EUROPEAN UNION – ANTI-DUMPING MEASURES ON CERTAIN FOOTWEAR FROM CHINA
Document: Report of the Panel
Date: 28 October 2011
Document codes: WT/DS405/R
Complainant: China
Respondent: EU
Third parties: Australia, Brazil, Colombia, Japan, Turkey, U.S., Vietnam
Dispute stage: Panel
Agreements cited: Art. 9  Anti-dumping  Protocol of AccessionArt. 6.10, 9.2, 9.3, 9.4  Anti-dumpingArt. I, XVI:4, X:3(a)  GATT 1994Art. 2.1, 2.4  Anti-dumpingArt. VI:1  GATT 1994Art. 3.1, 17.6, 3.4, 3.5, 6.1.2, 6.5, 6.5.1, 6.5.2, 6.8, 11.3, 12.2.2, 1, 18.1, 2.2.2, 2.6, 9.1, 3.3, 6.2, 6.4, 6.5.1, 6.5.2, 6.1.1, 6.9, 6.10.2  Anti-dumping

EUROPEAN UNION – ANTI-DUMPING MEASURES ON
CERTAIN FOOTWEAR FROM CHINA

Report of the Panel

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/DS405/2, 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.

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 Regulation, 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.

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 complainant 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 positive 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 information in the non-confidential questionnaire
responses filed by sampled EU producers;

- 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 arguments 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 measure 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, the 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.

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 Panel 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 from 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 are 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 obligations 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 Report as annexes (see List of Annexes, pages vi-vii).

V. ARGUMENTS OF THE 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 requested 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 refers to the footnote numbers 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 organization 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 that 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.

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 time, 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 added 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.

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.

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 have modified this paragraph accordingly.
6.21 Paragraph 7.146: Both parties requested review with r espect to this paragraph. 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-dumping investigation, would become pure dicta.
20
6.23 In support of its request, China reiterates the arguments 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.

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 concerned" 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, albeit 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 arguments 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.

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 arguments, 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 language China proposes we add to paragraph 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.

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 the 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 Member must have an estimation of "the actual value
which the proxy is meant to represent"", a view 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 requirement 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.

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 paragraph 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. However, we have inserted
the word "any" before the word "adjustments" in the 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.

China's request, to the extent that China is ar guing that the Panel failed to address its argument
regarding the Commission's unilateral reclassification 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 reclassification 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 this 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 considers that no amendment is necessary.44
6.50 Given that the requested modification reflects China'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

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.

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 benchmark 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.

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 refer 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.

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.

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, which we have taken into 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 and 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, citing China, second written submission, para. 606.

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 reflects 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 submission, 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 statement, China, first written submission, para. 451.

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 this paragraph in response 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 modified 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;
69 European Union, comments on China's request for interim review, p. 3.
70 China, request for interim review, para. 38.

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 made 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].").

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.

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 paragraph 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.

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 the 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.

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 added 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 the 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.

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 the 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 paragraph 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 proceeding 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.

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 modification 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 demonstrated 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.

for confidential treatment on behalf of, inter alia , the supporters of the complaint. We therefore
consider that the last sentence of this paragraph accurately reflects the facts, and have made no change
to this paragraph in response 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 confidential 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 paragraphs 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.

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 requests 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 response 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 question 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.

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 response 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 obligation 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 was 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 production 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 information, 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.

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 European 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 contents 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.

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 "standing 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.

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 European Union's assertion as fact. China 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-confidential 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 nature, 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 between the confidential and non-confidential 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.

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 Panel 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 submitted 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, which 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.

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 would 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 7.806 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.

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 led 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 otherwise 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.

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."

conformity with the Agreement if it rests upon one of those permissible
interpretations."
Taken together, Article 11 of the DSU and Article 17.6 of the AD Agreement establish the standard of
review we must apply with respect to both the factual 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 authority 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).

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 interpretation 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 the 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:

"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 evidence 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.

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 appropriate to dispose of
the issues raised by that request before turning 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 the "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 panel 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 argument 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 respect 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 Definitive Regulation (claims III.3 and III.20) which are not identified on the face

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 nature 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 China's panel request to determine whether it
identifies the specific measure, and provides a brief summary of the legal basis of the
complaint, and potentially whether the 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 subsequent 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, according 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.

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.

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 provisions. 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.

"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
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 Union 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, para. 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.

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.
190 China, first written submission, para. 115; closing or al statement at the first meeting with the Panel,
191 China, first written submission, paras. 99, 104, 122 and 114.

(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.

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.

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 understood 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 directly 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, with 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.

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 issue 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.

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 violations 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 Article 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 that 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 referred 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
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.

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
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.

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 would 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 utility 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 appropriate 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.

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 DSU 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).

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 Union 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 China 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).

(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 the 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 reference 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.

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 establishment 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 "Consultations", 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 Agreement, providing in relevant part:

"17.1 Except as otherwise provided herein , the Dispute Settlement Understanding
is applicable to consultations 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.
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 December 2005, DSR 2005:XXII, 10853.

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 terms of reference were determined
by the complaining Member's panel request, adding that as long as the request for consultations and the
panel request concerned the same "dispute", 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 though they were identified in the panel 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 consultations. 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.

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 agreed 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).

"In our view, the fact that certain provi sions were added to the list of alleged
violations in the request for establishment compared 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 legal 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 Mexico'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).

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 normal 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 "market economy test", require evidence that:
(a) decisions of firms regarding prices, costs and in puts, including for instance 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 payment 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.

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 management positions shall either be in minority
or it must be demonstrated that the company is nonetheless sufficiently independent
from State interference;
(d) exchange rate conversions are carried out at the market rate; and
(e) State interference is not such as to permit circumvention of measures if individual
exporters are given different rates of duty."
These criteria are 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. Producers/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:

 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 applied 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 margin 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.

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 lowest 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.

this regard to Article 9 as a whole, Article 6.10, and 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 country-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.
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.

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 meaning 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.

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 provided 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.

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 yet, 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 reflecting 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 relevant in the context of producers and exporters from
a non-market economy. The United States does not, however, 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.

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 and /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 Article 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 information 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

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-dumping 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" claims, 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.

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 concerned of the product under investigation. In
cases where the number of exporters, producers, importers or types of products
involved is so large as to make such a determination impracticable, the authorities
may limit their examination either to a reasonable number of interested parties or
products by using samples which are 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.

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 inconsistent 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 respect 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.

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.

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 Agreement, by definition Article 9(5) of the Basic
AD Regulation could not violate the non-discrimination 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.

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 long 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

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 different 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.

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 operate 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".

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 under 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.

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.
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.

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 sought 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 the 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.

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 weighted-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 thus, 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 injury 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.

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 conduct 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 determinations initially included the
four largest Chinese producers. However, in the course 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, the 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.

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.

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, China 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.

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 1516 (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.

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 consistent 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 Articles 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 determine 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.

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."
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.

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 reviewed 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 continuation 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 with 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.

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 analysis 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.
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.

(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, that 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."
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 evidence" 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."

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 violation 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.

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 and 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 context 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" based 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.

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.

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 inconsistent with Article 11.3.373

7.165 There is no dispute in this case that the Commission 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 recurrence 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 neither party suggests that it should be so limited.

(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 examine 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-the-spot verification, disclosure of the acceptance 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.

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.
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.

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.
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.
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.

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 four 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 substantiated 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

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.

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 claim 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.

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 contained 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 Accession 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 Paragraph 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 second meeting with the Panel, para. 28.

while Paragraph 151(f) refers to "detailed reasoning", 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 with 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 Paragraphs 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-dumping 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 and 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.

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 producers, 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 prices 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.

"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 that they operate under market economy conditions.433
7.193 Paragraph 15(a) of China's Accession Protocol 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.

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, including 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 calculation 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 European 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.
437 China, answer to Panel question 89, para. 531; second written submission, paras. 1232 and 1241;
closing oral statement at the second meeting with the 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

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 industry 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 sampling 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-sampled 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.
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.

"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 "based 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.
447 See paragraph 7.217 below.

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 sales 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 therefore 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 with the criteria established in Article 6.10.2 of the AD Agreement.
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 understand 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.

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 the 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

453 China, first written submission, paras. 1021-1024.
454 China, first written submission, paras. 1020-1021. China 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.

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 European 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 that "reasonable" for purposes of Article 6.10 is what
is practicable for the investigating authority, in terms of the "number" of exporters 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 establish compliance with Article 6.10, since that did
not encompass agreement with the methodology 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.
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.
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.

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 product 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 "largest percentage" option in Article 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 (Confidential). The European Union "finds it unacceptable
that China should now purport to disown the agreement that it reached 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

(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' association, 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 Th e
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 the 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, opening oral statement at the second meeting with the Panel, paras. 440-442.
468 Notice of Initiation, Exhibit 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.

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 concerned of the product under investigation. In
cases where the number of exporters, producers, importers or types of products
involved is so large as to make such a determination impracticable, the authorities
may limit their examination either to a reasonable number of interested parties or
products by using samples which are 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

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 that 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.

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 parties 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

478 We recall that all STAF was excluded from the product under consideration 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.

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 excluded 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 the 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 reasonably 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

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 information 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 consultations 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.

(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 construction 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.
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
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.

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 price 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,
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.

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 event, China contends that the
drafters of the Protocol actually made their intentions clear as to what an appropriate 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.
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

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-income 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 selecting 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 system of non-automatic import licensing for footwear, and the fact that Brazil
had imposed an anti-dumping duty of $13.85/pair on Chinese footwear imports. China, first written submission,
para. 392.

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 country 511; 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, first written submission, para. 937.
513 China, first written submission, para. 930; second written submission, paras. 1328-1329.

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 costs 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, opening oral statement at the second meeting 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 meeting 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, paras. 173-175; answer to Panel question 37.

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 the 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 Article 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) require 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.

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 Articles 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; first 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 therefore 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.

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 criticism 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 producers is unsubstantiated.540
7.246 With respect to the selection of an analogue country 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 statement 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 meeting with the Panel, paras. 110-117.

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.

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.

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 price 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, Exhibit 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.

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 establish 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 review 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 arguments 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 Anti-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 dumping 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.

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 forth 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 demonstrated 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
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.

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.

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 investigating 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 particular 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 unreasonable 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

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 comparison". 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 considers that the AD Agreement does require that the
analogue country selected be "appropriate", 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 Commission's consideration of those facts.

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 the 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.
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

(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 differences 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 investigation 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, China 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; second written submission, paras. 1331 and 1333.
579 China, first written submission, paras. 412-413; second written submission, paras. 487-488.
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.

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 Article 2.4. Furthermore, the European 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 footwear 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.

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 consider 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, particularly 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.

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 normal 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 understood 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 product 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 original investigation. See, e.g., China, answer to Panel question 27.

physical and technical characteristics which affected price comparability.
599 In our view, however,
the mere fact that an investigating authority chooses 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 demonstrating 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 the 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 argument 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 classifications 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 Regulation, Exhibit CHN-3, recitals 127-145.

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, and 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 requirements of Article 2.2.2 of the AD Agreement.605

602 Definitive Regulation, Exhibit 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

(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" within 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.
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

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), that 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.
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.

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 accounting records that were independently 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 regarding Article 9.4, in Article 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.

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 producers 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, Exhibit 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 sales) 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).

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 production 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 general 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 normally 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.

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 light 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 consideration 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 whatsoever 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.

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 Regulation, 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.
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.
638 China, first written submission, paras. 993-994, and 996-999.
639 China, first written submission, paras. 1001-1003.

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 tastes 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.

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 that 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.

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 should 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 concluded 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, Exhibit 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.

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 argument, 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 concluded above, this does not constitute 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.

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.

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 interested 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 continuation 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 determination 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.
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-reference 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.
669 China, second written submission, paras. 503 and 578.

b. European Union
7.322 The European Union submits that China's understanding 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 argues that, separate from, and in addition 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 Agreement 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. 248; answer to Panel question 43, paras. 94-95.
676 European Union, first written submission, para. 250.
677 European Union, second written submission, para. 91. The 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.

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 any 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.

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 determination 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 determination 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 Goods Sunset Reviews, p. 285, and US – Anti-Dumping Measures on Oil Country Tubular
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.

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 been 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).
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.

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 likelihood 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 continuation 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 necessarily 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 that injury determination are inconsistent
with Article 3 of the AD Agreement. However, China 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 violation 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.

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 determination 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 reviews, 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

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 the 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 continuation 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 basis" and "reasoned and adequate 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 making 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 individual 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 C h i n a h a s
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 considered sufficient to demonstrate the consistency of the
determination with Article 11.3 of the AD Agreement.

(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, inconsistently 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.

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 positive 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.
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.

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 Article 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, this 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. 255; Review Regulation, Exhibit CHN-2, recital 19.
720 European Union, first written submission, para. 26 2. The European Union refers to Panel Report,
721 Brazil, third party written submission, paras. 57-58, 60 and 62.

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 determinations 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 known 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, paras. 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.

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 representativeness 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 injury 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.

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 used 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.

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 complainant 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,
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.
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.

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 procedures 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 was 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 Note 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.
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.

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 whether 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 the 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 sample. 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 process 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.

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).

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 selection of the sample. Even if such a requirement
were to be implied, we can see no basis for concluding 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.

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 with 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 represent 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 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

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 selected 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.

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.
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 opposition by using statistically valid sampling techniques."
771 China, first written submission, paras. 496 and 498.

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.

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 other 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 China'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.
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 sample in the injury context. See footnote 774 above.

Article 6.10 for some indications as to how sampling might 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 Article 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 this 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.

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 representative of the domestic industry as a whole.
7.386 China asserts that the fact that the EU industry 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

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, citing 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 Regulation, Exhibit CHN-2, recital 23.
793 Review Regulation, Exhibit CHN-2, recital 23.
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.

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 European 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 respect 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

799 China, first written submission, paras. 528-529.
800 European Union, first written submission, para. 292.
801 See paragraphs 7.272-7.274 above.
803 See paragraphs 7.276-7.287 above.

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 Nam 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 between 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.
810 China, first written submission, paras. 1158 and 1165, citing Provisional Regulation, Exhibit CHN-
4, recital 158.

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 registered 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.
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. 694; answer to Panel question 93, paras. 260-261.

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.

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 other 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 over 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 jointly for the purpose of the injury analysis.
825

824 Provisional Regulation, Exhibit CHN-4, recitals 156-162.
825 Definitive Regulation, Exhibit CHN-3, recitals 163-167.

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 products 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 domestic industry faces the impact of dumped 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.

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 "conditions of competition". As we observed 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).

(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 objective 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

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 'producers' in the context of sampling of the domestic
industry but instead mentions the term 'complainants'."
China, first written submission, para. 535 (footnotes omitted). See also second written submission, para. 697.
836 China, second written submission, paras. 734 and 735.
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.

relied, in its evaluation of injury, on unverified data allegedly collected from individual producers at
the complaint stage, that is, the 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 sufficiently 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.
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.
846 European Union, second written submission, para. 154.

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 concerning 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 with producers' associations is inconsistent 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

"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 ,
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.

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 definition 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.

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.
869 China, first written submission, para. 536; second 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.

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 around 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 the 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.
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.
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
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.

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 the 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 Commission 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 demonstrates 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.

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 European 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. See also, China, second written submission, para. 746.
886 China, first written submission, paras. 556-557; second written submission, para. 746.
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

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 consistently 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 defined 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.

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 given 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.

898 Review Regulation, Exhibit CHN-2, recital 247.

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 addressed. 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 insufficiency 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, and 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

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

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 negative 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 profit 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-checking 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, Exhibit 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, Exhibit CHN-3, recitals 214-215.
905 China, first written submission, paras. 1078 and 1082.

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 obtained 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 production 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

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.
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.

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 relied 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 interpretation 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 capacity 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.
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.

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 throughout 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 indicators on a macroeconomic level. 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 adequately 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 implied 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 explain why market share analysis 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, Exhibit CHN-3, recitals 188-189.
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.

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 factors, 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.

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 profitability 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 volatility 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 provisional 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 investigating 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.

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 examination 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

933 European Union, first written submission, paras. 723-724.
934 Definitive Regulation, Exhibit CHN-3, recital 193.

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 dropped 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 reported 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.

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 authority 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 therefore reject this aspect of China's claim.

940 Definitive Regulation, Exhibit CHN-3, recital 194.
941 Provisional Regulation, Exhibit CHN-4, recital 184.

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 establish 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 finding that the lifting of the quota on Chinese footwear

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.

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 considered 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 reject 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 original 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.
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.

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 was 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.
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.
958 China, first written submission, paras. 614-618 and 621.

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.
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.
967 European Union, answer to Panel question 56; second written submission, para. 160.

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 undertook 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 Article 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 factors 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 factors 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.

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 indicated 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.

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 consideration 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.

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 injuring 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 other factors known to the investigating authority which
may be causing injury to the domestic industry, there is no required method of analysis in undertaking
that examination.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 their 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.

"[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 before 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 inconsistent 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 factor … 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.

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.

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.

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 allegations 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 consumption 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 fact, 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.

"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 'different' 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 likelihood 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" concerning 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, Exhibit CHN-3, recitals 297-298.

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 across 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 being 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.

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 this 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
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.

determination, but has merely put forward an alternat ive interpretation of the relevant facts, which is
not enough to demonstrate an inconsistency 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

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.

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 changes 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 "the 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.

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 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."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 therefore 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.

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.
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.

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 factors other than the dumped imports that 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 therefore reject this aspect of China's claim.

1039 China, first written submission, paras. 605-607; second written submission, paras. 827-836.
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 "outsourcing" 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.

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; second 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).

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 cannot be concluded that the development 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 therefore 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.

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 addition, 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 dumped 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, Exhibit CHN-3, recitals 221-239.
1061 China, first written submission, paras. 1202-1206.
1062 China, first written submission, paras. 1208-1212.

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.

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 considered in determining that EU industry was materially injured.1069
China disagrees with the European Union's position that export performance does 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 characterization 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, Exhibit 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.

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 from 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. See also answer to Panel question 94, para. 634.
1081 European Union, first written submission, paras. 737-738.

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 consumption and decline in demand
7.528 China submits that the European Union did not adequately evaluate injury 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.
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.

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 the 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 types 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 conclusion 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.
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.

industry over the period of investigation as "relativ ely stable" is incorrect. We recall that, on an
indexed basis, consumption declined from 100 in 2001 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 Articles 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.
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.

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 export 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.

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 them 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,
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.

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 export 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 authority 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 therefore 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.

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 claims 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 Agreement. 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 their 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, necessary 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.

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 that 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 would 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.
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.
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.

(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.

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.

1140 Notice of Initiation, Exhibit CHN-6, recital 6(d).
1141 MET and IT Questionnaire, Exhibit CHN-77.

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 those 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 that 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 information 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.
1145 China, first written submission, paras. 1352 and 1357.

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 Chinese 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 information 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.

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.

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 including 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 imposed 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 violation 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 Protocol 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).
1157 China, first written submission, para. 1363 (italics in original).

 (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. Moreover, 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.

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 "promptly" 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
1161 See, e.g. China, fist written submission, paras. 641- 643; answer to Panel question 58; second
written submission, para. 862.

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 automatically 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-confidential, 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; second written submission, paras. 869-874.
1165 China, second written submission, paras. 876-877 and 904.

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 firms 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 meeting with the Panel, fn. 229.
1170 European Union, first written submission, para. 370; answer to Panel question 64.

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 the 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 responses 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.

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, for 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

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 meeting with the Panel, paras. 234-
240.
1179 China, answer to Panel question 58; second written submission, para. 874.

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 Commission 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 consider 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 Panel, 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 response, 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 November 2008 as asserted
by the European Union.

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 inconsistently 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 periods constitute delays which establish 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 whether making them available to interested parties
would disclose confidential information.

7.583 The word "promptly" is defined as "in 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.

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 was 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 after 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 requests 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; second 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 meeting with the Panel, para. 62.

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, when 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 opportunities 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 only referring to specific factual allegations 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.
1199 China, first written submission, paras. 665-667.

China further claims that by failing to provide tim ely opportunities for interested parties to see this
information, the European Union also violated 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

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,
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, paras. 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.

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 complaints 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

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 presentations 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

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
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 –

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 determinations 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.

7.604 Article 6.2 of the AD Agreement, also the 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 investigating 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 the 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.

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 their 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 available 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.

information was confidential; and in so far as it concerns other facts surrounding those
communications, such facts are not "information" 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 version 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 investigating 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.

sample before 10 October 2008 and the fact that they 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 determination. 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 reject 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.
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.

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 acknowledges 1237, that the information at issue was made available to
interested parties in a Note for the File dated 29 October 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 the 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, Exhibit 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 sample 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 December 2008, Exhibit CHN-134, pp. 1-2.
1242 Definitive Regulation, Exhibit CHN-2, recitals 25-33.

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 therefore 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, para. 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.

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.

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 led 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, with 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 Union 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.
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.

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 there 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

1260 European Union, first written submission, paras. 396.
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 evidence to support such a conclusion.
1263 China, first written submission, paras. 681-683; second written submission, paras. 965 and 968.

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 would 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 the 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 the 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

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 disclosure 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 responses 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.
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.

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 investigation 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.

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 when 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 China 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.

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 information 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 claim 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.
1283 European Union, opening oral statement at the second meeting with the Panel, para. 300.
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.

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 available 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 producers. In addition, we note that China presented
no independent argument in support of a claim under Article 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.

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 consequential 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 made 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 Werner Calçados LTDA and Henrichs & CIA LTDA.
1295 China, first written submission, paras. 690-691.

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).

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 their 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-going 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.
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.

opportunities to see information which it did not possess. 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 concerning 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 parties 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 the 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.

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 was 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 analysis. China, first written submission, para. 1272.
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.

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 versions 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 consequence, 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.

(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 the 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-confidential 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.

be demonstrated to their satisfacti on from appropriate sources that the
information is correct.
18
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 information 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 investigating 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 position, 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.

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 Union 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.

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 "information" 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 investigating 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 possible, that an appropriate 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.

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 whether 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.

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 confidential 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

 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, while the letters from each complainant 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; second 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

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 negotiation 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 "revealed 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.

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.

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 which 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
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.

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:
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
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.
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.

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 Agreement 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

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, para. 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 provides 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

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 names 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 producers 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 complainants 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 asserted 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.

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 the 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 reject 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 practically, 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.

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 explanation 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.
1375 Panel Report, EC – Fasteners (China), para. 7.530.
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.

the European Union, investigating authorities are obliged to take whatever steps are necessary to
ensure that the right to confidentiality 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 ensuring 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 figures 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 information 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 information 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 requested would result in the disclosure of information for
which confidential treatment was properly sought and was granted.

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 does 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 interested 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 the requirements of Article 6.5.1.

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 any 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 further 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.
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 "parties 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 Regulation, 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.

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 response 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.
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.

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 with 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 judicial 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 representative 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.

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 assert 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 and Note for the File dated 6 July 2005
7.722 China asserts that the European Union violated Article 6.5 of the AD Agreement due to a lack
of information in the complaint and the Note for the 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 and 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 CEC'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 the second meeting with the Panel, para. 418.
1407 European Union, first written submission, paras. 791 and 765.

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 other 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 facie case of violation of these provisions with respect to
the information contained in Annex 2 to the complaint.
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 contains information on prices of individual 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).

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 reasons/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.

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 provided 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. 1324-1325, 1328-1330 and 1333; second written submission,
paras. 1461-1462.
1422 European Union, opening oral statement at the second meeting with the Panel, para. 418.
1423 European Union, first written submission, paras. 791 and 765.

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 questionnaire 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.

AD Agreement because it should have rejected such in formation. China further claims that to the
extent that the information at issue was not confidential, 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 opportunity 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 assume 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 China 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.

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 context 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 question 1435, 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 request for confidential treatment or showing of good cause
for such treatment.

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 economy 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. Notice of Initiation, Exhibit CHN-6, recital 7.
1440 China, first written submission, paras. 1340-1341.

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 violation 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.
 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 here was, in fact, treated as confidential.

7.750 Based on the foregoing, we conclude that, with respect to the original investigation, 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 referred 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 treatment 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 confidential 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.
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",

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 notes 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 warranted 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 confidential 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 meeting 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 meeting with the Panel, para. 316.

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 did 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 warranted. 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 confidentiality 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
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.
1459 European Union, opening oral statement at the second meeting with the Panel, paras. 328 and 330.

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 the 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 producers 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 showing 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 supporters of the expiry review 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 investigation, 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.

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 "certain 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 declarations 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.

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 suggests 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 with 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.

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 satisfy 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.
1478 European Union, first written submission, paras. 428 and 438.
1479 See, e.g. China, first written submission, paras. 728-735.

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 the 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 submission, 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.

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 h e
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 permit 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

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.
1491 China, second written submission, 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.

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 information 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 the 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.

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 contained 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
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.

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 requested 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 second 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 statement 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.

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.

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 explanation 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 respect 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.

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 was 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 that 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 concerns 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.
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".

confidential versions of the questionnaire respons es of the sampled EU producers demonstrates that
information was treated as confidential by the Commission. 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 treatment 1529, 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 narrative statements, we cannot 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 Article 6.5 with respect to this information.

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 information 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 summary 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.

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 compliance 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 sampled 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 authorities 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 was 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.
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 Article 6.5 of the AD Agreement. In this respect, we recall
that we have found that the 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.

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 claim 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.

1547 European Union, answers to panel questions 59 and 63; opening oral statement at the second
1548 China, answer to Panel question 57.
1549 See paragraphs 7.588 and 7.654.

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 countries 1551; 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
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.

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 claim 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, with 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 have 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.

(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 confidential 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 submission, 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.

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.
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,
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.

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 relevant 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.

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 significantly 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, affirmative 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.

assuming that the producers concerned supplied "inc orrect and misleading information" or impeded
the investigation, Article 6.8 did not require the European 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 investigating authority may work to correct those errors.

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 conclusions 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.
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 second 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 deficient 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.

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 Agreement 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 determination 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 calculate 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.
1592 European Union, first written submission, para. 819.
1593 European Union, first written submission, para. 821.

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 disclosure 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,
1600 United States, third party written submission, fn. 55.
1601 Final General Disclosure Document, dated 7 July 2006, Exhibit CHN-81.

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 consideration 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 "essential 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 question 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.

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 October 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 foreshadowed 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 understanding 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.

apply definitive measures", we recall that interested parties were, in fact, given an opportunity to
submit comments. China's claim is that the period allowed, 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 document 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 Disclosure 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.
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 (Review Regulation) and 1386 (Definitive Regulation).

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 authority 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 information 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 information 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.
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.

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. The 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 interested 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.

or rejection of relevant arguments or claims 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 the 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 determination. We observe that the list of topics in
Article 12.2.1 is limited to matters associated 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.

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 below 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.

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

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 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 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

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 information 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 determination of injury consistent with Article 3.1.
1642 Review Regulation, Exhibit CHN-2, recital 22.

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 producers 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 producers 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 where the AD Agreement does establish 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.

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 European 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 China'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 covered 1653 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.
1653 The European Union refers in this regard to China, first written submission, para. 800.
1654 European Union, first written submission, para. 520.

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.

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 basis 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 China'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 provide 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, qualitatively, 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.

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 China'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 definition 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.

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 Agreement. 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 China'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 states 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 true, 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.

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 consideration, 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

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.

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 like 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 having 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 geographical 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 sample; 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.
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.

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 Regulation 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 European 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 Regulation 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
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.
1682 European Union, first written submission, para. 867.
1683 See paragraphs 7.690 and 7.699 above.

3. determination concerning the evaluation of macroeconomic injury indicators
7.880 China asserts that the European Union did not provide 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 was 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 considered 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 Union, first written submission, para. 868.
1686 European Union, first written submission, para. 868.
1688 European Union, first written submission, para. 869.

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 the 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 China's allegations in this regard.

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.
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.

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 normal 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 Definitive 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.

response was not made accessible in the non-confidential 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 summarization 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.

(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 injury 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.
1702 China, second written submission, para. 1376 (italics in original).
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).
1708 China, first written submission, para. 1092; second written submission, paras. 1368-1371.

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 elimination 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 calculated 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

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.
1714 China, first written submission, para. 1111, quoting Definitive Regulation, Exhibit CHN-3,
recital 309.
1715 China, first written submission, paras. 1115, 1119.

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

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,
1726 China, answer to Panel question 98, para. 653.

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 European 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 this 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.

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 European 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
1743 European Union, first written submission, para. 683.
1744 European Union, first written submission, paras. 685, 687 and 691.

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 greater 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 investigation and the like domestic product, 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.

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 the 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, Exhibit CHN-3, recitals. 303-314.

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.
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.

"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 Article 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 may 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.

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 apply 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.
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 injury 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.

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 respect 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)).

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 injury 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 requirements 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 obligations 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 Agreement, 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.

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 preliminary 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 investigation 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 European 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";

1786 China, first written submission, paras. 814-815 and 1404-1405.
1787 China, second written submission, paras. 1222-1223 and 1537.

(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 response 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 response 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 Union 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 treatment 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

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 claim 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 consequence or independently, Article 6.2 of
the AD Agreement, with respect to certain information in the original investigation
and expiry review;

(r) Article 6.5 of the AD Agreement, and as a consequence or independently, Article 6.2
of the AD Agreement, in connection with the 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 affecting 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;

(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 review 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 Disclosure 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";

(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 the sampled EU producers, in the original
investigation;
(d) Article 6.2 of the AD Agreement with respect 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 certain provisions of the AD and WTO Agreements and
the GATT 1994, it has nullified or impaired benefits 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).

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 Measures on Stainless Steel from Mexico ("US –
Stainless Steel (Mexico) "), WT/DS344/R, adopted 20 May 2008, as modified by Appellate Body Report

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 have 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.