. 315 and 731.  European Union, first written 
submission, para. 735. 
972 European Union, second written submission, para. 253.  WT/DS405/R 
  Page 211  
 
 considers first individually and then collectively whether other factors have broken the causal link 
between dumped imports and material injury:  "in other words, having considered the effect of the 
other factors can one still say that the dumped imports are a cause of injury."
973  M o r e o v e r ,  t h e  
European Union argues that China's critique of the European Union's methodology is purely theoretical, and that "China has adduced no eviden ce to support a claim that failure to make a 
collective assessment in the initia l investigation 'attributed improperly to dumped imports the injuries 
caused by other factors'."
974 
 (b) Arguments of third parties 
(i) Brazil 
7.477  Brazil considers that, in order to comply with Article 3.5 of the AD Agreement, investigating 
authorities must identify, separate and distinguish the injurious effects of the dumped imports from 
the injurious effects of other factors.  This does not mean, however, that Article 3.5 of the 
AD Agreement establishes an obligation on investigat ing authorities to quantify or otherwise estimate 
the injury caused by other factors.  In Brazil's view, it is enough for the investigating authority to 
(i) investigate other factors claimed to be causing injury; (ii) separate and distinguish the injurious 
effects of these other factors, for instance by consideri ng that it is not substantial, or not of a nature to 
break the causal link; and (iii) assess whether, in th e absence of these factors, injury would still have 
taken place.  Brazil asserts that the AD Agreemen t does not prescribe the methodology by which an 
investigating authority must avoid attributing the injury caused by factors other than dumped imports, 
and that investigating authorities have broad discre tion to choose how to conduct such an analysis.  
According to Brazil, the Appellate Body has indicat ed only that investigating authorities must identify 
the effects of other factors, i.e. "undertake th e process of assessing appropriately, and separating and 
distinguishing, the injurious effects of dumped imports from those of other known causal factors" and that "this requires a satisfactory explanation of the nature and extent of the injurious effects of the 
other factors, as distinguished from the injurious effects of the dumped imports".
975   
(ii) Colombia 
7.478  Columbia submits that, although Article 3.5 of  the AD Agreement sets out different factors 
that might be relevant in order to determine the causal relationship be tween dumped imports and 
injury, this provision "neither requi res the examination of any of the specific factors mentioned in its 
text, nor sets forth criteria regarding the best practic es for authorities".  In addition, Colombia notes 
that pursuant to the Appellate Body's interpretation of this provision, there are two mandatory criteria 
for the causal relationship analysis to be carried out by an investigating authority: "i) they should 
analyze all the relevant factors identified, except those regarding the imports subject of dumping; and 
ii) they should verify the non attribution of the injury, caused by other factors …, to the dumped imports."
976 
(iii) Japan 
7.479  Japan contends that, pursuant to Article 3.5 of the AD Agreement, investigating authorities 
are required to "appropriately" separate and distinguish the injurious effects of other factors from the injurious effects of dumped imports.  Japan ac knowledges that the AD Agreement does not set out 
                                                      
973 European Union, second written submission, para. 228. 
974 European Union, second written submission, paras. 232 and 234. 
975 Brazil, oral statement, paras. 10-12, quoting Appellate Body Report, US – Hot-Rolled Steel , 
paras. 228 and 226. 
976 Colombia, third party written submission, paras. 87-88 and 90.  Colombia refers to Appellate Body 
Report, US – Hot-Rolled Steel , paras. 222-223. WT/DS405/R 
Page 212  
 
 any particular methods or approaches for how  investigating authorities should separate and 
distinguish such injurious effects.  Nevertheless, Japan contends that "[i]n order for the Panel to 
examine whether the authority's explanation on the causation is reasoned and adequate, therefore, the 
Panel must review the adequacy of the authority's analysis of the non-attribution issue upon an examination of the particular facts of this case."  Japan argues that, while in some cases it might be 
sufficient for the investigating authority to make a qualitative analysis of the injurious effects of 
dumped imports and those of other factors, in ot her cases it might be necessary for the investigating 
authority to conduct a quantitative analysis separa ting and distinguishing the different injurious 
effects in order to reach a reasoned and adequa te conclusion.  Japan also states that the 
AD Agreement neither mandates nor exempts investigating authorities from undertaking a 
quantitative analysis, but at a minimum an investigating authority must do more than simply list other 
known factors and then dismiss such factors with bare qualitative assertions.
977 
(iv) United States 
7.480  The United States disagrees with China's suggest ion that an investigating authority must 
attempt to measure the "magnitude" of injury attr ibutable to every known factor causing injury.  The 
United States maintains that the language of Article 3.5 of the AD Agreement and the interpretation of 
this provision by the Appellate Body make it cl ear that the AD Agreement does not prescribe any 
methodology by which an investigating authority must avoid attributing injuries caused by other factors to dumped imports.  In addition, the Unite d States argues that, as the AD Agreement does not 
require any quantitative measurement of the magnitude  of either the overall injury to the domestic 
industry or the injury caused by dumped imports, beyond the finding that injury is "material", the 
AD Agreement "necessarily does not require measures of  the magnitude of injury caused by factors 
other than dumped imports."  Thus, the United States concludes that there is no legal basis for China's 
suggestion that investigating authority must provide  a "good-faith estimate" of the magnitude of the 
injury caused by factors other than dumped imports.
978 
(c) Evaluation by the Panel 
7.481  China's claims with respect to the considerati on of causation in both the expiry review and the 
original investigation are brought under Articles 3.1, 3.5, and 17.6(i) of the AD Agreement.979  
7.482  Article 3.5 of the AD Agreement, which is most directly relevant to our analysis of China's 
claims, provides: 
"It must be demonstrated that the dumped imports are, through the effects of 
dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this 
Agreement.  The demonstration of a causal  relationship between the dumped imports 
and the injury to the domestic industry shall be based on an examination of all relevant evidence before the authorities.  The authorities shall also examine any 
known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injuries caused by these other factors must not be 
attributed to the dumped imports.  Factors which may be relevant in this respect 
include, inter alia , the volume and prices of imports not sold at dumping prices, 
                                                      
977 Japan, oral statement, paras. 11-14. 
978 United States, third party written submission, paras. 37-40.  The United States refers to Appellate 
Body Reports, US – Hot-Rolled Steel , para. 224, and EC – Tube or Pipe Fittings , para. 189. 
979 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision 
further here.    WT/DS405/R 
  Page 213  
 
 contraction in demand or changes in the pa tterns of consumption, trade restrictive 
practices of and competition between the foreign and domestic producers, 
developments in technology and the export performance and productivity of the domestic industry." 
It is clear that, pursuant to Article 3.5, a cau sal link between dumped imports and injury to the 
domestic industry must be established for the impos ition and maintenance of an anti-dumping duty 
under the AD Agreement.
980  In addition, through the use of the word "injuries" in the plural, this 
provision makes it clear that many factors may be in juring the domestic industry at the same time, and 
investigating authorities are not permitted to a ttribute to dumped imports injuries caused by other 
factors.981   Previous panel and Appella te Body reports make it clear that while an investigating 
authority is required to consider the effects of ot her factors known to the investigating authority which 
may be causing injury to the domestic industry, ther e is no required method of analysis in undertaking 
that examination.982  The issue for us is whether the consid eration of the injurious effects of "known 
factors other than dumped imports" by the Commission,  and the explanations given in light of the 
facts, in the Review and Definitive Regulations, fall  short of the requirements of Article 3.5 of the 
AD Agreement. 
   7.483  In this context, we recall that Article 3. 5 contains no guidance on the assessment of other 
factors, and the reports of the Appellate Body c oncerning the need to "separate and distinguish" the 
effects of dumped imports from those of other f actors causing injury similarly do not provide any 
direction to investigating authorities as to how this is to be done.  We consid er that, in reviewing the 
Commission's determinations in this respect, it is appropriate for us to und ertake a careful and in 
depth scrutiny of those determinations, in order to  evaluate whether the explanations given by the 
Commission as to why the effects of certain factors did not break the causal link between dumped imports and material injury, and why certain othe r factors were not a source of injury, are such 
reasonable conclusions as could be reached by an unbiased and objective inv estigating authority in 
light of the facts and arguments before it and the expl anations given.  However, we recall that we are 
not to substitute our judgment for that of the Commission.
983   
7.484  In our view, it is also clear that there is no requirement under Article 3.5 that investigating 
authorities seek out and examine in each case, on thei r own initiative, the effects of all possible factors 
other than imports that may be cau sing injury to the domestic industry.984  The Appellate Body has 
clarified that  
                                                      
980 Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 117. 
981 Appellate Body Report, EC – Tube or Pipe Fittings , para. 175. 
982 Appellate Body Report, US – Hot-Rolled Steel , para. 178;  Appellate Body Report , EC – Tube or 
Pipe Fittings , para. 189; Appellate Body Report, United States – Final Countervailing Duty Determination with 
Respect to Certain Softwood Lumber from Canada – Recourse by Canada to Article 21.5 of the DSU ("US – 
Softwood Lumber IV (Article 21.5 – Canada)") , WT/DS257/AB/RW, adopted 20 December 2005, DSR 
2005:XXIII, 11357, para. 154. 
983 Moreover, the Appellate Body has made it clear that a  
"prima facie case must be based on "evidence and legal argument" put forward by the complaining party in relation to each of the elements of the claim.  A complaining party may 
not simply submit evidence and expect the panel to divine from it a claim of WTO-
inconsistency.  Nor may a complaining party simply allege facts without relating them to its legal arguments." 
Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting 
Services ("US – Gambling "), WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, 5663 (Corr.1, DSR 
2006:XII, 5475), para. 140 (footnotes omitted).  
984 Panel Report, Thailand – H-Beams , para. 7.273. WT/DS405/R 
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 "[i]n order for this obligation to be triggere d, Article 3.5 requires that the factor at 
issue: 
(a) be "known" to the investigating authority;   (b) be a factor "other than dumped imports"; and  (c)  be injuring the domestic industry at  the same time as the dumped imports."
985 
Although the AD Agreement does not indicate how other factors might become "known" to the 
investigating authority, or how they should be ra ised by interested parties in order to become 
"known",986 we consider that "known" other factors would, at a minimum, include factors allegedly 
causing injury that are clearly raised by inter ested parties during the course of the anti-dumping 
investigation.987  However, in our view,  even though a factor is alleged by an interested party to be a 
"known factor other than the dumped imports … in juring the domestic industry," an investigating 
authority may nonetheless conclude that the allegati on is unfounded, and conclude that the factor in 
question does not in fact cause injury to the domestic industry at the same time as dumped imports.  In 
such a case, it is in our view apparent that the investigating authority need not go on to consider it 
further.988  Moreover, previous panel and Appellate Body reports make it clear that, while an 
investigating authority must consider the effect s of other factors known to it which may be causing 
injury to the domestic industry, there is no re quired method of analysis in undertaking that 
examination.989  We also recall that it is our task to undertake a careful scrutiny of the 
European Union's determinations to assess whether th e conclusions therein could be reached by an 
unbiased and objective decision maker, taking into account  the facts that were be fore the investigating 
authority, and in light of the explanations given.  The task of the investigating authority is to weigh 
the evidence and make a reasoned judgement.  This, of course, implies that there may well be 
evidence, and arguments, that detract from the conclusions reached.   
7.485  We also recall that Article 17.6(i) of the AD Agreement requires us, on review, to determine 
whether the authorities' establishment of the fact s was proper and whether their evaluation of those 
facts was unbiased and objective.  If we find this to be the case, we may not overturn the authorities' 
determination even if we would have reached a diffe rent conclusion.  In our view, this means that, 
unless a complaining party in dispute settlement dem onstrates that the evidence and arguments before 
the investigating authority were su ch that an unbiased and objective investigating authority could not  
reach a particular conclusion, we are obliged to sust ain the investigating authority's judgment, even if 
we would not have reached that conclusion ourselv es.  In addition, we do not consider that a 
determination can only be sustained on review if  every argument and conflict in the evidence was 
resolved by the investigating authority in favour of  the determination made.  That is, as long as the 
investigating authority's explanations are reasonabl e and supported by the evidence cited, merely that 
another overall conclusion might have been reached  does not demonstrate that the investigating 
authorities' determination is inc onsistent with either Article 3.1 or 3.5 of the AD Agreement.  
7.486  China asserts that nothing in the text of Article  3.5 indicates that the degree or magnitude of 
injury to the domestic industry caused by other factors is relevant.  According to China, "[t]he 
unambiguous rule is that if there is another known fa ctor … then irrespective of  the magnitude of such 
injury, the injury on account of this factor 'must' not be attributed to the allegedly 'dumped' 
                                                      
985 Appellate Body Report, EC – Tube or Pipe Fittings , para. 175. 
986 Appellate Body Report, EC – Tube or Pipe Fittings , para. 176. 
987 Panel Reports, Thailand – H-Beams , para. 7.273; and EC – Tube or Pipe Fittings , para. 7.359. 
988 See Appellate Body Report, EC – Tube or Pipe Fittings , paras. 177-178.   
989 Appellate Body Reports, US – Hot-Rolled Steel , para. 178; EC – Tube or Fittings , para. 189; US – 
Softwood Lumber IV (Article 21.5 – Canada) , para. 154.   WT/DS405/R 
  Page 215  
 
 imports."
990  China argues that the European Union's me thodology does not estimate the extent of the 
contribution of various known "other factors" to th e injury suffered by the EU industry.  China notes 
that "it may never be … 'precisely known' how much impact a given factor has on injury, but the Anti-
dumping Agreement , as interpreted by the AB, has square ly placed the burden on investigating 
authorities to at least make a good-faith estimate."991  The European Union argues that  
"estimations of extent are implicit in the methodology that the European Union refers 
to as breaking the causal link.  If the Europ ean Union did not have an appreciation of 
the relative contribution of dumped imports (as manifested in volume and price factors), on the one hand, and the various know n 'other factors' on the other, it would 
not be able to reach the conclusion to whic h it refers in terms of breaking the causal 
link."
992   
7.487  We recall that the AD Agreement does not prescr ibe any methodology by which investigating 
authorities must undertake the non-attribution analysis required by Article 3.5.993  We do not consider 
that it is either possible or appropriate for us to define a general rule  regarding whether the 
investigating authority must estimate the extent of the contribution of various known "other factors".  
The question whether the determination is consiste nt with Article 3.5 can only be addressed upon an 
examination of the particular facts of each case.   
7.488  China also argues that the Eur opean Union's "break the causal link" analysis does not comply 
with the requirements of Article 3.5 of the AD Agreement.  China acknowledges that the 
AD Agreement does not prescribe any methodology to  analyse known "other factors", but submits 
that the European Union's methodology necessarily precludes a collective assessment of known "other 
factors" causing injury.994  The European Union argues that it considers first individually and then 
collectively whether "other factors" have broken the causal link.995   
7.489  Nothing in Article 3.5 requires an investigating authority to examine the collective impact of 
known "other factors", as long it complies with the obligation to not attribute to dumped imports the injuries caused by "other factors".
996  In any event, we do not ag ree that the European Union's 
methodology per se  precludes a collective assessment of known "other factors."  We consider that it is 
neither possible nor appropriate for us to define general rules regarding the methodology applied by 
the European Union in this case, or indeed, co ncerning appropriate methodologies in general.  
Whether an investigating authority has satisfied th e requirements of Article 3.5 of the AD Agreement 
with respect to non-attribution can only be reso lved based on the particular facts of each case, 
including the particular explanations given by th e investigating authority for how it conducted the 
required examination, the facts it considered, and its  reasoning.  Therefore, we will examine each 
"other factor" China alleges the European Union fail ed to consider, in order to evaluate whether the 
European Union satisfied the requirement of Article  3.5 to ensure that injuries caused by other known 
factors were not attributed to the dumped imports.   
                                                      
990 China, first written submission, para. 590. 
991 China, first written submission, para. 1243. 
992 European Union, second written submission, para. 253. 
993 Appellate Body Reports, EC – Tube or Pipe Fittings , para. 189; US – Hot-Rolled Steel , para. 224; 
and Panel Report, EC – Salmon (Norway) , para. 7.656. 
994 China, answer to Panel question 96, paras. 563-564.  
995 European Union, second written submission, para. 228. 
996 Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel 
Products ("US – Steel Safeguards "), WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, 
WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR 2003:VII, 3117, para. 490; Appella te Body Report, EC – Tube or Pipe Fittings , 
paras. 190-192; and Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 154. WT/DS405/R 
Page 216  
 
 7.490  With these principles in mind, we turn to China' s specific allegations in this dispute.  With 
respect to each of the measures in dispute, we will first descri be the relevant findings of the 
Commission, and then examine China's allega tions with respect to that measure.   
(i) Review Regulation 
7.491  In the Review Regulation, the Commission noted that, during the period concerned, prices of 
Chinese imports remained stable while prices of Vi etnamese imports decreased, and that the average 
import prices for China (8.60 Euros) and for Viet  Nam (9.51 Euros) continued to cause a major 
concern to the EU producers, whose average sales pr ices were above 30 Euros.  During this period, 
price undercutting by Chinese imports increased from 13.5 per cent to 31.9 per cent, and price 
undercutting by Vietnamese imports increased from 15.9  per cent to 38.9  per cent.  The Commission 
concluded that imports from China and Viet Nam, both in terms of volume and price, continued to 
adversely affect the performance of EU producers.   The Commission also examined the impact of 
other factors in order to ensure that possible injury  caused by such factors was not attributed to the 
dumped imports, specifically:  (i) lack of competition between the EU-produced shoes and those imported from China and Viet Nam; (ii) structural in efficiencies of the EU producers and the impact 
of globalization; (iii) imports from third countries; (iv) changes in consump tion patterns and consumer 
preferences; and changes in the structure of the retail sector in the European Union, and (v) export 
performance of the EU industry.
997  The Commission concluded that "none of the other known factors 
in isolation or seen together would be such as to break the causal link between the dumped imports 
and the injury suffered by [European Union] producers".998 
7.492  In addition, the Commission examined the likely effect of the following factors other than 
dumped imports that might bring into question the li kely effect of continued dumped imports on the 
future situation of the EU industry:  (i) market  downturn; (ii) changes in consumption patterns; 
(iii) drop in export performance; (iv) structural ine fficiencies of EU producers; (v) imports from third 
countries; and (vi) fluctuations in exchange rates.   The Commission concluded that "while it cannot be 
ruled out that other factors including the economi c downturn will have an effect on the financial 
situation of the [European] Union producers the investigation has not shown that on their own they 
would break the link between the dumped imports and the continued injury that the [European] Union 
industry would suffer."999 
7.493  The European Union raises an issue whether a ca usation analysis is necessary at all in the 
context of an expiry review.  The European Uni on argues that, unlike the conclusion of the Appellate 
Body's regarding the relevance of Article 2 of th e AD Agreement in expiry reviews, it is not clear 
whether Article 3 of the AD Agreement applies to expiry review under Article 11.3 of the 
AD Agreement for two reasons.1000  First, the European Union submits that the anti-dumping measure 
in force during the expiry review will at the sa me time reduce injury to the domestic industry and 
encourage the exporter to increase the dumping margin to off-set the duty.  Thus, the European Union 
argues, in an expiry review, it is more likely dumpi ng will be detected, but less likely that injury will 
be detected.  Second, the European Union observes that although the calculation of a dumping margin 
is an essentially mathematical exercise, a finding of injury is a judgement process, involving the weighing up of multiple, and possibly contradictory, factors.
1001   
7.494  Article 11.3 of the AD Agreement does not address the question of the relevance of 
Article 3.5 in expiry reviews.  In f act, the Appellate Body has stated that: 
                                                      
997 Review Regulation, Exhibit CHN-2, recitals 262-283. 
998 Review Regulation, Exhibit CHN-2, recital 285. 
999 Review Regulation, Exhibit CHN-2, recitals 299-320. 
1000 European Union, second written submission, para. 160. 
1001 European Union, second written submission, paras. 161-162.  WT/DS405/R 
  Page 217  
 
 "On its face, Article 11.3 does not require investigating authorities to establish the 
existence of a 'causal link' between likely dumping and likely injury.  Instead, by its 
terms, Article 11.3 requires investigatin g authorities to determine whether the expiry 
of the duty  would be likely to lead to continuation or recurrence of dumping and 
injury .  Thus, in order to continue the duty, there must be a nexus between the 'expiry 
of the duty', on the one hand, and 'continuation or recurrence of dumping and injury', 
on the other hand, such that the former 'woul d be likely to lead to' the latter.  This 
nexus must be clearly demonstrated."
1002 
In this same dispute, the Appellate Body concl uded that "this does not mean that a causal link 
between dumping and injury is required to be established anew in a "review" conducted under 
Article 11.3 of the Anti-Dumping Agreement .  This is because the 'review' contemplated in 
Article 11.3 is a 'distinct' process with a 'diffe rent' purpose from the original investigation."1003   
7.495  We have concluded above that, if an investiga ting authority makes a determination of injury 
in the context of an expiry review that is inc onsistent with Article 3, and relies on that injury 
determination in determining likelih ood of continuation or recurrence of  injury, the inconsistency with 
Article 3 taints the likelihood determination, becau se by relying upon the inconsistent determination 
of injury the investigating authority will have failed to make a likelihood determination based on a 
"sufficient factual basis" allowing it to draw "r easoned and adequate c onclusions" concerning the 
likelihood of injury.1004  We see no reason why the same result should not obtain with respect to an 
investigating authority's determination of causation,  including its determination with respect to other 
factors allegedly causing injury, in the context of an injury determination in the context of an expiry 
review.   
7.496  In this case, it is undisputed that the European  Union in fact made a determination with 
respect to causation, including with respect to non- attribution under Article 3.5, in the context of its 
injury determination in the expiry review.1005  We recall that the Review Regulation specifically 
addresses the question whether factors other than du mped imports would put into question the likely 
effect of dumped imports on the situation of the EU industry in the future, and refers in this regard to 
the discussion in the context of the injury determination.1006  We will therefore examine each of 
China's allegations of error with respect to Article  3.5 in the context of the Review Regulation, in 
order to evaluate whether China has established th at any inconsistencies with the AD Agreement in 
the Commission 's analysis and determination of causation demonstrate that the Commission failed to make a likelihood determination based on a "sufficien t factual basis" allowing it to draw "reasoned 
and adequate conclusions" concer ning the likelihood of continuation or recurrence of injury.  
a. structural inefficiency of EU producers 
7.497  China argues that the European Union failed to correctly evaluate and address the injurious 
effect of the structural inefficiency of the EU producers.
1007  China asserts that the European Union 
downplayed the injurious effect of this factor , did not individually and objectively separate and 
distinguish the injurious effects of this factor, and offered no factual support for its conclusion that 
"lack of efficiency and structural problems with the industry is not breaking the link between the 
                                                      
1002 Appellate Body US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 108 (footnote 
omitted). 
1003 Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 118 
(footnote omitted). 
1004 See paragraphs 7.329-7.338 above. 
1005 See paragraphs 7.491-7.492 above. 
1006 Definitive Regulation, Exhib it CHN-3, recitals 297-298. 
1007 China, first written submission, para. 577; second written submission, para. 768. WT/DS405/R 
Page 218  
 
 dumping and the injury sustained."
1008  China contends that interest ed parties provided substantiated 
evidence to the Commission that the EU industry is characterized by small-scale producers that lack 
the resources to produce mass-scale  footwear, and by high labour costs that translate into high 
production costs as the footwear industry is labour intensive.  China asserts that the Commission was 
itself aware that the EU industry's production st ructures are incapable of facing international 
competition and competing with imported footwear.  Th is has led some EU producers to change their 
business models, resulting in changes in distributi on policy, clustering of production, shifting to 
higher end product segments, and outsourcing of the entire production, or at least the labour-intensive parts.
1009  The European Union disputes China's view of the facts, asserting that Commission did not 
conclude in the Definitive Regulation, as China asserts, that EU producers are incapable of producing 
footwear on a mass scale, th at those producers could not withstand competition from non-dumped 
imports, and that producers are being injured as a result of their inefficient production structures.1010  
The European Union contends that the Commission,  in the Review Regulation, found that the EU 
industry as then structured could not match the pri ces of dumped imports from China and Viet Nam.  
The European Union asserts that Ch ina cannot transfer the injury caused by dumped imports to the 
structure of the EU industry simply because restructuring would reduce such injury.1011 
7.498  There is no dispute that this factor was ar gued to the Commission as a factor other than 
dumped imports allegedly causing injury to the EU industry.1012  The Commission addressed this 
factor, and the parties' arguments, in  the Review Regulation, as follows: 
"Parts of the industry are producing unbranded footwear in the mid- to low-end of the 
product segment and are selling through wholesaler s rather than directly to retail. But 
this does not mean that these companies are inefficient by nature. What is clear from 
the investigation is that, irrespective of their competitive position, their difficult 
situation is being materially caused by dumped imports. …  
Notwithstanding their marked improvement and adaptation of business model, those 
companies that have redefined business model do not reach the target profits of 6 % 
as established in the original investigation. This shows that also this group is affected 
by the overall downward pressure exerted acro ss all segments as a consequence of the 
dumped imports. … 
The fact that even the comp anies that have moved to a new business model are still 
affected by the injurious dumping despite be ing highly efficient in terms of pooling of 
resources and specialisation, would suggest that lack of efficiency and structural 
problems within the industry is not breaking the link between the dumping and the 
injury sustained."1013 
7.499  China argues that the European Union acknowle dged that the economic crisis could further 
deteriorate the situation of the EU industry, ev en for those companies that specialized in the 
high/medium segment.1014  China asserts that the European Uni on downplayed the injurious effect of 
                                                      
1008 China, first written submission, paras. 583-584 , citing Review Regulation, Exhibit CHN-2, 
recital 274.  See also second written submission, paras. 773-782 and 786-787. 
1009 China, first written submission, paras. 577-581; second written submission, paras. 771-773. 
1010 European Union, first written submission, para. 319. 
1011 European Union, first written submission, para. 325. 
1012 EFA submission dated February 2009, Exhibit CHN-23, pp. 50-51; and EFA submission dated 
12 November 2008, Exhibit CHN-34, pp. 60-67. 
1013 Review Regulation, Exhibit CHN-2, recitals 272-274. 
1014 China, first written submission, para. 582; second written submission, paras. 783-784.  WT/DS405/R 
  Page 219  
 
 this factor, and offered no factual support for its conclusion.
1015  The European Union contends that it 
found that the EU industry as then structured could not match the prices of dumped imports from China and Viet Nam.  If it restructured, "it would be in a better position to meet this unfair competition, but even in its restructured state it had difficulty matching the prices of those imports."
1016  The European Union asserts that "China's argument appears to be that because the 
European Union industry could by restructuring reduce the injury resulting from the dumped imports, 
the state of that industry, rather than the dumped imports, is the cause of its injury."1017   
7.500  We recall that it is not our role to review the evidence de novo , or to choose which of 
alternative interpretations of the facts would be most convincing to us were we to reach our own 
conclusion.  Rather, as noted above, we are to unde rtake a careful scrutiny of the European Union's 
determination to assess whether the conclusions therein could be reached by an unbiased and 
objective decision maker, taking into account the fact s that were before the investigating authority, 
and in light of the explanations given.  In th is regard, the Appellate Body has stated that: 
"a panel is not compelled under Article 11 to  'automatically reject' the explanation 
given by an investigating authority merely  because a plausible alternative explanation 
has been proffered.  At the same time, a panel may find the investigating authority's 
explanation inadequate when, even though  that explanation seemed 'reasoned and 
adequate' at the outset, or in the abstract, it no longer seems so when viewed in the 
light of the plausible alternatives.  In ot her words, it is not the mere existence of 
plausible alternatives that renders the investigating authority's explanation 
'implausible'.  Rather, in undertaking its review of a determination, including the 
authority's evaluation (or lack thereof) of a lternative interpretations of the evidence, a 
panel may conclude that conclusions that  initially, or in the abstract, seemed 
'reasoned and adequate' can no longer be characterized as such.176 
_______________ 
 176 A panel's duty to consider whether the investigating authority's explanation is 
"reasoned and adequate" in the light of alternativ e plausible explanations should not be read as 
a requirement that panels must reject the authority's explanation if it does not rebut the alternatives.  Rather, a panel must verify that the investigating authority has taken account of 
and responded to plausible alternative explanatio ns that were raised before it and that, having 
done so, the explanations provided by it in support of its determination remain "reasoned and 
adequate
".1018 
7.501  In our view, the Review Regulation presents a re asonable conclusion, based on the facts, and 
one which could be reached by an  unbiased and objective investigati ng authority on the basis of the 
information before it.  The fact that the EU indus try could restructure and thus reduce the injurious 
effects caused by dumped imports do es not mean that the structure of the EU industry itself is causing 
injury.  China argues that the European Union offe red no factual support for its  conclusion.  However, 
we consider that a lack of direct evidence for such reasoning is not fata l, particularly where, as in this 
case, the reasoning itself is a rational explanation of  the observed facts, and is not undermined by 
other evidence before the Commission.  In this re gard, we recall that China does not dispute the facts 
in connection with this aspect of its claim, a nd has referred to no other evidence that was not 
considered that would undermine the conclusions set out in the Review Regulation.  We consider that 
China has not demonstrated a failure of reas oning or explanation in the European Union's 
                                                      
1015 China, first written submission, paras. 583 a nd 584.  See also second written submission, 
paras. 773-782 and 786-787. 
1016 European Union, first written submission, para. 322. 
1017 European Union, first written submission, para. 325. 
1018 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 117. WT/DS405/R 
Page 220  
 
 determination, but has merely put forward an alternat ive interpretation of the relevant facts, which is 
not enough to demonstrate an inconsistenc y with Article 3.5 of the AD Agreement. 
b. imports from third countries, notably India and Indonesia  
7.502  First, China argues that the "European Union si mply adopted a 'check the box' approach and 
failed to objectively separate and distinguish the in jurious effects of this factor from those of the 
dumped imports."
1019  Second, China argues that imports from third countries, notably from India and 
Indonesia, were causing injury to the EU industry.  China argues based on the Review Regulation that 
the European Union accepted that imports from Indi a and Indonesia were large and increasing, and 
that it could not be precluded that market share lost by Chinese imports had been taken over by Indian and Indonesian footwear imports.
1020  China also asserts that the Re view Regulation explicitly states 
that imports from third countries, and not imports from China, would be the "main cause of concern" 
to the European Union in the future.1021  China contends that, in light of the above and because the 
price comparison between Chinese imports on the one hand, and Indian and Indonesian imports on the 
other hand was based on Eurostat import data whic h does not take into account product mix, the 
European Union had no basis to conclude that "h igher prices of imports from other Asian countries" 
did not break the causal link between dumped Chin ese imports and injury to domestic industry.1022  
Thus, according to China, the Eu ropean Union's establishment of facts was neither objective nor 
based on positive evidence.  The European Union acknowledges that imports from third countries 
with low prices, such as India and Indonesia, we re large and increasing, and that other exporting 
countries, including India and Indonesia may have been taking market share from China and Viet Nam, but that the price levels were important .  Nevertheless, the European Union asserts that it 
adequately assessed the significance of the inju ry caused by dumped imports from China and 
Viet Nam, after discounting any effects of non-dumped imports from third countries.  The European Union asserts that it was appropriate to rely on th e Eurostat data to compare the price of Chinese 
imports on the one hand, and Indi an and Indonesian imports on the other hand in assessing whether 
those imports were a cause of injury.
1023   
7.503  Again, there is no dispute that this factor w as argued to the Commission as a factor other than 
dumped imports allegedly causing injury to the EU industry.1024  The Commission addressed this 
"other factor" as follows: 
"In terms of market share, the shares lost  by China and Viet Nam may have been 
taken over by other exporting countries — in particular by India and Indonesia. However, the effect of their prices is not comparable to the effect of prices of imports 
from China and Viet Nam. While not taki ng into account differences in product mix 
the difference in price is particularly stark in the case of India, where the average export price is 25,8 % higher than the average export price of shoes imported from Viet Nam and 40,3 % higher than the average export price of shoes imported from China. Therefore their effect on the Union industry is significantly less pronounced. 
The average export price of shoes imported from Indonesia is 13,2 % higher than the 
average price of shoes imported from Chin a and comparable to the average export 
price of shoes imported from Viet Nam. Nevertheless the volumes of Indonesian imports would still mean that their relative impact would be limited. Having regard to 
                                                      
1019 China, second written submission, para. 788. 
1020 China, first written submission, para. 586-587; second written submission, para. 791. 
1021 China, first written submission, para. 591.  See also second written submission, paras. 803-804. 
1022 China, first written submission, para. 588; second written submission, paras. 794-798. 
1023 European Union, first written submission, para. 328, 331 and 333. 
1024 EFA submission dated 12 November 2008, Exhibit CHN-34, pp. 68-69; and Comments by Chinese 
exporter Yue Yuen dated 3 November 2009, Exhibit CHN-46, pp. 10-11.  WT/DS405/R 
  Page 221  
 
 the above, the relative volumes and highe r prices of imports from other Asian 
countries do not allow to conclude that their effect would be sufficient to breach the link between the injury suffered by the Union industry and the large volumes of 
dumped imports from China and Viet Nam."
1025 
7.504  In light of this discussion, it is clear that th e European Union did consider the effect of 
imports from third countries, but concluded that in light of the price levels, these did not break the 
link between dumped imports and injury.  China do es not dispute that third country imports were 
considered, but relies on the argument that the nature  of the price information undermines the validity 
of the European Union's analysis, and proposes an alte rnative interpretation of the facts.  Even though 
the Eurostat data does not take into account the pro duct mix, we consider this data is an adequate 
basis on which to compare the general levels of pr ices of imports from different sources in the context 
of a consideration of the possibly injurious effect of imports from third countries.  In our view, for 
purposes of examining causation, the Eurostat data relied on by the Commission were not inadequate 
to compare the price of Chinese imports on the one  hand, and Indian and Indonesian imports on the 
other hand.  Thus, we conclude that China has faile d to demonstrate that the European Union did not 
make a reasonable analysis and interpretation of the facts, and that it reached a conclusion which 
could not have been reached by an unbiased and obj ective investigating authority, on the basis of the 
information before it.  We therefore reject this aspect of China's claim. 
c. contraction in demand and cha nges in consumption patterns 
7.505  China asserts that the European Union did not co rrectly evaluate injury caused by contraction 
in demand and changes in consumption patterns, desp ite repeated references by interested parties and 
the European Union's own analysis showing that both factors affected production and sales of EU 
industry.  China notes that the European Union found that consumption of the product under consideration decreased by 7 per cent between 2006 and the review investigation period, while 
consumption of other footwear types increased signi ficantly during the same period, and that the ratio 
of decline in consumption correlates to the ratio of decline in production and sales of the EU industry 
during the review investigation period.  However,  China submits that the European Union, after 
acknowledging that the decline in production and sal es mirrored the decrease in consumption, did not 
sufficiently explain or provide any analysis as to why changes in patterns of consumption and contraction in demand should not be considered the cause of injury to the domestic industry.  In 
addition, China argues that the European Union's implication that 100 per cent substitutability would 
be necessary to prove the break in causal link is  illogical, and while there cannot be 100 per cent 
substitutability between a textile/plas tic shoe and a leather shoe, it is clear that there was a shift in 
demand from leather footwear to other kinds of footwear which affected the production and sales of the EU industry.
1026  With respect to the changes in consum ption patterns, the European Union asserts 
that the Review Regulation clearly explained that "t he growth in demand for non-leather footwear had 
not impinged significantly on that for leather footwear."  European Union acknowledges that there 
was a contraction in demand.  The European Union argues that China wishes to attribute the entire 
decline in EU production to a decline, in demand,  noting that China compar es the two declines in 
percentage terms.   However, the European Un ion argues these declines cannot be compared as they 
represent very different numbers in absolute terms.  The European Union explains that its methodology does not imply that 100 per cent substitu tability would have been necessary to break the 
causal link, as argued by China.  Rather, the Euro pean Union contends that "the relatively small 
degree of substitutability that was found to exist between leather and non-leather footwear did not 
have that consequence vis-à-vis the dumped imports from China and Viet Nam."  The European Union argues that it distinguished the ef fects of contraction in demand and changes in 
                                                      
1025 Review Regulation, Exhibit CHN-2, recitals 210 and 277. 
1026 China, first written submission, paras. 593, 595-596, 598-599; second written submission, 
paras. 809-810 and 817-820. WT/DS405/R 
Page 222  
 
 consumption patterns from those of the dumped impor ts in determining that the dumped imports 
caused material injury.
1027 
7.506  There is no dispute that contraction in de mand and changes in consumption patterns was 
argued to the Commission as a factor other than du mped imports allegedly causing injury to the EU 
industry.1028  In its analysis, the Commission stated: 
"The decrease in consumption has to be seen in conjunction with a parallel increase 
of consumption of other types of  shoes outside the product scope ( e.g., textile, rubber 
& plastic). By reference, textile, rubber and plastic shoes consumption increased by 
23% in the same period. This appears to  point to some substitution amongst the two 
product categories, linked also to fashion trends (penetration of mixed 
synthetic/leather shoes, or synthetic sho es which resemble leather). Considering 
however, that the increase in consumption of  other footwear is far higher (23%) than 
the decrease in consumption of leather footwear (7%), it can however not be concluded that textile and other materials have substituted leather footwear to more 
than a limited degree. Furthermore, average import prices of other footwear is half of 
that of leather footwear and this price di fference makes it clear had there been large 
interchangeability between the two types, th e far more expensive leather footwear 
segment would have been obliterated. … 
In this context the investigation has s hown that there has been a decrease in 
consumption of product concerned. However,  if there had been full substitutability 
between leather shoes and other materials, this decrease would have been much more 
pronounced. The decrease in consumption and changes in consumer preference would 
therefore not on its own appear to be a factor that would break the causal link."
1029 
The Commission also stated that "the relatively sm all degree of substitutability that was found to exist 
between leather and non-leather footwear did not have  that consequence vis-à-vis the dumped imports 
from China and Viet Nam."1030   
 
7.507  The Review Regulation clearly addresses the changing patterns of consumption, and the 
relative declines and increases between the product under consideration and other footwear.  It notes 
the significance of prices in concluding that other footwear did not significantly affect the leather footwear segment of the market. Despite the fact  that the Review Regulation refers to "full 
substitutability" and not to "relatively small degree of substitutability", we consider that the Review 
Regulation was simply providing an example of a situation in which the conclusion of the 
Commission might have been different.  We consider this to be a reasonable interpretation of the facts 
concerning the decline in consumption of the product under consideration and the increased 
consumption of other footwear, and one which could be reached by an unbiased and objective 
investigating authority on the basis of the informa tion before it.  Once more, we note that China does 
not dispute the facts in question in connection with this aspect of its claim, but merely proffers an 
alternative interpretation.  We therefor e reject this aspect of China's claim. 
                                                      
1027 European Union, first written submission, paras. 335-338 and 340, referring to China, first written 
submission, para. 595. 
1028 EFA submission dated 12 November 2008,, Exhibit CHN-34, pp. 69-71; and EFA submission 
dated February 2009, Exhibit CHN-23, p. 50. 
1029 Review Regulation, Exhibit CHN-2, recital 279. 
1030 European Union, first written submission, para. 340.  WT/DS405/R 
  Page 223  
 
 d. alleged failure to evaluate the impact of certain factors  
7.508  China submits that the European Union did not even evaluate the impact of certain factors 
identified by interested parties as causes of injury to the EU industry.
1031  Specifically, China refers in 
this respect to (i) high labour costs in the Eu ropean Union, (ii) increasing outsourcing by EU 
producers, and (iii) the impact of fluctuations in the Euro-U.S. dollar exchange rate.  The European 
Union argues that the issues rai sed by China do not constitute "other factors" for purposes of 
Article 3.5 of the AD Agreement, and therefore the Commission was not obliged to separately consider them.
1032   
1. high labour costs 
7.509  China argues that the European Un ion failed to analyse the effects of high labour costs in the 
European Union, despite the fact that interested parties provided detailed data and argument on this 
factor throughout the investigation.1033  The European Union contends that "high labour costs" is 
essentially the same factor as the "structural ineffi ciency of the European Union production", which 
was appropriately considered by the Commission in the Review Regulation.1034   
7.510  We note that this factor was argued to the Commission as a factor other than dumped imports 
allegedly causing injury to the domestic industry.1035  The evidence shows that  one interested party 
identified both "high labour costs" and "structural inefficiency" as rele vant to the analysis of "other 
factors", but that it identified "high labour cost " in the context of its argument concerning the 
structural inefficiency of EU production.1036  Thus, it seems to us that  high labour costs were not 
identified as an independent factor allegedly causing injury, but rather as a part of the argument that 
structural inefficiency was causing injury.  There is no dispute that the element of "high labour costs" 
was considered by the Commission in its discussion of the structural inefficiency of the EU 
industry,1037 which, as noted above,1038 was explicitly considered.  In these circumstances, we consider 
that the European Union did not fail to consider th e allegedly injurious effects of high labour costs 
merely because it did not explicitly address them separat ely as an "other factor" causing injury in that 
section of the Review Regulation.  We therefore reject this aspect of China's claim. 
2. outsourcing 
7.511  China contends that the European Union did not analyse the effect of increasing outsourcing 
by EU producers, despite the arguments of inte rested parties, the then-Community interest 
questionnaire responses, and the fact that one sa mpled EU producer outsourced its entire production 
                                                      
1031 China, first written submission, paras. 602,  604, 608 and 613; second written submission, 
para. 824. 
1032 European Union, first written submission, para. 352. 
1033 China, first written submission, para. 603; second written submission, para. 825. 
1034 See paragraph 7.497 above. 
1035 EFA submission dated 12 November 2008, Exhibit CHN-34, pp. 63-64.  However, we do not agree 
with China that EFA submission dated February 2009, Exhibit CHN-23, pp. 50-51, identifies "high labour 
costs" as an "other factor" causing injury. 
1036 One interested party addressed, under the h eading "Main challenges faced by the Community 
industry", the following factors: "fragmented Community industry", "high labour costs", "niche production" and 
"inherent incapability of the Complainants to compete under global competition conditions", in order to conclude that "the preceding sections demonstrates that the Community footwear industry suffers from inherent 
structural problems which cannot be overlooked or blamed on imports from the countries concerned."  EFA 
submission dated 12 November 2008, Exhibit CHN-34, pp. 61-67. 
1037 Review Regulation, Exhibit CHN-2, recital 271. 
1038 See paragraphs 7.497-7.501 above. WT/DS405/R 
Page 224  
 
 of the like product to a third country during the review investigation period.
1039  China agrees with the 
European Union that outsourcing is a "symptom of injury", but submits that "the source of the injury is not the dumped imports but the high production cost s and failure of the producers on that count to 
face international competition."
1040  China asserts that (i) the "Community interest questionnaire 
responses" from sampled companies, (ii) the f act that a sampled producer outsourced its entire 
production of the like product to outside the Europe an Union during the review investigation period, 
and (iii) data of non-complainant producers that  completed sampling forms are the basis for its 
assertion that outsourcing was an "other factor" causing injury and requiring consideration by the European Union.
1041   The European Union argues that the issue of outsourcing was addressed and 
analysed in the injury analysis in the context of  sampling, where it was found that outsourcing had no 
impact on the injury assessment.  In addition, the European Union argues that the reasonable 
assumption is that outsourcing results in an improveme nt of the condition of the companies, and it is 
therefore difficult to understand how outsourcing could be an "other cause" of injury.  In fact, the 
European Union argues, "outsourcing is a symp tom of injury, the source of the injury lies 
elsewhere."1042   
7.512  We have reviewed the evidence relied upon by China in this regard.1043  Although the Union 
interest questionnaires provide information with resp ect to "outsourcing", we see nothing in them that 
would identify "outsourcing" as an "other factor" al legedly causing injury.  Indeed, it would in our 
view be somewhat surprising for the domestic industry, in responding to questionnaires seeking 
information as to whether imposition of an anti-dumping measure is in the interest of the European Union, to identify factor s other than the dumped imports th at are causing injury.  Moreover, 
we agree with the parties that outsourcing may be a symptom of injury, and consider that in such a 
case, it is illogical to at the same time treat it as a factor in itself causing injury, particularly in the 
absence of specific assertions to th at effect.  We recall that there is no requirement under Article 3.5 
that an investigating authority in each case seek out and examine on its own initiative the possibility 
that some factor other than dumped imports is causing injury to the domestic industry.
1044  Thus, 
merely because the Community interest questionnai res mention outsourcing is not sufficient to 
demonstrate that this was an "other factor" causing injury which the European  Union was required to 
consider in its determination. We theref ore reject this aspect of China's claim. 
                                                      
1039 China, first written submission, paras. 605-607; second written submission, paras. 827-836. 
1040 China, second written submission, para. 835. 
1041 China, first written submission, para. 605; second written submission, para. 832. 
1042 European Union, first written submission, paras. 345-346. 
1043 China refers to Exhibits CHN-44 (Community interest questionnaire response of Company D dated 
16 January 2009), CHN-45 (Community interest questionnaire response of Company F dated 15 January 2009), 
and CHN-49 (Community interest questionnaire responses of Companies E, G and H dated January 2009), and 
argues that the non-confiden tial versions of the "Community interest questionnaire responses" of five sampled 
EU producers (companies D, E, F, G and H) state that outsourcing increased during the period in question.  
China also refers to recital 401 of the Review Regulation itself to suppor t its position.  China, first written 
submission, paras. 606-607.  In addition, China mentions the fact that a sampled producer outsourced its entire production and data of non-complainant producers that completed sampling forms, but does not refer to any 
specific evidence or exhibits.  In th e absence of evidence with respect to these two situations, we cannot 
conclude that interested parties raised outsourcing as an "other factor" during the course of the anti-dumping investigation.  Even if we were to assume that China intended to refer to Exhibits CHN-21, Sampling form sent 
to non-complaining EU producers, or CHN-101, Questionnaire responses provided by the sampled EU 
producers (in particular to page 12 (Company 1), pa ge 16 (Company 2), page 5 (Company 4), page 3 
(Company 5), page 14 (Company 7), page 10 (Company 8), pages 11-12 (Company 9)), regarding the sampling 
form sent to non-complaining EU producers, we do not see in those forms any indication that any interested 
party informed the Commission that "out sourcing" was an "other factor" causing injury.  Therefore, we limit our 
analysis to the specific "Community interest questionnaire responses" referred to by China. 
1044 Panel Report, Thailand – H-Beams , para. 7.273.  WT/DS405/R 
  Page 225  
 
 3. fluctuations in the Euro-U.S. dollar exchange rate  
7.513  China contends that the European Union failed to analyse the impact of the Euro-U.S. dollar 
exchange rate fluctuation as a factor causing injury to the EU industry,1045 despite the fact that 
Chinese exporters argued that changes in the exchange  rate were relevant to the determination of 
injury and would directly affect the injury margin.  China notes that an investigating authority should 
examine other "known" factors, and thus disagrees with the European Union' s assertion that because 
fluctuation in exchange rates is not a factor ex plicitly mentioned in Article 3(7) of the Basic 
AD Regulation, which is similar to Article 3.5 of  the AD Agreement, the European Union was not 
required to take it into account.  Moreover, China not es, fluctuations in exchange rates was a factor 
considered relevant by the European Union in th e context of the selection of the analogue country, 
despite not being considered an "other cause" of injury in the causation context.1046  China argues that 
this was an "other factor" causing injury identified by interested parties, and that simply because 
fluctuation in exchange rates is not a factor e xplicitly mentioned in either the EU regulation or 
Article 3.5 of the AD Agreement, the European Un ion is not allowed to ignore this factor.  The 
European Union contends that such exchange rate  fluctuations do not qualify as an "other factor" 
within the meaning of Article 3.5, contending that, as the Commission had found in the original 
investigation, exporters cannot  escape responsibility for dumping by blaming movements of 
exchanges rates.1047 
7.514  We agree that the list of factors set out in Article 3.5 is illustrative,1048 and that investigating 
authorities must examine all "known" other factors causing injury to the domestic industry at the same time as dumped imports, whether or not identified in that provision.
1049  We note that the "Euro-U.S. 
dollar exchange rate fluctuation" was indeed argued to the Commission.1050  The European Union 
suggests that this issue was raised in the contex t of whether a lesser duty would be sufficient to 
prevent injury.1051  We do not agree.  The submission in question states:  
"[e]xchange rates were a major cause of inju ry in the original investigation.  The 
impact of exchange rates was wrongly rejected by the Commission. … Exchange 
rates are now critical in this review. The reverse in exchange rate rends since last year 
(i.e. increasing US$ against Euro) mean s that import prices, predominantly 
denominated in US$, will be increasing. … Further, the RMB is appreciating against 
the US$, further emphasising this trend.  These exchange rates developments are 
therefore highly relevant when consider ing the likelihood of continuation or 
recurrence of injury.  In fact, exchange  rate developments now make it highly 
unlikely that Chinese/Vietnamese imports could cause injury if the measure was 
removed."1052 
The European Union also asserts that the argument that exchange rate fluctuations constituted an 
"other factor" was rejected in the Provisional Regula tion in the original investigation, and contends 
that that analysis is equally applicable in the pr esent context, and should be taken in to account in 
                                                      
1045 China, first written submission, para. 609; seco nd written submission, paras. 837-839 and 841. 
1046 China, first written submission, paras. 610-612. 
1047 European Union, first written submission, paras. 347-348.   
1048 Panel Reports, Egypt – Steel Rebar , para. 7.115; Thailand – H-Beams , paras. 7.231 and 7.274; and 
EC – Tube or Pipe Fittings , para. 7.359. 
1049 Whether or not an "other factor" is identified in do mestic legislation is not relevant to our analysis, 
as our jurisdiction does not extend to questions of whether the European Union complied with EU law. 
1050 Hearing submission and comments of Chinese F ootwear Coalition and China Leather Association 
dated 24 March 2009, Exhibit CHN-10, pp. 18-19 (second document). 
1051 European Union, first written submission, para. 350. 
1052 Hearing submission and comments of Chinese F ootwear Coalition and China Leather Association 
dated 24 March 2009, Exhibit CHN-10, p. 18 (second document). WT/DS405/R 
Page 226  
 
 considering China's claim.
 1053  However, while we agree that the Provisional Regulation is relevant 
for our consideration of the consis tency of the Definitive Determination in the original investigation, 
we do not accept that the European Union can rely on a decision in a different proceeding in order to 
support the Review Regulation.  Nothing in th e Review Regulation refers to the Provisional 
Regulation with respect to this question, and thus  the Provisional Regulation is not relevant to our 
analysis here.   
7.515  However, the Review Regulation does address the "l ikely impact of fluctuations in exchange 
rates,"1054 in the section headed "likelihood of continua tion of injury".  Despite its location in the 
Review Regulation, we consider it appropriate to take this discussion into account.  Although it might 
have been clearer if the Commission had made a reference in the sub-section on "impact of other 
factors" to its analysis of exchange rate fluctua tions analysis in the section of the Review Regulation 
entitled "likelihood of continuation of injury", we see no reason why our evaluation of the consistency 
of a Member's determination regarding the im position or continuation of  anti-dumping measures 
should be limited by the structure of the published noti ce of that determination, or by where in that 
notice various considerations are addressed.  Rath er, we consider it appropriate to review the 
substance of the determination as a whole, to dete rmine whether the Member acted consistently with 
its obligations.   
7.516  In this regard, we note that the Commission a ddressed the argument that "injury to the Union 
producers is likely to decrease as a result of the appreciation of the USD to the EURO."  The 
Commission noted that it was not required to analyse factors affecting the levels of prices, as opposed 
to the differences between price levels, and consider ed it unlikely that importers buying from China 
and Viet Nam would be able to increase prices as a result of the USD appreciation.  Finally, the 
Review Regulation states that "it ca nnot be concluded that the developm ent of exchange rate could be 
another factor causing injury".1055  To us, this clearly indicates th at the Commission considered this 
question, and concluded that the "Euro-U.S. dollar exchange rate fluctuation" was not an "other 
factor" causing injury to the domestic industry.  In this circumstance, we are of the view that there 
was no need for any further consideration.  We th erefore reject this aspect of China's claim.   
7.517  Based on the foregoing, we consider that China has failed to demonstrate that the 
European Union acted inconsistently with Article  3.5 of the AD Agreement by failing to examine 
known factors other than the dumped imports which were at the same time causing injury to the 
domestic industry, or by attributing injuries caused by these other factors to the dumped imports.  Having found no inconsistency with respect to Article 3.5, we further consider that China has failed to 
demonstrate any inconsistency with respect to Article 3.1 of the AD Agreement.  We therefore 
conclude that China has failed to demonstrate that  the European Union acted inconsistently with 
Article 11.3 of the AD Agreement in concluding that there was a likelihood of continuation or 
recurrence of injury based, at least in part, on a determination that dumped imports caused the injury 
that continued during the review investigation period.
1056   
(ii) Definitive Regulation 
7.518  In the original anti-dumping investigation, the Commission examined whether the material 
injury to the EU industry it had found was ca used by dumped imports of the product under 
consideration originating in China and Viet Nam.   In the Provisional Regulation, the Commission 
noted that the significant increase in volume of dumpe d imports coincided with  the deterioration of 
                                                      
1053 European Union, first written submission, para. 348. 
1054 Review Regulation, Exhibit CHN-2, recitals 314-319 
1055 Review Regulation, Exhibit CHN-2, recitals 314-319. 
1056 We recall in this regard our views concerning the consideration of alleged violations of Article 3 of 
the AD Agreement in the context of an expiry review, paragraphs 7.329-7.340 above.  WT/DS405/R 
  Page 227  
 
 the economic situation of the EU industry, whic h suffered a drop in production and sales volume of 
around 30 per cent during the period considered.  In a ddition, the average price of the dumped imports 
declined by 30 per cent, depressing the EU industry prices, which decreased around 8 per cent.
1057  
The Commission also found, in the Provisional Regulation. that the EU industry lost around 9 percentage points of market share between 2001 and the investigation period, 1 April 2004 to 31 
March 2005, while the market shares of China and Viet Nam expanded by around 14 percentage 
points, during a period of relatively stable cons umption.  The Commission concluded that "the 
dumped imports played a determining role in th e injurious situation of the [European Union] 
industry."  The Commission went on to examine the effects of other factors allegedly causing injury: 
(i) the performance of other EU producers, (ii)  the export performance of the EU industry, 
(iii) imports from third countries, (iv) changes in  the patterns of consumption and decline in demand, 
(v) exchange rate fluctuations, (vi) lifting of th e quota, (vii) structural inefficiencies of the EU 
industry and high labour costs, and (viii) outsourci ng.  The Commission concluded in the Provisional 
Regulation that "the effect of the other examin ed factors was practically non-existent and was 
therefore not such as to break the causal link betw een the dumped imports and the injurious situation 
of the [European Union] industry."
1058 
7.519  In the Definitive Regulation, the Commission confirmed the conclusion in the Provisional 
Regulation, finding that "the dumpe d imports played a determining role in the material injury suffered 
by the [EU] industry."  The Commission noted that various interested parties argued that the material 
injury suffered was caused by other factors, but  states that "[n]o new elements were however 
provided, and therefore the main conclusions set out in the [P]rovisional Regulation are 
clarified/expanded, where necessary below."  The Commission then examined the effects of the 
following other factors: (i) export performance of the EU industry, (ii) imports from other third 
countries, (iii) exchange rate fluctuations, (iv) lifting of the quota, (v) structural inefficiencies of the 
EU industry and high labour costs, and (vi) outsour cing.  The Commission rejected the arguments of 
the interested parties that these other factors we re the cause of the material injury found, and 
confirmed the findings and conclusions of the Provisional Regulation.1059 
a. export sales 
7.520  China argues that the European Union failed to objectively assess the level, evolution and 
injury impact of export sales, in order to ensure this injury was not attributed to dumped imports.1060  
China argues that the European Un ion failed to correctly evaluate and address in an objective manner 
the injurious effects of loss of export sales a nd the comments and evidence submitted by interested 
parties, showing that the reduction in exports from the European Union reflected a long-term decline 
of the EU footwear industry's export performance.1061  China disagrees with the European Union's 
statement that export performance does not have any impact on most injury indicators, since pursuant to China's understanding most of the injury factors do not distinguish between domestic sales and export sales, and export performance is one of  the factors listed in Article 3.5 of the 
AD Agreement.
1062  China also argues that, based on inform ation submitted by interested parties, 
around 30 per cent of total EU production is destined for export sales.1063  The European Union asserts 
that the injury analysis took no account of the con sequences of changes in the level of export sales, 
and thus any injury from a decline in export sales w as necessarily distinguished from injury caused by 
the dumped imports.  In addition, the European  Union recalls that the Provisional Regulation 
                                                      
1057 Provisional Regulation, Exhibit CHN-4, recitals 204-206. 
1058 Provisional Regulation, Exhibit CHN-4, recitals 208-232. 
1059 Definitive Regulation, Exhib it CHN-3, recitals 221-239. 
1060 China, first written submission, para. 1215. 
1061 China, first written submission, paras. 1202-1206. 
1062 China, first written submission, paras. 1208-1212. 
1063 China, first written submission, para. 1214. WT/DS405/R 
Page 228  
 
 observed that the vast majority of EU productio n was intended to be sold on the EU market, 
indicating that the majority of decrease in production is  related to injury in the EU market, and not to 
a decrease in exports.
1064  
7.521  Several interested parties had argued that the "loss of export sales" was an "other factor" 
allegedly causing injury.1065  The European Union addressed this  question first in the Provisional 
Regulation: 
"In this context, it should firstly be noted that the injury analysis focuses on the 
situation of the Community industry on the Community market. Therefore a deterioration of the export performance, if any, does not have any impact on most of 
the indicators analysed above,  such as sales volume, market share and prices. In terms 
of the overall production volume, where the distinction between Community and 
outside Community market cannot be made, since footwear is produced on order, a 
decrease of sales on the Community market will necessarily translate into a declining 
production. Since the vast majority of the production is intended to be sold on the 
Community market, and even though export sales also decreased during the period 
considered, it is concluded that the major pa rt of the decrease in production is related 
to injury suffered on the Co mmunity market, and not to decreasing exports. Finally, 
the assertion made by the Community producers, in fact, merely refers to prevention of exploitation of their export potential, a nd should therefore be seen as the inability 
to compensate decreasing sales on the Commun ity market, i.e. where injury is being 
suffered, by increasing exports. 
The claim was therefore rejected and it is concluded that the export performance of 
the Community industry did not  cause any material injury."
1066  
7.522  We consider it appropriate to take into acc ount the Provisional Regulation in reviewing the 
European Union's final determination,  which is the measure before us.1067  The Definitive Regulation 
also addressed the claims of parties that the "poor economic situation of the Community footwear 
industry was due to a deterioration of  its export performance" and states: 
"alleged deterioration of the export performance, if any, does not have any impact on 
most of the indicators analysed above, such as sales volume, market shares and 
depression of prices, since those factors have been established at the level of sales in the Community….given that the vast majority of the production is intended to be sold on the Community market, the provisional conclusion that the major part of the 
                                                      
1064 European Union, answer to Panel question 97, paras. 264-266. 
1065 Supplemental injury comments submitted by FESI [Federation of the European Sporting Goods 
Industry] dated 12 January 2006, Exhibit CHN-88 , pp. 28-29; Coalition Submissions on Commission 
Provisional Regulation 553/2006, 8 May 2006, Exhibit CHN-91, pp. 38-40; FESI [Federation of the European 
Sporting Goods Industry] submission dated 23 August 2005, Exhibit CHN-93, pp. 55-57; Supplementary Coalition Submissions on Commission Provisional Regu lation 553/2006: Leather Footwear from China & 
Vietnam, 20 June 2006, Exhibit CHN-102, pp. 20-21. 
1066 Provisional Regulation, Exhibit CHN-4, recitals 212-213. 
1067 We note in this regard that the Definitive Regulation clearly indicates that the findings in the 
Provisional Regulation are an integral part of the final determination:  
"Following the imposition of the provisional measures, various interested parties claimed that the material injury suffered was caused by other f actors. Those parties referred to claims that 
were already made at an earlier stage, and duly  addressed in the provisional Regulation. … No 
new elements were however provided, and therefore the main conclusions set out in the provisional Regulation are clarified/expanded, where necessary, below." 
Definitive Regulation, Exhibit CHN-3, recital 222.  WT/DS405/R 
  Page 229  
 
 decrease in production is related to inju ry suffered on the Community market is 
confirmed.   
As a matter of fact, during the period considered, the decrease in sales volume on the 
Community market (– 34 %) corresponds to  the decrease of production during the 
same period (– 33 %). 
The claim was therefore rejected, and it is  definitively concluded that the export 
performance of the Community industry did not cause any material injury."
1068 
Thus, the European Union argues, the injury analysis  took no account of changes in the level of export 
sales, and any injury from declines in export sal es was distinguished from injury caused by the 
dumped imports as it was never consid ered in determining that EU industry was materially injured.1069  
China disagrees with the European Union's position that export performance doe s not have any impact 
on most injury indicators, asserting that most of the injury factors do not distinguish between domestic sales and export sales, and reiterating that export performance is one of the factors listed in 
Article 3.5 of the AD Agreement.
1070  Moreover, China disagrees with the European Union's 
conclusion that the "vast majority" of production is for the EU market, arguing that information 
submitted by interested parties shows that "[i]n both 2001 and the IP, EU industry sales on the EU 
market accounted for around 70% of total production (a majority but not the 'vast majority').  This suggests that around 30% of production is exported."
1071   
 7.523  In our view, China is simply disagreeing with the European Union's characterization of the 
facts.  While China's characterization of the facts is not unreasonable, in order to establish a violation 
of Article 3.5 of the AD Agreement, it does not su ffice to demonstrate that another conclusion could 
be reached by an unbiased and objective investigating au thority on the basis of the facts before it and 
in light of the arguments.  China does not dispute that the Commission based its conclusion of injury 
on the performance of the EU industry in the EU ma rket, without taking into account the effect of 
exports.  That China disagrees with the characterizati on of the proportion of production sold in the EU 
market as the "vast majority" does not detract from that  analysis.  China also asserts that the fact that 
production and sales in the European Union follow  a similar decreasing trend does not necessarily 
mean that export sales cannot follow the same trend,  and would thus have an effect on domestic 
industry performance.
1072  However, even assuming that were the case, and China has pointed to no 
evidence in this regard, we do not see how that  undermines the European Union's conclusion.  A 
proportionate decline in export performance would not  demonstrate that any injury caused by that 
decline was wrongly attributed to the dumped imports .  We therefore reject this aspect of China's 
claim. 
b. import quotas 
7.524  China argues that the European Union failed to adequately evaluate and address the injurious 
effect of the lifting of the quota on Chinese footwear on 1 January 2005.1073  China submits that the 
European Union wrongly dismissed this factor out of hand, and asserts that the Panel need not make 
                                                      
1068 Definitive Regulation, Exhib it CHN-3, recitals 223-226. 
1069 European Union, answer to Panel question 97, paras. 264-265, quoting the Provisional Regulation, 
Exhibit CHN-4, recital 212. 
1070 China, first written submission, paras. 1208-1212. 
1071 China, first written submission, para. 1214, refe rring to Submissions on Commission Disclosure of 
what it intends to recommend for Imposition of Definitive Anti-Dumping Measures in AD 499 – Leather Upper 
Footwear from China and Vietnam, Submitted on beha lf of the Coalition of Chinese Shoes Manufactures 
Against EU Anti-Dumping Actions, 17 July 2007, Exhibit CHN-103, p. 14. 
1072 China, first written submission, para. 1215. 
1073 China, first written submission, para. 1216. WT/DS405/R 
Page 230  
 
 any conclusions as to the actual effect of lifting th e quota in order to find that the European Union 
acted inconsistently with Ar ticle 3.5 in this regard.
1074  The European Union asserts that the fact that 
many of the dumped Chinese imports would not have been imported into the European Union if the 
quota had not been removed does not convert the removal of the quota into an "other factor" causing injury to the EU industry.  The European Un ion considers that Chinese exporters cannot escape 
responsibility for engaging in dumping by identifyin g factors that had given them the opportunity to 
dump their products into the EU market, such as the removal of a quota.
1075   
7.525  With respect to the lifting of the quota on Ch inese footwear, there is no dispute that this 
matter was raised by interested par ties during the original investigation.1076  With respect to these 
arguments, the Provisional Regulation states: 
"Certain parties claimed that the lifting of the import quotas at the beginning of 2005 
was also a cause of injury to the Community  industry. In this respect, it is recalled 
that the quotas only applied to one of the two countries concerned and not all the products covered by this proceeding. In addition, the injury analysis has been 
established over a longer period, in this case between 2001 and the end of the IP, and 
does therefore not only refer to the post quota period, i.e. the first quarter 2005. The 
claim was therefore rejected."
1077 
The Definitive Regulation adds that: 
"No new elements have been put forward in that respect. It should however be noted 
that given the acceleration of the imports during the last quarter of the IP, this may indeed have exacerbated the injurious  effects of those dumped imports."
1078 
7.526  China notes that "the highest increase in imports occurred from China and that it took place 
during the first quarter of 2005."1079  China argues that although the European Union explicitly 
admitted that the lifting of the quota was a factor that may have had an effect on injury, the European Union failed to separate and distinguish its injurious effects.
1080  The European Union recalls that 
Chinese imports were found to be dumped and caused ma terial injury to the EU industry, and asserts 
that the "fact that many of these imports would not have taken place if the quota had not been 
removed does not convert the removal of the quota into an 'other factor' causing injury to the 
European Union industry."  The European Un ion argues that Chinese exporters cannot escape 
responsibility for dumping by identifying factors that had given them the opportunity to dump their products into the EU market, such as the removal of a quota.
1081   
7.527  In our view, the Provisional Regulation sets forth a reasonable interpretation of the facts, and 
one which could be reached by an  unbiased and objective investigati ng authority on the basis of the 
information before it.  Indeed, we agree with the notion that an exogenous event, such as the lifting of 
                                                      
1074 China, answer to Panel question 95, para. 650. 
1075 European Union, first written submission, paras. 737-738. 
1076 Coalition Submissions on Commission Provisional Regulation 553/2006, 8 May 2006, Exhibit 
CHN-91, pp. 42-44; Supplementary Coalition Submissions on Commission Provisional Regulation 553/2006: 
Leather Footwear from China & Vietnam, 20 June 2006, Exhibit CHN-102, pp. 22-25; Submissions on Commission Disclosure of what it intends to recommend for Imposition of Definitive Anti-Dumping Measures 
in AD 499 – Leather Upper Footwear fr om China and Vietnam, Submitted on behalf of the Coalition of Chinese 
Shoes Manufactures Against EU Anti-Dumping Actions, 17 July 2007, Exhibit CHN-103, p. 16. 
1077 Provisional Regulation, Exhibit CHN-4, recital 226. 
1078 Definitive Regulation, Exhibit CHN-3, recital 233. 
1079 China, first written submission, para. 1217.  S ee also answer to Panel question 94, para. 634. 
1080 China, first written submission, para. 1219. 
1081 European Union, first written submission, paras. 737-738.  WT/DS405/R 
  Page 231  
 
 an import quota, which allows for an increase in th e volume of dumped imports, is not itself a factor 
causing injury.  In addition, we note that China do es not dispute the facts in question in connection 
with this aspect of its claim, and we consider that China has not demonstrated a failure of reasoning or 
explanation in the European Union's determination.  We therefore reject this aspect of China's claim. 
c. changes in patterns of consum ption and decline in demand 
7.528  China submits that the European Union did not adequately evaluate in jury caused by changes 
in patterns of consumption and the decline in demand.
1082  China claims that  the European Union 
accepted that changes in consumer pr eferences occurred, although not to  such an extent as to break 
the causal link, but failed to provide any explanation as to the extent of this factor.  China also argues 
that the European Union failed to objectively examin e the issue of decline in  demand, noting that the 
European Union's conclusion that demand re mained relatively stable is incorrect.1083  T h e  
European Union argues that the ch anges in fashion in question were entirely within the footwear 
market that was considered in this  investigation, and thus any changes that would negatively affect 
producers of one type of footwear would be compensa ted by the benefits obtained by the producers of 
another type of footwear.1084  Moreover, the European Union rejects China's view that the data 
showed a decline in demand and maintains its view  that the figures for consumption are "relatively 
stable".1085 
7.529  Concerning changes in patterns of consumption and decline in demand, there is again no 
dispute that this was argued to the Commission as an "other factor" allegedly causing injury.1086  With 
respect to this factor, the Provisional Regulation states: 
"In this respect, reference is made to section 2 above where it was concluded that all 
types of the product concerned and the lik e product were regarded as forming one 
single product and that footwear produced in the countries concerned and in the Community compete at all levels of the market. Any claim regarding certain types is therefore not relevant and the analysis should be carried out at the level of the product 
concerned and the like product, i.e. all types of footwear with uppers of leather as 
described in the relevant paragraph above . As to the overall Community consumption 
for the footwear with uppers of leather, it remained relatively stable during the period considered. The claims were therefore reject ed and it is concluded that injury was not 
caused by any decline of demand."
1087 
7.530  According to China, interested parties argued that consumer trends shifted from formal to 
casual, sport and fashionable footwear, and that co nsumers are not inclined to purchase formal, more 
expensive shoes, a market segment in wh ich EU-produced shoes are concentrated.1088  China claims 
that the European Union accepted th at changes in consumer preferences occurred, although not to 
such an extent as to break the causal link, but failed to provide any explanation as to the extent of this 
factor.1089  In fact, China argues that "[t]here is nothing in the Definitive Regulation addressing 
[consumer preferences]… or even incorporati ng by reference the discussion in the Provisional 
                                                      
1082 China, first written submission, para. 1228.  See also answer to Panel question 95, paras. 619-625. 
1083 China, first written submission, para. 1233. 
1084 European Union, first written submission, para. 741. 
1085 European Union, first written submission, paras. 742-743. 
1086 Supplemental injury comments submitted by FESI [Federation of the European Sporting Goods 
Industry] dated 12 January 2006, Exhibit CHN-88, p. 28; FESI [Federation of the European Sporting Goods Industry] submission dated 23 August 2005, Exhibit CHN-93, pp. 47-48. 
1087 Provisional Regulation, Exhibit CHN-4, recital 219. 
1088 China, first written submission, para. 1228, c iting FESI [Federation of  the European Sporting 
Goods Industry] submission dated 23 August 2005, page 47, Exhibit CHN-93. 
1089 China, first written submission, para. 1233. WT/DS405/R 
Page 232  
 
 Regulation, which seems to be a prima facie  failure to provide a satisfactory explanation of the 
analysis."
1090  The European Union asserts that it did anal yse the nature and extent of changes in 
consumer preferences, and it was by doing so that it was able to conclude that, taking into account the 
effects of such changes, it was still clear that dumped imports were a cause of injury.1091   
7.531  We reject the view that we may only consid er the Provisional Regulation in reviewing the 
European Union's final determination if the De finitive Regulation specifically incorporates the 
discussion of the same matter in the Provisional Regula tion.  In any event, we note that the Definitive 
Regulation does, in fact, specifically refer to th e Provisional Regulation in general, stating: 
"Following the imposition of the provisional measures, various interested parties 
claimed that the material injury suffered was caused by other factors. Those parties 
referred to claims that were already made at an earlier stage, and duly addressed in 
the provisional Regulation. … No new elements were however provided, and therefore the main conclusions set out in the provisional Regulation are clarified/expanded, where necessary, below."
1092   
We consider this a sufficient basis to take in to account all matters discussed in the Provisional 
Regulation in our consideration of the Definitive Regul ation, even if that matter is not specifically 
addressed in the latter.1093   
 7.532  Second, China questions the European Union's dismissal of arguments concerning only 
certain types of footwear on the basis that all typ es of the product concerned and the like product were 
regarded as forming one single product.  In China's view, this completely missed the point, as nothing 
in Article 3.5 of the AD Agreement implies that su ch arguments should be disregarded.  China also 
contends that the Commission's c onclusion that demand remained relatively stable represents a failure 
to objectively examine the issue of decline in dema nd, since consumption decreased by 10 per cent in 
2002, and, according to China, only recovered to the level of 2001 by virtue of the lifting of the import quota in 2005.
1094  The European Union argues that the changes in fashion in question were 
entirely within the footwear market that was consid ered in this investigation, and thus "[p]roblems 
that might have been caused to producers of one type  of footwear would be offset by benefits obtained 
by those producing another", a situation quite differe nt from where all the products of an industry fall 
out of fashion. The European Union rejects China's view that  the data showed a decline in demand and 
maintains its view that the figures for consumption ar e "relatively stable", noting that after an initial 
decline, the level steadily increased.1095 
7.533  We agree that, in a situation where numerous di fferent types of footwear constitute one like 
product, consideration of the performance of a particular type as opposed to other types within one like product is not necessarily relevant.  We recall th at the industry is defined as producers of the like 
product, and the determination to be  made is whether the industry as a whole is materially injured by 
dumped imports.
1096  In this context, we consider that declining consumption in one market segment 
need not be analysed as an "other factor" causing inju ry to the industry of which that market segment 
is a part.  We do not agree with China's view th at the characterization of demand in the footwear 
                                                      
1090 China, answer to Panel question 94, para. 620. 
1091 European Union, second written submission, para. 252. 
1092 Definitive Regulation, Exhibit CHN-3, recital 222. 
1093 See also paragraph 7.522 above. 
1094 China, first written submission, para. 1233. 
1095 European Union, first written submission, paras. 741-743. 
1096 Appellate Body Report, US – Hot-Rolled Steel , para. 190.  While the Appellate Body in that report 
indicated that an analysis of market segments was permit ted, it made clear that the analysis had to take account 
of all market segments in some way, to ensure that the determination of injury was with respect to the industry 
as a whole.  WT/DS405/R 
  Page 233  
 
 industry over the period of investigation as "relativ ely stable" is incorrect.  We recall that, on an 
indexed basis, consumption declined from 100 in 200 1 to 90 in 2002, then increased to 94 in 2003 and 
again to 99 in 2004, and was 101 during the investigation period.
1097  While these figures might be 
described differently, we do not consider that the European Union's characterization is unreasonable, 
particularly given that consumption at the end of the period considered was almost the same as at the 
beginning.  Thus, in our view, the Provisional Regul ation provides a reasonable interpretation of the 
facts, and a reasoned conclusion which could be r eached by an unbiased and objective investigating 
authority on the basis of the information before it.   We see nothing in China's arguments that either 
undermines the European Union's reasoning or the fact s on which it is based. We therefore reject this 
aspect of China's claim. 
d. fluctuations in the Euro-U.S. dollar exchange rate 
7.534  China argues that the European Un ion failed to adequately evaluate and address the effects of 
the Euro-U.S. dollar exchange rate fluctuation.  Chin a argues that, as footwear originating in China is 
priced in U.S. dollars, the exchange rate itself, that  is the appreciation of the Euro vis-à-vis the U.S. 
dollar, can make such footwear more attractive, re gardless of whether the goods are being dumped in 
the European Union market.1098  China submits that the European Union cannot ignore fluctuations in 
exchange rates simply because this factor is not explicitly mentioned in either Article 3.5 of the 
AD Agreement or the corresponding provisions in the EU  regulation, namely Artic les 3(6) and 3(7) of 
the Basic AD Regulation.1099  The European Union argues that when  exchange rate fluctuations result 
in exports priced in U.S. dollars becoming cheaper  when priced in Euro, exporters may choose to 
maintain price levels, thereby retaining the price adva ntage, or they can raise their prices so that the 
products have the same price in Euro as before the rate change.  In the European Union's view, if 
products are being dumped, and their low prices inju re producers in the European Union, exporters 
cannot escape responsibility for that dumping by  blaming movements of exchange rates.1100   
7.535  With respect to the Euro-U.S. dollar exchange ra te fluctuation, there is again no dispute that 
this was raised before the Commission as an  "other factor" allegedly causing injury.1101  We agree that 
the European Union cannot ignore fl uctuations in exchange rates simply because this factor is not 
explicitly mentioned in either Article 3.5 of the AD Agreement or the corresponding provisions in the 
EU regulation, namely Articles 3(6) and 3(7) of th e Basic AD Regulation.  We recall in this regard 
our view that the list of factors set out in Article 3.5 is illustrative, and that investigating authorities 
must examine all "known" other factors causing injury  to the domestic industry at the same time as 
dumped imports, whether or not identified in that provision.1102  In this case, we note that the 
Provisional Regulation addressed this question at length: : 
"It is recalled that the investigation has to establish whether the dumped imports (in 
terms of prices and volume) have caused mate rial injury to the Community industry 
or whether such material injury was due to other factors. In this respect, Article 3(6) 
of the basic Regulation states that it is n ecessary to show that the price level of the 
                                                      
1097 Provisional Regulation, Exhibit CHN-4, recital 154. 
1098 China, first written submission, paras. 1235-123 7.  See also answer to Panel question 94, 
paras. 580-582 and 608-610. 
1099 China, first written submission, para. 1240. 
1100 European Union, first written submission, para. 746. 
1101 Coalition Submissions on Commission Provisional Regulation 553/2006, 8 May 2006, Exhibit 
CHN-91, pp. 44-46; FESI [Federation of the European Sporting Goods Industry] submission dated 23 August 2005, Exhibit CHN-93, pp. 51-55; China, first written submission, para. 1240. 
1102 See paragraph 7.514 above; Panel Reports, Egypt – Steel Rebar , para. 7.115; Thailand – H-Beams , 
paras. 7.231 and 7.274; and EC – Tube or Pipe Fittings , para. 7.359. 
Whether or not an "other factor" is identified in domes tic legislation is not relevant to our analysis, as 
our jurisdiction does not extend to questions of whether the European Union complied with EU law. WT/DS405/R 
Page 234  
 
 dumped imports cause injury. It therefore mere ly refers to a difference between price 
levels, and there is thus no requirement to analyse the factors affecting the level of 
those prices. 
In practice, the effect of the dumped impor ts on the Community industry's prices is 
essentially examined by establishing price undercutting, price depression and price 
suppression. For this purpose, the dumped export prices and the Community 
industry's sales prices are compared, and expor t prices used for the injury calculations 
may sometimes need to be converted into  another currency in order to have a 
comparable basis. Consequently, the use of exchange rates in this context only 
ensures that the price difference is established on a comparable basis. From this, it 
becomes obvious that the exchange rate can in principle not be another factor of the 
injury. 
The above is also confirmed by the wording of Article 3(7) of the basic Regulation, 
which refers to known factors other than dumped imports. The list of the other known 
factors in this Article does not make refere nce to any factor affecting the price level 
of the dumped imports. To summarise, if th e exports are dumped, and even if they 
benefited from a favourable development of exchange rates, it is difficult to see how 
the development of such exchange rate could be another factor causing injury. 
Thus, the analysis of the factors affecting the level of the prices of the dumped 
imports, be it exchange rate fluctuations or something else, cannot be conclusive and 
such analysis would go beyond the requirements of the basic Regulation. 
In any event, and without prejudice of the a bove, even if exchange rate fluctuations 
had an effect on import prices, it would be impossible to separate and distinguish their impact since it is not precisely known to what extent imports from the countries concerned are traded in USD. In addition the biggest importers hedge their USD financial transactions and it is therefore very  difficult to determine what would be the 
relevant exchange-rate to be examined."
1103 
The arguments that injury suffered by the EU i ndustry was caused by the appreciation of the Euro 
against the U.S. dollar, leading to significant import price decreases, were reiterated in the final stage 
of the investigation.  The Definitive Regulatio n addressed these arguments, referring expressly to the 
Provisional Regulation in this regard, as follows:  
"No new elements were given, and it is ther efore referred to recitals 220 to 225 of the 
provisional Regulation. It is also to be noted  that, even if one were to accept that 
exchange rate fluctuations had an effect on import prices, the volume alone of the 
imports concerned were of such a magnitude as to cause material injury to the Community industry."
1104 
7.536  China argues that the European Union is not allowed to use arguments of "administrative 
feasibility" in order not to "separate and distingui sh the injurious effects of other known factors".1105  
With respect to the European Union's argument that  even assuming exchange rate fluctuations had an 
effect on import prices, the volume of imports was of  such a magnitude as to ca use material injury to 
                                                      
1103 Provisional Regulation, Exhibit CHN-4, recitals 221-225. 
1104 Definitive Regulation, Exhibit CHN-3, recital 232. 
1105 China, first written submission, para. 1240.  See al so answer to Panel question 94, paras. 606-607; 
second written submission, para. 852.  WT/DS405/R 
  Page 235  
 
 the EU industry,
1106 China recalls that when interested parti es identified the exchange rate fluctuation 
as an "other known factor", the issue was not whet her imports caused material injury, but the separate 
question of whether the exchange rate had an  injurious effect on the domestic industry.1107  China 
argues that the European Union's approach "renders  the non-attribution analysis null with respect to 
many factors which are unrelated to the actual effects of dumping."1108  China considers that in order 
to find that the European Union violated Article 3.5, "the Panel need not make any conclusions 
regarding actual effect of the currency appreciation in this case … but should simply determine that 
the logic regarding its status as a potential 'oth er' injurious factor is theoretically sound."1109  T h e  
European Union argues that when exchange rate fluc tuations result in exports priced in U.S. dollars 
becoming cheaper when priced in Euro, exporters  may choose to maintain price levels, thereby 
retaining the price advantage, or they can raise thei r prices so that the products have the same price in 
Euro as before the rate change.  In  the European Union's view, if they  choose to maintain price levels, 
and their low prices injure producers in the Euro pean Union, exporters ca nnot escape responsibility 
for that dumping by blaming movements of exchange  rates.  The European Union asserts that, as it 
did with regard to the effect of the removal of the quota, "China seeks to shift responsibility for the 
injury suffered by the EU producers away from the exporters and onto an extraneous event."1110  The 
European Union clarifies that "[a]s long as an expor ter is not dumping he is of course entitled to any 
advantage that might come his way from movements in exchange rates without incurring the risk of 
anti-dumping action."1111   
7.537  In the original investigation, the Commission not ed that it was not required to analyse factors 
affecting the levels of prices, as opposed to the di fferences between price levels.  In addition, the 
Commission clarified that exchange rates were only used to ensure that the price difference between 
dumped imports and the EU industr y's sales prices was established on a comparable basis, and 
concluded that the "Euro-U.S. dollar exchange rate  fluctuation" was not an "other factor" causing 
injury to the domestic industry.1112  We recall our findings concerning this issue in the context of the 
expiry review, and consider th em equally applicable here.1113  In our view, the Provisional Regulation 
sets out a reasonable interpretation of the facts, a nd a reasoned conclusion which could be reached by 
an unbiased and objective investigating authority on the basis of the information before it.  Nothing in 
China's argument undermines the conclusion in the Provisional Regulation that "if the exports are dumped, and even if they benefited from a favourable development of exchange rates, it is difficult to 
see how the development of such exchange rate  could be another factor causing injury."
1114  W e  
therefore reject this aspect of China's claim. 
e. alleged failure to address a known "other factor" 
7.538  Finally, China asserts that one interested pa rty explicitly identified non-tariff barriers in EU 
export markets preventing EU producers from exporti ng with their full capacity as an "other known 
factor" causing injury to EU producers, but the European Union failed to analyse this factor. 1115  The 
European Union argues that its investigation already took account of this factor, in so far as it relates 
                                                      
1106 China, first written submission, para. 1241, citing Definitive Regulation, Exhibit CHN-3, 
recital 232.  See also answer to Panel question 94, para. 588. 
1107 China, first written submission, para. 1242.  See al so answer to Panel question 94, paras. 598-599, 
answer to Panel question 96, para. 574. 
1108 China, answer to Panel question 94, para. 599. 
1109 China, answer to Panel question 94, para. 605 
1110 European Union, first written submission, paras. 745-746. 
1111 European Union, second written submission, para. 239. 
1112 Provisional Regulation, Exhibit CHN-4, recitals 221-225. 
1113 See paragraph 7.515 above. 
1114 Provisional Regulation, Exhibit CHN-4, recital 223. 
1115 China, first written submission, paras. 1245-1247. WT/DS405/R 
Page 236  
 
 to a loss of export sales, as it did not take lost export sales into account in assessing injury.
1116  Thus, 
according to the European Union, it was not necessary in the analysis of causation to separate out any 
"injury" caused by loss of export sales. 
7.539  There is no dispute that one interested party ar gued this as an "other factor" allegedly causing 
injury during the original investigation.1117  The European Union argues that its investigation already 
took account of this factor, "in so far as [this "other factor"] referred to loss of export sales, by simply 
not taking into account any injury that might have been attributed to that source."1118  In addition, the 
European Union contends that the trade barriers referr ed to by China in this regard are of a long-term 
or permanent character, and as such could not have b een the cause of injury to the EU industry, which 
had occurred recently.1119  Finally, the European Union contends that it is not "enough for the 
investigating authorities to be told about some supposed 'other factor', without any supporting 
evidence being provided, in order for the factor to become 'known'."1120    
7.540  We note that neither the Provisional Regulation nor the Definitive Regulation specifically 
addresses non-tariff barriers in European Union export markets as an "other factor" allegedly causing 
injury to the EU industry.  However, as discussed  above, the Provisional and Definitive Regulations 
conclude that the EU industry's e xport performance did not cause injury.1121  We have rejected China's 
arguments that the Commission's conclusion of injury did not take account of the effects of declines in 
export sales.1122  We also recall that an investigating authority may conclude, notwithstanding the 
arguments of an interested party, that an alleged "other factor" causing injury does not, in fact, cause 
injury to the domestic industry at the same time as  dumped imports, in which case, it is in our view 
apparent that the investigating au thority need not address it further.1123  We have also found that while 
an investigating authority must consider the e ffects of other factors known to the investigating 
authority which may be causing injury to the dom estic industry, there is no required method of 
analysis in undertaking that examination.1124  Thus, despite the fact that it would have been clearer if 
the Commission had stated that non-tariff barriers were  not a factor causing inju ry, we consider that 
this is implicit in the Commission's determinati on regarding loss of export sales.  China has not 
explained how non-tariff barriers could be considered as an "other factor" causing injury other than in 
connection with their impact on export sales.  Thus , we consider the Commi ssion's conclusion to be 
sufficient, based on a reasonable interpretation of th e facts, and one which could be reached by an 
unbiased and objective investigating authority on the basi s of the information before it.  We therefore 
reject this aspect of China's claim.  
7.541  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union violated Article 3.5 of the AD Agreement in the Definitive Regulation by failing to examine 
known factors other than the dumped imports which were at the same time causing injury to the 
domestic industry, or by attributing injuries caused by these other factors to the dumped imports.  Having found that there is no violation of Article 3.5,  we consider that there is also no violation of 
Article 3.1 of the AD Agreement, and we theref ore reject China's claim under that provision.  
                                                      
1116 European Union, first written submission, para. 751. 
1117 FESI [Federation of the European Sporting Goods Industry] submission dated 23 August 2005, 
Exhibit CHN-93, p. 51. 
1118 European Union, first written submission, para. 751. 
1119 European Union, first written submission, para. 752. 
1120 European Union, first written submission, para. 752. 
1121 See paragraphs 7.521-7.522 above. 
1122 See paragraphs 7.520-7.523 above.  
1123 See paragraph 7.484 above. 
1124 Appellate Body Reports, US – Hot-Rolled Steel , para. 178; EC – Tube or Pipe Fittings , para. 189; 
and US – Softwood Lumber IV (Article 21.5 – Canada) , para. 154.   WT/DS405/R 
  Page 237  
 
 7. Claims II.6, II.7, II.8, II.9, II.10, II.12,  III.10, III.11, III.12, III.13, III.14 and III.19 – 
Procedural Issues  
7.542  In this section of our report, we address China's cl aims of violations in the conduct of both the 
original investigation and the expiry review.  Wh ile China argues these claims  separately, there is a 
significant degree of overlap in its assertions, and in the factual situations underlying these claims.  
The specific provisions under which China asserts viola tions are Articles 6.1.1, 6.1.2, 6.2, 6.4, 6.5, 
6.5.1, 6.5.2, 6.8, 6.9, and 12.2.2 of the AD Agre ement.  We examine each of China's claims below. 
(a) Claim III.13 – Alleged violation of Article 6.1. 1 of the AD Agreement and Paragraph 15(a)(i) 
of China's Accession Protocol – Failure to provi de at least 30 days to reply to the MET/IT 
claim forms  
7.543  In this section of our report, we address Ch ina's claim that the European Union acted 
inconsistently with Article 6.1.1 of the AD Agre ement and Paragraph 15(a)(i) of China's Accession 
Protocol by failing to provide Chinese exporters with  at least 30 days to reply to the MET/IT claim 
forms in the original investigation. 
(i) Arguments of the parties  
a. China 
7.544  China asserts that the European  Union violated Article 6.1. 1 of the AD Agreement in the 
original investigation by providing less than 30 days for exporting producers to reply to the MET and/or IT questionnaires.
1125  According to China, the MET questionnaire is a questionnaire within the 
meaning of Article 6.1.1, because (i) it is th e initial questionnaire for Chinese exporting producers; 
(ii) it explicitly provides that it may be subject to  verification; and (iii) it does not constitute "any 
other request for information/clarification".1126  In the alternative, Ch ina submits that the MET 
questionnaire is a part of the initial anti-dumpi ng questionnaire, because provided the MET criteria 
are satisfied and an exporting producer obtains M ET, through completion of the MET questionnaire, 
which in most cases is verified by the European Union, the Chinese exporting producers' data in the 
anti-dumping questionnaire is used by the European Un ion.  Therefore, China contends 30 days for a 
reply should have been allowed.1127  Furthermore, China claims th at the European Union violated 
Paragraph 15(a) of China's Accession Protocol b ecause the very short deadline granted precluded the 
exporters from fully exercising their rights of defenc e, as they were not granted a full opportunity to 
demonstrate that they operate under market economy conditions.1128   In this regard, China points to 
Paragraph 151 of China's Accession Working Party Report and the chapeau of Article 6.1 of the 
                                                      
1125 China, first written submission, para. 1346.  China notes that the MET and IT "questionnaires" are 
a single document, but in its submission makes no specific reference to the IT aspect of these questionnaires.  However, China notes that this should not be considered to imply that China has relinquished its claim 
concerning IT questionnaires.  China, first written submission, fn. 865. 
1126 China, first written submission, paras. 1351-1352, citing Panel Report, Egypt – Steel Rebar , 
paras. 7.276-7.277.  China submitted two such questi onnaires to support its contentions concerning their 
significance, the level of information requested, and thei r alleged treatment by the European Union as the initial 
questionnaire in investigations con cerning non-market economy countries .  China, first written submission, 
paras. 1351-1352; MET and IT questionnaire, Exhibit CHN-77.  China notes that the MET questionnaire states 
that where an interested party refuses access to, or othe rwise does not provide, necessa ry information within the 
limits, or significantly impedes the investigation or supplies false or misleading information, claims for MET may be rejected, and asserts that this statement effectiv ely implements Article 6.8 of the AD Agreement.  China 
also argues that Annex I, paragraphs 6 and 7 of the AD Agreement provide contextual support for interpreting 
the term "questionnaire" as referring to questionnaires that may be subject to verification.   
1127 China, first written submission, para. 1359. 
1128 China, first written submission, para. 1347. WT/DS405/R 
Page 238  
 
 AD Agreement as support, arguing that, given the funda mental nature of the MET questionnaire for a 
Chinese exporting producer, 15 days for response to th e detailed request for significant information in 
the MET questionnaire, to the extent and in th e format and manner requested, does not provide 
Chinese exporters a full opportunity to defend their interests or to show that they operate under 
market economy conditions.
1129  China considers that the European Union's view that there is only one 
document that constitutes the questionnaire in an an ti-dumping investigation is a false premise that 
rests on a restrictive reading of the report in Egypt – Steel Rebar .1130  While it disagrees with the 
views of the panel in this regard in US – Anti-Dumping and Countervailing Duties (China) , China 
contends that this case, as well as the facts underlying the report in Egypt – Steel Rebar , are 
distinguishable.1131  China notes the panel's conclusion in US – Anti-Dumping and Countervailing 
Duties (China) that the term "questionnaires", as used in Article 12.1.1 of the SCM Agreement, refers 
to the initial comprehensive questionnaire or set of questionnaires, 1132  and asserts in this regard that: 
"[i]f comprehensive questionnaires covering dumping (or subsidy), injury or 
causation are, even if sent separately, part of the same set of original questionnaires, 
then the MET questionnaire certainly is part of that same set of questionnaires, as it is 
a comprehensive questionnaire that concerns  an important aspect of the investigation 
which is directly related to the dum ping determination in case of non-market 
economy countries. As such, it should be seen as an extension of the "dumping" 
questionnaire in case of non-market economy countries."1133 
China contends that all the relevant characteristics of a "questionnaire" are satisfied in the case of the 
MET questionnaire, asserting that it is a "comprehen sive written enquiry carried out at the beginning 
of the investigation and backed up by a verification visit".1134 
 
b. European Union 
7.545  The European Union notes that the term "questionnaire" is not defined in Article 6.1.1, but 
considers that the panel in Egypt – Steel Rebar  resolved this issue, and th at there is only one document 
that constitutes the "questionnaire" in a dumping investigation, namely the initial questionnaire.1135  
The European Union notes that practical problems w ould arise were multiple documents subject to the 
30 day response rule.1136  In addition, the European Union cont ends that China does not articulate any 
claim based on China's Accession Protocol, noting, inter alia , that China's arguments in this regard 
refer to Paragraph 151 of Chin a's Accession Working Party Repor t, which the European Union 
maintains does not impose any binding obligations on Members.1137  
                                                      
1129 China, first written submission, paras. 1361-1363.  In this regard, China points to the magnitude of 
the information solicited and the high burden of proof w ith respect to the MET criteria.  China, first written 
submission, para. 1367.   
1130 China, second written submission, para. 1466. 
1131 China, answer to Panel question 100, referring to Panel Report, US – Anti-dumping and 
Countervailing Duties (China) , and China, second written submission, para. 1467. 
1132 China, second written submission, para. 1469-1470. 
1133 China, second written submission, para. 1471. 
1134 China, second written submission, para. 1474. 
1135 European Union, first written submission, para. 801. 
1136 European Union, first written submission, paras. 803-805. 
1137 European Union, first written submission, paras. 808 and 810-813.  WT/DS405/R 
  Page 239  
 
 (ii) Arguments of third parties 
a. United States 
7.546  The United States considers that China's appare nt assumption that the term "questionnaires" 
in Article 6.1.1 encompasses any request for information made by an investigating authority is 
inconsistent with the views of the panel in Egypt – Steel Rebar , which explained that the context of 
Article 6.1.1 reveals that the term "questionnair e" for purposes of the AD Agreement refers to one 
particular request for information made by the investig ating authority, specifically, the original 
antidumping questionnaire in an investigation.  The United States asserts that the opportunity 
provided by an investigating authority to pe rmit Chinese companies to claim market economy 
treatment or individual treatment is a precursor to the issuance of the actual antidumping 
questionnaire, and therefore not subject to the obligations in Article 6.1.1.
1138  The United States notes 
that the panel in US – Anti-Dumping and Countervailing Duties (China)  rejected a similar claim by 
China under Article 12.1.1 of the Agreement on Subsidies and Countervailing Measures ("SCM 
Agreement"), a provision almost identical to Article 6.1.1 of the AD Agreement.1139   
(iii) Evaluation by the Panel 
7.547  Before addressing China's claims, we recall the f acts pertinent to this aspect of the dispute, 
which we understand to be undisputed.  The Notice of  Initiation of the original investigation indicated 
that "Duly substantiated claims for market economy treatment (as mentioned in point 5.1(e)) and/or 
for individual treatment pursuant to Article 9(5) of  the basic Regulation, must reach the Commission 
within 15 days of the publication" of the Notice.1140  Forms for making such claims, entitled "Form for 
Companies Claiming Market Economy Status a nd/or Individual Treatment in Anti-Dumping 
Proceedings",1141 were sent to Chinese exporting producer s.  Chinese exporting producers were given 
the 15 days mentioned in the Notice to respond. 
7.548  Article 6.1.1 of the AD Agreement provides, in pertinent part:  
"6.1.1 Exporters or foreign producers receiving questionnaires used in an 
anti-dumping investigation shall be given at least 30 days for reply.15  Due 
consideration should be given to any requ est for an extension of the 30-day period 
and, upon cause shown, such an extension should be granted whenever practicable. 
_______________ 
 15  As a general rule, the time limit for exporters shall be counted from the date of 
receipt of the questionnaire, whic h for this purpose shall be deem ed to have been received one 
week from the date on which it was sent to th e respondent or transmitted to the appropriate 
diplomatic representative of the exporting Me mber or, in the case of a separate customs 
territory Member of the WTO, an official  representative of the exporting territory." 
                                                      
1138 United States, third party written submission, paras. 50-52.  The United States notes that in China's 
own practice in countervailing duty cases, where Artic le 12.1.1 of the SCM Agreement, similarly to 
Article 6.1.1 of the AD Ag reement, establishes a minimum 30-day response period to questionnaires in CVD 
investigations, China's investigating authority appear to recognize that the 30-day time period for reply does not apply to every request for information made by an investigating authority.  United States, third party written 
submission, para. 53.   
 
1139 United States, oral statement, para. 29. 
1140 Notice of Initiation, Exhi bit CHN-6, recital 6(d). 
1141 MET and IT Questionnaire, Exhibit CHN-77. WT/DS405/R 
Page 240  
 
 The fundamental questions before us, therefore, are what is the meaning of "questionnaire" in this 
provision, and whether the MET/IT claim forms which are the subject of China's claim constitute such a "questionnaire".    7.549  These are not questions of first impression.  In  addition to the reports of the panels in Egypt – 
Steel Rebar and US – Anti-Dumping and Countervailing Duties (China) , referred to by the parties and 
third party as relevant in this regard, we note that the recent report of the panel in EC – Fasteners  
(China) addressed precisely these questions, under Article 6.1.1 of the AD Agreement, in a case 
involving the same parties, the European Uni on and China, concerning essentially the same 
document, that is, a form for claiming MET and/or IT status in anti-dumping investigations conducted 
by the Commission involving non-market economies, in that case, China.
1142  With the exception of 
China's reliance on Paragraph 15(a)(i) of its Prot ocol of Accession, which we address below, the 
arguments in EC – Fasteners  (China) were substantially the same as t hose before us here.  Nothing in 
China's arguments concerning the meaning of Article 6.1.1 in the context of the MET/IT claim forms 
in question in this dispute leads us to conclude th at a different outcome from that reached by the panel 
in EC – Fasteners  (China) is warranted in this case.   
7.550  The panel in EC – Fasteners  (China) considered the ordinary meaning of the term 
"questionnaire" as used in Article 6.1.1, in context,  and in light of practical considerations in the 
conduct of anti-dumping investigations .  That panel concluded that  
"the term "questionnaires" in Article 6.1. 1 refers to one kind of document in an 
investigation.  Turning to the question of wh at that document might be, we note that 
the considerations of context referred to above suggest that it refers to the initial 
comprehensive questionnaire issued in an  anti-dumping investigation to each of the 
interested parties by an investigating aut hority at or following the initiation of an 
investigation, which questionnaire seeks in formation as to all relevant issues 
pertaining to the main questions that will need to be decided (dumping, injury and 
causation)."1143  
We agree with this conclusion, and the analysis on which it is based, and adopt them as our own. 
 7.551  China contends that the MET/IT claim form in question should be considered a 
"questionnaire" within the meaning of Article 6.1.1, given that it is sent at the outset of the investigation to obtain information from Chinese  exporting producers concerning whether market 
economy conditions prevail for the producers with re gard to the manufacture, production and sale of 
the product under investigation.  China observes that  this is the ""initial" questionnaire" received by 
those producers, and the "first questionnaire in  an anti-dumping investigation concerning Chinese 
exporting producers".
1144  Moreover, China asserts that the MET/IT  claim form is a "properly drafted, 
standard and detailed questionnaire requiring extremely detailed info rmation on the MET criteria" and 
is, moreover, subject to verification.1145  Alternatively, China asserts that, even if it is not considered a 
                                                      
1142 Panel Report, EC – Fasteners (China) , paras. 7.562-7.579. 
1143 Panel Report, EC – Fasteners (China) , para. 7.574 (footnote 1122 omitted).  The panel noted that it  
"recognize[d] that there may be differences in the initial comprehensive questionnaires sent to 
the different interested parties, reflecting their different activities and interests in the 
investigation.  Moreover, depending on how a Member organizes the conduct of anti-dumping 
investigations, there may be separate and distin ct initial questionnaires concerning the issues 
of dumping and injury and causation.  These circumstances do not affect our fundamental 
conclusion, that the initial comprehensive document, or set of documents, covering all of these 
issues are encompassed by the term " questionnaires" in Article 6.1.1."   
Id., footnote 1123. 
1144 China first written submission, para. 1351. 
1145 China, first written submission, paras. 1352 and 1357.  WT/DS405/R 
  Page 241  
 
 questionnaire within the meaning of Article 6.1.1, th e MET/IT claim form is a "part of the initial anti-
dumping questionnaire to be completed by a Chin ese exporting producer", and therefore the minimum 
30 day period to respond should apply.
1146   
7.552  Similar arguments were rejected by the panel in EC – Fasteners (China).1147  Like that panel, 
we do not agree that the MET/IT claim form in qu estion can be considered a "questionnaire" within 
the meaning of Article 6.1.1, as we understand that  term.  China refers to this document as a 
"questionnaire" throughout its arguments, while the Eu ropean Union, referring to its title, contrasts it 
with the "main document sent to sampled expor ters/producers [which is entitled] 'ANTI-DUMPING 
QUESTIONNAIRE'".1148  While we have referred to the doc ument by an abbreviation of its actual 
title, as a "MET/IT claim form", we give no significance to the title of the document in our analysis of 
China's claims.   
7.553  We certainly do not agree with China's contention that the MET/IT claim form is the "original 
questionnaire".  As the panel in EC – Fasteners (China) observed, in our view correctly, "merely that 
it is the first request for informa tion sent to Chinese exporters does not, ipso facto , demonstrate that it 
is a questionnaire within the meaning of Article 6.1.1."1149  Looking at the MET/IT claim form in 
question,1150 we agree with the panel in EC – Fasteners (China) that it  
"clearly is not a comprehensive questionnaire seeking all the information on the 
issues of dumping, injury and causation that the investigating authority considers will 
be required, at least at the outset of the investigation, in  order to make its 
determinations on those issues consiste ntly with the requirements of the 
AD Agreement.  Rather, it elicits informati on relevant to the market economy test and 
individual treatment test applied by the European Union in anti-dumping 
investigations involving certain non-market economies."1151   
As the panel in EC – Fasteners (China) observed, these questions are not relevant in all 
investigations, and are not directly related to th e determinations of dumping, injury and causation 
required by the AD Agreement.  Rather, they are questions which are properly treated as preliminary 
requests for information, necessary for the investigating authority to determine, inter alia , which 
interested parties will receive the comprehensiv e questionnaires that are within the scope of 
Article 6.1.1.1152  While we recognize that the resolution of MET and IT claims is important for the 
Chinese exporting producers in an anti-dumping investig ation, we do not consider that this changes 
the nature of the MET/IT claim form, or brings it within the scope of Article 6.1.1.  Finally, we also consider persuasive the point made by the panel in EC – Fasteners (China) , that, to treat the MET/IT 
claim form in question as a "questionnaire" within the meaning of Article 6.1.1  
 
"would mean that a subsequently issued comprehensive questionnaire seeking all the 
relevant information needed for the determ inations of dumping, injury and causation 
would be something other than a "questionnair e" within the meaning of Article 6.1.1.  
                                                      
1146 China, first written submission, para. 1359. 
1147 Panel Report, EC – Fasteners (China) , paras. 7.576-7.577.   
1148 European Union, first written submission, para. 806.   
1149 Panel Report, EC – Fasteners (China) , para. 7.576. 
1150 MET and IT Questionnaire, Exhibit CHN-77. 
1151 Panel Report, EC – Fasteners (China) , para. 7.577. 
1152 Panel Report, EC – Fasteners (China) , para. 7.577.  Moreover, while China places considerable 
emphasis on the extent of information requested and the effort required to re spond, in our view these 
considerations do not affect the nature of the documents in question.  We note that China has made no claim independent of Article 6.1.1, with the exception of its claim under Paragraph 15(a)(i) of China's Accession 
Protocol, arguing that the 15-day period for response was unreasonably short. WT/DS405/R 
Page 242  
 
 This would, in our view, deny exporters precisely the right that is afforded them by 
that provision, a result we find untenable."
1153 
7.554  We therefore conclude that the "Form for Companies Claiming Market Economy Status 
and/or Individual Treatment in Anti-Dumping Proceedings" at issue in this dispute is not a 
"questionnaire" within the meaning of Article 6.1.1,1154 and that therefore, the European Union did not 
violate Article 6.1.1 of the AD Agreement by not pr oviding Chinese exporters with 30 days to submit 
their responses.   
7.555  Turning to China's claim that the European Union violated Paragraph 15(a)(i) of China's 
Accession Protocol, we note that beyond invoking th is provision, China has presented no substantive 
arguments concerning its text, meaning or import.  China asserts that:  
"through the terms of Paragraph 151 of the Working Party Report on the Accession of 
China to the WTO, all WTO Members includi ng the European Union agreed that : " in 
implementing subparagraph (a)(ii) of S ection 15 of the Draft Protocol, WTO 
Members" ... "provide Chinese producers and exporters a full opportunity for the 
defence of their interests in a particular case."  1155  
China then notes the chapeau of Article 6.1 of  the AD Agreement, which provides that "[a]ll 
interested parties in an anti-dumping investigation shall be given notice of the information which the 
authorities require and ample opportunity to present in writing all evidence which they consider 
relevant in respect of the investigation in questions."1156  China goes on to point out the importance of 
the MET/IT claim form for the determinati on whether a Chinese exporting producer will be 
considered for market economy treatment, and emphasizes the volume of detailed information 
required by the form, asserting that "in light of the burden of proof impo sed on the Chinese exporting 
producers to be demonstrated within the extremely short 15 days deadline is extensive and effectively 
does not provide them a ' full opportunity to defend their interests' , Chinese producers do not have 
ample opportunity to show that they operate under market economy conditions".1157 
 
7.556  As we understand it, therefore, China's claim is that the extent and degree of detail and 
complexity of the information requested in the MET/ IT claim form is such that a 15-day deadline to 
respond deprives Chinese exporting producers of a full opportunity to defend their interests, as provided for in Article 6.1 of the AD Agreemen t, and mentioned in Pa ragraph 151 of China's 
Accession Working Party Report, resulting in a violat ion of Paragraph 15(a)(i) of the Protocol.   
7.557  The difficulty we have with China's claim is that we see nothing in the provision of China's 
Accession Protocol invoked by China which can serve as a legal basis for the claim asserted.  
Paragraph 15 of China's Accession Protoc ol reads, in pertinent part:  
"Price Comparability in Determining Subsidies and Dumping  Article VI of the GATT 1994, th e Agreement on Implementation of 
Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping 
Agreement") and the SCM Agreement shall apply in proceedings involving imports 
of Chinese origin into a WTO Member  consistent with the following: 
                                                      
1153 Panel Report, EC – Fasteners (China) , para. 7.578. 
1154 We emphasize that our conclusion is not based on the name of the document, but on our 
consideration of its substance and its  purpose in anti-dumping investigations conducted by the European Union. 
1155 China, first written submission, para. 1361 (italics in original). 
1156 China, first written submission, para. 1361. 
1157 China, first written submission, para. 1363 (italics in original).  WT/DS405/R 
  Page 243  
 
  (a) In determining price comparability under Article VI of the 
GATT 1994 and the Anti-Dumping Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry under i nvestigation or a 
methodology that is not based on a strict comparison with domestic prices or costs in China based on the following rules: 
(i) If the producers under investigation can clearly show that market economy 
conditions prevail in the industry produci ng the like product with regard to the 
manufacture, production and sale of that product, the importing WTO Member shall 
use Chinese prices or costs for the industry under investigation in  determining price 
comparability." 
While this provision clearly gives Chinese producers unde r investigation a right to the use of Chinese 
prices or costs for the industry under investigation in determining price comparability if they can 
clearly show that market economy conditions prevail in the industry producing the like product with 
regard to the manufacture, production and sale of that product, there is nothing in this provision 
concerning full or ample opportunity to defend their interests.  Nor does this provision address 
anything about procedures or methodologies for making the necessary showing that market economy 
conditions prevail, or standards for judging whether the necessary showing has been made. 
 7.558  It is true that Article 6.1 of the AD Agreement provides that interested parties shall be given 
"ample opportunity to present in writing all evidence which they consider relevant in respect of the 
investigation".  However, even assuming the info rmation requested in the MET/IT claim forms 
constitutes "evidence ... relevant" to the investiga tion, a question we do not address, China has made 
no claim under Article 6.1 concerning the MET/IT cl aim forms, although its argument refers to this 
provision.  
7.559  It is also true that Paragraph 151 of China's Accession Working Party Report states:   
"members of the Working Party confirmed that in implementing subparagraph (a)(ii) 
of Section 15 of the Draft Protocol, WTO Members would comply with the 
following: ... 
(d) The importing WTO Member should give notice of information which it 
required and provide Chinese producers and exporters ample opportunity to present 
evidence in writing in a particular case. 
(e) The importing WTO Member should provide Chinese producers and 
exporters a full opportunity for the defence of their interests in a particular case." 
However, as discussed elsewhere in this report,
1158 this paragraph of China's Accession Working Party 
Report is not binding upon the European Union or other WTO Members.  Paragraph 1.2 of China's 
Accession Protocol establishes that China's Accessi on Protocol is an integral part of the WTO 
Agreement, and thus establishes rights and oblig ations of WTO Members.  However, the only 
commitments in China's Accession Working Party Report which are included in China's Accession 
Protocol, and thus constitute binding obligations, are those referred to in Paragraph 342 of China's 
Accession Working Party Report.  These do not incl ude Paragraph 151 of China's Accession Working 
Party Report.  Therefore, Paragraph 151 do es not establish any binding obligation on the 
European Union, or any other WTO Member.  Moreove r, subparagraphs (d) and (e) of that Paragraph, 
quoted above, essentially reiterate the requirements of Articles 6.1 and 6.2 of the AD Agreement, 
which already bind all WTO Members in the contex t of anti-dumping investigations of imports from 
                                                      
1158 See paragraphs 7.180-7.185 above. WT/DS405/R 
Page 244  
 
 all WTO Members, including China.  Thus, there would be no reason for Members to agree to 
additional binding provisions in this regard in  the context of China's accession, and we cannot 
conclude that they did so.  Moreover, even had they done so, China's claim purports to arise under 
Paragraph 15(a)(i) of the Protocol, and not Pa ragraph 151 of China' s Accession Working Party 
Report, although China refers to the latter in its argument. 
 
7.560  Based on the foregoing, we conclude that there is  no legal basis for China's claim with respect 
to the 15-day deadline for submitting MET/IT clai m forms under Paragraph 15(a)(i) of China's 
Accession Protocol, and therefore dismiss China's claim.   
(b) Claim II.6 – Alleged violation of Article 6.1.2 – Failure to make evidence available promptly 
7.561  In this section of our report, we address Ch ina's claim that the European Union acted 
inconsistently with Article 6.1.2 of the AD Agreem ent in the expiry review by not making certain 
evidence presented in writing available "pro mptly" to other interested parties.   
(i) Arguments of the parties  
a. China  
7.562  China considers, consistent with the dictionary  meaning of the term "prompt", that evidence 
presented in writing by an interested party should be made available to other interested parties 
"quickly" and "without delay".
1159  China argues that: (i) although companies C, B and G submitted 
non-confidential versions of their injury questionn aire responses and did not request confidential 
treatment, the Commission did not make these respon ses available "promptly" to interested parties, 
considering, on its own initiative, that some inform ation in those responses was confidential; (ii) the 
revised questionnaire response of Company H, the orig inal of which could not be printed or was not 
legible, was not made available promptly; and (iii) the Union Interest questionnaire responses of five 
sampled EU producers were not made available at all.1160   
7.563  Relying on the views of the panel in Guatemala – Cement II , China argues that Article 6.1.2, 
read together with Article 6.5, makes clear that (i) an investigating authority may not delay making 
evidence available simply because of the possibility, unsubstantiated by any request for confidential 
treatment, that the evidence contains confidential in formation; (ii) it is not for an investigating 
authority, on its own, to speculate or judge whet her there is confidential information or not in a 
document submitted by an interested party; and (iii) it is the party submitting the evidence that has to 
request confidential treatment and demonstrate "g ood cause" for confidentiality and in the absence 
thereof, the investigating authority's obligation is to promptly make available the evidence submitted 
by one interested party to all other interested parties.1161  China disagrees with the European Union's 
contention that the "promptness" requirement in Ar ticle 6.1.2 starts running after the investigating 
authority has ensured that the non-confidential subm ission does not contain confidential information, 
                                                      
1159 China, first written submission, para. 659; answer to Panel question 64.   
1160 China, first written submission, paras. 638, 645-6 56 and 662; answer to Panel question 65; second 
written submission, paras. 887, 894-902 and 905.  Furt hermore, concerning the questionnaire response of 
Company H, China argues that while this company's response was not made available to interested parties because it could not be printed/was not legible, the Commission did not make available the revised 
questionnaire response of this company promptly either.  That revised response was made available 5 days after 
its submission.  China considers this delay to have been  in addition to the 15-days it took to obtain a legible 
response from the company.  In China's view, this demonstrates the lack of promptness in making available the 
evidence submitted by interested parties.  China, fi rst written submission, paras. 654-655; answer to Panel 
question 64; second written submission, para. 905. 
1161 See, e.g.  China, fist written submission, paras. 641- 643; answer to Panel question 58; second 
written submission, para. 862.  WT/DS405/R 
  Page 245  
 
 which China considers to be an unjustified "ch ecking action" in the absence of a request for 
confidential treatment and "good cause" showing by  the submitter of the non-confidential version.
1162 
7.564  China asserts that the facts in this disput e are similar to those examined by the Guatemala – 
Cement II panel.  In particular, China argues that th e European Union has adduced no evidence to 
demonstrate that the sampled producers concerned requested confidentiality and showed "good cause" 
for confidential treatment of the parts of the ques tionnaire response which the European Union claims 
were confidential.  China argues that in the expi ry review there were no requests for confidential 
treatment other than for the names of the complain ants and that the confidentiality granted to the 
names of these complainants could not be extended au tomatically to other information provided in the 
questionnaire responses.1163 
7.565  China disagrees with the European Union's view  that investigating authorities "are entitled, 
indeed they are bound" to ascertain the true confid ential status of evidence before they make it 
available to interested parties.  For China, i nvestigating authorities receiving evidence labelled as 
"non-confidential" have an unambiguous obligation to  make it promptly available to interested 
parties, without any consideration of whether or not  the evidence is, in fact, properly labelled as "non-
confidential".  In this regard, China argues that  a party submitting a non-confidential questionnaire 
response is fully cognizant of the fact that the information may be  disclosed.  In addition, China 
considers that the panel in Guatemala – Cement II  made it clear that it is not for the investigating 
authorities to judge or speculate whether there is  confidential information or not in a document 
submitted by an interested party.  Consequently , China argues, it is not for the investigating 
authorities to identify concerns, explain their concerns  to the interested party and seek the approval of 
the interested party as to whether or not there is confidential information in a non-confidential 
questionnaire response.1164  
7.566  China further considers that th e European Union's position, if accepted, would lead to a 
situation not foreseen in the AD Agreement: a process whereby i nvestigating authorities would 
effectively take over the task of interested parties to judge what information is confidential and what 
information is submitted on a confidential basis.  Th is, in China's view, is neither the object nor the 
purpose of Article 6.5 whether read in isolation or  in the context of Article 6.1.2.  China also 
considers that the European Union's interpretation c ould very well result in the situation the panel in 
Guatemala – Cement II  expressly warned against:  circumvention of the specific requirement of 
Article 6.1.2, undermining the purpose of that provision.  In any event, China argues, that were the Panel to agree with the European Union's pos ition, the European Union nonetheless violated 
Article 6.1.2 by not making the other parts of the questionnaire responses of companies C, B and G, 
which were clearly non-confid ential, available "promptly".
1165   
b. European Union  
7.567  The European Union submits that the Co mmission properly invoked confidentiality as a 
reason for delaying the release of information and disagrees that the panel report in Guatemala – 
Cement II  precludes its actions in this respect.  In that  case, the European Union argues, there was no 
request for confidential treatment, and the Guatem alan investigating authority, acting on its own 
initiative, delayed the release of evidence simply because of the possibility that it might contain 
confidential information.  The European Union cont ends that in the expiry review at issue here, 
justified requests for confidential treatment had been  made and granted, and the Commission had very 
                                                      
1162 China, first written submission, para. 659; answer  to Panel question 64; second written submission, 
paras. 892-893, citing Panel Report, Guatemala – Cement II , paras. 8.135, 8.141-8.143 and 8.220.  
1163 China, second written submission, paras. 864-868, 881-882 and 884.  
1164 China, answer to Panel question 58; se cond written submission, paras. 869-874. 
1165 China, second written submission, paras. 876-877 and 904. WT/DS405/R 
Page 246  
 
 good reasons to believe that the questionnaire responses submitted as "non-confidential versions" 
contained information that the producers wanted to be covered by these prior requests for confidential 
treatment.
1166  
7.568  The European Union argues that the situati on facing the Commission when it received the 
questionnaire responses from the sampled EU produ cers was that a request had been made for 
confidential treatment of the identities of the firm s supporting the review request, and the Commission 
had concluded that there was good cause for this de mand and decided to treat the information as 
confidential.  However, despite the parties' request for confidential treatment, the Commission 
considered that certain information in the non-conf idential versions of their questionnaire responses 
could, if made available to other interested par ties, have disclosed the id entities of the companies 
supplying the responses, the very information for which confidential treatment had been sought and 
granted.  Given this apparently contradictory behaviour on the part of the companies, the Commission concluded that there was a serious possibility that th ey had not understood the nature of this aspect of 
the procedure, and therefore decided that there were serious doubts whether the companies actually 
intended the information in question to be released.
1167  The Commission therefore delayed the release 
of the non-confidential questionnaire responses un til it had clarified the producers' intentions 
regarding confidential treatment of information.1168 
7.569  The European Union argues that investigati ng authorities are entitled, indeed are bound, to 
ascertain the true status of information about which there is real uncertainty concerning its 
confidential status before they make it available to  interested parties.  The European Union relies on 
the text of Article 6.5 of the AD Agreement, which provides for the protection of confidential 
information.  The European Union argues that in or der to secure that protection it is the investigating 
authority's duty to clarify a party's intentions regarding confidentiality where the investigating 
authority is uncertain about them.  The European  Union further considers that the investigating 
authority's determination in this regard should also be guided by the requirement in Article 6.13 that 
investigating authorities "take due account of any di fficulties experienced by interested parties in 
supplying information requested".  In the European Union's view, the "information requested" 
includes information that was intended to justify claims for confidential treatment.1169  
7.570  Furthermore, the European Union contends that the non-confidential versions of the responses 
were in any event made available to interested parties "promptly".  The European Union considers 
that the period for assessing prompt availability runs  from the time when the non-confidential status 
of evidence has been determined.1170  The European Union is also  of the view that whether 
information is made available "promptly" must be assessed by weighing up the reasons for delay, on 
the one hand, and the obligation of promptness, on the other hand. As regards the first factor, the 
European Union considers that account must be taken of the importance that the AD Agreement 
places on respect for confidentiality of information.  With respect to the second factor, the European 
Union notes that the AD Agreement provides no guidance as to how much weight should be accorded 
to the "promptness" obligation where it is in conflic t with the right to confidential treatment.  The 
European Union considers that in this situation one  element to be taken into account is the right of 
interested parties to defend their interests and the gui dance provided in this context by Article 6.4.  In 
                                                      
1166 European Union, first written submission, para s. 357 and 360; answer to Panel question 61; 
opening oral statement at the second meeting with the Panel, fn. 230.  
1167 The European Union asserts that this conclusion was reinforced by the fact  that the companies did 
not have legal assistance in completing the questionnaires .  European Union, openin g oral statement at the 
second meeting with the Panel, para. 236.  
1168 European Union, first written submission, para. 360; opening oral statement at the second meeting 
with the Panel, paras. 231-239.   
1169 European Union, first written submission, paras.  358-359; answer to Panel question 60; opening 
oral statement at the second mee ting with the Panel, fn. 229.   
1170 European Union, first written submission, para. 370; answer to Panel question 64.   WT/DS405/R 
  Page 247  
 
 this case, the European Union not es that the non-confidential versi ons of the questionnaire responses 
were released in late 2008, i.e. one year before  the Review Regulation was adopted, and therefore 
interested parties had many months in which to study and prepare their reactions to those responses.
1171  
7.571  With respect to the Union Interest questionnair e responses of five sampled EU producers, the 
European Union rejects China's claims as a matter of fact.  It submits that, as stated during the first 
substantive meeting with the Panel, only three r esponses to the Union Interest questionnaires were 
received from the sampled EU producers, and all of these responses were made available to interested 
parties, a fact China does not dispute.  The Euro pean Union also argues that, contrary to China's 
assertion, it is China as the complainant that b ears the burden of proving the factual assertions 
underlying its claims.1172  
(ii) Evaluation by the Panel 
7.572  Article 6.1.2 of the AD Agreement provides: 
"6.1.2 Subject to the requirement to protect confidential information , evidence 
presented in writing by one interested party sh all be made available promptly to other 
interested parties participating in th e investigation." (emphasis added)  
Article 6.1.2 thus imposes an obligation on inv estigating authorities to make evidence available 
promptly to other interested parties participating in the investigation.  The text of Article 6.1.2 makes 
it clear, however, that this obligation is "subject  to the requirement to protect confidential 
information".   
7.573  China alleges that the European  Union violated this provision in the Review Regulation by 
failing to make certain evidence available "promptly" .  We consider each of China's allegations of 
error below.  
7.574  With respect to the facts, th ere is no dispute between the parties that the questionnaire 
responses at issue in this claim constitute "eviden ce presented in writing", and therefore are subject to 
the requirements of Article 6.1.2, to the extent they are not confidential.  Nor is there any dispute that 
the evidence was made available to other interested parties.
1173  The issue in this claim concerns 
whether the European Union complied with the requirement to make the evidence available 
"promptly".   
a. non-confidential injury questionnaire re sponses of four sampled EU producers 
7.575  China claims that the European Union violat ed Article 6.1.2 (i) because the Commission 
delayed in making available, on the grounds that responses contained confidential information, the 
non-confidential injury questionnaire responses of company B, C and G, even though these producers 
did not request confidential treatment of inform ation in those responses; and (ii) because the 
                                                      
1171 By way of contrast, the European Union notes that the delay that was considered in Guatemala – 
Cement II  was such that the period between the release of the information and the imposition of definitive 
measure was only nine days.  European Union, opening oral statement at the second meeting with the Panel, 
paras. 240-244.  
1172 European Union, second written submission, para. 177; answer to Panel question 63; opening oral 
statement at the second meeting with the Panel, para. 228.   
1173 As discussed below, the European Union asserts that certain of the questionnaire responses at issue 
in this claim were not made available to interested pa rties because they were never in fact submitted to the 
Commission, but does not dispute that those that were  submitted fall within the scope of Article 6.1.2. WT/DS405/R 
Page 248  
 
 Commission did not make available "promptly" to  interested parties the injury questionnaire 
responses of company B, C, G and H.
1174   
7.576  With respect to the first aspect of China's claim,  we note certain relevant facts.  The evidence 
before us indicates, and the European Union itsel f acknowledges, that the Commission withheld the 
non-confidential injury questionnaire responses of companies B, C and G from the non-confidential 
file while it checked the confidential status of information in those responses with those producers.1175  
The European Union explained, in the course of this proceeding, that the Commission had received a 
request, which it considered justified and granted, fo r confidential treatment of the identities of the EU 
producers.1176  Subsequently, the Commission received the "non-confidential" questionnaire responses 
of parties whose identities were confidential informat ion, and which appeared to contain information 
which, if made available to other interested parties,  would disclose that confidential information.  As a 
result, the Commission sought to clarify the intentio ns of the producers regarding the confidentiality 
of certain information in their responses that could, if  made available to other parties, have led to their 
identities being disclosed.  In order to do so, the Commission, delayed the release of the non-confidential responses in question.
1177   
7.577  China does not dispute the European Union's explanation of the delay in releasing the non-
confidential versions of the questionnaire responses in question.  However, China asserts that the 
European Union provided no evidence demonstra ting that the delay occurred because of the 
Commission's uncertainties with respect to the pr oducers' intentions regarding confidentiality.1178 
Moreover, China asserts that it is for the submitter of  information to decide whether information is 
confidential, and therefore investigating authoriti es receiving evidence labelled as "non-confidential" 
must make it available without any consideration as to whether or not the evidence is, in fact, properly 
treated as "non-confidential".1179   
7.578  We note that it clear as a matter of fact that a request for confidential treatment of the 
identities of EU producers had been received by the Commission and granted.  In this circumstance, 
we do not consider that evidence of the reason fo r the delay, that is evidence to support the 
European Union's explanation for that delay, whic h China does not dispute, is necessary in order for 
us to evaluate the parties' arguments with respect to  the European Union's actions under Article 6.1.2.   
7.579  We do agree with China that it is for the s ubmitter of information to seek confidential 
treatment of information, as provided for in Article  6.5 of the AD Agreement.  However, we note that 
Article 6.5 places an obligation on the investigating authority to not disclose confidential information, 
providing that "[s]uch [i.e. confidential] information shall not be disclosed  without the specific 
permission of the party submitting it".  We consider that Article 6.1.2 cannot be understood to require 
an investigating authority to make evidence availabl e promptly in a situation where the investigating 
authority has a justified concern as to the possibl e disclosure of confidential information should it 
disclose the evidence in question.  
7.580  We recall that the obligation to make eviden ce available "promptly" in Article 6.1.2 is 
"subject to" the requirement to protect confidential in formation.  In this case, the European Union has 
explained that the Commission delayed the release of the "non-confidential"  questionnaire responses 
of the producers concerned in order to ensure th at it did not disclose information concerning their 
                                                      
1174 China, first written submission, para. 643.  
1175 Response from European Commission to the EFA dated 8 May 2009, Exhibit CHN-51, pp. 5-6.   
1176 The Commission's grant of confidential treatment in this regard is the subject of China's claim 
under Article 6.5 of the AD Agreement, addressed below at paragraphs 7.667-7.807. 
1177 See, e.g.  European Union, opening oral statement at the second meeti ng with the Panel, paras. 234-
240.  
1178 China, second written submission, para. 903.   
1179 China, answer to Panel question 58; second written submission, para. 874.   WT/DS405/R 
  Page 249  
 
 identities which had been granted confidential tr eatment.  We see nothing in the AD Agreement, 
including in Article 6.1.2, that would preclude an investigating authority from seeking to ascertain the 
confidential status of informati on submitted by an interested party in order to ensure that the 
investigating authority does not violate Article 6.5 by disclosing information it has a justified reason 
to believe may be confidential.
1180  In this case, we agree with  the European Union that, having 
granted confidential treatment to the identities of EU producers, when the Commission received 
questionnaire responses which appeared to contain info rmation which, if made available to interested 
parties, would disclose the identities of the pro ducers submitting the information, the Commission 
was entitled to ascertain the facts to avoid itself violati ng Article 6.5.  We note in this regard that we 
have found that the European Union's grant of c onfidential treatment to this information was not 
inconsistent with Article 6.5 of the AD Agreement.1181  In these circumstances, we reject China's 
arguments in this regard.   
7.581  Turning to the second aspect of China's clai m, concerning the alleged failure of the 
Commission to make available "promptly" the qu estionnaire responses of Company B, C, G and H, 
we note the following facts.  Company B submitted its non-confidential questionnaire response on 
19 November 2008.  The response was not made available because it contained information which 
had to be further discussed with the company, name ly the information contained in table D of the 
questionnaire.1182  On 28 November 2008, that is, nine da ys later, the non-confidential questionnaire 
response was added to the non-confidential file.1183  Company C submitted its first non-confidential 
version of the questionnaire response on 20 November  2008.  However, due to confidentiality issues, 
this response was not immediately added to the non-confidential file. The same was the case for 
                                                      
1180 China's arguments are mainly premised on the panel report in Guatemala – Cement II .  However, 
we do not consider that report to be pertinent to the is sue before us.  In that case, there was no request for 
confidential treatment of information by the submitter of the evidence in question.  The investigating authority 
failed to make information available until shortly before the final determination based on a "possibility" that the 
evidence contained confidential information.  Given that the asserted possibility was unsubstantiated by a request for confidential treatment from the submitter of the evidence, the panel concluded that the delay was 
inconsistent with Article 6.1.2.  In this case, however,  the facts are different, as the Commission's concern that 
the evidence in question contained confidential information is substantiated by a previous request for confidential treatment of information, which the Co mmission had deemed justified and granted.   
1181 See paragraph 7.762 below. 
1182 Response from European Commission to the EFA dated 8 May 2009, Exhibit CHN-51, p. 5; Letter 
of the DG Trade dated 21 September 2009, Exhibit EU-21, p. 5.  
1183 Letter of the DG Trade dated 21 September 2009, Exhibit EU-21, p. 5. China asserts that the non-
confidential injury questionnaire response of Company B was only made available to interested parties around 
12 December 2008.  In support of its a ssertion, China provided, as an "additio nal issue" to its replies to Panel 
questions after the second substantive meeting, a copy  of e-mail exchanges between the Commission and legal 
counsel for the European Footwear Alliance (EFA) co ncerning the questionnaire responses of the sampled 
producers at issue.  China requests that the Panel consid er this evidence, arguing that its delayed submission was 
due to technical issues on account of which the e-mails could not be retrieved earlier.  China, replies to Panel 
questions after the second meeting, "additional issues" at pp. 31-33.  We deny China's request.  China's evidence 
was not submitted before or during our first substantiv e meeting with the parties, nor was it submitted in 
connection with China's rebuttal or questions from the Pa nel, as required by our working procedures.  We do not 
consider China's justification to constitute "good cause" for an exception to those procedures.  We agree with 
the European Union that China could have signalled that it was having technical problems in retrieving evidence 
it wished to submit at an earlier stage of the proceedings, rather than waiting to provide the evidence in its last submission to the Panel.  European Union, Comments on China's responses to the second set of questions from 
the Panel, para. 4.  In any event, the evidence does not,  in our view, support China's assertion.  The e-mails only 
indicate (i) that EFA, on 3
 and 9 December 2008, requested informatio n regarding whether the response of 
Company B had been received, and if so, whether EFA c ould schedule an appointmen t to copy this response; 
and (ii) that the Commission, in respon se, set 12 December 2008 for the parties to see the requested information.  
Exhibit CHN-135.  However, this does not demonstrate that the injury questionnaire response of Company B was only added to the non-confidential file on 12 Decembe r 2008, as opposed to 28 N ovember 2008 as asserted 
by the European Union.   WT/DS405/R 
Page 250  
 
 Company C's second submission.  The final non-confidential response of Company C was submitted 
on 15 December 2008, and was added to the non-confidential file, but the evidence does not make clear when this occurred.
1184  The European Union asserts that it was made available immediately, on 
15 December 2008, that is, 25 days after the origin al submission, while China argues that it was made 
available after that date, but does not specify a date.  Company G submitted its non-confidential 
questionnaire response on 17 November 2008.  This  response was withheld due to confidentiality 
issues.  The revised version of Company G's non-confidential response, submitted on 26 November 2008, was added to the non-confidential  file as of 27 November 2008, that is, 9 days 
after the original submission.
1185  Company H submitted its non-confidential questionnaire response 
on 19 November 2008, but due to a technical error it c ould not be read or printed.  A printable version 
of the response was submitted on 5 December 2008.1186  The evidence does not  indicate when this 
version was added to the non-confidential file.  China asserts, and the European Union does not 
dispute, that Company H's non-confidential questionn aire response was made available to interested 
parties around 9 December 2008.1187   
7.582  We recall that we have concluded above th at the European Union was entitled to delay 
making available the non-confidential questionnaire r esponses while it determined whether to do so 
would disclose information which could result in the disclosure of confidential information.  Thus, the 
periods during which the Commission consulted with Co mpanies B, C, and G in this regard do not, in 
our view, demonstrate a failure to make evidence ava ilable promptly to other interested parties within 
the meaning of Article 6.1.2.  Consequently, th e periods of delay which we must consider in 
determining whether the European Union acted in consistently with Article 6.1.2 are as follows: 
(a) Company B – some unspecified period less than  9 days  
(b) Company C –  either none, or some unspecified period 
(c) Company G – 1 day 
We do not consider that these peri ods constitute delays which establis h that the European Union failed 
to make evidence available promptly to other interest ed parties.  We recall that the expiry review was 
initiated on 3 October 2008, and the final determination was issued on 22 December 2009.  As best 
we can determine from the evidence before us, the non-confidential versions of these three producers 
questionnaire responses were made available to in terested parties no later than mid-December 2008, 
within a few days of the Commission ascertaining whet her making them available to interested parties 
would disclose confidential information.  
7.583  The word "promptly" is defined as "i n a prompt manner, without delay"
1188 and "[i]n a prompt 
manner; readily, quickly; at once, without delay; directly, forthwith, there and then".1189  In our view, 
these definitions do not support the conclusion that in formation must be made available immediately 
in order to comply with Article 6.1.2.  We consider  that to make evidence available promptly must be 
understood in the context of the proceeding in question .  In the context of a proceeding lasting 
months, where there are numerous opportunities for the pa rties to participate in the investigation after 
the evidence has been made availabl e, we consider that the delays in this case do not establish a 
                                                      
1184 Response from European Commission to the EFA dated 8 May 2009, Exhibit CHN-51, p. 5.  
1185 Response from European Commission to the EFA dated 8 May 2009, Exhibit CHN-51, p. 6. 
1186 Response from European Commission to the EFA dated 8 May 2009, Exhibit CHN-51, p. 6. 
1187 China, first written submission, paras. 654-6 55; European Union, first written submission, 
para. 368.  
1188 New Shorter Oxford English Dictionary, Clarendon Press, 1993. 
1189 Oxford English Dictionary, on-line edition, consulted 27 March 2011.  WT/DS405/R 
  Page 251  
 
 violation of Article 6.1.2, and we therefore reject  China's claim with respect to Companies B, C and 
G.   
7.584  Company H submitted its non-confidential questi onnaire response on 19 November 2008, 
but due to a technical error it could not be read or  printed.  A printable version of the response was 
submitted on Friday, 5 December 2008.
1190  The evidence does not indicate when this version was 
added to the non-confidential file.  China asserts, and the European Union does not dispute, that 
Company H's non-confidential questionnaire response w as made available to interested parties around 
Tuesday, 9 December 2008.1191   
7.585  China considers that the European Union should be held responsible for the entire delay, from 
the original date of submission of an unusable version of Company H's questionnaire response until 
9 December 2009.  We do not agree.  We consider that Article 6.1.2 cannot be understood as 
requiring an investigating authority to make availa ble evidence which it does not have in a usable 
form, as in this case, Company H's questionnaire r esponse which could not be read or printed until 
5 December 2008.  Therefore, the only delay with respect to making Company H's questionnaire response available was from Friday, 5 December until Tuesday, 9 December, or 4 days, including a 
weekend.  In the context of this proceeding, wher e there are numerous opportunities for the parties to 
participate in the investigation afte r the evidence has been made availabl e, we consider that this 4-day 
delay does not establish a violation of Article 6.1.2, and we therefore reject China's claim with respect 
to Company H. 
b. non-confidential Union Interest questi onnaire responses of five sampled EU 
producers 
7.586  China claims that while the eight sampled EU producers in the expiry review were required to 
complete the Union Interest questionnaire, only th e responses of three producers were made available 
in the non-confidential file and therefore the European Union violated Article 6.1.2 of the 
AD Agreement by failing to make available the questionnaire responses of the remaining five 
sampled producers.   
7.587  At the first meeting with the parties, the Eur opean Union indicated that only three responses 
to the Union Interest questionnaires were in fact  received from the sampled EU producers, and that 
the non-confidential versions of these responses were  made available in the non-confidential file.
1192  
China does not dispute that three responses were ma de available promptly, but maintains that the 
European Union has provided no proof that the ot her five EU producers did not submit a response, 
and did not mention this in its first written submis sion, the Review Regulation, or any Note for the 
File during the investigation, , despite repeated reque sts of interested parties for clarification regarding 
the absence of the non-confidential Union interest qu estionnaire responses of these five producers.  In 
particular, China argues that in the absence of an y proof from the European Union establishing that 
the five sampled EU producers did not submit Uni on Interest questionnaire responses, its claim under 
Article 6.1.2 stands.  China requests the Panel to ask the European Union to provide some 
correspondence or other proof to substantiate its assertion that the five sampled producers did not 
provide responses to the Union Interest questionnaire.1193   
                                                      
1190 Response from European Commission to the EFA dated 8 May 2009, Exhibit CHN-51, p. 6. 
1191 China, first written submission, paras. 654-6 55; European Union, first written submission, 
para. 368.  
1192 In its subsequent submissions, the European Union restated its assertion that only three responses to 
the Union Interest questionnaires were received from the sampled EU producers.  See, generally, European 
Union, answer to Panel question 63; seco nd written submission, paras. 163-179.  
1193 See, e.g.  China, answer to Panel question 57; second written submission, paras. 859-860; opening 
oral statement at the second mee ting with the Panel, para. 62.  WT/DS405/R 
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 7.588  Despite China's suggestion that the European Union failed to engage in dispute settlement 
procedures in good faith by not indicating earlier th at the five EU producers in question did not 
submit Union Interest questionnaire responses, wh en it would have known this since January 2009
1194, 
we accept the European Union's statement in this respect as a matter of fact.1195  Thus, China's claim 
of violation rests on a flawed factual premise.  Article 6.1.2 requires that "evidence presented in 
writing" shall be made available promptly to other interested parties.  Where nothing has been 
presented to the investigating authority, as in this case, there is nothing to be made available, and 
therefore no violation of Article 6.1.2 can be found.  We therefore reject China's claim under 
Article 6.1.2 with respect to the non-confidential Union Interest questionnaire responses of five 
sampled EU producers. 
(c) Claims II.7 and III.10 – Alleged violation of  Articles 6.4 and 6.2 of the AD Agreement – 
Failure to provide timely oppor tunities to see information   
7.589  In this section of our report, we address Chin a's claims that the European Union acted 
inconsistently with Article 6.4 of the AD Agre ement by failing to provide timely opportunities for 
interested parties to see non-confidential informa tion that was relevant to the presentation of their 
cases and was used by the Commission in the expiry review and original investigation at issue, and 
China's claims under Article 6.2 with respect to the same information.   
7.590  Before addressing China's specific allegations, we  note that in some instances, China has 
made a general claim of violation, indicating that its specific factual allegations are examples of the 
general violation claimed and/or onl y referring to specific factual a llegations despite having asserted a 
general violation.  However, we consider that  a claim under any paragraph of Article 6 of the 
AD Agreement, including Articles 6.2 and 6.4, requ ires a careful examination of the specific facts 
alleged in order to evaluate whet her a violation occurred.  Thus, our analysis and conclusions are 
limited to the specific factual situations raised by China.  
(i) Arguments of the parties  
a. China  
7.591  China claims that the European Union violat ed Article 6.4 by failing to provide timely 
opportunities for interested parties to see all non-conf idential information that was relevant to the 
presentation of their case and was used by Commission in the original inves tigation and the expiry 
review.1196  With respect to the original investigati on, China's claim concerns the identities of the 
complainants, supporters, sampled EU producers and all the known EU producers.1197  With respect to 
the names of all known producers, China claims that to  the extent that this information was not made 
available to interested parties, the European Un ion also violated Article 6.2 of the AD Agreement.1198  
With respect to the expiry review , China's claim concerns certain information pertaining to:  (i) the 
sample of the EU producers; (ii) revised production  and sales data of the complainants and of the 
sampled EU producers following the discovery that one sampled producer had discontinued 
production of the like product during the review i nvestigation period; (iii) the analogue country 
selection; and (iv) the Union Interest questionnaire responses of five sampled EU producers.1199  
                                                      
1194 China, answer to Panel question 57. 
 1195 We decline to require the European Union to provide proof to substantiate its assertions, as China 
has requested we do.  China, answer to Panel question 57, para. 369.  We can conceive of no proof of the non-
submission of these questionnaire responses that could be forthcoming in response to a request for proof of a negative.   
1196 China, first written submission, paras. 666-667, 1288, 1297 and 1300. 
1197 China, first written submission, paras. 1288, 1297 and 1300. 
1198 China, first written submission, para. 1300. 
1199 China, first written submission, paras. 665-667.    WT/DS405/R 
  Page 253  
 
 China further claims that by failing to provide tim ely opportunities for interested parties to see this 
information, the European Union also vi olated Article 6.2 of the AD Agreement.
1200  
7.592  China argues, relying on prior panels' statem ents regarding the term "information", that 
information submitted by interested parties or collect ed by investigating authorities, or information 
that emanates from investigating authorities, su ch as the Commission's Notes for the File, all fall 
within the meaning of "information" as u sed in Article 6.4 of the AD Agreement.1201  China asserts, 
relying on the panel report in EC – Salmon (Norway) , that "the dates of receipt of questionnaires" or 
"when an interested party responded to the questionna ire" is information relating to factual matters 
that investigating authorities consider in an inves tigation, and therefore constitutes "information used 
by investigating authorities" under Article 6.4.1202   
7.593  Concerning the meaning of "timely", China argues that under Article 6.4, if an interested 
party requests information which is relevant to  the presentation of its case and is used by the 
investigating authority, the latter is obliged to provi de an opportunity to see, in a timely fashion, the 
information concerned.  China submits that there ar e two relevant aspects of the meaning of "timely":  
first, whether interested parties were provided an opportunity to see the re quested information in a 
timely manner; and second, whether the opportunity to  see the information allowed interested parties 
sufficient time to make their presentations at the rele vant point in the investigation with respect to the 
relevant issue to defend their interests.1203  
7.594  China also claims that, by failing to provide timely opportunities to see the information at 
issue, the European Union prevente d interested parties from fully exercising their rights of defence as 
provided for in Article 6.2 of the AD Agreement.  In this regard, China submits that its claim under 
Article 6.2 is not consequential to its claim unde r Article 6.4.  Thus, were the Panel to find no 
violation of Article 6.4, China asserts that the Pa nel would still be required to address its claim under 
Article 6.2.1204  
b. European Union  
7.595  The European Union disagrees with the broad in terpretation of the term "information" in 
Article 6.4 proffered by China, which includes not only the substance of "information", but also 
details such as the date of receipt of informati on by the Commission.  According to the European 
Union, the term "information" as used in Article  6.4, is narrower, and relates only to factual 
information either supplied by interested par ties or coming from other sources, including factual 
information collected by investigating authorities.   Moreover, the European Union notes that 
Article 6.4 applies to information "used by the au thorities".  In this regard, the European Union 
distinguishes between, for instance, the contents of questionnaire responses, and surrounding details 
such as the date of arrival, asserting that the latter is not the subject of Article 6.4 because it is not "used by the authorities".
1205 
                                                      
1200 China, first written submission, para. 668;  second written submission, para. 909.   
1201 See, e.g. China, second written submission, paras. 915-918, referring to Panel Reports, Korea – 
Anti-Dumping Duties on Imports of Certain Paper from Indonesia – Recourse to Article 21.5 of the DSU by Indonesia ("Korea – Certain Paper (Article 21.5 – Indonesia) "), WT/DS312/RW, adopted 22 October 2007, 
DSR 2007:VIII, 3369, para. 6.83; EC – Salmon (Norway) , para. 7.769; and Guatemala – Cement II , para. 8.148.   
1202 China, second written submission, paras. 922-925, citing Panel Report, EC – Salmon (Norway) , 
para. 7.769. 
1203 See, e.g. China, second written submission, para s. 928 and 931; answer to Panel question 66.  
1204 See, generally, China, first written submission , para. 668; answer to Panel question 68; second 
written submission, para. 909.  
1205 European Union, first written submission, paras. 379-385; second written submission, para. 185.   WT/DS405/R 
Page 254  
 
 7.596  The European Union also contends, relying on previous panel reports, that neither the 
intentions nor the reasoning of investigating author ities fall within the scope of "information" within 
the meaning of Article 6.4.
1206  Thus, it argues, matters such as "whether or not the Indian producers 
would be contacted or whether or not other c ountries were being considered" do not constitute 
"information" within the meaning of Article 6.4 in the European Union's view.  In this regard, the 
European Union adds that the AD Agreement, in particular Article 6.9, explicitly sets out those 
instances where the investigating authority is required to  inform interested parties of its intentions, but 
that it does not oblige investigating authorities to k eep parties informed of the development of its 
intentions during the course of the investigation.1207  
7.597  The European Union also asserts that China's co mplaints concerning alleged delays in placing 
information in the non-confidential file, without  explaining how these alleged delays prevented 
interested parties from having timely opportunities to see such information, are outside the scope of 
Article 6.4 of the AD Agreement.  For the European Un ion, the term "timely" in Article 6.4 refers to 
the period that follows the provision of the opportuni ty to see relevant information and not to the 
period between information being submitted to the investigating authorities and that information 
being made available to interested parties, which it contends is addressed by Article 6.1.2 of the AD 
Agreement.1208   
7.598  As regards China's claim under Article 6.2 of the AD Agreement, the European Union asserts 
that at no point in its first written submission did China invoke Article 6.2 independently.  Thus, the 
European Union submits, China may not elaborate ne w bases for its Article 6.2 claim at a later stage 
of the proceedings, i.e. in its second written submission.1209  In any event, the European Union 
submits that Article 6.2 is of limited applica tion where individual rights are conferred by other 
specific provisions in Article 6 of the AD Agreem ent.  Thus, for the Eu ropean Union, where 
Article 6.4 puts limits on the scope of the obligati on to make information available, those limits may 
not be by-passed by relying on Article 6.2.1210   
(ii) Arguments of third parties  
a. Japan  
7.599  Japan considers that failure to meet the le gal obligation to disclose information under 
Article 6.4 would result in the failure to afford inte rested parties "a full opportunity for the defence of 
their interests", and therefore, a "violation of Article 6.4 also constitutes the violation of Article 6.2".  
Japan also argues that provided th at the information satisfies the conditions of Article 6.4, such 
information must be disclosed to interested parties,  regardless of the source of the information.  In 
                                                      
1206 European Union, second written submission, para. 186, citing Panel Reports, Korea – Certain 
Paper (Article 21.5 – Indonesia) , para. 6.83; and United States – Sunset Reviews of Anti-Dumping Measures on 
Oil Country Tubular Goods from Argentina – Recou rse to Article 21.5 of the DSU by Argentina ("US – Oil 
Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) "), WT/DS268/RW, adopted 11 May 2007, as 
modified by Appellate Body Report WT/DS268/AB/RW, DSR 2007:IX-X, 3609, paras. 7.214-7.216. 
1207 European Union, second written submission, paras. 186-189. 
1208 European Union, first written submission, paras. 388-389.  
1209 See, e.g. European Union, second written submission, paras. 201-203.  
1210 European Union, second written submission, para. 202.  The European Union adds that there would 
be no point for the AD Agreement to have specific provisions dealing with the investigating authorities' 
obligation to provide information if Article 6.2 were in tended to be applied to the same context but with a 
broader scope.  This interpretation, in the European Union's view, would be contrary to the "general rule of 
interpretation" which requires that meaning and effect mu st be given to all the terms of a treaty and to the lex 
specialis  principle which suggests that whenever two or more norms deal with the same subject matter, priority 
should be given to the norm that is more specific.  European Union, op ening oral statement at the second 
meeting with the Panel, para. 271.  WT/DS405/R 
  Page 255  
 
 addition, Japan submits that the use in Article 6.4 of  the phrase "which is used", rather than the phrase 
"which form the basis for the decision" provided in Ar ticle 6.9, clarifies that information, on which an 
authority did not base its decision and thus was not  required to disclose under Article 6.9, still falls 
within the disclosure requirement of Article 6.4.  Thus, for Japan, the information to be disclosed 
under Article 6.4 could be broader than under Article 6.9.  Finally, Japan is of the view that the 
determination whether the timing of disclosure provides a full opportunity for the defence would 
depend on the facts and circumstances of each case.
1211 
b. United States  
7.600  The United States agrees with Chin a that Article 6.4 generally requires that an investigating 
authority give interested parties access to all non- confidential information that is submitted during an 
investigation, and that failure to provide such access  would not only be inconsistent with Article 6.4, 
but also with Article 6.2.  In the United States ' view, without access to information described in 
Article 6.4, an interested party is necessarily deni ed "a full opportunity for the defence of their 
interests".1212  
(iii) Evaluation by the Panel  
a. Overview 
7.601  Article 6.4 of the AD Agreement provides: 
"The authorities shall whenever practicable  provide timely  opportunities for all 
interested parties to see all information  that is relevant  to the presentation of their 
cases, that is not confidential  as defined in paragraph 5, and that is used  by the 
authorities in an anti-dumping investigation, and to prepare presentations on the basis 
of this information." (emphasis added) 
Article 6.4 addresses the right of interested parties to see all the information used by investigating 
authorities in an anti-dumping investigation in a timely  fashion.  We note, however, that this right is 
not absolute.  Rather, it is limited by the requirement that providing opportunities to see the 
information be "practicable" for the investigating authority.  Moreover, it is limited to information 
that is "relevant" to the parties' presentation of their case, "used" by the inv estigating authority in the 
investigation, and "not confidential"  within the meaning of Article 6.5.1213  With respect to all 
information that satisfies these conditions, Article 6. 4 requires the investigating authority to provide 
"timely opportunities" to "see" and "prepare presentati ons on the basis of" the information in question.   
 7.602  The panel in EC – Salmon (Norway)  elaborated its understanding of these obligations as 
follows:  
"It seems clear to us that the timeliness  of the opportunities must be assessed by 
reference to the right of the interested parties to prepare presentations on the basis of the information seen. It is similarly clear to us that whether particular information is relevant  is not determined from the investigating authorities' perspective, but with 
reference to the issues to be considered by the investigating authority under the 
AD Agreement.
880 Thus, information which relates to issues which the investigating 
authority is required to consider under the AD Agreement, or which it does, in fact, 
                                                      
1211 Japan, third party written submission, paras. 39, 41-43, 50 and 54.  
1212 Unites States, third party written submission, para. 46.  
1213 Appellate Body Report, EC – Tube or Pipe Fittings , para. 142; and Panel Reports, EC – Fasteners 
(China) , para. 7.479; and Korea – Certain Paper (Article 21.5 – Indonesia) , para. 6.82.  WT/DS405/R 
Page 256  
 
 consider, in the exercise of its discreti on, during the course of an anti-dumping 
investigation, presumptively falls within the scope of Article 6.4.
881 Clearly, an 
investigating authority may not allow inter ested parties to see information which is 
properly treated as confidential  under the AD Agreement.882 Finally, the question of 
whether information is " used " by the investigating authority cannot, in our view, be 
assessed from the perspective of whether the in formation is specifically referred to or 
relied upon by the investigating authority in  its determination. If the investigating 
authority evaluates a question of fact or an issue of law in the course of an antidumping investigation, then, in our view, all information relevant to that question 
or issue that is before the investigating authority must necessarily be considered by 
the investigating authority, in order to make an objective and unbiased decision. 
Consequently, it seems clear to us that  whether information is "used" by the 
investigating authority must be assessed by reference to whether it forms part of the information relevant to a particular issue th at is before the investigating authority at 
the time it makes its determination.
883 
_______________ 
 
 880 We find support for this conclusion in the views of the Appellate Body in EC – 
Tube and Pipe Fittings , paras. 145-146. 
 
 881 We thus reject the view of the EC that, in the context of whether information is 
relevant to the presentation of an interested party's case, "the investigating authority may 
decide on which information access should  be granted". EC, FWS, para. 531. 
 
 882 Except to the extent that disclosure is made pursuant to protective orders, as 
provided for in footnote 17 of the AD Agreement.  
 883 We find support for this conclusion in the views of the Appellate Body in EC – 
Tube and Pipe Fittings , para. 147."1214 
 
We agree with the views expressed by this panel, and will apply them in our evaluation of China's 
claims.   
7.603  In addition, we agree with the view of the panel in Korea – Certain Paper that in order to 
establish a prima facie  case of violation of Article 6.4, a co mplaining party must demonstrate that an 
interested party requested to see "information" with in the meaning of Article 6.4, and that such 
request was rejected, or granted in an untim ely fashion, by the investigating authority.1215  I n  t h i s  
regard, we consider that, unlike Article 6.9 of  the AD Agreement, which requires investigating 
authorities to "inform all interested parties" of  certain matters, and gives guidance regarding the 
timing of "[s]uch disclosure", Article 6.4 does not  impose any obligation on investigating authorities 
to actively inform or disclose information to interested  parties.  The obligation in Article 6.4 is clearly 
stated, and is to make information available such that interested parties can "see" it in a timely 
fashion.  Moreover, this obligation applies to the extent that interested parties request such an 
opportunity to see information.1216  Finally, we consider that the text  of Article 6.4 makes it clear that 
the obligation on investigating authorities applies to "information," and not to the methodologies, reasoning, analysis, and determina tions of investigating authorities.
1217   
                                                      
1214 Panel Report, EC – Salmon (Norway) , para. 7.769 (emphasis added).  
1215 Panel Report, Korea – Certain Paper , paras. 7.196 and 7.300. 
1216 Panel Reports, EC – Fasteners (China) , paras. 7.480 and 7.497; and Korea – Certain Paper 
(Article 21.5 – Indonesia) , para. 6.87.  
1217 Panel Reports, EC – Fasteners (China) , para. 7.539; and US – Oil Country Tubular Goods Sunset 
Reviews (Article 21.5 – Argentina) , para. 7.124.  WT/DS405/R 
  Page 257  
 
 7.604  Article 6.2 of the AD Agreement, also th e subject of China's claims, provides: 
"Throughout the anti-dumping investigation all interested parties shall have a full 
opportunity for the defence of their interests. To this end, the authorities shall, on request, provide opportunities for all interest ed parties to meet those parties with 
adverse interests, so that opposing view s may be presented and rebuttal arguments 
offered. Provision of such opportunities must  take account of the need to preserve 
confidentiality and of the convenience to the parties. There shall be no obligation on any party to attend a meeting, and failure to do so shall not be prejudicial to that party's case. Interested parties shall also ha ve the right, on jus tification, to present 
other information orally." 
Article 6.2 thus establishes a general due process righ t of interested parties to a "full opportunity" to 
defend their interests during the investigation.  We no te that while the Appellate  Body has stated that 
Article 6.2 requires that interested parties be afford ed "liberal opportunities" to defend their interests, 
it has also stated that it does not provid e an "indefinite" right in this regard.
1218  Thus, this due process 
right does not extend so far "as to enable respondent s to submit relevant evidence, attend hearings, or 
participate in the inquiry as and when they choose".1219  Moreover, the text of Article 6.2 makes it 
clear that the rights of interested parties establis hed therein do not apply to information treated as 
confidential consistently with Article 6.5 of the AD Agreement.  Finally, in our view, there is nothing 
in the text of Article 6.2 that would require inves tigating authorities to actively disclose information to 
interested parties.1220  Indeed, there is nothing specific in th e text of Article 6.2 that relates to 
"information" at all.  The only specific proscription concerning the "full opportunity" for parties' 
defence of their interests is the obligation for investigating authorities to, on request, provide 
opportunities for parties to meet other parties with adve rse interests.  It is clear that the obligation to 
provide for such meetings does not exhaust th e scope of parties' rights under Article 6.2.1221  However, 
while a "full opportunity" for the defence of a part y's interests may well include, conceptually, the 
notion of access to information, in our view, the more specific provisions of Article 6, including 
Articles 6.1.2, 6.4, and 6.9, establish the obligations on investigating authorities in this regard.  In our 
view, Article 6.2 does not add anything specific to  the obligations on investigating authorities with 
respect to interested parties' ab ility to see or receive information in the hands of the investigating 
authorities established in other provisions of Article 6.   Thus, while a failure to comply with one of 
the more specific provisions of Article 6 concerning access to or disclosure of information may establish a violation of Article 6.2, we find it difficu lt to imagine a situation where the more specific 
provision is complied with, but Article 6.2 is nonetheless violated as a result of an investigating 
authority's actions in connection with access to or disclosure of information to interested parties. 
  7.605  With these considerations in mind, we examine below each of China's allegations of error.  
b. Expiry Review 
7.606  China claims that the European  Union violated Article 6.4 of the AD Agreement by failing to 
provide timely opportunities during the expiry review for interested parties to see certain information 
with respect to:  (i) the sample of the EU producer s; (ii) the revised production and sales data of all 
the EU producers, the complainants, and the sample d EU producers following the discovery that one 
sampled producers had discontinued the production of the like product during the review investigation 
                                                      
1218 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 241. 
1219 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 241. 
1220 Panel Report, EC – Fasteners (China) , para. 7.481.  
1221 As noted above, the Appellate Body has stated that Article 6.2 of the AD Agreement requires that 
interested parties be afforded "liberal" opportunities to defend their interests.  Appellate Body Report, US – Oil 
Country Tubular Goods Sunset Reviews , para. 241. WT/DS405/R 
Page 258  
 
 period; (iii) the analogue country selection; and (iv) the Union Interest questionnaire responses of five 
sampled EU producers.  China alleges that while this information was used by the Commission and 
was relevant for interested parties to defend their interests, the Commission did not provide them with 
timely opportunities to see and prepare presentations on the basis of such information.  In addition, 
China claims that the European  Union violated Article 6.2 of  the AD Agreement because Chinese 
exporters were denied the opportunity to defend thei r interests due to the lack of this information.
1222   
1. certain information concerning the sample of the EU producers 
7.607  China claims that the Europ ean Union failed to provide timely opportunities to see the 
following information concerning the sample of the EU producers: (i) information of the individual complainant producers submitted in the complain t, standing exercise, and CEC submissions; 
(ii) information that eight producers had been sam pled and had accordingly been sent questionnaires; 
(iii) the number of EU member States and the production represented by the sampled producers; 
(iv) the names of the member States and the numbe r of sampled companies from each member State; 
and (v) the revised information of the EU producer which discontinued production in the 
European Union during the review investigation period.   
a) information in the complaint, standing exercise, and CEC 
submissions 
7.608  China claims that despite sev eral requests, interested parties were not provided any 
opportunity to see the information of the individual complainant producers available in the complaint, 
standing exercise, and CEC submissions, which alle gedly formed the basis for the selection of the 
sample of the EU producers in the review at issue.  In this regard, China argues that information for 
sampling provided by Chinese exporters, EU impor ters and non-complaining producers was added to 
the non-confidential file, and therefore, all info rmation relevant for sampling pertaining to the 
individual complainant EU producers allegedly availa ble to the European Union cannot be considered 
confidential.  China also alleges that this info rmation was used by the Commission to select the 
sample and was relevant for interested parties to  make presentations on issues such as the alleged 
representativity of the sample.1223  Thus, China argues, to extent the information contained in the 
complaint, standing exercise, and CEC submissions pertaining to the individual producers was not confidential, the European Union violated Article  6.4 by failing to provide any opportunity for 
interested parties to see such information.  The Eu ropean Union argues that in  so far as China's claim 
concerns data in the complaint, the responses to the standing forms, and in the CEC submissions, the 
                                                      
1222 In response to a question from the Panel following the first meeting, China clarified that its claim 
under Article 6.2 was an independent claim of violation and not consequential to its claim under Article 6.4.  China, answer to Panel question 68.  The European Union argues that Ch ina elaborated new bases for a claim 
under Article 6.2 later in the proceedings in its seco nd written submission.  In the European Union's view, 
China's claim in this regard was not eligible for inclusion in the "written rebuttal" as provided in the Working Procedures for the Panel.  European Union, second writte n submission, paras. 200-202; opening oral statement 
at the second meeting with the Panel,  para. 270.  However, nothing in our Working Procedures precludes China 
from elaborating new bases for or arguments in suppor t of its claims in its second written submission.  
Moreover, China's claim under Article 6.2 is clearly included in its panel request, and the European Union does 
not argue otherwise.  In this regard, we note that a complaining party is not prevented from developing, in its 
second written submission, arguments supporting a claim that is within the terms of reference of the panel, even 
if it did not do so in its first written submission.  See, e.g.  Appellate Body Report, EC – Bananas III , paras. 141 
and 145.  We therefore will address China's claim of vi olation under Article 6.2 in conjunction with its claims 
under Article 6.4.   
1223 See, generally, China, first written submissi on, paras. 675-676; second written submission, 
paras. 940-949.  WT/DS405/R 
  Page 259  
 
 information was confidential; and in so far as it concerns other facts surrounding those 
communications, such facts are not "informa tion" within the meaning of Article 6.4.
1224  
7.609  As we understand it, China's claim concerns the individual data of the complainants contained 
in the complaint, standing exercise, and CEC subm issions, which allegedly formed the basis for the 
selection of the sample of the EU producers.  China asserts that interested parties, namely the 
European Footwear Alliance ("EFA") and the Coa lition of Chinese Producers, requested to see this 
information.1225  The evidence before us, however, indica tes that none of the requests cited by China 
refers to the information at issue.  With respect to the two requests from the EFA referred to by China, 
the evidence shows that EFA, in  its submission dated 12 November 2008, complained about the 
untimely opportunities to see the non-confidential vers ion of the producers' sampling forms and that it 
requested to see "a non-confidential version of the extension request of the EU producers as well as 
the Commission's reply thereto, including the length of  extension granted" and to be informed about 
"the sampling methodology" used by the Commission.1226  In its submission dated February 2009, 
EFA comments with respect to the lack of clarity of the data used by Commission "to assess the 'representativeness in terms of product segment, ge ographical location and sales value and production 
volume' of the sampled EU producers".
1227  Thus, nothing in these requests indicates that EFA 
requested to see the information at issue, that is, th e individual data of the complainants contained in 
the complaint, standing exercise, and CEC submissions.1228  Similarly, with respect to the request 
from the Coalition of Chinese Producer s, the evidence indicates that, in  response to the confidential 
treatment granted by the Commission to the identity of the EU producers, these producers stated that 
"we expect that either identity of Community producers is disclosed, or a full disclosure of 
information and data without identifyi ng Community producers are disclosed".1229  Nothing in this 
alleged request indicates that the Coalition of  Chinese Producers requested to see (and/or was 
concerned with) the information at issue in China's claim.  We recall our view that Article 6.4 does not impose any affirmative obligation on investigatin g authorities to disclose information to interested 
parties, but only to make information available to the extent that an opportunity to see that 
information has been request ed by interested parties.
1230  In this instance, China has failed to 
demonstrate that interested parties requested to see the information in question.  We therefore reject 
China's claim under Article 6.4 with respect to this information.   
7.610  With respect to China's claim under Article 6.2, we note that China has made no independent 
arguments in support of its claim under this provi sion and therefore consider that China has not 
established an independent violation of  Article 6.2 with respect to this information.  We also dismiss 
China's consequential claim of violation of Article 6.2, which is based on the same considerations we 
have rejected above with respect to  Article 6.4, for the same reasons. 
b) information that eight producers had been sampled and had 
accordingly been sent questionnaires 
7.611  China asserts that the European Union faile d to provide timely opportunities to see 
information concerning the fact that eight compla inant producers had been selected to be in the 
                                                      
1224 European Union, first written submission, para. 391; answer to Panel question 69; opening oral 
statement at the second meeting with the Panel, paras. 283-290. 
1225 China points specifically to (i) the EFA requests dated 12 November 2008 and February 2009, 
Exhibits CHN-34, pp. 29-31, and CHN-23, pp. 14-15, re spectively; and (ii) the request from the Coalition of 
Chinese Producers dated 24 March 2009, Exhibit CHN-10, pp. 2-3.  
1226 EFA request dated 12 November 2008, Exhibit CHN -34, pp. 29-31. 
1227 EFA request dated February 2009, Exhibit CHN-23, pp. 14-15. 
1228 We recall, moreover, that as noted above in para graph 7.603, the obligation set forth in Article 6.4 
applies to "information", and not to the "methodology" used by the investigating authorities.   
1229 Exhibit CHN -10, pp. 2-3.  
1230 See paragraph 7.603 above.  WT/DS405/R 
Page 260  
 
 sample before 10 October 2008 and the fact that th ey had been sent the anti-dumping questionnaire on 
10 October 2008.
1231  China argues that the fact that eight  complainant producers had been sent the 
anti-dumping questionnaire on 10 October 2008 implies that  they were selected to be in the sample 
before 10 October 2008, and clearly relates to  the assessment of the legal and factual issues 
considered by Commission in its sampling determ ination and therefore constitutes information "used 
by investigating authorities".1232  The European Union submits that information regarding the 
"sending" of anti-dumping questionnaires to the eight producers is not "information" within the meaning of Article 6.4.
1233   
7.612  We recall that whether information is "used" by an investigating authority is assessed by 
reference to whether it forms part of the information "r elevant" to a particular issue that is before the 
investigating authority at the time it makes its determ ination.  China's argument that the information at 
issue constitutes information "used by investigati ng authorities" is based on the contention that the 
information "related" to the Commission's sampling determination.  In our view, however, the mere 
fact that information "relates" to a particular issu e that is before the investigating authority does not 
establish that the information was "used" by the au thority in making its dete rmination.  In this 
instance, moreover, we fail to see how the "sending of the questionnaires" or "requests to complete 
questionnaire responses" could have constituted information per se  that was "used" by Commission in 
the selection of the sample, which we understand to be  the relevant determination.  We do not see the 
relevance of the dates on which questionnaires we re sent to the substantive issues involved in 
selecting the sample.  Indeed, we see nothing in the evidence before us that would indicate that the 
Commission "used" the fact that the anti-dumpi ng questionnaires were sent to the sampled EU 
producers on 10 October 2008 in any way in the sampl e determination.  Moreover, in our view, the 
fact that eight producers had been sent questionnaires on that date at most suggests that they had been, 
at least preliminarily, selected for the sample, and thus would be a preliminary conclusion reached by the Commission with respect to the sampl e selection, rather than information per se .  We recall that 
Article 6.4 requires "timely opportunities" to see "i nformation", and not the analysis and conclusions 
of the investigating authority.  Thus, we consider th at the "information" at issue is not covered by the 
obligation in Article 6.4 and therefore rej ect China's arguments in this regard.   
7.613  Turning to China's claim under Article 6.2, Ch ina alleges that because of the "excessive 
delay" in disclosing the information at issue, inte rested parties were prevented from fully exercising 
their rights of defence.
1234  China asserts that once the sample is established it is not changed, and 
therefore the delay in disclosing information rega rding the alleged selection of the eight sampled 
producers before 10 October 2008, and the fact that  they had been sent anti-dumping questionnaires 
on that date impinged on the rights of defence of in terested parties.  According to China, not only 
were they denied the opportunity to make comments at the relevant point in time, they were also 
denied any opportunity to do any background re search and/or solicit further support from non-
complainant producers when the sample selection was on-going.1235  The European Union recalls its 
                                                      
1231 In response to a question from the Panel, China clar ified that its claim with regard to Article 6.4 in 
this context pertains to the information that eight complainant producers had been selected to be in the sample 
before 10 October 2008 and had acco rdingly been sent the anti-dumping questionnaires on 10 October 2008. 
China, answer to Panel question 113.   
1232 China, second written submission, para. 950.  
1233 European Union, first written submission, para. 392. 
1234 We note that China has framed its argument in terms of alleged delay in "disclosing" information 
here, and at other points in its arguments under Article s 6.2 and 6.4.  We recall that, in our view, neither 
Article 6.2 nor Article 6.4 imposes oblig ations with respect to disclosure of information.  Nonetheless, we 
address each of China's claims. 
1235 China, second written submission, para. 962.    WT/DS405/R 
  Page 261  
 
 position that Article 6.2 does not include the matter s referred to by China in this aspect of its 
claim.
1236   
7.614  China's argument, as we understand it, is pr emised on the contention that, when the 
information at issue was made available to inter ested parties, the sample of the EU producers had 
already been established, and that once a sample ha s been established it is not changed.  Therefore, 
China asserts that interest ed parties were denied the opportunity to make comments at the relevant 
point in time and to do any background research and/or solicit further support from non-complainant 
producers when the sample selection was on-going, in violation of Article 6.2.   
7.615  We note, as China acknowledges1237, that the information at issue was made available to 
interested parties in a Note for the File dated 29 Oc tober 2008.  This Note states, in relevant part:   
"[w]ithout prejudice to the final selection of the sample  the Commission Services 
have sent on 10 October 2008 the full questionna ire to eight large producers in order 
to ensure an as expeditious procedure as possible, should any or all of these 
companies finally be selected in the sample … In addition, five other producers have requested to be part of the sampling a nd have been sent the sampling form. Two 
replies were received … The analysis needed for the selection of the sample is 
ongoing ."
1238  (emphasis added) 
Thus, the Note explicitly indicates that when the information about which China complains became 
available to interested parties, the sample of the EU producers had not yet been definitively selected.  
As the Note makes clear, the Commission's analysis in this regard was still on-going.  This is 
confirmed by other Notes for the File, made availabl e to interested parties, which indicate that the 
sample of EU producers was not selected until sometime in December 2008.1239  In light of this 
evidence, China's contention that the Commission di sclosed the information at issue in a delayed 
manner because it was disclosed after the sample ha d been established cannot be substantiated as a 
matter of fact.1240   
 
7.616  Moreover, we note that the facts demonstrate that interested parties had the opportunity to 
make comments and to do research and/or solic it further support while the sample selection was on-
going.  Indeed, the evidence before us shows that some interested parties did make comments to the 
Commission during the process of selection of the sample.1241  Moreover, it is clear that the 
Commission considered comments received in this regard.1242  Thus, we reject China's contention that, 
                                                      
1236 European Union, opening oral statement at th e second meeting with the Panel, para. 294.   
1237 See, e.g. China, first written submission, para . 677; second written submission, para. 962.  
1238 Note for the file date 29 October 2008, Exhibit CHN-25.  
1239 In this regard, we note that the Note for the File dated 9 Decem ber 2008 clearly states that no 
decision had been taken on the selection of the sample . Note for the File dated 9 December 2008, Exhibit CHN-
26.  Moreover, we note that in a subsequent communi cation from the Commission, dated 23 December 2008, 
the parties were informed of the final selection of the sample. Communication from the Commission, dated 23 December 2008, E xhibit CHN-33.   
1240 We note that in the context of its claim under Article 6.4, China asserts that "by the end of 
October 2008 the sample would have been definitely selected as no additional information was collected pursuant to the submission of the sampling forms by the two non-complainant producers on 22 October 2008 
and considering that the eight complainants had alread y been selected."  We are not persuaded by these 
arguments.  China has provided no evidence to substantiate  this assertion.  Indeed, the evidence before us is to 
the contrary, and clearly shows that the samp le was not established until December 2008.   
1241 Submission of the EFA dated 12 November 2008, Exhibit CHN-34, pp. 30-31; Letter from the 
European Outdoor Group, the Federation of the European Sporting Goods Industry, and the European Branded Footwear Coalition, dated 20 Decembe r 2008, Exhibit CHN- 134, pp. 1-2. 
1242 Definitive Regulation, Exhibit CHN-2, recitals 25-33. WT/DS405/R 
Page 262  
 
 as a result of delay in disclosing the information at i ssue, interested parties were deprived of a full 
opportunity for the defence of their interests, and th erefore reject China's claim under Article 6.2.   
c) number of member States and production represented by the sampled 
producers 
7.617  China asserts that information regarding the number of member States and the production 
represented by the sampled producers from each memb er State was disclosed five months after the 
initial selection of the sample and two and half months  after the finalization of the sample, through a 
Note for the File dated 9 March 2009.  China argues th at it was relevant for interested parties to see 
this information early in the expiry review so th at they could make meaningful comments regarding 
the selection of the sample.1243  The European Union submits that China's allegations are outside the 
scope of Article 6.4.  The European Union argues that  the term "timely" in Article 6.4 refers to the 
period that follows the provision of the opportunity to see relevant information, while China's claim 
concerns delays in placing information in the non- confidential file, thus providing the opportunity to 
see the information.  Furthermore, the European Un ion asserts that the information at issue concerns 
the methodology adopted by the Commission, and thus does not fall within the scope of Article 6.4.  
The European Union argues that, in  any event, the date on which this information was released to 
interested parties allowed them sufficient time to make presentations.1244  
7.618  The Note for the File dated 9 March 2009 referred to by China explains, inter alia , that based 
on the methodology applied by the Commission, ei ght companies located in four different EU 
member States were selected for the sample of EU producers.1245  It goes on to explain that these 
companies were chosen on the basis of production, sales, location and sector segment, and provides 
the total production of the sampled companies for each country.1246  It seems clear to us that the 
information in this Note concerns the methodology adopted by the Commission in its determination of 
the sample of the EU producers for the injury aspect  of the investigation.  We recall our view that 
Article 6.4 does not apply to the methodology used  by or determinations of the investigating 
authorities, and does not require investigating authorities to provide opportunities for interested 
parties to "see" such methodologies and determinations .  We therefore reject China's arguments in this 
regard under Article 6.4.  
7.619  With respect to Article 6.2, China relies on the same arguments it raised in connection with its 
claim concerning the information that eight pr oducers had been selected for the sample and sent 
questionnaires in October 2008.  Essentially, Chin a argues that the European Union violated 
Article 6.2 because the information regarding the number of member States and production 
represented by the sampled producers from each member State was di sclosed after the sample was 
selected.  China again asserts that once the sample is established it is not changed, and therefore the 
rights of defence of interested parties were deni ed, as they did not have the opportunity to make 
comments and to do any background research and/ or solicit further support from non-complainant 
producers at a relevant point in time.1247   
                                                      
1243 China, first written submission, pa ra. 677; second written submission, paras. 955-956.  While China 
suggests that its claim concerns all the information rele vant to the presentation of their cases with respect to 
sampling, including the Note for the File dated 9 March 2009, China second written submission, para. 956, our 
analysis and conclusions are limited to the instances for which China has submitted specific arguments, i.e. the 
number of member States represented and the production represented by the eight sampled EU producers.   
1244 European Union, first written submission, para. 388; opening oral statement at the second meeting 
with the Panel, para. 292.   
1245 Note for the File dated 9 March 2009, Exhibit CHN-27.  
1246 Note for the File dated 9 March 2009, Exhibit CHN-27. 
1247 China, second written submission, para. 962.   WT/DS405/R 
  Page 263  
 
 7.620  We recall that the information regarding th e number of EU member States and production 
represented by the sampled producers from each memb er State was made available to interested 
parties through the Note for the File dated 9 Marc h 2009, while the sample of the EU producers was 
selected sometime in December 2008.  Thus, the prin cipal question for us in resolving China's claim 
is whether, by making available the information at issue after the sample of the EU producers had 
already been established, the European Union failed  to ensure that interested parties had a full 
opportunity for the defence of their interests under Article 6.2 of the AD Agreement.  
7.621  We recall our view that Article 6.2 does not est ablish any specific obligations with respect to 
disclosure of or access to information.  Thus, to the extent China is asserting a delay in "disclosure" of 
information, we see no basis for its claim in Article 6.2 and reject it.  Moreover, while China has 
presented as an uncontested fact that the Commission 's selection of the sample of EU producers was 
irrevocable, the European Un ion refutes China's assertion,
1248 and China has provided no evidence in 
support of it.  We therefore reject China's conten tion that interested parties were precluded from 
exercising their rights of defence because "once the sample is established it is not changed".  Furthermore, we recall that while interested par ties should be given liberal opportunities to defend 
their interests, this right is not "indefinite", and do es not allow parties to participate in the inquiry as 
and when they choose.
1249  In this case, the evidence before us  demonstrates that, even after the 
selection of the sample, interested parties ha d opportunities to comment with respect to the 
Commission's sample selection, and did so in submissions to the Commission.1250  In our view, this 
demonstrates that interested parties indeed had oppor tunities to defend their interests in this regard.  
We therefore reject China's contentions that due to the alleged delay at issue interested parties were 
deprived of a full opportunity for the defence of th eir interests and therefore reject China's claim 
under Article 6.2.   
d) names of the member States and the number of the sampled 
companies 
7.622  China asserts that the European Union failed to  provide any opportunity to Chinese exporting 
producers to see information regarding (i) the numbe r of companies in the sample from each of the 
member States from which these companies were selected and (ii) the names of these member States.  China argues that this information was taken into  consideration by the Commission in its sampling 
assessment.
1251  Furthermore, China considers that the na mes of member States are information "used 
by the authorities," since it was information submitted by the complainants and was considered by the 
Commission to establish the member States represented in the sample as well as in concluding that the 
sample was representative of EU production.1252  The European Union submits  that the real nature of 
China's claim is the failure of the Commission to inform interested parties of the names of the 
member States and the number of companies from each member State that the Commission 
"intended" to include in the sample.  The European  Union argues that the scope of the obligation in 
Article 6.4 does not extend to the intentions of the investigating authorities since they do not 
                                                      
1248 See, e.g. European Union, open ing oral statement at the second meeting with the Panel, para. 279 
and fn. 276.   
1249 See paragraph 7.604 above. 
1250 In this regard, we note the hearing submission and comments submissions of the Chinese Footwear 
Coalition and China Leather Association, dated 6 Apr il 2009, Exhibit CHN-18, pp. 2-10 (second document). 
Moreover, after the disclosure of essential facts under Article 6.9 of the AD Agreement, we note the submission 
by the Chinese exporter Yue Yuen, dated 3 November 2009, Exhibit CHN-46, p. 2; the submission by the EFA, 
dated 3 November 2009, Exhibit CHN-35, pp. 16-22; and the submission of the Chinese Footwear Coalition and China Leather Association, dated 3 November 2009, Exhibit CHN-14, pp. 12-17.  Merely that the Commission 
did not alter its conclusions as a result of these submissions does not demonstrate that parties did not have a full 
opportunity for the defence of their interests. 
1251 China, first written submission, paras. 678-679.  
1252 China, second written submission, para. 957. WT/DS405/R 
Page 264  
 
 constitute "information that is used by the authoriti es".  Furthermore, the European Union notes that 
the names of the member States in which the in dividual producers were located were treated as 
confidential since their disclosure could have le d to the identification of the complainants.
1253 
7.623  With respect to the first aspect of China's claim, concerning the number of the sampled 
companies from each member State, we recall that whether information is "u sed" by an investigating 
authority must be assessed by reference to whether it forms part of the information "relevant" to the 
particular issue that is before the investigating au thority.  China asserts that the information at issue 
was information which was taken into cons ideration by the Commission in its sampling 
assessment.1254 China does not explain, however, how this information may have been relevant to or 
considered by the Commission in its selection of the sample.  Nor do we consider that the mere fact 
that information was before the investigating authority at a point in time demonstrates that the 
information was relevant to the particular issues bei ng evaluated by an investigating authority at that 
time.  On the other hand, we recall our view that Article 6.4 does not impose any affirmative 
obligation on investigating authorities to disclose info rmation to interested parties, but only to make 
information available to the extent that an opport unity to see that information has been requested by 
interested parties.1255  In this case, China has provided no evid ence, or even argued, that interested 
parties requested to see the information at issue.  We therefore reject this aspect of China's claim 
under Article 6.4.   
7.624  Turning to the second aspect of China's claim, w ith respect to the names of the member States 
represented in the sample, Article 6.4 clearly states  that the right to see information is limited to 
information that is not confidential.  In this regard, we note that we have found that the 
European Union did not err in granting confidentia l treatment to the names of the countries of the 
complainants, which included the eight sampled EU producers.1256  We therefore reject this aspect of 
China's claim under Article 6.4.   
7.625  With respect to China's claim under Article 6. 2, China has provided no specific arguments in 
support of an independent claim under this provision.   We therefore consider that China has not 
established a prima facie  case of violation of Article 6.2 with respect to the number of companies in 
the sample from each of the member States and the names of the member States independent of its claim in this respect under Article 6.4.
1257  Having rejected China's clai m under Article 6.4, we also 
reject China's consequential claim of violation of Article 6.2.   
e) revised information of the EU producer which discontinued 
production in the European Union during the review investigation 
period 
7.626  China asserts that "revised information" of the sampled EU producer which discontinued 
production of the like product in the European Uni on during the review investigation period was made 
available to interested parties on 6 May 2009, although this information was available to the 
Commission by March 2009 and was used by the Commission in its injury analysis.1258  C h i n a  
acknowledges that Chinese exporters could have made comments regarding this issue after 
6 May 2009, as the European Union contends, bu t argues that those comments would have been 
                                                      
1253 European Union, first written submission, para. 394; opening oral statement at the second meeting 
with the Panel, para. 286 and fn. 275.  
1254 China, first written submission, para. 679.  
1255 See paragraph 7.603 above. 
1256 See paragraph 7.770 below.  
1257 Moreover, with respect to the names of the member  States, we note that we have found that the 
confidential treatment acco rded to this information is consistent with  Article 6.5 and that Article 6.2 does not 
apply to confidential information.  See paragraph 7.770 below.  
1258 China, first written submission, para. 680.  WT/DS405/R 
  Page 265  
 
 rejected by the Commission as untimely since th e verifications had already been completed.
1259  The 
European Union does not consider that the release of  the information at issue on 6 May 2009 limited 
the opportunities of interested parties to make presen tations with respect to that information.  The 
European Union argues that there was considerable  time available for interested parties to make 
presentations after the date on which this informat ion was released and before the EU authorities 
made their final decisions.  In this regard, the Eu ropean Union notes that the definitive disclosure of 
"essential facts and considerations" was made on 12 October 2009, and that even that date did not 
represent the final conclusion of the matter, as th ere was an opportunity for comments thereafter.1260  
7.627  We recall our view that Article 6.4 does not require active disclosure of information by 
investigating authorities, and that in order for a claim to prevail under this provision, a complaining 
party must show that an interested party requested to see information and that its request was rejected, 
or granted in an untimely manner, by the investigati ng authority.  In this case, China merely contends 
that because of an alleged delay in providing the revised information of the EU producer at issue, 
interested parties were prevented from making pr esentations on the basis of this information.1261  
However, China has not demonstrated, or even argu ed, that interested par ties requested to see this 
information and were denied an opportunity to do so.  Moreover, as China itself acknowledges, there 
was time, after the information became available,  for interested parties to prepare and submit 
presentations on the basis of the information.  Ch ina's assertion that such comments would have been 
rejected is speculation, and insufficient to demonstrate a violation of Article 6.4.1262  In light of the 
foregoing, we reject China's arguments in this regard.   
7.628  With respect to China's claim under Article 6. 2, China has provided no specific arguments in 
support of an independent claim under this provision.   We therefore consider that China has not 
established a prima facie  case of violation of Article 6.2 with respect to the alleged delay in making 
revised information concerning the EU producer in qu estion available independent of its claim in this 
respect under Article 6.4.  Having rejected China's claim under Article 6.4, we also reject China's 
consequential claim of violation of Article 6.2.   
2. information concerning the revised production and sales data of all EU producers, 
complainants, and sampled EU producers following the discovery that one sampled 
producer had discontinued the production of the like product during the review 
investigation period 
7.629  China alleges that despite several requests, interested parties we re never provided an 
opportunity to see the revised production and sales data  of all the EU producers, the complainants, 
and the sampled EU producers.  China argues that this information was used  by the Commission and 
was relevant to interested parties in order to make comments on issues such as the changes in the 
revised representativeness of the sample of the EU producers.1263  The European Union submits that 
an initial estimation of the production of the ei ght sampled EU producers was made available on 
8 November 2008, and that it was followed by a notification from the Commission on 9 March 2009 
that the actual figures "could be more than 10% lo wer".  The more precise overall information, the 
European Union states, was provided in the Gene ral Disclosure document, and in addition, the 
adjustment made to the response of the sample d producer that had discontinued production was 
                                                      
1259 China, second written submission, para. 960.  
1260 European Union, first written submission, paras. 396. 
1261 China, first written submission, para. 680.  
1262 Moreover, we decline to make a finding of violation on the premise that, had interested parties 
submitted comments, the Commission would have ignored th em.  To accept China's assertion would require us 
to conclude that the investigating authority would have acted inconsistently with its obligations under AD Agreement, without a shred of eviden ce to support such a conclusion.   
1263 China, first written submission, paras. 681-683; second written submission, paras. 965 and 968.  WT/DS405/R 
Page 266  
 
 evident in the revised version of that company's non-confidential data which were made available to 
interested parties on 6 May 2009.
1264 
7.630  As we understand it, China argues that the Commission used information concerning the 
revised production and sales data of the EU produ cers, the complainants, and the sampled EU 
producers to determine the total production of the sampled producers after the discovery that one 
sampled producer had discontinued production of th e like product during the review investigation 
period, but that this information was not made available to interested parties.  It is not clear to us that 
the Commission did, as China suggests, use the re vised production and sales data of all the EU 
producers, the complainants, and all the sample d EU producers to determine the total production 
represented by the sample after the discovery that  one sampled producer had discontinued production 
during the review investigation period.  China notes that before it was discovered that this producer 
had discontinued production, the Commission had ma de available the sales and production data of all 
EU producers, the complainants, and sampled pr oducers, and assumes that the Commission used 
revised production and sales data of these producer s in order to determine the total production 
represented by the sample after the discovery that one sampled producer had discontinued production.  
However, China provides no evidence to substantia te its factual assertion.  Nor does the evidence 
before us indicate that the Commission revised th e production and sales data of all the EU producers 
in question in order to determine the total produc tion represented by the sample of the EU producers 
after the discovery that one of them had discon tinued production.  The Note for the File, dated 
9 March 2009, by which the Commission informed interested parties that "one of the sampled 
companies had discontinued production of the product concerned", states: 
"[t]his could imply that total EC production of the sampled companies could be more 
than 10% lower than previously thought.  We are now proceeding to analyse whether 
this has an effect on the calculation of production for Community industry as a whole. 
This matter will be further examined in the light of the information available to the 
Commission services and further checks on the production level in the Community 
will be undertaken, such as with associations of shoe manufacturers."1265 
Thus, nothing in the Note suggests that the Commission intended to or in fact did use revised 
production and sales data of all the EU producers in question to determine the total production of the 
sampled EU companies after the discovery that one producer had discontinued its production in the 
Union.   
7.631  Moreover, even assuming that the Commission did base its determination with respect to 
production on the data referred to by China, we note that this information woul d have constituted part 
of the methodology used by Commission in its overall determination of the sample of the EU 
producers for the injury aspects of th e investigation.  In this respect, we recall that Article 6.4 does not 
apply to the analysis or determinations of inves tigating authorities, nor does it requires investigating 
authorities to provide opportunities for interested par ties to "see" such analysis and determinations.  
Furthermore, we recall that in order to establish a prima facie  case of violation of Article 6.4, a 
complaining party must demonstrate that an inter ested party requested to see information within the 
meaning scope of this provision.  However, Chin a has not demonstrated that interested parties 
requested to see the information at issue.1266  We therefore reject China's claim under Article 6.4 in 
this regard. 
                                                      
1264 European Union, opening oral statement at th e second meeting with the Panel, para. 295.  
1265 Note for the file dated 9 March 2009, Exhibit CHN-27, p. 2. 
1266 The evidence referred to by China in this regard does not demonstrate that interested parties 
requested to see the revised production and sales data of  all the EU producers, the complainants, and all the 
sampled producers which allegedly formed the basis of the Commission's determination with respect to the  WT/DS405/R 
  Page 267  
 
 7.632  With respect to China's claim under Article 6.2,  China asserts that the European Union denied 
interested parties the right to defend their interests by providing the revised production volume of the European Union and the production represented by the sampled EU producers only in the Definitive 
disclosure.  In particular China argues that interest ed parties could not cross-check the viability of the 
sample, understand the data taken into account by the European Union, or evaluate the basis of its 
decision and calculation.
1267  The European Union, on the other hand, asserts that these data were 
"essential facts under consideration which [formed] the basis for the decision" whether to extend the measures and therefore fell within the scope of Ar ticle 6.9 and were as a consequence included in the 
Definitive disclosure.
1268 
7.633  We recall our view that Article 6.2 does not require investigating authorities to disclose 
information to interested parties.  Thus, to the extent China is asserting a delay in "disclosure" of 
information, we see no basis for its claim in Article 6.2, and reject it.  Furthermore, we recall that 
while Article 6.2 requires that interested parties be provided with liberal opportunities to defend their 
interests, this due process right is not "indefinite", th at is, it does not allow parties to participate in the 
inquiry as and when they choose.1269  In this case, even after the discl osure of the information at issue, 
evidence before us demonstrates that interested pa rties had opportunities to defend their interests with 
respect to the Commission's sample determinati on, and did so in submissions to the Commission.1270  
We therefore reject China's contentions that due to the alleged delay at issue interested parties were 
precluded from defending their interests and reject China's claim under Article 6.2. 
3. analogue country selection 
7.634  China alleges that the European Union faile d to provide timely opportunities to see certain 
information pertaining to the analogue country sel ection.  Specifically, China's claim concerns 
(i) certain information concerning the analogue country selection procedure; and (ii) certain 
information in the questionnaire respon ses of the analogue country producers. 
a) certain information concerning the analogue country selection 
procedure 
7.635  China asserts that the Commission did not provi de timely opportunities for interested parties 
to see information regarding: (a) whether or not  all the Indian and Indonesian producers were 
contacted and/or sent questionnaires; (b) when Indian  and Indonesian producers were contacted, if at 
all; (c) whether all the analogue country produc ers were given equal time to respond to the 
questionnaires; (d) whether extensions of time to  respond were granted to these producers; and (e) 
whether any analogue country producer responded to the questionnaire.  Chin a asserts that despite 
several requests, this information was provided to  interested parties only four months after the 
initiation of the expiry review.  China argues that due to this delay, interested parties could not make 
timely submissions regarding, inter alia , the flexibility granted to the Brazilian producers in replying 
                                                                                                                                                                     
production represented by the sample of the EU producers after the discovery that one of these producers had 
discontinued production.  See Hearing submission a nd comments of Chinese Footwear Coalition and China 
Leather Association dated 24 March 2009, Exhibit CHN- 10, p.5; Comments of Chinese Footwear Coalition and 
China Leather Association dated 6 April 2009, Exhibit CHN-18, p.1; Comments of Chinese Footwear Coalition 
and China Leather Association dated 3 November 2009, Exhibit CHN-14, p. 14; EFA submission dated 3 November 2009, Exhibit CHN-35, p. 15; and Comments by Chinese exporter Yue Yuen dated 
3 November 2009, Exhibit CHN-46, p.1. 
1267 China, second written submission, para. 969.  
1268 European Union, opening oral statement at the second meeting with the Panel, para. 296. 
1269 See paragraphs 7.604 and 7.621 above. 
1270 We note for instance the submission of the Chinese Footwear Coalition and China Leather 
Association, dated 3 November 2009, Exhibit CHN-14, pp. 13-14; and the submission of the EFA, dated 
3 November 2009, Exhibit CHN-35, pp. 18-22. WT/DS405/R 
Page 268  
 
 to the questionnaires as well as the delay in sending  the questionnaires to the Indonesian and Indian 
producers.
1271  In addition, China considers that this in formation constitutes information "used by the 
authorities" within the meaning of Article 6.4, asserting that it formed th e factual basis for the 
Commission's decision to send analogue country questionnaires and to select the analogue country.1272   
7.636  In response, the European Union argues that mu ch of the information that was obtained from 
the various analogue country producers contacted was confidential.  Moreover, in the 
European Union's view, matters such as whether or  not all the Indian and Indonesian producers were 
contacted and if any analogue country producers responded to the questionnaires do not constitute 
"information that is used by the authorities", as neither the intentions nor the reasoning of the 
investigating authority falls within the meaning of "information" in Article 6.4.  Furthermore, the 
European Union notes that interested parties not only were informed about the development of the 
selection process for analogue countries but also were provided with enough time to make presentations regarding this information.  In this  regard, the European Union notes that while the 
relevant information was made available on 6 Febr uary 2009, the comprehensive disclosure of the 
Commission was made in October 2009 and the Review Regulation was adopted on 
22 December 2009.
1273  
7.637  China asserts that the information at issue in this  aspect of its claim falls within the scope of 
information "used by the authorities" within the m eaning of Article 6.4.  China does not explain, 
however, how the information at issue was germane to the Commission's determination with regard to 
the selection of the analogue country.  Indeed, China' s arguments make clear that its concern is that 
various steps of the procedure of selecting the analogue country were not disclosed to interested 
parties as they were being taken.  We recall th at Article 6.4 requires the provision of timely 
opportunities to see information "used by the authorities" , that is, information relevant to the issues 
before the investigating authority.  In this case, we do not see how the fact that a particular producer 
has been contacted, and if so when it was contact ed, or whether all producers were given an equal 
amount of time to respond to questionnaires, or if any of them were granted an extension of time to 
respond, or which of them, if any, responded to th e questionnaire, is information relevant to the 
Commission's determination of the analogue country.  Rather, if anything, we view these matters as 
aspects of the investigative process undertaken by th e Commission in order to obtain information that 
will be analysed in making its determination with r espect to the analogue country.  However, in our 
view, nothing in Article 6.4 establishes an interest ed parties' right to, e ffectively, look over the 
investigating authority's shoulder and be kept apprised of various steps in the process of obtaining 
information and making determinati ons.  Moreover, we recall our view that "information" within the 
meaning of Article 6.4 does not include the analys is and determinations made by investigating 
authorities.  In light of the foregoing, we reject this aspect of China's claim.   
7.638  China also asserts that the delayed disclosure of the analogue country selection procedure did 
not allow interested parties to duly defend their inter ests, contrary to Article 6.2.  China notes that 
while interested parties submitted comments and proposed alternate analogue countries on 
13 October 2008, it was only through the Note for th e File dated 6 February 2009, i.e. four months 
later, that for the first time in terested parties were informed th at questionnaires had been sent to 
Brazilian producers on 21 November 2008, and to Indian and Indonesian producers on 23 and 
22 December 2008, respectively.  China alleges that during these four decisive months interested 
                                                      
1271 China, first written submission, paras. 684-685; second written submission, para. 971.  
1272 See, e.g. China, second written submission, para s. 972-974; answer to Panel question 66.  China 
adds that the European Union's inte rpretation of "information", if accepted , would preclude interested parties 
from challenging the lack of transparency in the investig ation on account of the absence of information on issues 
such as the analogue country selection. 
1273 See, e.g.  European Union, first written submission, pa ras. 402-403; second written submission, 
paras. 186-199.   WT/DS405/R 
  Page 269  
 
 parties could not comment on the analogue country selection and therefore interested parties did not 
have "full" opportunities to defend their interests "throughout the investigation".  In addition, China 
argues that, by the time interested parties learned wh en the Indian and Indonesian producers were sent 
questionnaires, all deadlines had already passed and ther efore interested parties in the defence of their 
interests could not even attempt to secure the coope ration of the Indian and Indonesian producers that 
they had proposed be considered.
1274   
7.639  Information concerning the process of selecting the analogue country was made available to 
interested parties in a Note for the File dated 6 February 2009.1275  China alleges that by this date all 
deadlines had passed and therefore interested parties could no longer secure the cooperation of the 
Indian and Indonesian producers that they had been  proposed.  However, the Note for the File dated 
6 February 2009 clearly indicates that the selection of the analogue country was still being analysed 
by the Commission.1276 
7.640  Thus, given that at this point no final decision had yet been taken on the selection of the 
analogue country, we fail to see how interested parties were deprived of a full opportunity for the defence of their interests with regard to attempti ng to secure the cooperation of the analogue country 
producers in India and Indonesia that they had pr oposed.  Moreover, we do not see any legal basis for 
China's contention that interested parties did not have a full opportunity to defend their interests 
during the investigation because they could not comment on the analogue country selection process 
prior to the issuance of the Note fo r the File in question.  We recall that while interested parties must 
be provided with liberal opportunities to defend thei r interests, this right does not entitle them to 
participate in the investigation as and when they choose.
1277  We see no basis to conclude that 
interested parties were precluded from defending thei r interests in the context of the selection of the 
analogue country.  Indeed, arguments in this regard  were made by parties at subsequent stages of the 
expiry review.1278  Merely that the Commission did not make the determination sought by interested 
parties does not demonstrate that they were depriv ed of a full opportunity for the defence of their 
interests.  In light of the foregoing, we reject China's claim under Article 6.2 of the AD Agreement in 
this regard.   
 
b) certain information in the questi onnaire responses of the analogue 
country producers 
7.641  China claims the European Union failed to pr ovide Chinese exporters timely opportunities to 
see the non-confidential version of the questionnair e responses of some analogue country producers 
by either not placing them in the non-confidential f ile or by delays in doing so.  China's claims 
concern:  (i) the information contained in the questionnaire responses of two of the five Brazilian 
producers which replied to the questionnaire; (ii) the initial questionnaire response of one cooperating 
Brazilian producer (West Coast Group); and (iii)  the questionnaire responses, as well as the PCN 
information, of two cooperating Brazilian producer s (Werner Calçados LTDA and Henrichs & CIA 
LTDA) and of the cooperating Indian and Indonesian producers.1279  China contends that this 
                                                      
1274 China, answer to Panel question 68; second written submission, para. 977. 
1275 Note for the File, 6 February 2009, Exhibit CHN-8.  
1276 Note for the File, 6 February 2009, Exhibit CHN-8 (replies of Indonesian producers "are currently 
being analysed", one Indian producer "indicated it woul d send a reply", replies of  Brazilian producers "are 
currently being analysed").  
1277 See paragraphs, 7.604, 7.621 and 7.633 above.  
1278 This is clearly reflected in the Review Regulation,  Exhibit CHN-2, recitals 83-104.  We also note 
the submission of the Chinese Footwear Coalition and Ch ina Leather Association, dated 24 March 2009, Exhibit 
CHN-10, pp. 1-2 and the submissions of the EFA, dated 23 February and 4 June 2009, Exhibits CHN-23, pp. 9-11and CHN-118, pp. 4-5, respectively. 
1279 See, generally, China, first written submission, paras. 683-692.  WT/DS405/R 
Page 270  
 
 information was used by the Commission to select the analogue country and to calculate the dumping 
margin for Chinese exporters and was therefore rele vant to the defence of their interests.  In 
particular, China argues that the lack of timely , and in some cases any, opportunities to see these 
questionnaire responses or some of information therein precluded Chinese exporters from making any 
comparative evaluation of the cooperation of the analogue country producers as well as of the data 
provided by them.  China asserts that by the tim e this information became available to Chinese 
exporters, the Commission had already selected Brazil as the analogue country.
1280  
7.642  The European Union contends that China's a llegations regarding the delay and non-provision 
of the questionnaire responses of the Brazilian, Indian  and Indonesian producers are outside the scope 
of Article 6.4 since "timeliness" in that provision re lates to the period after release of information to 
interested parties, while China's allegations refer to the period between info rmation being submitted to 
the Commission and the information being made availa ble to interested parties.  In any event, the 
European Union asserts that the replies of the an alogue country producers were made available to 
interested parties in a timely manner so that they c ould prepare their presentations.  In this regard, the 
European Union rejects China's contention that Brazil was selected as the analogue country at an early 
stage of the proceedings, noting that China relies in this regard on a Note for the file dated 
7 April 2009, which clearly states that the consideration of the choice of the analogue country was continuing at that stage.
1281   
7.643  With respect to the questionnaire responses of two of the five Brazilian producers which 
replied to the questionnaires, China asserts that Ch inese exporters were not provided any opportunity 
to see the information contained in these responses.1282  The European Union submits that the 
responses of these producers revealed that they did not produce any of the types of shoes that were 
exported from China to the European Union and ther efore their replies were rejected as irrelevant.1283  
China itself acknowledges that the data in thes e questionnaire responses was not used by the 
Commission in its analogue country analysis.1284  However, China contends that the fact that the 
information at issue was not used does not justify a violation of Article 6.4.  In support of its 
assertion, China relies on the report of the panel in EC – Salmon (Norway) , to assert that the 
information was "relevant" within the meaning of Article 6.4.1285   
7.644  However, we recall that Article 6.4 only requi res the provision of timely opportunities to see 
information which satisfies all of the conditions in that provision:  it has to be "relevant" to the 
presentation of the interested parties'  cases, "used" by the authorities, and "not confidential" within the 
meaning of Article 6.5.  In this case, it is clear  to us that the information in the questionnaire 
responses of the Brazilian producers in question was not  used by the Commission in its determination 
with respect to the selection of the analogue country .  We therefore reject this aspect of China's 
argument.1286  With respect to China's cl aim under Article 6.2 in this regard, we note that China makes 
no independent argument in support of its claim and therefore consider that China has not established 
                                                      
1280 See, e.g.  China first written submission, para. 693.  
1281 European Union, first written submission, paras.  388, 404 and 406-408; second written submission, 
para. 196.  
1282 China, first written submission, para. 688.  
1283 European Union, opening oral statement at th e second meeting with the Panel, para. 300.  
1284 China, first written submission, para. 688.  
1285 China, closing oral statement at  the second meeting with the Panel, para. 80, citing Panel Report, 
EC – Salmon (Norway) , paras. 7.769 and 7.774. 
1286 In its first written submission, China also argued that no information was made available as to why 
the data of these producers was not used and who thes e two producers were.  China, first written submission, 
para. 688.  However, why information was not used is clearly an aspect of the Commission's reasoning, which is 
not within the scope of Article 6.4.  With respect to  the identities of the two producers, even assuming this 
information is not confidential, we fail to see, and China has not indicated, how this constitutes information 
"used" by investigating authorities.  WT/DS405/R 
  Page 271  
 
 an independent violation of this provision.  Having  rejected China's claim under Article 6.4, we also 
reject China's consequential claim of violation of Article 6.2. 
7.645   With respect to the non-confidential versi on of the initial questionnaire response of the 
Brazilian cooperating producer West Coast Group, China asserts that this response was not made 
available to interested parties.
1287  The European Union contends th at this information, which was 
later corrected by the producer concerned, can not be considered "information used by the 
authorities".1288  China disagrees, arguing that: 
"it was incumbent upon the European Uni on to provide interested parties the 
opportunity to see the initial non-confidential questionnaire response of that company even though subsequently the European Union did not rely upon the information in 
the initial confidential questionnaire respon se of that company after having assessed 
the need for additional/revised data."
1289 
7.646  We do not agree.  China appears to acknow ledge that the information in the initial 
questionnaire response of the producer concerned wa s not "used" by the Commission.  Thus, it does 
not satisfy one of the prerequisites of Article 6.4.  Nor has China demonstrated, or even argued, that 
the interested parties requested to see this inform ation and were denied an opportunity to do so.  We 
recall that Article 6.4 does not impose any affirm ative obligation on investigating authorities to 
actively disclose information to interested parties.   We therefore reject this aspect of China's 
arguments.  With respect to China's claim under Arti cle 6.2 in this regard, we note that China makes 
no independent argument in support of its claim and therefore consider that China has not established 
an independent violation of this provision.  Having  rejected China's claim under Article 6.4, we also 
reject China's consequential claim of violation of Article 6.2.   
7.647  With respect to the two Brazilian producers Werner Calçados LTDA and Henrichs & CIA 
LTDA, one Indian producer, and five Indonesian producers, China asserts that (i) the PCN information of these producers was not made availa ble at all, and (ii) the relevant questionnaire 
responses of these producers were made availa ble only after delays of several months.
1290   
7.648  With regard to the first aspect of China's a llegations, China argues that the European Union 
used the PCN information of all these producers a nd that information was relevant for Chinese 
exporters to make their arguments regarding the suitability of the analogue country selected.1291  We 
recall that Article 6.4 does not obligate investiga ting authorities to actively disclose information to 
interested parties.  We also recall in this contex t that, in order for a claim to prevail under this 
provision, it must be shown that an interested part y requested to see information and that its request 
was rejected, or granted in an untimely manner, by th e investigating authority.  In this case, China has 
not demonstrated, or even argued, that interested parties requested to see the PCN information of the 
producers at issue and were denied an opportunity to do so.  We therefore consider that China has failed to make a prima facie  case of violation of Article 6.4 with respect to the PCN information in the 
questionnaire responses of the two Brazilian producer s Werner Calçados LTDA and Henrichs & CIA 
LTDA, one Indian producer, and five Indonesian produ cers.  In addition, we note that China presented 
no independent argument in support of a claim under Artic le 6.2, and we therefore consider that China 
                                                      
1287 China, first written submission, 689.  
1288 European Union, first written submission, para. 405; opening oral statement at the second meeting 
with the Panel, para. 302.  
1289 China, second written submission, paras. 981-982.  
1290 China, first written submission, paras. 688 and 690-692; second written submission, paras. 980 and 
983.   
1291 China, first written submission, para. 692.  WT/DS405/R 
Page 272  
 
 has not established an independent case of violation of  this provision.  Thus, having rejected China's 
claim under Article 6.4, we also reject China's conse quential claim of violation of Article 6.2.     
7.649  Turning to the second aspect of China's allegati ons, concerning the alleged delay in providing 
the non-confidential versions of the questionnaire responses of the producers at issue, China argues 
that these questionnaire responses were not made availabl e to interested parties in a timely manner, as 
they were made available between two and thr ee months after the producers had submitted their 
responses.
1292   
7.650  We have noted above that in order to establish a prima facie  case of violation of Article 6.4, a 
complaining party must demonstrate that an inter ested party requested to see information within the 
scope of this provision and that its request was de nied, or not timely granted, by the investigating 
authority.  China has cited no evidence indicating, or even argued, that any interested party made a 
request to the Commission to see this information.  We note that, in any ev ent, the information was 
disclosed to the parties well before any final dete rmination was made by the Commission.  China's 
claim relates to delays between the receipt of th e information and when it was placed in the non-
confidential file.  We recall, however, our view that  the timeliness of opportunities to see information 
under Article 6.4 is judged from the perspective of  the ability of interested parties to prepare 
presentations based on that information.  China has ma de no allegation that parties were not able to do 
so with respect to the information in question.  We  therefore consider that China has failed to make a 
prima facie  case of violation of Article 6.4 with respect to the questionnaire responses of the two 
Brazilian producers Werner Calçados LTDA and Henr ichs & CIA LTDA, one Indian producer, and 
five Indonesian producers.   
7.651  With respect to China's claim under Article 6.2 in this regard, China argues that due to the 
Commission's delayed disclosure of the information in question, interested parties could not make comments or evaluate the substantive basis of the appropriateness of using the data of the Brazilian 
producers as compared to that of the Indonesian pro ducers, and therefore they did not have a full 
opportunity to defend their interests at a ll points in time of the investigation.
1293  China also argues 
that the Note for the File dated 7 April 2009 makes clear that by that date Brazil had already been 
selected by the European Union as the analogue country.1294  
7.652  The questionnaire responses at issue were made av ailable to interested parties by the end of 
March and/or mid-April 2009.1295  China asserts that the delay in  making available the questionnaire 
responses of the producers concerned precluded inte rested parties from having a full opportunity to 
                                                      
 1292 In particular, China alleges that (i) the ques tionnaire responses of the two Brazilian producers, 
Werner Calçados LTDA and Henrichs & CIA LTDA, were added to the non-confidential file by the end of 
March or mid-April 2009, respectively, while they had su bmitted their responses on 22 January 2009; (ii) the 
questionnaire responses of the Indonesian producers were added to the non-confidential file between end of March or mid-April 2009, while they had submitted their responses on 30 January 2009; and (iii) the 
questionnaire response of the sole cooperating Indian producer was added to the non-confidential file between 
mid-end April 2009, while it had submitted its response by post on 4 February 2009 and the date of registration of response is 2 March 2009.  China, first written submission, paras. 688-691.  
1293 We note that the scope of Chin a's claim is not entirely clear.  China generally refers to "two 
Brazilian producers" without specifying to which Br azilian producers it refers.  China, second written 
submission, para. 985.  We recall that in the context of its claim under Article 6.4, China challenged the 
"delayed disclosure" of the questionnaire responses of the two Brazilian producers, Werner Calçados LTDA and 
Henrichs & CIA LTDA, while it asserted the "non-disclosur e" of information with respect to the rest of the 
Brazilian producers.  Given that China's claim under Article 6.2 concerns the "delayed disclosure" of 
information in the non-confidential questionnaire responses, we understand that the two producers to which 
China refers in the present claim are Wern er Calçados LTDA and Henrichs & CIA LTDA. 
1294 China, second written submission, para. 985.  
1295 China, first written submission, paras. 690-691.   WT/DS405/R 
  Page 273  
 
 defend their interests in the expiry review.  As we understand it, China alleges that the Commission 
had already selected Brazil as the analogue country  when it disclosed the questionnaire responses in 
question to interested parties, relying on a Note for the File dated 7 April 2009, which reads, in relevant part:  
"Analysis on the selection of analogue country 
This note sets out the current state of play on the choice of analogue country , in 
view of the facts collected with respect to Brazil, India and Indonesia ...  
Brazil 
Brazil was the analogue country chosen in the original investigation. On-spot 
verifications were carried out in thr ee Brazilian companies in February 2009. 
Domestic sales for the three companies amount to a total of between 1,600,000 and 
2,000,000 pairs in the IP, which represent more than 5% of exports of the sampled exporters in China and Viet Nam respectiv ely. These sales cover a wide range of 
footwear, which correspond largely to tho se exported by the sampled Chinese and 
Vietnamese companies. 
The method applied for comparing Brazilia n and Chinese Vietnamese products was 
the same as in the original investigation,  i.e. comparison of exports by PCN with 
matching or most resembling PCN in Brazil. … 
India 
One Indian producer replied to the questionnaire, reporting domestic sales of 
(confidential) pairs. These sales concerned, according to this producer, only one PCN.  
In terms of quantity this represents (confid ential) exports and (confidential) of the 
exports of the Vietnamese co mpanies that were sampled id est  less that 5% 
respectively.  
These data were not considered workable, si nce they are very little representative in 
terms of product range (1 PCN), of quan tity sold domestically as compared to 
exported volumes and number of producers (1). India is therefore no longer 
considered an appropriate analogue market. 
Indonesia 
A desk analysis was carried out regarding the five Indonesian companies who replied 
to the questionnaire. These companies ha ve total domestic sales of between 150,000 
and 200,000 pairs, which represent far less than 5% of exports of the Chinese and 
Vietnamese sampled companies. Although this quantity is very low, Indonesia is still 
being examined as a possible analogue market in view of the wide range of 
footwear types produced by the five comp anies concerned. The method applied for 
comparing Indonesia and Chinese/Vietnamese  products was the same' as in Brazil 
and the original investigation."1296  
The Note for the File does not suggest, as China impl ies, that Brazil had already been selected as the 
analogue country when the information in question was made available to interested parties.  Rather, 
                                                      
1296 Note for File dated 7 April 2009, Exhibit CHN-60 (bold emphasis added).  WT/DS405/R 
Page 274  
 
 this document clearly indicates that the selection of the analogue country was still in progress.
1297  We 
can therefore see no factual basis for China's asserti on that parties were denied a full opportunity for 
the defence of their interests, since it seems clear to us that, following receipt of this Note, parties 
could have made submissions to the Commission c oncerning the appropriateness of using the data of 
the Brazilian producers as compared to that of the Indonesia producers.  Indeed, certain interested 
parties did make subsequent presentations asserting that Indonesia was a more appropriate analogue 
country as opposed to Brazil.1298  In our view, there thus is no basis in fact to conclude that interested 
parties were deprived of a full opportunity for th e defence of their interests with respect to the 
analogue country selection in the expiry review.1299  We therefore reject China's claim under 
Article 6.2 in this regard. 
4. Union Interest questionnaire responses of five sampled EU producers  
7.653  China claims that the Europ ean Union did not provide timely opportunities for interested 
parties to see the Union Interest questionnaire responses of five of the eight sampled EU producers in 
the expiry review, as these five questionnaire res ponses were never added to the non-confidential file. 
In the absence of such informati on, China argues that Chinese exporters were denied the opportunity 
to defend their interests by making presentations/subm issions on the basis of such information, in 
violation of Articles 6.4 and 6.2.1300  China notes that at the first meeting with the Panel, the 
European Union stated that the five  sampled producers in question did not in fact submit replies to the 
Union Interest questionnaire.  Nonetheless, China maintains its claim under Article 6.2 despite this 
disclosure.1301  China argues that the Eur opean Union's failure to confirm that no responses were 
received from these five producers, in response to  the repeated questions of interested parties 
regarding the absence of their non-confidential and confidential Union Interest questionnaire 
responses, precluded interested parties from commenti ng on several aspects of the investigation and 
therefore they were deprived of th eir right to defend their interests.1302  
7.654  Notwithstanding China's suggestion that the Eur opean Community failed to engage in dispute 
settlement procedures in good faith by not indicating earlier that the five EU producers in question did 
not submit Union Interest questionnaire res ponses, when it would have known this since 
January 2009, we accept the European Union's st atement in this respect as a matter of fact.1303  It is 
not clear whether China maintains its claim under Artic le 6.4 in this respect, but in our view, the 
European Union cannot be found to have violat ed Article 6.4 by failing to provide timely 
                                                      
1297 China asserts that the Note for the File support s its view that Brazil had already been selected 
because, as it shows that (i) verifications at the premis es of Brazilian producers had been conducted; (ii) the 
normal value for footwear types including children's sh oes had been established; (iii) for the Indonesian 
producers only a desk check was conducted; and (iv) a detailed comparison of the data for the three countries 
was provided specifically with the objective of demonstr ating the appropriateness of selection of Brazil as the 
analogue country.  While we would not disagree that the Note suggests that the Commission was leaning toward 
selection of Brazil as the analogue country, the wording of  the Note referring to the "current state of play" and 
that "Indonesia is still being examined " in our view clearly indicates an on-g oing process of analysis, not a fixed 
determination, and we decline to conclude otherwise.  
1298 We note for example the submi ssion of the EFA, dated, 4 May 2009, where it states that based on 
the information provided by the Commission in the Note for the File, dated 7 April 2009, Indonesia was a more 
appropriate analogue country than Brazil.  Submission of the EFA, dated, 4 May 2009, Exhibit CHN-19, p. 1.  
1299 See footnote 1278 above. 
1300 China, first written submission, paras. 696-697.   
1301 China, second written submission, para. 992.  
1302 China, answer to Panel question 57. 
1303 China, answer to Panel question 57, para. 368.  We decline to require the European Union to 
provide proof to substantiate its assertions, as China ha s requested we do.  China, answer to Panel question 57, 
para. 369.  We can conceive of no proof of the non-submission of these questionnaire responses that could be 
forthcoming in response to a request for proof of a negative.   WT/DS405/R 
  Page 275  
 
 opportunities to see information which it did not po ssess.  Moreover, while China asserts that the EFA 
noted the absence of the non-confidential Union in terest questionnaire responses several times during 
the expiry review, without receiving a response from the Commission, we do not consider that this 
demonstrates that it requested to see "information" within the meaning of Article 6.4, and that its 
request was denied.
1304   
7.655  With respect to China's claim under Article 6.2,  as we understand it, China considers that by 
not informing interested parties that five EU producers had failed to submit responses to the Union Interest questionnaires, the Commission deprived interested parties of a full opportunity for the 
defence of their interests, as it deprived them of  their "right to comment on several aspects of the 
investigation as well as on the European Union's inv estigatory process," referring specifically in this 
regard to the lack of cooperation of the five producer s in question, alleged bias in the failure of the 
Commission to apply facts available or require a r esponse from the five producers, lack of objectivity 
in the assessment of the Union interest, aspects c oncerning outsourcing by sampled producers, etc.
1305   
7.656  We recall that the right of parties to defend th eir interests accorded by Article 6.2 is not 
indefinite.  While it certainly extends  to ensure that interested partie s have a full opportunity to defend 
their interests with respect to s ubstantive matters in the course of an anti-dumping investigation, it is 
less than clear to us that it also includes a right  to comment on the investigatory process and each of 
the elements referred to by China in its arguments in this respect.  Certainly, one can posit that any failure to provide information to interested parti es means that certain arguments may not be made.  
This does not, however, in our view mean that any failure in this regard establishes a violation of 
Article 6.2.  To so conclude would be to impose on investigating authorities a standard of perfection 
in the conduct of investigations that we consid er unwarranted.  In our view, China has failed to 
demonstrate that the fact that the Commission did not inform interested parties that five producers had not submitted responses to the Union Interest questi onnaire responses deprived interested parties of a 
full opportunity for the defence of their interest in any meaningful sense, and we therefore reject 
China's claim under Article 6.2 of th e AD Agreement in this regard.   
7.657  In light of the foregoing, we reject China's cl aim that the European Union failed to provide 
timely opportunities to see information in violation of Article 6.4 of the AD Agreement in the expiry 
review.  We further reject China's consequen tial claim of violation of Article 6.2 of the 
AD Agreement with regard to the same information.  Finally, we reject China's independent claim of 
violation of Article 6.2 with respect to the same information.  
c. Original Investigation 
1. information regarding the identities of th e complainants, supporters, sampled EU 
producers, and all known EU producers 
7.658  China claims that the Europ ean Union did not disclose the identities of the complainants, 
supporters, sampled EU producers, and all known EU  producers, and therefore failed to provide 
interested parties timely opportunities to see such in formation, in violation of Article 6.4 of the 
AD Agreement.  In addition, with respect to the na mes of all known producers, China also claims that 
to the extent that this information was not made av ailable to interested parties, the European Union 
violated Article 6.2 of the AD Agreement.1306  China argues that this information is not confidential 
since "names" cannot be considered "information"  within the meaning of Article 6.5 of the 
                                                      
1304 Indeed, the submission of the EFA dated 4 June 2009 refers to the delay in filing the responses, 
"assuming that all eight sampled producers in fact filed a confidential questionnaire response" by the deadline.  
Submission of the EFA dated 4 June 2009, Exhibit CHN-118. 
1305 China, answer to Panel question 57, para. 374.   
1306 China, first written submission, paras. 1288, 1297 and 1300. WT/DS405/R 
Page 276  
 
 AD Agreement and therefore cannot be  granted confidential treatment.
1307  Furthermore, China 
alleges that the identities of the producers was inform ation relevant to interested parties, and non-
disclosure of this information prevented them fro m commenting on many aspects of the investigation, 
and restricted their opportuniti es to defend their interests.1308  China also asserts that this information 
was used by the Commission since without this in formation the Commission would have been unable 
to (a) select the sample, (b) analy se injury at the macro- and micro economic levels, (c) calculate price 
undercutting and underselling, and (d ) perform the causation analysis.1309  Finally, China considers 
that the partial release of this information by the Commission – a document listing 1531 "all known 
producers" – does not constitute the information that interested parties requested, nor a disclosure of 
the identities of the producers.  Specifically, China argues that since the list did not indicate whether 
the companies were involved in the investigation, the names of the EU producers were not disclosed 
at all.1310  In any event, China contends that this information was not provided in a "timely" 
manner.1311  
7.659  The European Union argues that  China has not substantiated its claim as it has failed to 
establish that the information at issue w as not entitled to confidential treatment.1312  
7.660  We note that we have found that the European Union did not err in according confidential 
treatment to this information.1313  Article 6.4 makes it clear that the right to see information is limited 
to information that is not confidential.  We ther efore reject this aspect of China's claim that the 
European Union failed to provide timely opportunities to  see information in violation of Article 6.4 of 
the AD Agreement in the original investigation.  China's claim of violation of Article 6.2 of the 
AD Agreement with respect to the names of a ll known producers is dependent on its claim of 
violation of Article 6.4.  Having f ound no violation of Article 6.4 with respect to this information, we 
find no violation of Article 6.2 in this regard.1314 
(d) Claims II.8, II.9, III.10, III.11, and III.12 - Allege d violations of Articles 6.5, 6.5.1, 6.5.2, and 
6.2 of the AD Agreement – Confidential treatment of information  
7.661  In this section of our report, we address Chin a's claims that the European Union acted 
inconsistently with Article 6.5 of the AD Agreem ent in both the expiry review and the original 
investigation by wrongly treating certain information as confidential.  We also  address China's claims 
that the European Union acted inconsistently w ith Article 6.5.1 of the AD Agreement in both the 
expiry review and the original investigation by failing, with respect to some of the information at issue that was treated as confidential, to require adequate non-confidential su mmaries thereof, or an 
explanation as to why such summarization was not po ssible.  Finally, we address China's claims that, 
with respect to some of the information at i ssue in both the expiry review and the original 
investigation, the European Union acted inconsiste ntly with Article 6.5.2 of the AD Agreement, by 
                                                      
1307 See, e.g. China, first written submission, para. 1273.  
1308 For instance, China argues th at Chinese exporters could not comment on the selection of the 
sample; any potential relationships between complainan ts and exporters; the level of outsourcing by the 
complainants and sampled companies; the existence of a ny injury at the macro- or microeconomic levels; the 
levels of undercutting and underselling, and the causation an alysis.  China, first written submission, para. 1272.  
1309 China, first written submission, para. 1274.  
1310 China, first written submission, paras. 1268-1269 and 1286.  
1311 China notes that this information was provided the day after the publication of the provisional 
measures, thus, after the sample of EU producers had already been selected and a provisional affirmative 
determination of injury and causation had already been  taken.  China, first written submission, para. 1286. 
1312 European Union, first written submission, paras. 768 and 796.  
1313 See paragraph 7.699 below. 
1314 We recall, in addition, that the obligations under Article 6.2 do not apply to confidential 
information.  WT/DS405/R 
  Page 277  
 
 failing to disregard certain information because confidential treatment of that information was not 
warranted.   
(i) Arguments of the parties 
a. China 
7.662  With respect to the original investigation,  China's claim under Article 6.5 specifically 
challenges the confidential treatment of the following information:  (i) the names of complainant EU 
producers and other EU producers of the like product; (ii) information pertaining to the selection of the sample of the domestic industry, adjustments for differences affecting price comparability, the 
non-confidential questionnaire response of one sa mpled EU producer, and missing declarations of 
support; (iii) certain information in the complaint a nd in a Note for the File dated 6 July 2005; and 
(iv) certain information in the non-confidential vers ions of the questionnaire responses of the sampled 
EU producers.  With respect to this information, ex cept for the names of producers, China also claims 
that the European Union violated Article 6.5.1 of the AD Agreement by failing to require an adequate 
non-confidential summary of confidential informa tion or an explanation why summarization was not 
possible.  Concerning the information in the in jury questionnaire responses of the sampled EU 
producers, China claims that the Euro pean Union also violated Article 6.5.2.  Also, to the extent that 
all the information listed above was not properly treated  as confidential, and/or to the extent that it 
was, but adequate non-confidential summaries were not provided, China claims that the 
European Union violated Article 6.2 of the AD Ag reement as a consequence of the violations of 
Articles 6.5, 6.5.1 and 6.5.2.
1315   
7.663  With respect to the expiry review, China's cl aim under Article 6.5 specifically challenges the 
confidential treatment of the following information:   (i) the names of the EU producers of the like 
product, i.e. the complainants, the supporters and the sampled producers, as well as the sampled 
producers in the original investigation that comple ted the Union Interest questionnaire in the expiry 
review; (ii) certain information in the expiry revi ew request; (iii) the information which formed the 
basis for the selection of the EU producers included in  the sample of the domestic industry; (iv) the 
volume of production of the like product for 2007 and January 2008 by the EU producers supporting 
the request; (v) certain information in the inju ry questionnaire responses of the sampled EU 
producers; (vi) the information in the Union Inte rest questionnaire responses of certain sampled EU 
producers; and (vii) certain information in the an alogue country questionnaire responses of producers 
in the potential analogue countries.  With respect to  this information, Chin a also claims that the 
European Union violated Article 6.5.1 of the AD Agreement by failing to require an adequate non-
confidential summary of confidential informati on or an explanation why summarization was not 
possible.  Finally, with respect to the confidential treatment of the names of the EU producers and the 
injury questionnaires responses of the sampled EU pr oducers, China claims th at the European Union 
also violated Article 6.5.2, and as a conseque nce, violated Article 6.2 of the AD Agreement.1316   
b. European Union 
7.664  The European Union rejects all China's claims unde r Articles 6.5, 6.5.1, 6.5.2, and 6.2 of the 
AD Agreement.1317   
                                                      
1315 See, generally, China, first written submission, paras. 1260-1341. 
1316 See, generally, China, first written submission, paras. 699-771.  
1317 See, generally, European Union, first written submission, paras. 455, 459 and 796.  WT/DS405/R 
Page 278  
 
 (ii) Arguments of third parties  
a. Colombia  
7.665  Colombia considers that, consistent with the rulings of previous panels, both information by 
nature confidential and informati on generally public can be treated as confidential only if there is 
"good cause" for such treatment.  Thus, argues Colo mbia, investigating authorities must assure the 
showing of good cause regardless the nature of th e information for which confidentiality is sought.
1318 
b. United States  
7.666  The United States is of the view that, consiste ntly with the findings of prior panels, it is 
neither useful nor appropriate to attempt to articulate a categorical standard concerning what constitutes "good cause".  Furthermore, the United St ates considers the "good cause" for confidential 
treatment of information which is asserted to be "by nature confidential" is demonstrated by the 
inherently confidential nature of this information, while for other type of information, the submitter 
will need to provide a particularized explanation of why confidential treatment is warranted for the 
information in question.  In the case of pot ential commercial retaliation asserted as good cause for 
confidential treatment, the United States considers th at where a submitter asserts in good faith that 
disclosure of information it provides could cause cust omers to retaliate against it, there may well be 
sufficient grounds for an authority to conclude th at disclosure of the information would cause the 
submitter substantial competitive harm  and to find "good cause" for the information to be treated as 
confidential.
1319 
(iii) Evaluation by the Panel 
a. Overview 
7.667  Article 6.5 of the AD Agreement provides: 
"Any information which is by nature conf idential (for example, because its disclosure 
would be of significant competitive advantage to a competitor or because its disclosure would have a significantly a dverse effect upon a person supplying the 
information or upon a person from whom that  person acquired the information), or 
which is provided on a confidential basis by  parties to an investigation shall, upon 
good cause shown, be treated as such by the au thorities.  Such information shall not 
be disclosed without specific permission of the party submitting it.
17 
 6.5.1 The authorities shall require in terested parties providing confidential 
information to furnish non-confidentia l summaries thereof.  These summaries 
shall be in sufficient detail to pe rmit a reasonable understanding of the 
substance of the information submit ted in confidence.  In exceptional 
circumstances, such parties may indi cate that such information is not 
susceptible of summary.  In such excep tional circumstances, a statement of 
the reasons why summarization is not possible must be provided. 
 6.5.2 If the authorities find that a request for confidentiality is not 
warranted and if the supplier of the in formation is either unwilling to make 
the information public or to author ize its disclosure in generalized or 
summary form, the authorities may disr egard such information unless it can 
                                                      
1318 Colombia, answer to Panel question 15.  
1319 United States, answer to Panel question 16.  WT/DS405/R 
  Page 279  
 
 be demonstrated to their satisfacti on from appropriate sources that the 
information is correct.
18 
______________ 
 17 Members are aware that in th e territory of certain Members disclosure pursuant to a 
narrowly-drawn protective order may be required. 
 18 Members agree that requests for confidentia lity should not be arbitrarily rejected."   
Article 6.5 thus establishes the criteria for deciding  whether or not information may be treated as 
confidential in the course of an anti-dumping investiga tion.  It specifies that information which is "by 
nature" confidential, and informati on submitted on a confidential basis, shall be treated as confidential 
by investigating authorities, provided that good cause fo r such treatment is shown.  Moreover, the last 
sentence of Article 6.5 requires that confidential information not be disclosed without the specific 
permission of the party submitting it.1320  Article 6.5.1, in turn, obliges investigating authorities to 
require interested parties providing confidential information to furnish non-confidential summaries 
thereof.  These summaries must permit a reasonable understanding of the substance of the confidential 
information.  However, such non-confidential summa ries need not be furnished when, in exceptional 
circumstances, the information is not susceptible of summarization.  In such cases, Article 6.5.1 
requires interested parties instead to indicate the re asons why summarization is not possible.  Finally, 
Article 6.5.2 provides that an investigating authorit y may disregard information if it concludes that a 
request for confidential treatment is not warrant ed and the supplier is unwilling to make the 
information public or authorize its disclosure in generalized or summary form, unless it is demonstrated to the satisfaction of the investiga ting authority that the information is correct.   
 7.668  China's claims under Article 6.5 raise questions  concerning the nature of information which 
may be treated as confidential, as well as the parame ters of the requirement to show good cause for 
confidential treatment.  China's cl aims under Article 6.5.1 raise questions of the sufficiency of non-
confidential summaries provided, as well as scope of the obligations of the investigating authority 
with respect to ensuring compliance with this provisi on.  Before turning to the specific arguments in 
this dispute, we discuss below several general issues  raised by China's claims, the resolution of which 
informs our understanding of Article 6.5 as a whole, and will be relevant in our consideration of the 
issues before us in evaluating these claims.  
7.669  While the first sentence of Article 6.5 on its face  makes it clear that "information" which is by 
nature confidential or which is s ubmitted on a confidential basis by parties to an investigation, must 
be treated as confidential, it does not define the te rm "information".  Nor does any other provision of 
the AD Agreement define this term.  China consider s that the European Uni on treated as confidential 
matters that do not constitute "infor mation" within the meaning of Article 6.5, specifically, the names 
of producers.  In support of its pos ition, China refers to the following dictionary definition of the word 
"information":  "communication of  the knowledge of some fact or occurrence; knowledge or facts 
communicated about a particular subjec t, event, etc.; news; intelligence".
1321  For China, since this 
definition does not refer to names in defining th e term "information", it excludes "names" from the 
scope of the term "information".  China also contends  that the use of the term "information" in other 
provisions of Article 6 of the AD Agreement, notably Articles 6.2, 6.3, 6.4, 6.6, 6.7 and 6.8, supports 
its view that this term does not include the name of  a company.  China argues,  for instance, that with 
respect to Article 6.6, names cannot be "informati on" on which findings are based, while with respect 
                                                      
1320 The European Union does not disclose information pursuant to protective order, and therefore 
footnote 17 of the AD Agreement is irrelevant in this case. 
1321 China, first written submission, para. 713, c iting Shorter Oxford English Dictionary, (Oxford 
University Press, 2007), p. 1379, Exhibit CHN-62.  WT/DS405/R 
Page 280  
 
 to Article 6.8, information as used in this provi sion implies knowledge conc erning facts, situations, 
figures or data of a company, but not its name.  Further, China asserts that Article 6.7 differentiates between the firms whose information is verified, an d the names of those firms.  Thus, China argues, 
the name of a producer/company cannot be consider ed "information" to which confidential treatment 
can be accorded.
1322   
7.670  The European Union asserts that China's argume nt is flawed, contending that when the 
Commission granted confidential treatment to the names of companies making or supporting the original application for anti-dumping relief or the expiry review request, what it was doing was granting confidential treatment to the information that the particular company was one that was 
making or supporting the request.  The European Union considers that this factual information may be 
treated as confidential.  The European Union also  argues that China's contextual arguments fail, 
noting for instance that an  investigating authority can satisfy  itself as to the accuracy of this 
information or verify it under Articles 6.6 and 6.7.   The European Union recognizes that a grant of 
confidential treatment creates problems for other in terested parties, but considers that where the 
conditions set out in the AD Agreement are satisfied, such treatment may clearly be granted.  Nor is 
there any requirement to weigh the relative impor tance of the information granted confidential 
treatment against the difficulties such treatme nt might cause other parties.  Finally, the 
European Union contends that China's assertion th at the names of companies are "by nature public 
information" both recognizes that names are informa tion, and fails to recognise that what is being 
treated as confidential is the fact that the partic ular companies in question made or supported the 
application or request, which the European Un ion asserts clearly is not public information.
1323 
7.671  While we find the dictionary definition of the term "information" to be useful, we do not 
consider it dispositive of the question before us.  Moreover, we do not consider that the dictionary 
definition of the term is so limited as to exclude, a priori , names from the scope of "information" that 
may be treated as confidential under Article 6.5.  The definition of information is without limitation or 
qualification, and thus does not suffice to demonstrat e that the name or identity of a producer in an 
anti-dumping investigation cannot be considered "inf ormation".  In our view, the term "information" 
may encompass names, particularly where, as here, to  identify the names of companies is to identify 
their status as a complainant or supporter of the comp laint in the original investigation or the expiry 
review request.  We see no reason why the identity of  a company in this context cannot be considered 
"knowledge or facts communicated about a particul ar subject".  Moreover, we consider it highly 
relevant that in Article 6.5 itself, the term "informa tion" is modified by the word "any".  In our view, 
this clearly indicates the term "information" should be given a broad meaning.  Article 6.5 contains 
only one limitation on the treatment of "any inform ation" as confidential – the requirement of a 
showing of good cause.  It certainly does not explic itly limit the type or nature of information that 
may be treated as confidential – the use of the word "any" to modify information leads to precisely the 
opposite conclusion.  Thus, we see no basis in the text of Article 6.5 for the a priori  exclusion of 
certain types of information, the names of companie s in this case, from being treated as confidential.  
In our view, a restrictive interpretation such as proposed by China could undermine the purpose of 
Article 6.5, which is intended, in our view, to  encourage parties to provide information to 
investigating authorities by ensuring that the info rmation provided will, if good cause is shown, be 
treated as confidential.   
                                                      
1322 China, first written submission, paras. 713-715, 1263 and 1273; second written submission, 
para. 1446.  
1323 European Union, first written submission, paras. 416-420.  WT/DS405/R 
  Page 281  
 
 7.672  In any event, we recall that a treaty term can only be properly understood in its context and in 
the light of the object and purpose of the agreement in question.
1324  Concerning context, China argues 
that the use of the term "information" in Articl es 6.6, 6.8 and 6.7 of the AD Agreement supports its 
view that "information" in Article 6.5 cannot be considered to include the name of a company.  
Specifically, China argues that:  (i) the term "infor mation" in Article 6.6 does not include a company's 
name as it cannot be the basis of the findings of an investigating authority; (ii) the term "information" 
in Article 6.8 implies the knowledge of, inter alia , the data of a company but not its name; and 
(iii) Article 6.7 clearly establishes a difference betw een "information" and "interested parties' names" 
as it differentiates between the firms concerned and the information pertaining to those firms.   
7.673  We do not agree with China's arguments in this  respect.  In our view, even assuming China 
were correct, and the use of the term "information" in these provisions excluded the names of 
companies, a question which we need not and do not resolve, we note that in the provisions cited by China, the term "information" is not modified by th e term "any".  Rather, in each of those provisions, 
the term "information" is modified or qualifie d by other phrases, referring to, for instance, 
"information supplied by interested parties" (Ar ticle 6.6), verification of "information provided" 
(Article 6.7), and refusal or failure to provide "n ecessary information" (Article 6.8).  These modifiers 
imply limitations on the term information, while the modifier "any" in Article 6.5 implies breadth of 
scope.  Thus, we do not consider the meaning of the term "information" in these other provisions to be 
particularly informative, and certainly not contro lling, for our understanding of the meaning of the 
term "information" as used in Article 6.5.  Accord ingly, based on the foregoing, we consider that, 
provided good cause is shown, there is no limit on the type or nature of information may be treated as 
confidential in an anti-dumping investigation. 
7.674  With respect to Article 6.5.1 of the AD Agreem ent, we are of the view that, although not 
explicitly provided for in the text, this provision imposes an obligation on investigating authorities to 
require interested parties to provide a statemen t of the reasons why summarization of confidential 
information is not possible.  In our view, this in terpretation is consistent with the balance that 
Article 6.5.1 seeks to strike between confidential treat ment of information and the transparency of the 
investigation and proceedings.
1325  Therefore, we consider that pursuant to Article 6.5.1, investigating 
                                                      
1324 Appellate Body Report, China –  Measures Affecting Trading Rights and Distribution Services for 
Certain Publications and Audiovisual Entertainment Products ("China – Publications and Audiovisual Products") , WT/DS363/AB/R, adopted 19 January 2010, para. 348. 
1325 We find support for this view in the following statement by the panel in EC – Fasteners (China) :  
"In our view, Article 6.5.1 serves to balance the goal of ensuring that the availability of 
confidential treatment does not undermine the tran sparency of the inves tigative process, with 
recognition of the importance of maintainin g the confidentiality of information where 
appropriate. We consider that it is the investiga ting authorities' obligation to ensure that all the 
requirements of Article 6.5.1 are respected by inte rested parties. That is, we consider that the 
investigating authority must ensure that an appropriate non-confidential summary is provided, or in exceptional circumstances, if that is not po ssible, that an appropri ate statement of reasons 
why summarization is not possible is given. Clearly, in the absence of scrutiny of the non-
confidential summaries or st ated reason why summariza tion is not possible by the 
investigating authority, the potential for abuse of  confidential treatment by interesting parties 
would be unchecked unless and until the matter were reviewed by a panel. This would 
obviously defeat the goal of maintaining transpar ency during the course of the investigation 
itself that is one of the purposes of Article 6. 5. Thus, in our view, the investigating authorities 
must ensure that where an interested party asserts that a particular piece of confidential 
information is not susceptible of summary, th e reasons for that asse rtion are appropriately 
explained."   
Panel Report, EC – Fasteners (China) , para. 7.515 (footnotes omitted), citing Panel Reports, Mexico – 
Anti-Dumping Duties on Steel Pipes and Tubes from Guatemala ("Mexico – Steel Pipes and Tubes "), 
WT/DS331/R, adopted 24 July 2007, DSR 2007:IV, 1207, para. 7.379; Guatemala – Cement II , para. 8.213; and 
Mexico – Olive Oil , para. 7.89. WT/DS405/R 
Page 282  
 
 authorities are obliged to ensure that a party subm itting confidential information also furnishes an 
appropriate non-confidential summary, or in excepti onal circumstances, where the information is not 
susceptible of summary, that the party provides an appropriate statement of the reasons why 
summarization is not possible.   
7.675  With respect to Article 6.5.2 of the AD Agreem ent, as we understand it, China argues that the 
Commission was obligated to determine that confid ential treatment of certain information was not 
warranted, and should have disregarded the inform ation on that basis.  However, in our view, 
Article 6.5.2 does not impose any affirmative oblig ation on investigating authorities to examine 
whether or not confidential treatment is warranted.  The determination of wh ether information may be 
treated as confidential falls under Article 6.5 ch apeau.  Article 6.5.2 addresses what actions 
investigating authorities may take if they "find th at a request for confidentiality is not warranted".
1326  
Thus, there is, in our view, no basis for a claim of violation of Article 6.5.2 in a situation where a 
request for confidential treatment was granted by the investigating authority – that is, in a case where 
it finds that the request for confidentiality is warranted.   
7.676  Having established our general unde rstanding of the provisions of  Article 6.5, we address 
each aspect of China's claims, with respect to each item of information concerned, below.  We note in 
this regard that in some instances,  China has made a general claim of  violation, and indicates that the 
specific factual allegations it addresses in its s ubmissions are examples of the general violation 
claimed.  However, in our view, a claim under Ar ticle 6.5 of the AD Agreement, or any of its 
subparagraphs, requires a careful examination of th e specific facts at issue in order to evaluate 
whether a violation occurred.1327  Thus, our analysis and conclusions are explicitly limited to the 
specific factual situations raised by China. 
b. Original Investigation  
1. confidential treatment of the names of complainant EU producers and other EU 
producers of the like product 
7.677  China claims that the European  Union violated Article 6.5 by treating as confidential the 
names of EU producers, including the complain ants, supporters, and sampled producers and all the 
known producers.1328  China argues first, that the names of  the producers were not "information" 
eligible for confidential treatment,1329 and second, that the producers whose names were  treated as 
confidential did not show "good cause" for such treatm ent.  China further clai ms that, to the extent 
this information was not confidential, the Euro pean Union also violated Article 6.2 of the 
AD Agreement because a non-confidential summary of the information was not provided to the 
interested parties.1330   
                                                      
1326 We note that previous panels have also concluded that the obligation on investigating authorities to 
determine whether a request for confidential treatment is warranted is addressed by Article 6.5 of the 
AD Agreement.  Panel Reports, Guatemala – Cement II , para. 8.209, and Mexico – Steel Pipes and Tubes , 
para. 7.381. 
1327 See paragraph 7.590 above. 
1328 See, e.g.  China first written submission, paras. 1288, 1297 and 1300.  China also made a claim 
under Articles 6.2 and 6.4 with respect to this category of information.  China's claim in this regard is addressed 
in paragraphs 7.658-7.660 above. 
1329 China, first written submission, paras. 713-715, 1263 and 1273; second written submission, 
para. 1446.  
1330 China, first written submission, para. 1297.  With respect to the names of the complainants and 
sampled producers, China further claims  that even if this information was not confidential, the European Union 
also violated Article 6.2 of the AD  Agreement because a non- confidential summary of the information was not 
provided to the interested parties.  Id.  China, however, has made no claim under Article 6.5.1 in this regard.    WT/DS405/R 
  Page 283  
 
 7.678  With respect to the alleged lack of a s howing of good cause, China submits that the 
European Union treated as confidential the names of  the complainants and sampled producers on the 
basis of a generic request made by the CEC, d espite that good cause was not shown by each of these 
producers.
1331  Furthermore, China argues that the 36 non-complainant producers who supported the 
complaint did not request confidential treatment of their identities, and did not show good cause as to 
why their names should be treated as confidential.1332  China also contends that the complainants did 
not show good cause as to why the names of producers on the list of "other producers" should be treated as confidential.
1333  Finally, China contends that the a lleged "risk for retaliation," asserted in 
support of the request for confidential treatment of  the names in question, cannot, in the absence of 
any proof, be considered "good cause" for confidential  treatment within the meaning of Article 6.5 of 
the AD Agreement.  China also asserts in this regard that, after the imposition of provisional 
measures, seventeen Italian producers disclosed th eir names when they filed an application for 
annulment of the Provisional Regulation, and also disclosed their names when  they intervened in 
various European court proceedings filed by Chinese exporters following the imposition of the 
definitive measure.  This, in Chin a's view, demonstrates that ther e was in fact no real risk of 
retaliation.1334 
7.679  The European Union submits that China has faile d to establish that the information at issue 
was not properly treated as confidential.1335  In addition to arguing that the names of companies may 
be treated as confidential in order to not disclose wh ether they were complainants or supporters of the 
complaint, the European Union argues that all the producers concerned showed good cause for 
confidential treatment.1336  The European Union contends that although the 36 producers who gave 
their support but were not themselves complainants  expressed their support separately, that support 
was for the complaint, which in turn requested conf idential treatment for the identities of "supporters".  
Thus, the European Union argues, the support given by these producers included endorsing the 
request for confidential treatment in the complaint.1337  The European Union ar gues that, in light of 
the request for confidential treatment of the identiti es of complainants and supporters, and the stated 
fear of retaliation, the confidential treatment acco rded to the "list of other producers" was entirely 
reasonable.  The European Union asserts that, had it published this list, it would have in effect 
revealed the names of those companies who were supporting the complaint, since the names of all 
producers were in large part public knowledge.1338  Finally, concerning China's allegations with 
respect to the disclosure of the names of Ita lian producers in European court proceedings, the 
                                                      
1331 China, first written submission, para. 1277. 
 1332 China asserts that although CEC's request mentions "complainants and supporters", the CEC was 
acting only on behalf of the former.  In fact, China argues, wh ile the letters from each co mplainant stated that it 
"supports the complaint as a complainant", the declarations  of support did not contain such a statement.  China, 
first written submission, paras. 1290-1292; seco nd written submission, paras. 1447-1450.   
1333 China submits that the names of  these producers could not be cons idered confidential information 
since the inclusion of a producer's na me on that list could not necessarily reveal whether the producer was a 
complainant.  China, first written submission, para. 1299; second written submission, paras. 1453-1454.  
1334 China, first written submission, paras. 127 9 and 1281-1282; second written submission, 
paras. 1441-1443. According to China, it can be assumed that the seventeen Italian producers were among the complainants since thei r reason to file a court case was to have children's shoes included in the product scope 
following the imposition of provisional measures.   
1335 European Union, first written submission, para. 796.  
1336 The European Union notes in this regard that the complainants and other producers made requests 
for confidentiality at various times, noting for instance Annex I of the complaint and attached letter from CEC.  
European Union, first written submission, paras. 754-756. 
1337 The European Union adds that its interpretation is confirmed by the supporters' actions:  they 
removed their names and addresses from the declarations of support.  European Union, opening oral statement 
at the second meeting with the Panel, para. 413.   
1338 European Union, first written submission, paras. 769-770; opening oral statement at the second 
meeting with the Panel, para. 414.  WT/DS405/R 
Page 284  
 
 European Union submits that even assuming that these producers were among the complainants or 
supporters, the proceeding filed by these producer s after the imposition of the provisional measures 
would have not provided a basis for modifying th e confidentiality accorded to the information in 
question.
1339  The European Union notes that the other legal proceedings referred to by China were 
commenced after the adoption of the Definitive Regulation and therefore have no bearing on the 
actions taken by the Commission during the investigation.1340 
7.680  This aspect of China's claim raises two main is sues.  The first is whether the name of a 
producer/company can be considered "information"  within the meaning of Article 6.5 of the 
AD Agreement.  As we concluded above,1341 in our view, provided good cause is shown, "any" 
information may be treated as confidential in an an ti-dumping investigation, including, in this case, 
the names of producers.  We therefore reject China's contention that the names of producers are not 
"information" which may be treated as confidential.1342  
7.681  The second issue raised by this aspect of Ch ina's claim is whethe r "good cause" was shown 
for justifying the treatment of the producers' an d supporters' identities as confidential.  China 
advances two main arguments in support of its asser tion that the producers whose names were treated 
as confidential did not show "good cause".  China argues first, that the risk of retaliation by customers 
for acting as a complainant or supporting the compla int cannot be considered "good cause" within the 
meaning of Article 6.5 in the absence of any proof , and second, that the producers concerned did not 
themselves show good cause for the confidential treatment of their names.   
a) alleged risk of retaliation as "good cause" for confidential treatment 
7.682  Turning first to the relevant facts, which we  understand to be undisputed, we note that the 
complaint in the original investigation was submitt ed by the CEC on behalf of EU producers.  The 
complaint requests confidential treatment of "the names and countries of the individual complaining 
producers, together with the powers of attorney and support forms".1343  A letter from CEC 
accompanying the complaint states that:   
"The disclosure of the names of the compla inants and supporters of this application 
would have a significantly adverse effect upon them, in terms of being subject to 
retaliatory actions. 
The footwear market structure … has th e perfect conditions for retaliation: huge 
business interests at stake and unequal negotiati on power for the parties involved, i.e.  
on one side, a fragmented Community in dustry that in some cases import raw 
materials from the countries concerned, and on the other, very big distributors. 
                                                      
1339 In this regard, the European Union notes that the report of the case to which China refers merely 
states that the applicants had "reveal ed their concerns to the staff of the Member of the Commission responsible 
for trade during the administrative procedure", and that the action of the producers was dismissed on the basis 
that the measure was of insufficient individual concer n to them, whereas under European Union law companies 
that launch complaints would normally qualify in this respect.  European Union, first written submission, para. 759. 
1340 European Union, first written submission, para. 761.  
1341 See paragraphs 7.671-7.673 above. 
1342 We note that the panel in EC – Fasteners (China)  considered a similar claim and, after having 
determined that good cause had been shown, concluded that the Commission did not err in granting confidential 
treatment to the names of the complainants and supporters.  Panel Report, EC – Fasteners (China) , paras. 7.453-
7.455.  
1343 Anti-dumping complaint lodged by CEC, Exhibit CHN-76, Annex 1.   WT/DS405/R 
  Page 285  
 
 In fact, in the previous case concerning footwear, this problem was already rampant, 
as acknowledged by the Commission and the Council.  At that time … The investigation confirmed that certain Co mmunity producers had been subjected to 
severe commercial pressure to stop coopera ting in the investigation and withdraw 
their support for the complaint.  Accordingly, it was considered appropriate not to 
disclosure [sic] the names of these 15 Community producers'.   
Such pressures have already been suffered in this case. Therefore, it is absolutely necessary that  the names and countries of the companies 
involved in this application are kept strictly confidential."
1344  
In addition, the Provisional Regulation states that sampled EU producers and other cooperating 
producers requested that their identities be kept conf idential, specifically asserting a risk of retaliation 
by some of their clients, including the possible termination of their business relationships.  These 
producers noted that certain complainant producers supplied EU customers who also sourced products 
from China and Viet Nam, thus benefiting direct ly from the allegedly dumped imports.  These 
complainants were thus in a sensitive position, si nce some of their clients might have not been 
satisfied with their lodging or supporting a comp laint against the alleged injurious dumping, and 
therefore there was a risk of retaliation by some of their clients, including the possible termination of 
their business relationships.1345  The Provisional Regulation notes that the request was granted as it 
was considered "sufficiently substantiated".1346   
7.683  China does not dispute that an alleged risk of retaliation could per se  constitute good cause 
for confidential treatment.1347  Rather, China asserts that the alle ged risk of retaliation stated in the 
complaint, in the absence of any evidence substa ntiating the severity of the risk, could not be 
considered "good cause" within the meaning of Article 6.5.1348   
7.684  While Article 6.5 requires that good cause be s hown in order for information to be granted 
confidential treatment, it contains no guidance as to what might constitute good cause, or how it 
should be established.  We see nothing in Article 6. 5 which would require any particular form or 
means of showing good cause, or any particular type or degree of supporting evidence which must be 
provided.  In our view, the adequacy of a showin g of good cause must be assessed in light of the 
circumstances of each investigation and each request for confidential treatment.1349  What constitutes 
"good cause" will depend on the nature of the information for which confidential treatment is 
sought.1350  The nature of the good cause alleged to exist, in turn, will determine the kind of evidence 
that may be needed to demonstrat e the existence of such good cause.1351  In our view, these are 
matters for investigating authority to  consider and resolve in the first instance, on the basis of the facts 
of each investigation, subject, of course, to review by a panel.   
7.685  In this case, the complaint asserted a risk of re taliation if the names of the complainants and 
supporters of the complaint were disclosed.  There is no indication on the evidence before us, nor does 
the European Union argue, that specific evidence to support the alleged risk of retaliation was 
                                                      
1344 Anti-dumping complaint lodged by CEC, Exhibit CHN-76. 
1345 Provisional Regulation, Exhibit CHN-4, recital 8. 
1346 Provisional Regulation, Exhibit CHN-4, recital 8. 
1347 China refers to "unsubstantiated  statements in the absence of an y proof supporting the claims of 
risk of retaliation".  China, first written submission, para. 1279 (footnote omitted). 
1348 China, first written submission, para. 1279; answer to Panel question 75(b).  
1349 Panel Report, EC – Fasteners (China) , para. 7.451. 
1350 Panel Reports, EC – Fasteners (China) , para. 7.451; Korea – Certain Paper , para. 7.335; and 
Mexico – Steel Pipes and Tubes , para. 7.378. 
1351 Panel Report, EC – Fasteners (China) , para. 7.451. WT/DS405/R 
Page 286  
 
 submitted.  In our view, however, this lack of  evidence does not preclude the alleged fear of 
retaliation from constituting good cause for the treatment  of the identities of the producers concerned 
as confidential.  As discussed above, the nature of the good cause alleged is re levant in determining 
the kind of evidence that will be sufficient to demonstr ate its existence.  In this regard, we consider 
that direct or concrete evidence substantiating concerns about potential retaliatory actions by 
customers is not likely to be obtainable.  Thus , these concerns may well be evidenced only by the 
testimony of the submitter of the information for whic h confidential treatment is sought.  Therefore, in 
our view, unless there is some reason to believe that  the alleged risk of retaliation was unreasonable, 
unfounded, or untrue, the absence of more concrete  evidence supporting the alleged risk of retaliation 
does not, by itself, preclude the concern for po ssible retaliation from being good cause within the 
meaning of Article 6.5.
1352   
7.686  Moreover, we consider that the risk of reta liation alleged in the complaint was not mere 
assertions based on conjectures, as China contends.  The CEC's letter asserted that, during a previous 
anti-dumping investigation concerning footwear impo rts, it was "confirmed that certain Community 
producers had been subjected to severe commercial pr essure to stop cooperating in that investigation 
and withdraw their support for the complaint, and th at this pressure had already been suffered in the 
investigation at issue."1353  In our view, this assertion of fact, which China does not dispute, directly 
supports the fear of retaliation asserted as good cause for confidential treatment of the identities of complainants and supporters.   
7.687  China asserts that after the imposition of provis ional measures, seventeen Italian producers 
disclosed their names when they filed an applica tion for annulment of the Provisional Regulation and 
also when they intervened in various Europ ean court proceedings filed by Chinese exporters 
following the imposition of the definitive measures.  This, in China's view, demonstrates that the 
alleged risk of retaliation was untrue.
1354   
7.688   We are not persuaded by this argument.  China has not demonstrated that these seventeen 
producers were among the producers whose identities were  treated as confidential in the investigation 
– rather, China argues that it can reasonably be  "assumed" that these seventeen producers were 
complainants in the original investigation, since th eir reason to file a court case was to have children's 
shoes included in the product scope foll owing the imposition of provisional measures.1355  However, 
the mere fact that a producer of footwear in th e European Union would seek  to have a category of 
                                                      
1352 We find support for this view in the reasoning of the panel in EC – Fasteners (China) .  That panel, 
which addressed an issue similar to the one before us in the present dispute, concluded that concerns about 
potential retaliation may constitute good cause for confidential treatment.  The panel stated that: 
"'potential commercial retaliation' is not a sufficiently concrete phenomenon that evidence of 
its existence is likely to be obtainable. Thus, un less there is some reason to believe that the 
fear of retaliation is unreasonable, unfounded, or  untrue ... we consider that the allegation of 
the complainants in this case is a sufficient basis for the Commission's conclusion.  938 
_______________ 
 
 938 We do not exclude the possibility of there being some situation in which such an 
allegation can be substantiated by some more concrete evidence than the testimony of the 
party seeking confidential treatment for the information that it submits. However, it is difficult to conceive of what such evid ence might be – the likelihood of complainants being able to 
produce a written document, or an audio record ing, of a customer threatening commercial 
retaliation seems far-fetched, and yet in the absence of such evidence, we do not see what could be proffered as evidence to support a fear of such retaliation." 
Panel Report, EC – Fasteners (China) , para. 7.453.  We agree with the views expressed by the panel.  
1353 Anti-dumping complaint lodged by CEC, Exhibit CHN-76, Annex 1. 
1354 China, first written submission, para. 1281; second written submission, paras. 1441-1443. 
1355 China, second written submission, para. 1442.   WT/DS405/R 
  Page 287  
 
 shoes included in the scope of an anti-dumping me asure does not, in our view, demonstrate that the 
producer was itself a complainant or supporter of th e complaint who sought confidential treatment of 
its identity.  It is entirely possible that a previously uninvolved producer might, once a provisional measure is in place, conclude that it is in its in terest to broaden the scope of such a measure.  The 
court case to which China refers does not identif y these seventeen producers as complainants or 
supporters of the complaint in the original investiga tion.  It merely states that these producers "might 
have revealed their concerns to  the staff of the Members of th e Commission responsible for trade 
during the administrative proceedings".
1356  Therefore, it is not, in our view, reasonable to assume that 
these seventeen producers were among the complainan ts whose identities were treated as confidential 
during the investigation.  Moreover, even assuming, arguendo , that they were, we are of the view that 
the fact that the names of these producers were disclosed in European court proceedings does not 
affect our evaluation of the grant of confidential tr eatment of the names of producers in the original 
investigation, and particularly not with respect  to the confidential treatment of the names of other  EU 
producers.  Finally, even assuming these seventeen produ cers had revealed to the court that they were 
complainants in the investigation, thus somehow waiving or rescinding the request for confidential 
treatment of their identities during the investigation, we fail to see how this affects whether or not the 
risk of retaliation asserted in the complaint was reaso nable at the time it was made.  We certainly do 
not see how this demonstrates that retaliation never occurred, as China argues.1357 
7.689  With respect to the other court cases referred to  by China, in which these seventeen producers 
intervened,1358 we note that these proceedings were commenced, and the seventeen producers 
intervened, after  the adoption of the Definitive Regulation.  Thus, in our view, they are irrelevant to 
our evaluation of the confidential treatment of names in the original investigation, which we consider 
must be assessed as of the time it was granted, and not in light of later developments after the conclusion of the investigation.  China has made no other arguments in support of the contention that 
the alleged risk of retaliation was not true.   
7.690  We therefore reject China's contention that the ri sk of retaliation alleged in this investigation 
did not constitute good cause for confidential treatme nt of the names of EU producers within the 
meaning of Article 6.5 of the AD Agreement. 
                                                      
1356 Paragraph 18 of the decision of the Court of Justice reads as follows:  
"Dans leur demande, les requérantes font valoir que le recours au principal es t recevable. Le règlement 
n° 553/2006 les affecterait directement et individuellement dans la mesure où, premièrement, toutes les 
requérantes seraient des producteurs de chaussures pour enfants, deuxièmement, les requérantes auraient exposé 
leurs préoccupations au cabinet du membre de la Commission en charge du commerce pendant la procédure 
administrative et, troisièmement, le règlement n° 553/2006 serait directement applicable." Moreover, it appears that these producers did not, in fact, take part in the anti-dumping investigation at issue.  In 
dismissing the application filed by the seventeen Italian producers, the court noted that:   
"28 En deuxième lieu, il ne ressort nullement de la demande, d'une part, qu'elles aient participé à la procédure administrative qui a abouti à l'adoption du règlement n° 553/2006 et, 
d'autre part, qu'elles aient été identifiées par les actes de la Commission ou concernées par les 
enquêtes préparatoires. À cet égard, les requéra ntes n'ont pas démontré à première vue que les 
contacts qu'elles avaient eus avec le cabinet du membre de la Commission en charge du 
commerce n'avaient pas été que des contacts info rmels, ne pouvant pas être caractérisés 
comme une participation à la procédure administrative." 
Case T-163/06, BA.LA. di Lanciotti Vittorio & C. Sas, and others v. Commission, Order of 2 August 2006, 
paras. 18 and 28. Court of Justice of th e European Union, ( accessed 4 April 2011) 
<http://www.curia.europa.eu>).  In our view, this statement suggests that these producers were not, in fact, 
active participants in the investigation.   
1357 China, second written submission, para. 1062. 
1358 Joined Cases T-407/06 and T-408/06 Zhejiang Aokang Shoes Co., Ltd and Wenzhou Taima Shoes 
Co., Ltd. v Council; Case T-409/06, Sun Sang Kong Yuen Shoes Factory (Hui Yang) Corp. Ltd. v. Council; and 
Case T-1/07 Apache footwear Ltd. v. Council.  WT/DS405/R 
Page 288  
 
 b) whether good cause was shown by the EU producers and "other 
producers"  
7.691  China's second argument, as we understand it, is  that the EU producers and supporters whose 
names were granted confidential treatment did not themselves show good cause for the confidential 
treatment requested.  In this regard, China rai ses three points:  (i) that good cause was not shown 
individually by each of the complainants and sample d EU producers; (ii) that the 36 non-complainant 
producers who supported the complaint did not them selves specifically request confidential treatment 
of their names, nor did they themselves show good cause as to why their names should be treated as 
confidential; and (iii) that the complainants did not show good cause as to why the names of "other 
producers" listed in the complaint should be treated as confidential. 
7.692  With respect to the first aspect of this argu ment, China contends that the European Union 
treated as confidential the identities of the compla inants and sampled producers on the basis of a 
generic request made by CEC and that no g ood cause was shown by each of these producers.1359  As 
we understand it, China's argument is that it was n ecessary for each producer individually to request 
confidential treatment of its identity and demonstr ate good cause, and not for a third party, in this 
case, the CEC, to do so.1360   
7.693  As noted above, in this investigation, the CE C, acting on behalf of EU  producers of footwear, 
filed the complaint.  That complaint, and the accompanying letter, requested that the names and 
countries of the complainants and supporters of th e complaint be kept confidential, based on the 
asserted risk of retaliation.1361  It is therefore clear, and we believe it to be undisputed, that the request 
for confidential treatment, as well as the demons tration of good cause, was made by the CEC on 
behalf of the complainants and supporters.   
7.694  We recall that Article 6.5 of the AD Ag reement provides, in pertinent part: 
"6.5 Any information which is by nature  confidential … or which is provided on a 
confidential basis by parties to an inv estigation shall, upon good cause shown, be 
treated as such by the authorities. Such information shall not be disclosed without 
specific permission of the party submitting it."   
We see nothing in the text of Article 6.5 which would preclude a party – in this case, a trade 
association, the CEC – from requesting confidential treatment of certain information in a complaint 
(or other submission) it files on behalf of another pa rty or parties, in this case the complainants and 
supporters, and showing good cause for such trea tment on behalf of that party or parties.1362  We note 
that Article 6.5 does not refer to the "owner" of the information for which confidential treatment is 
sought requesting such treatment and showing good cau se.  Nor does it even specifically require that 
the provider or submitter of the information do so, although this is the most likely scenario.1363  In this 
                                                      
1359 China, first written submission, para. 1277.  
1360 In this regard, we note that China advances a similar argument with respect to the confidential 
treatment granted to the names of EU producers in the expiry  review.  In that context, China alleges that it is for 
the submitter of the information concerned, and not for a third party or association, to demonstrate "good 
cause".  See. e.g. China, first written submission, pa ra. 1299; second written submission, paras. 1453-1454.  
1361 Anti-dumping complaint lodged by CEC, Exhibit CHN-76. 
1362 We note in this regard that Article 6.11 of the AD  Agreement provid es that, for the purposes of the 
AD Agreement, "interested parties" in clude "trade and business associations".   It is not disputed that the CEC 
was entitled to submit the complaint, and participate in the investigation.   
1363 We note that one basis for considering information to be "by nature confidential" is because its 
disclosure would have a significantly adverse effect upon a person from whom the person supplying the information obtained it.  In this situation, good cause might be demonstrated by the person supplying the 
information indicating the nature of the significantly adverse effect disclosure would have on the person from  WT/DS405/R 
  Page 289  
 
 case, it seems to us that the CEC was actually the submitter of the information for which confidential 
treatment was sought, and was theref ore certainly entitled to request that treatment, and make the 
requisite showing of good cause.    7.695  In addition, we note that the complaint includ es specific authorizations from the individual 
complainants for the CEC to act on their behalf in filing the complaint.
1364  In our view, the notion that 
the individual complainants were somehow required to, in addition, individually request confidential 
treatment and show good cause therefor, is  without basis in the AD Agreement.1365  Thus, we consider 
that China's assertion that the producers whose name s were treated as confidential did not show "good 
cause" for such treatment is unfounded as a matter of fact and without legal basis.1366   
7.696  The second aspect of China's argument relates to the alleged failure of the 36 supporting 
producers to themselves request confidential treatme nt of their names and to show good cause for 
such treatment.  There is no dispute that these produ cers declared their support for the complaint.  The 
letter from CEC accompanying the complaint explicitly  requested confidential treatment of the names 
and countries of "complainants a nd supporters".  We see nothing in the evidence, and China has 
pointed to nothing, that would indicate that th ese 36 supporting producers, in separately declaring 
their support for the complaint, nonetheless were somehow disclaiming or rejecting the CEC's request for confidential treatment of the identities of compla inants and supporters.  Nor is there any indication 
that these 36 supporting producers subsequently, during the investigation, waived or disclaimed the 
confidential treatment that had been accorded.  In our  view, it is more reasonable to conclude that the 
support for the complaint expressed by these 36 suppor ting producers included support for the request 
for confidential treatment of the names of supporters  asserted by the CEC in that complaint.  As 
discussed above, we see no requirement, in the contex t of a complaint filed by a trade association on 
behalf of producers, for individual requests for confidential treatment and showings of good cause 
therefor.   
7.697  China argues that while the CEC's request men tions "complainants and supporters", the CEC 
was acting only on behalf of the former.  To s upport this view, China notes that the 36 supporting 
producers merely declared their support for the comp laint, but did not provide powers of attorney 
authorizing CEC to act on their behalf.
1367  We recall our view that Article 6.5 does not establish any 
particular form or mechanism by which "good cause"  must be shown.  We see nothing in Article 6.5 
that would require that a party's request for confid ential treatment on behalf of other parties must be 
supported by a document or other statement specifically  authorizing or granting legal authority to the 
representative to act on its behalf.  In our view, th ese are procedural and methodological questions to 
be resolved by each investigating authority, c onsistent with the legal requirements of the WTO 
                                                                                                                                                                     
whom the information was obtained.  In this scenario, the "owner" of the information may be entirely 
unconnected to the anti-dumping investigation.  
1364 Note for the file dated 6 July 2005 (Excerpts), Exhibit CHN-108, p. 3. 
1365 Moreover, we recall that, at verification, samp led producers requested confidential treatment of 
their names and asserted risk of retaliation as cause for the confidentiality.   
1366 We note that China's argument in this regard is limited to the alleged failure of the sampled 
producers to "themselves" show good cause for confidentiality of their names.  China has made no argument concerning whether or not the risk of retaliation alleged by these producers constituted "good cause".  In any 
event, we have concluded that the assert ed risk of retaliation sufficed as good  cause, and our views in that regard 
extend to the grant of confidential treatment of the identities of the sampled producers in question. 
1367 China, first written submission, paras. 1290-1 292; second written submission, paras. 1447-1450; 
closing oral statement at the second meeting with the Panel, para. 111.  We recall that the individual 
complainants' statements indicate that  each company "supports the complaint as a comp lainant and authorizes 
CEC to act on its behalf in all matters concerning the anti-dumping proceeding."  Note for the file dated 
6 July 2005 (Excerpts), Exhibit CHN-108.  WT/DS405/R 
Page 290  
 
 Member in which it is operating, and as always, subject to review by a panel.
1368  We therefore reject 
China's contention that the 36 supporting producers failed to request confidential treatment of their 
names and/or to show good cause for such treatment.   
7.698  Moving to the third aspect of China's argument, concerning the list of "other producers", 
China argues that the complainants did not show good cause for confidential treatment of the names 
of these producers.  In particular, China argues that if a producer's name was not included in the list of 
"other producers", it could not be concluded that this producer was necessarily a complainant, as it 
could also be the case that it was simply not known.1369  We are not convinced by this argument.  The 
evidence before us indicates that the complainan t CEC requested confidential treatment of the 
identities of the "other producers" named in a list pr ovided in the complaint, asserting that disclosure 
of those names could have led to the identifi cation of the companies supporting the complaint.1370  
The European Union asserts, and China does not disput e, that the names of EU producers of footwear 
were in large part publicly known.  Thus, it cannot be excluded that the disclosure of a list of the 
names of the "other producers" could have revealed , by elimination, the identities of the complainant 
producers and producers supporting the compliant.  In such circumstances, th e effectiveness of the 
confidential treatment of the latter's identities c ould be at risk, as knowing the names of "other 
producers" might well allow the identities of comp lainants and supporters to be deduced, thus 
rendering the confidential treatment of their identiti es a nullity.  Thus, we reject China's contention 
that the complainants did not show good cause for th e confidential treatment accorded to the list of the 
"other producers".   
7.699  Based on all the foregoing, we conclude that China has not established that the 
European Union acted inconsistently with its ob ligations under Article 6.5 of the AD Agreement in 
treating as confidential the names of EU producers in  the original anti-dumping investigation.  As 
China's claim of violation of Article 6.2 of the AD Agreement is dependent on its claim of violation 
of Article 6.5, which we have rejected, we rej ect China's claim under Article 6.2 in this regard. 
2. information with respect to the methodology and the data used for the selection of the 
Sample of EU producers, adjustments for di fferences affecting price comparability, non-
confidential questionnaire response of one sampled EU producer, and missing 
declarations of support 
7.700  China claims that the European  Union violated Articles 6.5 and 6.5.1 of the AD Agreement 
by not disclosing information with respect to (i) the methodology and data used for the selection of 
the sample of EU producers; (ii) the adjustments for differences affecting price comparability made 
by the Commission; and (iii) the non-confidential questionnaire response of one sampled EU producer 
and missing declarations of support.  China asserts  that good cause was not shown for confidential 
treatment of this information, and no non-conf idential summaries or explanations as to why 
summarization was not possible were provided.  Furtherm ore, China claims that to the extent that this 
information was not confidential, and where it w as but no non-confidential summaries were provided, 
the European Union also violated  Article 6.2 of the AD Agreement.1371   
7.701  The European Union submits that most of the in formation at issue is not information of the 
kind whose release is regulated by the provis ions invoked by China.  Furthermore, the 
                                                      
1368 As a general matter, where there are no specifi c mechanisms or methodologies set out in the 
AD Agreement for how a particular provision is to be put into effect by an investigating authority, as is the case 
here, we would be extremely reluctant to require any specific procedures, as we could not be certain that these 
would be appropriate, legally and pr actically, for all WTO Members.   
1369 China, first written submission, para. 1299; second written submission, paras. 1453-1454. 
1370 Anti-dumping complaint lodged by CEC, Exhibit CHN-76, Annex 2. 
1371 China, first written submission, para. 1317; second written submission, paras. 1455-1457.  WT/DS405/R 
  Page 291  
 
 European Union alleges that China's claims are st ated with insufficient precision for a proper defence 
to be attempted and therefore request  the Panel not to consider them.
1372   
a) methodology and data used for the selection of the sample of EU 
producers 
7.702  China argues that the European Union failed to  (i) disclose how the methodology was applied, 
namely on the basis of which elements the geog raphical spread of the industry was considered; 
(ii) clarify why sales data were not used in the selection of the sample, as had been announced would be done in the Notice of Initiation of the original inv estigation; and (iii) disclose certain data used to 
select the sample, specifically the individual production figures of the domestic producers for the first quarter of 2005.
1373  China claims that this information w as treated as confidential in the absence of 
good cause, and further claims that no non-confiden tial summary was provided with respect to this 
information, nor was there any explanat ion for the lack of such a summary.1374 
7.703  With respect to the first two aspects of China' s claim, we note that Article 6.5 of the 
AD Agreement addresses the confidential treatment of information submitted by interested parties.  
We see nothing in this provision that addresses the confidential treatment of the methodologies used 
and determinations made by inv estigating authorities during the investigation.  Nor has China 
demonstrated otherwise.  We agree in this regard with the panel in EC – Fasteners (China) , which 
concluded that the question whether an investiga ting authority's analysis and determinations are 
subject to confidential treatment or to disclosure does not fall within the subject matter of the obligations contained in Article 6.5, but rather  within the scope of other provisions of the 
AD Agreement, for instance, Article 12.2.
1375  We therefore reject these two aspects of China's claim.  
7.704  With respect to the third aspect of China's claim, concerning the individual production data of 
the domestic producers for the first quarter of 2005,  China argues that no good cause was shown for 
the confidential treatment of this information.1376  The European Union does not deny that the 
information at issue was treated as confidential and not made available to interested parties.1377  Nor 
does the European Union argue that confidential treatment was specifically requested, or good cause 
for such treatment was specifically shown, by the submitters of this information.  However, the 
European Union asserts that the protection accorded  to the individual data of these producers was 
necessary in order to ensure respect for the confidential treatment of their identities.1378  According to 
                                                      
 1372 European Union, first written submission, paras. 772-786. 
1373 China, first written submission, paras. 1301-1305; second written submission, para. 1455.   
1374 China, first written submission, para. 1317. 
1375 Panel Report, EC – Fasteners (China) , para. 7.530.   
1376 China, second written submission, para. 1455.  
1377 We note that here, and in other instance, China has phrased its arguments in terms of the European 
Union's alleged failure to "disclose" certain matters.   However, we consider that Article 6.5 of the 
AD Agreement is not a provision that addresses disclosure  of information, but rather, a provision that requires 
non-disclosure, that is, confidential treatment, of information, where warranted.  Other provisions of the 
AD Agreement, which do require disclosure of information,  or making information available to parties, such as 
Articles 6.4 and 6.9 of the AD Agreement, subject th ose requirements to the obligation to maintain the 
confidentiality of information treated as confidential under Article 6.5. 
1378 Specifically, the European Union argues that, in  the circumstances of this investigation, the 
justified request for confidential treatment of the iden tities of the EU producers could not be properly respected 
merely by deleting their names, as their identities could be deduced from other information that they submitted.  
The European Union adds that the Commission's conclusion in this regard was based on oral communications from the producers concerned viewed in the light of the Commission's general knowledge of commercial affairs.  
European Union, oral statement at the second meeting with the Panel, para. 415; answer to Panel question 71.   WT/DS405/R 
Page 292  
 
 the European Union, investigating authorities are obliged to take whatever steps are necessary to 
ensure that the right to confiden tiality in Article 6.5 is respected.
1379   
7.705  We recall that Article 6.5 provides that info rmation which is by nature confidential and 
information submitted on a confidential basis shall, upon good cause shown, be treated as 
confidential, and goes on to specify that "[s]uch information shall not be disclosed  without specific 
permission of the party submitting it" (emphasis adde d).  Thus, in our view, the plain language of 
Article 6.5 makes it clear that investigating author ities are obliged to preserve the confidentiality of 
information to which they have granted confidential treatment.1380  It is also clear from the text of 
Article 6.5 that, unless the party submitting the confid ential information authorizes its disclosure, the 
mandatory obligation to protect confidentiality perm its no other derogation.  In addition, there is 
nothing in Article 6.5 that qualifies or limits the obligation on investigating authorities to ensure that 
information accorded confidential treatment is not di sclosed.  In our view, Article 6.5 cannot be read 
in a way that would preclude investigating authorities from being able to ensure that they satisfy the 
obligations imposed on them with respect to en suring the confidentiality of information.   
7.706  In this case, the European Union argues that c onfidential treatment of the individual data of 
the domestic producers, specifically the production fi gures for the first quarter of 2005, was necessary 
because otherwise the identities of the producers coul d have been deduced.  China has not adduced 
any evidence or argumentation to counter this asser tion.  Moreover, the evidence before us indicates 
that the individual production and economic data of  at least some EU producers is in the public 
domain.1381  In these circumstances, it seems clear to us th at failure to keep confidential the individual 
production data of the producers concerned could have  resulted in the disclosure of their identities by 
deduction.  This would have rende red meaningless the confidential tr eatment given to the names of 
producers, which we have conc luded above was not inconsiste nt with Article 6.5 of the 
AD Agreement, and may well have constituted a viola tion of the investigating authority's obligation 
under the second sentence of Article 6.5.  We decline to  read Article 6.5 in a way that could, require 
an investigating authority to indirectly disclose in formation it has itself decided to treat as confidential 
under that provision.  Thus, in our view, the co nclusion that the confidential treatment of the 
individual production data of the then-EC producers w as necessary in order to ensure the confidential 
treatment of their identities is not unreasonable.  We therefore reject China's contention that the 
European Union violated Article 6.5 by not discl osing the individual production data of the then-
EC producers for the first quarter of 2005.1382  As China's claim of violation of Article 6.2 of the 
AD Agreement is dependent on its claim of violation of  Article 6.5, which we have rejected, we reject 
China's claim under Article 6.2 in this regard. 
                                                      
1379 European Union, answer to Panel question 71.  
1380 We also note that this obligation applies in all phases of the investigation.  We note in this regard, 
for instance, that Articles 6.1.2, 6.1.3, 6.2, 6.4 and 6.7, concerning evidentiary issues, and Article 12, concerning the requirements regarding the contents of public notices , require that due consideration must be given to the 
requirement for the protection confidential information.  
1381 For instance, the submission from an association of importers (EFA), dated 12 November 2008, 
shows that the economic indicators of leading footwear manufacturing companies in the then-
European Communities, including their production data for the year concerned (2005), were in the public 
domain.  Exhibit CHN-34, Annex 4.  We do not consider that the fact that this document was submitted in the context of the expiry review affects our conclusion in this regard.  
 
1382 That said, however, we emphasize that our finding is limited to the circumstances of this 
investigation.  Our reasoning here should not be understood to imply that an investigating authority's duty to protect the confidentiality of certain inform ation granted confidential treatment gives it carte blanche  to treat as 
confidential other information in an investigation.  Our conclusion is limited to the situation where, as here, 
there is a reasonable basis for the conclusion that the failure to treat as confidential information for which 
confidential treatment may not have been specifically requ ested would result in the disclosure of information for 
which confidential treatment was prop erly sought and was granted.    WT/DS405/R 
  Page 293  
 
 7.707  Turning to China's claim under Article 6.5.1 of the AD Agreement, China alleges that no non-
confidential summary of the individual production data  at issue was provided, and no explanation as 
to why such summarization was not possible was give n.  The European Union asserts that China's 
claim in this regard is refuted by the Note for the File, dated 6 July 2005,
1383 which sets forth 
aggregate figures for EU production of footwear, whic h the European Union apparently considers an 
adequate non-confidential summary of the information in question.   
7.708  The Note for the File does indeed set forth an estimate of total footwear production in the EU 
for the first quarter of 2005.1384  However, it is not clear how this estimate relates to the individual 
production data at issue here.  It appears from the evidence before us that the aggregate figure for 
production in the first quarter of 2005 was calculated by the Commission itself, based on information 
in the complaint and information received from individual companies and associations.1385  Thus, it is 
not apparent to us that this constitutes an ad equate non-confidential summary of the individual 
production data at issue, furnished by the provider of  the information, as required by Article 6.5.1.  
We recall our view that Article 6.5.1 requires in vestigating authorities to ensure that the party 
submitting confidential information furnishes a non-confidential summary of the confidential 
information or, if that is not possible, that the party provides a statement of reasons explaining why 
such a summary is not possible.1386  In our view, the obligation to require submitters of confidential 
information to provide a non-confidential summary thereof is not satisfied by the investigating 
authority itself making available an aggregate figur e which is not, on its face, a summary of the 
confidential information provided.1387  Thus, we consider that a non-confidential summary of the 
individual production data at issue was not provided.  The European Union does not argue, and 
nothing in the evidence before us  suggests, that the submitters of the production information at issue 
provided any explanation as to why summarization was not possible.   
7.709  We therefore find that the European Union acted  inconsistently with Article 6.5.1 of the 
AD Agreement by failing to ensure that the pr oducers submitting confidential production data 
supplied an adequate non-confidential summary ther eof, or an explanation as to why summarization 
was not possible.  With respect to China's claim under Article 6.2 of the AD Agreement, we note that 
this provision concerns the more general right of inte rested parties to have a "full opportunity for the 
defence of their interests".  The European Union did make available the estimate of total footwear 
production in the EU for the first quarter of 2005.  That this was not an adequate non-confidential 
summary of the information submitted by the parties do es not, in our view, demonstrate, in addition to 
the violation of Article 6.5.1, a violation of Artic le 6.2.  China has made no additional arguments in 
this regard, and we therefore cannot  conclude that inter ested parties did not have a full opportunity for 
the defence of their interests as a result.  We therefore reject China's claim under Article 6.2 in this 
regard.  
b) information regarding adjustments for differences affecting price 
comparability made by the Commission 
7.710  China claims that the European Union did not  make available all relevant information 
regarding the allowances made by the Commission for:   (i) differences in transport costs; (ii) ocean 
                                                      
1383 Note for the file dated 6 July 2005 (Excerpts), Exhibit CHN-108; and Note for the file dated 
July 2005, Exhibit EU-16. 
1384 Note for the file dated 6 July 2005 (Excerpts), Exhibit CHN-108; and Note for the file dated 
July 2005, Exhibit EU-16, para. 1. 
1385 Note for the file dated 6 July 2005 (Excerpts) , Exhibits CHN-108; and Note for the file dated 
July 2005, Exhibit EU-16, para. 1. 
1386 See paragraphs 7.667 and 7.674 above. 
1387 We need not and do not address the question whether an investigating authority may prepare non-
confidential summaries of confidential information submitted by a party which fails to do so, and if so, whether 
this would be consistent with th e requirements of Article 6.5.1. WT/DS405/R 
Page 294  
 
 freight and insurance costs; (iii) handling; (iv) loading and ancillary costs; (v) packing costs; 
(vi) credit costs; (vii) warranty and guarantee cost s and commissions; (viii) the quality of the leather; 
(ix) R&D and design costs; and (x) children's s hoes.  Specifically, China contends the Commission 
did not provide (a) the figures for the calculation of adjustments, (b) the levels of adjustments, and 
(c) the calculation methods.
1388  China claims that this informati on was treated as confidential in the 
absence of good cause, and further claims that no non-confidential summary was provided with 
respect to this information, nor was there a ny explanation for the lack of such a summary.1389   
7.711  The European Union contends that the details of  adjustments are not information of the kind 
whose release is regulated by the provisions in voked by China, as they concern the Commission's 
methodology in making the calculations required by the AD Agreement, and must be distinguished 
from the information obtained from interested partie s and other sources to which that methodology is 
applied.1390  With respect to the adjustment for childre n's shoes, the European Union asserts that the 
Definitive Regulation explains that the difference was apparent in Eurostat data, and those data could 
be checked by any interested party to evaluate the adjustment made.1391  Finally, the European Union 
notes that it is not clear that any party requested fu rther information about this  adjustment when it was 
explained in the Definitive Disclosure in July 2006.1392   
7.712  China's allegations in this context concern for the most part the methodologies used and 
determinations made by the Commission in calculating and making the allowances at issue.  Essentially, China appears to consider that the Co mmission, by failing to provide full transparency 
with respect to the entire process of making adjust ments, from the data involved to the methodologies 
employed and the conclusions reached, treated in formation as confidentia l inconsistently with 
Article 6.5.  This is clear to us from the argument s advanced by China in support of this aspect of its 
claims.
1393  China asserts that "[s]ome details were provided" concerning adjustments, but interested 
parties demanded more details, that the "'explanati on' in the Definitive Regulation … fails to address 
several vital issues", that "the disclosures sent to interested parties do not provide more details", and that there is "no explanation as to how [the fi gure for adjustments] was obtained … [o]ne can only 
guess how the calculations were made".
1394  We recall our view that Article 6.5 of the AD Agreement 
deals with the confidential treatment of in formation, and not the methodologies used and 
determinations made by investiga ting authorities in their investigations, or the disclosure of either 
information, explanations or conclusions.  To th e extent China's claim in this regard concerns 
methodologies and conclusions of the Commission, we do not consider these matters to fall within the 
scope of Article 6.5, and reject these aspects of China's claim.   
7.713  With respect to the remaining aspects of Ch ina's claim, we find it difficult to see the 
relationship of China's arguments to a claim th at the European Union treated information as 
confidential inconsistently with Article 6.5 of the AD Agreement.  We note that China has not 
demonstrated that the European Union did not make  the information at issue available because it was 
information submitted by an interested party and tr eated as confidential under Article 6.5.  Rather, 
                                                      
1388 China, first written submission, paras. 1306-1308. 
1389 China, first written submission, para. 1317. 
1390 European Union, first written submission, para. 778. 
1391 European Union, first written submission, para. 779, citing Definitive Regulation, Exhibit CHN-2, 
recital 136.  The Definitive Regulation went on to note "p arties that regarded this adjustment erroneous failed to 
provide any better alternative method that could be used and ensure comparison of export prices and normal 
values on a fair basis."  Definitive Re gulation, Exhibit CHN-2, recital 137. 
1392 European Union, first written submission, para. 779. 
1393 Moreover, China's arguments are again couched in terms of "all relevant information on such 
adjustments" not having been made available interested parties.  China, first written submission, para. 1306.  As 
noted above, Article 6.5 does not concern disclosure of or making available information.  We address China's claims in terms of Article 6.5, under which they are advanced. 
1394 China, first written submission, paras. 1309-1313.   WT/DS405/R 
  Page 295  
 
 China's arguments at best demonstrate that the Eu ropean Union failed to disclose certain information 
or explain certain conclusions.  However, as we have  explained, these are not matters that fall within 
the scope of Article 6.5.  We therefore consider that China has failed to make a prima facie  case of 
violation of Article 6.5 with respect to these aspects of its claim.  As China's claim of violation of 
Article 6.2 of the AD Agreement is  dependent on its claim of violati on of Article 6.5, which we have 
rejected, we also reject China's claim under Article 6.2 with respect to China's allegations concerning 
all relevant information in regard to the allowances made by the Commission. 
c) non-confidential questionnaire res ponse of one sampled EU producer 
and missing declarations of support  
7.714  China asserts that the non-confidential questi onnaire response of one sampled EU producer 
and certain declarations of support from then-EC pr oducers were not included in the non-confidential 
file, and argues that the European Union withheld this information without the necessary showing of 
"good cause".  Specifically, in regard to the declar ations of support, China asserts while the complaint 
was lodged on behalf of 814 Community producers, only around 229 declarations of support were 
included in the non-confidential file.  Moreover, China contends that 36 "additional" Community 
producers allegedly supported the complaint but that only 10 declarations of support from these 
producers were included in the non-confidential file.1395  China claims that this information was 
treated as confidential in the absence of good cau se, and further claims that no non-confidential 
summaries were provided with respect to this inform ation, nor was there any explanation for the lack 
of such summaries.1396 
7.715  The European Union states that because of the tim e that has passed since the investigation, it 
was unable to locate in its archives the material th at would enable it to address the issue raised by 
China regarding the non-confidential version of  the questionnaire response of one sampled EU 
producer.  Furthermore, the European Union submits that the declarations of support included in the 
non-confidential file constituted a re presentative sample of those that were received, and adds that 
interested parties did not request that the missi ng declarations of support at issue be made 
available.1397   
7.716  With respect to the missing questionnaire respon se at issue, the evidence before us indicates 
that questionnaires were sent to the ten Community  producers selected for the sample in the original 
investigation, and that all of them  submitted responses to the Commission.1398  The evidence also 
indicates, and indeed, the European Union does no t dispute, that the non-confidential questionnaire 
response of the producer in question was never place d in the non-confidential file maintained by the 
Commission.1399  Thus, it appears that this questionnaire response was treated as confidential by the 
Commission.  However, there is no evidence concer ning a request for confidential treatment for any 
or all information in that response.  Nor is ther e any evidence that the submitter provided adequate 
non-confidential summaries of any confidential info rmation, or, assuming exceptional circumstances, 
an explanation why summarization was not possible.   
                                                      
1395 China, first written submission, paras. 1314-1316.  
1396 China, first written submission, para. 1317. 
1397 European Union, first written submission, paras. 780-781.  
1398 Interested parties expressed concern during the investigation about the absence of these 
questionnaire responses from the file.  Provisional Regulation, Exhibit CHN-4, recitals 6-7.  See also General Disclosure Document, dated 7 July 2006, Exhibit-CHN-81, para. 146.   
1399 See FESI comments date 8 May 2006, Exhibit CHN-87, p. 36; Comments on the Commission Final 
Disclosure, submitted on behalf of Chinese producers dated 17 July 2006, Exhibit CHN-105, paras. 97-99; and Comments regarding the Provisional Duty Regulation and the disclosure in relation thereto on behalf of, inter 
alia, Qingdao Changshin Shoes Co., Ltd dated 8 May 2006, Exhibit CHN-107, p. 26.  WT/DS405/R 
Page 296  
 
 7.717  During the course of this proceeding, the Eu ropean Union indicated  that, because of the 
passage of time since the investigation, it was unable to locate in its records the material necessary to 
address China's claim.  While we are sympathetic to the problems involved in responding to claims 
concerning treatment of information as confidential in investigations conducted several years in the 
past, we do not consider that the passage of time  excuses a Member from responding to the claims of 
another Member in dispute settlement.  Based on the evidence before us, it appears that the "missing" 
questionnaire response was received by the Commissi on.  The European Union does not dispute that 
the questionnaire response in questio n was treated as confidential, but merely asserts that it lacks the 
information needed to respond to China's claim.   
7.718  We recall that a prima facie  case is one which, in the absence of effective refutation by the 
defending party, requires a panel, as a matter of law, to rule in favour of the complaining party 
presenting the prima facie  case.
1400  In this instance, the fact that the questionnaire response was 
received and not placed in the non-confidential file suffices, in our view, to make out a prima facie  
case that the information in that document was treate d as confidential.  There is no evidence that a 
showing of good cause for such treatment was ever  made, as required by Article 6.5, and the 
European Union does not contend otherwise.  We also consider that China has made out a prima facie  
case that neither an adequate summary of c onfidential information nor an explanation why 
summarization was not possible was provided.  There is no evidence that these ever existed, and the 
European Union does not assert otherwise.  In th e absence of any substantive refutation by the 
European Union, we conclude that the European Union acted inconsistently with Articles 6.5 and 
6.5.1 of the AD Agreement with regard to the missing questionnaire response.  Having found a 
violation of Articles 6.5 and 6.5.1 in connection w ith the non-confidential version of the questionnaire 
response of the sampled EU producer in question, we  consider that additional findings on China's 
claim under Article 6.2 would not contribute to the r esolution of this dispute or be potentially useful 
in implementation.  We therefore exercise judi cial economy with respect to this claim.   
7.719  Turning to China's claim with respect to the declarations of support missing from the non-
confidential file, we recall that China asserts that this information was treated as confidential in the 
absence of good cause shown.  The European Union does not dispute that 814 Community producers, 
as well as the 36 "additional" Community producers, submitted declarations of support.  Nor does the 
European Union dispute that these declarations of support contained information treated as 
confidential.1401  The European Union argues, however, that the declarations of support included in 
the non-confidential file constituted a representa tive sample of those that were received.1402   
7.720  We fail to see the factual and legal relevance of the European Union's argument to China's 
claims under Articles 6.5 and 6.5.1.  The European Union does not dispute that the missing declarations of support contained confidential inform ation.  There is no evidence that the submitters 
of these declarations provided adequate non-confid ential summaries of such confidential information 
or, in exceptional circumstances, an explanation why summarization was not possible.  The fact that a 
"representative sample" of the declarations of s upport was included in the non-confidential file does 
not demonstrate compliance with either  Article 6.5 or Article 6.5.1.   
7.721  Based on the evidence before us, it is clear that that missing declarations of support were 
received by the Commission and treated as confidential.   It also seems clear that, at least for 229 
declarations of support, non-c onfidential versions were provide d by the submitters, as these were 
                                                      
1400 Appellate Body Report, EC – Hormones , para. 104 (quoting Appellate Body Report, US – Wool 
Shirts and Blouses , p. 14).  In order to establish a prima facie case, a complaining party must adduce evidence 
sufficient to raise a presumption that what is claimed is true.  Appellate Body Report, US – Wool Shirts and 
Blouses , p. 14. 
1401 European Union, first written submission, para. 781. 
1402 European Union, first written submission, para. 781.  WT/DS405/R 
  Page 297  
 
 placed in the non-confidential file.  In this case,  we are satisfied that China has made out a prima facie  
case that the declarations of support were treated as confidential.  There is no evidence that a showing 
of good cause for such treatment was ever made, as required by Article 6.5, and the European Union 
does not contend otherwise.  In addition, we  are satisfied that China has made out a prima facie  case 
that, with respect to the 585 missing declarations  of support, neither an adequate non-confidential 
summary nor an explanation why summarization was not possible was provided.  There is no 
evidence that these ever existed, and the European Union does not asser t otherwise.  In the absence of 
any substantive refutation by the European Union, we conclude that the European Union acted 
inconsistently with Articles 6.5 and 6.5.1 of th e AD Agreement by failing to require either an 
adequate summary of confidential information or an explanation why summarization was not possible 
from the submitters of the 585 missing declarations  of support.  Having found a violation of 
Articles 6.5 and 6.5.1 with respect to the 585 missi ng declarations of support, we consider that 
additional findings on China's claim under Article 6. 2 would not contribute to the resolution of this 
dispute or be potentially useful in implementati on.  We therefore exercise judicial economy with 
respect to this claim. 
3.  certain information in the complaint a nd Note for the File dated 6 July 2005 
7.722  China asserts that the European Union violated Article 6.5 of the AD Ag reement due to a lack 
of information in the complaint and the Note for th e file dated 6 July 2005.  Specifically, China argues 
that Annexes 2, 6, 7 and 8 of the complaint cont ain no information regarding (i) the list of "other" 
producers; (ii) domestic prices in Brazil; (iii) export prices from China; and (iv) export prices from Viet Nam, respectively.  With resp ect to the information in the Note for the File dated 6 July 2005, 
China submits that (i) the production, sales, and employment data from 2001 to Q1 2005 contained in 
the CEC letter dated 26 May 2005 (attached to the Note for the File dated 6 July 2005) was not 
provided, and (ii) the production figures for 2003 a nd 2004 in the 229 declarations of support attached 
to the CEC letter were deleted.
1403  China also claims that, contrary to Article 6.5.1 of the 
AD Agreement, non-confidential summaries of this  information were not provided, nor was any 
explanation for why such summarization was not possible given.  In addition, China claims that to the 
extent that the information at issue was not conf idential, or to the extent that it was but no non-
confidential summary thereof was made available to  interested parties, the European Union also 
violated Article 6.2 of the AD Agreement.1404 
7.723  The European Union contends that commercial information of individual companies is 
confidential by nature, and this information in th e complaint was therefore appropriately treated as 
confidential, and that an adequa te non-confidential summary of the confidential information at issue 
was provided by the complainants them selves in the body of the complaint.1405  The European Union 
contends that the letter dated 26 May 2005 was not part of the complaint, but was a document sent to 
the CEC which the CEC forwarded to the Commissi on to demonstrate the level of support for the 
complaint.1406  The European Union maintains that the CE C's request for confidential treatment for the 
names of both "complainants and supporters" provided good cause to treat the data in the declarations 
of support as confidential.1407   
a) certain information in the complaint 
7.724  China claims that information concerni ng Brazilian domestic prices and Chinese and 
Vietnamese export prices, provided in Annexes 6, 7, and 8 to the complaint respectively, could not be 
                                                      
1403 China, first written submission, paras. 1318-1321, 1324-1330 and 1333.  
1404 China, first written submission, paras. 1322-1323, 1332 and 1333. 
1405 European Union, first written submission, paras. 788-790.  
1406 European Union, opening oral statement at th e second meeting with the Panel, para. 418.  
1407 European Union, first written submission, paras. 791 and 765.  WT/DS405/R 
Page 298  
 
 considered confidential since the names of the producers concerned were unknown.
1408  China argues 
that domestic prices in Brazil and export prices for China and Viet Nam could not be linked to any individual company and therefore could not be consid ered confidential.  China alleges that because 
the information at issue was provided without discl osing the names of the producers concerned, it 
could not possibly be of any advantage to a co mpetitor nor have any adverse effect upon the 
complainants or the person supp lying the information and theref ore it could not be considered 
confidential information.
1409  Furthermore, China argues that no "good cause" was shown for the 
confidential treatment of this information.1410   
7.725  The European Union contends that commercial in formation of individual companies, such as 
sales and production data, is confiden tial by nature and that it retains its value to competitors even 
when the name of the company is unknown.  The European Union adds that good cause for 
confidential treatment of information that is by na ture confidential is shown by placing it in that 
category.  Furthermore, the European Union asserts that a non-confidential summary of the confidential information at issue was provided by the complainants themselves in the body of the 
complaint and that such summarization was adequate.
1411   
7.726  In our view, the fact that the name of the submitter of information (or of the person from 
whom the submitter acquired the information) is unknown does not necessarily mean that the 
information may not be treated as confidential.  We  do not agree that simply because the name of the 
submitter or the person from whom the informa tion was acquired is unknown establishes that the 
information has no commercial value or could not be of any advantage to a competitor, nor that its 
disclosure could not have an adverse effect on th e person supplying the information.  We therefore 
reject China's contention that because the names of  the producers concerned were not disclosed their 
individual sale price data could not be treated as confidential.  
7.727  This does not mean, however, that confidential treatme nt in this particular case was justified.  
In this case, the evidence before us indicates th at the complaint asked the Commission to treat the 
Brazilian domestic prices and the Chinese and Vietnamese export prices as confidential, asserting that 
disclosure of this information "would be of signifi cant advantage to a competitor and/or would have a 
significantly adverse effect upon a person supplyi ng the information and/or upon the person from 
whom he has acquired the information."1412  China argues that merely reciting the language of 
Article 6.5 of the AD Agreement is insufficient to show good cause for confidential treatment of 
information, even of information that is by nature confidential.1413  The European Union, as a general 
                                                      
1408 In its first written submission, China also refers  to the information contained in Annex 2 to the 
complaint, concerning the "list of othe r producers".  China did not, however, identify the legal basis of its claims 
with respect to this information, nor did China address this aspect of its claims in its second written submission.  
China's oral statements make no reference to this issue.   China's claim under Article 6.5 with respect to this 
information is addressed at paragraph 7.698 above.  As regards China's claims under Article 6.5.1 and 6.2, 
however, we consider that China has not made a prima f acie case of violation of thes e provisions with respect to 
the information contained in Annex 2 to the complaint.  
1409 China, first written submission, para. 1320.   
1410 China, first written submission, para. 1318; second written submission, para. 149.  
1411 European Union, first written submission, paras. 788-790.  
 1412 The request for confidential treatment of the domestic prices in Brazil states that  "[t]he 
[information is] confidential because it co ntains information on prices of indi vidual companies and its disclosure 
would be of significant advantage to a competitor and/or would have a significantly adverse effect upon a person supplying the information."  In  the case of export prices from Chin a and Viet Nam, both requests state 
that "[this information] is confidential because its disclosure would have  a significantly adverse effect upon the 
person supplying the information and/or upon the person from whom he has acquired the information".  Anti-dumping complaint lodged by CEC, Exhibit CHN-76, Annexes 6 to 8. 
1413 China, answer to Panel question 75(a).  WT/DS405/R 
  Page 299  
 
 matter, argues that for information that is by nature confidential, good cause is demonstrated by 
establishing that the information falls into that category.
1414  China disagrees, arguing that  
"a party providing information which is c onfidential by nature would have to first 
clarify whether the disclosure of the information would be of significant competitive advantage to a competitor or would have a significantly adverse effect upon a person 
supplying the information or upon a pe rson from whom that person acquired the 
information, as well as the proof of his statements. Thereafter, it would have to provide well substantiated reas ons/justification as to why either of the three situations 
would exist. ... The standard for "good cause" for confidential treatment of 
information which is not confidential by na ture but is submitted to the investigating 
authority in confidence for the purpose of the investigation should be even 
stricter."
1415  
7.728  We do not agree that Article 6.5 requires th e showing posited by China in order to 
demonstrate good cause to treat information as conf idential, whether it is information that is 
confidential by nature, or submitted on a confidential basis.  We recall that while Article 6.5 requires 
that "good cause" be shown in order for information to be treated as confidential, it does not provide 
any guidance on what constitutes good cause means or  how it should be established.  In this 
connection, we recall our view that there is nothing  in Article 6.5 which would require any particular 
form or means for showing good cause, or any particular type or degree of supporting evidence which must be provided.
1416  Moreover, we recall that the nature of  the showing that will be sufficient to 
satisfy the "good cause" requirement will vary, depe nding on the nature of the information for which 
confidential treatment is sought.1417  In this regard, we agree with the views of the panel in Mexico – 
Steel Pipes and Tubes  that 
"a showing of 'good cause' for information that  is 'by nature confidential' may consist 
of establishing that the information fits in to the Article 6.5 (chapeau) description of 
such information: 'for example, becau se its disclosure would be of significant 
competitive advantage to a competitor or  because its disclosure would have a 
significantly adverse effect upon a person s upplying the information or upon a person 
from whom that person acquired the information.'"1418   
7.729  In this case, the complaint requested confidentia l treatment of domestic prices in Brazil and 
export prices from China and Viet Nam on the basis th at "disclosure of the information would be of 
significant advantage to a competitor and/or woul d have a significantly adverse effect upon a person 
supplying the information and/or upon the person  from whom he has acquired the information."  
Thus, the complaint asserts that the information in  question fits within the category of information 
that is described in Article 6. 5 as being confidential by nature, and the Commission accepted that 
assertion.  China has offered no evidence or arguments  that would demonstrate that the assertion is 
untrue, arguing merely that it is insufficient.  In our view, absent some evidentiary basis for 
concluding that the assertion that the information fits  the Article 6.5 description of information that is 
by nature confidential is untrue, there is no basis for a finding of violation.  In this instance, we 
conclude that the Commission did not err in treati ng the information in question as confidential, and 
therefore reject China's claim under Article 6.5.   
                                                      
1414 European Union, first written submission, para. 789.  
1415 China, answer to Panel question 75(c). 
1416 See paragraph 7.684 above. 
1417 See paragraph 7.684 above.  
1418 Panel Report, Mexico – Steel Pipes and Tubes , para. 7.378.  WT/DS405/R 
Page 300  
 
 7.730  Turning to China's claim under Article 6.5.1, we recall that Article 6.5.1 requires that 
interested parties submitting confidential informati on also supply non-confidential summaries of that 
information and that these summaries shall "permit a reasonable  understanding of the substance  of 
the information submitted in confidence" (emphasi s added).  The non-confidential version of the 
complaint provides average data on domestic pri ces in Brazil and export prices from China and 
Viet Nam.
1419  We recall that the information in qu estion was presented in the context of the 
complaint seeking the initiation of an anti-dumping  investigation, presumably in satisfaction of 
Article 5.2(iii), which requires a complainant to provide "information" on normal value and export 
price.  In this context, we are of the view that  the average prices provide d suffice as a non-confidential 
summary of the specific prices reported in th e annexes, sufficient to permit a reasonable 
understanding of the "substance" of the confidential information in question.  We therefore reject 
China's claim that an  adequate non-confidential summary of th e domestic prices in Brazil and export 
prices from China and Viet Nam was not provided.1420  
7.731  Having found no violation of Article 6.5 or 6.5.1, we consider that there is no basis for 
China's claim under Article 6.2, which we recall re cognizes the need to preserve confidentiality.  We 
therefore reject China's claim under Article 6.2. 
b) certain information in the Note for the File dated 6 July 2005 
7.732  China argues that since the id entities of the companies supplying certain information in a 
letter from the CEC dated 26 May 2005, provided with the complaint, and attached to a Note for the 
File dated 6 July 2005, were not disclosed, the information in question could not be considered 
confidential.  In addition, China submits that no good cause was shown for th e confidential treatment 
of this information.1421   
7.733  The European Union asserts that the letter dated 26 May 2005 was not part of the complaint, 
but was a document sent to the CEC which the CEC forwarded to the Commission to demonstrate the level of support for the complaint.
1422  The European Union also argues,  in respect of the data supplied 
in the declarations of support, that the CEC's reque st for confidential treatment of the names of both 
"complainants and supporters" provided good cause for treating that information as confidential.1423   
7.734  The Note for the File dated 6 July 2005 reports the conclusions of the Commission's 
examination of the degree of support for the initiati on of the investigation, or standing.  The Note 
indicates that "attached documents" yielded the resu lts relied on with respect to the volume of total 
production of footwear in the European Uni on, the volume of production accounted for by 
complainants and supporters of the complaint, and the fact that no producers expressing opposition 
came forward.  The Note concludes that "the rele vant thresholds, set out in the Basic AD Regulation, 
                                                      
1419 Specifically, with respect to the Brazilian prices, an average of the ex-works domestic prices in 
Brazil for product type is provided, while with respect to the Chinese and Vietnamese prices, an adjusted 
average per product type of the ex-works prices for export to the European Union is provided.  Questionnaire responses provided by the sampled EU producers, Exhibit CHN-101, p. 7.  
1420 We note China's argument, concerning the export  prices from China, that while Annex 7 shows 
prices on a FOB basis, the summary provided contained adjusted figures at the ex-works level.  However, while the summary of this information shows adjusted average data, it also sets out the level of the adjustments:  the 
complaint states that the adjustments were less than 5 per cent of the price.  Thus, by deducting the level of 
adjustments from the price information provided, it was possible to obtain a reasonable understanding of the substance of the confidential information at issue on the same basis.  We therefore reject China's argument.   
1421China, first written submission, paras. 1324-1 325, 1328-1330 and 1333; second written submission, 
paras. 1461-1462. 
1422 European Union, opening oral statement at th e second meeting with the Panel, para. 418.  
1423 European Union, first written submission, paras. 791 and 765.   WT/DS405/R 
  Page 301  
 
 are met."
1424  China's claim refers to information containe d in some of the documents attached to the 
Note for the File dated 6 July 2005; specifically :  (i) production, sales, and employment data from 
2001 to Q1 2005 contained in a copy of a letter sent to the CEC dated 26 May 2005;1425 and 
(ii) production figures for 2003 and 2004 allegedly c ontained in the 229 support forms attached to the 
Note.1426   
7.735  We recall that Article 6.5 only addresses the c onfidential treatment of information submitted 
by parties to an investigation, and does not impo se any obligations on the investigating authority to 
disclose information or its conclusions, or  make information available to parties.1427  China's claim, as 
presented, concerns the non-disclosure of informa tion which formed the basis of the Commission's 
standing determination, and which is, to the extent relevant to that determination, summarized in the 
Note for the file.  Whether this information must be  disclosed is a matter that, in our view, does not 
fall within the scope of Article 6.5.  Moreover, in  our view, an investigating authority may treat as 
confidential information for which confidential treatment  is not specifically sought, if this is necessary 
in order to maintain the confidentiality of inform ation accorded such treatment.  We recall that we 
have concluded that the treatment of the name s of EU complainant producers and supporters as 
confidential was not inconsistent with Article 6. 5 of the AD Agreement.  Thus, to the extent 
disclosure of the specific information referred to in this aspect of China's claim could have resulted in 
the disclosure of that confidential information, we  consider that the European Union was entitled to 
treat the specific information in question as confiden tial.  We therefore conclude that China has not 
established that the European Uni on acted inconsistently with Article 6.5 in respect of certain 
information contained in the Note for the File da ted 6 July 2005.  Having found no violation of 
Article 6.5, we consider that there is no basis fo r China's claim under Article 6.5.1, which we recall 
applies only with respect to confidential information provided by interested parties.  As China's claim 
of violation of Article 6.2 of the AD Agreement is dependent on its claim of violation of Article 6.5, 
which we have rejected, we also reject China's claim under Article 6.2.   
4. certain information provided in the questi onnaire responses of the sampled EU producers 
7.736  China claims that information was removed or deleted from the non-confidential versions of 
EU producers' questionnaire responses, and that the European Union therefore violated Articles 6.5 
and 6.5.1 of the AD Agreement.  China asserts th at where such information could have not been 
linked to specific companies, the information was not  by nature confidential, and in any case no good 
cause was shown for treating it as confidential.  In add ition, China contends that there is no proof that 
non-confidential summaries were provided or any explanations as to why summarization was not 
possible were given.  Furthermore, with respect to  the instances in which questions were simply left 
blank or an entire questionnaire was missing, China argues that, to the extent that the European Union 
granted confidential treatment to such information, it violated Article 6.5.1 of the AD Agreement because no non-confidential summaries or statemen t as to why summarization was not possible were 
provided.  In addition, China claims that the Eu ropean Union also violated Article 6.5.2 of the 
                                                      
1424 Note for the file dated 6 July 2005 (Excerpts), Exhibit CHN-108, p.1. 
1425 Note for the File dated 6 July 2005, Exhibit CHN-108, p. 2. 
1426 Note for the File dated 6 July 2005, Exhibit CHN-108, p. 3.  China, first written submission, 
paras. 1324 and 1333; second written submission, paras.  1461-1462.  We note that page 3 of Exhibit CHN-108 
(Note for the file dated 6 July 2005 (Excerpts)) contains what appears to be the first page of one of the 229 support forms.  That page contains no data.  China refers to information in the individual declarations of support 
that "has been deleted", China, first written submission, para. 1328, but gives no indication as to the source on 
which this statement is based, or where the example reproduced in its submission might be found.  Finally, while China refers to production figures having been "b lacked out" in each of 229 declara tions of support 
attached to the CEC's letter, China, first written subm ission, para. 1324, only one is included in Exhibit CHN-
108.  Nonetheless, taking a generous approach, we presume that the relevant data to which China refers is found in the pages of the support forms not attached to the Note for the File in question.   
1427 See paragraph 7.703 above.  WT/DS405/R 
Page 302  
 
 AD Agreement because it should have rejected such in formation.  China further claims that to the 
extent that the information at issue was not confiden tial, or if it was, but no non-confidential summary 
was provided, the European Union also violated  Article 6.2 of the AD Agreement by denying 
interested parties with a full oppor tunity to defend their interests.
1428 
7.737  The European Union considers that Article 6. 5 does not require investigating authorities to 
prevent the removal of information, but rather speci fies how authorities must deal with documents for 
which confidential treatment has been  claimed without adequate basis.1429   
a) information removed or deleted from the questionnaire responses 
7.738  China alleges that information was removed or  deleted from the non-confidential versions of 
the questionnaire responses of sampled EU producers 1 through 9.1430  China's claim concerns three 
main categories of information:  (i) specific comp any information (name, address, contact, telephone, 
telefax, e-mail, list of shareholders holding more than 1 per cent of the capital, affiliated companies 
data, general products' in formation, audited accounts, legal re presentation); (ii) net unit sales price 
data; and (iii) information on the product concerned.1431   
7.739  We note first that China's claims that info rmation was wrongly treated as confidential with 
respect to the turnover of Company 4 and the a udited accounts and product concerned of Company 5 
appear to rest entirely on the fact that the non-c onfidential versions of these companies' questionnaire 
responses indicate that this information was provi ded as an attachment, but do not contain the 
attachments themselves.  However, neither do these non-confidential versions indicate that 
confidential treatment of this information in the a ttachments was requested and granted.  With respect 
to these items of information, China appears to assu me that because the attachments were not with the 
non-confidential versions of these questionnaire res ponses, the information in those attachments was 
treated as confidential.  This po ses a difficulty for us, as in our vi ew, the mere fact that some 
information is not in the non-confidential versi on of a questionnaire response does not necessarily 
mean that it was information treated as confidentia l – it may well be that the information was simply 
not provided.  In the absence of an adequate showing that the in formation in question was actually 
submitted to the Commission and was treated as confid ential, we consider that China has not made 
out a prima facie  case under Article 6.5, and we therefore reject this aspect of China's claim.   
7.740  Moving to the remaining aspects of China's clai m, China argues that the specific information 
in question1432 could not be considered "by nature c onfidential", and that no good cause was shown 
                                                      
1428 China, first written submission, paras. 1334-1341. 
1429 European Union, first written submission, paras. 794-796.  
1430 Specifically, (a) for Companies 1 and 8, China's claim concerns information on net unit prices, 
(b) for Companies 2, 3, 7 and 9, China's claim concerns information on the list of shareholders holding more 
than 1 per cent of the capital and information on net un it prices, (c) for Company 4, China's claim concerns the 
list of shareholders holding more than 1 per cent of  the capital, the audited acc ounts of the company, and 
turnover, (d) for Company 5, China's claim concerns the audited accounts of the company and information on 
the product concerned and on net unit prices, and (e) fo r Company 6, China's claim concern the identity of the 
company (name, address, contact, telephone, telefax, e- mail), the list of shareholders holding more than 
1 per cent of the capital, information on affiliated comp anies, product information, the audited accounts of the 
company, and information on legal representation.  Chin a suggests that its claim under Articles 6.5 and 6.5.1 
concerns all the instances in which information was rem oved or deleted from, or answers were left blank in 
questionnaire responses.  China, first written submission, para. 1341.  However, as previously noted, we 
consider that a claim under Article 6.5 requires a careful examination of the facts with respect to the claim.  Thus, our analysis and conclusions are limited to the in stances with respect to which China has made specific 
arguments, namely the instances addressed by Chin a in its first written submission at para. 1337.   
1431 China, first written submission, para. 1337; Questionnaire responses provided by the sampled EU 
producers, Exhibit CHN-101. 
1432 See footnote 1430 above.  WT/DS405/R 
  Page 303  
 
 for treating this information as confidential.  Chin a recalls its position that, where the names of the 
companies are not disclosed and the information cannot  be linked to them, such information cannot be 
considered "by nature confidential".  In the contex t of this claim, China argues that because the names 
of the producers were not disclosed, the vast majority of the information provided in their 
questionnaire responses – i.e. information such as company turnover, sales volume, unit prices, full 
cost of sales, profit/loss, and cash-flow – could not be  treated as confidential, as it could not be of any 
advantage to a competitor nor have any adverse e ffect upon the complainants or the person supplying 
the information.   
7.741  We have already rejected China's position in this regard, concluding that the mere fact that the 
identity of the company submitting information is no t disclosed does not mean that the information 
loses its commercial value or could not be of any advantage to a co mpetitor, or that its disclosure 
could not have an adverse effect on the person supplying the information.
1433  We therefore reject 
China's argument that because the names of the sampled EU producers were not disclosed, the vast 
majority of the information provided in their questionnaire responses could not be treated as 
confidential.   
7.742  We also reject China's allegation that the Eu ropean Union violated Article 6.5 because no 
good cause was shown for the confidential treatment accorded to the specific company information1434 
in the questionnaire responses of the producers in ques tion.  In this regard, we recall that we have 
concluded that the confidential treatment of the na mes of the EU producers was not inconsistent with 
Article 6.5 of the AD Agreement.  Moreover, we re call our view that an investigating authority may 
treat as confidential information for which confidentia l treatment is not specifically sought, if it is 
necessary in order to maintain the confidentiality of  information accorded such treatment.  In this 
case, it is evident to us that the disclosure of th e specific information in question could well have 
resulted in the disclosure of the identities of the companies submitting it.  Thus, even if a specific 
request for confidential treatment or showing of good cause was not made with respect to all the 
specific company information in question1435, we do not consider that the European Union erred in 
treating this information as confidential.1436  We therefore reject China's allegations under Article 6.5 
with respect to this information.   
7.743  We recall, however, that Article 6.5.1 requires i nvestigating authorities to ensure that a party 
submitting confidential information furnishes a non-confidential summary of the confidential 
information or, in exceptional circumstances, an expl anation why such summarization is not possible.  
In this instance, we see nothing in the evidence befo re us that suggests that the Commission requested 
the provision of a non-confidential summary of the c onfidential information in question, nor is there 
any evidence that the Commission requ ested the submitters to explain th e reasons for the lack of such 
                                                      
1433 See paragraph 7.726 above.  
1434 China refers in this regard to the name, addres s, contact, telephone, telefax, e-mail, list of 
shareholders holding more than 1 per cent of the capital, affiliated companies data, general products' 
information, audited accounts, and legal representation of the companies.  China, first written submission, 
paras. 1337 and 1341, referring to Questionnaire responses provided by the sampled EU producers, Exhibit CHN-101. 
1435 The evidence shows that while this information was either blacked out or redacted as "limited", no 
good cause was shown for the confiden tial treatment accorded to  this information.  Questionnaire responses 
provided by the sampled EU producers, Exhibit CHN-101. The European Union does argue otherwise.  
1436 Indeed, we consider that it would not be appropriate to read Article 6.5 in a way that would 
effectively require an investigating authority to pot entially disclose confidential information because the 
submitter of information failed to make an adequate requ est for confidential treatment or showing of good cause 
for such treatment. WT/DS405/R 
Page 304  
 
 summarization.
1437  We therefore consider that the Europ ean Union acted inconsistently with its 
obligations under Article 6.5.1 by failing to en sure sampled EU producers' compliance with the 
requirements of this provision.  Having found a violation of Article 6.5.1 with respect to the specific company information in question, we consider that additional findings on China's claim under 
Article 6.2 would not contribute to the resolution of this dispute or be potentially useful in 
implementation.  We therefore exercise judicial econom y with respect to this aspect of China's claim. 
7.744  With respect to the net unit sales price data, the non-confidential versions of the questionnaire 
responses of the sampled EU producers in question indicate that this information was labelled as 
"limited"
1438, which we understand to mean, in EU practi ce, that the information was submitted as 
confidential.1439  The European Union asserts that the good cause requirement for information that is 
by nature confidential, such as sales price information, is satisfied by  establishing that the information 
falls within that category.  We recall that good cause must be established for information which is 
confidential by nature and information which is subm itted on a confidential basi s.  In this case, while 
we do not disagree that sales price data may, in  principle, constitute information "by nature 
confidential", we see nothing in the evidence be fore us that would indicate, nor does the 
European Union argue, that its legislation, or it s practice, defines in advance the categories of 
information that the Commission will treat as "by na ture confidential," so that simply because the 
information falls within that category will suffi ce to satisfy the good cause requirement.  In the 
absence of any indication that the submitters of th is information even asserted that the information 
met the criteria defining information which may be considered by nature confidential, we therefore 
conclude that the European Union acted inconsistently  with Article 6.5 by treating this information as 
confidential.   
7.745  Moreover, we see nothing in the evidence before  us that indicates that the Commission 
requested the provision of a non-confidential summary  of the information in question or that it 
requested the producers to explain the reasons for the lack of such summarization.  We therefore 
conclude that the European Union violated Article  6.5.1 by failing to ensure sampled EU producers' 
compliance with the requirements of this provision.  Having found a violation of Articles 6.5 and 
6.5.1 with respect to the information at issue here , we consider that additional findings on China's 
claim under Article 6.2 would not contribute to the r esolution of this dispute or be potentially useful 
in implementation.  We therefore exercise judicial  economy with respect to this aspect of China's 
claim. 
b) answers left blank in the questionnaire responses and absence of an 
entire questionnaire response 
7.746  China's claim in this regard refers specifically to (a) instances in which the answer is blank in 
the questionnaire responses of the sampled EU  producers; and (b) the absence of an entire 
questionnaire response of one sampled EU producer.1440  China asserts that the European Union 
violated Article 6.5.1 because, to the extent that  this information was treated as confidential, the 
European Union did not assure the provision of a n on-confidential summary or an explanation as to 
                                                      
1437 The mere fact that the nature of information might make it not susceptible of summarization does 
not exempt investigating authorities from the obligation to ensure that the submitter of the confidential information provides an explanation why summarization was not possible. 
1438 Questionnaire responses provided by the sampled EU producers, Exhibit CHN-101. 
1439 We understand that in the EU practice, the label "limited" with respect to information submitted 
indicates that the submitter considers it to be confidential information within the meaning of Article 6.5 of the 
AD Agreement.  In this regard, we note that in the Notice of Initiation of the investigation, the Commission 
explained that information submitted as "limited" means, inter alia , that it was considered confidential pursuant 
to Article 6 of the AD Agreement.  Noti ce of Initiation, Exhibit CHN-6, recital 7. 
1440 China, first written submission, paras. 1340-1341.   WT/DS405/R 
  Page 305  
 
 why summarization was not possible.
1441  With respect to its claim under Article 6.5.2, China argues 
that the European Union should have disregarded the information in question as confidentiality was 
not warranted.1442 
7.747  China's claim seems to rest on the view that an  answer left blank in the non-confidential 
version of a questionnaire response demonstrates th at information was treated as confidential by the 
Commission.  In our view, however, the mere fact  that information is not in the non-confidential 
version of a questionnaire response does not nece ssarily mean that an answer was treated as 
confidential – it is just as likely to be the case th at no answer was provided to the question.  There 
must be some demonstration by the complaining Member that information was actually treated as confidential before we can consider a claim that confidential treatment was accorded inconsistently 
with Article 6.5 of the AD Agreement.   
7.748  Our examination of the evidence does not suggest that the Commission treated the 
information at issue as confidential.  For instan ce, some producers provided responses, which were 
not treated as confidential, to some of the qu estions whose answers were  left blank by other 
producers.  This, in our view, indicates that the Commission did not treat as confidential the answers 
that were left blank.
1443  In the circumstances of this case, we  cannot conclude, merely on the basis of 
blank answers in the non-confidential versions of  some questionnaire responses, that the responses 
were provided but were treated as confidential.  We recall that the Article 6.5.1 obligation to provide 
adequate non-confidential summaries applies only with respect to information treated as confidential.  
In this case, we consider that China has failed to de monstrate that the information at issue was, in the 
first place, treated as confidential.  We theref ore consider that China has failed to make a prima facie  
case that the European Union violated Article 6.5.1 with respect to the instances in which answers in 
the non-confidential versions of questionnaire responses were blank.  As China's claim of violation of 
Article 6.2 of the AD Agreement is dependent on its claim of violation of Article 6.5.1, which we 
have rejected, we find no violation of Article 6.2 in this regard. 
7.749  China also claims that the Eur opean Union violated Article 6.5.2 of the AD Agreement.  As 
we understand it, China's argument is that the Commi ssion should have determined that confidential 
treatment of the information in question was not warranted, and in the absence of authorization to 
disclose the information, should have disregarded it.  However, Article 6.5.2 does not impose any 
affirmative obligation on investigating authorities to  examine whether or not confidential treatment is 
warranted – that obligation is set out in Article  6.5 chapeau.  Article 6.5.2 addresses what actions 
investigating authorities may take if they "find that a request for confidentiality is not warranted".1444  
There is no evidence before us indicating that th e investigating authorities found that confidential 
treatment was not warranted, and China has not ar gued otherwise – rather, China argues that the 
Commission should  have found the information did not  warrant confidential treatment.1445  In these 
circumstances, we fail to see the legal or factual basis for China's claim and we therefore reject 
China's claim under Article 6.5.2.  As China's claim of violation of Article 6.2 of the AD Agreement 
is dependent on its claim of violatio n of Article 6.5.2, which we have rejected, we find no violation of 
Article 6.2 in this regard.  
                                                      
1441 With respect to China's claim under Article 6.5.1 regarding the "missing" questionnaire response of 
one sampled EU producer, we recall our findings in this regard, in paragraph 7.718 above.  
1442 China, first written submission, para. 1341. 
 1443 For instance, we note that while some producers left blank the question regarding the PCN 
information, there were other producers who answered this question by providing this information.  
Questionnaire responses provided by the sampled EU producers, Exhibit CHN-101. 
1444 We recall that that the obligation on investigating authorities to determine whether a request for 
confidential treatment is warranted is addressed by Article 6.5 of the AD Agreement.  See paragraphs 7.667 and 
7.675 above. 
1445 China, first written submission, para. 1341.  Moreover, we have concluded that China has failed to 
demonstrate that the information in question he re was, in fact, treated as confidential. WT/DS405/R 
Page 306  
 
 7.750  Based on the foregoing, we conclude that, with r espect to the original i nvestigation, China has 
established that the European Union acted inconsiste ntly with Article 6.5 of the AD Agreement with 
respect to the questionnaire response of one samp led EU producer and missing declarations of 
support, and has established that the European Union acted inconsistently  with respect to Article 6.5.1 
of the AD Agreement with respect to the same in formation, the individual production data of the 
domestic producers for the first quarter of 2005 an d certain information in the non-confidential 
questionnaire responses of the sampled EU producers.  We further conclude that, with respect to the 
original investigation, China has failed to demonstr ate that the European Un ion acted inconsistently 
with Articles 6.5, 6.5.1 and 6.5.2 with respect to th e remaining information refe rred to by China in its 
claims.  We also conclude that China has faile d to demonstrate that the European Union acted 
inconsistently with Article 6.2 of the AD Agreemen t, either as a consequence of violations of 
Articles 6.5, 6.5.1, or 6.5.2, or independently, with respect to names of the EU producers, methodology and data used for the selection of the sample of EU producers, adjustments for differences affecting price comparab ility, certain information in the complaint, certain information in 
the Note for the File dated 6 July 2005, and certa in information in the non-confidential questionnaire 
responses of the sampled EU producers.  Finally, we exercise judicial economy regarding China's 
claim under Article 6.2 with respect to the qu estionnaire response of one sampled EU producer, 
missing declarations of support, and certain in formation in the non-confidential questionnaire 
responses of the sampled EU producers.   
c. Expiry Review  
1. confidential treatment of the names of EU producers  
7.751  China claims that by granting confidential treatme nt to the names of the EU producers, that is, 
the names of the complainants, the supporters of th e expiry review request, the eight EU producers in 
the sample for the injury aspects of the expiry review, and the six sampled EU producers in the 
original investigation that completed the Union Interest questionnaire in the expiry review, the 
European Union violated Articles 6.5 and 6.5.1 of the AD Agreement.1446  In particular, China alleges 
that the name of a producer cannot be consider ed "information" within the meaning of these 
provisions.1447  In the alternative, China submits that  were the Panel to find that "names" are 
"information" for purposes of Article 6, the Europ ean Union has still violated Articles 6.5 and 6.5.1 
because the names of companies ar e neither information which is confidential "by nature" nor can 
they be considered as information that may be s ubmitted in confidence because such information is 
already in the public domain.1448   
7.752  Moreover, if the Panel finds that names may be  treated as confidential,  China argues that the 
European Union violated Article 6.5 by granting co nfidential treatment in the absence of "good cause" 
shown.  China asserts that the general statement requesting confidentiality by CEC on behalf of the 
complainants and supporters was insufficient, as none of the producers concerned individually 
requested confidentiality, and therefore the CEC's request cannot be considered "good cause" for the 
confidential treatment accorded to their names.  Fo r China, it is the submitter of the information 
concerned, and not for a third party or association, to demonstrate "good cause".1449  China also argues 
that the alleged risk of retaliation by some cust omers, in the absence of any proof, cannot be 
considered "good cause" within the meaning of Article 6.5.1450  In addition, China asserts that the 
                                                      
1446 China, first written submission, paras. 712 and 720; second written submission, para. 1034.   
1447 China, first written submission, paras. 713-715; second written submission, para. 1046. 
1448 China, first written submission, para. 721; second written submission, para. 1047.  
1449 China, first written submission, para. 722; second written submission, paras. 1048-1049, 1051-1053 
and 1076; answer to Panel question 75(a), (d).  
1450 China, first written submission, para. 723; seco nd written submission, paras. 1012-1017.  China 
argues that the standard for demonstr ating "good cause" for information which is not "confidential by nature",  WT/DS405/R 
  Page 307  
 
 alleged fear of retaliation was unr easonable, unfounded and untrue a nd thus did not constitute "good 
cause".  In this regard, China notes in particular that, after the imposition of the provisional measure 
in the original investigation, seventeen Italian pr oducers had disclosed their names when they filed an 
application for annulment of the Provisional Regula tion, and also disclosed their names when they 
intervened in various European court proceedings  filed by Chinese exporters following the imposition 
of the definitive measure.  In addition, China not es that the names of the Italian producers cooperating 
as analogue country producers in the Brazilian anti- dumping investigation against Chinese footwear 
imports were disclosed.
1451   
7.753  China also claims that the European Union vi olated Article 6.5.2 of the AD Agreement by 
failing to find that the requests for the confidentia l treatment of the names of the EU producers were 
not warranted.  China asserts that Article 6. 5.2 imposes a positive obliga tion upon investigating 
authorities to evaluate whether or not confidentialit y is warranted based on the criteria of Article 6.5 
and the surrounding circumstances, notably the argum ents/evidence provided by interested parties.  
This obligation, China argues, flows from the a ssumption that investigating authorities make their 
evaluations in an objective and impartial manner.  In this case, China notes that the Commission was 
provided with evidence demonstrating that the c onfidentiality of the names of the complainant 
producers and supporters was not warr anted as the alleged fear of retaliation was incorrect, unfounded 
and unsubstantiated.1452   
7.754  In addition, China claims that  the European Union violated Article 6.2 of the AD Agreement 
by failing to ensure that Chinese exporters had a full  opportunity to defend their interests.  In this 
regard, China submits that the Eu ropean Union's decision to grant confidential treatment to the 
identities of the complainants was biased, and fo reclosed all opportunities for Chinese exporters to 
defend their interests on several issues, including thos e related to the expiry review request, sampling, 
injury and causation determinations.1453 
7.755  The European Union rejects China' s allegations.  In the European Union's view, the name of a 
producer is subject to confidential treatment where its disclosure could reveal whether the producer is 
a complainant or supporter of the expiry review request.1454  Furthermore, the European Union asserts 
that the producers in question showed good cause for their requests for confiden tial treatment, even if 
they did not do so individually, as the assertion of potential retaliation as justification was made in the 
expiry review request in respect of all "complainant s and supporters".  In this regard, the European 
Union contends that the request for confidential treat ment can be made by or on behalf of the party 
whom it is intended to benefit.  In the expiry  review, the European Union notes that while the 
complainants were evidently party to this request, the companies supporting the expiry review request 
signed a statement in which they stated that they "support the request for the review as applicant", and 
that the most plausible understanding of this acti on was that their support extended to the request for 
confidentiality.1455  With respect to the six sampled producers in the original investigation which were 
included in and responded to the Union Inter est questionnaire in the expiry review, the 
European Union asserts that these producers indicated to the Commission that they wanted to benefit 
                                                                                                                                                                     
such as names, is very high, and therefore an assertio n of "fear of retaliation" based on mere conjectures does 
not establish "good cause".  See, e. g. China, second written submission, paras. 1058-1059; answer to Panel 
question 75(a)-(b). 
1451 China, first written submission, para. 723; s econd written submission, paras. 1060-1063; closing 
oral statement at the second mee ting with the Panel, para. 93.   
1452 See, e.g. China, first written submission, paras.  758-764; second written submission, paras. 1131 
and 1133.  
1453 See, e.g.  China, first written submission, paras. 764- 765; second written submission, paras. 1146-
1149. 
1454 European Union, first written submission, paras. 415-417 and 420.   
1455 European Union, first written submission, para. 42 2; answer to Panel question 75(d); opening oral 
statement at the second meetin g with the Panel, para. 316. WT/DS405/R 
Page 308  
 
 from the confidential treatment acco rded to the identities of the supporters of the expiry review 
request.
1456  
7.756  In addition, the European Union asserts that  the producers presented a clearly argued and 
sufficiently substantiated good cause for confidential treat ment, that is, fear of retaliation, on the basis 
of which the Commission determined that there "was  a significant possibility of retaliation in the form 
of lost sales for these producers" and therefore granted confidential treatment to their names.1457  With 
respect to the disclosure of names of Italian producers in European court proceedings during and after the original investigation, and in the Brazilian anti-dumping investigation, the European Union notes 
that the Commission concluded that none of th ese considerations outweighed the case made for 
granting confidential treatment, as those disclosures di d not identify the companies as complainants or 
supporters in the expiry review.
1458  Furthermore, the European Union asserts that the Commission 
had received convincing accounts of threats of re taliation to be carried out by importers and 
distributors and that the implications for them of  the participation of the Italian producers in the 
European court and Brazilian proceedings were much  less significant than the consequence of the 
producers' support for the expiry review at issue.1459   
7.757  Finally, the European Union submits that neith er Article 6.2, nor Article 6.5.2, provides a 
basis for the kind of complaints that China raises in this claim.  The European Union argues that while 
Article 6.5.2 refers to the obligations of Memb ers "[i]f the authorities find that a request for 
confidentiality is not warranted", China's claim re fers to instances where the Commission had found 
that the request for confidential treatment was warran ted.  In addition, the European Union asserts that 
Article 6.2 does not override the specific rights contained in Articles 6.1.2, 6.4 and 6.9.  Therefore 
where an issue is one that is covered by one of these provisions, Article 6.2 cannot be invoked, unless 
it is invoked in a consequential way.   
7.758  Before addressing China's claim, we first note the following relevant facts, which we 
understand to be undisputed.  The evidence before us  shows that the request for review, filed by the 
CEC on behalf of the producers, requests confiden tial treatment of the "names and countries" of the 
complainants and supporters of the request for review, as follows:  
"The disclosure of the names of the re questing parties and supporters of this 
application would have a significantly adve rse effect upon them, in terms of being 
subject to retaliatory actions.   
The footwear market structure … has the perfect conditions for retaliation: import 
business interest at stake and unequal negotiati on power for the parties involved, i.e.  
on one side a fragmented Community industry that in some cases import raw 
materials from the countries concerned, and on the other, very big distributors.   
In the initial investigation … the European Commission acknowledged that 
Community producers could be placed in a sensitive position vis-à-vis their clients who also supply themselves in China and Vietnam. The European Commission 
therefore granted this request for confidentia lity of the names of the complainants …  
                                                      
1456 This is evidenced, the European Union argue s, by the fact these producers presented non-
confidential versions of their responses.  European Union, opening oral statement at the second meeting with the 
Panel, para. 325.  
1457 European Union, first written submission, paras. 423-424; opening oral statement at the second 
meeting with the Panel, para. 333.  
1458 In this regard, the European Union maintains that China has not demonstrated that the Italian 
footwear producers in the EU court proceedings we re themselves complainan ts, as China contends.  
European Union, first written submission, para . 426; second written submission, para. 204. 
1459 European Union, opening oral statement at the seco nd meeting with the Panel, paras. 328 and 330.   WT/DS405/R 
  Page 309  
 
 Since the conditions leading to the granting of  this request have not  been altered since 
the publication of the Regulation and the imposition of provision al and subsequent 
definitive antidumping duties, Community producers still feel this protection through confidentiality necessary.  We therefore trust the Commission will recognise the necessity of keeping in strict confidentiality the names  and countries  of the 
companies involved in this application for an expiry review, and will grant this 
request."
1460 (emphasis added) 
In a subsequent letter, the CEC reiterated the importance for the EU industry not to disclose the 
identities of the complainants and supporters of th e request for review, asserting a risk of retaliation 
and emphasizing that "certain Community producer s indeed already have been subject to severe 
pressure to stop cooperating in the investigation and to withdraw their support for the request."1461  
The Commission granted confidential treatment to th e identities of the compla inants, the sampled EU 
producers, and the supporters of the expiry review  request as it considered that the request for 
confidentiality was substantiated.1462  The Review Regulation also states that, at verification, the 
sampled EU producers as well as other cooperating EU producers requested that their identities be 
kept confidential, asserting "risk of retaliation by some of their clients, including the possible 
termination of their business relationship."1463   
7.759  China's claim with respect to th e expiry review is premised on the same general contentions it 
advanced in connection with its claim concer ning the confidential treatment accorded by the 
Commission to the names of the EU produ cers in the original investigation.   
7.760  We recall our view that, provided good cause is shown, "any" information may be treated as 
confidential in an anti-dumping investiga tion, including the names of producers.1464  We therefore 
reject China's contention that the names of producers are not "information" which may be treated as confidential.  Similarly, we reject China's allegati on that the name of a company cannot be subject to 
confidential treatment on the basis that it is informat ion already in the public domain.  In this case, it 
is clear to us that the basis for treating the name s of the EU producers in question as confidential was 
not the confidentiality of their names per se , but rather the confidentiality of whether they were 
participating as complainants or supporters of the expiry review request, disclosure of which could 
have led to retaliation from comp lainants' and supporters' customer s who import the subject product 
from China.
1465  Moreover, with respect to the require d showing of good cause, as discussed above, 
nothing in Article 6.5 precludes a party from requesti ng confidential treatment of information it files 
on behalf of another party or parties and from show ing good cause for such treatment on behalf of that 
party or parties.  Nor does Article 6.5 require that the "owner" of the information for which 
confidential treatment is sought requ ests such treatment  and shows good cause.1466  In this case, it is 
clear to us that the request for confidential treatment, along with the demonstration of good cause, was 
made by the CEC on behalf of the complainants and s upporters of the expiry revi ew request.  It is also 
clear to us that the CEC was actually the submitter of the information for which confidential treatment 
was requested, and was therefore entitled to request and demonstr ate good cause for that treatment.  
As we have noted with respect to the original i nvestigation, in our view, nothing in the AD Agreement 
supports the notion that each complainant was some how required to individually request confidential 
                                                      
1460 Expiry review request/complaint filed by CEC, Exhibit CHN-29, Annex 0; and CEC letter dated 
8 December 2008, Exhibit CHN-63.  
1461 CEC letter dated 8 December 2008, Exhibit CHN-63.  
1462 Review Regulation, Exhibit CHN-2, recitals 4, 40, 49 and 330.  
1463 Review Regulation, Exhibit CHN-2, recital 40.  
1464 See paragraphs 7.669-7.676 above.  
1465 See e.g.  Review Regulation, Exhibit CHN-2, recitals 4 and 40.  
1466 See paragraphs 7.694-7.699 above.  WT/DS405/R 
Page 310  
 
 treatment and show good cause therefor.
1467  In addition, in their letters  of support, each supporter of 
the expiry review request explicitly stated that it  supported the expiry review request, which included 
the request for confidentiality.1468  Nothing in the evidence before  us indicates that these supporting 
producers, in separately declaring their support for th e expiry review request, disclaimed or rejected 
the CEC's request for confidential treatment of their identities. Nor is there any indication that these 
producers subsequently, during the investigation, waiv ed or disclaimed the confidential treatment that 
had been accorded.  We therefore see no legal and factual basis for China's assertion that the 
complainants and supporters of the expiry review request failed to request confidential treatment or 
their names and/or to show good cause for such treat ment.  Accordingly, we reject China's contention 
in this regard.1469   
7.761  China asserts that the alleged fear of retaliation in the expiry review was unreasonable, 
unfounded and untrue, noting in support of its a ssertion that after the imposition of provisional 
measures in the original investigation, seventeen  Italian footwear producers disclosed their names 
when they filed an application for annulment of  the Provisional Regulation, and also when they 
intervened in various European court proceedings  filed by Chinese exporters following the imposition 
of the definitive measures.  We recall that we have  already considered and rejected China's arguments 
in this respect in the context of the original investigation.1470  We reach the same conclusions for the 
same reasons here.1471  In addition, even assuming, arguendo , that the seventeen Italian producers 
were among the producers whose names were treated  as confidential in the expiry review, we 
certainly fail to see how the disclosure of their names in past court proceedings demonstrates that the 
risk of retaliation asserted in the expiry review request was untrue at the time it was made.1472  In this 
case, moreover, the CEC's request states that "certa in Community producers indeed already have been 
subject to severe pressure to stop  cooperating in the investigation and to withdraw their support for 
the request."  This assertion of fact, which China does not contest, supports the conclusion that the 
asserted fear of retaliation was neither untrue nor unfounded.   
                                                      
1467 See paragraphs 7.694-7.697.  
1468 Examples of non-confidential versions of declara tions of support of complainant producers, Exhibit 
CHN-30.   
1469 Moreover, with respect to the EU sampled producers and other cooperating EU producers in the 
expiry review, the evidence before us shows that th ey requested confidential treatment of their names and 
asserted risk of retaliation as cause for the confid ential treatment accorded to their identities.  Review 
Regulation, Exhibit CHN-2, recital 40.  With respect to the sampled EU producers in the original investigation 
which completed the Union Interest questionnaire in the e xpiry review, we note the European Union's assertion 
that these producers indicated  to the Commission that they wanted to  benefit from the confidentiality accorded 
to the identities of the supporters of the expiry review requ est, and that this was evidenced by the fact that they 
submitted non-confidential versions of their responses.  China has not adduced any evidence or arguments to 
counter these assertions.  Nothing in the evidence before us indicates that these assertions are not true.  We 
therefore consider that China has not established that the Commission erred in granting confidential treatment to 
the names of these producers. 
1470 See paragraphs 7.677-7.699 above. 
1471 As it did in the context of the original investigation, China assumes, but has not established, that 
the seventeen Italian producers were complainants involved  in the expiry review whose names were treated as 
confidential.  China, second written submission, para. 1137.  As in the context of the original investigation, we 
do not consider that the participation of companies assumed to be among the complainants or supporters in 
European court proceedings establishes that the risk of retaliation asserted in the expiry review was 
unreasonable, unfounded or untrue.   
1472 China also refers to the Brazilian anti-dumping in vestigation against Chinese footwear imports, in 
which the names of the Italian producers cooperating as analogue country producers were disclosed.  We fail to see the relevance of China's argument to our evaluation of the grant of confidential treatment of the names of the 
EU producers in the expiry review.  We do not see how the disclosure of the names of these producers, as 
analogue country producers in a Brazilian anti-dumping i nvestigation, establishes that the asserted fear of 
retaliation in the expiry review request was untrue, especially given that their involvement in the expiry review 
as complainants has not been demonstrated.    WT/DS405/R 
  Page 311  
 
 7.762  Based on the foregoing, we conclude that Ch ina has not established that the confidential 
treatment accorded by the European Union to the na mes of the complainants, the supporters of the 
expiry review request, the sampled EU producers in  the review, and the sampled EU producers in the 
original investigation that completed the Union Inte rest questionnaire in the review, was inconsistent 
with Article 6.5 of the AD Agreement.   
7.763  We recall, however, that Article 6.5.1 requires i nvestigating authorities to ensure that a party 
submitting confidential information furnishes a non-confidential summary of the confidential 
information or, in exceptional circumstances, an expl anation why such summarization is not possible.  
In this case, we see nothing in th e evidence before us that suggest s that the Commission requested the 
provision of a non-confidential summary of the informa tion in question, nor is there any evidence that 
the Commission requested an explanation of the reas ons for the lack of such summarization.  We 
recall our view that the mere fact that informa tion might not be susceptible of summarization, does 
not exempt investigating authorities from their obliga tion to ensure that the submitter of confidential 
information provides an explanation as to why a su mmary of the information is not possible.  We 
therefore consider that the European Union act ed inconsistently with its obligations under 
Article 6.5.1 by failing to ensure compliance w ith the requirements of this provision.   
7.764  With respect to China's claim under Article 6. 5.2 of the AD Agreement, we recall that, as 
discussed previously
1473, Article 6.5.2 does not impose any affirmative obligation on investigating 
authorities to examine whether or not confidential treatment is warranted, but addresses what actions 
investigating authorities may take if they "find that a request for confidentiality is not warranted".  As 
we have found that the confidential treatment acco rded by the Commission to the names of the EU 
producers in question was warranted, we fail to see any legal or factual basis for China's claim that the 
European Union acted inconsistently with its obligat ion under Article 6.5.2, and we therefore reject 
that claim.   
7.765  Finally, with respect to China's claim under Artic le 6.2, we note that while China asserts that 
the European Union's decision to tr eat as confidential the identities of companies in the expiry review 
was biased and deprived Chinese exporters of thei r right to make meaningful comments on several 
issues, China has failed to demonstrate such bias.  We recall that the right of parties to defend their 
interest accorded by Article 6.2 is not indefinite, th at is, it does not allows parties to participate in the 
inquiry as and when they choose.1474  In this case, the evidence before  us shows that interested parties 
did make comments throughout the expiry review on the issues mentioned by China.1475  Moreover, 
we recall that the rights set forth in Article 6.2 do not apply to information treated as confidential 
under Article 6.5, and that we ha ve found that the Commission did not err in according confidential 
treatment to the names of the EU producers.  We therefore see no factual or legal basis for China's contention that Chinese exporters were deprived of  their right of defence due to the confidential 
treatment granted to this information by the Commi ssion, and we therefore reject China's claim of 
violation of Article 6.2 in this respect.   
                                                      
1473 See paragraphs 7.667 and 7.675 above. 
1474 See paragraphs, 7.604, 7.621 , 7.633, and 7.640 above. 
1475 In this regard, we note for instance the submissions of the Chinese Footwear Coalition and China 
Leather Association, dated 24 March and 6 April 2009, respectively Exhibits CHN-10 and CHN-18 (second document); the submissions of the EFA, dated 12 November 2008 and 23 February 2009, respectively Exhibits 
CHN-34 and CHN-23; and the submission of the Chinese exporter Yue Yuen, dated 3 November 2009, Exhibit 
CHN-46.  China also argues that it was the lack of objectivity and biased conduct of the European Union which 
precluded interested parties from fully exercising their rights of defence, since the European Union did not even 
bother to evaluate or make a comparative assessment of the substantiated comments submitted by the interest 
parties.  China, second written submission, para. 1146.  We note, however, that the Commission did examine the 
comments made by interested parties in this regard.  E.g.  Review Regulation, Exhibit CHN-2, recitals, 4, 104 
and 328-331.  WT/DS405/R 
Page 312  
 
 2. certain information provided in the expiry review request, CEC's submissions, standing 
forms, and questionnaire responses of sampled EU producers  
7.766  China claims that the European Union violated  Article 6.5 of the AD Agreement by granting 
confidential treatment to some information in the expiry review request, standing forms, CEC 
submissions, and the non-confidential questionnaire responses of the sampled EU producers, in the 
absence of "good cause" shown for such treatment.  China argues that even if good cause is 
demonstrated for one type of information, such  as the names of the comp lainants, it may not be 
presumed to exist for all information which the i nvestigating authority considers may lead to the 
identification of the complainants.  For China, th e confidential treatment granted to the name of a 
producer cannot be extended to other data, even if that data serves as a route to identifying that 
producer.1476  China also claims that the European Unio n violated Article 6.5.1 of the AD Agreement 
by failing to require the submitters of this info rmation to provide non-confidential summaries or to 
give a statement of reasons as to why summarization was not possible, and by failing to ensure that 
the non-confidential summaries provided permitted a reasonable understanding of the information 
submitted as confidential.1477 
7.767  The European Union asserts that in each inst ance of confidential treatment challenged by 
China, the relevant information was entitled to c onfidential treatment.  The European Union argues 
that treating the identity of a producer as confid ential does not make the issue of confidential 
treatment of the remainder of its data irrelevant, si nce that data might serve as a route to identifying 
the producer.  Furthermore, even if the producers'  names are not known, the European Union submits 
that their individual sales, production, etc. would be  considered information by nature confidential, 
and for such information, the showing of "good cau se" consists in establishing that the information 
falls into that category.1478   
a) information in the expiry review request 
7.768  China asserts that the European Union acted inconsistently with Article 6.5 by not requiring 
that good cause be shown for the complainants' request  for confidential treatment with respect to the 
information submitted in Annexes 1, 5, 6, 7 and 10 of  the expiry review request.  China notes that the 
producers' request for confidential treatment simply re peated the text of Article 6.5, and argues that 
this cannot be considered "good cause" without furthe r substantiation.  China also argues that simply 
quoting the title of the Annexes in question does not sa tisfy the requirement of Article 6.5.1 to provide 
a sufficiently detailed non-confidential summary  as to permit a reasonable understanding of the 
"substance" of the information submitted as confidential.1479   
7.769  The European Union notes that the informati on contained in Annexes 1, 6, 7, and 10 was 
withheld on the ground that it was by nature confid ential, and that while the information in Annex 5 
was the same in the confidential and non-confid ential versions, and thus was not treated as 
confidential, the names of the applicants appear ing in Annex 5 were treated as confidential.  
Furthermore, the European Union argues that th e general request for confidential treatment of 
identities, supported by the fear of retaliation,  was sufficient good cause for all the individual 
instances in which confidential treatment was granted.  Finally, the European Union asserts that all the 
information in question was used as part of calcu lations and conclusions presented in the expiry 
                                                      
1476 China, second written submission, paras. 1080-1081. 
1477 China, first written submission, para. 724.  
1478 European Union, first written submission, paras. 428 and 438.  
1479 See, e.g. China, first written submission, paras. 728-735.   WT/DS405/R 
  Page 313  
 
 review request, and was effectively summarized in tho se parts of the expiry review request that were 
not treated as confidential.
1480   
7.770  With respect to Annex 1, China's claim concer ns the following information: (i) the answers 
provided by the applicants; (ii) their countries; and (iii) a table regarding the standing of CEC.1481  
Although the body of the non-confidential version of  the expiry review request states that "the 
answers provided [by the individual  applicants] are given in confid ence … and attached in (limited) 
Annex 1", as China contends, we note that Annex 1 it self indicates that it contains "the list with the 
names and countries of the individual applicants a nd support forms" as well as a "table on standing of 
CEC".1482  Thus, nothing in Annex 1 suggests that it incl uded any "answers of the applicants" and, in 
our view, it seems more likely that the "answers" me ntioned in the body of the expiry review request 
refer to the "support decisions" mentioned in Annex 1.   We also note that the expiry review request 
requested confidential treatment of the names and countries of the individual applicants and support 
forms, on the basis that "its disclosure would be of significant competitive advantage to a competitor 
and/or would have a significant adverse effect upon a person supplying the information or upon a 
person from whom he has ac quire the information."1483  In this case, it is clear to us that the expiry 
review request asserted that the information in qu estion was by nature confidential, as described in 
Article 6.5.1484  Moreover, we recall that we have alrea dy found that the request and good cause for 
the confidential treatment accord ed to the names of the compla inants by the Commission was 
consistent with Article 6.5 of the AD Agreement.  We therefore conclude that the European Union did 
not err in treating the information contained in Annex 1 as confidential, and we therefore reject 
China's claim under Article 6.5 in this regard.1485   
7.771  Turning to China's claim under Article 6.5. 1, we recall that this provision requires 
investigating authorities to ensure that the s ubmitter of confidential information furnishes a non-
confidential summary of the information or, in ex ceptional circumstances, an explanation why such 
summarization is not possible.  Th e European Union notes that the co mplaint stated that the CEC was 
acting on behalf of the "producers of the produc t concerned, representing 38% of the total EU27 
production" and asserts that therefore a summary of th e confidential information in the table regarding 
the standing of the CEC was provided.1486  In our view, this is sufficient to permit a reasonable 
understanding of the "substance" of the confidential  information in question, that is, the standing 
issue, and we therefore reject China's claim under Ar ticle 6.5.1 with respect to this information.  
However, with respect to the a pplicant's countries of origin and their support decisions, there is 
nothing in the evidence before us that indicates that the Commission requested the provision of a non-
confidential summary of this information, or that it requested the submitter to explain the reasons for 
the lack of such summarization.  In connection with this information, we therefore consider that the 
                                                      
1480 European Union, first written submission, paras. 429-442. 
1481 China, second written submi ssion, paras. 1083-1087.  
1482 Expiry review request/complaint filed by CEC, Exhibit CHN-29, Annex 1.   
1483 Expiry review request/complaint filed by CEC, Exhibit CHN-29, Annex 1.   
1484 We recall our view that the showing of good caus e for information that is by nature confidential 
may be satisfied by establishing that the information meets the description of such information set out by Article 6.5 chapeau.  
1485 We also reject China's claim under Article 6.5 with respect to the table regarding the standing of 
CEC mentioned in Annex 1 of the complaint.  As we understand it, this table contained information of the 
individual applicants and their position with respect to the review request.  European Union, opening oral 
statement at the second meeting with the Panel, para. 339.  Thus, in our view, the disclosure of this information 
would have been inconsistent with the confidential treatment granted to the names of the EU producers, including the applicants, as it would have revealed wh ether or not these producers were participating as 
complainants or supporters of the expiry review request.  We conclude that the European Union did not err in 
treating this information as confidential, and we therefore dismiss China's claim under Article 6.5 in this regard. 
1486 European Union, opening oral st atement at the second meeting with the Panel, para. 339, referring 
to Expiry review request/complaint filed by CEC, Exhibit CHN-29, p. 5.  WT/DS405/R 
Page 314  
 
 European Union acted inconsistently with its ob ligations under Article 6.5.1 by failing to ensure 
compliance with the requirements of this provision.   
7.772  With respect to Annex 5, China's claim concerns the information regarding the 
representativeness of the products types.
1487  The factual basis for China's claim is the statement in the 
non-confidential version of the expiry review re quest that "CEC provides a table in annex 5, 
explaining how the representativeness of each product type [A, B and C] was calculated".1488  T he  
European Union asserts that this d escription in the body of the expiry  review request is incorrect, and 
that the actual contents of Annex 5 were the same  in the confidential and non-confidential version.1489  
We have no reasons to disbelieve this assertion.  In particular, nothing in  the evidence before us 
suggests that the two versions were different, and China has pointed to nothing that would suggest 
otherwise.  We therefore see no factual basis for China's contention that the European Union treated 
as confidential information in Annex 5 of the expiry  review request, and we therefore reject China's 
claim of violation of Article 6.5 with respect to this alleged information.  Having found no violation 
of Article 6.5, we consider that there is no basis for China's claim under Article 6.5.1, which we recall 
applies only with respect to confidential informat ion.  We therefore re ject China's claim under 
Article 6.5.1 with respect to the information in question.   
7.773  With respect to Annex 6, China's claim concer ns the domestic sales prices of three types of 
footwear produced and sold in Brazil.1490  China argues that no good cause was shown for the 
confidential treatment accorded to this information, asserting that a mere pro forma  repetition of the 
text of Article 6.5 does not meet this requirement.  In addition, China argues that the average figures 
provided in the non-confidential vers ion do not satisfy the requirement of Article 6.5.1 to provide a 
non-confidential summary in sufficient detail to perm it a reasonable understanding of the substance of 
the information submitted in confidence.1491  The European Union asser ts that the evidence of 
Brazilian domestic prices was submitted in conf idence on the ground that it was by nature 
confidential, and that the level of detail, c onsisting in average figures, provided in the non-
confidential version of the expiry re view request was adequate given the bona fide  interest in 
preserving commercial confidentiality.1492   
7.774  In this case, the expiry review request requested  confidential treatment of domestic prices in 
Brazil, which was evidenced by the submission of invoices for the year 2007, on the basis that "its 
disclosure would be of significant competitive a dvantage to a competitor or would have a 
significantly adverse effect upon a person supplyi ng the information or upon a person from who he 
has acquired the information."1493  Thus, the expiry review request asserted that the information in 
question fell within the category of information that  is described in Article 6.5 as being confidential 
by nature.1494  Nothing in the evidence befo re us suggests that this assertion is not true, and indeed, 
China does not argue otherwise.  We therefore c onclude that the European Union did not err in 
                                                      
1487 China, first written submission, para. 725.  
1488 Expiry review request/complaint filed by CEC, Exhibit CHN-29, p. 7.  
1489 European Union, first written submission, para. 430; second written submission, para. 341.  The 
non-confidential version of Annex 5 of the expiry review request, as provided by the European Union, contains pictures of the products types A, B and C as well as a list of the TARIC Codes of the product concerned. 
European Confedera tion of the Footwear Industry (CEC) Request for Expiry Review of Council Regulation 
(EC), No 1472/2006 , 27 June 2008, Non-limited, Annex 5, Exhibit EU-12. 
1490 China, first written submission, para. 725.  
1491 China, second written submi ssion, paras. 1091-1092.  
1492 European Union, first written submission, para. 431; opening oral statement at the second meeting 
with the Panel, para. 343. 
1493 Expiry review request/complaint filed by CEC, Exhibit CHN-29, p. 15 and Annex 6.  
1494 We recall our view that the showing of good caus e for information that is by nature confidential 
may be satisfied by establishing that the information meets the description of such information set out by 
Article 6.5 chapeau.  WT/DS405/R 
  Page 315  
 
 treating the domestic prices in Brazil as confidentia l, and we therefore re ject China's claim under 
Article 6.5 in this regard.   
7.775  Turning to China's claim under Article 6.5.1, in this case, the non-confidential version of the 
expiry review request sets out average normal valu es (ex-factory prices) on the Brazilian market for 
each product type concerned.  These average figures, in our view, are sufficient to permit a reasonable 
understanding of the "substance" of the confidential in formation in question, that is, information with 
respect to the normal value in the analogue country .  We therefore reject China's claim that an 
adequate non-confidential summary of the informa tion contained in Annex 6 was not provided.   
7.776   With respect to Annex 7, China's claim concerns (i) Chinese production figures for the 
product concerned and estimates for production levels  until 2011; and (ii) export prices for Chinese 
footwear, consisting of price offers and invoices.
1495  The factual basis for the first aspect of China's 
claim is the statement in the non-confidential versi on of the expiry review request that "Annex 7 … 
contain[s] evidence on [China's] production level and the estimations made for production of the 
product concerned until 2011".1496  The European Union asserts that this description in the body of the 
expiry review request is incorrect, and asserts that the confidential version of  Annex 7 only contains 
"information on export prices for China consisting of invoices".1497  We have no reason to disbelieve 
this factual assertion.  In particular, we note that th e expiry review request itself states elsewhere that 
Annex 7 contains "Export price from the People's Republic of China – Confidential", and we see 
nothing in the evidence before us that would suggest  to us that this is not, as the European Union 
asserts, a correct description of the contents of Annex 7.1498  We therefore see no factual basis for 
China's contention that the European Union treat ed as confidential Chinese production figures for the 
product concerned and estim ates for production levels until 2011, a llegedly contained in Annex 7 of 
the expiry review request, and we therefore reject this aspect of China's claim.   
7.777  With respect to the information on export pri ces for China consisting of price offers and 
invoices, the expiry review request sought confidential treatment of this information asserting that "its disclosure would be of significant competitive ad vantage to a competitor and/or would have a 
significant adverse effect upon a person supplying the information or upon a person from whom he 
has acquired the information."
1499  The expiry review request asserted that this information was by 
nature confidential, as de scribed in Article 6.5.1500  Nothing in the evidence before us suggests that 
this assertion was untrue.  We therefore consider th at the European Union did not err in treating the 
information contained in Annex 7 of the expiry revi ew request as confidential, and we reject China's 
claim under Article 6.5 with respect to this informat ion.  Having found no violation of Article 6.5, we 
consider that there is no basis for China's claim unde r Article 6.5.1, which we recall applies only with 
respect to information treated as confidential.  We  therefore reject China's claim under Article 6.5.1 
with respect to the information in question.   
7.778  With respect to Annex 10, China's claim concer ns (i) evidence on injury factors provided by 
the complainants; (ii) calculations made by CEC on th e basis of Eurostat data; (iii) data collected from 
producers and supporters; and (iv) tables made by CEC providing an overview of the injury factors.  
                                                      
1495 China, first written submission, para. 725; second written submission, paras. 1094-1096.  
1496 Expiry review request/complaint filed by CEC, Exhibit CHN-29, p. 11.  
1497 European Union, first written submission, para. 432; opening oral statement at the second meeting 
with the Panel, para. 344.  
1498 Expiry review request/complaint filed by CEC, Exhibit CHN-29, page 4.  We note in this regard 
that China has not argued that information concerning Chinese production figures was required to be provided in the request for expiry review. 
1499 Expiry review request/complaint filed by CEC, Exhibit CHN-29, Annex 7.  
1500 We recall our view that the showing of good caus e for information that is by nature confidential 
may be satisfied by establishing that the information meets the description of such information set out by 
Article 6.5 chapeau.  WT/DS405/R 
Page 316  
 
 China argues that the expiry review request only quotes Article 6.5 verbatim, and therefore no good 
cause was shown for the confidential treatment granted to  this information.  In  addition, China alleges 
that no non-confidential summaries of this inform ation were provided.  Nor was any explanation 
given as to why such summarization was not possible.
1501  The European Union asserts that good 
cause was shown for the confidential treatment of this  information.  In addition, the European Union 
notes that the request for confidential treatment was not made in favour of Eurostat data, but with 
respect to the results of adjustments to those da ta made by the CEC, and that the adjustments 
contained confidential information.1502   
7.779  The expiry review request sought confidential tr eatment of this information on the basis that 
"its disclosure would be of significant competitive advantage to a competitor and/or would have a 
significant adverse effect upon a person supplying the information or upon a person from whom he 
has acquired the information."1503  Thus, the expiry review request asserted that the information in 
question was by nature confidential, as provided for in Article 6.5.1504  Nothing in the evidence before 
us suggests that this information does not fit in to the category asserted, and China does not argue 
otherwise.  We conclude that the European Union did not err in treating the information contained in 
Annex 10 of the expiry review request as confiden tial, and we therefore re ject China' s claim under 
Article 6.5 with respect to this information.  W ith respect to China's claim under Article 6.5.1, we 
note that the non-confidential version of the expi ry review request provides average figures with 
respect to the various injury factors, as well as with respect to the results of the calculations made by 
CEC in connection with its injury allegations.1505  These average figures, in our view, suffice to permit 
a reasonable understanding of the "substance" of the confidential information in question, that is the 
injury alleged in the expiry review request.  We therefore reject China's cl aim that an adequate non-
confidential summary of the information c ontained in Annex 10 was not provided.   
b) information in the expiry review  request, standing forms, and CEC 
submissions 
7.780  China notes that the European Union had stated  in the Review Regulation that there was 
extensive information about the individual compla inant producers in the expiry review request, 
standing forms and CEC submissions, on the basis of which the sample of the EU producers was selected.  China asserts that the non-confidential ve rsions of the expiry review request and CEC 
submissions did not contain individual data on production volumes and sales, business models, and 
product specialization, and there is no proof that  good cause was demonstrated for the confidential 
treatment of such information, or that non- confidential summaries were required by the 
European Union.
1506  The European Union asserts that Chin a's argument implies that the expiry 
review request had to contain a range of informati on similarly wide as the range of information used 
by the Commission in selecting the sample, and conte nds that this argument cannot constitute a claim 
of violation of the AD Agreement.  The European  Union also notes that much of the information 
contained in the expiry review request and its annexes was entitled to and was accorded confidential 
treatment.1507   
                                                      
1501 China, first written submission, para. 725; second written submission, paras. 1098-1099.  
1502 European Union, first written submission, paras. 433-437; opening oral statement at the second 
meeting with the Panel, para. 345.  
1503 Expiry review request/complaint filed by CEC, Exhibit CHN-29, Annex 10.  
1504 We recall our view that the showing of good caus e for information that is by nature confidential 
may be satisfied by establishing that the information meets the description of such information set out by 
Article 6.5 chapeau.  
1505 Expiry review request/complaint filed by CEC, Exhibit CHN-29, pp. 7-8 and 18-23. 
1506 China, first written submission, paras. 736-737.  
1507 European Union, first written submission, para. 443.  WT/DS405/R 
  Page 317  
 
 7.781  As we understand it, China's claim rests on the assumption that because the non-confidential 
versions of the expiry review request and CEC s ubmissions did not contain individual EU producer 
data on matters which the Commission stated it took into account in selecting the sample of the EU 
producers, this information was treated as confiden tial without a showing of good cause, and with no 
non-confidential summaries provided.  We have pr eviously observed that the mere fact that 
information is not available to interested parti es does not necessarily mean that it was information 
treated as confidential under Article 6.5.
1508  Similarly, the allegation that the information is not 
reflected in the non-confidential versions of docume nts referred to by the investigating authority as 
containing extensive information which served as the basis of the selection of the sample, does not, in 
our view, establish that the specific information was submitted in those documents and accorded 
confidential treatment.  We recall that Article 6.5 is not a provision calling for disclosure of 
information to parties.  Thus, merely that informa tion is not available to a party does not demonstrate 
that it was wrongly treated as confidential.  China h as not demonstrated that the information at issue 
was submitted in the expiry review request and CE C submissions, and was treated as confidential.  
Under these circumstances, we see no factual basi s on which to conclude that the European Union 
acted inconsistently with its obligations under Artic le 6.5 with respect to this information.  We 
therefore consider that China has not made out a prima facie  case under Article 6.5, and we therefore 
reject China's claim in this regard.  Having found no violation of Article 6.5, we see no basis for 
China's claim under Article 6.5.1, which we r ecall applies only with respect to confidential 
information.  We therefore reject China's claim unde r Article 6.5.1 with respect to the information in 
question.   
c) information in the standing forms 
7.782  China notes that the European Un ion, following questions from the Panel, stated that four 
companies supporting the expiry review request completed standing forms.  China argues that 
interested parties were not provided any opportunity  during the expiry review to see these documents.  
In China's view, this implies that the informati on in those standing forms was granted confidential 
treatment, without good cause having been shown.  In  addition, China asserts that there were no non-
confidential summaries provided, or a statement of  the reasons why such summaries could not be 
provided.1509  China submits that the European Union's e xplanation, that the standing forms of the 
producers in question were not added to the non-conf idential file because the contents were identical 
to the declarations of support, is  incorrect, as the information request ed in the standing form was more 
extensive than that provided in  the declarations of support.1510   
7.783  The European Union contends that these four  companies were among the 196 that had already 
declared their support for the expiry review request , and that the non-confidential versions of their 
responses to the standing form were the same as their non-confidential declarations  of support, that is, 
the only information in these documents was that an unidentified company was supporting the expiry review request.
1511  Consequently, the European Union explains, the Commission decided not to add 
these four standing forms to the non-confidential f ile, as to do so would have given the impression 
that four additional companies supported the request.1512  Furthermore, the European Union argues 
that the confidential information in the standi ng forms largely duplicated that in the support 
statements, and that the extra information sought by the standing forms included (i) questions to 
                                                      
1508 See paragraph 7.747 above.   
1509 China, second written submission, para. 1107; answer to Panel question 116. 
1510 China, closing oral statement at the se cond meeting with the Panel, para. 97.  
1511 In particular, the European Union explains that  because of the request for confidential treatment, 
the non-confidential declarations of support said no mo re than that there was an  unidentified company that 
supported the review request and that the non-confidential responses to the standing form were exactly the same in this respect.  European Union, opening oral statem ent at the second meeting with the Panel, para. 347.  
1512 European Union, opening oral statement at the second meeting with the Panel, paras. 347-348. WT/DS405/R 
Page 318  
 
 which the four companies provided no answers,  so there was nothing to summarize in non-
confidential form; and (ii) data specific to the four  companies, which was summ arized in the Note for 
the File dated 2 October 2008, together with a ll the information that the Commission had received on 
standing.
1513  
7.784  The non-confidential versions of the standing fo rms of the four companies show that the 
answers to the questions in the standing form are blank.1514  The European Union does not deny that 
these answers were treated as confidential by the Commission.  Rather, the European Union asserts 
that the non-confidential responses of these producers were  not included in the non-confidential file in 
order to avoid double counting these four compani es, which had also submitted declarations of 
support, and had provided no additional information in the standing forms.1515   
7.785  On the basis of the evidence before us we cannot determine whether the four companies 
which completed the standing forms were among the 196 supporters of the expiry review request, as 
the European Union contends.  Thus, we cannot ac cept the European Union's contention that their 
standing forms did not contain information additiona l to that in the declarations of support, non-
confidential versions of which had been included in the file.  Moreover, it is clear that the standing 
forms requested information additional to th at provided in the declarations of support.1516  While the 
information in the standing forms may fall within  the scope of information for which confidential 
treatment was requested by these four companies, or by the CEC on their behalf, it is not clear that it 
would fall within the scope of information for which the need to protect their identities would 
establish good cause for confidential treatment, a nd the European Union has not demonstrated 
otherwise.  In these circumstances, we consider that  the European Union acted inconsistently with its 
obligations under Article 6.5 by treating as confiden tial, in the absence of good cause shown, the non-
confidential responses to the standing form of the four EU producers concerned.  Having found a 
violation of Article 6.5 with respect to this in formation, we consider that additional findings on 
China's claim under Article 6.5.1 would not contri bute to the resolution of this dispute or be 
potentially useful in implementation.  We therefore exercise judicial economy with respect to China's 
claim under Article 6.5.1 in respect to this information.  
d) declarations of support  
7.786  China claims that no good cause was shown for the confidential treatment accorded to (i) the 
supporters' countries of origin and (ii) their pr oduction volume of the like product for the year 2007 
and January 2008.  China first argues that it was fo r each complainant to request for confidentiality; 
and second, that the cause provided in the declarations  of support, that all information "was provided 
to the Commission in confidence", cannot be considered  a "good cause" demonstration.  In addition, 
China asserts no non-confidential summaries of the information in question were provided, nor was a 
statement as to why summarization of such informati on was not possible given.  In this regard, China 
rejects the European Union's assertion that the in formation was summarized in the expiry review 
request, noting that expiry review request cont ained only aggregate data, but no summaries of 
individual data of the complainants.1517   
7.787  The European Union submits that by giving support to the expiry review request, the 
producers were also endorsing the request and jus tification for confidential treatment of their 
identities contained in that request.  Furthermore,  the European Union asserts that the individual 
                                                      
1513 European Union, comments to China's answer to Panel question 116.   
1514 Sampling form sent to Chinese exporters, Exhibit EU-20. 
1515 European Union, opening oral statement at the second meeting with the Panel, paras. 347-348. 
1516 For instance, we note that the standing form requires production, sales, employment, etc. data for 
the year 2006.  Sampling form sent to Chinese exporters, Exhibit EU-20.   
1517 China, first written submission, paras. 738-739; second written submission, paras. 1104-1106.   WT/DS405/R 
  Page 319  
 
 production volumes of the supporting producers is information that could have led to their 
identification and was therefore asso ciated with their fear of retalia tion.  In addition, even without 
company names, the European Union argues, th is kind of information represents commercial 
information that is entitled to confidential treatment .  The European Union adds that the information 
was effectively summarized in the expiry review request.
1518   
7.788  China's claim concerns certain information in  the declarations of support, namely the 
information regarding the countries of origin a nd production volume of the like product of the 
supporting producers for the year 2007 and January 2008  of the supporting producers.  We recall that 
the expiry review request explicitly sought confiden tial treatment of the "countries" of the supporters 
and of their "support forms" as a whole.1519  In addition, we recall that in their letters of support, each 
supporter explicitly declared its support for the expi ry review request, which included the requests for 
confidentiality contained therein.  We see nothing in the evidence before us that would indicate that 
the supporting producers, in separately declaring their support for the expiry review request, 
nonetheless were somehow disclaiming or rejecting the CEC's requests for confidential treatment of 
the information contained in their declarations of  support.  Nor is there any indication that these 
producers waived or disclaimed the confidential tr eatment that the Commission accorded to this 
information, and that we have found to be consistent with Article 6.5.1520  Moreover, as discussed 
above, we see no requirement, in the context of an expiry review request filed by a trade association 
on behalf of producers, for individual requests for confidential treatment and showings of good cause 
therefor.  We therefore see no factual or legal basis for China's contention that no good cause was 
shown for the confidential treatment accorded by  the Commission to the supporters' countries of 
origin and production volume for the year 2007 and January 2008, and we therefore reject China's 
claim under Article 6.5 in respect of this information.   
7.789  With respect to China's claim Article 6.5.1, we  recall that this provision requires investigating 
authorities to ensure that a party submitting conf idential information furnishes a non-confidential 
summary of the confidential information or, in ex ceptional circumstances, an explanation why such 
summarization is not possible.  In this case, we see nothing in the evidence before us that suggests 
that the Commission requested the provision of a n on-confidential summary of the information in 
question, nor is there any eviden ce that the Commission requested an  explanation of the reasons for 
the lack of such summarization.1521  We recall that, in our view, the mere fact that information might 
not be susceptible of summarization does not exempt investigating authorities from ensuring that the 
submitter of confidential information provides an e xplanation as to why a summary of the information 
is not possible.  We therefore consider that th e European Union acted inconsistently with its 
obligations under Article 6.5.1 with resp ect to the information in question.  
e) information in the non-confiden tial questionnaires responses of the 
sampled EU producers 
7.790  China claims that the European Union violated  Article 6.5 of the AD Agreement by treating 
as confidential, in the absence of good cause, informa tion in the injury questionnaire responses of the 
eight sampled EU producers.  China also claims th at the European Union acted inconsistently with 
Article 6.5.1 either by failing to require th e sampled EU producers to provide non-confidential 
                                                      
1518 European Union, first written submission, para. 445; opening oral statement at the second meeting 
with the Panel, para. 346.  
1519 Expiry review request/complaint filed by CEC, Exhibit CHN-29 Annexes 0 and 1. 
1520 See paragraph 7.760 above. 
1521 The European Union asserts that the production data  at issue was summarized in the expiry review 
request.  We fail to see the factual relevance of this assertion, however.  The review request does not contain a summary of the supporters' production data for the year 2007 and January 2008, but overall estimations of the 
production in the European Union.  Expiry review request/complaint filed by CEC, Exhibit CHN-29. WT/DS405/R 
Page 320  
 
 summaries, or a statement as to why summarization was not possible, or by failing to ensure that the 
non-confidential summaries provided were sufficien tly detailed to permit a reasonable understanding 
of the substance of the confidential information.
1522  In addition, China claims that the European 
Union violated Article 6.5.2 of the AD Agreement by failing to find that confidential treatment of 
information for which no non-confidential summaries were provided was not warranted.  In particular, 
China argues that the Commission wa s obligated, as an objective and unbiased investigating authority, 
to disregard this information because (i) it coul d have been summarized; (ii) no request for its 
confidential treatment was made; and (iii) there was no explanation as to why only some producers 
provided summaries for responses to partic ular questions while others did not.1523  China further 
claims that the European Union violated Article  6.2 of the AD Agreement because Chinese exporters 
were precluded from defending their interests due to the absence of non-confidential responses of the 
sampled EU producers on certain vital issues.1524   
7.791  The European Union asserts that in  the vast majority of individual instances referred to by 
China, the confidential and non-confidential respon ses of the companies concerned were the same, 
and therefore no issue of confidentiality arose.  In  addition, the European Union submits that the 
confidential treatment challenged by China was ju stified, because the information was by nature 
confidential, and for such information, good cause is  shown by establishing that the information falls 
into that category.  Furthermore, the European Un ion argues that the producers reiterated orally the 
requests for confidentiality made by the CEC in the expiry review request, and many of the producers 
also submitted individual letters emphasizing the im portance of confidentiality and their fear of 
retaliation.  The European Union further contends th at China's claim that the European Union failed to 
require the producers to submit adequate summaries of  information is misplaced, because in many of 
the instances referred to by Chin a, the answers were by nature confidential and therefore nothing 
meaningful by way of summary could have been provided.1525  The European Union maintains that 
neither Article 6.2 nor Article 6.5.2 provides a basi s for the kind of compla ints China makes in these 
claims.  Thus, the European Union contends that Ar ticle 6.5.2 refers to the obligations of Members 
where a request for confidentiality is not warranted,  while China's claim con cerns instances where the 
request for confidentiality was found to be wa rranted by the Commission.  In addition, the 
European Union asserts that Article 6.2 does not override the specific rights contained in other provisions of Article 6, and therefore where an issu e is one that is covered by one of these provisions, 
Article 6.2 cannot be invoked, unless it is invoked in a consequential way.
1526   
7.792  China's claim under Article 6.5 concerns (i) "questions not answered" in the questionnaire 
responses of the sampled EU producers, that is , instances where the answer is blank; and 
(ii) "incomplete or meaningless" answers provided by producers.1527  As we understand it, the first 
aspect of China's claim rests on the premise that the fact that  answers were blank in the non-
                                                      
1522 See, generally, China, first written submissi on, paras. 740-747; second written submission, 
paras. 1109-1110. 
1523 See, e.g. China, first written submission, para. 769. 
1524 China, first written submission, para. 770.  
1525 See, e.g.  European Union, first written submission, paras. 447 and 449; answers to Panel 
questions 59, 74 and 75(c); opening oral statement at the second meeting with the Panel, paras. 323 and 350. 
1526 European Union, first written submission, paras. 456-472. 
1527 China suggests that its claim under Articles 6.5 and 6.5.1 concerns all the instances where 
confidential treatment was granted in the injury questionn aire responses of the sampled EU producers.  China, 
second written submission, para. 1109.  However, as pr eviously noted, we consider that a claim under any 
paragraph of Article 6 requires a careful examination of th e facts with respect to the claim.  Thus, our analysis 
and conclusions are limited to the inst ances with respect to which China ha s made specific arguments, namely 
the instances referred to by China in Exhibit CHN-65 (Examples of questions in the non-confidential injury 
questionnaire responses of each of the eight sampled producers that were left blank and for which the non-confidential summaries of data and information wa s not provided) as "questions not answered" and 
"incomplete/meaningless answers".  WT/DS405/R 
  Page 321  
 
 confidential versions of the questionnaire respons es of the sampled EU producers demonstrates that 
information was treated as confidential by the Commissi on.  We recall our view that the mere fact that 
information is not in the non-confidential version of a questionnaire response does not prove that an answer was treated as confidential – it is just as likely to be the case that no answer at all was 
provided to the question.
1528  In this case, except for one inst ance in which the European Union 
acknowledges that the information in ques tion was treated as confidential treatment1529, China has not 
demonstrated that the information it challe nges was actually treated as confidential by the 
Commission.  Nothing in the non-confidential versi ons of the questionnaire responses of the sampled 
producers indicates that confidential treatment of in formation was requested and granted with respect 
to these blank answers.  In these ci rcumstances, we see no factual basis on which to conclude that the 
information at issue was accorded confidential tr eatment inconsistently with Article 6.5 of the 
AD Agreement.   
7.793  Similarly, we fail to see the factual or legal basis for China's claim with respect to the 
instances where allegedly "incomplete" or "meaningless" answers were provided in the non-confidential versions of questionnaire respon ses by the sampled producers.  China has not 
demonstrated, nor does anything in the evidence be fore us suggest, that the "incompleteness" or 
"meaninglessness" of the answers of the producers w as due to confidential treatment being granted to 
information, and the non-confidential summaries bei ng inadequate.  It may simply be that these 
answers were substantively poor in both the conf idential and non-confidential versions.  We note in 
this regard that the questions at issue call for narrative responses, and the answers reproduced by 
China appear to be in poor E nglish, but not entirely meaningless.
1530  Article 6.5 only addresses the 
treatment of information submitted by parties to an investigation as confidential.1531  It says nothing 
about the substantive quality of that information.  Thus, in the absence of any showing that the non-
confidential versions were meaningless versions  of meaningful information submitted in the 
confidential version, as opposed to poorly drafted na rrative statements, we ca nnot conclude that China 
has demonstrated that information was granted confidential treatment, or that inadequate non-
confidential summaries were provided.  We conclude that China has not made out a prima facie  case 
under either Article 6.5 or Article 6.5.1 with re spect to the allegedly blank, incomplete and 
meaningless answers in the questionnaire responses of  the sampled EU producers, and we therefore 
reject China's claim in this regard.1532   
                                                      
1528 See paragraph 7.747 above.  In this case, we not e for instance the European Union's assertion that 
in the majority of instances referred to by China, th e confidential and non-confidential responses of the sampled 
EU producers were the same.  European Union, opening oral statement at the second meeting with the Panel, 
para. 350.  We have no evidentiary basis that would justify rejecting this assertion as untrue. 
1529 With respect to Table C4 (sales price data) of the questionnaire resp onse of Company H, the 
European Union acknowledges that although this pr oducer did not request confid ential treatment of this 
information, it was nonetheless treated as confidential by the Commission, since it wa s considered "by nature 
confidential".  European Union, answer to Panel questio n 59.  We recall, however, that good cause must be 
shown to justify confidential treatment even of information which is confidential by nature, although the essence 
of that showing may be different than for information which is submitted on a confidential basis.  In the absence of any indication that the producer even asserted that the information in question met the criteria defining 
information which may be considered by nature confid ential as per Article 6.5, we consider that the 
European Union acted inconsistently with Article 6.5 by treating this information as confidential. 
1530 China, first written submission, paras. 745-746.  
1531 See paragraph 7.703 above.  
1532 Our conclusion in this regard also applies to the instances in the questionnaire responses at issue, 
namely Section A5 of the questionnaire response of Company A, in which the information was provided as an 
attachment, but the response does not contain the attachment itself.  Nothing in the evidence before us indicates 
that confidential treatment was requested and accorded to the information in this attachment, and in the absence of an adequate showing that the information was in fact treated as confidential, we consider that China has not 
made a prima facie case of violation of Arti cle 6.5 with respect to this information. WT/DS405/R 
Page 322  
 
 7.794  China asserts that Company C did not provide an adequate non-confidential summary of its 
answer to Section C4 of the questionnaire, con cerning sales price data.  The evidence before us 
indicates that this producer asserted that this informat ion was by nature confidential as provided for in 
Article 6.5, stating that "its disclosure would be of a significant competitive advantage to a competitor 
and/or would have a significant adverse eff ect upon the company supplying the information."
1533  We 
therefore consider that the confidential treatment a ccorded to this information was not inconsistent 
with Article 6.5.1534  In addition, the European Union asser ts that an adequate non-confidential 
summary of this information, in indexed form, was provided.  China does not dispute this, but argues that the sales price data was requested on a quart erly basis, while the summary provided contained 
indexed data on annual basis.  As we understand it, China's position is  that indexed information on an 
annual basis cannot be an adequate non-confidential summary of quarterly information.  We recall 
that Article 6.5.1 requires that non-confidential summ aries of confidential information must "permit a 
reasonable understanding of the substance of the information submitted in confidence".
1535  Nothing in 
the text of the Article 6.5.1 requires that the su mmary of the confidential information must correspond 
exactly to the format in which the information was requested or provided on confidential basis.  In 
this case, we see nothing that would indicate to us  that only indexed data on quarterly basis could 
suffice to permit a reasonable understanding of the substance of the confid ential information in 
question, the net unit sales price for each PCN produced for the period 1 July 2007 to 30 June 2008.
1536  Nor has China argued otherwise.  We therefore reject China's contention that an 
adequate non-confidential summary of the confidential information at issue was not provided.  For all 
the reasons above, we reject China's claims unde r Articles 6.5 and 6.5.1 with respect to the 
information contained in Section C4 of the non-co nfidential version of the questionnaire response of 
Company C.   
7.795  China asserts that no answer was provided by Co mpany F to Section B2 of the questionnaire, 
concerning PCNs.  The European Union asserts that  Company F produced shoes falling into only one 
PCN category, and therefore confidential treatment  of this information was necessary in order to 
protect the confidentiality of its identity.1537  The non-confidential version of the questionnaire 
response of this producer confirms that it reported production of only one PCN and that it blacked out 
the relevant information in its non-confidential response.1538  We recall our view that information for 
which a specific request for confidential treatment or showing of good cause has not been made may 
be treated as confidential if it is necessary to ma intain the confidentiality of information accorded 
such treatment.1539  In this case, it seems clear to us that failure to keep this information confidential 
could have resulted in the disclosure of the identity  of Company F, as it could have been deduced 
from the single category of the product it produced.  We have concluded above that the identities of 
producers were entitled to confidential treatment, and to disclose this information could have rendered 
pointless the confidential treatment given to its iden tity and could well have c onstituted a violation of 
the investigating authority's duty under the second sen tence of Article 6.5.  Thus, in our view, the 
conclusion that the confidential treatment of the PCN information of Company F was necessary, in 
order to ensure the confidentiality of its identity, is not unreasonable.  We therefore reject China's 
contention that the European Union violated Article  6.5 by according confidential treatment to this 
information.   
                                                      
1533 Injury questionnaire response of Company C, dated 15 December 2008, Exhibit CHN-67, p. 11.   
1534 We recall our view that the showing of good caus e for information that is by nature confidential 
may be satisfied by establishing that the information meets the description of such information set out by 
Article 6.5 chapeau. 
1535 See paragraphs 7.667 and 7.674 above.  
1536 Injury questionnaire response of Company C, dated 15 December 2008, Exhibit CHN-67, p. 11.  
1537 See, e.g.  European Union, answer to Panel question 59. 
1538 Injury questionnaire response of Company F dated 19 November 2008, Exhibit CHN-73, p. 6.  
1539 See paragraphs 7.735 and 7.742 above.  WT/DS405/R 
  Page 323  
 
 7.796  We recall, however, that Article 6.5.1 requires i nvestigating authorities to ensure that a party 
submitting confidential information furnishes a non-confidential summary of the confidential 
information or, in exceptional circumstances, an expl anation why such summarization is not possible.  
We also recall that the mere fact that inform ation may not be capable of summarization does not 
exempt investigating authorities from their obligation to ensure that the subm itter of the information 
provides an explanation why summarization is not possible.  In this case, we see nothing in the 
evidence before us that suggest s that the Commission requested th e provision of a non-confidential 
summary of the confidential information in questi on, nor is there any evidence that the Commission 
requested the submitter to explain the reasons for the lack of such summarization.  We therefore 
consider that the European Union acted inconsiste ntly with its obligations under Article 6.5.1 by 
failing to ensure the sampled EU producer's complia nce with the requirements of this provision.   
7.797  China also claims that the European Union vi olated Article 6.5.2 of the AD Agreement.  
China's claim refers to the instances where no non-c onfidential summaries were provided, that is, to 
instances in the questionnaire responses of the samp led EU producers where the answers are blank.
1540  
China argues that in such inst ances, it was the obligation of th e European Union to find that 
confidentiality was not warranted.  We recall our  view that Article 6.5.2 does not impose any 
affirmative obligation on investigating authorities to  examine whether or not confidential treatment is 
warranted, but addresses what actions investigating aut horities may take if they "find that a request for 
confidentiality is not warranted".1541  There is no evidence before us  indicating that the Commission 
found that confidential treatment was not warranted , and China has not demonstrated or argued 
otherwise.  In these circumstances, we cannot see th e legal or factual basis for China's claim and we 
therefore reject China's claim under Article 6.5.2.   
7.798  Finally, with respect to China's claim under Article 6.2 of the AD Agreement, China argues 
that Chinese exporters were precluded from defe nding their interests because of the blank or 
incomplete or meaningless answers in the questi onnaire responses of the sampled EU producers.  
However, China does not explain, much less demons trate, how Chinese exporters were deprived of 
their right of defence because of the allegedly inad equacy of the information in question.  China 
merely asserts that Chinese exporters could not have  a complete picture based on the responses of the 
producers to adequately and in a timely manner defend their interests.1542  China's claim is premised 
on the assumption that the information in question w as treated as confidential by the Commission, and 
the non-confidential summaries were inadequate, which we have found not to be substantiated.1543  
Moreover, to the extent that the companies provide d no answers to questions, it is clear that there 
could be no effect on Chinese exporters' ability to de fend their interests with respect to information 
that did not exist.  In these circumstances, we  consider that China has failed to establish a prima facie  
case of violation of Article 6.2.1544  
                                                      
1540 See, e.g.  China, first written submission, para. 767.  
1541 See paragraphs 7.667 and 7.675 above.  
1542 China, first written submission, para. 770. 
1543 China, first written submission, para. 7 70; second written submission, para. 1150. 
1544 Moreover, we recall that the rights of interested parties established in Article 6.2 do not apply to 
information treated as confidential consistently with Artic le 6.5 of the AD Agreement.  In this respect, we recall 
that we have found that th e confidential treatment  accorded by the European Union to the information in Section 
C4 and Section B2 of the questionnaire responses of Co mpanies C and F, respectively, was consistent with 
Article 6.5, and we therefore see no legal basis for China's claim under Article 6.2 with respect to this information.  With regard to the information in Table C4 of the questionnaire response of Company H, in 
respect of which we have found a violation of Article 6.5, we consider that additional findings on China's claim 
under Article 6.2 would neither contribute to the resolution of this dispute nor be potentially useful in implementation.  We therefore exercise judicial economy with respect to China's claim under Article 6.2 in 
connection with this information.  WT/DS405/R 
Page 324  
 
 3. Union interest questionnaire responses  
7.799  China claims that the Union Interest ques tionnaire responses of the five sampled EU 
producers in the expiry review and the four sampled EU producers in the original investigation are not 
available in the non-confidential file.  Furthermor e, China asserts that no good cause for confidential 
treatment was shown by these producers, and that th e European Union failed to require them to 
provide non-confidential summaries or to explain why summarization of this information was not 
possible.1545  China submits that it is for th e European Union to demonstrate, prima facie , that the five 
sampled producers in the expiry review did not submit Union Interest questionnaire responses, and 
that in the absence of proof, the European Uni on's assertion in this regard cannot be accepted.1546  The 
European Union asserts that, as stated during the fi rst substantive meeting w ith the Panel, only three 
Union Interest questionnaire responses were receive d from the sampled EU producers in the expiry 
review, all of which were made available to interested parties, and that the remaining five EU producers referred to in China's cl aim did not submit responses.  The European Union also argues that 
all the non-confidential responses to the Union In terest questionnaire received by the Commission 
were made available to China.
1547   
7.800  We recall that despite China's suggestion that th e European Union failed to engage in dispute 
settlement procedures in good faith by not indicating earlier that the five EU producers in question did 
not submit Union Interest questionnaire res ponses, when it would have known this since 
January 2009,1548 we accept the European Union's statemen t in this respect as a matter of fact.1549  
Thus, China's claim of violation rests on a flawed factual premise.  In our view, the European Union 
cannot be found to have violated Article 6.5 by treating as confidential information which was never 
submitted by the parties to the investigation.   
7.801  With respect to China's claim concerning the Union Interest questionnaire responses of the 
four sampled EU producers in the original investig ation, China asserts that these responses were not 
available in the non-confidential file and therefor e contends that the European Union violated 
Article 6.5 by failing to require these producers to provide good cause for the confidential treatment 
accorded to this information.  Thus, China's claim appears to rest on the assumption that because these 
questionnaire responses were not in the non-confiden tial file, the information in those responses was 
treated as confidential.  However, as noted before, the mere fact that some information is not in the 
non-confidential file does not, in our view, establish that it was treated as confidential.  In the absence of an adequate showing that the information in question was actually treated as confidential, we see 
no factual basis on which to conclude that the European Union acted inconsistently with its 
obligations under Article 6.5.  Moreover, we not e the European Union's assertion, which China does 
not contest, that "all" the non-confidential responses  to the Union Interest questionnaires were made 
available to China. 
7.802  In light of the above, we consider that China has failed to make a prima facie  case of violation 
of Article 6.5 with respect to the questionnaire r esponses at issue here, and therefore reject China's 
claim in this respect.  Having found no violation of Ar ticle 6.5, we consider that there is no basis for 
China's claim under Article 6.5.1, which we recall a pplies only with respect to information treated as 
confidential.  We therefore reject China's claim unde r Article 6.5.1 with respect to the information in 
question.   
                                                      
1545 China, first written submission, para. 748. 
1546 China, second written submission, para. 1121. 
1547 European Union, answers to panel questions 59 and 63; opening oral statement at the second 
meeting with the Panel, para. 325. 
1548 China, answer to Panel question 57. 
1549 See paragraphs 7.588 and 7.654.   WT/DS405/R 
  Page 325  
 
 4. analogue country responses  
7.803  China asserts that the European  Union treated as confidential,  in the absence of good cause, 
information in the analogue country questionnaire responses of the producers in the potential analogue 
countries, and failed to require these producers to provide non-confidential summaries or a statement 
as to why summarization of confidential information was not possible.1550  Specifically, China refers 
to (i) the specific questions, as listed in Exhi bit CHN-68, in the non-confidential questionnaire 
responses of the producers in the potential analogue countries1551; and (ii) the information regarding 
the PCNs manufactured and the net sales price a nd quantity of each PCN sold in the questionnaire 
responses of some of these producers.1552  
7.804  The European Union submits that most of the instances challenged by China concern 
information regarding the PCNs manufactured by those producers and the net sale prices and quantity 
for shoes in each PCN.  In the Eu ropean Union's view, this is info rmation that is confidential by 
nature and therefore good cause was shown by establishing that the information fell into that category.  
Similarly, with respect to profit/loss and expenses in formation, the European Union argues that this 
data is by nature confidential.  Furthermore, the European Union asserts that the aim of providing 
summaries is in these cases in dir ect contradiction of the very r eason why confidentiality is sought.  
According to the European Union, producers do not want to release any information that could benefit 
competitors and therefore summaries are likely to be of no use.  In particular, the European Union 
notes that the three Brazilian comp anies whose data were used d eclined to provide summaries, 
asserting that they could jeopardize their position in the market.1553   
7.805  Our examination of the evidence indicates that th e information referred to by China mainly is 
(i) information submitted on a confidential basis;  and (ii) questions left unanswered in the 
questionnaire responses of the producers in question.  With respect to latter aspect of China's claim, 
we recall our view that the mere fact that info rmation is not in the non-confidential version of a 
questionnaire response does not prove that an answer was treated as confidential.  Nothing in the non-
confidential versions of the questionnaire r esponses of the producers concerned indicates that 
confidential treatment for this information was reque sted and granted.  Nor China has demonstrated 
otherwise.  We therefore see no factual basis on wh ich to conclude that the responses were provided 
and treated as confidential inconsistently with Artic le 6.5 of the AD Agreement, and therefore reject 
this aspect of China's claim.1554  Having found no violation of Article 6.5, we consider that there is no 
basis for China's claim under Article 6.5.1, which ap plies only with respect to information treated as 
                                                      
1550 See, e.g. China, first written submission, paras.  749-751; second written submission, para. 1123. 
1551 China's claim in this regard refers to the non-confidential analogue country questionnaire responses 
of West Coast Group; Henrich & CIA LTDA; Werner Calçados LTDA; Lakhani Footwear Ltd; Pt. Sepatu Mas 
Idaman; Pt.Utaliya; Kreasi San Ginesio; Kreasi Polart  Asri; and Pt. Teguh Murni Perdana.  See, e.g.  China, 
second written submission, para. 1128.  
1552 China's claim in this respect refers to the analogue country questionnaire responses of Werner 
Calçados LTDA; Henrich & CIA LTDA; Lakhani Footwear Ltd; Pt. Sepatu Mas Idaman; Pt. Utaliya; Kreasi San Ginesio; Kreasi Polart Asri; and Pt. Teguh Murni Perdana.  See, e.g.  China, second written submission, 
para. 1128.  
1553 European Union, first written submission, paras. 453-454; opening oral statement at the second 
meeting with the Panel, para. 357. 
1554 Our conclusion in this regard also applies to the instances in the questionnaire responses at issue, 
namely Sections A2 and Da of the questionnaire responses of Pt. Sepatu Mas Idaman and Lakhani Footwear Ltd, respectively, in which the information was provided as an attachment, but the responses do not contain the 
attachments themselves.  Nothing in the evidence before us indicates that  confidential treatment was requested 
and accorded to the information in these attachments, and in the absence of an adequate showing that the 
information was in fact treated as confidential, we consider that Chin a has not made a prima facie case of 
violation of Article 6.5 with respect to this information.   WT/DS405/R 
Page 326  
 
 confidential.  We therefore reject China's claim unde r Article 6.5.1 with respect to the information at 
issue here.  
7.806  With respect to the information submitted as  confidential, this information concerns 
information on sale prices, profit/loss/selling and expenses, and PCN information.
1555  The evidence 
before us indicates that this information was labe led as "confidential" or simply blacked out in the 
non-confidential responses.1556  The European Union contends that  this information is by nature 
confidential and that for such information good cause is satisfied by establishing that it falls within 
that category.  We recall that we have alread y addressed the European Union's argument in this 
respect and rejected it.  In particular, we determin ed that the European Uni on has not established that 
its legislation or practice defines in advance the categories of information that the Commission will 
treat as "by nature confidential."  Thus, simply because the European Union asserts that information 
falls within that category will not suffice to satisfy the good cause requirement.1557  In this instance, 
we see no indication that the submitters of this info rmation ever asserted that the information met the 
criteria defining information which may be considered  by nature confidential.  In these circumstances, 
we therefore conclude that the Eu ropean Union acted inconsistently with Article 6.5 by treating this 
information as confidential.  Having found a violation of Article 6.5 with respect to this information, 
we consider that additional findings on China's cl aim under Article 6.5.1 would not contribute to the 
resolution of this dispute or be potentially useful in implementation.  We therefore exercise judicial 
economy with respect to China's cl aim under Article 6.5.1 in connection with this information. 
7.807  Based on the foregoing, we conclude that, with  respect to the expiry review, China has 
established that the European Union acted inconsiste ntly with Article 6.5 of the AD Agreement with 
respect to the non-confidential responses to the standi ng form of four EU producers, Table C4 of the 
questionnaire response of Company H and certain  information in the non-confidential analogue 
country questionnaire responses of specific producers,  and has established that the European Union 
acted inconsistently with Article 6.5.1 of the AD Ag reement with respect to certain information in the 
expiry review request, declarations of support, an d Section B2 of the non-confidential questionnaire 
response of Company F.  We further conclude that, w ith respect to the expiry review, China has failed 
to demonstrate that the European Union acted incons istently with Articles 6.5, 6.5.1 and 6.5.2 with 
respect to the remaining information referred to by Ch ina in its claims.  We also conclude that China 
has failed to demonstrate that the European Unio n acted inconsistently with Article 6.2 of the 
AD Agreement, with respect to names of the EU producers and certain information in the non-
confidential questionnaire responses of the sampled EU  producers.  Finally, we exercise judicial 
economy regarding China's claim under Article 6.2 w ith respect to non-confidential responses to the 
standing form of four EU producers and with resp ect to Table C4 of the questionnaire response of 
Company H and China's claim under Article 6.5.1 with respect to the analogue country responses. 
                                                      
1555 In particular, we refer to (i) Section E of the questionnaire response of West Coast Group; 
(ii) Section Dc of the questionnaire response of Werner Calçados LTDA; (iii) Section Dc of the questionnaire 
response of Henrich & CIA LTDA; (iv) Sections Dc, D1 and E of the questionnaire responses of Kreasi Polart 
Asri and Kreasi San Ginesio; (v) Section E of the questionnaire response of Pt. Sepatu Mas Idaman; 
(vi) Sections Dc and E of the questionnaire respons es of Pt. Utaliya and Lakhani Footwear Ltd; and 
(vii) Sections Dc, D1 and E of the questionnaire response of Pt. Teguh Murni Perdana.  Examples of questions 
left unanswered by the analogue country producers, Exhibit CHN-68.   
1556 Examples of questions left unanswered by the analogue country producers, Exhibit CHN-68.  With 
respect to Section D1 (PCN information) of the questionn aire response of Pt. Sepatu  Mas Idaman, the evidence 
indicates that this producer submitted this information as  confidential, asserting that it is "considered to be 
commercially sensitive in that its disclosure would reveal the detailed product scope of the company for domestic and export markets".  Exhibit CHN-68.  This stat ement, however, does not assert that the disclosure 
would have been of significant competitive advantage or ha ve a significantly adverse effect, and thus, we cannot 
conclude that this producer established that the informat ion fit within the description of information "by nature 
confidential" in Article 6.5 chapeau.   
1557 See paragraph 7.744 above.   WT/DS405/R 
  Page 327  
 
 (e) Claim II.10 – Alleged violation of Articles 3. 1 and 6.8 of the AD Agreement – Failure to 
apply facts available 
7.808  In this section of our report, we address Ch ina's claim that the European Union acted 
inconsistently with Articles 3.1 and 6.8 of the AD Ag reement in the expiry review by failing to apply 
facts available in examining injury.   
(i) Arguments of the parties  
a. China 
7.809  China  claims that the European Un ion acted inconsistently with Articles 3.1 and 6.8 of the 
AD Agreement in the expiry review by failing to apply facts available to sampled EU producers who 
provided incorrect and misleading information or did not provide necessary information in their 
responses to the injury questionnaire.  China refers specifically to (i) the production information in the 
injury questionnaire response of the sampled produ cer that discontinued its production of the like 
product during the review period of investigation;
1558 (ii) the PCN information provided by some or 
all of the sampled producers in their injury ques tionnaire responses; and (iii) the five sampled EU 
producers which did not complete the Union Interest questionnaires.1559   
7.810  China acknowledges that the word "may" in Artic le 6.8 allows Members to resort to facts 
available and does not compel them to do so.  Howe ver, China asserts that the permissive language in 
this provision presumes that an investigating author ity would make its evaluation in an objective and 
impartial manner.  China argues that if an investig ating authority does not ap ply facts available to a 
domestic producer when it would have done so in th e case of an exporter, the investigating authority 
violates Article 6.8.1560  China also argues, under Article 3.1,  that because the sampled EU producers 
concerned "impeded the investigation", it was incumbent upon the Commission, as an unbiased and 
objective investigating authority, not to favour the interests of the sampled EU producers, but instead to apply facts available to them.
1561   
7.811  With respect to the facts, Ch ina asserts that the EU producer which discontinued production 
during the review investigation period provided  incorrect and misleading information about its 
production of the like product in the European Union,  and by providing this information impeded the 
investigation, as it affected, inter alia , the representativity of the sample and the injury determination 
based on this sample.1562  China contends that the European Union did not apply facts available to this 
producer because it was a domestic producer, and asserts that if similarly incorrect and misleading information were provided by an exporter, the Eur opean Union would have automatically resorted to 
                                                      
1558 China refers to information in both the confidentia l and non-confidential versions of this response. 
1559 China, first written submission, paras. 772-773,  776, 781 and 788; second written submission, 
paras. 1161, 1169 and 1180.  
1560 China, first written submission, para. 774; answ ers to Panel questions 78-79; second written 
submission, para. 1154.   
 1561 China contends that its claim under Article 3.1 raises two questions:  first, whether the European 
Union conducted the investigation in an unbiased and objective manner or disregarded the principles of good faith and fundamental fairness by favouring the interest s of the domestic producers a nd declining to apply facts 
available; and second, whether in light  of its decision not to apply facts available and accept the data provided 
by these producers, its injury determination can be considered to have been based on an objective examination of positive evidence.  China, second written subm ission, para. 115; answer to Panel question 80. 
1562 China, first written submission, paras. 777-77 9; answer to Panel que stion 79; second written 
submission, paras. 1157 and 1159-1161.  For instance, China alleges that the information regarding the sales volume, total production, production capacity, and capaci ty utilization in the injury questionnaire response of 
this producer was incorrect and misleading.  China, first written submission, para. 779.  WT/DS405/R 
Page 328  
 
 facts available.
1563  China contends that this situation de monstrates the absence of an objective and 
unbiased evaluation in the context of this produ cer, inconsistent with Articles 3.1 and 6.8.1564  China 
also asserts that some, or possibly all, of the sampled EU producers pr ovided incorrect and/or 
incomplete information with respect to the PCNs applicable to their production.1565  China argues that 
the provision of this incorrect information aff ected (i) the sample selected by the Commission (by 
including a producer that did not fall within the defi nition of an EU producer); (ii) all aspects of the 
European Union's injury determination; and (iii) other categories of information in the 
questionnaire.1566  China argues that the European Union,  as an unbiased and objective investigating 
authority, should have found that these producers "i mpeded the investigation" .  China asserts that the 
Commission corrected the information in question, rath er than applying facts available, contrary to its 
long-standing practice.1567  Finally, China submits that in light  of the European Union's disclosure 
during the first meeting with the Panel that five of the eight sampled EU producers did not complete 
the Union Interest questionnaire, the European Uni on also violated Articles 3.1 and 6.8 by failing to 
apply facts available to these producers and to act in an objective and unbiased manner.  In China's 
view, the failure to complete these questionnaires w as a failure to "provide necessary information" 
within the meaning of Article 6.8.1568   
b. European Union 
7.812  The European Union argues that the language  of Article 6.8 of the AD Agreement is 
permissive, and not compulsory.  According to the Eu ropean Union, the use of the word "may" in this 
provision allows Members, if the necessary conditions ar e met, to resort to using facts available, but 
does not compel them to do so in any case.  Th e European Union considers that the purpose of 
Article 6.8 is to provide investigating authorities with a means of overcoming obstructive parties, if 
and when they need to do so, but does not impo se any obligation on investigating authorities with 
                                                      
1563 China, second written submission, para. 1161.  In support of this contention, China refers to various 
anti-dumping investigations where, having found that exporters had provided misleading information or that 
their questionnaire responses were significantly deficien t and further weaknesses were revealed at verification,  
the Commission relied on facts available.  China, fi rst written submission, para. 780; answer to Panel 
question 79; second written submission, fn. 705.  
1564 China, first written submission, para. 782. 
1565 China notes that there were differences between the PCN information provided by the sampled EU 
producers in their non-confidential injury questionnaire responses and the verified PCN information provided by 
the Commission.  Specifically, China argues that 12 PCNs  in the injury questionnaire responses were not 
reflected in the PCN compilation by the Commission, and that in total 24 PCNs in the Commission's 
compilation were not in the injury questionnaire responses.  China submits that since the Commission's 
compilation does not mention to which companies the specific PCNs belonged, it cannot specify which of the sampled EU producers provided incorrect  and/or incomplete PCN information.  China, first written submission, 
paras. 783-785; second written submission, para. 1162. 
1566 China points, in particular, to the following categories of information in the questionnaire: PCN; 
production process and outsourcing; sales volume and value of the like product in the European Union and 
outside; profit and loss from the sales of the like product in the European Union; net production from fixed 
assets; and cash-flow for 2005, 2006, 2007 and the review investigation period; transaction-by-transaction sales information of the like product on a PCN-basis for each quarter in the review investigation period; total 
production, production capacity, capacity utilization, purch ases of the product under consideration from third 
countries; stocks of the like product; investments; employment in production in the European Union and salaries and wages thereof, for 2005, 2006, 2007 and the review investigation period; determination of the price of the 
like product by the company; turnover of the like product and profitability from the sales of the like product for 
2005, 2006, 2007 and the review investigation period; and financial situation of the company.  China, first written submission, para. 779.  
1567 China refers to examples of instances in wh ich the Commission applied facts available when it 
found at verification that relevant information was omitte d from the questionnaire resp onse of an exporter, or 
that the information provided by an exporter was false or misleading.  China, first written submission, para. 786.   
1568 China, second written submission, paras. 1171 and 1175.    WT/DS405/R 
  Page 329  
 
 respect to the way they carry  out their investigations.
1569  The European Union further asserts that 
nothing in the circumstances referr ed to by China in this claim could possibly convert the Article 6.8 
permission to use facts available into an obligation to do so.  
7.813  With respect to the situations referred to by  China, the European Union argues that the 
producer who discontinued production of the like pr oduct in the European Union during the review 
investigation period in fact provided "necessary info rmation within a reasonable period" and did not 
"significantly impede the investigation".1570  The European Union adds that contrary to China's 
assertions, the information originally provided was not "false and misleading", but rather reflected an error which appeared to the Commissi on "to have been made in good faith".
1571  With regard to the 
PCN information submitted by the sampled produ cers, the European Un ion argues that this 
information was usable.  The European Union cont ends that errors in the information as provided 
were innocent and the result of honest confusion, a nd argues that the rejection of this information 
would have amounted to a punishment for error on th e part of the submitters, and would have been 
contrary to the objectives of the AD Agreemen t, which values the use of data from firms.1572  The 
European Union contends that China introduces a ne w claim alleging breach of Article 6.8 in relation 
to the five producers that did not respond to the Union Interest questionnaires.1573  The European 
Union asserts that issues related to the Union Inter est questionnaires are not within the scope of this 
claim, which relates to failure to apply facts ava ilable with respect to information in the injury 
questionnaire responses.1574  With regard to the substance, th e European Union reiterates that the 
option of using facts available is a means to an end, in this case, to  obtain information regarding the 
Community interest test under EU law, and contends  that the discussion of this issue in the Review 
Regulation demonstrates that this end was achieved.1575 
(ii) Arguments of the third parties  
a. United States  
7.814  The United States considers that even assuming, arguendo , that the producers concerned 
supplied "incorrect and misleading information", Chin a's claim is not supported by the language of 
Article 6.8 of the AD Agreement.  The United States  agrees with the European  Union that the word 
"may" in this provision indicates that investigating authorities have the ability to use facts available under certain circumstances but they are not require d to do so.  According to the United States, if 
Article 6.8 were intended to impo se a mandatory obligation on authorities, it would have used the 
word "shall".
1576   
(iii) Evaluation by the Panel 
7.815  Before addressing China's claim, we note that the re levant facts do not appear to be in dispute.  
Some information provided in the original inju ry questionnaire responses of some producers 
contained errors.  The Commission explained how it addressed the situation of the producer found to 
have discontinued production in the European Uni on during the course of the review investigation 
                                                      
1569 European Union, first written submission, paras. 477, 481 and 492.  
1570 The European Union asserts that this produc er provided informati on that, once the correct 
parameters were respected, was used by the Commission.  Furthermore, the information was supplied "within a reasonable period", as the Commission was able to use th e information during the ex piry review proceeding.  
European Union, first written submission, paras. 478-480. 
1571 European Union, first written submission, para. 479. 
1572 European Union, first written submission, para. 493.  
1573 European Union, opening oral statement at the second meeting with the Panel, para. 367. 
1574 European Union, opening oral statement at the second meeting with the Panel, para. 368. 
1575 European Union, opening oral statement at the second meeting with the Panel, para. 372. 
1576 United States, third part submission, paras. 41-42.  WT/DS405/R 
Page 330  
 
 period, finding that the company acted in good faith in reporting its production as "EU production", 
and took into consideration only the correct information, which did not affect the overall 
determination.  The Commission did not make any findings suggesting that the producer either failed 
to provide necessary information or significantly impeded the investigation.
1577  With respect to the 
errors in the PCNs reported by some EU producer s, the Commission used the data provided by the 
companies, which was corrected by allocating production to the appropriate PCN categories.1578  The 
Commission made no findings suggesting that any producer who committed errors in this respect 
either failed to provide necessary information or si gnificantly impeded the investigation.  Finally, we 
accept, as a matter of fact, the European Union's c ontention that five EU producers did not respond to 
the Community Interest questionnaire.  It is clear that the European Union did not resort to facts 
available in examining the Community interest in this case, and that the Commission made no 
findings suggesting any producer who committed erro rs in this respect either failed to provide 
necessary information or significantl y impeded the investigation.   
7.816  Article 6.8 of the AD Agreement provides: 
"6.8 In cases in which any interested pa rty refuses access to, or otherwise does not 
provide, necessary information within a reas onable period or significantly impedes 
the investigation, preliminary and final de terminations, affirma tive or negative, may 
be made on the basis of the facts available. The provisions of Annex II shall be observed in the application of this paragraph." 
 
Article 6.8 addresses the situation where an inter ested party has "necessary information" for making 
"determinations", and the information is not pr ovided to the investigating authority within a 
reasonable period.  In particular, Article 6.8 speci fies that where an inter ested party refuses access to, 
or otherwise does not provide, "necessary informati on" within a reasonable period, or where an 
interested party significantly impedes the inves tigation, an investigating authority "may" make 
"determinations" on the basis of "facts available".  T hus, it is clear on the face of this provision that in 
order for an investigating authority to make a prel iminary or final determination on the basis of facts 
available, at least one of two conditions must be sat isfied:  (a) an interested  party must refuse access 
to or fail to provide necessary information within a reasonable period of time, or (b) an interested 
party significantly impedes the investigation.  Ev en if one or both of these conditions is satisfied, 
Article 6.8 merely allows  the investigating authority to make determinations on the basis of facts 
available.  We consider it evident that the use of  the term "may" in this provision precludes the view 
that an investigating authority is required to use f acts available, even if the conditions in Article 6.8 
are satisfied.  We are of the view that, in light of the permissive language of Article 6.8, even 
                                                      
1577 Review Regulation, Exhibit CHN-2, recitals 23-24.  The Commission explained that in the course 
of the investigation it found that one of the sampled EU  producers had progressively discontinued its production 
in the European Union during the review investigation period, ultimately taking its entire manufacturing activity 
outside the European Union.  This producer had reported the entirety of its production, including the outsourced 
production, as EU production.  According to the Commission, it appeared that this producer mistakenly considered outsourcing to a neighbour country as EU production, and the Commission concluded that the error 
was made in good faith.  In its analysis, the Commission used only data pertaining to its activity in the European 
Union.  Id., recital 23.  The Commission noted that the weight of this producer in the data was minimal in terms 
of overall production as well as in relation to the sample, so that even if it were excluded from the sample or the 
definition of the domestic industry, this would not aff ect the representativeness of the sample, the standing of 
the domestic industry or the findings on injury.  The Commission also noted that this producer did produce the like product in the European Union during the review investigation period.  In addition, the Commission noted 
that this producer subcontracted a large part of its production, which represented an important business model in 
the European Union footwear industry, and that this further ensured the representativeness of the sample in qualitative terms.  Id., recitals 196 and 338.   
1578 European Union, first written submission, para. 493.  WT/DS405/R 
  Page 331  
 
 assuming that the producers concerned supplied "inc orrect and misleading information" or impeded 
the investigation, Article 6.8 did not require the Eu ropean Union to resort to facts available.   
 7.817  Indeed, China itself acknowledges that "the lang uage of Article 6.8 is  permissive and the 
presence of the word "may" allows Members to resort  to facts available and does not "compel" them 
to do so."
 1579  Nonetheless, China goes on to assert that  
"this rule must be applied in a fundame ntally fair and impartial manner to all 
interested parties alike.  For instance, if an investigating authority has a practice of 
applying facts available to exporters when  they fail to respond to a request for 
information or when they give misleadi ng information such that it impedes the 
investigation, the same practice should be applied in the case of domestic producers.  
Otherwise, investigating authorities can act in an arbitrary manner and there were [sic] will be no limit to the discretion provided to investigating authorities. The permissive language of this Article presumes that an investigating authority would 
make its evaluation in an objective and impartial manner."
1580  
We do not agree.  We fail to see how the Article 3.1 obligation to undertake an  objective evaluation of 
positive evidence can be interpreted as requiring an investigating authority to use facts available, 
particularly where the prerequisite conditions of Artic le 6.8 are not satisfied.  Indeed, it seems to us 
that an investigating authority wh ich receives information that is erroneous and then works with the 
provider to correct that information is in fact making an effort to ensure that its determination is based 
on an objective examination of positive evidence.1581   
 
7.818  The decision of an investigating authority to b ase a determination on facts available rests first 
on a conclusion that one or both of the conditions in Article 6.8 is satisfied.  That conclusion can only 
be reached on the basis of the particular facts a nd circumstances of the case.  China refers to the 
"practice" of the Commission in applying facts availa ble to exporters in support of its view that an 
objective examination required the application of f acts available in this case, essentially arguing that 
the European Union discriminates in the application of  facts available between the two groups, that is, 
exporters and domestic producers.  Ho wever, China has made no claim in  this dispute with respect to 
the consistency of any EU practice in the use of fa cts available, either as applied to exporters, or as 
applied to domestic producers.  Moreover, China' s assertion that the European Union does not apply 
the same practice to exporters and domestic producer s implies that the two groups are in the same 
situation with respect to the provision of inform ation.  However, in our view, the situation of 
exporters, whose information is used in the cal culation of dumping margins, which as we have 
discussed elsewhere in this report is generally undertak en on an individual basis, is different from the 
situation of domestic producers, whos e information is relevant to a de termination of injury caused by 
dumped imports to a domestic industry as a whole, not to the individual producer.  Thus, even 
assuming there were a practice with respect to use of  facts available with respect to exporters, as 
asserted by China, we do not agree that not applying the identical practice to domestic producers demonstrates a violation of either Article 6.8 or Article 3.1.   
                                                      
1579 China, answer to Panel question 78, para. 474. 
1580 China, answer to Panel question 78, para. 474. 
1581 Whether it has in fact succeeded in that effort is another question, which is not before us in this 
dispute.  Moreover, we note that paragraph 5 of Annex II to the AD Agreement, which is an integral part of 
Article 6.8, provides that "[e]ven though the information provided may not be ideal in all respects, this should 
not justify the authorities from disregarding it, provided the interested party has acted to the best of its ability."  To us, the fact that even imperfect information may not in all circumstances be disregarded supports the view 
that, if information containing errors is submitted, the i nvestigating authority may work to correct those errors.  WT/DS405/R 
Page 332  
 
 7.819  Moreover, we consider that China has failed to  demonstrate that the prerequisite conditions 
for the use of facts available exis ted in this case.  We recall that Annex II to the AD Agreement is an 
integral part of Article 6.8.  Paragraph 3 of Anne x II identifies one circumstance when the conditions 
for resorting to "facts available" will not be established – namely, when the information that is 
provided by an interested party in response to a sp ecific request from an investigating authority "is 
verifiable, ... appropriately submitted so that it can be used in the investigation without undue 
difficulties, ... supplied in a timely fashion, and,  where applicable, ... supplied in a medium or 
computer language requested by the authorities".  When information is submitted that satisfies 
paragraph 3, it "should be taken into  account when determinations are made".  It follows that when 
the conditions for resorting to "facts available" have not been established, the specific information 
provided by an interested party in response to a re quest from an investigating authority must be taken 
into account in the investigating authority's determination.
1582  In this case, the European Union's 
arguments support the conclusion that the information submitted by the producer who discontinued production in the European Union, and by producers who erred in the allocation of their production to 
the appropriate PCN codes was sufficient to be deem ed "verifiable, ... appropriately submitted so that 
it can be used in the investigation without undue diffi culties, ... supplied in a timely fashion".  Indeed, 
China merely argues that "it cannot be precluded that the investigation was … impeded" by the 
information submitted by the producer who disc ontinued production in the European Union,
1583 and 
that the Commission "should have found that the i nvestigation was impeded" by the errors with 
respect to allocation of production to PCNs.1584  But it is clear the European Union did not so 
conclude.1585  Even assuming we were to agree that the conditions for applying facts available could 
have been established on the basis of the facts in th is case, it is not within the scope of our task in 
reviewing the Review Regulation to make such c onclusions where the Commission did not do so.   
7.820  Finally, with respect to China's allegati ons concerning five EU  producers who did not 
complete the Union Interest questionnaire, and the fa ilure to apply facts available to them, we share 
the European Union's concern over the introduction of this aspect of China's cl aim at a late stage of 
the proceedings.  While China did not respond specifica lly with respect to this concern, it did point 
out the distinction between claims and arguments, and asserted that much of what was "new" in its second written submission was in response to the Eu ropean Union's first written submission and the 
first meeting with the Panel, including the disclosure of facts.
1586  Assuming that China includes in 
this category the fact that five EU producers did not respond to the Union Interest questionnaire, we 
agree with the European Union that the failure to  submit Union Interest questionnaires is not within 
the scope of this claim, which, as set out in th e panel request and China's first written submission, 
relates to failure to apply facts available with respect to information in the injury questionnaire 
responses.1587   
                                                      
1582 Panel Report, EC – Salmon (Norway) , para. 7.34; Appellate Body Report, US – Hot-Rolled Steel , 
para. 81; Panel Report,  United States – Anti-Dumping and Countervailing Measures on Steel Plate from India 
("US – Steel Plate "), WT/DS206/R and Corr.1, adopted 29 July 2002, DSR 2002:VI, 2073, para. 7.55. 
1583 China, first written submission, para. 780. 
1584 China, first written submission, para. 788. 
1585 In the absence of findings that the conditions of Article 6.8 for use of facts available were satisfied, 
had the European Union based its dete rmination on facts available, a pane l might well conclude, if faced with 
such a claim, that the investigating authority had acted inconsistently with Article 6.8.   
1586 China, closing oral statement at the se cond meeting with the Panel, para. 6. 
1587 China's claim II.10 is set out at page 4 of its panel request, as follows: 
"Articles 3.1 and 6.8 of the Anti-Dumping Ag reement because the EU  did not apply facts 
available when faced with incorrect and deficien t information, including but not limited to the 
product classification information, provided  by sampled EU producers in the injury 
questionnaire responses." 
We do not consider that the phrase "including but not limited to" provides a basis for including failure to 
respond to the Community Interest questionnaires to the factual basis underlying this claim.  WT/DS405/R 
  Page 333  
 
 7.821  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union acted inconsistently with Articles 6.8 and 3.1 of the AD Agreement in failing to apply facts 
available in the Review Regulation.   
(f) Claim III.14 – Alleged violation of Article 6. 9 of the AD Agreement – Failure to properly 
disclose the essential facts under consideration  
7.822  In this section of our report, we address Ch ina's claim that the European Union acted 
inconsistently with Article 6.9 of the AD Agreemen t by failing to provide sufficient time for comment 
following issuance of the "Additional Final Disclosure Document" in the original investigation.   
(i) Arguments of the parties  
a. China 
7.823  China claims that in the origin al investigation, the European Union acted inconsistently with 
Article 6.9 of the AD Agreement.  China asserts that the European Union issued an "additional Final 
Disclosure" on Friday, 28 July 2006 at 18:00, a nd contends that this document contained essential 
facts that formed the basis fo r Commission's decision whether to apply definitive measures and in 
particular, the import value amounts for the calendar year 2005 and their intended use by the 
European Union.
1588  China claims that by providing only three working days, until 2 August 2006, 
for exporting producers to respond to the "Additiona l Final Disclosure Document", the European 
Union failed to make this disclosure "in sufficien t time for the parties to defend their interests", 
contrary to Article 6.9 of the AD Agreement.1589  China contends that the European Union's reliance 
on EC – Salmon (Norway)  to argue that the Additional Final Disclosure was not required by 
Article 6.9 is misplaced, arguing that the situation in this case involved more than the facts which led 
that panel to conclude that additional disclosure under Article 6.9 was not required.  According to 
China, in EC – Salmon (Norway)  the panel made a distinction between (i) "facts" and "factors" under 
consideration to make a determination and (ii) a "reassessment" of facts before the investigating 
authority and a revision of calculations resulting in a different dumping margin.  Pursuant to China, 
while the former would require a "disclosure" with in the meaning of Article 6.9, the latter would 
not.1590  China considers the facts relied upon in making  the calculations disclosed in the Additional 
Final Disclosure, in particular the import value am ounts for the entire calendar year 2005, to be new 
facts under consideration to make a determina tion that had not previously been disclosed.1591 
b. European Union 
7.824  The European Union asserts that the Add itional Final Disclosure Document informed 
interested parties of the new methodology used to cal culate the 'lesser duty', that is, the actual amounts 
of anti-dumping duty that would be imposed on imports from China and Viet Nam.1592  T h e  
European Union contends that, as its title indicates, this document followed the distribution of a Final 
General Disclosure Document, containing a draft of  the proposed measure, on 10 July 2006, which 
the European Union asserts was clearly a discl osure within the meaning of Article 6.9.1593  The 
European Union relies on the report of the panel in EC – Salmon (Norway)  to argue that the 
                                                      
1588 China, first written submission, paras. 1372, 1378 and 1380.  Specifically, China alleges that the 
document "significantly revised, inter alia , the form, method of calculation and level of the measures ..."  Id., 
para. 1374.  See also China, second written submission, paras. 1489-1491; closing oral statement at the second 
meeting with the Panel, paras. 117-118. 
1589 China, first written submission, paras. 1375 and 1381. 
1590 China, second written submission, paras. 1487-1488. 
1591 China, second written submission, para. 1491. 
1592 European Union, first written submission, para. 819. 
1593 European Union, first written submission, para. 821. WT/DS405/R 
Page 334  
 
 European Union was not obliged to provide this  "additional" disclosure under Article 6.9, and 
therefore the remaining provisions of Ar ticle 6.9 were not applicable to it.
1594  The European Union 
notes that the changes that were made by the Additi onal Final Disclosure concerned the calculation of 
the lesser duty, and asserts that, even assuming this  topic constituted a decision whether to apply 
definitive measures, because it involved merely a change in the calculation formula it was not one 
which would have required a further discl osure within the terms of Article 6.9.1595  Moreover, the 
European Union contends that the change did not  even involve consideration of any new facts.1596  
The European Union reiterates that the Commission was doing more than it was legally obliged to do 
when it provided disclosure of its changed decision and gave interested parties a further opportunity 
for comment rather than moving directly to a defi nitive determination, and asserts that, given the 
precise and limited nature of the change that ha d been made, the period given for comment, although 
short, was sufficient so that even if it were found that Article 6.9 did apply to the Additional Final 
Disclosure its requirements would have been satisfied.1597 
(ii) Arguments of third parties 
a. United States 
7.825  The United States asserts that Article 6.9 of the AD Agreement clearly does not specify any 
minimum amount of time that would constitute “suffici ent time” for a party to defend its interest.  
Moreover, the United States notes that Article 6. 9 "does not prescribe the manner in which the 
authority is to comply with this disclosure obligation."1598  In the United States' view, because 
Article 6.9 does not specify the manner in which authorities are to make disclosures, individual authorities may use different means to implemen t the requirements of the provision.  The 
United States believes that what constitutes a “suffici ent time” for an interested party to defend its 
interests and respond to the disclosure will depe nd on the size, significance, and nature of the 
disclosure.
1599  The United States takes no position on wh ether the amount of time allowed by the 
European Union for response to the final di sclosure was sufficient under the circumstances.1600 
(iii) Evaluation by the Panel  
7.826  Before addressing China's claim under Article 6.9,  we note certain relevant facts, which we 
understand to be undisputed.  On 10 July 2006, the Commission sent a letter conveying the "Final General Disclosure Document" in the origin al investigation to interested parties.
1601  The letter states 
that the document "constitutes disclosure of  the details underlying the essential facts and 
                                                      
1594 European Union, first written submission, para. 823.  The European Union notes that the document 
sets forth the possibility for an extension of the deadline for responses in the event of a substantiated request in 
this regard, and that at least one interested party ma de such a request and received a one-day extension.  
European Union, first written submission, para. 818. 
1595 European Union, opening oral statement at the second meeting with the Panel, para. 431. 
1596 European Union, opening oral statement at the second meeting with the Panel, para. 432. 
1597 European Union, opening oral statement at the second meeting with the Panel, paras. 433-434. 
1598 United States, third party written submission, para. 54, quoting Panel Report, Argentina – 
Definitive Anti-Dumping Measures on Imports of Ceramic Floor Tiles from Italy ("Argentina – Ceramic Tiles "), 
WT/DS189/R, adopted 5 November 2001, DSR 2001:XII, 6241, para. 6.125. 
1599 The United States suggests that this is analogous to the statement of the Appellate Body in US – 
Hot-Rolled Steel  in construing the term "reasonable period" unde r Article 6.8 of the AD Agreement, that "[t]he 
word 'reasonable' implies a degree of flexibility that i nvolves consideration of all of the circumstances of a 
particular case.  What is 'reasonable ' in one set of circumstances may pr ove to be less than 'reasonable' in 
different circumstances."  United States, third party written submission, fn. 54, quoting Appellate Body Report, 
US – Hot-Rolled Steel, para. 84. 
1600 United States, third party written submission, fn. 55. 
1601 Final General Disclosure Document, dated 7 July 2006, Exhibit CHN-81.  WT/DS405/R 
  Page 335  
 
 considerations on the basis of which it is inte nded to recommend the imposition of definitive anti-
dumping measures."
1602  The document contains a draft of  the proposed definitive regulation, 
including information on the proposed form and level of the anti-dumping duties to be imposed, as well as (i) the methodology for injury calcu lations and (ii)undercutting and underselling 
calculations.
1603  Interested parties were given ten cale ndar days, until 17 July 2006, to comment.1604  
On 28 July 2006, the Commission sent a letter to in terested parties, conveying the "Additional Final 
Disclosure Document" which set out "the details of the revision of the envisaged form of measures" 
and gave interested parties five calendar da ys, until 2 August 2006, to submit comments.1605  T h e  
document states that "[t]he purpose of this addi tional final disclosure document is to provide 
interested parties with information about a change with regard to the envisaged form of the definitive 
anti-dumping measures concerning imports of certain f ootwear with uppers of leather originating in 
China and in Viet Nam", that " DG Trade took careful note of the issues and questions raised by 
interested parties with regard to the originally  envisaged Delayed Duty System (DDS)", and that 
"[t]he envisaged course of action has been revised."1606  An annex to the document contains a "New 
Part H. of the General Disclosure Document."1607 
7.827  In evaluating China's claims, we begin with th e text of Article 6.9 of the AD Agreement, 
which provides: 
"The authorities shall, before a final dete rmination is made, inform all interested 
parties of the essential facts under considerati on which form the basis for the decision 
whether to apply definitive measures.  Such disclosure should take place in sufficient time for the parties to defend their interests." 
The obligations set out in this provision are quite straightforward – the investigating authority shall 
inform interested parties of "essen tial facts under consideration" prior to making a final determination, 
but in sufficient time for the interested parties to defend their interests.   
 7.828  China claims that the European  Union failed to give interested parties sufficient time to 
defend their interests in connection with the Add itional Final Disclosure made  by the Commission on 
28 July 2006, thus violating Article 6.9.  The pr emise of this claim is that the Additional Final 
Disclosure in question is subject to the requirements of Article 6.9, that is, that it "inform[s] all 
interested parties of the essential facts under consid eration which form the basis for the decision 
whether to apply definitive measures" within th e meaning of Article 6.9.  The European Union 
disputes this premise, and it is to this ques tion that we first turn our attention.   
7.829  Both parties refer to the report of the panel in EC – Salmon (Norway)  in support of their 
position.  In that case, the panel was consideri ng a claim by Norway that the then-European 
Communities had failed to disclose essential facts b ased in part on the fact that the Definitive 
Regulation ultimately issued was different from the dr aft of that regulation disclosed to interested 
parties in October 2005 pursuant to Article 6.9.   
                                                      
1602 Cover letter accompanying Final General Disclosu re Document, dated 7 July 2006, Exhibit CHN-
81. 
1603 Final General Disclosure Document, dated 7 July 2006, Exhibit CHN-81, paras. 269-293 and 
Annex. 
1604 Cover letter accompanying Final General Disclosu re Document, dated 7 July 2006, Exhibit CHN-
81. 
1605 Cover letter accompanying Additional General Disclosure Document, dated 28 July 2006, Exhibit 
CHN-99. 
1606 Additional General Disclosure Document, dated 28 July 2006, Exhibit CHN-99, page 2. 
1607 Additional General Disclosure Document, dated 28 July 2006, Exhibit CHN-99, page 4. WT/DS405/R 
Page 336  
 
 7.830  The panel rejected the view that a change  between what was disclosed for purposes of 
Article 6.9 and the ultimate determination entails a ch ange in the essential facts, concluding that "the 
essential facts do not change simply because the ultimat e determination of the investigating authority 
is not that which was intimated in the disclosure".
1608  The panel further concluded that on the facts 
before it, an additional or further disclosure was not  required after the Octobe r 2005 disclosure, before 
the final determination was issued.1609  Moreover, as in case before us, the then-European 
Communities had chosen to provide information to interested parties subsequent to the definitive 
disclosure.  The panel in EC – Salmon (Norway) observed in this regard that this "does not establish 
that there was an obligation to do  so – the AD Agreement establishes the minimum rights that must be 
afforded [to] interested parties in an anti-dumping investigation, but does not preclude a Member from 
affording additional rights, so long as in doing so it does not violate some provision of the 
AD Agreement."1610 
7.831  China asserts that in EC – Salmon (Norway)  the investigating authority merely reassessed 
facts that were before it, while in this case, th e facts and factors under consideration in making the 
final determination changed.  We do not accept the di stinction China seeks to draw.  In our view, the 
situation before us is entirely  congruent with the facts in EC – Salmon (Norway) , where the panel 
noted that "the investigating authority did not ma ke a different determina tion regarding dumping, but 
rather reassessed the fact s before it, and revised its calculations resulting in a different dumping 
margin than that foreshad owed in the disclosure."1611  Having reviewed the documents in question, we 
consider that the Additional Final Disclosure Docu ment reflects that, having considered comments by 
the interested parties on the Final General Disclosure, the Commission reassessed facts and 
arguments, revised calculations, and concluded that a different form and level of anti-dumping duties 
than that foreshadowed in the Final General Discl osure was appropriate.  In these circumstances, we 
conclude that simply because the European Unio n chose to disclose the revised section of the 
proposed definitive regulation does not mean that it was required to do so, and therefore does not 
mean that the Additional Final Disclosure triggere d the obligation to provide a sufficient time for 
comment under Article 6.9 of the AD Agreement.1612   
7.832  China's position would require the investigati ng authority to disclose whatever specific 
information it took into consideration in revising the form and level of the measures proposed, on the 
premise that the different result demonstrates that  "new" information was taken into account which 
constituted "essential facts" within the meaning of Article 6.9.  Article 6.9 would then mandate a 
further opportunity for interested parties to defend th eir interests, and an endless stream of disclosures 
and "sufficient time" for comments could ensue.  This  could well result in an impossible situation for 
investigating authorities, which must complete the investigation within the time limits set out in 
Article 5.10 of the AD Agreement.  Like the panel in EC – Salmon (Norway) ,1613 we do not accept 
that this is an appropriate understandi ng of the requirements Article 6.9.   
7.833  Finally, even assuming that the Additional Final Disclosure Document did constitute a 
disclosure of "essential facts under consideration wh ich form the basis for the decision whether to 
                                                      
1608 Panel Report, EC – Salmon (Norway) , paras. 7.796-7.797.  
1609 Panel Report, EC – Salmon (Norway) , para. 7.797. 
1610 Panel Report, EC – Salmon (Norway) , para. 7.797. 
1611 Panel Report, EC – Salmon (Norway) , para. 7.798.  In addition, we note that while there were 
multiple "disclosures" by the then-European Communitie s in that case (the "general" disclosure document 
consisting of a draft of the definitive regulation, an information note on "developments" following the Definitive 
Disclosure, and a subsequent information note regarding the definitive minimum import prices for fillets), interested parties were in fact not given opportunities to  comment following the later disclosures.  Panel Report, 
EC – Salmon (Norway) , para. 7.779. 
1612 We recall that the interested parties were, in fact, given an opportunity to submit comments in this 
case. 
1613 Panel Report, EC – Salmon (Norway) , para. 7.802.    WT/DS405/R 
  Page 337  
 
 apply definitive measures", we recall that interested parties were, in fact, given an opportunity to 
submit comments.  China's claim is that the period a llowed, five calendar days (which China counts as 
three business days, presumably because the document w as apparently provided to interested parties 
in an e-mail at 18h Brussels time
1614), was insufficient to allow inte rested parties "to analyse and 
comment on the substantial change in the form of the measures and the modification in the underlying 
calculations of the injury margins."1615  We note, in this regard, that  interested parties were allowed 
only ten calendar days, or six working days, to comment on the Final General Disclosure, which 
included the entirety of the proposed definitive regula tion, including the originally proposed form of 
the measures and the underlying calculations.  Inte rested parties, including Chinese exporters, did 
submit comments on various aspects of that disclosure within the time allowed.1616  While it may well 
be, as China asserts, that the Additional Final Discl osure Document contained complex calculations, 
there is no support for a conclusion that this documen t was more complex than the original disclosure, 
and China does not argue otherwise.  China has made no other arguments suggesting that the time 
allowed for comments was insufficient.  Given that the Additional Final Disclosure Document 
concerned only one aspect, albeit an important one, of the matters addressed in the Final General 
Disclosure Document, we do not agree with China' s view that the period for comments provided was 
not sufficient for interested parties to defend their in terests.  This is particularly so since the cover 
letter made clear that extensions of time could be sought, and at least one interested party did submit 
comments, and did seek and receive a one-day extension of time to do so.   
7.834  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union acted inconsistently with Article 6.9 of the AD Agreement with regard to the time provided for 
submission of comments on the Additional Final Discl osure Document in the original investigation.   
(g) Claims II.12 and III.19 – Alleged violations of Article 12.2.2 of the AD Agreement – Failure 
to provide sufficiently detailed explanations 
7.835  In this section of our report, we address Chin a's claims that the European Union acted 
inconsistently with Article 12.2.2 of the AD Agre ement in both the original investigation and the 
expiry review by failing to provide certain informa tion and explanations in the Definitive and Review 
Regulations.   
(i) Arguments of the parties  
a. China 
7.836  China claims that the European  Union violated Article 12.2.2 of the AD Agreement in both 
the Review and Definitive Regulations by failing to  provide the relevant information on matters of 
fact and law, and reasons that led to the original imposition and subsequent extension of the anti-
dumping measures on footwear.1617  China asserts that Article 12.2.2 of the AD Agreement requires 
the investigating authority to provide information  on all factual and legal issues, as well as reasons 
concerning the imposition and extension of the measures.  China argues, relying on the panel report in EC – Tube or Pipe Fittings , that the phrase "have led to" in Ar ticle 12.2.2 implies that the published 
notice must address those matters on which a factual or legal determination must necessarily be made 
                                                      
1614 E-mail to legal representatives, dated 28 July  2006, sent around 17:59, Exhibit CHN-109. 
1615 China, first written submission, para. 1381. 
1616 See Comments of Golden Step on General Disclosure Document, dated 18 July 2006; Comments 
on the proposed analogue country by FESI, dated 18 July 2005; and Comments on the definitive disclosure on behalf of FESI dated 17 July 2006, respectively, Exhibits CHN-82, CHN-83, and CHN-89.  We note that there 
may well have been other comments on various aspects of the Final General Disclosure Document submitted to 
the Commission, which were not provided to us by the parties as exhibits, but these alone are sufficient to demonstrate that the interested parties did make comments on the disclosure. 
1617 China, first written submission, paras. 796 (Rev iew Regulation) and 1386 (Definitive Regulation). WT/DS405/R 
Page 338  
 
 in connection with the decision to impose a defi nitive anti-dumping duty. China maintains that the 
investigating authorities must provide a suffici ent explanation on how the evidence supports the 
authority's determination on all matters of fact  and law, and the reasons for the imposition or 
extension of the measures.
1618  China considers that, under Article 12.2.2, the investigating authorities 
must provide information that is relevant and suffici ent, from the perspective of  the interested parties, 
to understand the basis and reasons for the investiga ting authority's determination.  In China's view, 
the relevance and sufficiency of the information provi ded on a particular matter of fact or law or with 
regard to the reasons for the imposition of the me asures cannot be considered on the basis of the 
extent to which the investigating author ity desires to disclose such information.1619  
7.837  With respect to the Review Regulation, Chin a asserts that the European Union failed to 
provide relevant informati on with respect to a series of issues:  the determination of the EU producers' 
sample; the confidential treatment  of the names of the complainants, supporters, sampled producers 
and producers sampled in the original investigati on; the determination concerning the evaluation of 
the macroeconomic injury indicators; the differen ce in the figures concerning the representativeness 
of the sample; the data of the sampled EU producer  that discontinued production of the like product in 
the review investigation period; PCN reclassificatio n; and the dumping margin calculation.  Finally, 
China asserts that the European Union did not provid e reasons for the rejection of arguments made by 
interested parties on a number of issues.1620   
7.838  With respect to the Definitive Regulation, Chin a asserts that the European Union failed to 
provide relevant informati on with respect to a series of issues:  the determination of the EU producers' 
sample; the confidential treatment  of the names of the complainants, supporters, sampled producers 
and reasons for granting confidential treatment to  their names; the determination concerning the 
evaluation of the macroeconomic injury indicators; the names of the suppliers; the price threshold for 
STAF; the number of MET questionnaires received; and the dumping margin calculation.  Finally, China asserts that the European Union did not provid e reasons for the rejection of arguments made by 
interested parties on a number of issues.
1621   
b. European Union 
7.839  The European Union first recalls its argument th at China's claim is not within the Panel's 
terms of reference because China failed to link the lega l basis of its claim, Article 12.2.2, with precise 
conduct on the part of the European Union, such that the claim is so lacking in specificity that it fails 
to satisfy the requirements of Article 6.2 of the DSU.1622   
7.840  With respect to the substance of China's cl aims, the European Union argues that China's 
demands for explanation imply a greater level of detail than is required by Article 12.2.2.  The 
European Union rejects the view, which it attributes to China, that Article 12.2.2 requires Members to 
include information as to how they gathered eviden ce relevant to the categories of data necessary for 
the investigation, such as which entities would be approached.  The European Union notes that the 
                                                      
1618 China, first written submission, para. 795 (emphasis in original), citing Panel Report, EC – Tube or 
Pipe Fittings , para. 7.421 and Appellate Body Report, US – Softwood Lumber VI  (Article 21.5 – Canada) , 
para. 98.  China refers to and reincorporates the analysis presented in the context of its claims with respect to the 
Review Regulation in support of its claims concer ning the Definitive Regulation, but makes no additional 
arguments.  China, first written submission, para. 1386. 
1619 China, second written submission, para. 1183. 
1620 China, first written submission, paras. 798 -800 and 802-808; second written submission, 
paras. 1186 and 1196. 
1621 China, first written submission, paras. 1287, 1388-1392 and 1394-1402. 
1622 European Union, first written su bmission, paras. 501-502.  We recall that we have rejected the 
European Union's request for a prelimin ary ruling to this effect, see paragraph 7.50 above, and we therefore go 
on to consider China's claim below.  WT/DS405/R 
  Page 339  
 
 Appellate Body has indicated that an investigatin g authority's "evidentiary path" must be clearly 
discernable when it reconciles divergent information a nd data, and asserts that this is not the situation 
here.  In addition, the European Union notes that  the Definitive Regulation does not stand on its own, 
but adopts by reference, or modifies as indicat ed, the reasoning and conclusions of the Provisional 
Regulation, and both Regulations assume to some ex tent statements made in the Notice of Initiation 
of the original investigation. Th e European Union asserts that Article 12.2.2 does not forbid Members 
referring to matters contained in earlier public notices, such as the Provisional Regulation, and 
contends that where such other documents are prope rly identified, have a similar degree of publicity 
and are equally accessible, there is no basis for the vi ew that a reference to them is insufficient under 
Article 12.2.2.  The European Union maintains th at there is no obligation under Article 12.2.2 to 
address matters which are not required by the AD Agreement to be considered, and which are not 
actually considered during the investigation.  In addition, the European Union notes that the 
Regulations rest on EU anti-dumping law, as interp reted and applied by the European courts, and 
apply that law, but do not explain or justify it.
1623  The European Union addresses China's specific 
assertions of error, and asserts that they are unfounded, and should be rejected. 
(ii) Arguments of third parties 
a. Brazil 
7.841  Brazil contends that Article 12.2 of the AD Ag reement requires that the public notice contain 
information on findings reached on material issues, a nd asserts that material findings are those related 
to issues that must necessarily be resolved in order for the investigating authorities to be able to reach 
their determination.  Brazil does not take a position as  to whether the European Union is in breach of 
Article 12.2 of the AD Agreement with respect to the matters raised by China.  However, in Brazil’s 
view, China’s claim implies the inclusion of a highe r level of detail than the standard laid down in 
Article 12.2 of the AD Agreement.  In Brazil's view, Article 12.2 of the AD Agreement does not require the publication of all information but only of  material issues of fact and law.  Brazil asserts 
that the standard is the information expressly liste d in items (i) to (v) of Article 12.2.1 of the 
AD Agreement.  Brazil notes that Article 12.2 of the AD Agreement deals with publicity of 
determinations and not with the right of defence, wh ich involves distinct standards. Brazil recalls that 
even when certain information is not available in  the public notice, this does not mean that the 
information was not disclosed to the interest ed parties in the course of the proceedings.
1624 
(iii) Evaluation by the Panel 
a. Overview 
7.842  Article 12.2.2 of the AD Agreement provides: 
"A public notice of conclusion … of an inv estigation in the case of an affirmative 
determination providing for the imposition of  a definitive duty … shall contain, or 
otherwise make available through a separat e report, all relevant information on the 
matters of fact and law and reasons wh ich have led to the imposition of final 
measures …, due regard being paid to the requirement for the protection of 
confidential information.  In particular, the notice or report shall contain the information described in subparagraph 2.1,  as well as the reasons for the acceptance 
                                                      
1623 European Union, opening oral statement at the second meeting with the Panel, paras. 446-448, 
citing Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 97; first written 
submission, para. 861.  
1624 Brazil, oral statement, paras. 13 and 15-16,  citing Panel Report, EC – Tube or Pipe Fittings, 
para. 7.424. WT/DS405/R 
Page 340  
 
 or rejection of relevant arguments or clai ms made by the exporters and importers, and 
the basis for any decision made under subparagraph 10.2 of Article 6".  
7.843  China alleges that the European Union violated  this provision in the Review and Definitive 
Regulations by failing to provide "relevant informat ion on matters of fact a nd law and reasons" that 
led to the determinations to impose and extend the measures.  China details numerous aspects of the 
determination which, it argues, demonstrate th e European Union's failings with respect to 
Article 12.2.2, concerning most of the aspects of t hose determinations with respect to which China 
has made substantive claims of violation.  Before addressing each of China's allegations in this regard, 
we address our understanding of th e requirements of Article 12.2.2,  which will guide our examination 
of China's claim. 
7.844  The chapeau of Article 12.2.2, Article 12.2,  requires the publication of "findings and 
conclusions on all issues of fact and law considered material by the investigating authorities " 
(emphasis added).  In our view, this is relevant context for a proper understanding of Article 12.2.2, 
and thus informs our understanding of what must be  included in a public notice under that provision.  
China suggests that whether information and reasons  for the acceptance or rejection of arguments 
must be provided in such a notice should be judged from  the perspective of the interested parties.  We 
do not agree.  We consider that while an inves tigating authority must make innumerable decisions 
during the course of an anti-dumping investigation, w ith respect to procedural matters, investigating 
methods, factual considerations, and legal analysis, which may be  of importance to individual 
interested parties, not all of these are "material" w ithin the meaning of Article 12.2.2.  In our view, 
what is "material" in this respect refers to an issue which must be resolved in the course of the 
investigation in order for the investigating author ity to reach its determination whether to impose a 
definitive anti-dumping duty.  We note in this regard the views of the panel in EC – Tube or Pipe 
Fittings : 
"Article 12.2 provides that the findings and conclusions on issues of fact and law 
which are to be included in the public notices,  or separate report, are those considered 
"material" by the investigating authority. The ordinary meaning of the term of 
"material" is "important, essential, relevant".   
We understand a "material" issue to be an i ssue that has arisen in the course of the 
investigation that must necessarily be r esolved in order for the investigating 
authorities to be able to reach their determin ation. We observe that the list of topics in 
Article 12.2.1 is limited to matters associat ed with the determinations of dumping and 
injury, while Article 12.2.2 is more genera lly phrased ("all relevant information on 
matters of fact and law and reasons wh ich have led to the imposition of final 
measures, or the acceptance of a price undertaking"). Nevertheless, the phrase "have led to", implies those matters on which a factual or legal determination must 
necessarily be made in connection with the decision to impose a definitive anti-
dumping duty. … contextual considerations al so support this interpretation since, the 
only matters referred to "in particular" in subparagraph 12.2.2 are, in addition to the 
information described in subparagraph 2.1, the reasons for acceptance or rejection of 
relevant arguments or claims, and the basis for certain decisions."
1625 
                                                      
1625 Panel Report, EC – Tube or Pipe Fittings , paras. 7.423-7.424.  That panel went on to conclude that, 
while Article 15 was an integral part of the AD Agreement,  the elements of Article 15 are not of the same nature 
as those referred to in Article 12, that is, elements as to  which "a factual or legal determination must necessarily 
be made in connection with the decision to impose a definitive anti-dumping duty", and concluded that it was therefore not a violation for the European Communities to not have provided information with regard to them in 
its published final determination.  Id., para. 7.425.  WT/DS405/R 
  Page 341  
 
 We cannot conclude that every single decision of an  investigating authority in the course of an 
investigation can be considered as having "led to" the imposition of the final measures, such that it 
must be described, together with the "information" relevant to the decision, in the published notice of 
the final determination.  Not every question or i ssue which arises during an investigation, and which 
is resolved by the investigating authority, is n ecessarily considered material by the investigating 
authorities, and may be said to have "led to" the imposition of the anti-dumping duty, even though it 
may be of interest or significant to one or more interested parties.  In our view, the notions of 
"material" and "relevant" in Article 12.2.2 must be  judged primarily from the perspective of the actual 
final determination of which notice is being given, and not the entirety of the investigative process.  
Other provisions of the AD Agreement, notably Articles 6.1.2, 6.2, 6.4, and 6.9 address the 
obligations of the investigating authority to ma ke information available to parties, disclose 
information, and provide opportunities for parties to defend their interests.  In our view, Article 12.2.2 
does not replicate these provisions, but rather, requir es the investigating authority to explain its final 
determination, providing sufficient background and r easons for that determination, such that its 
reasons for concluding as it did can  be discerned and are understood. 
7.845  In addition, we consider that, where there is a substantive inconsistency with the provisions of 
the AD Agreement, it is neither necessary nor appropri ate to consider whether there is a violation of 
Article 12, as the question of whether the notice of a decision that is inconsistent with a substantive 
requirement of the AD Agreement is "sufficient" under Article 12.2.2 is, in our view, immaterial.
1626  
Moreover, it is clear from the text of the provision that Article 12.2.2 does not permit the inclusion of information treated as confidential during the investigation in the public notice.
1627  We also consider 
that it is appropriate to take into accoun t the challenged notice or report as a whole,1628 and that where 
a later notice or report refers to or incorporates matters addressed in previously published notices or 
reports, we consider that this may, dependin g on the substance, be sufficient to satisfy 
Article 12.2.2.1629  Finally, we agree with the view expressed by the panel in EC – Fasteners (China)  
that "the nature and content of the explanation given may well differ depending on the nature of the 
determination or decision in question."1630 
7.846  With these principles in mind, we examine be low each of China's allegations of error. 
b. Review Regulation 
1. determination of the EU producers' sample 
7.847  China asserts that the European Union did not provide any information about the factual data 
used for the selection of the EU producers' sample , such as the total number of complainants from 
which the eight companies in the sample were selected, the total number of member States 
                                                      
1626 We find support for our position in the views of the Panel in EC-Bed Linen ,  
"A notice may adequately explain the determination that was made, but if the determination 
was substantively inconsistent with the relevant legal obligations, the adequacy of the notice is 
meaningless.  Further, in our view, it is m eaningless to consider whether the notice of a 
decision that is substantively inconsistent with  the requirements of the AD Agreement is, as a 
separate matter, insufficient under Article 12.2.  A finding that the notice of an inconsistent 
action is inadequate does not add anything to the finding of violation, the resolution of the dispute before us, or to the understanding of the obligations imposed by the AD Agreement." 
Panel Report, EC – Bed Linen , para. 6.259.  Other panels have reached the same conclusion, e.g.  Panel Reports, 
EC – Fasteners (China) , para. 7.544; EC - Salmon (Norway)  paras. 7.831-834;  and Mexico – Steel Pipes and 
Tubes , para. 7.400. 
1627 Panel Report, Korea – Certain Paper , paras. 7.210, 7.314-316) 
1628 Panel Report, US – Oil Country Tubular Goods Sunset Reviews , para. 7.252. 
1629 Panel Report, EC – Bed Linen , paras. 6.47 and 6.256. 
1630 Panel Report, EC – Fasteners (China) , para. 7.547. WT/DS405/R 
Page 342  
 
 represented by the complainants, the different bus iness models or product segments represented by 
the complainants, the total sales represented by the sampled companies.  In addition, the 
European Union did not provide information regarding the evidentiary path that led to the selection of 
the eight complainant producers.  Nor did it pr ovide information which could link the sampling 
criteria to the evidence in the non-confidential file wh ich explains or supports the application of these 
sampling criteria and the availabilit y of the relevant data for each of the complainants leading to the 
selection of the eight complainant producers.
1631  China further contends that the European Union 
used four criteria for the selection of the sample, but that relevant information concerning three of 
these, and the representativity of the sample with re ference to these criteria, was not provided.  China 
asserts that given that only the European Union had access to the data of complainant producers, 
interested parties could not draw inferences as to the number and distribution of the member States 
that were represented by the sample.  China notes that the assurances of th e European Union that 
information was considered cannot replace the requireme nt to provide the relevant information in the 
public notice/separate report.1632 
7.848  The European Union notes that the Review Regul ation sets forth, in recital 22, the relevant 
information.1633  The European Union states that the coll ection of producer names was part of a 
process of selecting a representative sample, and th at what was significant was the relative production 
represented by the sample rather than the absolute nu mber of firms, as the former would give the best 
indication of the representativeness of the sample, as discussed in recital 27 of the Review Regulation.  
The European Union also notes that the information in the Review Regulation was in addition to that 
provided to interested parties in a series of  notes from the European Union authorities.1634  T h e  
European Union acknowledges that the total nu mber of member States represented by the 
complainants is not given, but asserts that the Review Regulation does address the issue of geographical spread, in recital 28.
1635  The European Union contends that reasonable inferences could 
be drawn from this statement as to the number and distribution of member States that were represented by the sample.  The European Union notes that the Review Regulation addressed the 
different business models or product segments represented by the complainants, at recital 21.
1636  
                                                      
1631 China, first written submission, para. 797.   
1632 China, second written submission, paras. 1186-1188. 
1633 European Union, first written submission, para. 506, citing recital 22 of the Review Regulation, 
Exhibit CHN-2: 
"The 8 producers selected in the sample were thus considered to be representative of the 
overall producers in the Union, and represented 8,2% of the production of the complaining 
Union producers and 3,1% of the total Union production." 
1634 European Union, first written submission, para. 50 7, referring to, e.g. No te of 9 December 2008, 
Exhibit CHN-26; Note of 3 March 2009, Exhibit CHN-27.  The European Union also refers to Note of 18 November 2008, Exhibit CHN-37, which it asserts provided information on total production of both the 
complainants and the firms sampled.  European Union, first written submission, fn. 379. 
1635 European Union, first written submission, para. 509, citing recital 28 of the Review Regulation, 
Exhibit CHN-2: 
"the Commission took geographical spread into account when selecting the sample. It is 
underlined that, by nature, a sample does not have  to reflect the exact ge ographical spread (nor 
the exact distribution or breakdown of any other criterion) of the entire population in order to 
be representative. It suffices that, as is the case for the current sample, which includes four 
Member states, it reflects the relevant prop ortions of the major manufacturing countries 
involved." 
1636 European Union, first written submission, para. 511, citing recital 21 of the Review Regulation, 
Exhibit CHN-2: 
 "On the basis of the information obtained, the Commission selected a sample based on the 
largest representative volumes of production and sales within the Union which could be 
investigated within the time available. However, as detailed above, this is not an entirely homogenous industry and in order to assess representativeness of the selected companies, the 
producers' geographical spread amongst Member States (1), as well as the segment to which  WT/DS405/R 
  Page 343  
 
 According to the European Union, the Commissi on assured that the different models found were 
represented in the sample, and moreover, the Eur opean Union notes that individual business models, 
while not described in this recital, were examined elsewhere in the Review Regulation.
1637  W i t h  
respect to China's assertion regardi ng the evidentiary path that led to the selection of the sample, the 
European Union maintains that its investigating au thorities were not engaged in reconciling diverging 
information and data, which was the focus of the Appe llate Body in using that term in its report in US 
– Softwood Lumber VI (Article 21.5 – Canada).  Rather, the investigating authorities were engaged in 
identifying relevant factors and applying them  to the information th at they possessed.  The 
European Union asserts that the Review Regulati on gives a lengthy explanation of this process,1638 
and considers that China is seeking information at a level of detail that is greater than required by 
Article 12.2.2.  Furthermore, the European Union asser ts that a meaningful explanation at this level 
would not have been possible without revealing information that was protected as confidential.1639 
7.849  We note that we have concluded that the AD Agreement does not establish any guidelines for 
the selection of a sample for purposes of the injury determination.1640  In this context, given that there 
are no specific legal requirements for the process of selecting a sample,1641 we cannot agree with 
China's view that the procedural steps of and inform ation considered by the investigating authority are 
issues of fact and law that must be considered mate rial by the investigating authority and set out in 
sufficient detail in the public report.  In any event,  we note that the Review Regulation does, in fact, 
provide a significant amount of information on the selection of the sample, at recitals 19 to 33.  The Review Regulation explains in considerable detail why the Commission chose to rely on a sample for 
its injury examination, how the sample was select ed, the bases on which the sample was selected, the 
number of producers selected for the sample and per centage of EU production accounted for by those 
producers, and the conclusion that the sample was considered to be representative of the overall 
producers in the European Union.
1642  The Review Regulation also addresses issues that arose with 
respect to the sample during the investigation, a nd allegations and arguments made by the parties 
during the investigation with respect to representativeness of the sample.   
7.850  In our view, while the discussion in the Revi ew Regulation may not go into all the details 
China would have it address, it is more than suffi cient to explain the European Union's selection of 
                                                                                                                                                                     
their products belong were also taken into consideration. As a result 8 companies operating in 
four member States were selected. The sel ected companies also re present all the major 
business models present in the Union, in terms of how the product is manufactured, of how 
the product is distributed, and of product specialisation. Regarding product specialisation, the 
companies selected included production across all major price segments (low range, mid 
range, high range) as well as across all gender and age segments (ladies, men, unisex, children 
footwear). Regarding product distribution, the companies selected included all major levels of distribution (to wholesalers, to retailers, as we ll as direct retailing). Regarding production, the 
companies selected included full inhouse manuf acturing in all key stag es of the production 
process as well as companies which had outsourced parts of such manufacturing process (both in and outside the Union)." 
1637 European Union, first written submission, para. 512.  The European Union notes that, in any event, 
the business model of the producer was not part of the criteria on which the sample was initially selected.  European Union, first written submission, fn. 380.   
1638 European Union, first written submission, para. 51 4 and fn. 382, referring to Review Regulation, 
Exhibit CHN-2, recitals 19-33. 
1639 European Union, first written submission, para. 514. 
1640 See paragraph 7.358 above. 
1641 Of course, the sample selected must ultimately be sufficiently representative of the domestic 
industry to be an appropriate basis for the examinatio n of injury, such that the resulting determination is 
consistent with Article 3.1 of the AD Agreement.  But we do not consider that the process of selecting the 
sample is a necessary aspect of this issue – that is to say, in our view, the process by which a sample is selected is not determinative of whether it will result in a determ ination of injury consistent with Article 3.1.   
1642 Review Regulation, Exhibit CHN-2, recital 22.   WT/DS405/R 
Page 344  
 
 the sample of EU producers.  We agree with the European Union that China seeks a level of detail in 
the published notice that is not required by Article 12.2.2.  For instance, we do not consider that 
"information which could link the sampling criteria to the evidence in the non-confidential file which explains or supports the application of these sampli ng criteria" and "the availability of the relevant 
data for each of the complainants leading to th e selection of the eight complainant producers" are 
material issues of fact and law which have led to  the imposition of the final measures.  While they 
may well be of interest to the parties to the inves tigation, Article 12.2.2 does not, in our view, require 
an investigating authority to explain the elements  of information and links between the evidence it 
relied upon and its conclusions in its published report, particularly where, as here, there are no 
specific requirements under the AD Agreement that must be satisfied in question.
1643  Moreover, we 
consider that to have addressed some of the details  China considers should have been addressed might 
well have entailed discussion of confidential info rmation, which we recall is prohibited under 
Article 6.5, and under Article 12.2.2 itself.   
7.851  We recall that we rejected China's arguments w ith respect to the sample selection as a matter 
of substance, and in so doing based our consid eration primarily on the discussion in the Review 
Regulation itself.1644  China's arguments imply that the phrase "all relevant information" in 
Article 12.2.2 refers to all evidence on the basi s of which the investigating authority made its 
decisions, whether relevant and probative to the inves tigating authority or not.  We do not agree.  Not 
only would such a requirement potentially conflict w ith the requirement not to disclose confidential 
information, but it would be entirely unworkable as a practical matter.1645  Moreover, China has 
asserted no reason why the specific issues it raises in  connection with the selection of the sample 
should have been considered material by the i nvestigating authorities, and as having led to the 
imposition of the anti-dumping duty.  We therefore reject China's allegations in this regard.  
2. confidential treatment of the names of co mplainants, supporters, sampled producers and 
producers sampled in the original investigation 
7.852  China asserts that the Europ ean Union failed to provide th e names of the complainants, 
supporters, sampled producers and produ cers sampled in the original investigation, and proper reasons 
for granting confidential treatment to their names, did not explain whether it had any information that 
substantiated the risk of retaliation made by the complainants and supporters, and did not provide any 
reasonable explanation as to why confidentiality was warranted.1646  
7.853  The European Union contends that the Revi ew Regulation refutes China's allegations, 
referring in particular to recital 40, which states: 
"As was the case in the original investig ation the sampled Union producers as well as 
other cooperating Union producers requested , on the grounds of the provisions of 
Article 19 of the basic Regulation that their identities be kept confidential. They claimed that the disclosure of their identity could lead to a risk of significant adverse 
effects. Certain complainant Union producer s supply customers in the Union that also 
source their products from the PRC and Viet Nam, thus benefiting directly from these 
                                                      
1643 We recall that China's claims are with respect to the selection of the sample, and not with respect to 
whether, substantively, the injury determination wa s based on a sample which was representative of the 
domestic industry.  It may well be that more explanation of evidence and reasoning is  required with respect to 
aspects of the final determination relating to matters wh ere the AD Agreement does es tablish specific guidelines 
or requirements.   
1644 See paragraph 7.358 above. 
1645 See Panel Report, United States – Investigation of the International Trade Commission in Softwood 
Lumber from Canada ("US – Softwood Lumber VI "), WT/DS277/R, adopted 26 April 2004, DSR 2004:VI, 
2485, para. 7.41.   
1646 China, first written submission, para. 798.    WT/DS405/R 
  Page 345  
 
 imports. Those complainants are therefore in a sensitive position since some of their 
clients may have evident reasons to oppose their lodging or supporting a complaint against alleged injurious dumping. For these reasons they considered that there was a 
risk of retaliation by some of their clients, including the possible termination of their business relationship. The request was granted as it was sufficiently 
substantiated."1647 
Moreover, the European Union rejects China's asser tion that the use, in the Review Regulation, of 
phrases that had been used in prev ious measures for the same purpose fails to satisfy the requirements 
of Article 12.2.2.1648  Finally, the European Union considers th at it was in the nature of the kind of 
threats of retaliation which were considered in  this case that formal evidence would not be 
forthcoming, and thus China's assertion that no reasonable explanation was provided as to why 
confidentiality was warranted is refuted by recital 40 of the Review Regulation.1649 
 
7.854  We recall that we have concluded that the Eur opean Union did not err in treating the names of 
producers as confidential.1650  Therefore, that information could not be provided in the Review 
Regulation itself, and there can be no violation of Ar ticle 12.2.2 in this regard.  With respect to the 
alleged lack of explanation as to whether the Comm ission had any information that substantiated the 
risk of retaliation asserted by the complainants and supporters, we have found that the European 
Union did not err, as a substantive matter, in c oncluding that the risk of retaliation sufficed to 
demonstrate good cause for confidential treatment of certain information, even  in the absence of the 
kind of evidence substantiating that risk China argued was necessary.  In light of this conclusion, we 
reject China's argument that the Review Regulatio n did not explain why confidential treatment was 
warranted.  We therefore reject Chin a's allegations in this regard.  
3. determination concerning the evaluation of macroeconomic injury indicators 
7.855  China asserts that the European Union did not provide any information or reasons regarding 
why the macroeconomic indicators were evaluate d at the level of the "whole [European] Union 
production" and not at the level of the EU industry, as was done in the original investigation, and did 
not provide any information explaining how the figur es used for the evaluation of the macroeconomic 
indicators were calculated.1651  China considers that such a significant change in the methodology 
required a detailed explanation, in view of  Article 11(9) of the Basic AD Regulation.1652   
7.856  The European Union maintains that, as the Revi ew Regulation is a free-standing measure that 
provides its own justification, the information on the matters of fact and law,  and reasons which have 
led to its adoption, does not include an explan ation of how the methodology has changed from the 
Provisional Regulation.  The European Union asserts  that the remaining details China asserts should 
have been covered1653 were not considered of sufficient significance by the European Union to 
warrant inclusion in the Review Regulation.1654 The European Union notes that China refers to a 
                                                      
1647 European Union, first written submission, para. 515, citing Review Regulation, Exhibit CHN-2, 
recital 40 (emphasis added by the European Union). 
1648 European Union, first written submission, para . 517, citing China, first written submission, 
para. 798.  
1649 European Union, first written submission, para. 517. 
1650 See paragraph 7.762 above. 
1651 China, first written submission, paras. 799-800.  China further claims that no information was 
provided regarding how many and which individual producers' data was used, how estimates provided by national producer associations were reconciled with the Prodcom data, and how Prodcom data was established 
for the review investigation period  which was not a calendar year.  Id., para. 800. 
1652 China, second written submission, para. 1196. 
1653 The European Union refers in  this regard to China, first written submission, para. 800. 
1654 European Union, first written submission, para. 520. WT/DS405/R 
Page 346  
 
 provision of EU law that has no equivalent in the WTO system in support of its argument, and asserts 
that it is not the Panel's role to enforce EU law in this respect.
1655   
7.857  We recall that we have concluded that the Eu ropean Union did not act inconsistently with 
Article 3.4 in its consideration of injury f actors in the context of the review proceeding.1656  O u r  
conclusion in this regard is based  principally on our examination of the Review Regulation itself, in 
light of China's arguments.  In these circumstan ces, we see no basis for the conclusion that the 
European Union should have include d additional information and explana tions in that Regulation.  In 
any event, we recall that the European Union defi ned the domestic industry in the expiry review as 
EU producers as a whole, and in this circumstance, it  seems to us that a consideration of information 
on macroeconomic factors at that level is entirely appropriate.   
7.858  Moreover, even assuming the evaluation of macroeconomic factors was undertaken on a 
different basis in the expiry review than it was in  the original investigation, such a change in 
methodology does not require explanation in the Review Regulation.  There is nothing in the 
AD Agreement that requires an investigating author ity to follow the same methodology in an expiry 
review as it did in the original investigation, and thus we see no reason wh y a different methodology 
requires explanation.  Clearly, some explanation of  the methodology that is actually applied, and the 
relevant facts and conclusions, is required in the pub lic notice of the final determination in an expiry 
review, but that is a different matter, and not the subj ect of China's claim here.  Finally, we agree that 
whether or not EU law requires an explanation of  a change in methodology is irrelevant to our 
analysis, as it is not our role to enforce EU law.   China has asserted no reason why the specific issues 
it raises in this context should have been consider ed material by the investigating authorities, and as 
having led to the imposition of the anti-dumping duty.  We therefore reject China's allegations in this 
regard. 
4. difference in the figures concerning the representativeness of the sample 
7.859  China asserts the European Union did not pr ovide any information or reasoning for the 
discrepancy between the figures stated in the Note  for the File dated 18 November 2008 and in the 
Review Regulation taking into account the fact that  in the interim it was discovered that one sampled 
producer had discontinued production of the like product in the European Union.1657  
7.860  The European Union maintains that Article 12.2.2 does not require an account of the 
development of the investigation, and thus it was not required to explain differences in figures given 
for production by sampled EU producers and all complainant producers early in the review, and 
figures for that same information set out in the Review Regulation.1658  The European Union notes 
that "the phrase "have led to" in Article 12.2.2 im plies those matters on which a factual or legal 
determination must necessarily be made in connect ion with the decision to impose a definitive anti-
dumping duty," and asserts that the only determina tions that necessarily had to be made by the 
European Union authorities in the expiry review were  those relating to the final figures referred to by 
China, and it was on the basis of these figures that the Review Regulation was adopted.1659 
                                                      
1655 European Union, opening oral statement at the second meeting with the Panel para. 378.  The 
European Union notes that this is not a situation where the Panel is required to determine the content of national 
law.  Id. 
1656 See paragraph 7.432 above. 
1657 China, first written submission, paras. 802-803. 
1658 European Union, first written submission, para. 522. 
1659 European Union, first written submission, para. 522, citing Panel Report, EC – Tube or Pipe 
Fittings , para. 7.424.  WT/DS405/R 
  Page 347  
 
 7.861  We consider that Article 12.2.2 does not require  that changes in the data on which the final 
determination is made from that considered at earlier  stages of the investigation must be explained in 
the published notice of the final determination.  Indeed, it is to be expected that data under 
consideration, and the relevance of data, may ch ange over the course of an investigation, as 
information is collected, checked for accuracy and verified, and corrected as necessary.  The public 
notice of the final determination, which is at issue here, must provide a sufficiently detailed 
explanation of that determination, but we see no basi s for requiring that it explain how the information 
that was actually considered in making that fina l determination was differe nt from information at 
some earlier stage in the investigation, even if re ported in a Note for the file and made available to 
interested parties.
1660  Moreover, China has asserted no reason why the change in the data should have 
been considered material by the investigating au thorities, and as having led to the imposition of the 
anti-dumping duty.  We therefore reject Ch ina's allegations in this regard.   
5. data of the sampled EU producer that disc ontinued production of the like product in the 
review investigation period  
7.862  China asserts that the European Union did not pr ovide any information regarding the extent to 
which the data of the sampled producer that disc ontinued production in the European Union of the 
like product during the review investigation pe riod was used for the purpose of the injury 
examination, notably for the evaluation of the mi croeconomic injury indicators and the undercutting 
margin calculation.1661  
7.863  The European Union asserts that the Review Regulation explains in detail how the European 
Union authorities reacted to the developments with respect to one EU producer included in the sample 
of EU producers, which substan tially changed its business model during the review investigation 
period, engaging increasingly in outsourcing, and what  account was taken of the changes, referring to 
recital 23 of the Review Regulation, which states:   
"The investigation revealed that one of  the sampled Union producers progressively 
discontinued production in the Union during the RIP, taking its full manufacturing 
activity outside the Union. It should be noted that the weight of the company was not 
such as to have any significant impact, at least from a quantitative point of view, on the situation of the sampled companies as a whole—including their representativeness. The quantitative findings  on injury would not have been 
materially different should this company ha ve been excluded. In this context, and 
given that (i) it had produced in the Union during the RIP, and that (ii) it subcontracts 
large part of the production, a business mode l which, according to many parties, is 
important in the Union, it was decided not to  formally exclude this company from the 
sample. This further ensures that, qualitativ ely, the sample represents as adequately as 
possible the reality of the sector. Furthermor e, considering that an expiry review 
requires an analysis of continuation/recurre nce of injury, this may help in better 
predicting how the situation on the Union ma rket could develop if the measures were 
                                                      
1660 China asserts that the European Union failed to provide the information or explanations despite a 
request by Chinese exporters in this regard.  China, first written submission, para. 803.  We note in this regard that Article 12.2.2 does not establish a requirement for investigating authorities to disclose information during 
the course of an investigation.  Thus, the fact that information and explanation may have been requested does 
not, in our view, establish that it was required to be published in the notice of the final determination under Article 12.2.2. 
1661 China, first written submission, para. 804. WT/DS405/R 
Page 348  
 
 not continued. However, evidently only data pertaining to its activity as Union 
producer were used." 1662 
The European Union asserts that the specific info rmation China considers was wrongly not included 
in the published notice is very detailed in nature.1663  Given that the Review Regulation observes that 
"[t]he quantitative findings on injury would not have  been materially different should this company 
have been excluded", the European Union cons iders that China has not  established that the 
information in question would have been "rel evant" in terms of Article 12.2.2 of the 
AD Agreement.1664 
 
7.864  We note that we have concluded as a substantive matter that the European Union did not err 
in its treatment of the producer who progressive ly outsourced production of footwear outside the 
European Union during the review investigation pe riod.  Our conclusion in that regard is based 
principally on the Review Regulation itself, whic h explains how the European Union took this 
development into account, and conc ludes that resulting differences in the data did not affect its 
conclusions.1665  In our view, it would be anomalous for us  to conclude that Article 12.2.2 requires a 
greater level of detailed information and explanati on than is necessary to ascertain that the final 
determination was not, as a matter of substance, in consistent with the European Union's obligations 
under the AD Agreement.  We agree with the Eur opean Union that there is no basis on which to 
conclude that the extent to which this producer's  data was used for the purpose of the injury 
examination, the evaluation of the microeconomic  injury indicators and the undercutting margin 
calculation was relevant.  Moreover, China has ass erted no reason why these issues should have been 
considered material by the investigating author ities, and as having led to the imposition of the anti-
dumping duty.  We therefore reject Ch ina's allegations in this regard.  
6. PCN reclassification 
7.865  China asserts that the European Union di d not provide information as to how the 
reclassification of certain footwear from one PCN category to another was achieved for the Chinese 
exporters and the sampled complainant producers, or regarding the effect of the reclassification on the 
dumping and injury margins.1666  
7.866  The European Union reiterates its argument that the reclassification in question was not a 
restructuring of the PCN system, but a correction of a misallocation of footwear into PCNs on the part 
of certain interested parties.  The European Uni on asserts that the matter is sufficiently explained at 
recital 59 of the Review Regulation, which states: 
"Certain parties alleged that the Commission changed its methodology as compared 
to the original case by changing the defin ition of the product control numbers (PCN's) 
in the course of the investigation. This a llegation is however not correct. Rather, in 
the course of the investigation, it became a pparent that certain parties had wrongly 
interpreted and applied the PCN structure for certain product types. In order to ensure 
                                                      
1662 European Union, first written submission, para. 524, quoting Review Regulation, Exhibit CHN-2, 
recital 23. 
1663 The European Union describes the information in question as:  (i) whether data of this producer 
was used for the years 2006, 2007 and the review investigation period, or only for 2006 and 2007, or even partly 
for the review investigation period; (ii) to what extent  were the sales prices of this producer used in the 
undercutting margin calculation; and (iii) how was the data of this producer used for the evaluation of the 
various microeconomic indicators.  European Union, first written submission, para. 525. 
1664 European Union, first written submission, paras. 525-526.   
1665 Review Regulation, Exhibit CHN-2, recital 23. 
1666 China, first written submission, para. 805.  WT/DS405/R 
  Page 349  
 
 a consistent approach, the footwear models  in question were therefore re-classified 
and attributed to the proper PCN heading wherever this was found necessary. Thus, wherever the Commission identified inaccura te information given by the parties 
concerned it had to rectify this. Such rectif ication can therefore neither be considered 
as a change in methodology, nor as a change of content of the PCN. On the contrary, 
the need to respect the PCN methodology was the very reason why the rectification 
had to be carried out. Therefore the argument had to be rejected."
1667 
7.867  We have concluded that the European Union (i) did not err with respect to the PCN system it 
employed in the context of the dumping determination, and (ii) did not wrongly reclassify footwear into different PCNs.  Our conclusions in this re gard are based principally on the Review Regulation 
itself, including recital 59, which is sufficient, in our view, to explain the matter, to the extent that any 
explanation in this respect is necessary.  As we ha ve noted, it would be anomalous for us to conclude 
that Article 12.2.2 requires a greater level of deta iled information and explanation than is necessary to 
ascertain that the final determination was not, as a matter of substance, inconsistent with the 
European Union's obligations under the AD Agreemen t.  Moreover, China has asserted no reason why 
the correction of errors in the allocation of imports  to one or another PCN category should have been 
considered material by the investigating author ities, and as having led to the imposition of the anti-
dumping duty.  We therefore reject Ch ina's allegations in this regard.  
7. dumping margin calculation  
7.868  China asserts that the European  Union failed to provide releva nt information regarding the 
quantification (e.g. in terms of percentages) for allowances for differences in the level of trade, 
differences in commissions, and R&D and design, although the R&D adjustment made to the prices of 
the EU producers for the purposes of the undercu tting calculation was disclosed in terms of a 
percentage.1668   
7.869  The European Union notes that the types of  data China mentions typically involve 
confidential information.  The European Union stat es that, where there was no issue of confidentiality, 
such as when an adjustment was made "across the board" the Europ ean Union published the relevant 
figure.1669  
7.870  We note that it is clear that the European Union did explain the nature of the allowances made 
in order to undertake a fair comparison of normal value and export price, at recitals 120 through 125 
of the Review Regulation.  It is tr ue, as China alleges, that the actual value of those adjustments is not 
set forth in the Review Regulation.  However, we  share the European Union's view, which China has 
not disputed, that the relevant information may well be confidential, and therefore could not be 
included in the public notice under Article 12.2.2.  In any event, while it is clear that whether  
adjustments were made in the calculation of dump ing margins is significant in the calculation of 
dumping margins, China has not demonstrated that the precise level  of those adjustments, while no 
doubt of interest to the parties, should have been c onsidered material by the investigating authorities, 
                                                      
1667 European Union, first written submission, para. 527, referring to European Union, first written 
submission, para. 236, and quoting Review Regulation, Exhibit CHN-2, recital 59. 
1668 China, first written submission, paras. 806-807.  We note that China asserts that this information 
was not provided in the disclosure to Chinese exporter s.  China, first written submission, para. 806.  The 
European Union clarifies that this information would normally be included in disclosures made to individual 
exporters, but where an analogue country is used, the actual exporter would not receive these details.  
European Union, first written submission, para. 528.  Howe ver, as China has made no claim with respect to the 
disclosure of information to Chinese exporters under Article  6.9 in this regard, we do not address this question. 
1669 European Union, first written submission, para. 528. WT/DS405/R 
Page 350  
 
 and as having led to the imposition of the anti-dum ping duties.  We therefore reject China's 
allegations in this regard.  
8. alleged failure to provide reasons for the re jection of arguments made by interested 
parties on a number of issues 
7.871  China asserts that the European Union did not provide any information regarding the reasons 
for the rejection of arguments made by interested parties.  Specifically, China refers to:  (i) the 
rejection or acceptance of the fact, asserted by Ch inese exporters, that there is production of the like 
product in at least 20 member States, (ii) the rejection of the argument by one interested party that the high labour costs in the European Union affec ting the competitiveness of the EU producers and not 
the allegedly dumped imports from China were the s ource of injury to the EU industry, (iii) the 
rejection of the arguments of interested parties questioning whether the European Union had 
investigated the accuracy of the evid ence, to the extent any existed, of the risk of retaliation claimed 
by the complainant producers as a basis for requesti ng confidentiality of their names, and (iv) the 
rejection of the argument of interested parties re garding the absence of the then-Community Interest 
questionnaire responses of five sampled EU pr oducers from the non-confidential file and that 
accordingly the European Union should reject the confidential information provided by these 
companies.
1670   
7.872  The European Union notes that the argument by  exporters that there was production in 20 EU 
member States arose in the context of the sampling of EU producers, and was addressed at recital 28 
of the Review Regulation which states:   
"As explained above in recital 21, the Commission took geographical spread into 
account when selecting the sample. It is under lined that, by nature, a sample does not 
have to reflect the exact geographical spread (nor the exact distribution or breakdown of any other criterion) of the entire population in  order to be representative. It suffices 
that, as is the case for the current sample, which includes four Member states, it 
reflects the relevant proportions of the ma jor manufacturing countries involved. Any 
other approach would have been administ ratively impracticable, particularly if 
several different criteria have to be taken into account in order to ensure 
representativeness. In fact, this claim would imply in fine that a sample would be 
sufficiently representative only if it containe d the full population. The investigation 
has thus underlined that the sample which covers four Member states, including the 
three with the by far biggest production, is largely representative of the Union 
production as a whole, in particular when ta king into account production that is based 
on tolling arrangements and therefore should be accounted for in the Member state of 
the company ordering the tolling service."1671 
For the European Union, the releva nt issue at this stage of the in vestigation was whether the sample 
was representative, and in this context the total nu mber of member States that were in some way 
involved in production was not a relevant considerati on, a point the European Union considers did not 
need articulation.  The European Union asserts that the Review Regulation contained a full examination of the structural condition of the in dustry, which included the issue of labour costs.
1672  
The European Union reiterates its argument that it had no substantive obligation to reject confidential 
information provided in the context of its Union In terest investigation, and asserts that it would be 
                                                      
1670 China, first written submission, para. 808. 
1671 European Union, first written submission, para. 530, quoting Review Regulation, Exhibit CHN-2, 
recital 28 (emphasis added by the European Union). 
1672 European Union, first written submission, paras. 531-532, referring to European Union, first 
written submission, para. 318.  WT/DS405/R 
  Page 351  
 
 paradoxical if it were required by Article 12.2.2 to  publish information regarding the reasons for its 
actions.1673 
 
7.873  We consider that China's allegations with resp ect to the failure of the European Union to 
address certain arguments is based not on a lack of understanding as to information or clarity of 
reasons set out in the European Union's determina tion, but on substantive di sagreements with various 
elements of that determination.  Thus, for instance, it is clear from recital 28 of the Review Regulation 
that the European Union consider ed that, in selecting a sample, it had sufficiently considered the 
question of geographical distribution of EU producers.  That China disagrees does not demonstrate that the argument that there is production of the li ke product in at least 20 member States was material 
to the European Union's decision, or that reasons fo r its rejection were required to be explicitly set out 
in the public notice.  Similarly, it is clear th at the European Union took into account arguments 
concerning the allegedly high labour costs in the EU industry,
1674 but did not reach the conclusions 
urged by China.  This does not, however mean that it was required to respond in detail to the argument of one Chinese exporter asserting that high labour costs, not dumped imports, caused injury 
to the EU industry.  We have concluded that the European Union did not err in its consideration of the 
risk of retaliation asserted by complainant producer s in requesting confidential treatment of their 
names, and can see no reason why the rejection of partie s' arguments to the contrary should have been 
addressed in the public notice of the final determ ination, as China has asserted no reason why the 
rejection of the arguments regarding the absence of the then-Community Interest questionnaire 
responses of five sampled EU producers from the non- confidential file should have been considered 
material by the investigating authorities, and as ha ving led to the imposition of the anti-dumping duty. 
We therefore reject China's arguments in this regard.  
c. Definitive Regulation 
1. determination of the EU producers' sample 
7.874  China asserts that the European  Union did not provide any information about (i) the reason 
for the selection of the sample on the basis of the geog raphical spread; (ii) the factual data used for the 
selection of this sample such as the production figur es and the five member States represented by the 
complainants; (iii) the different business mode ls or product segments represented by the 
complainants; (iv) the total sales represented by the sam ple; and (v) the evidentiary path that led to the 
selection of the ten complainant producers or info rmation which could link the sampling criteria to 
evidence in the non-confidential file that explai ns or supports the application of these sampling 
criteria and the availability of relevant data for each  of the complainants leading to the selection of the 
ten complainant producers for the sample.1675  
7.875  The European Union notes that the Notice of Initiation of the original investigation and 
Provisional Regulation both addressed the question of the selection of the sample of EU producers, 
and that the Definitive Regulation addressed a number of  complaints that had been made by interested 
parties.1676  The European Union observes that China's argument with respect to the geographical 
spread of the sample in effect suggests that th e European Union should have explained why it was 
                                                      
1673 European Union, first written submission, para. 534, referring to European Union, first written 
submission, para. 450.  
1674 See Review Regulation, Exhibit CHN-2, recitals 229, 256 and 269-274. 
1675 China, first written submission, para. 1287. 
1676 European Union, first written submission, paras. 862-865, quoting Notice of Initiation, Exhibit 
CHN-6, Provisional Regulation, E xhibit CHN-4, recital 65, and Defi nitive Regulation, Exhibit CHN-3, 
recitals 55-58. WT/DS405/R 
Page 352  
 
 infringing WTO law in this respect, and asserts that this notion cannot be taken seriously.
1677  
Moreover, the European Union notes that recital 65 of the Provisional Regulati on explains the reasons 
for adopting such a spread.1678  The European Union asserts that individual production figures of the 
sampled companies and the particular member States  represented in the sample were not published for 
reasons of confidentiality.  In addition, the Europ ean Union contends that "total sales represented by 
the sample" was not information used by European  Union, as it relied on production levels, and that 
information regarding the "different business mo dels or product segments represented by the 
complainants" was also not used.  With respect to the "evidentiary path" that led to the selection of 
sample, the European Union contends that its inten tions in this regard were clearly set out in the 
Initiation Notice, and were impl emented, and thus no further reference to the matter was 
necessary.1679  
7.876  To the extent that explanation of the selection of the EU producers' sample is necessary, we 
consider that recitals 53 to 59 of the Definitive Re gulation are sufficient to satisfy the requirements of 
Article 12.2.2.1680  For the same reasons as set out in pa ragraphs 7.849 and 7.850 above, we reject 
China's allegations in this regard.   
2. confidential treatment of the names of comp lainants, supporters and sampled producers, 
and reasons for granting confidential treatment to their names 
7.877  China asserts that the European Union acted inconsistently with  Article 12.2.2 by failing to 
provide the names of the complainants, supporting and sampled producers, and by failing to provide 
proper reasons for granting confidential treatment to th eir names, or information that substantiated the 
risk of retaliation made by the complainants and supporters, or any reasonable explanation as to why 
confidentiality was warranted.1681  
7.878  The European Union considers that China me rely repeats the points that it made in 
challenging the grant of confidentiality, and suggest s that China appears to have an exaggerated 
notion of the extent of the obligation in Article 12. 2.2.  For example, the European Union disputes the 
notion that Article 12.2.2 requires that it list all of the more than 800 individual firms that sent 
statements of support for the complaint.  Similarly,  the European Union contends that the scope of 
Article 12.2.2 with respect to reasons for granti ng confidential treatment is not as wide as China 
suggests, asserting that while China may not regard th e reasons set forth in recital 8 of the Provisional 
Regulation as sufficient, that does not demonstrate a violation of Article 12.2.2.  The European Union also contends that Article 12.2.2 does not require th at the Commission explain, with respect to every 
factual assertion in the Regulation, the evidence on which it is based.1682   
7.879  We recall that we have concluded that the Eur opean Union did not err in treating the names of 
producers as confidential.1683  For the same reasons as set forth in paragraph 7.854 above, we reject 
China's allegation that the Definitive Regul ation was deficient in this regard.   
                                                      
1677 European Union, first written submission, para. 86 6, referring to China, first written submission, 
para. 1387. 
1678 The European Union recalls its view that Article 12.2.2 permits Members to rely on statements in 
earlier public notices, such as the Provisional Regulation.  European Union, opening oral statement at the second meeting with the Panel, para. 447. 
1679 European Union, first written submission, para. 866; European Union, opening oral statement at the 
second meeting with the Panel, para. 446. 
1680 We note also recital 65 of the Provisional Regulation, Exhibit CHN-4, which addresses the EU 
producers' sample. 
1681 China, first written submission, para. 1388. 
1682 European Union, first written submission, para. 867. 
1683 See paragraphs 7.690 and 7.699 above.  WT/DS405/R 
  Page 353  
 
 3. determination concerning the evaluation of macroeconomic injury indicators 
7.880  China asserts that the European Union did not pr ovide information explaining how the figures 
used for the evaluation of the macroeconomic indicat ors were calculated, including information as to 
how many and which individual producers' data was used, to what extent such data was used and 
where the data for the year 2001 came from, how the data of the associations was reconciled with the 
data of the individual producers, how the data for the investigation period wa s established, and which 
national associations' data were used.1684  
7.881  The European Union asserts that China is seeking a level of detail in the published measures 
that is not required by Article 12.2.2.  The European  Union contends that it is not required to explain 
how the figures used for the evaluation of th e macroeconomic indicators were calculated.1685  
Moreover, the European Union asserts that Article 12.2.2 refers to "all relevant information on 
matters of fact and law, and r easons", but does not require publishing information regarding evidence 
or the sources of information.1686  
7.882  We consider that China is seeking a level of detail in the public notice which is beyond what 
is required by Article 12.2.2.  While it is clear th at the notice must set forth in sufficient detail the 
information on which the final determination is based, and the reasoning and conclusions of the 
investigating authority, we do not agree that such methodological questions as are addressed in 
China's arguments are within the scope of what is  required.  Moreover, China has not demonstrated 
why these matters should have been considered mate rial by the investigating authorities, and as 
having led to the imposition of the anti-dumping duties.   We therefore reject China's allegations in 
this regard.   
4. names of suppliers  
7.883  China asserts that the European Union did not pr ovide the names of the suppliers, in that it 
provided only the names of the sampled Chinese produ cers, but not the non-sampled companies that 
cooperated.1687   
7.884  The European Union contends that such inform ation is too detailed to  merit publication, in 
particular since the anti-dumping duty that was imposed did not require these companies to be 
separately identified.1688 
7.885  We note that we have concluded, above, th at the imposition of a country-wide anti-dumping 
duty pursuant to Article 9(5) of the Basic AD Regulat ion was inconsistent with the European Union's 
obligations under Articles 6.10 and 9.2 of the AD  Agreement.  Thus, to the extent that the 
European Union seeks to justify the non-publi cation of the names of cooperating Chinese 
exporters/producers not included in the sample on th e basis of imposition of a country-wide duty, we 
find this insufficient to establish compliance with Artic le 12.2.2.  That said, however, we do not agree 
with China that Article 12.2.2 requires the publicatio n of a complete list of the names of all Chinese 
exporters/producers who cooperated in  the investigation.  We fail to see how such a list would be 
material to the investigating authority, or consid ered to have led to the imposition of the anti-dumping 
duty.  We do not share the view that Article 12.2.2 requires disclosure in detail of all facts and considerations throughout the entire proceeding.  Rath er, we consider that Ar ticle 12.2.2 is limited to 
                                                      
1684 China, first written submission, paras. 1389-1390. 
1685 The European Union considers that obligations in this regard may arise under Article 6, in 
particular Article 6.9.  European Unio n, first written submission, para. 868.  
1686 European Union, first written submission, para. 868. 
1687 China, first written submission, para. 1392. 
1688 European Union, first written submission, para. 869. WT/DS405/R 
Page 354  
 
 those issues of fact and law relevant to the fina l determination and material to the investigating 
authority in making that determination.  Moreover,  we note that the names of the companies in the 
sample, and whose information was therefore relevant to the determination, was, as China acknowledges, published.  We therefore reject  China's allegations in this regard.   
5. price threshold for STAF 
7.886  China asserts that the European Union did not  provide an explanation as to why a price 
threshold was applied to STAF, i.e. the reason fo r which STAF having a CIF price of less than €7.50 
was included in the investigation and the measures.1689  
7.887  The European Union notes that this is part of  the definition of the "product concerned", which 
need not be justified, and in any event, is addressed at recital 16 of the Definitive Regulation.1690 
7.888  We recall that we have rejected China's claim that the European Union acted inconsistently 
with the AD Agreement in the determination of th e product under consideration and/or like product.  
In our view, it follows from our finding that there is no violation of Article 12.2.2 in the fact that the 
European Union did not provide an explanation of why a price threshold was applied in deciding which STAF to exclude from the product under considera tion, since this was part of an analysis and 
determination it was not required to make.  Mo reover, the Definitive Regulation sets forth the 
conclusions of the Commission as to the product under consideration.
1691  To the extent that 
Article 12.2.2 requires any explanation of aspec ts of a determinati on not required by the 
AD Agreement, we consider that the Definitive Regu lation contains an adequa te explanation of this 
aspect of the European Union's determination. 
6. number of MET questionnaires received 
7.889  China asserts that although it referred to the high number of companies requesting MET/IT, 
the European Union did not specify th e number of MET/IT responses received.1692  
7.890  The European Union asserts that since the issue concerns the capacity of the European Union 
to investigate the claims, the explanation that th e number was so substantial that an individual 
examination was administratively impossible is completely sufficient.1693 
7.891  We do not agree with China that Article 12.2.2 requires the publication of the number of 
MET/IT responses received by the European Union.  We fail to see how "information" concerning the 
number of MET/IT responses received could be material  to the investigating authority, or considered 
to have led to the imposition of the anti-dumping duty,  and China makes no arguments in this regard.  
Moreover, the Definitive Regulation does explain that  the number of responses was so large as to 
make it unfeasible for the Commission to consider them all, and therefore a sample was considered.
1694  To the extent the number of MET/IT claims may have been relevant in the 
European Union's determination, we consider that this was sufficient to satisfy the requirements of 
Article 12.2.2.  We therefore reject Ch ina's allegations in this regard.   
                                                      
1689 China, first written submission, para. 1392. 
1690 European Union, first written submission, para. 870. 
1691 Definitive Regulation, Exhibit CHN-3, recitals 11-19.  We note that this issue is also addressed in 
the Provisional Regulation, Exhibit CHN-4, at recitals 12-27. 
1692 China, first written submission, para. 1393. 
1693 European Union, first written submission, para. 871. 
1694 Definitive Regulation, Exhibit CHN-3, recitals 60-61 .  We note that this discussion was in response 
to arguments from interested parties asserting an oblig ation to consider each MET/IT  claim individually.  In 
addition, we note that this issue is also addressed in the Provisional Regulation, Exhibit CHN-4, recitals 66-77.  WT/DS405/R 
  Page 355  
 
 7. dumping margin calculation 
7.892  China asserts that the European Union faile d to provide information in the Definitive 
Regulation regarding the quantification, e.g. in terms of percentages, fo r allowances in the form of 
adjustments for differences in transport costs, ocean  freight and insurance costs, handling, loading and 
ancillary costs, packing costs, credit costs, warra nty and guarantee costs, commissions, and R&D and 
design costs, or the methodology applied for the exclusion of STAF.1695   
7.893  The European Union notes that it does not, as a no rmal practice, publish figures in this regard, 
asserting that the relevant data are confidential to the individual producers, but that where an across-
the-board adjustment is made the figure will be published, as was the case for the adjustment for 
differences in the quality of leather used by Brazilian and Chinese exporters.1696  
7.894  We note that it is clear that the European Union did explain the nature of the allowances made 
in order to undertake a fair comparison of norma l value and export price, at recitals 126-145 of the 
Definitive Regulation.1697  It is true, as China alleges, that th e actual value of those adjustments is not 
set forth in the Definitive Regulation.  However, we share the European Union's view, which China 
has not disputed, that the relevant  information may well be confiden tial, and therefore could not be 
included in the public notice under Article 12.2.2.  In any event, while it is clear that whether 
adjustments were made in the calculation of dump ing margins is significant in the calculation of 
dumping margins, China has not demonstrated that the precise level of those adjustments, while no 
doubt of interest to the parties, should have been c onsidered material by the investigating authorities, 
and as having led to the imposition of the anti-dumping duties.1698  We therefore reject China's 
allegations in this regard.  
8. alleged failure to provide reasons for the re jection of arguments made by interested 
parties on a number of issues 
7.895  China asserts that the European Union did not provide reasons for the rejection of arguments 
(i) concerning the selection of Brazil as analogue country; (ii) questioning the accuracy of the information provided by the complainant; (iii) requ esting clarifications concerning the removal of 
information from the standing file and disclosure of data in the standing file and complaint; 
(iv) requesting access to 585 declarations of support; (v) that STAF shoes be excluded even if they did 
not reach the €9.00 price threshold established in the Provisional Regulation; (vi) that counterfeiting 
was a factor other than the dumped imports which had caused injury; (vii) that the Complainants 
should provide a breakdown per country  of the information on consumption; (viii) that the decisions 
to reject the MET applications of certain compan ies were unjustified; (ix)  requesting confirmation 
concerning the deadline that was granted to the Br azilian producers to respond to the questionnaire; 
(x) submitting that sampled producers should be considered non-cooperating as one questionnaire 
                                                      
1695 China, first written submission, paras. 1394-1396. 
1696 European Union, first written submission, para. 872. 
1697 We note that this issue is also addressed in the Provisional Regulation, Exhibit CHN-4, 
recitals 131-133. 
1698 Moreover, we note the statement in the Definitiv e Regulation, which China has not disputed, that 
"Some parties argued that the Commission did not disclose the exact figures on which basis the adjustment was calculated and why leather adjustment had to be revised after the 
provisional determination … However, the revision on the leather adjustment is explained 
above.  Furthermore, the Commission disclo sed to all companies concerned by this 
proceeding the necessary details on the basis of which it is intended to recommend the 
imposition of definitive measures." 
Definitive Regulation, Exhibit CHN-3, recitals 130- 131.  As we understand EU practice, confidential 
information on such matters as adjustments is often a part  of individual disclosures to companies participating in 
the investigation.  See footnote 1668 above. WT/DS405/R 
Page 356  
 
 response was not made accessible in the non-confiden tial file and the other companies did not respond 
to certain questions, had not requested confidential treatment or shown good ca use for such treatment 
or submitted an explanation as to why summari zation was not possible; and (xi) submitting, inter alia , 
that all footwear that complied with the STAF criteria should be excluded, without a price 
threshold.
1699   
7.896  The European Union notes first that recita ls 105-122 of the Definitive Regulation address 
arguments concerning the choice of the analogue country. In the European Union's view, China's criticisms would require that every demand for explan ation or justification by  an exporter or importer 
must be addressed in the public notice.  The Eur opean Union asserts that Article 12.2.2 requires the 
authorities to give reasons for acceptance or rejecti on of "relevant" information and arguments, which 
implies that not every communication requires a res ponse.  Moreover, the European Union contends 
that there is no obligation to give an explanation as to why an argument is not relevant.  Finally, the 
European Union contends that requests for informa tion are not "relevant arguments or claims", and 
therefore their rejection does not require published justification.   
7.897  We consider that China's allegations with resp ect to the failure of the European Union to 
address certain arguments is based not on a lack of understanding as to information or clarity of 
reasons set out in the European Union's determina tion, but on substantive di sagreements with various 
elements of that determination.  Thus, for instan ce, the bases for the selection of the analogue country 
are clear from the Definitive Regulation at recitals  105 to 122, and the Provisional Regulation at 
recitals 98-124.  Similarly, the basis for the tr eatment of STAF, the deci sion to reject the MET 
applications of certain companies, and the treat ment of sampled producers as cooperating are all 
explained in the Definitive Regulation.  That Ch ina disagrees with the investigating authorities' 
actions and the substance of its decisions in these matters does not establish that a greater level of 
detail was required, and does not mean that the Eu ropean Union was required to respond in detail to 
each argument made with respect to these issues.  China has not demonstrated that these matters 
should have been considered material by the i nvestigating authorities, and as having led to the 
imposition of the anti-dumping duty.  We agree with the European Union that "requests" for 
clarification of actions of the investigating aut hority, for access to documents, or for confirmation 
concerning deadlines, are not within the scope of Article 12.2.2.  We fail to see how this 
"information" could be material to the investigati ng authority, or considered to have led to the 
imposition of the anti-dumping duty, and China mak es no arguments in this regard.  We therefore 
reject China's arguments in this regard.  
7.898  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union acted inconsistently with Article 12.2.2 by  failing to provide adequate explanations with 
respect to the matters raised by China in the Review and Definitive Regulations. 
8. Claims III.6 and III.16 – Alleged violations of Articles 3.1, 3.2, 9.1, 9.2 and 17.6(i) of the 
AD Agreement – Imposition and collection of duties  
7.899  In this section of our report, we address Chin a's claims that the European Union acted 
inconsistently with Articles 3.1, 3.2, 9.1, 9.2 and 17.6(i) of the AD Agreement in the original 
investigation in its determination of the amount  of lesser duty to impose on dumped imports from 
China and in the collection of anti-dumping duties.   
                                                      
1699 China, first written submission, paras. 1397-1402.  WT/DS405/R 
  Page 357  
 
 (a) Arguments of the parties 
(i) China 
7.900  China claims that, in the original investigation,  the European Union violated Articles 3.1, 3.2, 
9.1, and 17.6(i) of the AD Agreement in determin ing the amount of lesser duty to impose on imports 
from China by (i) failing to undertake an objective exam ination in the adjustment of injury margins; 
(ii) not basing the "underselling" calculation on a ll export sales; and (iii) failing to properly establish 
the reasonable rate of profit for the EU industry.  In addition, China claims that the European Union 
violated Articles 3.1 and 9.2 of the AD Agreement by discriminating against China in the collection 
of anti-dumping duties.
1700   
7.901  China asserts that, while Article 9.1 of the AD Agreement states only a "preference" for 
application of a lesser duty, the European Union has implemented a mandatory lesser duty rule in its 
legislation.1701  In China's view, once an authority chooses to apply a lesser duty, "an authority is 
bound to interpret the term ' injury ' in terms of Article 3."1702  China submits that the implementation 
of a lesser duty rule necessarily involves a determin ation of injury, which implies that Article 3.1 is 
relevant, and that the concept of inju ry must be the same for lesser duty.1703   
7.902  China considers that Articles 3.1, 3.2, 9.1, 9.2 and 17.6(i) of the AD Agreement provide 
guidance for the determination of an appropriate less er duty, application of which is mandatory under 
EU law,1704 and bases its claims on Articles 3.1 and 17.6(i) of the AD Agreement, asserting that "this 
is the only way that a lesser duty assessment could be challenged."  China rejects as an impermissible interpretation of Article 9.1 the view that since the only expressed maximum duty level is the amount 
of the dumping margin, WTO Members using the lesser duty rule are free to set any duty level below 
that amount.  China argues that to allow investig ating authorities to set any duty level up to the 
maximum of the dumping margin could open the door to "discriminatory and non-objective setting of 
anti-dumping duty levels".
1705   
7.903  China emphasizes that it understands the Eu ropean Union's lesser duty calculation 
methodology, including that "non- injurious price represents ' the price that would be adequate to 
remove the injury to the domestic industry '."1706  China recognizes that there are no definitions of the 
concepts or methodologies relevant to application of a lesser duty rule in either the AD Agreement or 
EU law.  Nonetheless, China considers that certain  principles "might be useful in interpreting the 
lesser duty rule provision", including the concept of price undercutting in Article 3.2.1707  C h i n a  
concludes that the European Union's price underselling methodology, used in its lesser duty calculation, is conceptually similar to Article 3.2 of the AD Agreement.
1708  
7.904  According to China, the European Union appli es its lesser duty rule by calculating a price 
which represents the price that would be adequate to  remove the injury to the domestic industry, the 
"non-injurious price", usually by taking the cost  of production of the EU industry, and adding a 
                                                      
1700 China, first written submission, paras. 1102-1145. 
1701 China, first written submission, para. 1088. 
1702 China, second written submission, para. 1376 (italics in original).   
1703 China, second written submission, para. 1382. 
1704 China, answer to Panel question 98, para. 651. 
1705 China, second written submission, paras. 1374-1 375, referring to European Union, first written 
submission, para. 659. 
1706 China, second written submission, para. 1364, quoting China, first written submission, para. 1090 
(italics in original).  
1707 China, second written submission, para. 1365. 
1708 China, first written submission, para. 1092; second written submission, paras. 1368-1371. WT/DS405/R 
Page 358  
 
 reasonable rate of profit.
1709  It then compares the non-injuriou s price to the price of the dumped 
imports, and the difference, expressed in percentage terms, is referred to by China as the margin of 
"price underselling", "injury elimina tion level" or "injury margin".1710  The anti-dumping duty is set at 
a rate that will enable the domestic industry to cover its costs and obtain the profit that could 
reasonably be expected in the absence of dumped imports.   
7.905  China contends that the European Union originally followed its usual methodology in this 
case, but then changed its methodology to take acc ount of the fact that imports from China were 
limited by a quota for most of the period of investiga tion.  China states that the European Union first 
calculated injury margins, following its usual prac tice, of 29.5 per cent for Viet Nam and 23 per cent 
for China, but then, stating that the investigati on was characterized by "distinct and exceptional 
features", notably the existence of a quota on Chinese imports for much of the period of investigation, 
the European Union adjusted the in jury margins to give considerati on to the "quantitative element of 
injurious dumping."  The adjustment resulted in in jury margins for China an d Viet Nam respectively 
of 16.5 per cent and 10 per cent.  As a result, Ch ina contends that "the definitive anti-dumping duty 
imposed on China was significantly higher than that  imposed on Viet Nam, despite the fact that 
Viet Nam's dumping, price undercutting, and injury  margins were all higher than those applied to 
China."1711 
7.906  China asserts that the European Union did not adequately explain the rationale behind the 
methodology used to calculate the adjusted injury ma rgins.  China recalls that the Panel's "evaluation 
of the methodology can only be made on the basis of the public notice or any other document of public or confidential nature from the time of the original investigation", and asserts that the two 
relevant documents in this regard are the Defi nitive Regulation and the Additional Final Disclosure 
Document.  According to China, the European Un ion determined that the 2003 volume of imports 
from China and Viet Nam was non-injurious and calcu lated the non-materially injurious value amount 
of imports ("NIV") on the basis of that volume of imports.  Subsequently, the European Union 
allocated 62 per cent of the NIV to Viet Nam a nd 38 per cent to China, reflecting import volumes 
during the period of investigation.  China considers that this allocation was not adequately explained, 
as China asserts that the actual split in import volume for 2003 was 76 per cent for Viet Nam and 
24 per cent for China, and in 20 05, the first year with no qu ota on Chinese imports, the split was 
65 per cent for Viet Nam and 35 per cent for China.
1712  China asserts that by allocating the NIV based 
on the ratio of imports in the period of investiga tion, the European Union "effectively 'freezes' the 
quota-distorted import situation,"1713 and the European Union failed to explain how the choice of 
period "even[ed] out distortions due to differe nces in average per unit values of Chinese and 
Vietnamese imports" as stated in the Definitive Regulation.1714  According to China, the European 
Union later selected 2005 as the denominator in th e adjustment calculation, without adequately 
explaining the logic behind using data from different periods.1715  China contends that had data from 
only one period been used consistently, the resu lt would have been a lower anti-dumping duty for 
China than for Viet Nam.1716  China claims that the adjustment of the underselling margin by applying 
a volume-based reduction ratio to the originally cal culated price-based margin, and the allocation of 
                                                      
1709 China, first written submission, para. 1093. 
1710 China, first written submission, para. 1090. 
1711 China, first written submission, paras. 1095-1098, 1101; referring to and quoting Definitive 
Regulation, Exhibit CHN-3, recitals 298, 301. 
1712 China, first written submission, paras. 1102-1109 .  China contends that  the difference between 
2003, the period of investigation, and 2005 reflect the fact that the quota applied to Chinese imports for the 
entire year 2003, for 8 months of the 12-month period of investigation, and not at all in 2005.  
1713 China, first written submission, para. 1112. 
1714 China, first written submission, para. 1111, quoting Definitive Regulation, Exhibit CHN-3, 
recital 309. 
1715 China, first written submission, paras. 1115, 1119. 
1716 China, first written submission, para. 1120.  WT/DS405/R 
  Page 359  
 
 the non-injurious import value in relation to import values for 2005, which was outside the 
investigation period, constitute violations of  Articles 3.1 and 17.6(i) of the AD Agreement.
1717   
7.907  In addition, China notes that the injury margin was calculated based on a weighted-average to 
weighted-average basis, as the dumping margin ha d been calculated.  However, only some of the 
Chinese exporters' sales were used  in calculating underselling.1718  China asserts that this approach 
raises two problems: i) the use of different export price datasets for the dumping and injury margin 
calculations and ii) the fact that not all export prices we re used in the latter.  China asserts that for the 
lesser duty rule, a direct comparison is made betw een the dumping and injury elimination margins, 
and that unless the same set of export sales is us ed the dumping and injury margins could not be 
compared.1719  China refers to the findings of the panel in EC - Bed Linen with respect to zeroing as 
guidance for assessing whether the European Union' s injury margin determination was unbiased and 
objective, and concludes that if the injury margin ha d been calculated on the basis of all export prices, 
the rate of anti-dumping duty "may have been significantly different."1720  China claims that by 
relying on different approaches in calculating the dumping and injury margins and by not including all export sales in applying the lesser duty rule, the European Union violated Articles 3.1 and 17.6(i) of 
the AD Agreement.
1721   
7.908  China also challenges the Europ ean Union's determination of th e reasonable rate of profit 
used in determining the injury margin on the basi s of sales of footwear not affected by injurious 
dumping.  China asserts that "[f]ootwear not subject to materially injurious dumping is not product concerned and the rate of profit achievable may be much higher for footwear not subject to 
investigation."  China also considers that the Eu ropean Union did not act even-handedly by taking 
into account only the profitability of one segment of the domestic industry.  China claims that the 
European Union's calculation of the profit margin for the EU industry was not objective, and thus 
violated Article 3.1 of the AD Agreement.
1722   
7.909  Finally, China asserts that imports from China cannot have caused more injury than imports 
from Viet Nam, as the dumping, price undercutting, injury, and original underselling/injury 
margins1723 calculated for Viet Nam were highe r than those calculated for China.1724  In addition, 
Viet Nam had a significantly higher market share th an China during the injury investigation period, 
including during the period of investigation.1725  China considers that the Article 9.2 "obligation not to 
discriminate between " imports … from all sources found to be dumped and causing injury " applies 
equally in case an anti-dumping duty is imposed at a level " [that] would be adequate to remove the 
injury to the domestic industry .""1726  Moreover, China asserts that even though the European Union's 
methodology may appear reasonable, the result is discriminatory.1727  Therefore, China argues that 
                                                      
1717 China, first written submission, para. 1122; second written submission, para. 1388. 
1718 China, first written submission, paras. 1123 and 1124.  China notes that the European Union 
indicated "that only 46.6% of the Chinese exporters' sample export sales were used in calculating the injury margin".  China explains that "[t]he  exports of the Chinese sample were 7.3 million pairs, while the matching 
sales in the injury margin calculation were 3.4 [million] pairs.  The matc hing sales accounted for 46.6% of the 
total export sales of the sample."  China, first written submission, fn. 757.  
1719 China, first written submission, paras. 1125-1126. 
1720 China, first written submission, paras. 1129-1131. 
1721 China, first written submission, para. 1134; s econd written submission, para. 1391 (and drafting 
correction to China, first written submission, para. 1134, pursuant to China, second written submission, fn. 844). 
1722 China, first written submission, paras. 1138-1141; second written submission, para. 1393. 
1723 China, second written submission, para. 1400, cl arifying that China, first written submission, 
para. 1143 refers to China, fi rst written submission, para. 1100. 
1724 China, first written submission, para. 1143. 
1725 China, first written submission, para. 1143. 
1726 China, answer to Panel question 98, para. 653. 
1727 China, second written submission, para. 1397. WT/DS405/R 
Page 360  
 
 taking into account the European Union's adjustment  of the price underselling margin and the impact 
of adjustment on the level of duty to be collected , the anti-dumping duties applied to Chinese exports 
were imposed and collected on a discriminatory basis, in violation of Article 9.2 of the 
AD Agreement.
1728 
(ii) European Union  
7.910  The European Union contends that China's cl aims concerning the application of the lesser 
duty rule in this case are based on fundamental misunderstandings about the WTO provisions it 
invokes.  The European Union notes that the lesser  duty principle in Article 9.1 of the AD Agreement 
is implemented by many Members, but that this is the first time that the implementation of this principle has been challenged.  Moreover, the European Union maintains that China does not 
understand the purpose of the European Union's me thodology in applying the lesser duty rule under 
EU legislation.
1729   
7.911  The European Union first asserts that China's cl aim under Article 9.1 of the AD Agreement is 
not within the Panel's terms of reference, because it was not included in China's consultations request, 
but was first mentioned in China's request for establishment of a panel.1730  Moreover, the European 
Union argues, China failed to develop arguments in support of its claim on the basis of Article 9.1, 
and therefore has abandoned this claim.  The Eur opean Union contends in this regard that China 
frames its arguments concerning the application of the lesser duty rule in terms of Articles 3.1 and 
17.6(i) of the AD Agreement.  In addition, the Eur opean Union asks the Panel to conclude that insofar 
as China focuses on the stage of the proceeding at wh ich the level of duties is set, the Panel should 
find the claim outside its terms of reference.1731 
7.912  With respect to substance, the European Union contends that the first sentence of Article 9.1 
explicitly envisages that, where all requirements for the imposition of an anti-dumping duty have been 
fulfilled, a WTO Member may nevertheless decide not to impose such duties or may impose them at a lower level than the margin of dumping.  The Eur opean Union contends that with respect to the 
imposition at a lower level than the margin of dump ing, there is no qualification as to the level at 
which the duties could be set.
1732  The European Union contends that while the second sentence of 
Article 9.1 provides that imposition of a lesser duty ad equate to remove the injury is desirable, the 
option of imposing a lesser duty is not limited to th is situation.  The European Union asserts that 
"even if the expression 'adequate to remove the injury' was capable of being given a 
particular meaning in the light of Article  3 [of the AD Agreement], there is no 
obligation on a Member to adopt that m eaning if it operates a system for imposing 
'lesser duties'."1733   
The European Union concludes that there is no principle in WTO law which could result in the 
imposition of such an obligation on a WTO Member  merely because it describes its lesser duty 
system as one involving lesser duty adequate to remove the injury.1734  
 
7.913  With respect to China's claims under Ar ticle 17.6(i) of the AD Agreement, the 
European Union reiterates its objections to these cl aims.  Moreover, the European Union contends 
                                                      
1728 China, first written submission, paras. 1142 and 1145; second written submission, para. 1401. 
1729 European Union, first written submission, paras. 651-653. 
1730 European Union, first written submission, paras. 654-655; request for preliminary ruling, para. 127. 
1731 European Union, first written submission, para. 659. 
1732 European Union, opening oral statement at the second meeting with the Panel, para. 403. 
1733 European Union, opening oral statement at the second meeting with the Panel, para. 404. 
1734 European Union, opening oral statement at the second meeting with the Panel, para. 404.  WT/DS405/R 
  Page 361  
 
 that, even if a claim under Article 17.6(i) were prope rly before the Panel, China's claim is based on 
the assumption that the lesser duty principle is linked to the notions of injury and price undercutting in 
Article 3 of the AD Agreement.
1735  In the European Union's view, Members are under no obligation 
to apply Article 3.1 in the context of lesser duty.1736  In addition, the European Union contends that a 
claim that a Member has adopted the wrong calculation method under the AD Agreement cannot 
constitute a challenge to that Member's evaluation of facts.1737 
7.914  Assuming that the claim is within the Panel's te rms of reference, the European Union submits 
that the calculation and imposition of a lesser dut y is entirely voluntary, and is not addressed by 
Article 3.1 of the AD Agreement.1738  According to the European Union, Article 3.1 concerns the 
determination of injury for purposes of Article VI  of the GATT 1994.  Article VI contains no 
reference, express or implied, to the notion of l esser duty.  While Articles VI:1 and VI:6 of the 
GATT 1994 establish the notion of injury as a precondition for the levying of an anti-dumping duty, only Article VI:2 refers to a limit on the amount of  duty, stating that the duty should not be greater 
than the margin of dumping.  Accordingly, the Eu ropean Union argues that concepts such as objective 
examination in Article 3.1, applicable to the determination of injury, could only apply to the 
calculation of a lesser duty as a consequence of some other provision of the AD Agreement, but China 
has proffered no indication in this regard.
1739  Accordingly, the European Union considers that there is 
no basis for China's claim under Article 3.1, since th e calculation of a lesser duty is not subject to the 
obligations of Article 3.1.1740   
7.915  Moreover, the European Union argues that even if the clear wording of Article 3.1 did not 
make this point evident, its context would.  In the European Union's view, the voluntary character of 
lesser duty confirms that "the WTO rules impose a maximum limit on the quantity of anti-dumping 
duties that may be imposed, but below this level Members are free to set whatever amount of duty 
they wish."  The European Unio n asserts that these same arguments  refute China's invocation of 
Article 3.1 with respect to the range of export sal es used in calculating price underselling, and the 
determination of a reasonable profit margin.  Moreover, the European Union maintains that in order to 
determine a reasonable profit level for the domestic  industry for purposes of calculating an injury 
margin, it is entirely rational and objective for an inves tigating authority to look at the profit level in a 
segment of the footwear industry that was not the victim of the dumping.1741   
7.916  The European Union does consider that the calcu lation of lesser duty is subject to Article 9.2 
of the AD Agreement, which requires the collection of anti-dumping duties on a non-discriminatory basis.
1742  The European Union asserts that China's ar guments under Article 9.2 refer entirely "to the 
effects of the European Union's methodology rather than the methodology itself".1743  The 
European Union contends that China has not estab lished that the European Union's methodology for 
calculating the lesser duty in this case was discrim inatory towards Chinese producers, since China 
failed to articulate any effective argument in support of its claim, or demonstrate discrimination on the 
part of the Commission.1744  The European Union argues that the reasons for departing from its 
normal practice in calculating lesser duty in this  case were fully explained in the Definitive 
                                                      
1735 European Union, first written submission, paras. 669-670. 
1736 European Union, first written submission, para. 677. 
1737 European Union, first written submission, paras. 674 and 676.  See also opening oral statement at 
the second meeting with the Panel, para. 405. 
1738 European Union, first written submission, para. 664. 
1739 European Union, first written submission, paras. 662-663. 
1740 European Union, answer to Panel question 99, para. 268. 
1741 European Union, first written submission, paras. 664-667. 
1742 European Union, answer to Panel question 99, para. 269; opening oral statement at the second 
meeting with the Panel, para. 402. 
1743 European Union, first written submission, para. 683. 
1744 European Union, first written submission, paras. 685, 687 and 691. WT/DS405/R 
Page 362  
 
 Regulation, and rest on the unusual circumstance that  Chinese exports of footwear were subject to a 
quota limit during most of the injury investigation period.
1745  Further, the European Union argues that 
it is not clear to what China is referring when it argues that, according to "all objective measures" the 
injury from Vietnamese imports was gr eater than that from Chinese imports.1746  The European Union 
maintains that such a broad assertion cannot form th e basis of a viable claim, and must be judged 
against the basic notion of discrimination, and not  on the particular interpretation China wishes to 
accord to it.1747  Therefore, the European Union considers that China's claim based on Article 9.2 of 
the AD Agreement must also be rejected.1748   
(b) Arguments of third parties 
(i) Colombia 
7.917  Colombia explains that its investigating author ity analyses all variables for the determination 
of injury provided for in Article 3 of the AD Agre ement, when determining the application of a lesser 
duty.  Therefore, the investigating authority in Co lombia analyses the "adequ acy of the lesser duty in 
light of Article 3.1 and all of the paragraphs in  Article 3 of the AD Agreement", and in accordance 
with Article 9.1 of the AD Agreement, the investig ating authority "undertakes a comparison between 
the prices of the dumped products under investigati on and the like domestic pr oduct, during the period 
where the dumping took place."1749 
(ii) United States 
7.918  The United States maintains that Article 9. 1 of the AD Agreement does not obligate WTO 
Members to apply a lesser duty, and "for those Me mbers that do apply a lesser duty rule, neither 
Article 9.1 nor any other provision of the AD Agreement provides any guidance on how to calculate a 
lesser duty".  In addition, the United States notes that  Article 9 does not cross-reference Article 3 of 
the AD Agreement, and contends that the latter provi sion is not definitional in nature.  Therefore, 
according to the United States, there is no textual basis to incorporate Article 3.1 requirements for 
making an injury determination to the applica tion of a methodology that Members are under no 
obligation to apply.  Moreover, the United States asserts that "while a lesser duty analysis under 
Article 9.1 presupposes that an authority has made  an affirmative injury determination under 
Article 3, a lesser duty analysis is not the equivalent of an injury determination".  In other words, the 
United States considers that, on the one hand, for pur poses of a lesser duty, the investigating authority 
calculates the level of duty that will serve to "remove the injury", but on the other hand, Article 3 addresses how an investigating authority should de termine the existence of injury.  Finally, the 
United States asserts that nothing in Article 3 di rects an investigating authority to quantify the 
"amount" of injury or even provides a basis for the calculation of the duty level that would be 
sufficient to eliminate the injurious effect of dumped imports.
1750 
(iii) Viet Nam 
7.919  Viet Nam notes that although the application of th e lesser duty principle is encouraged by the 
text of Article 9.1 of the AD Agreement, WTO Members are not obliged to apply the lesser duty 
principle.  Consequently, Viet Nam understands that  "a Member may use the notion of injury in its 
lesser duty rules without thereby incurring a new WTO obligation or extending an existing one."  
                                                      
1745 European Union, first written submission, para. 684. 
1746 European Union, first written submission, para. 686. 
1747 European Union, first written submission, paras. 686 and 690. 
1748 European Union, first written submission, para. 691. 
1749 Colombia, third party written submission, paras. 27-28. 
1750 United States, third party written submission, paras. 38-40.  WT/DS405/R 
  Page 363  
 
 Viet Nam concludes that "it is groundless to cl aim that either the lesser duty rule itself or 
methodology used in application of the rule is inconsistent with the WTO regulations."
1751 
(c) Evaluation by the Panel 
7.920  Before addressing China's claims, we consider it useful to set out our understanding of the 
facts.  In the original anti-dumping investigation at issue, the European Union determined that 
dumped imports from China and Viet Nam caused materi al injury to the then-EC footwear industry, 
and therefore that definitive anti-dumping measures should be imposed.1752  As required by EU law, 
the Commission went on to consider the level of the definitive anti-dumping measures to be applied, 
noting that it should be  
"sufficient to eliminate the material injury  to the Community in dustry caused by the 
dumped imports without exceeding the dumpi ng margins found.  When calculating 
the amount of duty necessary to remove the effects of the materially injurious dumping, it was considered that any measure  should allow the Community industry to 
recover its costs and obtain a profit before  tax that could be reasonable achieved 
under normal conditions of competition, i.e.  in the absence of dumped imports taking 
into account the existence of a quota regi me covering imports from PRC until the end 
of 2004."
1753 
To calculate the amount of duty necessary to achie ve these aims, the Commission first established a 
profit margin which the domestic industry could be expected to obtain in the absence of materially 
injurious dumping and explains how the applicable profit margin was determined to be 6 per cent on 
turnover.  It next determined the price increase th at would be necessary in order to bring the prices of 
imports to a non-injurious level, that is, a level which would allow the industry to achieve the profit 
rate established in the first step.  This resulte d in the calculation of "underselling" margins of 
23 per cent and 29.5 per cent for China and Viet Nam, respectively.1754  The Commission next 
addressed certain "particularities" of the proceeding, notably the fact that until January 2005, imports 
from China were subject to quantitative restrictions .  The Commission stated that this called for a 
"closer consideration of the ade quate level of definitive anti-dum ping measures" and concluded that 
"non-materially injurious import quantities had to ade quately be reflected in the injury elimination 
levels".  In order to do so, the Commission adju sted the "injury elimination levels" for China and 
Viet Nam on the basis of import volumes for 2003, whic h were considered not materially injurious.  
The resulting "non-materially  injurious amounts" were then set in  proportion to the imports in 2005, 
the first year not affected by quantitative restric tions.  Finally, the duty levels established were 
reduced.  This resulted in the determination of "i njury thresholds" of 16.5 per cent and 10 per cent for 
China and Viet Nam respectively.1755  Finally, the Commission responded to the comments of 
interested parties made in response to th e additional disclosure of this methodology.1756  The definitive 
duties were established at the lower of the dumping or injury margins for both China and Viet Nam, 
                                                      
1751 Viet Nam, third party written submission, paras. 23-24. 
1752 The Commission first considered, as required by EU law, whether the imposition of definitive 
measures was in the Community (now Union) interest, and determined that it was.  Definitive Regulation, 
Exhibit CHN-3, recitals. 248-283. 
1753 Definitive Regulation, Exhibit CHN-3, recital 288. 
1754 Definitive Regulation, Exhibit CHN-3, recitals 289-295.  As we understand it, this "price 
underselling" margin is the difference, expressed as a percentage of the total CIF import value, between the 
weighted average import price and the non-injurious price of imports from China and Viet Nam. 
1755 Definitive Regulation, Exhibit CHN-3, recitals 296-301.  The same methodology was applied to 
determination of an injury threshold for Golden Step , the only Chinese company to  receive market economy 
treatment.  However, as its dumping margin was lower than the injury threshold so calculated, the definitive duty was applied at the level of the dumping margin. Id., recitals 302 and 322.  
1756 Definitive Regulation, Exhib it CHN-3, recitals. 303-314. WT/DS405/R 
Page 364  
 
 resulting in the injury elimination levels being established as the ceiling for the country-wide duty 
rates established for both countries.
1757 
 7.921  China claims that, as a result of establishing the level of lesser duty on imports from China at 
a rate higher than the rate of lesser duty establishe d for imports from Viet Nam, the European Union's 
imposition and collection of duties violates Articl es 3.1, 3.2, 9.1, 9.2 and 17.6(i) of the 
AD Agreement.  We note that China has made tw o separate claims in this regard.  Claim III.6 
concerns alleged violations of Articles 3.1, 3.2, 9.1 and 17.6(i) of the AD Agreement in the European 
Union's calculation of the lesser duty, specifically  with regard to the adjustment of the "injury 
margin", the calculation of "underselling", and est ablishment of a "reasonable profit margin" for the 
EU industry.  Claim III.16 concerns alleged viola tions of Articles 3.1 and 9.2 of the AD Agreement 
by discriminating against China in the collection of anti-dumping duties.  Since China's arguments 
under these two claims are largely similar and overlapping, we address the issues raised without distinction.
1758 
7.922  The European Union objects to the inclusion of Article 9.1 in China's claims.  We recall that 
we have found that this aspect of China's claim is within our terms of reference.1759  However, China's 
only reference in its first written submission to Article  9.1 was in the context of describing the factual 
background, and simply stated that while Article 9. 1 expresses a preference for application of a lesser 
duty, EU legislation establish es a mandatory lesser duty rule.1760  The European Union argued that 
China had abandoned its claim under Article 9.1.1761  In its second written submission, China argued 
further that the European Union was asserting an im permissible interpretation of Article 9.1 with 
respect to the lesser duty principle.1762   
7.923  In our view, China has not made out a prima facie  claim of violation of Article 9.1.  China 
itself acknowledges that its legal arguments are based  "in terms of the interpretation of Articles 3.1 
and 17.6(i)."1763  While China argues that the European  Union puts forward an impermissible 
interpretation of Article 9.1, China makes no speci fic arguments explaining the alleged violation of 
Article 9.1.  We therefore make no finding with r espect to Article 9.1 in the context of China's 
claim III.6.1764   
7.924  Nonetheless, we consider that Article 9.1 of  the AD Agreement is the appropriate starting 
point for our examination of China's claims, as it c ontains the only reference to the concept of lesser 
duty in the AD Agreement.  Article 9.1 is in the AD Agreement under the heading "Imposition and 
Collection of Anti-Dumping Duties", and provides: 
                                                      
1757 Definitive Regulation, Exhibit CHN-3, recitals 322 -324.  The duty rate for Golden Step, the only 
Chinese company granted market economy treatment, was set at the level of its dumping margin, which was lower than the injury elimination level.  Id., recitals 302 and 322. 
1758 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision 
further here. 
1759 See paragraphs 7.51-7.61 above. 
1760 See China, first written submission, para. 1088. 
1761 European Union, first written submission, para. 659. 
1762 China, second written submission, paras. 1373-1377. 
1763 China, second written submission, para. 1374. 
1764 However, we note that we find it difficult to see how this provision could be understood to 
establish obligations with respect to the adjustment of injury margins, the underselling calculation, and the establishment of profit margins, as Article 9.1 does not set out any methodological  guidance or any criteria, 
even implicitly, with respect to the calculation of a lesser duty.  WT/DS405/R 
  Page 365  
 
 "The decision whether or not to impose an anti-dumping duty in cases where all 
requirements for the imposition have been fulfilled, and the decision whether the amount of the anti-dumping duty to be imposed shall be the full margin of dumping or less, are decisions to be made by the authorities of the importing Member.  It is desirable that the imposition be permissive in the territory of all Members, and that 
the duty be less than the margin if such l esser duty would be adequate to remove the 
injury to the domestic industry." 
While the term "lesser duty" is not defined in the AD Agreement, it is clear that this term refers to the 
concept of an anti-dumping duty less than the full am ount of the margin of dumping, as described in 
Article 9.1.  It is also clear from the text of Artic le 9.1, and China does not dispute, that the imposition 
of a lesser duty is "desirable", but is not an obligation for WTO Members.
1765  Beyond stating that a 
lesser duty is desirable, if such lesser duty would be "adequate to remove the injury to the domestic 
industry", Article 9.1 says nothing about how the amount of a lesser duty should be established.  
Moreover, Article 9.1 also establishes that a Member may choose not to impose any anti-dumping 
duty at all, even where all the requirements for impos ition have been fulfilled, suggesting that there is 
no lower limit on the amount of duty that a Member may impose if all the requirements for imposition 
have been fulfilled.  Article 9.3 of the AD Agre ement, on the other hand, establishes a clear upper 
limit on the amount of anti-dumping duty that may be imposed.  It requires Member to ensure that the "amount of the anti-dumping duty shall not exceed the margin of dumping as established under Article 2".  This is consistent with Article VI:2  of the GATT 1994, which provides that "[i]n order to 
offset or prevent dumping, a contracting party ma y levy on any dumped product an anti-dumping duty 
not greater in amount than the margin of dumping in respect of such product."  There is no equivalent 
to Article 9.1 in the GATT 1994, which does not even mention the possibility of levying an anti-
dumping duty in any lesser amount.
1766  In our view it is clear, and indeed, China does not contend 
otherwise, that Article 9.1 does not prescribe any methodology or criteria for the determination of the 
amount of a lesser duty, should a Member choose to apply one. 
 
7.925  Article 3.1 of the AD Agreement, which is  the principal basis of China's claims,1767 provides: 
"A determination of injury for purposes of  Article VI of GATT 1994 shall be based 
on positive evidence and involve an objective examination of both (a) the volume of 
the dumped imports and the effect of the dumped imports on prices in the domestic 
market for like products, and (b) the consequent impact of these imports on domestic 
producers of such products." 
As several panels and the Appe llate Body have noted, Article 3.1 informs the more detailed 
obligations with respect to determination of injury set  out in the subsequent paragraphs of Article 3 of 
the AD Agreement.1768  It is clear from Article 3.1 that inv estigating authorities must ensure that a 
"determination of injury" is made on the basis of "positive evidence" and an "objective examination" 
                                                      
1765 See Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 122, and fns. 150 and 156; 
Panel Report, US – Steel Plate , para. 7.116.   
1766 Clearly, however, Article VI of the GATT 1994 does not preclude the possibility of a lesser duty.  
We note that whether or not the application of a "lesser duty" is mandatory under Article 9(5) of the Basic 
AD Regulation, or any other EU law or practice, is irre levant to our consideration of China's claims, as our 
jurisdiction extends only to the WTO covered agreements under which those claims are made. 
1767 We recall that we have concluded that Article 17.6(i) does not establish obligations on investigating 
authorities in the conduct of anti-dumping investigations, and have dismissed China's claims under that provision.  See paragraphs 7.35-7.44 above.  We therefore do not address China's claim under that provision 
further here.   
1768 Appellate Body Report, Thailand – H-Beams , para. 90; and Panel Report, Mexico – Anti-Dumping 
Investigation of High Fructose Corn Syrup (HFCS) from the United States ("Mexico – Corn Syrup "), 
WT/DS132/R, adopted 24 February 2000, and Corr.1, DSR 2000:III, 1345, para. 7.119. WT/DS405/R 
Page 366  
 
 of the volume and effect of dumped imports.
1769  Thus, Article 3.1 establishes criteria and standard for 
an investigating authority's determination of injury , which, as set out in footnote 9, means material 
injury to a domestic industry, threat of material in jury to a domestic industry, or material retardation 
of the establishment of such an industry.  However, Article 3.1 does not prescribe a particular 
methodology that must be followed making that determination.1770 
 
7.926  Nothing in Article 3.1 refers to the concept of  a lesser duty, much less to any methodology or 
criteria for determining the amount of such a lesser  duty, should a Member choose to apply one.  
China's argument rests on the premise that, because Article 9.1 of the AD Agreement refers to the 
imposition of a lesser duty "if such lesser duty would be  adequate to remove the injury to the domestic 
industry", that reference to "injury" in Article 9. 1 means that "[i]mplementation of a lesser duty rule 
necessarily involves a determination of injury which implicitly means that Article 3.1 is relevant."1771  
The European Union, on the other hand, asserts that the option of imposing a lesser duty is not limited 
to a situation where the amount of the lesser duty is  adequate to remove the injury, and therefore 
Article 3.1 has no bearing on the determination of a lesser duty.1772   
7.927  We agree with the European Union, and consider  that while the imposition of a duty at a level 
adequate to remove the injury is clearly contemplat ed by Article 9.1, this does not limit the basis on 
which an investigating authority may choose to appl y a duty less than the full amount of the margin of 
dumping.  Even assuming that, as in this case, an inv estigating authority's stated basis for application 
of a lesser duty is to impose a duty at a level adeq uate to "eliminate the material injury to the … 
industry caused by the dumped imports without exceeding the dumping margins",1773 this does not, in 
our view, establish that Article 3.1 is relevant to th e establishment of the level of lesser duty to be 
applied.  There is, in our view, no basis in the text  of Article 3.1 for the conclusion that it requires any 
particular approach to the calculation of a level of  duty that will be sufficient to remove the injury 
determined to exist.   
7.928  We recall that an injury determination made in  conformity with the requirements of Article 3 
of the AD Agreement, including Article 3.1, is one  of the prerequisites for the establishment of a 
WTO Member's right to impose a definitive anti-du mping measure.  The option of applying a lesser 
duty only arises once this phase of an anti-dumping investigation has been concluded, and the 
Member has concluded that an anti-dumping dut y may be imposed.  That is, the question of 
determining the level of duty less than the margin of  dumping to be imposed only arises (if, indeed, it 
arises at all, given that application of a lesser dut y is not mandatory), after the right to impose an anti-
dumping duty has been established.  Therefore, in our view, Article 3.1, which does not even provide 
guidance concerning methodologies for the determina tion of injury, cannot be stretched to provide 
guidance for the calculation of a lesser duty, which is not required in any case.1774  Certainly, in the 
case of an investigating authority which seeks to est ablish a level of duty "adequate to remove the 
injury", the injury referred to is the injury determ ined under Article 3.  However, we do not agree that 
this suffices to establish that the requirements of Arti cle 3 for the determination that such injury exists 
are necessary elements of the calculation of the amount of lesser duty to be applied.   
                                                      
1769 Appellate Body Report, EC – Bed Linen , para. 110. 
1770 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 204. 
1771 China, second written submission, para. 1382. 
1772 European Union, opening oral st atement at the second meeting with the Panel, para. 37; answer to 
Panel question 99, para. 268. 
1773 Definitive Regulation, Exhibit CHN-3, recital 288. 
1774 In this regard, we note that there is nothing in Article 3.1, or indeed, anyw here in Article 3 of the 
AD Agreement, that would require a quantification of the in jury found to exist.  While an investigating authority 
might choose to employ some form of quantitative analysis, which might result in some estimation of the 
"amount" of injury, in the absence of any requirements in this regard, it seems even less possible that Article 3.1 could be understood to provide guidance to the calculation of an amount of duty "adequate to remove the injury 
to the domestic industry" as indicated in Article 9.1.   WT/DS405/R 
  Page 367  
 
 7.929  China also asserts a violation of Article 3.2 of the AD Agreement, which provides: 
"With regard to the volume of the dumped imports, the investigating authorities shall 
consider whether there has been a signifi cant increase in dumped imports, either in 
absolute terms or relative to production or  consumption in the importing Member.  
With regard to the effect of the dumped imports on prices, the investigating 
authorities shall consider whether there h as been a significant price undercutting by 
the dumped imports as compared with the price of a like product of the importing Member, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree.  No one or several of these factors can necessarily give 
decisive guidance."  
Article 3.2 thus establishes specific requirements, expanding on Article 3.1, with respect to the 
consideration of the volume and prices of dumpe d imports in making a determination of injury.
1775  
However, again, nothing in Article 3.2 prescribes a particular methodology for the considerations that 
the investigating authority must undertake, including consideration of whether there has been 
"significant price undercutting".1776  China's arguments with respect to Article 3.2 simply assert a 
conceptual similarity between "price undercutting" re ferred to in Article 3.2, and the notion of "price 
underselling" in the European Union's calc ulation of the lesser duty to be applied.1777  Even assuming 
that the two are similar concepts, we fail to see how  this can establish that, in considering the question 
of price underselling, the European Union is requ ired to comply with Article 3.2, which as noted, 
establishes no specific guidelines for the consideration of price undercutting.   
 
7.930  China also claims a violation of Article 9.2 of  the AD Agreement, which provides in relevant 
part: 
"When an anti-dumping duty is imposed in r espect of any product, such anti-dumping 
duty shall be collected in the appropriate amounts in each case, on a 
non-discriminatory basis on imports of such product from all sources found to be 
dumped and causing injury, except as to imports from those sources from which price undertakings under the terms of this  Agreement have been accepted." 
Article 9.2 clearly requires an investigating authority to collect an anti-dumping duty in "the 
appropriate amounts" on all imports found to be du mped and causing injury without discriminating 
between different sources of those imports.  Wh ile this is generally understood to prohibit 
discriminatory collection of anti-dumping duties as  between imports found to be dumped and causing 
injury from different sources within a single WTO Member,
1778 China's argument is that the European 
Union discriminated between imports from China and Viet Nam with respect to the rate of lesser duty 
imposed.  China argues that the European Union discr iminated against China in adjusting the injury 
margin, resulting in a higher duty rate for China th an for Viet Nam, since Viet Nam's market share 
                                                      
1775 Appellate Body Report, EC – Tube or Pipe Fittings , para. 113. 
1776 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 204. 
1777 China states that "this point is only being made in order to establish the correct context within 
which the European Union's price underselling calcula tion takes place." China, second written submission, 
para. 1371. 
1778 See, for example, Panel Report, United States – Final Dumping Determination on Softwood 
Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada ("US – Softwood Lumber V 
(Article 21.5 – Canada) "), WT/DS264/RW, adopted 1 September 2006, as reversed by Appellate Body Report 
WT/DS264/AB/RW, DSR 2006:XII, 5147, para. 5.38.  ("It is  not clear that collection of duty only on imports 
into certain regions, to certain purchasers, or during cer tain time-periods, even if otherwise possible, would be 
consistent with [Article 9.2]." (footnote omitted)). WT/DS405/R 
Page 368  
 
 was higher than China's, Viet Nam's dumping margin  was higher than China's, and by "all objective 
measures" imports from Viet Nam caused more inju ry to the EU industry than imports from China.
1779   
7.931  In our view, China's argument does not state a clai m that falls within the scope of Article 9.2.  
Even assuming that Article 9.2 applies to the collection of anti-dumping duties from sources in different WTO Members, a question we need not and do not address,
1780 there is no dispute that the 
European Union did collect duties, in what it ha d determined to be the "appropriate amounts", on 
imports from "all sources" found to be dumped a nd causing injury, that is, on imports from both 
China and Viet Nam.1781  That the rate of duty on imports from different sources is different does not 
establish a violation of Article 9.2 – indeed, this is to be expected.   
7.932  China argues that the European  Union discriminated against China because several indicators 
demonstrated that imports from China were causing less injury to the EU industry than imports from 
Viet Nam were causing, but the rate of lesser duty on import from China was higher than the rate of 
lesser duty on imports from Viet Nam.  However, in our view, these "indicators" do not demonstrate that the lesser duty applied to imports from China should have been lower than the lesser duty applied 
to imports from Viet Nam, given that we have  found that the AD Agreement provisions relied upon 
by China do not establish any requirem ents for the determination of the amount of a lesser duty at all.   
7.933  Based on the foregoing, we conclude that China has failed to demonstrate that the European 
Union acted inconsistently with Articles 3.1, 3.2,  9.1, 9.2 and 17.6(i) of the AD Agreement in the 
imposition and collection of anti-dumping duties on imports from China.   
9. Claims II.14 and III.21 – Alleged consequential violations of Articl es 1 and 18.1 of the 
AD Agreement  
7.934  We now turn to the consequen tial claims raised by China.
1782  With respect to both the 
Review Regulation and the Definitive Regulation, Ch ina alleges violations of  Articles 1 and 18.1 of 
the AD Agreement as a consequence of the violations  it alleges with respect to the dumping, injury, 
and procedural aspects of both regulations.1783  More specifically, with respect to the Review 
Regulation, China claims violation of Articles 1 a nd 18.1 as a consequence of alleged violations of 
Articles 2.1, 2.4, 3.1, 3.4, 3.5, 6.1.2, 6.2, 6.3, 6. 5, 6.5.1, 6.5.2, 6.8, 6.10, 12.2.2 and 17.6(i) of the 
AD Agreement.1784  With respect to the Definitive Regulati on, China claims violations of Articles 1 
and 18.1 as a consequence of alleged viol ations of Articles 2.2.2, 2.4, 2.6, 3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 
                                                      
1779 China, first written submission, para. 1143; seco nd written submission, paras. 1400-1401; answer 
to Panel question 117, paras. 65-69. 
1780 We recall that China's claim of discrimination in this context is made only under Article 9.2 of the 
AD Agreement.   
1781 China has made no claim under Article 9.2 of the AD Agreement challenging the amount of lesser 
duty collected on imports from China as not "appropriate", although it does challenge the European Union's methodology in calculating that amount under Articles 3.1, 3.2, 9.1 and 17.6(i) of the AD Agreement, a claim 
we have rejected.  To the extent that China is arguing that the appropriate amount of duty was not imposed 
because imports from China caused less injury than imports from Viet Nam,  we have concluded above that the 
AD Agreement does not contain any oblig ations with respect to the calculation of a lesser duty, and therefore we 
see no basis for a claim of violation of Article 9.2 in this regard. 
1782 We recall that we have addressed a number of consequential claims of violation, in particular with 
respect to Article 6.2 of the AD Agreemen t, in the course of our findings above. 
1783 We note that China requested findings on these claims with respect to the Review Regulation at 
paragraphs 817(n) and 1224(n) of its first and second wr itten submissions, respectively, but did not specifically 
request findings on these claims with respect to the Definitive Regulation.   
1784 China, first written submission, para. 8 16; second written submission, para. 1221.  WT/DS405/R 
  Page 369  
 
 6.1.1, 6.2, 6.4, 6.5, 6.5.1, 6.5.2, 6.9, 6.10, 6.10.2, 9.2, 9.3, 12.2.2, and 17.6(i) of the 
AD Agreement.
1785   
7.935  We note that China has presented no specific arguments in support of these consequential 
claims.  In its first written submission, China simp ly quotes the text of Articles 1 and 18.1 of the 
AD Agreement.1786  In its second written submission, China again quotes these provisions, and in 
addition refers to the rulings of the panels in US – 1916 Act  and US – Customs Bond Directive .  
However, China does not connect these rulings to its claims of consequential violations of Articles 1 
and 18.1 of the AD Agreement.  Nor does China a dvance any arguments on the basis of these panel 
reports.1787  In these circumstances, in light of the detailed findings we have made above, we see no 
need to rule on these consequential claims.  To do so would add nothing to our findings, and would 
not assist in understanding them.  Moreover, as th e measures at issue, the Review and Definitive 
Regulations, have expired, fi ndings on these consequential claims can have no effect on 
implementation.  We therefore c onsider it appropriate to exercise judicial economy in respect of 
China's consequential claims of violation of  Articles 1 and 18.1 of the AD Agreement. 
VIII.  CONCLUSION AND RECOMMENDATIONS 
A. CONCLUSIONS  
8.1 Having considered the European Union's pr eliminary objections, we conclude that: 
(a) China's "as such" claims under Articles 6.10, 9.3 and 9.4 of the AD Agreement and 
X:3(a) of the GATT 1994 against Article 9(5) of the Basic AD Regulation are within our terms of reference;  
(b) China's claim under Article 3.5 of the AD Agreement with respect to the causation 
analysis in the expiry review is within our terms of reference;  
(c) China's claims under 12.2.2 of the AD Agreemen t with respect to the adequacy of the 
explanation of the determinations in the or iginal investigation and expiry review are 
within our terms of reference;  
(d) China's claim under Article 9.1 of the AD Ag reement with respect to the lesser duty 
determination in the original investigatio n is within our terms of reference; and 
(e) Article 17.6(i) of the AD Agreement does not impose any obligations on the 
investigating authorities of WTO Members in anti-dumping investigations that could be the subject of a finding of violation, a nd we therefore dismiss all of China's claims 
of violation of Article 17.6(i) of the AD Agreement.   
8.2 In light of the findings we have set out in th e foregoing sections of our Report, we conclude 
that China has established that the Euro pean Union acted inconsistently with: 
(a) Articles 6.10, 9.2 and 18.4 of the AD Agreement, Article I:1 of the GATT 1994, and 
Article XVI:4 of the WTO Agreement, with respect to Article 9(5) of the Basic AD Regulation "as such";  
                                                      
1785 China, first written submission, para. 1406; second written submission, para. 1536. 
1786 China, first written submission, paras. 814-815 and 1404-1405. 
1787 China, second written submission, paras. 1222-1223 and 1537. WT/DS405/R 
Page 370  
 
 (b) Articles 6.10 and 9.2 of the AD Agreement with respect to Article 9(5) of the Basic 
AD Regulation "as applied" in the original investigation;  
(c) Article 2.2.2(iii) of the AD Agreement with  respect to the determination of the 
amounts for SG&A and profit for Golden Step in the original investigation;  
(d) Article 6.5 of the AD Agreement in connecti on with the original investigation with 
respect to: 
(i) the non-confidential questionnaire respon se of one sampled EU producer; and  
(ii) missing declarations of support.  
(e) Article 6.5.1 of the AD Agreement in connec tion with the original investigation with 
respect to: 
(i) the individual production data of domes tic producers for the first quarter of 
2005; 
(ii) certain information in the non-confid ential questionnaire responses of the 
sampled EU producers;  
(iii) the non-confidential questionnaire respon se of one sampled EU producer; and  
(iv) missing declarations of support.  
(f) Article 6.5 of the AD Agreement in connecti on with the expiry review with respect 
to: 
(i) the non-confidential responses to the standing form of four EU producers; 
(ii) Table C4 of the questionnaire response of Company H; and  
(iii) certain information in the non-confid ential analogue country questionnaire 
responses of specific producers.  
(g) Article 6.5.1 of the AD Agreement in connec tion with the expiry review with respect 
to: 
(i) certain information in the expiry review request; 
(ii) declarations of support; and  
(iii) Section B2 of the non-confidential questionnaire response of Company F.  
8.3 In light of the findings we have set out in th e foregoing sections of our Report, we conclude 
that China has not established that the European Un ion acted inconsistently with: 
(a) Article 6.10.2 of the AD Agreement with r espect to the examination of the four 
Chinese producers who requested individual treat ment in the original investigation;  
(b) Articles 2.4 and 6.10.2 of the AD Agreem ent, Paragraph 15(a)(ii) of China's 
Accession Protocol, and Paragraphs 151(e) and (f) of China's Accession Working  WT/DS405/R 
  Page 371  
 
 Party Report, with respect to the ex amination of the non-sampled cooperating 
Chinese exporting producers' MET applications in the original investigation;  
(c) Article 6.10 of the AD Agreement with respect  to the selection of the sample for the 
dumping determination in the original investigation;  
(d) Article 11.3 of the AD Agreement with respect to the analogue country selection 
procedure and the selection of Brazil as the analogue country in the expiry review;  
(e) Articles 2.1 and 2.4 of the AD Agreement and Article VI:1 of the GATT 1994 with 
respect to the analogue country selection procedure and the selection of Brazil as the analogue country in the original investigation;  
(f) Article 11.3 of the AD Agreement with r espect to the PCN system used by the 
Commission in the expiry review;  
(g) Article 2.4 of the AD Agreement and Article  VI:1 of the GATT 1994 with respect to 
the PCN system used and the adjustment for leather quality made by the Commission 
in the original investigation;  
(h) Article 2.6 of the AD Agreement, read t ogether with Articles 3.1 and 4.1 of the 
AD Agreement, with respect to the Special Technology Athletic Footwear (STAF) in 
the original investigation;  
(i) Articles 3.1 and 6.10 of the AD Agreemen t and Article VI:1 of the GATT 1994 with 
respect to the procedure for sample selection and the selection of the sample for the injury analysis in the original investigation and the expiry review;  
(j) Article 11.3 of the AD Agreement with respect  to the procedure for sample selection 
and the selection of the sample for the injury  determination in the expiry review;  
(k) Article 3.3 of the AD Agreement with resp ect to the determination to undertake a 
cumulative assessment in the original investigation;  
(l) Article 11.3 of the AD Agreement with respect to the finding of likelihood of 
continuation or recurrence of injury in the expiry review;  
(m) Articles 3.4, 3.1 and 3.2 of the AD Agreement with respect to the evaluation of injury 
indicators in the original investigation;  
(n) Articles 3.5 and 3.1 of the AD Agreement with respect to the causation determination 
in the original investigation;  
(o) Article 6.1.1 of the AD Agreement and Paragraph 15(a) of China's Accession 
Protocol with respect to the MET/IT clai m forms in the original investigation;  
(p) Article 6.1.2 of the AD Agreement with respect to the non-confidential injury and 
Union Interest questionnaires responses of certain sampled EU producers in the expiry review;  
(q) Article 6.4 of the AD Agreement, and as c onsequence or independe ntly, Article 6.2 of 
the AD Agreement, with respect to certain information in the original investigation 
and expiry review;  WT/DS405/R 
Page 372  
 
 (r) Article 6.5 of the AD Agreement, and as a consequence or independently, Article 6.2 
of the AD Agreement, in connection with th e original investigation with respect to: 
(i) the names of the complainants, suppor ters, sampled EU producers, and all 
known producers;  
(ii) the methodology and data used for the selection of the sample of EU 
producers;  
(iii) adjustments for differences a ffecting price comparability;  
(iv) certain information in the complaint;  
(v) certain information in the Note for the File dated 6 July 2005; and  
(vi) certain information in the non-confid ential questionnaire responses of the 
sampled EU producers;  
(s) Article 6.5.1 of the AD Agreement, a nd as a consequence or independently, 
Article 6.2 of the AD Agreement, in connec tion with the original investigation with 
respect to: 
(i) certain information in the complaint;  
(ii) certain information in the Note for the File dated 6 July 2005; and  
(iii) certain information in the non-confid ential questionnaire responses of the 
sampled EU producers;  
(t) Article 6.5.2 of the AD Agreement, a nd as a consequence, Article 6.2 of the 
AD Agreement, in connection with the origin al investigation with respect to certain 
information in the non-confidential ques tionnaire responses of the sampled EU 
producers;  
(u) Article 6.5 in connection with the expiry review with respect to: 
(i) the names of the complainants, suppor ters, sampled EU producers in the 
review, and sampled EU producers in the original investigation that completed the Union Interest questionnaire in the review;  
(ii) certain information in the expiry review request and CEC submissions; 
(iii) certain information in the non-confid ential questionnaire responses of the 
sampled EU producers;  
(iv) the non-confidential Union Interest questionnaire responses of certain EU 
producers;  
(v) certain information in the declarations of support; and  
(vi) certain information in the non-confid ential analogue country questionnaire 
responses of specific producers;   WT/DS405/R 
  Page 373  
 
 (v) Article 6.5.1 of the AD Agreement in connec tion with the expiry review with respect 
to: 
(i) certain information in the non-confid ential questionnaire responses of the 
sampled EU producers;  
(ii) certain information in the expiry re view request and CEC submissions;  
(iii) the non-confidential Union Interest questionnaire responses of certain EU 
producers; and  
(iv) certain information in the non-confid ential analogue country questionnaire 
responses of specific producers;  
(w) Article 6.5.2 of the AD Agreement in connec tion with the expiry review with respect 
to: 
(i) the names of the complainants, suppor ters, sampled EU producers in the 
review, and sampled EU producers in the original investigation that completed the Union Interest questionnaire in the review; and 
(ii) certain information in the non-confid ential questionnaire responses of the 
sampled EU producers;  
(x) Article 6.2 of the AD Agreement in connecti on with the expiry review with respect 
to: 
(i) the names of the complainants, suppor ters, sampled EU producers in the 
review, and sampled EU producers in the original investigation that completed the Union Interest questionnaire in the review; and  
(ii) certain information in the non-confid ential questionnaire responses of the 
sampled EU producers.  
(y) Articles 3.1 and 6.8 of the AD Agreement with  respect to the failure to apply facts 
available in the expiry review;  
(z) Article 6.9 of the AD Agreement with respect to the time provided for submission of 
comments on the Additional Final Disclosur e in the original investigation;  
(aa) Article 12.2.2 of the AD Agreement in connection with the information and 
explanations provided in respect of specific  issues in the original investigation and 
expiry review; and 
(bb) Articles 3.1, 3.2, 9.1 and 9.2 of the AD Agreement with respect to the imposition and 
collection of anti-dumping duties in the original investigation;   
8.4 In light of the findings we have set out in pa ragraphs 8.2 and 8.3 above , we make no findings, 
based on judicial economy, with respect to China's claims under: 
(a) Articles 9.3 and 9.4 of the AD Agreement and Article X:3(a) of the GATT 1994 with 
respect to Article 9(5) of the Basic AD Regulation "as such"; WT/DS405/R 
Page 374  
 
 (b) Article 9.3 of the AD Agreement with respect to Article 9(5) of the Basic 
AD Regulation "as applied" in the original investigation;  
(c) Article 6.2 of the AD Agreement with resp ect to the questionnaire response of one 
sampled EU producer, missing declarations of  support, and certain information in the 
non-confidential questionnaire responses of th e sampled EU producers, in the original 
investigation;  
(d) Article 6.2 of the AD Agreement with resp ect to the non-confidential responses to the 
standing form of four EU producers and with  respect to Table C4 of the questionnaire 
response of the sampled EU producer (Company H), in the expiry review;  
(e) Article 6.5.1 of the AD Agreement with respect to certain information the non-
confidential analogue country questionnaire  responses of specific producers in the 
expiry review; and 
(f) Articles 1 and 18.1 of the AD Agreement with  respect to the original investigation 
and the expiry review.   
B. 
RECOMMENDATION  
8.5 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed 
under a covered agreement, the action is considered prima facie  to constitute a case of nullification or 
impairment of benefits under that agreement.  Acco rdingly, we conclude that to the extent that the 
European Union has acted inconsistently with cer tain provisions of the AD and WTO Agreements and 
the GATT 1994, it has nullified or impaired bene fits accruing to China under these agreements. 
8.6 On 28 March 2011, the European Union informed the Panel that, as of 31 March 2011, the 
anti-dumping measures on certain footwear from China at issue in this dispute would be terminated, 
and requested that the Panel refrain from maki ng any recommendation pursuant to the first sentence 
of Article 19.1 of the DSU with respect to the expired measures.1788  China did not dispute that the 
anti-dumping measures would expire as indicated by the European Union.  However, China opposes 
the European Union's request that the Panel refrain from making a recommendation, noting that 
Article 19.1 of the DSU provides that "[w]here a Panel or the Appellate Body concludes that a 
measure is inconsistent with a covered agreement, it shall recommend that the member concerned 
bring the measure into conformity with that agreement."1789  In addition, China notes the overall 
function of panels as set out in Article 11 of the DSU.   China also takes note of the fact that the Notice 
of Expiry indicates that the Commission consider ed it "appropriate to monitor for one year the 
evolution of the imports of footwear" from China,  and asserts that this is a "highly exceptional 
measure which effectively prolongs certain effects of the challenged measures beyond the period of 
application of anti-dumping duties".  China asserts that it "maintains a legal interest in obtaining findings from the Panel, [and] also to have a recommendation  from the Panel, in order to avoid a 
repetition of the lapsed measures in future and to ob tain removal of the monitoring of the imports of 
                                                      
1788 European Union, letter dated 28 March 2011, page 1, referring to Notice of the expiry of certain 
anti-dumping measures, Official Journal of the European Union  C 82/4, of 16 March 2011, citing Panel Report, 
Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes ("Dominican 
Republic – Import and Sale of Cigarettes "), WT/DS302/R, adopted 19 May 2005, as modified by Appellate 
Body Report WT/DS302/AB/R, DSR 2005:XV, 7425, paras. 7.363, 7.393 and 7.419; and Appellate Body 
Report, United States – Import Measures on Certain Products from the European Communities ("US – Certain 
EC Products "), WT/DS165/AB/R, adopted 10 January 2001, DSR 2001:I, 373, paras. 81 and 129. 
1789 China, letter dated 30 March 2011, page 1 (footnotes omitted, emphasis added by China).  WT/DS405/R 
  Page 375  
 
 footwear."
1790  China further recalls that the other measure at issue in this dispute, Article 9(5) of the 
European Union's Basic AD Regulation, remains in force, and that it has requested the Panel to 
suggest that "the European Union … refund the an ti-dumping duties paid thus far on imports of the 
product concerned from China."1791 
8.7 There is no dispute that two of the measures at issue in this dispute, the Review and 
Definitive Regulations, expired as of 31 March 2011.  In  this situation, we conclude that there is no 
basis for a recommendation to "bring the [expired] m easure into conformity" under Article 19.1 of the 
DSU.  We note that the Appellate Body and pane ls have taken this approach in a number of 
reports.1792  Indeed, in one case, the Appellate Body specifically criticized a panel for making a 
recommendation with respect to a measure that pane l had concluded was no longer in existence, and 
the Appellate Body itself declined to make a recommendation in that case.1793  We do not agree with 
China's view that the monitoring of imports of  footwear from China by the Commission "prolongs 
certain effects" of the expired measures.  If anything,  such monitoring is a distinct measure, which, if 
a Member believes it to be inconsistent with a provision of the AD Agreem ent or another covered 
Agreement, may be the subject of a new dispute.  However, this monitoring does not in our view 
suffice to establish that we could, or should, ma ke a recommendation with respect to the expired 
measures.  The fact that China requested the Pa nel to make a suggestion under the second sentence of 
Article 19.1 does not affect our conclusion.  First,  as discussed further below, it is clear that the 
making of a suggestion is at the discretion of a pane l.  Moreover, at least one panel has ruled that, 
where it makes no recommendation to the DSB on a claim in dispute, it cannot make any suggestion under Article 19.1.
1794  We take the same approach in this case. 
                                                      
1790 China, letter dated 30 March 2011, page 2 (emphasis in original).   In this regard, China asserts that 
if the Panel were to rule that the measures were inconsistent with the European Union's obligations, the 
European Union would "necessarily also have to immediately stop monitoring imports of footwear pursuant to 
the [Notice of expiry]".  Id., footnote 4. 
1791 China, letter dated 30 March 2011, page 3.   
1792 Appellate Body Reports, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by Ecuador , WT/DS27/AB/RW2/ECU, 
adopted 11 December 2008, and Corr.1 / European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Recourse to Article 21.5 of the DSU by the United States  ("EC – Bananas III 
(Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US) "), WT/DS27/AB/RW/USA and Corr.1, 
adopted 22 December 2008, para. 479, ("As the measure at issue in this dispute is no longer in existence, we do 
not make any recommendation to the DSB pursuant to Article 19.1 of the DSU"); Panel Report, Thailand – 
Customs and Fiscal Measures on Cigarettes from the Philippines ("Thailand – Cigarettes (Philippines) "), 
WT/DS371/R, circulated to WTO Memb ers 15 November 2010 [appeal in progress], para. 8.8 ("We do not 
make a recommendation for the Decembe r 2005 MRSP Notice as it is not disputed that it has expired and does 
not continue to exist for purpose of Article 19.1 of the DSU".); Panel Report, United States – Certain Measures 
Affecting Imports of Poultry from China ("US – Poultry (China) "), WT/DS392/R, adopted 25 October 2010, 
para. 8.7 ("given that the measure at issue, Section 727 has expired, we do not recommend that the DSB request the United States to bring the relevant measure into conformity with its obligations under the SPS Agreement  
and the GATT 1994.") 
1793 Appellate Body Report, US – Certain EC Products , paras. 80-81 and 129 ("the Panel, on the one 
hand, found that "the 3 March Measure is no longer in existence" and, on the other hand, recommended "that the 
Dispute Settlement Body request the United States to br ing its measure into conformity with its obligations 
under the WTO Agreement." … there is an obvious inconsistency between the finding of the Panel that "the 3 March Measure is no longer in existence" and the subsequent recommendation of the Panel that the DSB 
request that the United States bring its 3 March M easure into conformity with its WTO obligations.  The Panel 
erred in recommending that the DSB request the United  States to bring into conformity with its WTO 
obligations a measure which the Panel has found no longer exists . … As we have upheld the Panel's finding 
that the 3 March Measure, the measure at  issue in this dispute, is no longer in existence, we do not make any 
recommendation to the DSB pursuant to Article 19.1 of the DSU.") (emphasis added). 
1794 Panel Report, United States – Final Anti-Dumping Measu res on Stainless Steel from Mexico ("US – 
Stainless Steel (Mexico) "), WT/DS344/R, adopted 20 May 2008, as modified by Appellate Body Report WT/DS405/R 
Page 376  
 
 8.8 As a consequence, the only measure as to which we make a recommendation is Article 9(5) of 
the Basic AD Regulation.  Pursuant to Article 19.1 of the DSU, having found that the European Union 
acted inconsistently with provisions of the AD and WTO Agreements and the GATT 1994 as set out 
above, we recommend that the European Union br ing this measure into conformity with its 
obligations under those Agreements. 
8.9 China requests that the Panel recommend that  the DSB request the European Union to 
withdraw Article 9(5) of the Basic AD Regulation.   
8.10 Article 19.1 of the DSU provides: 
"Where a panel or the Appellate Body concl udes that a measure is inconsistent with a 
covered agreement, it shall recommend that the Member concerned bring the measure 
into conformity with that agreement. In addition to its recommendations, the panel or 
Appellate Body may suggest ways in which the Member concerned could implement the recommendations". (footnote omitted) 
Pursuant to Article 19.1, a panel "shall" recommend that a Member found to ha ve acted inconsistently 
with a provision of a covered agreement "bring the measure into conformity" and "may" suggest ways 
in which a Member could implement that recommenda tion.  Thus, a panel is not required to make a 
suggestion should it not deem it appropriate to do so.
1795   
 8.11 We also note that Article 21.3 of the DSU,  which requires Members to inform the DSB 
regarding implementation of panel and Appellate Body recommendations, provides: 
"At a DSB meeting held within 30 days afte r the date of adoption of the panel or 
Appellate Body report, the Member concerne d shall inform the DSB of its intentions 
in respect of implementation of the r ecommendations and rulings of the DSB". 
(footnote omitted). 
8.12 Previous panels have emphasized that Article 21.3 of the DSU gives the authority to decide 
the means of implementation, in the first instan ce, to the Member found to be in violation.
1796  In this 
case, although we have found the contested measure inconsistent with the AD and WTO Agreements 
and the GATT 1994 in a number of respects, we do not  find it appropriate to make a suggestion with 
respect to implementation of our recommendation, a nd we therefore deny China's request in this 
respect. 
_______________ 
  
                                                                                                                                                                     
WT/DS344/AB/R, DSR 2008:II, 599, para. 8.5 ("We note that by virtue of Article 19.1 of the DSU, a panel has 
discretion to ("may") suggest ways in which a Member could implement the recommendation that the Member concerned bring the measure into conformity with the covered agreement in question. Having made no 
recommendations to the DSB on Mexico's claims with respect to which Mexico seeks a suggestion, however, 
we cannot, and do not, make any suggestion under Article 19.1 of the DSU in these proceedings."). 
1795 Appellate Body Report, US – Anti-Dumping Measures on Oil Country Tubular Goods , para. 189.  
1796 E.g. Panel Reports, EC – Fasteners (China) , para. 8.8; and US – Hot-Rolled Steel , para. 8.13.